Court Opinion

ID: 6922099
Source: CourtListenerOpinion
Date Created: 2022-07-23 23:05:42.643563+00
Date Added: 2024-06-11T16:06:49.753561
License: Public Domain

THORNTON, J.,
specially concurring.
I concur in remanding this proceeding, but differ with the reasoning of the prevailing opinion in one important respect.
I would not agree with the conclusion that there is no law or regulation which prohibits a real estate broker from maintaining a "trust savings account” in addition to his statutory trust fund account. In my opinion the practice of Dean Vincent, Inc. (DVI) to transfer funds to such account was in violation of ORS 696.240 and Oregon Administrative Rules, ch 863, § 10-025.
ORS 696.240 provides as follows:
"Every person, partnership or corporation licensed as a real estate broker, who does not immediately place all funds entrusted to him in his capacity as a real estate broker by his principal or others in a neutral escrow depository in this state, shall maintain a trust fund account with some bank or recognized depository located in this state and place all such entrusted funds therein upon receipt. The Real Estate Division shall establish rules and regulations to provide for records to be maintained and the manner in which such deposits shall be made.”
The rules of the Real Estate Division so far as pertinent here provide:
"All moneys of whatever kind and nature pertaining to real estate transactions as defined in ORS 696.010 belonging to others and accepted by the broker while acting in his capacity as a broker, shall be deposited in a neutral escrow depository or in a separate bank account to be entitled CLIENT’S TRUST ACCOUNT * * * and shall be retained in this bank account until the transaction involved is consummated or terminated, at which time the broker shall account for the full amounts received. * * *” OAR 863-10-025(1).
*926As I read the above statute and regulation, DVI had no statutory authority to deposit funds obtained from customers in connection with real estate transactions anywhere but in either (a) a "neutral escrow depository,” or (b) the statutory "trust fund account.” DVI would have no more authority to transfer these funds to another account than it would to invest them in the stock market or in United States savings bonds. The violation was complete when DVI transferred these funds to the savings account. As I view this issue, we do not need to go into the question of who is entitled to the interest earnings, or whether the general law of trusts applies in these circumstances. Further, I do not necessarily agree with the conclusion in the prevailing opinion on this latter issue. See, 10 Am Jur2d 320, Banks, General and Special Deposits § 360 et seq (1963).
Except as indicated above I concur in the prevailing opinion and join in the remand.