STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL ) REGULATION, FLORIDA REAL )

ESTATE COMMISSION, )

)

Petitioner, )

)

vs. ) CASE NO. 87-2902

)

ERIC MARTEK, )

)

Respondent. )

)

RECOMMENDED ORDER

The formal administrative hearing in this case was held before William C. Sherrill, Jr., Hearing Officer, in Orlando, Florida, on March 28, 1988. The issue in this case is whether the Respondent, Eric Martek, has violated sections 475.25(1)(b) and (d), Fla. Stat., by failing to refund a deposit to buyers in a real estate transaction or to initiate arbitration or civil court proceedings to settle the dispute. Appearing for the parties were:

APPEARANCES

For the Petitioner: Arthur R. Shell, Esquire

DPR-Division of Real Estate

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802

For the Respondent: Eric Martek, Pro Se

5118 South Federal Highway Stuart, Florida 33494

The Petitioner presented 3 exhibits which were admitted into evidence, and the testimony of Randy Schwartz, Kenneth P. Grant, and Mary E. Grant. The Respondent presented no exhibits, and his own testimony. There is no transcript. The parties have not submitted proposed findings of fact and conclusions of law although twenty-one days was requested and granted for the filing of such proposed orders.

FINDINGS OF FACT

1. The Respondent, Eric Nartek, is now, and in the years relevant to this case, 1984 and 1985, a licensed real estate broker.

   
   

2. On about August 6, 1984, Kenneth P. Grant and Mary E. Grant gave to Mr. Martek a deposit of $1,000 (in two payments) as deposit for the purchase of a condominium from Goldenrod Realty Company.

3. At that time, Mr. Nartek was the broker and president of Goldenrod Realty Company.

   
   

4. Through no fault of Mr. and Mrs. Grant, closing of the sale of the condominium was prevented due to a cloud on title.

   
   

5. Subsequently, on March 21, 1985, Mr. and Mrs. Grant demanded return of their $1,000 deposit.

   
   

6. Mr. Martek's office manager, who worked under Mr. Martek's supervision, disbursed the $1,000 deposit to pay interest expenses of the developer, expenses which were not in any way an expense of the Grant's contract for sale. Mr. Martek asserted that he reviewed the disbursements from the escrow account every week and that he was in Boca Raton during this period, and not physically in the office. He discovered the disbursement after the fact. The disbursement was made to the developer by the office manager upon the request of the attorney for the developer. The office manager did not contact Mr. Martek before making the disbursement.

   
   

7. Mr. Martek allowed his office manager to make disbursements from escrowed deposits without his prior review and approval.

   
   

8. Mr. Martek requested an escrow disbursement order from the Florida Real Estate Commission, and that request was denied by letter dated June 24, 1985, since there was no contract closing date. The letter advised Mr. Martek that he immediately use one of the other two alternatives under section 475.25(1)(d), Fla. Stat., to either arrange for arbitration or to place the dispute before a civil court.

   
   

9. Mr. Martek received the letter of June 24, 1985. He did not initiate either alternative.

   
   

10. The $1,000 deposit has not been returned to Mr. and Mrs. Grant.

    
    

    CONCLUSIONS OF LAW

    
    

11. The Division of Administrative Hearings has jurisdiction of the subject matter and of the parties.

    
    

12. Mr. Nartek failed to exercise even slight care in the protection of escrow money. Review of disbursements after disbursement by some else is ineffective to prevent improper escrow disbursements since the review comes too late to prevent the loss.

    
    

13. The Respondent has violated section 475.25(1)(b), Fla. Stat., by culpable negligence in a business transaction in Florida by failing to supervise and to prevent the loss of the Grants' $1,000 deposit.

    
    

14. The Respondent has violated section 475.25(1)(d), Fla. Stat., by failing, upon the demand of the Grants to return their $1,000 deposit. The demand was justified due to the cloud upon the title that prevented closing on the time set for closing. The Respondent in equity and law had no right to keep the $1,000 deposit. The Respondent presented no credible evidence that there was any legitimate dispute as to the right of the Grants to have their deposit returned, and, in any event, failed to resolve any doubts in this dispute by one of the three methods set forth in that statute.

15. It should be noted that Mr. Martek was the president of the seller, Goldenrod Realty Company. The transfer of the sales deposit to pay the development debt of the seller, an entity that was operated by Mr. Martek, thus was more serious because of Mr. Martek's relationship to the seller. For this reason, the penalty should be more severe.

RECOMMENDATION

For these reasons, it is recommended that the Petitioner enter its final order finding the Respondent in violation of sections 475.25(1)(b) and (d), Fla. Stat., and suspending his real estate license for one (1) year.

DONE and RECOMMENDED this 13th day of May, 1988, in Tallahassee, Florida.

WILLIAM C. SHERILL, JR.

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 13th day of May, 1988.

COPIES FURNISHED:

Arthur R. Shell, Esquire DPR-Division of Real Estate

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802

Eric Martek

5118 South Federal Highway Stuart, Florida 33494

Darlene F. Keller Executive Director

Florida Real Estate Commission

400 West Robinson Street Post Office Box 1900 Orlando, Florida, 32802

William O'Neil General Counsel

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32399-0750

Docket for Case No: 87-002902

Orders for Case No: 87-002902