STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

RICARDO SANDA, )

)

Petitioner, )

)

vs. ) CASE NO. 76-2120

)

MICHAEL N. MYKYTKA, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, this cause came on for hearing before the Division of Administrative Hearings' duly designated Hearing Officer, James E. Bradwell, on February 3, 1977, in Fort Lauderdale, Florida.

APPEARANCES

For Petitioner: Louis B. Guttmann, III, Esquire

Florida Real Estate Commission 2699 Lee Road

Winter Park, Florida 32789

For Respondent: Mr. Michael N. Mykytka

c/o Hartford Homes, Inc. 12343 Southwest 267th Terrace Miami, Florida 33130

The Florida Real Estate Commission by its nominal Plaintiff, Ricardo Sanda, seeks to revoke or suspend the real estate license of Michael Mykytka, herein the Defendant, based on a one count administrative complaint filed May 4, 1976, alleging in pertinent part that the Defendant failed to advise certain prospective purchasers of real property to secure legal counsel to represent them in a legal transaction to check the merchantability of title or to obtain title insurance for the property and that by reason thereof, Defendant is guilty of fraudulent or dishonest dealings in a realty transaction in violation of Chapter 475.25(1)(a)(h), and that the Defendant is guilty of fraudulent and dishonest dealings in violation of rule 21V-10.01, FAC, and therefore in violation of Subsection 475.25(1)(d), Florida Statutes.

Based on my observation of the witnesses and their demeanor while testifying, I make the following:

FINDINGS OF FACT

1. The Defendant was at all times material herein registered with the Florida Real Estate Commission as a real estate salesman. (See Exhibit #1). On June 13, 1967, Defendant and Elizabeth Mykytka, his wife, as grantors, executed a warranty deed naming Kermit S. Thomas and Sandra L. Thomas, a/k/a Sandra L. Gray, as grantees certain real property located at 11091 Southwest 64th Street,

   Miami, Florida. The warranty deed was accompanied by an affidavit executed by Defendant and his wife reflecting that the subject property was free and clear of all liens, taxes, encumbrances, etc., except a first mortgage described on the face of the deed of approximately $12,672.35. Grantee, Sandra L. Gray, testified that the Defendant advised that he was a real estate salesman and that it was unnecessary for them (the Thomases) to obtain an abstract of title or to obtain title insurance inasmuch as he was a real estate salesman and would prepare all the necessary documents to effect the closing. Relying on such representations, the Grantees did not obtain legal counsel and the closing was consummated based on documents prepared by the Defendant. Approximately one year after the Thomases purchased the property, they attempted to obtain a home improvement loan on the property. The bank, upon examining the title to the property, discovered that there were several encumbrances on the property and rejected the Thomases' home improvement loan application. The bank's title search revealed a second mortgage in favor of Southern Industrial Bank for approximately $4,000.00 and two other encumbrances which appeared to be outstanding in favor of Beneficial Finance and H. H. G. Loans Company. During 1973, the Thomases placed the property on the market for sale and all prospective purchasers were unable to secure financing due to existing encumbrances against the property. The Thomases thereafter retained services of legal counsel who ultimately filed civil suit against the Defendant during January of 1974. Counsel for the Thomases discovered that there was an existing deficiency decree in favor of Prudential Insurance Company, in the amount of

   $4,010.22, plus interest. That decree was recorded during February of 1964 in Dade County and, on March 25, 1966, an assignment of the judgement pertaining to the above encumbrance and lien was executed and filed and the adjudgment was assigned to W. J. Driver, as administrator for the Veterans' Affairs section of the Veterans' Administration. During August of 1974, the Defendant satisfied all outstanding liens and encumbrances relative to the Thomases' property.

   
   

2. The Defendant testified that the above referenced deficiency decree resulted from a foreclosure on another property which he had sold to another couple who had left the state. As to the judgment assigned to the Veterans' Administration, Defendant testified that said judgment stemmed from a personal obligation which had no connection whatsoever with the Thomases' property. He testified that he advised the Thomases that inasmuch as they were both trying to pare the closing costs to a minimum, it was unnecessary for them to obtain an abstract or to obtain title insurance since he was a real estate salesman, however, he testified that he was unaware of the outstanding obligations relative to the subject property. The Defendant testified that he was at all times open and truthful in his dealings with the Thomases and that he satisfied all outstanding liens and encumbrances respecting this property. Respecting the liens in favor of Beneficial Finance and H. H. G. Loans Company, Defendant testified that they were personal obligations which were in no way related to the property in which the Thomases purchased.

   
   

3. The evidence reveals that the Defendant obtained a home improvement loan for the subject property from Stockton, Whatley, Davin and Company, on or about May 16, 1965 and that loan was satisfied on May 23, 1968, approximately one year after the closing date of the transaction involved herein. Respecting the mortgage outstanding in favor of Southern Industrial Savings Bank, the Defendant introduced a satisfaction of mortgage dated May 9, 1967. On August 19, 1974, the Defendant, pursuant to negotiations, obtained a receipt and covenant not to sue from the Veterans' Administration regarding the above referenced outstanding obligation in favor of the Veterans' Administration. I conclude that the Defendant in his duties and responsibilities as a salesman,

   was duty bound to fully apprise the Thomases of all outstanding liens and encumbrances. This he failed to do.

   
   

   Based on the foregoing findings of fact and conclusions, 1 hereby make the following:

   
   

   CONCLUSIONS OF LAW

   
   

4. The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this action.

   
   

5. The authority of the Commission is derived from Chapter 475, Florida Statutes.

   
   

6. The action of the Defendant as described above respecting his failure to advise, disclose or otherwise inform the Thomases of the above mentioned liens in favor of Stockton, Whatley, Davin and Company and the Veterans' Administration amount to a misrepresentation or fraud in a business transaction within the meaning of Subsection 475.25(1)(a), Florida Statutes.

   
   

7. The action of the Defendant by his failure to advise the Thomases to consult their attorney on the merchantability of title or to obtain title insurance amounts to a violation of Subsection 475.25(1)(h), Florida Statutes and is also violative of 21V-10.01, FAC and derivatively is a violation of Subsection 475.25(1)(d), Florida Statutes.

Based on the foregoing findings of fact and conclusions of law, I hereby make the following:

RECOMMENDATION

That the Defendant's registration with the Commission be suspended for a period of one year.

DONE AND ENTERED this 18th day of March, 1977, in Tallahassee, Florida.

JAMES E. BRADWELL, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304

(904) 488-9675

COPIES FURNISHED:

Louis B. Guttmann, III, Esquire Mr. Michael N. Mykytka Florida Real Estate Commission c/o Hartford Homes, Inc.

2699 Lee Road 12343 Southwest 267th Terrace Winter Park, Florida 32789 Miami, Florida 33130

Docket for Case No: 76-002120

Orders for Case No: 76-002120