STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL ) REGULATION, BOARD OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 82-281

) ED WASDIN, BETTY L. GREEN, ESTER L. ) TURNER, and ED WASDIN REALTY, INC., )

)

Respondents. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, R. L. Caleen, Jr.; held a formal hearing in this case on August 30, 1982, in Tallahassee, Florida.

APPEARANCES

For Petitioner: Bruce D. Lamb, Esquire

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

For Respondent W. Kirk Brown, Esquire Turner: 313 Williams Street

Post Office Box 4075 Tallahassee, Florida 32305

For all other Cathi C. O'Halloran, Esquire Respondents: Ben H. Wilkinson, Esquire

Post Office Box 3985 Tallahassee, Florida 32305

Issue Presented

Whether respondents' real estate salesmans' and brokers' licenses should be disciplined on charges of fraud, misrepresentation, false promises, false pretenses, concealment and dishonest dealing, and failure to properly supervise real estate salesmen.

Background

By administrative complaint dated January 26, 1982, petitioner, Department of Professional Regulation, Board of Real Estate (now Florida Real Estate Commission--" Department"), charged that respondents Ed Wasdin and Betty L. Green violated Subsection 475.25(1)(b), Florida Statutes (1979), and that respondent Ester L. Turner violated Subsection 475.25(1)(e). More specifically, the Department alleges that respondents Wasdin and Green are guilty of fraud,

misrepresentation, false promises, false pretenses, concealment and dishonest dealing, and that respondent Turner is guilty of failing to properly supervise real estate salesmen licensed by virtue of her broker's license. Based on these charges, the Department seeks to discipline respondents' real estate licenses.

Respondents disputed the charges and requested a Section 120.57(1) hearing.

On February 2, 1982, the Department referred this case to the Division of Administrative Hearings for assign-ment of a hearing officer. Thereafter, final hearing was set for August 30 and 31, 1982, in Tallahassee, Florida.

At hearing, the Department called, as witnesses, Charles W. Chellman, Simeon E. Dekle, Bertha Dekle, David Baker, Henry V. Mannheimer, Barbara A. Mannheimer, and Betty L. Vann. Petitioner's Exhibits 1/ No. 1-3, 5-7, 10-13, and 17 were received into evidence. The respondents offered Respondents' Exhibits 1/ No. 1-5 into evidence, each of which was received. In addition, the parties filed a prehearing stipulation, which has been made a part of the record.

Based on the evidence presented at hearing, the following facts are determined:

FINDINGS OF FACT I.

1. At all times pertinent to the charges, respondents have been licensed real estate salesmen and brokers. Respondent Ed Wasdin holds real estate salesman's license number 0341534. Respondent Betty L. Green 2/ held real estate salesman's license number 0341467 at the time of the alleged misconduct. She now is a licensed broker. Respondent Ester L. Turner holds broker's license number 0090375. At the time of the alleged misconduct, she was the qualifying broker for Ed Wasdin Realty, Inc., a registered corporate real estate broker. (Pretrial Stipulation; Testimony of Vann.)

   
   

2. During the time in question, Mr. Wasdin also owned and operated Ed Wasdin and Son, Inc., a licensed construction company, where Ms. Green served as his full-time secretary and office manager. She worked as a real estate salesman for Ed Wasdin Realty, Inc., on a part-time basis. (Testimony of Vann; Pretrial Stipulation.)

   
   

   II.

   
   

3. On November 11, 1980, Hank V. Mannheimer and his wife, Barbara, saw an Ed Wasdin Realty, Inc., "For Sale" sign in front of a house located at 721 West Crossway Road, Tallahassee, Florida. They called the telephone number listed on the "For Sale" sign and made an appointment for respondent Wasdin to show them the house. (Testimony of H. Mannheimer, B. Mannheimer.)

   
   

4. Later that day, Mr. Wasdin took the Mannheimers on a tour of the house. They then returned to Mr. Wasdin's office where respondent Green, as his secretary, prepared a standard real estate contract on a form published by the Florida Association of Realtors. The Mannheimers signed the contract as purchasers, and Ed Wasdin signed on behalf of Ed Wasdin and Son, Inc., the seller. The Mannheimers also delivered a $1,000 earnest money deposit check made payable to the seller, Ed Wasdin and Son, Inc. (Testimony of H. Mannheimer,

   B. Mannheimer; P-10, R-5.)

   III.

   
   

5. The real estate sales contract contained a "Termite Clause" granting the buyers the right to have the property inspected "to determine whether there is any active termite or wood destroying organisms in any improvement on said property, or any damage from prior termite or wood destroying organism to said improvements". (P-10.)

   
   

6. During the morning of January 15, 1981, respondent Green, on behalf of the seller, Ed Wasdin and Son, Inc., telephoned Helms Exterminating, Inc., and ordered a termite inspection of the house. David Baker, a termite inspection, was sent to the house to conduct the inspection that same morning. (Testimony of Vann, Baker.)

   
   

7. On inspecting the house, Mr. Baker found termite infestation and termite damage to the left front corner of the house. He then telephoned Ms. Green and told her that he had seen evidence of termites. He did not, however, tell her of any termite damage. She told him that she needed a "clear" termite report by that afternoon (since closing was scheduled for that afternoon or the next day) and authorized him to treat the house for termites. She did not speak to respondent Wasdin before authorizing the treatment. (Testimony of Vann.)

   
   

8. Mr. Baker testified that he told Ms. Green of termite damage to the house and that she promised to repair the damage in order to get him to issue a "clear" termite report that day. Ms. Green denied that Mr. Baker told of the damage and denied that she promised to make repairs. The testimony of Ms. Green is more credible and worthy of belief than that of Mr. Baker, whose previous statements about this incident have been incomplete, 3/ untrue or contradictory. In his termite inspection report of January 15, 1981, Mr. Baker indicated that no active termite infestation or visible termite damage was observed--the first statement was, at best, incomplete, the second was false. After discovering the termite damage, Mrs. Mannheimer questioned him twice. The first time, he told her that he had only found ter-mites on January 15, 1981, and mentioned nothing of termite damage. Later, when questioned again, he stated that he had also found termite damage. Further, Ms. Green was not authorized to promise structural repairs to a residence, and it is unlikely that she would have made such a promise when she did not know the extent of the damage and had no way of knowing the cost of repair. The conflict in testimony is therefore resolved in Ms. Green's favor. (Testimony of Vann, Baker.)

   
   

9. On January 15, 1981 after treating the residence for termites, Mr. Baker issued a termite inspection report indicating that he had observed no active termite infestation or visible damage. The report, on its face, indicated that it was to be mailed to Ed Wasdin Realty at 4432 Kensington Road, Tallahassee, Florida. The Mannheimers did not see the report until after the closing. (Testimony of Baker, Green; P-7.)

   
   

   IV.

   
   

10. In negotiating for and purchasing the house from Ed Wasdin and Son, Inc., the Mannheimers believed, and had reasonable grounds to believe, that they were dealing with realtors associated with Ed Wasdin Realty, Inc. The house was advertised by an Ed Wasdin Realty, Inc., "For Sale" sign; they called the number listed on the sign, and Mr. Wasdin showed them the property; a contract identified with the Florida Association of Realtors was executed which contained an Employment of [Real Estate] Agent clause; 4/ both Ms. Green and Mr. Wasdin worked for both companies; and the offices of the Wasdin realty and construction

    companies were located in the same model home. Although the offices in the model home were separately marked as construction or realty company offices, the conference room (where the closing took place) was not marked as belonging to either. In actuality, the sale of the residence was not a transaction on the account of Ed Wasdin Realty, Inc. The house was not listed with the realty company; a commission was not promised or paid to the realty company; and the deposit was not placed in the realty company escrow account. (Testimony of Vann, H. Mannheimer, B. Mannheimer.)

    
    

11. No evidence was presented to show that respondent Wasdin knew, or should have known, that the house in question had a termite infestation or termite damage. There is not a sufficient factual basis to impute such knowledge to him. Neither was any evidence presented to show that respondent Turner, qualifying broker for Ed Wasdin Realty, Inc., knew, or should have known, about the real estate transaction in question, including the termite infestation and damage. The evidence is insufficient to support a factual inference that Ms. Turner was negligent or derelict in her duty to supervise the realty company's operations. Although, in this case, a realty company's sign was used to advertise a property which was not listed with the company, the evidence does not show that this had ever happened before, that this was anything but an isolated mistake. The evidence is insufficient to support a finding that either Mr. Wasdin or Ms. Green saw the termite inspection report prior to closing, or affirmatively represented to the Mannheimers that no termites had been discovered during the January 15, 1981, termite inspection.

    5/

    
    

    CONCLUSIONS OF LAW

    
    

12. The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this proceeding. Section 120.57(1), Florida Statutes (1981).

    
    

13. License revocation proceedings, such as this, are penal in nature. The prosecuting agency bringing the charges must offer proof commensurate with the potential penalty facing the licensee:

    
    

    [T]he violation of a penal statute is not to be found on loose interpreta- tions and problematic evidence, but the violation must in all its impli- cations be shown by evidence which weighs as "substantially" on a scale suitable for evidence as the penalty does on the scale of penalties.

    
    

    Bowling v. Department of Insurance, 394 So.2d 165, 172 (Fla. 1st DCA 1981). Further, penal statutes are strictly construed, and any ambiguities must be construed in favor of the person charged. School Board of Pinellas County v. Noble, 384 So.2d 205, 206 (Fla. 1st DCA 1980).

    
    

14. Measured by these standards, it is concluded that the evidence is insufficient to demonstrate that respondents have violated Chapter 475, Florida Statutes (1979), as alleged.

    
    

15. The respondents' contention, however, that the license disciplinary provisions of Chapter 475 do not apply here is rejected. The purchasers reasonably believed that the transaction in question was being handled by

    realtors associated with Ed Wasdin Realty, Inc. The disciplinary provisions of Chapter 475 apply to licensees involved in a business transaction even if, as here, it is undertaken on the personal account of the licensee and not on his account as a real estate salesman. See, Sellars v. Florida Real Estate Commission, 380 So.2d 1052 (Fla. 1st DCA 1979).

    
    

16. Count I of the administrative complaint charges that respondent Green committed fraud, misrepresentation, false promises and false pretenses in a business transaction in violation of Section 475.25(1)(b), Florida Statutes (1979), by promising repairs to the residence as an inducement for a "clear" termite report, repairs which were never performed. But the evidence is insufficient to establish that Ms. Green made any such promise.

    
    

17. Count II charges that respondent Wasdin vicariously, through the actions of Ms. Green, committed fraud, misrepresentation, false promises and false pretenses in a business transaction in violation of Section 475.25(1)(b), Florida Statutes (1979). But since his liability is derivative, and Ms. Green has not been found guilty of wrongdoing, this count, too, must fail.

    
    

18. Count III charges respondent Wasdin with fraud, misrepresentation, breach of trust, false pretenses, concealment, and dishonest dealing by trick, scheme, or device, in violation of Section 475.25(1)(b), Florida Statutes (1979), because he knew or should have known, by virtue of Ms. Green's knowledge, of the wood-destroying termite infestation at the residence and did not inform the Mannheimers prior to closing. The evidence does not show that he had actual knowledge of the infestation. Neither may such knowledge be fairly imputed to him under the facts of this case. See, e.g., Bach v. Florida State Board of Dentistry, 378 So.2d 34 (Fla. 1st DCA 1980); Cohen v. Schott, 48 So.2d 154, 156 (Fla. 1950) ["An inquisition into a charge of violating the conditions of one's license is in no sense criminal but equitable in nature and should be adjudicated on equitable principles."] And, finally, it has not been shown that there was a duty on the part of Ms. Green to affirmatively inform the Mannheimers of a termite infestation at the residence when she believed it had been eliminated by the exterminating company.

    
    

19. Count IV charges respondent Turner, the qualifying broker for respondent Ed Wasdin Realty, Inc., with failing to properly supervise respondents Wasdin and Green. This allegation lacks sufficient evidentiary support.

    
    

20. No substantive charges whatsoever were filed against respondent Ed Wasdin Realty, Inc., so there is no lawful basis for disciplining its license.

    
    

21. The parties' proposed findings of fact have been carefully considered. To the extent they have been incorporated in this recommended order, they are adopted; otherwise, they are rejected as unsupported by the necessary quantum of evidence or unnecessary to resolution of the issues presented.

RECOMMENDATION

Based on the foregoing, it is RECOMMENDED:

That the administrative complaint against the respondents be dismissed.

DONE and RECOMMENDED this 15th day of October, 1982, in Tallahassee, Leon County, Florida.

R. L. CALEEN, JR. 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 15th day of October, 1982.

ENDNOTE

1/ Petitioner's and Respondents' Exhibits will be referred to as "P- " and "R-

", respectively. Pages of the transcript will be referred to as "Tr. 2/ Now known as Betty L. Vann. (Tr. 104.)

3/ He explained that he issued the report after he treated the structure, so that at the time he signed the report, later in the day, there was not the active infestation which he had observed earlier in the day. The report states the findings are based on what was visible at the time of the inspection. But no time is indicated, only a date. The report could just as easily be referring to the inspection conducted during the morning hours of January 15. If that is the case, the "clear" report is false. If it refers only to the second inspection conducted after the termite treatment, it should have so stated.

4/ Paragraph 11. "The Seller acknowledges that he has employed the Agent to find a purchaser and agrees to pay to said Agent for his services out of the first money received, the fee applicable on the sale of this type of property, or such sum as may have heretofore been agreed to in writing "

5/ Although Ms. Green knew that termites had been detected during the January 15, 1981, inspection, she honestly believed that the problem had been solved by the termite treatment which she had authorized the exterminator to perform. (Testimony of Vann.)

COPIES FURNISHED:

Bruce D. Lamb, Esquire Department of Professional

Regulation

130 North Monroe Street Tallahassee, Florida 32301

W. Kirk Brown, Esquire

313 Williams Street Post Office Box 4075

Tallahassee, Florida 32305

Cathi C. O'Halloran, Esquire Ben H. Wilkinson, Esquire Post Office Box 3985 Tallahassee, Florida 32305

C. B. Stafford, Executive Director Florida Real Estate Commission

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

Samuel R. Shorstein, Secretary Department of Professional

Regulation

130 North Monroe Street Tallahassee, Florida 32301

William M. Furlow, Esquire Florida Real Estate Commission

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

Docket for Case No: 82-000281

Orders for Case No: 82-000281