STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA REAL ESTATE COMMISSION, )

)

Petitioner, )

)

vs. ) CASE NO. 77-1391

) PD NO. 3215

CALVIN DAWSON THOMPSON, )

)

Respondent. )

)

RECOMMENDED ORDER

This case was heard pursuant to notice on November 17, 1977, in the Conference Room of the Florida Real Estate Commission Office in Orlando, Florida, by Stephen F. Dean, assigned Hearing Officer of the Division of Administrative Hearings. This case was presented on an administrative complaint filed by the Florida Real Estate Commission against Calvin Dawson Thompson, alleging that Thompson had violated Section 475.25(1)(a), and Rules 21V-10.01 and 10.02, Florida Administrative Code, by failing to advise a purchaser of an existing mortgage of which Thompson had knowledge and by selling property which could not be released prior to foreclosure for an amount less than the amount left due from the purchaser after sale.

The Florida Real Estate Commission introduced a copy of a Mortgage Deed (Exhibit 2) for the NE 1/4 of the SE 1/4, Section 19, Township 20 South, Range

32 East, Seminole County, Florida and an agreement for deed (Exhibit 5) for the SW 1/4 of the NE 1/4 of the SE 1/2, Section 19, Township 20 South, Range 32 East. Thompson admitted that he did not advise the purchasers under the agreement for deed of the existence of the mortgage deed. The issues raised were did Thompson violate Section 475.25(1)(a), and Rules 21V-10.01 and 10.02, F.A.C.

APPEARANCES

For Petitioner: Robert J. Pierce, Esquire

Florida Real Estate Commission 2699 Lee Road

Winter Park, Florida 32789

For Respondents: Calvin Dawson Thompson

Route 1, Box 1075

Oviedo, Florida 32765 FINDINGS OF FACT

1. Thompson, at the time in question, was a registered real estate broker.

   
   

2. Thompson purchased a one-half interest in the property described as the NE 1/4 of the SE 1/4, Section 19, Township 20 South, Range 32 East, Seminole County, Florida, from his business partner George K. Roller. Thompson purchased

   subject to the Mortgage Deed (Exhibit 2) between George and Mary Roller and Charles and Eva Markowicz, of which Thompson was aware.

   
   

3. Subsequently, Thompson sold the property described as SW 1/4 of the NE 1/4 of the SE 1/4, Section 19, Township 20 South, Range 32 East, to Benjamin E. Price, Sr. and Sarah B. Price, his wife, and Benjamin E. Price, Jr. and Pamela

   1. Price his wife, by an Agreement for Deed. Thompson did not advise the Prices of the existence of the mortgage deed covering the property which he sold the Prices.

      
      

4. Thompson did arrange to provide the Prices' attorney with a copy of the existing abstract on the property. Thompson did so without knowledge of its contents and without any obligation to do so under the contract. The attorney advised the Prices that he did not feel that it was necessary to update the abstract.

   
   

5. Subsequent to the sale, the Prices made all the payments due under the Agreement for Deed until they were served with a copy of the complaint in a foreclosure suit brought by the Markowiczs. This suit arose because of the failure of another purchaser, Fruend, to make payments on a wrap-around mortgage for another portion of the property covered by the Markowicz mortgage. Thompson was essentially unaware of the failure of the purchaser to make payments and the Markowicz's foreclosure action. Thompson had made payments to the Markowiczs due and owing under the mortgage deed on all portions of the property sold under agreements for deed, to include the portion sold to the Prices.

   
   

6. Under the terms of the Mortgage Deed, the SW 1/4 of the NE 1/4 of the SE 1/4 of the subject property could be released from the terms of the mortgage upon the payment of $10,000 upon the principle amount of the mortgage of

   $16,660. Under the Agreement for Deed, the Prices paid $4,500 down and agreed to pay $15,000 in equal monthly installments of $185.98. The property could have been released from the mortgage upon payment of an amount less than the remaining amount due from the Prices after sale.

   
   

   CONCLUSIONS OF LAW

   
   

7. The Florida Real Estate Commission has authority to file an administrative complaint against its registrant Thompson and to enter its final order pursuant to the provisions of Chapter 475 and Chapter 120, Florida Statutes.

   
   

8. The facts show that Rule 2IV-10.02 was not violated. The mortgage provided for release of the property upon payment of less than the amount left due after purchase.

   
   

   Rule 2IV-10.01 provides as follows:

   "Title. It shall be deemed fraudulent and dishonest dealing for any broker or salesman to sell or offer for sale any property where

   he has notice that the title is not merchantable or upon which he has notice that a mortgage

   or other lien exists, and about which he fails to inform the purchaser before any portion of the purchase price is paid."

   
   

9. This rule creates a presumption that a salesman or broker who sells property to which the title is not merchantable or upon which there is a

   mortgage of which he has notice and fails to inform the seller is involved in fraudulent or dishonest dealing. This rule per se cannot be violated.

   Enforcement of Rule 2IV-10.11 must be through Section 475.25(1)(a), Florida Statutes, which specifically relates to fraudulent or dishonest dealing.

   
   

10. The Florida Real Estate Commission presented a prima facie case of a violation of Section 475.25(1)(a) by showing that Thompson did not advise the Prices of the Markowiczs mortgage of which Thompson had knowledge.

    
    

11. Thompson's testimony was very forthright and candid. He admitted knowledge of the mortgage, and stated that he had no independent recollection of discussing it with the Prices. Thompson stated that the Prices had always made their payments in a timely fashion and that he in turn had made all payments to the Markowiczs as required by the mortgage. He further stated that he was unaware of the foreclosure action until he was also served. Thompson stated that he had not felt it was necessary to reveal the mortgage where there was an agreement for deed and where the sellers were represented by counsel and a title search was made. Thompson had himself arranged for the Markowiczs abstract to be sent from their attorney to the Prices' attorney. Thompson never examined the abstract or was unaware of its contents. The testimony of the Prices revealed that their attorney had recommended that the title not be further updated. This failure resulted in the mortgage not being discovered. Clearly, in providing the abstract Thompson was not attempting to conceal the state of the title nor was he obligated to provide an abstract under the terms of the sale. The evidence, therefore, tends to mitigate the charge of fraud and dishonest dealing. Thompson's conduct was inconsistent with the state of mind or intent to induce the Prices into the contract by concealing the mortgage.

    
    

12. Section 475.25(1)(a) under which Thompson is charged also addresses culpable negligence. By virtue of Thompson's neglect in disclosing the mortgage, the Prices purchased without full knowledge of the status of the title. This lack of knowledge prevented them from entering into the transaction fully aware of the potential dangers. Had they known this, they may have elected not to purchase. However, Thompson's failure to disclose, as state above, was not fraud in the inducement but culpable negligence. Thompson's culpable negligence is a violation of Section 475.25(1)(a), Florida Statutes.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, the Hearing Officer recommends that the registration of Thompson be suspended for a period of one year.

DONE and ORDERED this 6th day of December, 1977, in Tallahassee, Florida.

STEPHEN F. DEAN

Hearing Officer

Division of Administrative Hearings Room 530 Carlton Building Tallahassee, Florida 32304

COPIES FURNISHED:

Robert J. Pierce, Esquire Florida Real Estate Commission 2699 Lee Road

Winter Park, Florida 32789

Calvin Dawson Thompson Route 1, Box 1075

Oviedo, Florida 32765

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AGENCY FINAL ORDER

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

STATE OF FLORIDA DIVISION OF OCCUPATIONS

DEPARTMENT OF PROFESSIONAL AND OCCUPATIONAL REGULATION FLORIDA REAL ESTATE COMMISSION

FLORIDA REAL ESTATE COMMISSION,

An Agency of the State of Florida,

Petitioner, DOAH CASE NO. 77-1391 PROGRESS DOCKET

vs. NO. 3215

SEMINOLE COUNTY

CALVIN DAWSON THOMPSON,

Respondent.

/

FINAL ORDER

At a regular meeting of the Florida Real Estate Commission held at its Executive Headquarters in Orlando, Florida, on January 19, 1978,

Present: Maggie S. Lassetter, Chairman

Levie D. Smith, Jr., Vice-Chairman Arthur N. Hamel, Member

Appearances: Robert J. Pierce, Esquire

Attorney for Petitioner

W. H. Morrision, Esquire Attorney for Respondent

Calvin Dawson Thompson, Respondent

This matter came on for Final Order upon the Hearing Officer's Recommended Order, the Petitioner's and Respondent's Exceptions-thereto, and upon consideration thereof, together with a review of the complete record and oral

argument of both attorneys and statements made by the Respondent in person, and the Commission being fully advised in the premises, finds:

That according to the records of the Commission, the last address Respondent Thompson has registered with the Commission is as a broker-salesman, c/o Gus Miller Real Estate, Inc., Route 1, Box 1075, Oviedo, Florida 32765.

The Petitioner's Exceptions to the Hearing Officer's Recommended Order as related to the Conclusions of Law are well taken and should be accepted.

The Respondent's Exceptions to the Hearing Officer's Recommended Order are not well taken and should be rejected.

The Hearing Officer's Recommended Order is supported by competent, substantial evidence in the record and should be adopted as the Order of the Commission.

It is thereupon ordered that:

1. the Petitioner's Exceptions to the Hearing Officer's Recommended Order be, and the same are hereby accepted.

   
   

2. The Respondent's Exceptions to the Hearing Officer's Recommended Order be, and the same are hereby rejected.

   
   

3. The Hearing Officer's Findings of Fact, Conclusions of Law (as modified by Petitioner's Exceptions) and Recommended Order be, and the same are hereby adopted by the Commission.

The Hearing Officer's Recommendation to suspend the Respondent's registration for a period of one (1) year be, and the same is hereby adopted.

IT IS THEREUPON ORDERED that the Respondent, Calvin Dawson Thompson, be, and he is hereby, found guilty of violating Subsection 475.25(1)(a), Florida Statutes, as charged in the Administrative Complaint in Count 1, and for said violation the registration of Respondent Thompson is hereby suspended for a period of one (1) year.

DONE AND ORDERED at Orlando, Florida this 23rd day of January 1978.

Maggie S. Lassetter Chairman

Pierce D. Smith, Jr. Vice-Chairman

Anthony N. Hamel Member

I HEREBY CERTIFY that I mailed a copy of the foregoing Final Order to W. H. Morrision, Esquire, Attorney for Respondent, 620 Maitland Avenue, Altamonte Springs, Florida 32701 by United States Registered mail this 23rd day of January, 1978.

Executive Director

RJP/tm

NOTICE TO RESPONDENT: This Order shall become effective on the 22nd day February, 1978. However, you have the right of review by an appellate court, if you desire.

Please comply with this Order. We are including an envelope for your convenience in surrendering your registration certificate.

Docket for Case No: 77-001391

Orders for Case No: 77-001391