STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL ) REGULATION, DIVISION OF REAL ) ESTATE, )

)

Petitioner, )

)

vs. ) Case No. 85-2967

) MARY S. DAVEY and MARCO BEACH ) ENTERPRISES, INC., )

)

Respondent. )

)

RECOMMENDED ORDER

The issue in this case is whether the Florida Real Estate Commission should discipline Respondents, Mary S. Davey and Marco Beach Enterprises, Inc., for several alleged violations of provisions of Chapter 475, Florida Statutes (1985).

Although a final hearing was held in Naples on June 24, 1986, the parties agreed to the submission of virtually the entire case on written evidence. Other than the submission of joint exhibits, the final hearing consisted of argument of counsel and a single answer to a single question asked of Respondent Mary S. Davey. The parties also stipulated to all of the following factual allegations in the Administrative Complaint, as amended:

APPEARANCES

For Petitioner: Susan Hartmann, Esquire

Department of Professional Regulation Division of Real Estate

P. O. Box 1900

Orlando, Florida 32802

For Respondent: Arthur V. Woodward, Esquire

940 North Collier Blvd.

P. O. Box 1

Marco Island, Florida 33937

1. Petitioner is a state government licensing and regulatory agency charged with the responsibility and duty to

   prosecute Administrative Complaints pursuant to the laws of the State of Florida, in particular Section 20.30, Florida Statutes, Chapters 120, 455 and 475, Florida Statutes, and the rules promulgated pursuant thereto.

   
   

2. Respondent Mary S. Davey is now and was at all times material hereto a licensed real estate broker in the State of Florida having been issued license number 0019819 in accordance with Chapter 475, Florida Statutes. The last license issued was as a broker, c/o Marco Beach Enterprises, Inc., 685 S. Collier Blvd., Marco Island, Florida, 33937.

   
   

3. Respondent Marco Beach Enterprises, Inc., is now and was at all times material hereto a corporation licensed as a real estate broker having been issued license number 0182845. The last license issued was as a broker, 685 S. Collier Blvd., Marco Island, Florida, 33937.

   
   

4. At all times material hereto Respondent Mary S. Davey was licensed and operating as qualifying broker for and officer of Marco Beach Enterprises, Inc.

   
   

5. On or about May 11, 1983, Clifford and Ina Crowe, as sellers, entered into a sales contract for a certain condominium unit with Respondent Mary S. Davey, as agent for buyers, Dr. Robert and Mary LaPointe. The contract provided for an initial deposit of $500.00, to be followed by a subsequent deposit of

   $16,500.00 upon sellers' acceptance, to be placed into Respondents' escrow account. A copy of the sales contract is

   . . . Administrative Complaint Exhibit 1.

6. On or about May 12, 1983, Robert A. LaPointe drew a

   $16,500.00 check, made payable to Marco Beach Enterprises Escrow Account. The check was deposited in the Marco Beach Enterprises, Inc. escrow account. A copy of the check is . . .Administrative Complaint Exhibit 2.

   
   

7. The contract was a valid contract for the purchase and sale of real estate. (Emphasis added.) However, the contract failed to close. On or about June 19, 1984, the LaPointes, buyers, and the Crowes, sellers, and Deltona's Marco Island realty, with whom the Crowes' condominium unit was listed, entered into an agreement by which the $16,500 deposit was to be disbursed. The LaPointes, the Crowes and Thomas L. Barnard' sellers' agent, agreed that the Crowes were to receive $3,000 and the LaPointes were to receive $13,500, plus all interest accrued while the deposit was in the escrow account. Respondents refused to sign the agreement.

8. Instead, Respondents retained the $3,000 for a commission, and gave the remaining $13,500, plus accrued interest, to the LaPointes' attorney. On May 24, 1985, Respondents gave the retained $3,000 to A. V. Woodward, Esquire, to maintain in his escrow account.

Finally, the parties stipulated that the only remaining question for determination is who is the rightful owner of the

$3,000.00. Nonetheless, also to be determined obviously is whether Respondents violated Sections 475.25(1)(b) and (d), Florida Statutes (1985).Counts I and III of the Administrative Complaint charge Respondents, Mary S. Davey and Marco Beach Enterprises, Inc., respectively, with culpable negligence and breach of trust in a business transaction in violation of Section 475.25(1)(b), Florida Statutes (1985). Counts II and IV of the Administrative Complaint charge them, respectively, with failure to deliver the $3,000.00 to the rightful owner, the Crowes, in violation of Section 475.25(1)(d), Florida Statutes (1985).

FINDINGS OF FACT

1. Although the parties to this case stipulated that the contract between the LaPointes and the Crowes was a valid contract for the purchase and sale of real estate, a genuine dispute arose between the LaPointes and the Crowes in that regard.

   
   

2. Respondents became involved in this matter by showing the Crowes' property to the LaPointes on or before May 9, 1983, and thereby becoming a "co-operating broker'. with Deltona's Marco Island Realty Co. under an Exclusive Right To Sell agreement between Deltona and the Crowes dated January 13, 1983.

   
   

3. Under the Exclusive Right To Sell, the Crowes agreed to pay Deltona a fee of 6% of the sales price for brokerage services and agreed, if a buyer failed to close a sales contract and forfeited a deposit to the Crowes, that Deltona could retain one- half of the deposit, but not exceeding the total amount of Deltona's fee, as compensation. The Exclusive Right To Sell also provided that Deltona was responsible to promptly pay any cooperating broker who sells the property for his services as soon as possible after receipt by Deltona of its real estate broker fee as provided in the Exclusive Right To Sell.

   
   

4. By May 10, 1983, the LaPointes had made an offer to buy the property and the Crowes, by May 10, 1983, telegram to Deltona, agreed to sell the property for "$165,000, $500 in escrow with balance of $15,500 additional deposit after acceptance with balance at closing . . . sales commission $8,650.

5. On May 11, 1983, Respondent Mary S. Davey, signed the sales contract for the LaPointes' purchase of the Crowes' property as "Agent (authorized by Buyer)." The sales contract also recited: "Buyer acknowledges that Marco Beach Enterprises, Inc/Deltona Marco Island Realty is the procuring real estate broker(s) in this transaction, and that the Broker is the agent for the Seller, and is being paid by the Seller." Respondent. Davey notified the LaPointes of the requirement for a $500 initial deposit and submitted the signed sales contract for the Crowes' signature.

   
   

6. By letter dated May 12, 1983, Respondents confirmed "that the total commission to be paid on the sale of the [Crowes'] property is $8,650.00." It also confirmed: said commission is to be split 50/50 between MARCO BEACH ENTERPRISES, INC. and Deltona's Marco Island Realty."

   
   

7. Also on May 12, 1983, the LaPointes sent Respondents a check for the $500 initial deposit with a note asking for a complete inventory of the contents of the condominium the LaPointes had inspected and a list of renters.

   
   

8. The Crowes signed the Sales Contract on May 16, 1983.

   
   

9. By May 24, 1983, Respondents still had not complied with the request for a complete inventory of the condominium's furnishings and for a list of renters. On that date, Respondents sent the LaPointes a copy of the signed Sales Contract with a letter requesting them to sign the Sales Contract under Respondent Davey's signature. Before they arrived, the LaPointes' May 25, 1983, letter to Respondents crossed in the mail. It requested that Respondents put something in the contract concerning pro-ration of water bills and taxes and payment of a water damage bill by the Crowes. The LaPointes repeated their request for an accurate inventory of the furnishings of the condominium and stated that they were placing their trust in Respondents to represent the LaPointes' interests.

   
   

10. Some time between the LaPointes' receipt of Respondents' May 24 letter with a copy of the Sales Contract and June 13, 1893, the LaPointes decided to ask for cancellation of the purchase. The LaPointes cited circumstances involving their financing and their disappointment that Respondents had not furnished an inventory of the furnishings. By June 16, 1983, Respondents had responded to the request for cancellation, vigorously contending that a valid and binding contract existed between the LaPointes and the Crowes. By June 24, 1983, the Crowes, through an attorney, echoed their agreement with the position taken by the Respondents that there was a valid and binding contract.

11. By letter dated June 29, 1983, from the LaPointes attorney, the LaPointes questioned the validity of the contract, saying that Respondent Davey had no authority to sign the Sales Contract on behalf of the LaPointes, who never did sign. The Respondents got a copy of this June 29 letter.

    
    

12. On July 11, 1983, the LaPointes, through a Florida attorney, demanded of Respondents that their deposit be, returned. Respondents tried to extricate themselves by referring the LaPointes to the Crowes' attorney. The Crowes and the LaPointes remained at a stalemate until after May 7, 1984, when the Crowes sold their property to another purchaser for $162,500. Thereafter, by about June 19, 1984, the LaPointes, the Crowes and Deltona had negotiated their proposed resolution of the matter by disbursement of $3,000.00 to the Crowes and $13,500.00, plus all accrued interest, to the LaPointes. Respondents had not been included in any of these negotiations, and they refused to sign the agreement. As stipulated by the parties to this case, the matter remains unresolved.

    
    

13. The Florida Real Estate Commission Handbook states in pertinent part:

    
    

    "But, what are the rights of the seller and the broker? In the absence of a specific agreement or custom, when a purchaser refuses to sign a contract after the offer has been accepted, the broker is only entitled to the agreed or usual commission percentage of

    the deposit. Where the purchaser refuses to go through with a contract by which he is bound and which can be enforced against him by the seller, the

    broker may, in the absence of a contract or custom, appropriate the deposit up

    to the amount of the earned commission."

    CONCLUSIONS OF LAW

    
    

14. Section 475.25(1), Florida Statutes (1985), provides in pertinent part:

    
    

    1. The commission may deny an application for licensure, registration, or permit, or renewal thereof; may stipend a license ore permit for a period not exceeding 10 years; may revoke a license or permit; may impose an administrative fine not to exceed $1,000

       for each count or separate offense; and may issue a reprimand, or any or all of the foregoing, if it finds that the licensee, permittee, or applicant:

       
       

       * * *

       
       

       (b) Has been guilty of . . . culpable negligence, or breach of trust in any business transaction in this state or any other state, nation, or territory; has violated ~ duty imposed upon him by law or by the terms of a listing contract, written, oral, express, or implied, in a real estate transaction; has aided, assisted, or conspired with any other person engaged in any such misconduct and committed an overt act in furtherance of such intent, design, or scheme. It is immaterial to the guilt of the licensee that the victim or intended victim of the misconduct has sustained no damage or loss; that the damage or loss has been settled and paid after discovery of the misconduct; or that such victim or intended victim was a customer or a person in confidential relation with the licensee or was an identified member of the general public.

       
       

       * * *

       
       

       (d) Has failed to account or deliver to any person, including a licensee under this chapter, at the time which has been agreed upon or is required by law or, in the absence of a fixed time, upon demand of the person entitled to such accounting and delivery, any personal property such as money, fund, deposit, check, draft, abstract of title, mortgage, conveyance, lease, or other document or thing of value, including a share of a real estate commission, or any secret or illegal profit, or any divisible share or portion thereof, which has come into his hands and which is not his property or which he is not in law or equity entitled to retain under the circumstances. However, if the licensee, in good faith, entertains doubt as to what person is entitled to the accounting and delivery of the escrowed property, or if

       conflicting demands have been made upon him for the escrowed property, which property he still maintains in his escrow or trust account, the licensee shall promptly notify the commission of such doubts or conflicting demands and shall promptly:

       
       

       1. Request that the commission issue an escrow disbursement order determining who is entitled to the escrowed property;

          
          

       2. With the consent of all parties, submit the matter to arbitration; or

          
          

       3. By interpleader or otherwise, seek adjudication of the matter by a court.

       
       

       If the licensee promptly employs of the Escape procedures contained herein, and Resulting therefrom, no administrative License for failure to account for, Deliver, or maintain the escrowed Property.

       (k) Has failed, if a broker, to immediately place, upon receipt, any money, fund, deposit, check, or draft entrusted to him by any person dealing with him as a broker in escrow with a title company, banking institution, or savings and loan association located and doing business in this state, or to deposit such funds in a trust or escrow account maintained by him with some bank or savings and loan association located and doing business in this state, wherein the funds shall be kept until disbursement thereof is properly authorized or has failed, if a salesman, to immediately place with his registered employer any money, fund, deposit, check, or draft entrusted to him by any person dealing with him as agent of his registered employer. The commission shall establish rules to provide for records to be maintained by the broker and the manner in which such deposits shall be made.

       * * *

       
       

       Petitioner, Department of Professional Regulation, Division of Real Estate (Department), has charged Respondents' Mary S. Davey and Marco Beach Enterprises, Inc., with violations of (b) and (d), but not (k).

       
       

15. As "co-operating broker," Respondents were parties to the Sales Contract, and third party beneficiaries to the Exclusive Right To Sell between the Crowes and Deltona's Marco Island Realty Co. See Pallardy-Watrous Ins. Agency, Inc. v. M. Tucker, Inc., 163 So. 284 (Fla. 1235); Technicable Video Systems, Inc. v. Americable of Greater Miami, Ltd., 479 So. 2d 810 (Fla. 3rd DCA 1985); Jones v. Atlas Realty Corp., 154 So.2d 905 (Fla. 2nd DCA 1963). Respondents' May 12, 1983, letter to the Crowes confirmed and gave notice of Respondents' interest in the LaPointes' deposit. Under the Exclusive Right To Sell, assuming a valid and binding sales contract, Deltona would be entitled to retain one-half of the deposit, or $8,250.00, which is less than the total fee of $8,650.00 to which Deltona would be entitled, as Deltona's compensation. Out of this amount, Respondents would be entitled to one-half or $4,125.00. This would be confirmed by the Florida Real Estate Commission Handbook.

    
    

16. Respondents' and Deltona's entitlement depends on the validity of the Sales Contract. The parties to this case stipulated for purposes of this proceeding that the Sales Contract is valid and binding between the LaPointes and the

    Crowes. Therefore, the $3,000.00 which Respondents have retained is their rightful property as compensation for their brokerage services.

    
    

17. Since Respondents are the rightful owners of the

    $3,000.00 in question, Respondents have not failed to account or deliver the $3,000.00 to the Crowes upon demand because the Crowes are not "entitled to such accounting and delivery," as specified in Section 475.25(1)(d), Florida Statutes (1985). See Golub vs. Department of Professional Regulation, 450 So.2d 229 (Fla. 5th DCA 1984), review denied, 459 So.2d 1040 (Fla. 1984). Nor was there any requirement under these circumstances for Respondents to follow the "escape procedures" provided in Section 475.25(1) (d). See Grieser vs. Myers, 267 So.2d 673 (Fla. 4th DCA 1972).

    
    

18. As for Section 475.25(1)(b), Florida Statutes (1985), Respondents were not guilty of culpable negligence or breach of trust since they were entitled to the $3,000.00.

RECOMMENDATION

Based on the foregoing Findings Of Fact and Conclusions Of Law, it is recommended that the Florida Real Estate Commission enter a final order dismissing the Administrative Complaint that has been filed by Petitioner, Department of Professional Regulation, Division of Real Estate, against Respondents, Mary S.·Davey and Marco Beach Enterprises, Inc.

RECOMMENDED this 7 day of August, 1986, in Tallahassee, Florida.

J. LAWRENCE JOHNSTON Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 7 day of August, 1986.

APPENDIX

The following are rulings on proposed findings of fact to the extent required by Section 120.59(2), Florida Statutes (1985):

1. Paragraphs 1 through 6 of Petitioner's proposed findings of fact are accepted as substantially factually accurate and are incorporated in the Findings Of Fact to the extent necessary.

   
   

2. Paragraphs 8 and 10 of Petitioner's proposed findings of fact would be included in paragraph 1 above except that they are unnecessary.

   
   

3. Paragraph 7 of Petitioner's proposed findings of fact is rejected as unsupported by the evidence.

   
   

4. Paragraph 9 of Petitioner's proposed findings of fact is rejected as contrary to the greater weight of the evidence and/or Findings Of Fact. It ignores the Exclusive Right To Sell which must be read together with the Sales Contract.

   
   

5. Respondents submitted no proposed findings of fact designated as such or in a form which entitles them to specific rulings. However, their proposed findings of fact were carefully considered.

COPIES FURNISHED:

Susan Hartmann, Esquire Department of Professional Regulation

Division of Real Estate

P. O. Box 1900

Orlando, Florida 32802

Arthur V. Woodward, Esquire 940 North Collier Blvd.

P. O. Box 1

Marco Island, Florida 33937

Fred Roche Secretary

Department of Professional Regulation

130 N. Monroe Street Tallahassee, Florida 32301

Harold Huff Executive Director

Division of Real Estate

Department of Professional Regulation

P. O. Box 1900 Orlando, FL

Docket for Case No: 85-002967

Orders for Case No: 85-002967