STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL )

REGULATION, DIVISION OF )

REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case No. 89-2517

)

CHARLES P. GRIMES, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the above-styled matter was heard before Joyous D. Parrish, a Hearing Officer with the Division of Administrative Hearings, on October 6, 1989, in Vero Beach, Florida. The parties were represented as follows:

APPEARANCES

For Petitioner: James H. Gillis, Senior Attorney

Department of Professional Regulation, Division of Real Estate

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

For Respondent: Glenn M. Blake

200 South Indian River Drive, Suite 101 Fort Pierce, Florida 34950

STATEMENT OF THE ISSUES

The central issue in this case is whether Respondent is guilty of the violations alleged in the administrative complaint dated January 19, 1989; and, if so, what penalty should be imposed.

PRELIMINARY STATEMENT

This case began on January 19, 1989, when the Department of Professional Regulation, Division of Real Estate (Department), filed an administrative complaint against the Respondent, Charles P. Grimes. That complaint alleged the Respondent was guilty of violating Sections 475.25(1)(b), (d), and (k), Florida Statutes. Specifically, the complaint charged that Respondent was 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; of having failed to account and deliver a deposit; and of having failed to maintain trust funds in his real estate brokerage escrow account or some other proper depository until disbursement was

authorized. On April 24, 1989, Respondent requested a formal hearing to review the matter. The case was forwarded to the Division of Administrative Hearings for further proceedings on May 5, 1989.

At the hearing, the Department presented the testimony of the following witnesses: Phillip Charles Crawford and John L. Burns. The Department's exhibits numbered 1 through 5 were admitted into evidence. The Respondent testified in his own behalf and offered exhibits numbered 1 through 3 which were admitted into evidence.

The transcript of the proceedings was filed on October 27, 1989.

Thereafter, the Department timely submitted a proposed recommended order which has been considered in the preparation of this order. Rulings on the proposed findings of fact are included in the attached appendix.

FINDINGS OF FACT

Based upon the prehearing stipulation filed by the parties, the testimony of the witnesses, and the documentary evidence received at the hearing, the following findings of fact are made:

1. The Department is the state agency charged with the responsibility of regulating and disciplining real estate licensees.

   
   

2. The Respondent, Charles P. Grimes, is, and has been at all times material to the allegations of the administrative complaint, licensed as a real estate broker in the State of Florida, license number 0034301.

   
   

3. In November, 1980, a contract for sale and purchase of real estate was drafted between Dorothy Langham Scott, seller, and Phillip Crawford, buyer. The contract, which was subsequently executed by both parties, provided that a deposit in the amount of $18,500 was to be held in escrow by Respondent.

   
   

4. A separate brokerage agreement between Respondent and the seller, executed November 30, 1980, provided that Respondent would receive a brokerage fee of ten percent of the total gross sales price. The brokerage agreement specified that "should the buyer default and not close the transaction in accordance with the Contract, the Broker shall not be entitled to any commission." The agreement further provided that Respondent would "use reasonable diligence and his best efforts to see that the transaction is closed in accordance with the executed Contract."

   
   

5. The contract described in paragraph 3 did not close.

   
   

6. Subsequently, the seller sued Respondent in the Circuit Court in Palm Beach County, Case no. 82-1974 CA (L) 01 B. On August 13, 1985, an amended final judgment was entered which provided, in part:

   
   

   The facts adduced at trial indicate that Crawford and Scott entered into a contract for the purchase and sale of certain real property, located in Putnam County and that for no apparent reason Crawford defaulted on the contract. The evidence is clear and convincing and unrefuted. Crawford has admitted several letters which he says were communicated to the attorney for Scott.

   However, the substantial weight of the evidence will not support his repudiation of the contract. Accordingly, it is clear that as between Scott and Grimes, the real estate agent who was allegedly holding the deposit under the provisions of the deposit receipt contract, Scott is entitled to a judgment for

   $18,500.00, plus its costs and attorney's fees.

   
   

7. John L. Burns, an attorney who represented the seller, Scott, during the contract negotiations in November, 1980- January, 1981, received a letter from Respondent on December 12, 1980. That letter, dated December 5, 1980, provided: "I have enclosed the signed contract and have received the deposit check from Dr. Crawford."

   
   

8. On or about January 29, 1981, Mr. Burns received a letter from Respondent which indicated that the contract would close in March, 1981.

   
   

9. Respondent did not advise the seller that the deposit on the Crawford/Scott contract was not in escrow. Respondent erroneously assumed that a deposit from the buyer (which had been deposited on another contract for sale and purchase) could be applied to the contract. That deposit, in the amount of

   $20,000.00, was not transferred and was not used to satisfy the amended judgment entered in Scott's favor.

   
   

   CONCLUSIONS OF LAW

   
   

10. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of these proceedings.

    
    

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

    
    

    The commission may deny an application for licensure, registration, or permit, or renewal thereof; may suspend a license or 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 fraud, misrepresentation, concealment, false pretenses, dishonest

    dealing by trick, scheme, or device, culpable negligence, or breach of trust in any business transaction. .

    * * *

    (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. . . 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...

    * * *

    (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. until disbursement thereof is properly authorized....

    
    

12. In this case, the Department has not established that the Respondent failed upon its receipt to place the deposit into his escrow account. The Respondent never received the deposit; therefore, he did not fail to deposit it. Consequently, Respondent is not guilty of violating Section 475.25(1)(k), Florida Statutes.

    
    

13. The Department has proven, by clear and convincing evidence, that the Respondent has violated Section 475.25(1)(b), Florida Statutes. Clearly, Respondent acted as the agent of the seller, Scott, and owed her a duty with regard to the transaction between Scott and Crawford. Respondent breached that duty by failing to inform Scott, or her attorney, that the property would not close as contemplated and that he did not hold the deposit as represented on the contract and on Respondent's letter to Burns. This failure demonstrates a breach of trust.

    
    

14. Respondent's assertion that the Crawford deposit on another contract could be applied to the Scott contract is without merit. Had that been the case, Respondent would still be in violation of the licensing statutes since he failed to notify the commission of conflicting demands for the deposit. Section 475.25(1)(d), Florida Statutes. As alleged in the administrative complaint, however, Respondent is not guilty of a violation of that section since he did not receive the deposit. Consequently, he could not fail to deliver what he did not have.

    
    

15. Rule 21V-24.001, Florida Administrative Code, provides the disciplinary guidelines regarding violations of Section 475.25, Florida Statutes. That rule specifies the maximum penalty for a violation of Section 475.25(1)(b), Florida Statutes, to be up to 5 years suspension or revocation in addition to a fine up to $1000.00.

RECOMMENDATION

Based on the foregoing, it is

RECOMMENDED:

That the Department of Professional Regulation, Florida Real Estate Commission, enter a final order finding the Respondent guilty of the violation of Section 475.25(1)(b), Florida Statutes, imposing an administrative fine in the amount of $1000.00, suspending his license for a period of 60 days, and placing the Respondent on probation for a period of two years. It is recommended that the Respondent be found not guilty of the other alleged violations.

DONE and ENTERED this 18th day of December, 1989, in Tallahassee, Leon County, Florida.

JOYOUS D. PARRISH

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32301

(904)488-9675

Filed with the Clerk of the Division of Administrative Hearings this 18th day of December, 1989.

APPENDIX TO CASE NO. 89-2517

RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE DEPARTMENT:

1. Paragraphs 1 through 4 are accepted.

2. With regard to paragraph 5, it is accepted that on or about November 30, 1980, Respondent was attempting to procure the contract described; however, the exact date the parties executed the contract is not known. The contract was ultimately executed by both parties but did not close. Consequently, the proposed fact, as written, is not supported by the record.

3. Paragraphs 6 and 7 are accepted.

4. With regard to paragraph 8, it is accepted that the contract did not close and that a court of competent jurisdiction determined that the deposit should be awarded the seller; otherwise, the paragraph is rejected as outside the scope of this record.

5. Paragraph 9 is accepted but is irrelevant.

6. Paragraph 10 is accepted.

7. Paragraph 11 is rejected as irrelevant.

8. Paragraph 12 is accepted.

RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE RESPONDENT:

None submitted.

COPIES FURNISHED:

James H. Gillis Senior Attorney

Department of Professional Regulation, Division of Real Estate

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

Glenn M. Blake

Blake & Torres, P.A.

200 South Indian River Drive Suite 101

Fort Pierce, Florida 34950

Darlene F. Keller Division Director

Department of Professional Regulation, Division of Real Estate

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

Kenneth E. Easley General Counsel

Department of Professional Regulation

1940 North Monroe Street Tallahassee, Florida 32399-0792

=================================================================

AGENCY FINAL ORDER

=================================================================

STATE OF FLORIDA DEPARTMENT OF PROFESSIONAL REGULATION

FLORIDA REAL ESTATE COMMISSION

DEPARTMENT OF PROFESSIONAL REGULATION, DIVISION OF REAL ESTATE,

Petitioner,

vs. CASE NO. 0160166

DOAH CASE NO. 89-2517

CHARLES P. GRIMES,

Respondent.

/

FINAL ORDER

On January 16, 1990, the Florida Real Estate Commission heard this case to issue a Final Order.

Hearing Officer Joyous D. Parrish of the Division of Administrative Hearings presided over a formal hearing on October 6, 1989. On December 18, 1989, she issued a Recommended Order, which is adopted by the Florida Real Estate Commission as to all Findings of Fact and Conclusions of Law. A copy of this Recommended Order is attached hereto as Exhibit A and made a part hereof.

However, upon a complete review of the record, the Florida Real Estate Commission finds that the Recommended Penalty should be rejected, in part, for the following reason: The penalty of probation was one not authorized by statute at the time the violation occurred.

Therefore, for the reason cited above, the Florida Real Estate Commission ORDERS:

1. That the Respondent pay an administrative fine of $1000.

   
   

2. That the license of Charles P. Grimes be suspended for a period of sixty (60) days.

This Order shall be effective 30 days from date of filing with the Clerk of the Department of Professional Regulation. However, any party affected by this Order has the right to seek judicial review, pursuant to s. 120.68, Florida Statutes, and to Rule 9.110, Florida Rules of Appellate Procedure.

Within 30 days of the filing date of this Order, review proceedings may be instituted by filing a Notice of Appeal with the Clerk of the Department of Professional Regulation at 400 West Robinson Street, Suite 309, Orlando, Florida 32801. At the same time, a copy of the Notice of Appeal, with applicable filing fees, must be filed with the appropriate District Court of Appeal.

DONE AND ORDERED this 16th day of January, 1990 in Orlando, Florida.

Darlene F. Keller, Director Division of Real Estate

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true copy of the foregoing was sent by U.S. Mail to: Glenn M. Blake, Esquire, Blake & Torres, P.A., 200 South Indian River Drive, Suite 101, Ft. Pierce, Fl 34950; to Hearing Officer Joyous D. Parrish, Division of Administrative Hearings, 1230 Apalachee Parkway, Tallahassee Fl 32399-1550; and to James Gillis, Esquire, DPR, Post Office Box 1900, Orlando, Fl 32802, this day of , 1990.

(not dated)

Director

Docket for Case No: 89-002517

Orders for Case No: 89-002517