Judges: ARNOLD H. POLLOCK
Agency: Department of Business and Professional Regulation
Latest Update: Sep. 22, 1983
Summary: Evidence was sufficient to establish fraud or misrepresentation in one case but not in the other.
83-0139.PDFSTATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF PROFESSIONAL REGULATION, ) FLORIDA REAL ESTATE COMMISSION, )
)
Petitioner, )
)
vs. ) CASE NO. 83-139
) GUSTAVE A. MILLER and PAMELA MICHEALS, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice, an administrative hearing was held before Arnold H. Pollock, Hearing Officer with the Division of Administrative Hearings, on April 27, 1983, in Orlando, Florida. The issue for determination was whether Respondents' licenses to practice real estate in Florida should be revoked, suspended, or otherwise disciplined because of alleged violations of Florida Statutes as contained in the Administrative Complaint dated December 8, 1982.
APPEARANCES
For Petitioner: Tina Hipple, Esquire
Florida Real Estate Commission Post Office Box 1900
Orlando, Florida 32802
For Respondent: Robert W. Olsen, Esquire
205 North Rosalind Avenue Post Office Box 1767 Orlando, Florida 32802
BACKGROUND INFORMATION
Respondents are charged with two counts of dishonest dealing, misrepresentation, concealment, or breach of trust, in violation of Section 475.25(1)(b), Florida Statutes (1981). Both Respondents, in Election of Rights forms signed on January 3, 1983, disputed the allegations contained in the Administrative Complaints and requested a formal hearing.
In support of the allegations, Petitioner presented the testimony of William G. Stahl, Joyce H. Freed, Betty B. Stahl, Robert G. McRae, and Charles
Kimming, and Petitioner's Exhibits 1 through 12. Respondents both testified in their own behalf, presented the testimony of Flora Belle Turner Van Trease and Helen Vierbickas, and Respondents' Exhibits A and B.
FINDINGS OF FACT
Upon consideration of the oral and documentary evidence presented at the hearing, the following facts are found:
At all times pertinent to this case, Respondent Gustave A. Miller was a licensed real estate broker with license number 0060208, and Respondent Pamela Michaels was a licensed real estate salesman with license number 0059873.
At all times pertinent to this case, Respondent Miller operated Gus Miller Real Estate, Inc., 5505 E. Colonial Drive, Orlando, Florida; and Respondent Michaels was a salesperson working for him at that office.
On or about November 15, 1981, Respondent Michaels prepared a contract for the sale of property owned by Betty B. Stahl (1/2 interest) and Helen Vierbickas or Flora Belle Turner Van Trease (1/2 interest) in Orlando, Florida, to Timothy Karl Kunke and Shawna Jean Kunke. Purchase price was to be $64,000 with $1,000 paid as deposit. Buyer was to apply and qualify for a loan guaranteed by the Federal Housing Administration (FHA). Seller was to clean and paint the inside of the house, but did not enter into a contract with Respondents to accomplish this work. The contract contained the usual provision for the division of forfeited deposit in the event of buyer default.
Due to a death in the buyer's family, he was not able to qualify for an FHA loan, and without any coordination with or approval of seller, Respondent Miller deducted $235 from the deposit held by him, as his fee for painting the property, and refunded $765 to the Kunkes.
Thereafter, on or about December 4, 1982, Respondent Michaels presented a second contract for the sale of the same property to Mrs. Stahl, although the majority of her dealings were actually with Mr. Stahl, who was advising his wife. The buyer listed this time was Robert G. McRae, and the contract reflected a deposit in the amount of $4,000 paid by check to Gus Miller Real Estate, Inc. This contract, which was accepted by the sellers, also called for the buyer to apply for and qualify for an FHA loan, and seller agreed to pay the discount points on that loan, not to exceed 3 percent. Though the $4,000 was reflected as paid on the front of the contract, the provision reflecting the receipt of earnest money to be held in escrow on the bottom of the reverse side of the contract was not filled in or signed by either Respondent, even though Respondent Miller's firm name was stamped in. Nonetheless, when Mr. Stahl asked Respondent Michaels about the check at the time the contract was signed by Mrs. Stahl, Michaels assured him they had it in their possession and agreed to send him a photocopy of it, which she failed to do. In the prehearing stipulation, Respondents agreed that no deposit had been paid.
At some point in time, Respondents admitted they did not have the deposit. Mrs. Vierbickas, a friend of Mrs. Stahl's sister, Mrs. Van Trease, was told by Respondent Michaels that they did not have the check, but she is unsure when she was told this. I find, nonetheless, that Respondents continued to represent to the Stahls that the deposit had been received and was being held by them until after the transfer was cancelled for other reasons.
McRae signed the contract on December 4, 1981. That same day, he was taken by Respondent Michaels to the Orlando office of Countrywide Funding Corporation where, before an employee of that Company, Joyce Freed, he filled out an application for an FHA mortgage in the amount of $61,300. On that same visit, he signed a certificate that the property to be covered by the mortgage would serve as his primary home. He also acknowledged in writing that he understood FHA financing could not be utilized for any purpose other than owner- occupied properties. He subsequently signed additional documents in relation to
the loan in which he affirmed that the property to be financed would be occupied by him, even after the mortgage commitment was received from the FHA.
On January 11, 1982, McRae certified on a U.S. Department of Housing and Urban Development (BUD) form that he intended to occupy the property. Coincidentally, that same day, a lease was signed by a Barbara Sullivan, on behalf of herself and her husband, purporting to lease the home McRae was then occupying for one year at $650 per month with an advance deposit of $1,300 paid. McRae was not asked to sign this lease, which was witnessed by both Respondents and notarized by Respondent Miller. McRae did not receive any rent from this lease, which was not a bona fide conveyance of an interest in the property. It was not intended to convey the property, but was generated by Respondents for some purpose not related to a tenancy by the Sullivans.
McRae testified that when Michaels took him to Countrywide's office, he did not intend to occupy the property to be purchased, but instead intended for his daughters to live there. However, when he saw from the forms he was signing that there was a requirement for the property to be owner-occupied, he, at that moment, changed his mind; and when he signed the documents, minutes thereafter, he intended to move in. I find this testimony to be unworthy of belief.
During the period from the date of the sales contract with McRae to the date of the proposed closing, the interest rate went up higher than was called for in the contract, and McRae refused to close.
Sometime later, in late February, 1982, a Larry Werts came to the property in question and discussed with Mr. Stahl the possible purchase of Mrs. Stahl's one-half interest in the property for $27,500 in cash. Werts was, however, unable to secure this much cash. Thereafter, he indicated he would make an offer on the entire parcel through Respondent Michaels; and subsequently, Respondents, together, brought a contract to Mrs. Stahl, signed by Werts, which reflected a purchase price of $50,000. The Stahls rejected this offer as being too low.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of this proceeding.
Both Counts I and II, although alleging different facts, charge violations of Section 475.25(1)(b), Florida Statutes (1981), which states:
The board may deny an application for licensure or renewal, may suspend a license for a period not exceeding
10 years, may revoke a license, may impose an administrative fine not to exceed $1,000 for each count or separate offense, or may issue a reprimand, if it finds that the licensee or applicant has:
(b) 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; has violated a duty imposed upon him by law or by the terms of a listing contract, written, oral, express, or implied, in a real estate transaction; has aided, assisted, or conspired with any other person engaged in any such misconduct and in furtherance thereof; or has formed an intent, design, or scheme
to engage in any such misconduct and
has committed an overt act in furtherance of such intent, design, or scheme.
It shall be immaterial to the guilt of the licensee that the victim or intended victim of the misconduct
has sustained no damage or loss; that the damage or loss has been settled and paid after discovery of the misconduct; or that such victim or intended victim was a customer or
a person in confidential relation
with the licensee, or was an identified member of the general public . . .
In Count I, Respondents are alleged to and have admitted to having presented a contract for sale and purchase of certain real property in Orlando, Florida, to the sellers which reflected that the proposed buyer had paid a
$4,000 deposit to Gus Miller Real Estate, Inc., when in fact no such deposit had been made. In Count II, they are alleged to have arranged with the proposed purchaser of the property to transfer it after purchase to another individual who could not qualify for financing, in an attempt to circumvent the FHA criteria on financing.
The presentation of a contract containing a false statement regarding a deposit paid when such did not exist is clear indication of an intentional misrepresentation, notwithstanding Respondents' contention that the contract form in question did not reflect receipt on the reverse side. Mrs. Vierbickas, who claims Respondents told her there was no deposit, cannot remember when she was told this, but believed it was ten days or so after she signed the contract. It should be noted that the copy of the contract she signed was not the same copy as was signed by Mrs. Stahl. Both Mr. and Mrs. Stahl are adamant they had no notice that the deposit did not exist even up to the date of the scheduled closing. Considering the weight of the testimony, the representation of the deposit was a part of a plan designed to get Mrs. Stahl's signature on the contract.
With regard to the alleged misrepresentation in Count 11, however, the conclusion must be different. The evidence shows that McRae tried to buy the property and tends to indicate he did not intend to use it as his own residence. He falsified loan documents and admitted that the lease of his property was probably not legitimate.
It is coincidental that McRae was brought to the Stahls by Respondents. He was brought to the mortgage company by them, as well. Werts and Kunke were both clients of Respondents. Respondent Miller appraised the property
for Mrs. Van Trease. From this it is clear Respondents are the thread running to all parties involved with this property.
However, even if McRae did not intend to occupy the house, even if he intended to convey it to someone else, even though he may have falsified applications and other documents in qualifying for the loan as a part of a scheme to circumvent governmental requirements, and while there may be some evidence to link the Respondents to all this, it is insufficient to support a finding of the violation as alleged in the Administrative Complaint.
Speculation on what really happened here could lead down many avenues, including that pointing to the Respondents. However, speculation will not support a conclusion of law. In an administrative hearing convened under the provisions of Section 120.57(1), Florida Statutes (1981), the burden of proof is on the party asserting the affirmative; Balino v. Department of Health and Rehabilitative Services, 348 So.2d 349 (1 DCA Fla. 1977). Further, this state has consistently recognized the importance of insuring that be fore an individual is deprived of his or her opportunity to earn a livelihood in the manner for which he or she was trained, the evidence of wrongdoing must be supported by evidence as substantial and the consequences; Bowling v. Department of Insurance, 394 So.2d 165 (1 DCA Fla. 1981). Applying this standard, this allegation is not supported by sufficient evidence to sustain a conclusion that the allegation has been proven.
RECOMMENDATION
Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED:
That the license of each respondent be suspended for one year, that each respondent pay an administrative fine of $1,000, and that each respondent be reprimanded in writing, but that the execution of the suspension be deferred for one year with a provision for automatic recission.
RECOMMENDED this 31st day of May, 1983, in Tallahassee, Florida.
ARNOLD H. POLLOCK
Hearing Officer
Division of Administrative Hearings 2009 Apalachee Parkway
Tallahassee, Florida 32301
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 31st day of May, 1983.
COPIES FURNISHED:
Tina Hipple, Esquire
Florida Real Estate Commission Post Office Box 1900
Orlando, Florida 32802
Robert W. Olsen, Esquire
205 N. Rosalind Avenue Post Office Box 1767 Orlando, Florida 32802
Mr. Fred Roche Secretary
Department of Professional Regulation
130 North Monroe Street Tallahassee, Florida 32301
Mr. Harold Huff Executive Director
Florida Real Estate Commission Post Office Box 1900
Orlando, Florida 32802
William M. Furlow, Esquire Department of Professional Regulation
Post Office Box 1900 Orlando, Florida 32802
Docket for Case No: 83-000139
Orders for Case No: 83-000139
| Issue Date |
Document |
Summary |
|
Jul. 26, 1983 |
Agency Final Order
|
|
|
May 31, 1983 |
Recommended Order
|
Evidence was sufficient to establish fraud or misrepresentation in one case but not in the other.
|
