STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL ) REGULATION, FLORIDA REAL ESTATE ) COMMISSION, )

)

Petitioner, )

)

vs. ) CASE NO. 81-2789

)

JOHN J. PICCIONE, JOHN J. ) PICCIONE REAL ESTATE, INC., ) and THERESA M. HARRIS, )

)

Respondents. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, WILLIAM B. THOMAS, held a formal hearing in this case on July 7, 1982, in Ocala, Florida. The transcript was received on August 20, 1982, and the parties were allowed 20 days thereafter to submit proposed findings of fact and conclusions of law. These have been filed by the Petitioner and have been adopted. Nothing has been submitted by or on behalf of John J. Piccione and John J. Piccione Real Estate, Inc. Theresa M. Harris filed a post-hearing statement consisting of argument and comment on the quality and quantity of the evidence, but the assertions made have been disregarded as contrary to the weight of the credible evidence.

APPEARANCES

For Petitioner: James S. Quincey, Esquire

Post Office Box 1090 Gainesville, Florida 32602

For Respondents: W. E. Bishop, Esquire John J. Piccione and Post Office Box 2105 John J. Piccione Real Ocala, Florida 32670 Estate, Inc.

For Respondent: Theresa M. Harris, in pro per Theresa M. Harris Route 1, Box 1308

Weirsdale, Florida 32695

By Administrative Complaint issued on October 16, 1981, the Petitioner seeks to revoke or suspend the real estate licenses of the Respondents, or otherwise discipline them, for alleged violation of Section 475.25(1)(b), Florida Statutes. This statute permits discipline of a real estate licensee who is guilty of fraud, misrepresentation, concealment, false promises, dishonest dealings by trick, scheme or device, culpable negligence, or breach of trust in

any business transaction. Specifically, the Complaint charges that the Respondents violated this statute in connection with the sale of real estate in Marion County, Florida, from Wilbur J. Hamilton to Mr. and Mrs. James Smith in December of 1980. The Respondents deny that any wrongful conduct occurred in connection with this real estate transaction.

The Petitioner presented four witnesses in support of the Administrative Complaint, together with ten exhibits which were received in evidence. The Respondents, John J. Piccione and Theresa M. Harris, testified in their own behalf.

FINDINGS OF FACT

Based upon the testimony and exhibits in evidence, and the observed candor and demeanor of the witnesses, the following are found as facts:

1. The Respondent John J. Piccione, is a licensed real estate broker, having been issued license No. DK006911.

   
   

2. The Respondent John J. Piccione, Inc., is a corporate real estate broker, having been issued license No. CW0069127.

   
   

3. The Respondent Theresa M. Harris, is a licensed real estate salesperson having been issued license No. FL0331486.

   
   

4. At all times material to the issues in the Administrative Complaint, the Respondent Theresa M. Harris was a licensed salesperson with the Respondent John J. Piccione Real Estate, Inc., under the brokerage license of the Respondent John J. Piccione.

   
   

5. Theresa M. Harris was the listing and selling salesperson in connection with a real estate transaction between Wilbur J. Hamilton, Jr., as seller, and Mr. and Mrs. James Smith, as buyers. This transaction was closed on December 16, 1980, in Ocala, Florida.

   
   

6. The closing was held in the offices of American Mortgage Funding Corporation, and was conducted by Thomas G. Sawaya, Esquire, as Closing Attorney. Present at the closing were the seller, Mr. Hamilton, the buyers, Mr. and Mrs. Smith, the Respondent, Theresa M. Harris, and Charles DeMenzes, President of American Mortgage Funding Corporation.

   
   

7. Prior to the time the Contract for Sale was executed by the seller and the buyers, the Respondent Harris was informed by a party named Mr. Alsobrook that he claimed an interest in the proceeds from the sale on the subject property.

   
   

8. The seller acknowledged that Mr. Alsobrook was entitled to a share of the proceeds.

   
   

9. After the contract was signed, but before closing, the Respondent Harris was contacted on two more occasions by Mr. Alsobrook concerning his interest in the proceeds of the sale.

10. On December 15, 1980, before the closing occurred, a Civil Complaint was filed against the seller in the Circuit Court of Marion County by Mr. Alsobrook regarding Mr. Alsobrook's interest in the property and the proceeds. In connection with this lawsuit a Lis Pendens was delivered to the Office of the Clerk of the Circuit Court on December 15, 1980, but was not filed in the Official Records Book of Marion County until December 17, 1980, in O.R. Book 1046, page 116, after the Deed from Mr. Hamilton to Mr. and Mrs. Smith had been recorded in O.R. Book 1046, page 73.

    
    

11. On December 15, 1980, the day before, the closing, Robert Duggan, who is Mr. Alsobrook's attorney had a telephone conversation with the Respondent Harris, in which he informed her that a lawsuit had been filed concerning Mr. Alsobrook's interest in the proceeds of the sale, and that a Lis Pendens had been or was going to be filed against the property.

    
    

12. This attorney requested that the closing be delayed until the dispute concerning the property could be resolved.

    
    

13. On December 16, 1980, before the closing, the Respondent Harris conveyed to the Respondent Piccione, her broker, the contents of her conversation with Mr. Alsobrook's attorney.

    
    

14. The Respondent Harris was instructed by the Respondent Piccione to attend the closing and not to mention either the call from Attorney Duggan, or the pending lawsuit, or the Lis Pendens, unless someone else brought these matters up.

    
    

15. At no time during the closing or prior to the closing did the Respondent Harris make known to the buyers, the lender, or the closing Attorney, the facts known to her regarding the call from Attorney Duggan, the pending lawsuit, or that a Lis Pendens had been or would be filed against the property.

    
    

16. The Respondent Piccione was aware of the fact that a Lis Pendens had been or was going to be filed against the property, but he instructed his salesperson, Respondent Harris, to withhold this information from the parties to the sales transaction at the time of closing.

    
    

17. The closing was completed and the lender, without knowledge of the pending suit and Lis Pendens, disbursed the net proceeds of $15,728.24 to Mr. Hamilton as the seller.

    
    

18. The closing Attorney and the lender were informed of the Lis Pendens and the pending suit by the attorney for Mr. Alsobrook the day after the closing took place.

    
    

19. Upon being informed of the pending lawsuit, the lender contacted the seller, who agreed to return the proceeds to the lender

    
    

20. The lawsuit was subsequently dismissed and the Lis Pendens discharged upon distribution of the net sale proceeds to Mr. Alsobrook in the amount of

    $6,385.19 and to Mr. Hamilton in the amount of $9,393.05.

    
    

21. The Respondents received a commission of $1,500 which was paid $900 to Mrs. Harris and $600 to Piccione Real Estate, Inc.

    CONCLUSIONS OF LAW

    
    

22. The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this action. Section 120.57(1), Florida Statutes.

    
    

23. Section 475.25(1)(b), Florida Statutes authorizes the Board of Real Estate to suspend or revoke a real estate license, or impose an administrative fine not exceeding $1,000 for each separate offense, if it finds that a licensee has been guilty of "fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust in any business transaction. . .". The Administrative Complaint charges the Respondents with violating this statute by failing to disclose to anyone connected with the transaction the facts known to them regarding the lawsuit concerning the property in question, and the fact that a Lis Pendens had been or was going to be filed against the property.

    
    

24. The testimony of the witnesses and the documents in evidence establish that the Respondents knew or should have known that there was a dispute concerning the subject property, and that a Lis Pendens had been or was going to be filed. These facts were known before the closing of the real estate transaction took place. A real estate broker is required:

    
    

    "to act in good faith toward his principal and is under a legal obligation to make full, fair and prompt disclosure to his employer of all facts within his knowledge which are or may be material to the matter in connection with which he is employed."

    
    

    "[H]e is bound to disclose to his principal any fact or circumstance known to him material to the transaction which might influence the principal in the conduct in the transaction."

    
    

    Hershey v. Keys Co., 209 So.2d 240, (Fla. 3rd DCA 1968). In addition to their duties to their principals, brokers are "statutorally charged with a duty to prospective buyers as well as to the principals whom they represent." Shelton

    v. Florida Real Estate Commission, 120 So.2d 191 (Fla. 2nd DCA 1960). These statutes were designed to protect the public and safeguard persons who put their money and trust in the hands of real estate brokers.

    
    

25. The failure to disclose material facts by a real estate broker has been held to result in a forfeiture of the broker's right to a commission, even though there was no financial loss or injury. Prall v. Corum, 403 So.2d 991, (Fla. 2nd DCA 1981).

    
    

26. The Florida Real Estate Commission has found a violation of Section 475.25(1)(b), Florida Statutes, where the broker failed to disclose or reveal known title defects, Florida Real Estate Commission v. Horace C. Sellars, FALR, March 12, 1979, page 210, (DOAH 78-749, January, 1979), and for failure to disclose that property was subject to a lawsuit, Department of Professional Regulation, Board of Real Estate v. Wayne A. Drizin, 4 FALR 310-A, (December, 1981).

27. In this case, the withholding of information concerning the pending lawsuit and Lis Pendens constitutes concealment, false pretenses, dishonest dealing by trick, scheme or device, or breach of trust in a business transaction, and is in violation of Section 475.25(1)(b), Florida Statutes. Whether a loss was sustained is immaterial to this disciplinary proceeding. Shelton, supra.

    
    

28. Each of the Respondents participated in and condoned the concealment of material facts at the time of the closing of the real estate transaction which was involved in this case. The Respondent Piccione directed the concealment and the Respondent Harris participated in the concealment. Essentially, there is no difference in the degree of culpability of each of the Respondents. Thus, there is no basis for assessing anything but equal penalties against them. 1/

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Respondent, Theresa M. Harris, be found guilty of

violating Section 475.25(1)(b), Florida Statutes, and that her license be suspended for one year.

It is further

RECOMMENDED that the Respondents, John J. Piccione and John J. Piccione Realty, Inc., be found guilty of violating Section 475.25(1)(b), Florida Statutes, and that their licenses be suspended for one year.

THIS RECOMMENDED ORDER entered on this 27 day of September, 1982.

WILLIAM B. THOMAS, Hearing Officer Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 27 day of September, 1982.

ENDNOTE

1/ Although Section 455.227(2), Florida Statutes, authorizes a fine in addition to any other discipline, the Respondents were not charged under this statute, the Petitioner did not plead it in the Administrative Complaint, and the matter was not noticed for hearing thereunder. Section 475.25(1), Florida Statutes, under which these Respondents were charged does not authorize multiple penalties. Linkous v. Board of Real Estate, 5th DCA Case No. 81-1343, decided August 4, 1982.

COPIES FURNISHED:

James S. Quincey, Esquire Post Office Box 1090 Gainesville, Florida 32602

W.E. Bishop, Esquire Post Office Box 2105 Ocala, Florida 32670

Theresa M. Harris Route 1, Box 1308

Weirsdale, Florida 32695

Frederick H. Wilsen, Esquire Department of Professional

Regulation - Legal Section

400 West Robinson Street Orlando, Florida 32801

Carlos B. Stafford Executive Director

Florida Real Estate Commission Post Office Box 1900

Orlando, Florida 32802

Samuel R. Shorstein, Secretary Department of Professional Regulation Old Courthouse Square Building

130 North Monroe Street Tallahassee, Florida 32301

Docket for Case No: 81-002789

Orders for Case No: 81-002789