STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DIVISION OF FLORIDA LAND SALES ) AND CONDOMINIUMS, )

)

Petitioner, )

)

vs. ) CASE NO. 78-2210

)

GARY STEINMAN, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice an administrative hearing was held in the above styled cause on July 24, and July 25, 1979, before Delphene C. Strickland, Hearing Officer of the Division of Administrative Hearings, beginning at 1:00 p.m. on July 24, 1979. The record was closed on September 2, 1979, upon receipt of exhibits agreed to be furnished by Respondent. A transcript of said hearing was received by the Division of Administrative Hearings on September 4, 1979.

APPEARANCES

For Petitioner: William A. Hatch, Esquire

Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301

For Respondent: John W. McWhirter, Jr., Esquire

Post Office Box 2150 Tampa, Florida 33601

ISSUE

Whether the certificate of registration as a salesman of Respondent, Permit 2000S, should be revoked or suspended, or whether Respondent should be fined.

FINDINGS OF FACT

1. The Respondent, Gary Steinman, was a licensed lot salesman, who worked as an employee of Suncoast Highland Corporation for about eight (8) years prior to October, 1978. Respondent had begun to work as a salesman at Shadow Run, a subdivision owned by Suncoast Highland Corporation, in November of 1974. Shadow Run is the subdivision involved in the Administrative Complaint filed herein.

   
   

2. Respondent Steinman made application for renewal of his Land Sales Board license in August of 1978, but said license was not renewed for the reason that the broker bad not renewed his license. Respondent Steinman has had a suspended license since October of 1978, and has not been selling since that time.

3. On or about October 18, 1978, a notice to show cause why the Petitioner Division should not suspend or revoke the license of Respondent or impose a fine of not more than $1,000.00 was served on Respondent Steinman. A request for an administrative hearing was entered by Respondent's Counsel.

   
   

4. Respondent Steinman, as an employee of Suncoast Highland Corporation, attempted to sell and sold lots in Shadow Run subdivision from November of 1974, to October, 1978.

   
   

5. Mr. and Mrs. Fred Reed purchased a lot from Respondent, built a home upon it, and moved into the Shadow Run subdivision in November of 1975. Prior to the purchase of their lot, the Reeds were furnished a colored advertising map of the subdivision by Respondent Steinman indicating that underground utilities would be furnished the subdivision, that tennis courts and a boat ramp would be built in a recreational park, that the Lake Grady Road and Bridge District would be formed, and that assessments would be levied at a future date against each lot.

   
   

6. Respondent Steinman and the Reeds examined and viewed the large map together, and Respondent pointed out the placement of the proposed tennis court and boat ramp. Respondent told the Reeds that underground utilities and telephone lines would be provided and later pointed out black conduit pipes in the front of each lot, which he stated were to be used for said underground facilities. Respondent told the Reeds that the assessment cost indicated on the Florida Public Offering Statement dated September 16, 1974, and furnished by Respondent to the Reeds, would be a total of approximately $200.00.

   
   

7. Subsequently, the Reeds learned that underground utilities would not be provided. At the time of this hearing, no tennis court has been constructed, and the boat ramp is little more than a marshy opening at the water's edge. The roads are said by the Reeds to be in poor repair and not constructed or maintained properly, and street signs have just recently been placed.

   
   

8. Respondent's Exhibit 2 is a letter dated November 30, 1978, from an engineering firm stating that part of the streets of the subdivision were constructed in accordance with 1973 plans and were up for final inspection. At the time of this hearing the roads had not been accepted by the County.

   
   

9. The Reeds were told that the building restrictions would be enforced, but said restrictions were violated while Respondent Steinman was a member of the approving board. A house was constructed in the subdivision that violated the restrictions but was approved by Respondent Steinman, who was a member of the Architectural Board of Shadow Run. The Architectural Board at that time consisted of three (3) members: the President of Suncoast Highland Corporation, an engineer employed by the corporation, and Respondent Steinman.

   
   

10. Similar representations as to recreational facilities and underground utilities and telephone wires as were made to the Reeds were made to John Castellana, a purchaser and home owner in Shadow Run. Mr. Castellana was told by Respondent Steinman that a dirt dike in the lake would be removed, but at the time of this hearing said dike had not been removed. Mr. Castellana was told that the assessment on his lot by the Lake Grady Road and Bridge District would be much less than his estimated total of $600.00 or $700.00.

    
    

11. Similar representations as to recreational facilities, underground utilities and telephone lines, and assessments were made by Respondent Steinman to James Dovin, who purchased two (2) lots in April of 1975, from Respondent

    upon which to build a house. Mr. Dovin had not built his house at the time of this hearing and has filed a suit to require Suncoast Highland Corporation to buy back from him one lot. Mr. Dovin's other lot was bought back because of a buy-clause and lack of an offering statement.

    
    

12. Similar representations were made to Phillip Midulla, who bought two

    1. lots in May of 1975, and built a home, and to Mrs. Cherie Pacheco. Mrs. Pacheco was told by Respondent Steinman that there would be nature trails and a concrete boat ramp. She was furnished a receipt for the required HUD report but not the report itself. Mrs. Pacheco had read the public offering statement and was not misled by Respondent Steinman into believing the assessment would be only $100.00 to $200.00.

       
       

13. Mr. Chester Fennell, who purchased a lot in February of 1976, and began construction of his home the following May, was told by Respondent Steinman that Lake Grady was completely private and for the use of the subdivision home owners, that the above-ground utilities then in place were temporary in nature, and that the roads would soon be accepted by the County. Mr. Fennell's understanding from Respondent was that the assessment would be at most $200.00 or $300.00, and that he would be assessed only after the development was completed.

    
    

14. Mr. Alfred Vetrano purchased a lot from Respondent, and similar representations were made to him as to the recreational facilities, underground utilities, and lot assessment. Mr. Vetrano was also told that the earthen dike across Lake Grady, which was very close to his backyard and blocked his view of the lake, would be removed within a few months. Mr. Vetrano relied upon the representations of Respondent Steinman and purchased the lot, but the dike has not been removed as promised. Respondent Steinman later told Mr. Vetrano that a permit could not be obtained to remove the dike, but Mr. Vetrano was informed by the Southwest Water Management District that a permit could be obtained upon payment of $16.00. Mr. Vetrano had also been told that the subdivision would have a children's playground, but no playground exists at the time of this hearing.

    
    

15. Peter Scaglione, employed as Counsel for Suncoast Highland Corporation since August of 1976, was produced as the only witness for Respondent. The representations made by Respondent Steinman, which are the subject matter of this hearing, were made to purchasers between late 1974, and late 1978.

    
    

16. Mr. Scaglione testified that Suncoast Highland Corporation will soon be constructing a tennis court and another court when 400 lots are sold, that the corporation will construct a picnic area, and that some reconstruction will be done on the boat ramp, providing a proposed agreement is entered into with the Shadow Run Homeowners Association.

    
    

17. Respondent Steinman's employer, Suncoast Highland Corporation, represented by Mr. Scaglione, began receiving complaints about the representations concerning recreational facilities and other misrepresentations involving the Shadow Run subdivision in February of 1977. Mr. Scaglione was familiar with six (6) of the witnesses for the Petitioner Division and served as "middleman" between the corporation and the Shadow Run Homeowners Association, receiving for the corporation the complaints about Shadow Run and Respondent Steinman.

    
    

18. Mr. Scaglione testified that the assessment on the lots made by the Road and Bridge District was about $4,500.00 on the platted lots and $1,300 on

    the unplatted land. Because of the complaints of misrepresentation and fraud on the part of Suncoast Highland Corporation, Shadow Run, and Respondent Steinman, the assessment on each lot was reduced from $4,480.52 to the sum of $975.00, to be paid either in a lump sum or amortized over a period of approximately twenty- eight (28) years. This compromise was worked out some four (4) years after the lots began to be sold in Shadow Run.

    
    

19. A plan for correcting deficiencies in the roads of Shadow Run was presented for the fourth or fifth time to the Road and Bridge District by the owner of the subdivision a few days before this hearing, and it was learned that the County had inspected the roads and could not approve them. There were still thirteen (13) deficiencies to be corrected before approval of the roads would be considered.

    
    

20. Mr. Scaglione had no personal knowledge of the selling methods of Respondent Steinman and had not worked with Respondent.

    
    

21. Respondent Steinman testified in his own behalf, quoting what was told to him by Mr. Peterson, the President of Suncoast Highland Corporation, and a Mr. Estep, an engineer, but no witnesses were called to corroborate Respondent's statements.

    
    

22. Respondent denied that he had told purchasers that the total assessment would be approximately $100.00 to $700.00. He stated that after some two (2) years he stopped telling prospective buyers that there would be underground utilities, having learned in January of 1975, that there would be none. Respondent testified that he had furnished the Florida Public Offering Statement to all prospective purchasers, and that he knew of its contents, however said Statement is inconsistent with the representations of Respondent.

    
    

23. Respondent Steinman acknowledged that there were two (2) home owners on Lake Grady whose homes were not in Shadow Run. This allowed nonresidents of Shadow Run entrance to the lake, and therefore the lake was not a privately owned lake.

    
    

24. Respondent's main answer to the complaints against him was that he believed the representations of the President of Suncoast Highland Corporation and its engineer, and that the things Respondent told prospective buyers were true.

    
    

25. The various public offering statements on Shadow Run filed with the Petitioner Division did not provide information as to whether the utilities would be above ground or underground. The public statements indicated that recreational facilities are in Brandon, within eight (8) miles of the subdivision.

    
    

26. The promotional brochure, an attractive blue and yellow folder used to promote sales and either given to prospective purchasers or placed in the sales office where it can be easily secured, shows park and recreational areas on a large map of Shadow Run. The first brochure was revised, and the map of the revised brochure shows a portion of the lake as not included in the subdivision but a more extensive park area. The brochure states there will be protective restrictions and all roads will be paved and curbed, but unlike the first brochure the map shows outside access to the lake.

    
    

27. Both parties submitted proposed findings of fact, memoranda of law and proposed recommended orders. These instruments were considered in the writing

    of this Order. To the extent the proposed findings of fact have not been adopted in, or are inconsistent with, factual findings in this Order they have been specifically rejected as being irrelevant or not having been supported by the evidence.

    
    

    CONCLUSIONS OF LAW

    
    

28. The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this action pursuant too Section 120.57, Florida Statutes.

    
    

29. Section 478.31 Registration and regulation of salesmen. -- provides:

    
    

    1. A certificate of registration of a salesman may be suspended for a period of not more than 6 months or a fine imposed of not more than $500 upon a finding of fact showing that the salesman has:

       1. Violated any provisions of this chapter;

       2. Directly and knowingly engaged in any false, deceptive, or misleading promotion or sales method for the purpose of offering or disposing of inter- est in subdivided land;

       3. Made statements contrary to the information contained in the approved promotional publications and the current public offering statement;...

          
          

30. Section 478.31 further provides:

    
    

    1. The registration of a salesman may be revoked or suspended for a period of not more than 1 year or a fine imposed of not more than $1,000 upon a finding of fact showing that the salesman has:

       1. Persisted in the doing of any act for which his registration could be suspended;...

    
    

31. Respondent Steinman violated the foregoing statute by furnishing misleading promotional material to prospective buyers, which caused them to believe that various recreational and road facilities would be built promptly in the subdivision. Respondent misled prospective buyers into believing that the lake on the property was private and that improvements would be made promptly. Respondent knew the recreational facilities cited in the public offering statements referred to a town some eight (8) miles away from Shadow Run, but by his statements and references to the subdivision promotional brochure Respondent deceived prospective buyers into believing that tennis courts, a boat ramp and a park would be promptly installed.

    
    

32. Respondent Steinman knew or should have known that the County would not promptly accept the roads as indicated in the promotional brochure. Respondent knew there were no underground utility installations planned after January of 1975, but he continued to use underground utilities as part of his sales promotion. Respondent continued to sell lots for four (4) years while aware that roads were not being constructed as planned, that road signs were not installed, that the boat ramp was primitive, and that no tennis courts were being constructed.

    
    

33. The first lots in Shadow Run were sold more than four (4) years ago, and fifty (50) home owners now live in the subdivision. There are no

    underground utilities, the tennis court has not been built, there is no good boat ramp, and the roads have not been accepted by the County. The home owners were forced to join together to force an adjustment on the lot assessments, which they had been misled by Respondent Steinman into believing were to be much less than were ultimately assessed in 1979.

    
    

34. Respondent Steinman, as an experienced salesman for Suncoast Highland Corporation, either knew or should have known that the representations he was making as to the installations in the Shadow Run subdivision would not be promptly fulfilled, if at all. Respondent knew that the Florida Public Offering Statement was contrary to the promotional publications he gave to prospective buyers. Although much of the fault and misrepresentations by Respondent were caused by the negligence of the developers, Suncoast Highland Corporation, Respondent knew or should have known that prospective buyers relied on his representations. Failure to properly inform himself of the truth of statements made by his employer is a negligent act.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, the Hearing Officer recommends that the Respondent, Gary Steinman, be reprimanded and his license be suspended for a period of six (6) months from the date hereof.

DONE and ORDERED this 12th day of September, 1979, in Tallahassee, Leon County, Florida.

DELPHENE C. STRICKLAND

Hearing Officer

Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301

(904) 488-9675

COPIES FURNISHED:

William A. Hatch, Esquire John W. McWhirter, Jr., Esquire Department of Business 1776 Exchange National Bank Building

Regulation Post Office Box 2150 725 South Bronough Street Tampa, Florida 33601 Tallahassee, Florida 32301

================================================================= AGENCY FINAL ORDER

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

STATE OF FLORIDA DEPARTMENT OF BUSINESS REGULATION

DIVISION OF FLORIDA LAND SALES AND CONDOMINIUMS

DIVISION OF FLORIDA LAND SALES AND CONDOMINIUMS,

Petitioner,

vs. DOCKET NO. 78183RS

CASE NO. 78-2210

GARY STEINMAN,

(Salesman's Certificate of Registration - Permit No. 2000S issued 10-17-77)

Respondent.

/

FINAL ORDER

This matter concerns a dispute between this Agency and Respondent, Gary Steinman, a salesman who previously held a Certificate of Registration as a Salesman (Permit No. 2000S) issued by this agency, regarding whether Respondent should be fined. On October 18, 1978, a Notice to Show Cause why this agency should not revoke or suspend Respondent's Certificate of Registration or impose a fine of not more than one thousand dollars ($1,000) was issued and served upon Respondent.

A hearing officer of the Division of Administrative Hearings has conducted a formal proceeding in this matter pursuant to Section 120.57, Florida Statutes, and has submitted a recommended order, dated September 12, 1979, and the complete record in this matter.

IT IS THEREFORE ORDERED, as follows:

ISSUE

The issue as stated in the recommended order is hereby adopted as the issue before this agency.

FINDINGS OF FACT

1. The Findings of Fact contained in the recommended order are hereby adopted in toto as this Agency's Findings of Fact.

   
   

   CONCLUSIONS OF LAW

   
   

2. The Conclusions of Law contained in the recommended order are hereby adopted in toto as this Agency's Conclusions of Law.

BILLINGS ON EXCEPTIONS AND APPLICATION FOR ORAL ARGUMENT

The Respondent has filed Exceptions to the recommended order within the time provided by law. After full review of the entire record and careful consideration to the Exceptions, each exception is hereby rejected for the following reasons:

1. Exception No. 1 is rejected because the Hearing Officer was not bound by the strict rules of evidence in conducting the hearing. It was not wrong to admit probative evidence of matters which, if found to be true, would establish a violation of the statute, where there was no prejudice to Respondent's ability to meet such evidence.

   
   

2. Exception No. 2 is rejected because this Agency cannot reverse a finding of fact unless it finds that it was not based on competent substantial evidence. It appears that the Hearing Officer's findings of fact were based on competent substantial evidence.

   
   

3. Exception No. 3 is rejected. The Hearing Officer's ruling on the admissibility of the hearsay testimony proffered from Mr. Scaglione was based on Respondent's failure to offer any corroborating evidence from any corporate officer. This was a proper application of the hearsay rule under Section 120.58(a), Florida Statutes.

   
   

4. Exception No. 4 is rejected because this Agency cannot reverse a finding of fact unless it finds that it was not based on competent substantial evidence. It appears that the Hearing Officer's findings of fact were based on competent substantial evidence.

   
   

5. Exception No. 5 is rejected because the Conclusion of Law contained in the recommended order is a correct statement of the law.

   
   

6. Exception No. 6 is rejected because it is not specified as to what evidence outside the record was relied on, and such reliance does not appear from the recommended order.

Further, with regard to Exceptions numbers 1, 2, 3, 4 and 6, even if they were granted, in the totality of the record, they do not touch upon or establish prejudice to any substantial right of the Respondent.

Respondent's Application For Oral Argument is hereby denied.

PENALTY

The recommended order contains a Recommendation, based upon the Findings of Fact and Conclusions of Law, that the Respondent, Gary Steinman, be reprimanded and his Certificate of Registration as a salesman (Permit No. 2000S) be suspended for six (6) months. After careful review of the entire record and with due consideration to the Hearing Officer's Conclusion of Law that the Respondent continued to sell lots for four (4) years while misleading the purchasers into believing that the improvements would be completed.

IT IS HEREBY FURTHER ORDERED that:

Respondent's Certificate of Registration (Permit No. 2000S), which certificate expired on October 31, 1978, is hereby revoked.

DONE AND ORDERED this 3rd day of November, 1979, in Tallahassee, Leon County, Florida.

JAMES S. ROTH, Director Division of Florida Land Sales

and Condominiums

Department of Business Regulation State of Florida

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true copy of the foregoing FINAL ORDER has been furnished to GARY STEINMAN by U.S. Mail addressed to him in care of Suncoast Highland Corporation, 300 South Duncan Avenue, Suite 1000, Clearwater, Florida, 33515, and his attorney JOHN W. McWHIRTER, JR., in care of McWhirter & Bakas, P.A., 1776 Exchange National Bank Building, Post Office Box 2150, Tampa, Florida, 33601, this 3rd day of November, 1979.

Docket for Case No: 78-002210

Orders for Case No: 78-002210