Demand Letter Breach of Contract Sale Return Earnest Money by tzn10004

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Demand Letter Breach of Contract Sale Return Earnest Money document sample

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									                 IN THE SUPREME COURT OF FLORIDA
                           (Before a Referee)


                                      Supreme Court Case No.: SC09-1447
vs.                                   TFB File No. 2008-10,561(20A)

Robert David Royston, Jr.,


                   ENHANCEMENT PROGRAM

I.     RECOMMENDATION: Pursuant to Rules Regulating The Florida Bar 3-
5.3(h)(1), the referee adopts the parties conditional agreement for diversion to a
practice and professionalism enhancement program, a copy of which is attached
hereto and incorporated herein.

II.    NARRATIVE SUMMARY: Respondent, Robert D. Royston, Jr., was at
all times relevant to the allegations of the complaint filed in this action “of
counsel” to the law firm of Costello & Royston, LLP, now known as Costello,
Royston & Wicker, LLP (the “firm”), working as an independent contractor for
JOHN M. WICKER, P.A., a partner of the Firm.

      On or about September 12, 2007, PETER D. SOROFMAN, as “Buyer”, and
DGLT TUCKER STATION, LLC, a Florida limited liability company, as “Seller”
entered into a contract for the purchase and sale of the assets of Seller doing
business as Tucker Station (the “Contract”).

      Respondent was named as the escrow and closing agent in paragraph 31 of
the Contract.

      A copy of the Contract and a check from the Buyer for the earnest money
deposit of $6,000.00 was received by Respondent on September 18, 2007. The
earnest money was deposited into the Florida Bar IOTA trust account maintained

by Respondent in the ordinary course of business.

       On October 1, 2007, Respondent received from Buyer a demand for
payment of the earnest money deposit, alleging that he was not satisfied with proof
of the value of the business assets.

       As the result of the failure of employees of the Firm failing to follow direct
instructions and established policies with respect to the refund of earnest money
deposits, on October 3, 2007, Buyer received a refund of his earnest money deposit
without the knowledge of or approval by any attorney for the Firm. Respondent
admitted direct supervisory control of the employees who caused the misdelivery
of the earnest money deposit to Buyer.

       The morning of October 10, 2007, Respondent received a demand from
Seller dated October 9, 2007, for payment of the earnest money deposit.

       Immediately thereafter, upon pulling the file from the file drawer to file the
Seller’s demand, Respondent discovered the receipt given to Buyer, learned the
earnest money had been refunded to the Buyer the previous week and that the
check had been presented and paid by the bank at which his trust account was

       On October 10, 2007, Respondent prepared a written demand to Buyer
demanding repayment of the earnest money deposit, despite which demand Buyer
failed and refused to do.

       On October 10, 2007, Respondent prepared a written letter to the Seller,
setting forth the facts that lead to the mistaken delivery of the earnest money to the
Buyer, and advising that Respondent would address the matter of his liability to
Seller, if Seller was successful in establishing its right to be paid the earnest money
deposit against the Buyer.

       Despite request by Respondent, the Seller failed and refused to commence
an arbitration action pursuant to paragraph 33 of the contract to determine whether
or not Seller was entitled to receive the earnest money deposit as liquidated
under the terms of the contract for the alleged breach by Buyer or whether Buyer
rightfully cancelled the contract and was entitled to the return of earnest money

       The contract contained a provision in paragraph 34 regarding escrow
disputes: “If in doubt as to Agent’s duties or liabilities under the provisions of
Contract, Agent may at Agent’s option, continue to hold the subject matter of the
escrow until the parties mutually agree to its disbursement or until a judgment of a
court of competent jurisdiction shall determine the rights of the parties or Agent
may deposit same with the clerk of the circuit court having jurisdiction of the
dispute.” (emphasis added).

       On or about July 25, 2008, Respondent paid $6,000.00 of his own funds into
the registry of the court in connection with the filing of an action for declaratory
judgment against the Buyer and Seller to determine their respective rights to the
earnest money deposit.

       Respondent contests the allegations of The Florida Bar that Respondent
violated Rule 4-5.3(b)(3)(B). Respondent contends he did not know of the conduct
of the employees at a time when the consequences could be avoided or mitigated,
he did not fail to take reasonable remedial action, it is not possible to interplead
funds that are no longer in the possession of an escrow agent and that his liability
and that of the Firm to Seller, if any, was contractual.

      The Florida Bar contends that Respondent had the duty to interplead the
misdelivered funds and that his delay of nine months in paying $6,000.00 of his
own funds into the registry of the court constituted failure to take reasonable
remedial action.

      On or about July 25, 2008, that Respondent filed a Complaint with the
Twentieth Judicial Circuit of Florida regarding the disputed escrow funds and
deposited $6,000.00 into the court registry and, thereby, took appropriate remedial

III.   COSTS:      The Respondent shall pay the costs of this matter in the amount

       Administrative costs pursuant to
       Rule 3-7.6(q)(1)(I)                                $1,250.00

       TOTAL                                              $1,250.00

IV.    PPEP Fee: $750.00 Trust Accounting Workshop Registration Fee

V.    ATTENDANCE: Respondent shall attend Trust Accounting Workshop
within six (6) months of the date of the Supreme Court order approving this
Conditional Agreement for Diversion.

VI. EFFECT OF DIVERSION: The undersigned parties agree that diversion
to a practice and professionalism enhancement program shall close this file without
the imposition of a disciplinary sanction and diversion shall not constitute a record
of professional misconduct. The parties further agree that if Respondent
successfully completes the diversion recommended hereunder, this file shall
remain closed.

The parties agree that failure of the Respondent to successfully complete all
requirements of this diversion may result in this disciplinary file being reopened
and further proceedings being conducted under Rule 3-5.3(k), Rules Regulating
The Florida Bar. Failure to complete the practice and professionalism
enhancement program shall be considered as a matter of aggravation when
imposing a disciplinary sanction.

Pursuant to Rules 1-3.6(c) and (e), Rules Regulating The Florida Bar: Any person
now or hereafter licensed to practice law in Florida shall be deemed a delinquent
member if the member: (c) fails to pay the costs assessed in diversion or
disciplinary cases within 30 days after the disciplinary decision or diversion
recommendation becomes final, unless such time is extended by the Board of
Governors for good cause shown; (e) fails to pay fees imposed as part of diversion
for more than 90 days after the diversion recommendation became final, unless
such time is extended by the Board of Governors for good cause shown.
Delinquent members shall not engage in the practice of law in Florida nor be
entitled to any privileges and benefits accorded to members of The Florida Bar in
good standing.

Should this conditional agreement not be approved by the Supreme Court of
Florida, it and all statements herein are void and of no effect whatsoever.

DATED this 12th day of October 2009.

                                              ___s/Rick De Furia
                                              Honorable Rick A. DeFuria, Referee


Henry Lee Paul, Bar Counsel, The Florida Bar, 4200 George J. Bean Parkway,
Suite 2580, Tampa, Florida 33607

Robert David Royston, Jr., Respondent, Costello, Royston & Wicker, LLP, P.O.
Box 60205, Fort Myers, Florida 33906-6205

Kenneth Lawrence Marvin, Esquire, Staff Counsel, The Florida Bar, 651 E.
Jefferson Street, Tallahassee, Florida 32399-2300


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