Judges: STEPHEN F. DEAN
Agency: Department of Business and Professional Regulation
Latest Update: Apr. 14, 1983
Summary: Respondents are not guilty of fraud in complex real estate transaction in which they did all they said they would.
82-1850STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF PROFESSIONAL )
REGULATION, FLORIDA REAL )
ESTATE COMMISSION, )
)
Petitioner, )
)
vs. ) CASE NO. 82-1850
)
CARMINE AMATO and AMERIGO )
DI PIETRO, )
)
Respondent. )
)
RECOMMENDED ORDER
This case was heard pursuant to notice on January 25, 1983, in Fort Lauderdale, Florida, by Stephen F. Dean, assigned Hearing Officer of the Division of Administrative Hearings. This case arose on an Administrative Complaint filed by the Florida Real Estate Commission against the Respondents, Carmine Amato and Amerigo DiPietro.
APPEARANCES
For Petitioner: Fred Langford, Esquire
Florida Real Estate Commission
400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802
For Respondent: Lawrence F. Kranert, Jr., Esquire Carmine Amato 1000 South Federal Highway, Suite 103
Fort Lauderdale, Florida 33316
Amerigo DiPietro David F. Hannan, Esquire
3300 Inverrary Boulevard, Suite 200
Lauderhill, Florida 33319
The Administrative Complaint alleged that the Respondents had violated Section 475.25(1)(b), Florida Statutes, which provides that the Commission may suspend or revoke a license or impose an administrative fine 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 in this state or any other state. . .
Therefore, the factual issue is whether any of the representations made by the Respondents were misrepresentations, false, dishonest, etc.
Both parties have submitted conclusions of law which were received on February 25, 1983, and which have been considered in the writing of this order. To the extent that the proposed findings of fact have not been included in the factual findings in this order, they are specifically rejected as being irrelevant, not being based upon the most credible evidence, or not being a finding of fact.
FINDINGS OF FACT
Carmine Amato is a real estate broker holding license number 0110690, and is the broker for Wise Realty in Broward County, Florida, which he wholly owns. Amerigo DiPietro is a real estate salesman holding license number 0326813. At all times in question, DiPietro was employed by Wise Realty, and Amato was his supervising broker.
In August, 1980, DiPietro took a sales contract from Charles and Jennie Conroy for the sale of their home in Broward County, Florida, described as Lot 3, Block 5 of Margate Estates, Section 3.
DiPietro suggested to the Conroys that they could afford a larger home by selling their present house and using the equity to put a down payment on a new house.
The Conroys subsequently contracted to buy a larger and more expensive house in Broward County from the Hocenics, said house described as Lot 13, Block
8 of Kimberly Forrest.
DiPietro found buyers, the Meads, for the Conroys' house; however, the Meads were unable to qualify, and the contract did not close.
The Conroys were anxious to close on the Hocenics' house and, as a result, sought a loan from Security Pacific Finance Company, said loan being referred to as a "swing" loan. The Conroys used this swing loan to close on the Hocenics' house, and this loan was secured by a security interest in their old home and the Hocenics' home.
The Conroys were not induced in any manner by the Respondents to seek this swing loan.
Having obtained the loan, the Conroys closed on the Hocenics' house, moved out of their old house and into the Hocenics' house, and assumed financial responsibility for both homes. Because the Conroys were short $2400, DiPietro took a note from the Conroys payable from the proceeds of the sale of their house. This represented money due DiPietro, which the Conroys could not pay at closing.
DiPietro continued to attempt to sell the Conroys' old home and found another buyer, the La Serras. The La Serras qualified, but the Conroys could not raise $3400 needed to pay off their obligation at the closing of the sale of their old home. Because of this, the La Serra transaction did not close.
In an effort to save the deal and close the La Serra contract, DiPietro made every effort, even agreeing to take a note for the commissions due
to Wise's sales people, who represented both buyer and seller. The Conroys refused to close.
With the swing loan almost due, Mrs. Conroy asked DiPietro if he and Amato would buy their old house outright. Eventually, DiPietro and Amato agreed to buy the house and accept financial responsibility for the first mortgage if the Conroys would agree to certain conditions. DiPietro indicated from the outset that neither he nor Amato had sufficient cash to purchase the house outright, and that financing would have to be arranged. DiPietro also advised the Conroys that, if this financing could not be arranged, the swing loan would have to be extended, and that it would be necessary for the Conroys to work with Amato and him to arrange for the extension of this loan. The specific conditions which the Conroys would have to meet were as follow: (a) the Conroys would give Amato and DiPietro a quit claim deed to their old house; (b) the Conroys would do those things necessary to extend the swing loan another six months; and (c) DiPietro and Amato would assume immediate financial responsibility for the house and, during the six months' period, sell it or arrange for long-term financing.
The Conroys concurred in this agreement and executed a quit claim deed to their old house to the Respondents.
DiPietro tried three different companies, seeking substitute financing for the house. When he failed in this, DiPietro contacted Mr. Conroy about renewing the swing loan. Mr. Conroy accompanied DiPietro to Security Pacific to renew the swing loan.
DiPietro attempted to get Security Pacific to substitute any of a number of pieces of property owned by Amato and him for the Conroys' new house and to release its security interest in said house. Because of Security Pacific's excellent equity position in this new house, Security Pacific was unwilling to release its encumbrance on the Conroys' house. Security Pacific said it would release its interest in the Conroys' house only if the amount of the loan was paid down to an amount that the old house could secure. Neither Amato, DiPietro nor Conroy could afford to do this. Security Pacific said it would renew the loan only upon the Conroys' reapplication. Lastly, Security Pacific made clear that it still looked to the Conroys and to their new house as primary security on the swing loan.
During all this time, the Conroys' old home was vacant. It had been vandalized and had suffered significant damage which decreased its value. In addition, no yard maintenance had been performed during the period since the Conroys had moved out. To be salable, substantial repairs and maintenance had to be performed by DiPietro and Amato.
The revelation that Security Pacific looked to him and his wife for payment of the loan secured by their new house frightened Mr. Conroy. The Conroys were already financially strapped, having been responsible for the payments on both houses during this time. With the swing loan nearly due, and envisioning the loss of both houses and being left with an unsatisfied $28,000 debt, Conroy went to an attorney. The attorney advised Conroy not to join with DiPietro and Amato in extending the swing loan.
When the swing loan was not extended, Security Pacific commenced foreclosure proceedings. Amato and DiPietro kept up the payments on the first mortgage, although Mrs. Conroy had to complain at first when these payments were
late. The first three payments (July, August and September) were delayed following transfer from the Conroys to Amato and DiPietro.
DiPietro and Amato did not promise to assume sole responsibility for the swing loan. DiPietro's representation was that they would try to refinance the property, and that if they could not refinance it they would assume primary responsibility for payment of the swing loan if the Conroys would join with them in extending the swing loan.
Respondent Amato never saw or spoke to the Conroys and never made any promises which he did not fulfill.
When the foreclosure action commenced, DiPietro stepped up his effort to sell the Conroys' old house and, approximately six to eight weeks later, sold it after substantial repairs were completed.
The sales price was $57,000. At the time of the sale, approximately
$32,000 was owed on the house to Security Pacific, and approximately $21,000 was owed to Heritage Mortgage Company on the first mortgage. Respondent Amato had put approximately $2,000 into repairs on the house, and Wise Realty was owed a note of approximately $2400 representing commission on the Hocenic/Conroy sale.
CONCLUSIONS OF LAW
The Florida Real Estate Commission has jurisdiction to discipline licensed salesmen and brokers pursuant to the provisions of Chapter 475, Florida Statutes. The Division of Administrative Hearings has authority to enter this Recommended Order pursuant to Section 120.57, Florida Statutes.
The Florida Real Estate Commission charges the Respondents, DiPietro and Amato, with violation of Section 475.25(1)(b), Florida Statutes. This statute provides that the Florida Real Estate Commission may revoke, suspend or levy a civil fine against a licensee if the Commission finds that the 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 in this state or any other state, nation or territory.
The facts reveal that Respondent Amato never saw or spoke with the Conroys, never made any representations to them, and fulfilled all of the obligations which he undertook with regard to the transaction between himself, DiPietro and the Conroys. The facts show that he was late in paying Heritage Mortgage Company on the first mortgage; however, there is no indication that this was purposeful. Given the situation which existed, this failure does not constitute culpable negligence. The Florida Real Estate Commission abandoned in its proposed findings any suggestion that Amato violated Section 475.25(1)(b), Florida Statutes. Respondent Amato did not violate Section 475.25(1)(b), Florida Statutes.
Regarding Respondent DiPietro, the Administrative Complaint alleges that he made the following misrepresentations or false statements: (1) Wise Realty would pay off the swing loan in its entirety if the house hadn't been sold by August 1, 1981, and Wise would assume the entire debt, including the first mortgage; and (2) Wise Realty was unable to find a buyer, contrary to its representation that it could find a buyer for the Conroys home; and (3) DiPietro asked the Conroys to convey the house by quit claim deed to Wise Realty; and (4) the Conroys attempted to renew the swing loan; and (5) the attempt by the
Conroys to renew the swing loan was denied by Security Pacific because there were four names on the deed; and (6) the Conroys were led to believe that Wise Realty, Amato and DiPietro would pay the first and second mortgages; and (7) the Respondents did not pay the swing loan.
The testimony upon which the first allegation is based is that of Mrs. Conroy. When the contract for sale of the Conroys' home was entered into, there was no anticipation of the fact that the swing loan would be necessary or involved in the transaction. It is hardly likely, therefore, that DiPietro agreed to accept financial responsibility for the swing loan as an inducement to the Conroys to sell their home. It is not believable that DiPietro and Amato accepted responsibility for the Conroys' house, which had become at best a white elephant, out of the goodness of their hearts. It is concluded that DiPietro did indicate to the Conroys, as an inducement for them to contract to sell their house and to buy the Hocenics' house, that if the Conroys could not sell their house Wise Realty would buy it or otherwise assume financial responsibility for it. However, at the time this representation was made, the Conroys' house was not encumbered by the swing loan. Neither DiPietro nor Amato encouraged or induced the Conroys to obtain this loan. DiPietro did represent that he and Amato would assume responsibility for the Conroys' home under the specific conditions stated in the Findings of Fact. The facts support the conclusion that DiPietro and Amato did or attempted to do all that they were obligated to do under their agreement with the Conroys. It was the refusal of the Conroys to join with DiPietro and Amato in extending the swing loan that brought things to a halt. DiPietro and Amato could not afford to pay the swing loan, and the Conroys would not join with them to extend it. The result was that Security Pacific commenced foreclosure proceedings on both the Conroys' old home and their new home.
The next allegation is that Wise Realty was unable to find a buyer for the Conroys' home. To the contrary, the facts reveal that DiPietro and Wise Realty found two buyers for the Conroys' house. The second closing failed because of the Conroys inability to pay $3400 in cash. This allegation is not proven.
The next allegation is that DiPietro asked the Conroys to convey the house to the Respondents by quit claim deed. This representation is true; however, there is no allegation that this was wrong when DiPietro and Amato were assuming financial responsibility for the property. This allegation is not proven.
The next allegation is that the Conroys attempted to renew the swing loan and were denied by Security Pacific. The facts are to the contrary. The Conroys did not extend or renew the swing loan on the advice of their attorney. It was this refusal which prevented DiPietro and Amato from renewing the loan and eventually satisfying the debt. This allegation is not proven.
The next allegation was that the Conroys were led to believe that Amato and DiPietro would pay the first mortgage and the swing loan. DiPietro did indicate that he and Amato would eventually pay the first mortgage and the swing loan. This representation was contingent upon the Conroys' renewal of the swing loan if DiPietro could not obtain financing prior to the time the swing loan became due. When the Conroys did not join with the Respondents in extending the swing loan, the Respondents were released from their obligation because Security Pacific would not renew unless the loan was paid down or was secured by the Conroys' new home. After a delay in July, August and September payments, the Respondents continued to make payments on the first mortgage until
the house was sold. The allegation that Respondents did not pay the first mortgage and swing loan is not proven.
The last allegation was that the Respondents did not pay the swing loan. DiPietro did not agree to pay off the swing loan when it became due the first time. He promised to pay it or to satisfy it if the Conroys renewed it. The Conroys refused to renew the swing loan, and their refusal released him from the obligation to satisfy the swing loan. This allegation is not proven.
In summary, none of the representations made by the Respondent DiPietro were false, fraudulent, misrepresentative or dishonest. He and Amato performed all of the obligations which they were able to perform. The commencement of the foreclosure action by Security Pacific was not the fault of DiPietro or Amato but sprang directly from the Conroys' refusal to join in reapplying to extend the swing loan. DiPietro did not represent to the Conroys that he and Amato would pay the swing loan when it initially became due. The Conroys' refusal precipitated the foreclosure action, which immediately gave rise to the instant controversy.
RECOMMENDATION
Based on the foregoing Findings of Fact and Conclusions of Law, the following is recommended:
That the charges against the Respondent, Carmine Amato, be dismissed, it having been found that he had no contact with the Conroys, could not have made any representations to them, and is not guilty of Violating Section 475.25(1)(b), Florida Statutes; and
That the charges against the Respondent, Amerigo DiPietro, be dismissed, it having been found that he made no misrepresentations to the Conroys and therefore did not violate Section 475.25(1)(b), Florida Statutes.
DONE and RECOMMENDED this 14th day of April, 1983, in Tallahassee, Leon County, Florida.
STEPHEN F. DEAN, 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 14th day of April, 1983.
COPIES FURNISHED:
Fred Langford, Esquire
Florida Real Estate Commission
400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802
Lawrence F. Kranert, Jr., Esquire 1000 South Federal Highway,
Suite 103
Fort Lauderdale, Florida 33316
David F. Hannan, Esquire 3300 Inverrary Boulevard,
Suite 200
Lauderhill, Florida 33319
Harold Huff, Executive Director Florida Real Estate Commission
400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802
Frederick Roche, 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: 82-001850
Orders for Case No: 82-001850
| Issue Date |
Document |
Summary |
|
Apr. 14, 1983 |
Recommended Order
|
Respondents are not guilty of fraud in complex real estate transaction in which they did all they said they would.
|
