STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) Case No. 85-4089

)

FORTONATO BENJAMIN-PABON, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, W. Matthew Stevenson, held a formal hearing in this case on April 9, 1986 in Tampa, Florida. The following appearances were entered:

For Petitioner: Arthur R. Shell, Jr., Esquire

Department of Professional Regulation

400 W. Robinson Street Orlando, Florida 32801

For Respondent: (No appearance)

ISSUE

The issue for determination at the final hearing was whether the Respondent violated the real estate licensing law, as alleged in the Administrative Complaint, by failing to account and deliver a deposit; failing to maintain a deposit in a real estate brokerage escrow account or some other proper depository until disbursement thereof was properly authorized; and/or being guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, and/or breach of trust in a business transaction.

PROCEDURAL BACKGROUND

The Petitioner filed the Administrative Complaint on September 23, 1985. By letter dated November 14, 1986, the Respondent disputed the factual allegations contained in the Administrative Complaint and requested a formal hearing pursuant

to Section 120.57(1), Florida Statutes, before a Hearing Officer appointed by the Division of Administrative Hearings.

This cause was thereafter scheduled for final hearing on April 9, 1986. On the afternoon of April 8, 1986, at approximately 4:10 p.m. the Respondent contacted the undersigned by telephone and requested a continuance of the formal hearing. The Respondent stated that he was in New York working on a business deal, that he had to fly to Paris after that, and that he did not know when he would be available to attend the hearing if it were rescheduled. The Respondent was informed that his telephonic motion would not be granted without some indication as to the Petitioner's position on the request and that he should telephone the Petitioner to ascertain his position and immediately call the undersigned back. At approximately 4:30 p.m., the undersigned called the Petitioner and was informed that the Respondent had in fact called as requested and was told that Petitioner objected to the request for continuance. The Respondent did not thereafter contact the undersigned. The Respondent did not appear at the final hearing. After waiting approximately 40 minutes past the scheduled commencement time, the hearing was called to order at 10:10 a.m. At the final hearing, the Petitioner called the following witnesses: Mavel Amador; Eileen Cumbie; Bradford Monroe; Vivian Castellanos; Danilo Castellanos; and, Jorge Blondet. In addition, Petitioner's Exhibits 16 were duly offered and admitted into evidence. Neither party submitted post-hearing proposed findings of fact.

FINDINGS OF FACT

Based on my observation of the witnesses and their demeanor while testifying, the documentary evidence received and the entire record compiled herein, I hereby make the following findings of fact:

1. Respondent is now, and was at all times material hereto, a licensed real estate broker in the State of Florida having been issued license number 0360741. The last license issued was as a broker, c/o Consolidated American Realty Services, Inc., in Tampa, Florida.

   
   

2. From June 6, 1983, through June 25, 1984, Respondent was licensed and operating as a real estate broker under the trade name, "Benjamin Realty," in Tampa, Florida.

   
   

3. For sometime prior to June 2, 1984, Eileen Cumbie attempted to sell a lot owned by her located at 1102 26th Avenue, Tampa, Florida.

4. On June 2, 1984, the Respondent contacted Ms. Cumbie and informed her that he had a client interested in purchasing the property. Ms. Cumbie informed the Respondent that as long as she netted a certain amount, she would be willing to sell the property. Ms. Cumbie allowed the Respondent to put together a contract for the sale of the lot.

   
   

5. In connection therewith, the Respondent prepared a sales contract with Danilo Castellanos, as purchaser, and Eileen W. Cumbie, as seller, for the purchase and sale of the property.

   
   

6. Pursuant to the purchase and sales agreement, the Respondent received in trust from Mr. Castellanos a $500 earnest money deposit via check dated June 2, 1984.

   
   

7. On June 5, 1984, the Respondent deposited the check into his real estate brokerage account maintained at the Central Bank of Tampa, 2307 W. Rennedy Boulevard, Tampa, Florida.

   
   

8. Mr. Castellanos entered into the contract for the benefit of his son and daughter-in-law who resided in New Jersey but were planning to relocate to the Tampa area. Mr. Castellanos' daughter-in-law went to look at the lot on June 10, 1984 and decided that she did not like the area in which it was located.

   
   

9. The closing of the transaction was set for June 15, 1984. On approximately June 13, 1984, Mr. Castellanos' daughter- in-law informed the Respondent that they were no longer interested in purchasing the property.

   
   

10. Ms. Cumbie was out of town during the time of the scheduled closing, but had prepared and signed all of the paperwork in advance. When she returned after June 15, 1984, she called Respondent to find out how the closing went. The Respondent informed her that the buyers failed to go through with the transaction.

    
    

11. The contract provided in part as follows:

    
    

    ". . . If the buyer fails to perform this contract within the time specified herein, time being of the essence of this agreement, the deposit made by the buyer shall be disposed of in the following manner: To the Broker an amount equal to his earned commission, but not to exceed 1/2 of the deposit which shall discharge the sellers obligation to him for that service; remainder to the seller to be credited to him against

    his damages accrued by reason of the breach of contract. "

    
    

12. After the transaction failed to close, Ms. Cumbie requested that Respondent give a portion of the deposit to her. The Respondent told Ms. Cumbie that he would give her the entire deposit because she had paid for the survey and a few other items to facilitate the closing of the transaction.

    
    

13. Over the next several months, the Respondent, on several occasions, promised to deliver a check to Ms. Cumbie. However, the Respondent never delivered any such check to Ms. Cumbie.

    
    

14. Because the Respondent failed to provide Ms. Cumbie with a share of the earnest money deposit, she initiated a civil action in the County Court of Hillsborough County. On October 15, 1985, Ms. Cumbie was awarded a final judgment in the amount of $250 against Respondent for her share of the forfeited earnest money deposit.

    
    

15. As of the date of the final hearing, the Respondent had not satisfied the judgment and Ms. Cumbie had not received any proceeds from the forfeited earnest money deposit.

    
    

16. Shortly after the transaction failed to close, the purchasers requested that the Respondent return the earnest money deposit to them. However, the Respondent informed them that they were not entitled to the return of the earnest money deposit.

    
    

17. The earnest money deposit was never returned to the purchasers.

    
    

18. On July 31, 1984, the balance in Respondent's escrow account was $568.83. However, on September 1, 1984, the balance in the Petitioner's escrow account fell to S18.83. From October 31, 1984 to January 1, 1986, the balance in the Petitioner's escrow account remained $3.83.

    
    

    CONCLUSIONS OF LAW

    
    

19. The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of these proceedings. Section 120.57(1), Florida Statutes (1983).

    
    

20. This proceeding is penal in nature and the burden of proof is on the Petitioner, Bach v. Florida Board of Dentistry,

    378 So. 2d 34 (Fla. 1st DCA 1980); Balino v. Department of Health and Rehabilitative Services, 398 So. 2d 349 (Fla. 1st DCA 1977). Because the Respondent's license is at stake, the evidence to

    support the charges must be more substantial than that required to support conventional forms of regulatory action. Under these circumstances, Bowling v. Department of Insurance, 394 So. 2d 165 (Fla. 1st DCA 1981) requires the evidence weigh as substantially on a scale suitable for evidence as the penalty does on the scale of penalties.

    
    

21. In Count I of the Administrative Complaint, the Petitioner charges that Respondent failed to account and deliver a deposit in violation of Section 475.25(1)(d), Florida Statutes. That Section provides that the Commission may take disciplinary action where the licensee:

    
    

    ". . . 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 . . . or other document or thing of value . . . which has come into his hands and which is not his property for 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; or

       
       

    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."

       
       

22. The Petitioner proved by clear and convincing evidence that the Respondent is guilty of failing to account for and deliver the $500 earnest money deposit concerned herein. The Respondent repeatedly promised the seller that he would give her a share of the earnest money deposit as provided for in the

    contract. However, the Respondent never "made good on his promise." Although it may be argued that conflicting demands had been made upon him for the escrowed funds, the evidence clearly indicates that the Respondent entertained no doubt as to what person was entitled to delivery of the funds. The purchaser was informed by the Respondent that he would not receive a return of the earnest money deposit and the seller was promised that she would receive the forfeited earnest money deposit. The Respondent failed to provide the seller with her share of the forfeited earnest money deposit even after the seller obtained a judgment against him in civil court. The Petitioner is guilty of a violation of Section 475.25(1)(d), Florida Statutes as alleged in Count I of the Administrative Complaint.

    
    

23. In Count II of the Administrative Complaint, the Petitioner charges that the Respondent failed to maintain a deposit in a real estate brokerage escrow account or some other proper depository until disbursement thereof was properly authorized in violation of Section 475.25(1)(k), Florida Statutes. That section provides that the Commission may take disciplinary action if the licensee:

". . . 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 . or to deposit such funds in a trust or escrow account maintained by him with some bank or savings and loan association . wherein the funds shall be kept until disbursement thereof is properly authorized."

1. The Petitioner established- that the Respondent is guilty of the allegations contained in Count II of the Administrative Complaint. Although the $500 earnest money deposit was initially placed into Respondent's escrow account, the funds were thereafter removed. Subsequent to July 31, 1984, the Respondent's escrow account fell below $500 and remained below $500 through January 1, 1986. During such period, the escrowed funds were not delivered to either the purchaser or the seller.

   
   

2. In Count III of the Administrative Complaint, the Petitioner charges that Respondent is guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable

negligence, and breach of trust in a business transaction in violation of Section 475.25(1)(b), Florida Statutes. The Petitioner alleges that the Respondent utilized all or part of the $500 for his own use and benefit or for some other use and benefit not intended by the purchaser and seller and without the prior knowledge and consent of the purchaser and seller, the persons entitled to the deposit. In removing the funds from the escrow account, and in failing to deliver the escrowed funds to either party pursuant to the terms of the contract, a breach of trust by Respondent in a business transaction has been proven.

The Respondent is guilty of a violation of Section 475.25(1)(b), Florida Statutes.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is therefore,

RECOMMENDED that the registration of Fortunato Benjamin- Pabon as a real estate broker be revoked.

DONE and ORDERED this 18th day of June, 1986, in Tallahassee, Florida.

W. MATTHEW STEVENSON, 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 18th day of June, 1986.

COPIES FURNISHED:

Arthur R. Shell, Jr., Esquire Department of Professional

Regulation

400 W. Robinson Street Orlando, Florida 32801

Fortunato Benjamin-Pabon 2729 N. Ridgewood Avenue, #1

Tampa, Florida 33602

Harold Huff, Executive Director Department of Professional

Regulation

Division of Real Estate

P. O. Box 1900

Orlando, Florida 32802

Fred Roche, Secretary Department of Professional

Regulation

130 North Monroe Street Tallahassee, Florida 32301

Salvatore A. Carpino, Esquire General Counsel

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

Docket for Case No: 85-004089

Orders for Case No: 85-004089