STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA REAL ESTATE COMMISSION, )

)

Petitioner, )

)

vs. ) CASE NO. 79-365

) JOHN G. WOOD and BRUNO PAIS )

)

Respondent. )

)

RECOMMENDED ORDER

This matter came on for hearing in Winter Haven, Florida, before the Division of Administrative hearings, by its duly designated Hearing Officer, Robert T. Benton, II, on May 24, 1979. The Division of Administrative Hearings received a transcript of the proceedings on June 6, 1979. At the hearing, the parties were represented by counsel:

APPEARANCES

For Petitioner: Fred R. Langford, Esquire

400 West Robinson Street Orlando, Florida 32802

For Respondent: Stephen F. Baker, Esquire and

John G. Wood, Jr., Esquire

200 Avenue K, Southeast, Suite 2 Winter Haven, Florida 33880

By administrative complaint filed January 22, 1979, petitioner alleged that on February 17, 1977, respondent Pais, a real estate salesman employed by respondent Wood, a real estate broker, "negotiated a contract for the sale of a residence owned by" respondent Wood to Mr. and Mrs. James D. Anderson; that the "ground under the patio and rear wall of the residence had sunk on two occasions prior to November 17, 1977"; that respondent Wood had filled "in such a way as to repair, cover and conceal the hole in the sunken ground under the patio"; that neither respondent informed the Andersons "of the sink hole or sunken condition of the property"; that, after they had signed the contract, the Andersons "learned that because of the sink hole or sunken condition of the property the bath tubs would not drain, the patio door would not close properly, and the rear wall of the house appeared to be caving in"; and that respondents' failure to disclose "the sink hole or sunken condition" makes them guilty of misrepresentation, concealment, dishonest dealing or of having violated a duty imposed upon them by law, all in violation of Section 475.25(1)(a), Florida Statutes (1978 Supp.)

FINDINGS OF FACT

1. At all pertinent times, respondent John G. Wood was a registered real estate broker and a registered general contractor; and respondent Bruno Pais was

   one of approximately 15 registered real estate salesmen employed by respondent Wood, trading as Wood Realty. At the time of the hearing, approximately 125 people were employed in respondent Wood's construction business, which had built some 3,000 houses.

   
   

2. John Wood and Associates, respondent Wood's construction firm, built a house at 903 Wakulla Drive in Winter Haven, Florida, on what had previously been a citrus grove. The house sits on a corner lot and adjoins a heavily travelled state road. In 1975, after the house had been built, respondent Wood learned that the ground underneath the patio near a glass door at the rear of the house had settled. He directed a construction superintendent to reinforce the footing underneath the house and to replace the patio. This repair proved ineffectual, however.

   
   

3. In the summer of 1976, respondent Wood engaged Ivan Dewitt King, Jr., a civil engineer and land surveyor with some 30 years' experience, to evaluate the house at 903 Wakulla Drive and to advise what should be done to repair the house. Mr. King examined the foundation and dug several test holes. He found that the foundation had deflected downward one-quarter to one-half inch and that the soil was softer where the deflection had occurred than elsewhere. Although the foundation had bowed, it had not cracked. There was no sinkhole in the area. The softness of the soil might have been the result of a tree's having been uprooted.

   
   

4. Mr. King recommended excavating under the existing foundation, pouring concrete to make a new, broader footing underneath the then-existing footing and, after the new footing had cured, placing jacks on it to jack up the original footing and hold it there until the space between the old and new footings was filled with concrete. Mr. King suggested a "twenty- four inch footer to go underneath the existing one, (T.56) and advised respondent Wood that taking these steps would solve the problem. In August of 1976, at respondent Wood's instance, Jeffrey N. Riner, who had been in the foundation and concrete business for some ten years,

   
   

   went in and dug out. . below the foundation and put like a three or four foot wide by about fifteen foot long solid concrete pad with steel across both ways coming up and out of it, and then. . took jacks, like twenty- ton jacks, and jacked the foundation and. jacked. . the slab back. . as close as possible to its original. . place, and then poured the concrete back underneath in between this foundation and the original foundation. (T. 65).

   
   

   Mr. Riner testified that, in his opinion, "that part of the house will never go anywhere." (T.65) After this second repair, respondent Wood observed the house and observed "no structural problems" (T.42) "other than minor cracks in the masonry and expansion cracks." (T.41)

   
   

5. Originally, respondent Wood had sold this house to Fred Crabill.

   Shortly before the second repair, respondent Wood took the house back as partial payment for another house he sold Fred Crabill. Some six months after the repair, on February 17, 1977, James D. and Erma C. Anderson signed an agreement to purchase the house. Driving by, Mr. Anderson had noticed the house and had thought about buying it, but decided to do so only after respondent Pais showed

   him the house. Respondent Pais was aware of the condition of the soil, that the foundation had deflected, and that repairs had been done. He had been given to understand that there was no longer any structural problem with the house. Mr. Anderson asked respondent Pais if there were anything wrong with the house, and respondent Pais assured him that there was nothing wrong.

   
   

6. When he first inspected the house, Mr. Anderson observed that the house was dirty, but noticed no other problems. After the Andersons moved in, they found that the bath tub did not drain properly. The drainage problem was not caused by settling of the house or deflection of the foundation, and was known to neither respondent until after the Andersons vacated the premises. After Mr. Anderson removed some sliding glass doors for cleaning, be had difficulty opening and closing the doors. The Andersons began noticing hairline cracks in a rear wall, two or three of which grew over time to be about one-quarter inch wide at their widest points. These cracks reflected minor setting of the soil underneath the house, attributable to vibration caused by nearby traffic.

   (T.43)

   
   

7. The Andersons never made a down payment on the house. Under their agreement with respondents, the sale was to be closed on or before April 3, 1977, with the Andersons making mortgage payments until the closing. The closing was postponed while the Andersons tried to sell other real property so as to be able to apply the proceeds to the house on Wakulla Drive. In September of 1977, respondents threatened to evict the Andersons unless they closed the transaction. On September 11, 1977, the Andersons, who had learned by then of the repairs previously done to the house, and who were worried about the cracks they had seen, moved out. Thereafter, a complaint was filed with petitioner.

   
   

8. In November of 1977, respondents caused some re- grouting to be done to repair cracks in the mortar first observed by the Andersons on a rear wall of the house. Subsequently, Lane A. Bohannon took the house in trade for other property. He knew that the foundation had been repaired at the time. Mr. Bohannon, who rents the house, was unaware of any problems with the house's settling or with the operation of the sliding glass doors during the approximately eight months that he had owned the house.

   
   

   CONCLUSIONS OF LAW

   
   

9. Petitioner contends that respondents' failure to disclose the "sunken condition of the property" makes them guilty of misrepresentation, concealment, dishonest dealing or of violating a duty imposed by law, all in violation of Section 475.25(1)(a), Florida Statutes (1978 Supp.). There was no showing that respondent Wood ever dealt directly with the Andersons, however; or that he failed to disclose any pertinent fact to respondent Pais, who did deal directly; or that he ever suggested to respondent Pais that any pertinent fact be concealed from any prospective buyer.

   
   

10. In contrast, respondent Pais, in response to a direct question, assured the Andersons that there was nothing wrong with the house. He made no mention of the loose soil on which he knew that the house stood. While he had good reason to believe that the deflection of the foundation had been remedied, he had no reason to believe other than that the soil underneath remained uncompacted. As a result of the loose soil, moreover, further cracks appeared in the masonry. The evidence showed respondent Pais to be guilty of concealment within the meaning of Section 475.25(1)(a), Florida Statutes (1978 Supp.).

RECOMMENDATION

Upon consideration of the foregoing, it is RECOMMENDED:

1. That petitioner dismiss the administrative complaint as against John G. Wood.

   
   

2. That petitioner suspend Bruno Pais' registration as a real estate salesman for thirty (30) days.

DONE and ENTERED this 26th day of June, 1979, in Tallahassee, Florida.

ROBERT T. BENTON, II

Hearing Officer

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

(904) 488-9675

COPIES FURNISHED:

Fred Langford, Esquire

Florida Real Estate Commission

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802

Stephen Baker, Esquire and John Wood, Jr., Esquire

Suite 2, 200 Avenue K, Southeast Winter Haven, Florida 33880

Docket for Case No: 79-000365

Orders for Case No: 79-000365