STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA REAL ESTATE COMMISSION, )

)

Petitioner, )

)

vs. ) CASE NO. 79-553

) PD NO. 3447

RICHARD J. CULBERTSON, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, K. N. Ayers, held a public hearing in the above styled case on 24 May 1979 at St. Petersburg, Florida.

APPEARANCES

For Petitioner: Kenneth M. Meer, Staff Counsel

Florida Real Estate Commission

400 West Robinson Street Orlando, Florida 32802

For Respondent: Richard J. Culbertson

1728 Fourth Avenue North

St. Petersburg, Florida 33713

By Administrative Complaint filed 19 January 1979 the Florida Real Estate Commission, Petitioner or FREC, seeks to suspend or otherwise discipline the license of Richard J. Culbertson, as a real estate salesman, and licensee's right to practice thereunder. As grounds therefor it is alleged that Respondent obtained a V.A. certificate of reasonable value of a home owned by a corporation controlled by Respondent and altered this certificate of reasonable value by raising the evaluation in order to induce the purchaser to pay a higher price for the home. These acts are alleged to constitute fraud, misrepresentation and dishonest dealing in a business transaction in violation of Section 475.25(1)(a), Florida Statutes.

Four witnesses were called by Petitioner, two witnesses, including Respondent, were called by Respondent and 6 exhibits were admitted into evidence.

FINDINGS OF FACT

1. Richard J. Culbertson, Respondent, is registered with FREC as a real estate salesman and at all times here relevant was so registered.

   
   

2. In 1975 Respondent, with his wife, purchased residential property known as Lot 14, Block 61, Meadowlawn Tenth Addition in Pinellas County for $29,000. (Exhibit 6.) Some time thereafter the property was transferred to Aloha Pools,

   Inc., a corporation controlled by Respondent. The details of this transaction were not introduced into evidence but are not material to the issues here involved.

   
   

3. At the time he purchased this property, Respondent was aware that the previous owner had purchased the property some two years earlier for $27,000 and had spent approximately $1,000 installing wall-to-wall carpeting. After purchasing the property Respondent replaced the air conditioning units at a cost of approximately $1,000.

   
   

4. In 1975 Respondent leased this property to Elizabeth Coffee and her live-in companion, R. J. Connell, with an option to buy the property. The rental agreement provided for rent payments less than Respondent's mortgage payments. During the tenancy the tenants were frequently delinquent in their rental payments.

   
   

5. During the time the parties occupied the premises, Respondent was in frequent contact with Connell trying to finalize the sale of this property. At this time Respondent suffered from cataracts on both eyes of sufficient severity that he was legally blind.

   
   

6. In June 1976 Respondent requested Charter Mortgage Company to obtain a

   V.A. appraisal on this property for him. The property was duly appraised and Charter Mortgage mailed a copy of the appraisal to the real estate office where Respondent was still receiving mail but at which he was too blind to work.

   
   

7. Subsequent thereto a copy of this appraisal was given to Connell by Respondent. At some time between the mailing of the appraisal report to Respondent and the Complaint filed by Connell with FREC the appraisal had been changed to $31,500 from $28,500 contained on the original appraisal report. At this time Respondent was physically incapable of writing over existing numbers due to his deteriorated vision. He is unaware of anyone else who may have altered the appraisal report.

   
   

8. During the negotiations which were carried out between Respondent and Connell at their frequent meetings while the tenants were in possession, Respondent was asking $32,000 for the property and Connell was offering $31,000.

   
   

9. Finally, on August 2, 1976, Elizabeth Coffee executed a contract to purchase this property for $31,000. According to her testimony the price agreed upon was not related to or affected by the appraisal. At the time the contract to purchase was entered into she and Connell had occupied the house for some 15 months and certainly had full opportunity to become aware of any conditions that would detract from the value of the property.

   
   

10. At the closing which duly followed, the purchaser did not have enough money to satisfy the cash required over the mortgage assumed and Respondent took a note from Connell at no interest but due and payable one year from date of execution.

    
    

11. Shortly before this note became due Connell remembered the appraisal report looked like it may have been altered and he obtained a copy of the original appraisal from Charter Mortgage. He then reported to the FREC that Respondent had defrauded him and he has not made payment on the note he signed for the additional cash required at closing.

12. Respondent calculated the house's value and his asking price on the fact that the property had appreciated $2,000, less the cost of carpeting, while in the possession of the former owner and Respondent expected a like appreciation in value while he held the property. At no time did he ever consider selling the property for less than he had invested in it.

    
    

    CONCLUSIONS OF LAW

    
    

13. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of these proceedings.

    
    

14. Section 475.25(1), Florida Statutes, provides in pertinent part:

    
    

    The registration of a registrant may be suspended for a period not exceeding two years

    . . . upon a finding of facts showing that the registrant has:

    1. Been guilty of fraud, misrepresentation, concealment . . . dishonest dealing . . . in any business transaction . . .

       
       

15. Here no evidence was presented that Respondent altered the appraisal report and she fact that it was altered cannot be inferred to be an act of Respondent, particularly since at the time it Is alleged the appraisal was altered Respondent could not see well enough to have made the alteration. It would appear as likely, if not more so, that Connell himself altered the appraisal than it was altered by Respondent. Certainly Respondent was the more credible witness of the two.

    
    

16. Even if the appraisal was altered between the time it was forwarded by Charter Mortgage to Respondent and the delivery of a copy of the appraisal to Connell by Respondent, the evidence was uncontradicted that the appraisal report did not induce Ms. Coffee to purchase the property for the agreed price of

    $31,000.

    
    

17. From the foregoing it is concluded that the evidence submitted is inadequate to show that Respondent was guilty of dishonest dealing, etc. in a business transaction as alleged. There was not one scintilla of evidence that Respondent altered the appraisal report or that he even knew it was altered, let alone a preponderance of the evidence that he was responsible for the alteration. Any inference of guilt of Respondent imputed by his possession of an altered appraisal had even that been proven, is negated by the fact he could not have seen well enough to alter the appraisal report. It is therefore

RECOMMENDED that the Administrative Complaint filed 19 January 1979 against Richard J. Culbertson be dismissed and this case closed.

Entered this 8th day of June, 1979.

K.N. AYERS Hearing Officer

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

(904) 488-9675

COPIES FURNISHED:

Kenneth M. Meer Staff Counsel

Florida Real Estate Commission

400 West Robinson Street Orlando, Florida 32802

Mr. Richard J. Culbertson 1728 Fourth Avenue N.

St. Petersburg, Florida 33713

Docket for Case No: 79-000553

Orders for Case No: 79-000553