STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL )

REGULATION, DIVISION OF )

REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 89-5021

)

JOHN C. LARKER, )

)

Respondent. )

)

RECOMMENDED ORDER

A hearing was held pursuant to notice on January 19, 1990, in Shalimar, Florida, by Stephen F. Dean, assigned Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Steven W. Johnson, Esquire

Department of Professional Regulation Division of Real Estate

400 West Robinson Street Orlando, Florida 32802

For Respondent: Stephen R. Moorhead, Esquire

McDonald, Fleming, & Moorhead 700 South Palafox Street Pensacola, Florida 32501

PRELIMINARY STATEMENT

The Petitioner filed an Administrative Complaint against the Respondent on August 17, 1989. The Respondent disputed the charges and requested a formal hearing pursuant to Section 120.57(1), Florida Statutes. The Hearing was held on January 19, 1990. The parties filed their proposed findings on March 5 and 6, 1990. The proposed findings of the parties have been read and considered and Appendix A contains a list of those findings adopted and those rejected and why.

FINDINGS OF FACT

1. At all times material to these proceedings, Respondent was a licensed real estate salesman licensed by the Division of Real Estate.

   
   

2. On November 1, 1983, J.B. and N., Inc., a Florida Corporation, purchased a parcel of real estate located in Santa Rosa County, Florida, for the purpose of developing a residential subdivision.

3. Robert J. Furse (Furse) and Respondent were officers, director, and owners of J.B. and N., Inc.

   
   

4. At the time of the acquisition of the parcel of real property referenced above, Furse and the Respondent each owned 50 per cent of J.B. and N., Inc.

   
   

5. The parcel of property purchased by J.B. and N., Inc., was roughly rectangular running north to south between US Highway 98 and the Gulf of Mexico/Santa Rosa Sound.

   
   

6. Mr. Lewis Johnston, registered surveyor, was retained by J.B. and N., Inc., to survey the property and prepare a preliminary plat for subdividing the parcel. A drawing of this plat is attached to Petitioner's Exhibit 5. The parcel was divided east and west by a north-south road from U.S. 98 which stops short of the sound. Ten lots of equal size border the east and west boundaries of the road and three waterfront lots front on Santa Rosa Sound.

   
   

7. The Respondent and Furse intended and attempted to provide the inland lot owners in the subdivision with a pedestrian access to the waterfront. This access can be seen along the western boundary of Lot 13 as depicted in the plat attached to Petitioner's Exhibit 5.

   
   

8. The plat prepared by Johnston was never recorded in the official records of Santa Rosa County. The regulations for establishing a subdivision in Santa Rosa County did not require filing of a plat plan when this subdivision was developed.

   
   

9. On November 2, 1983, Furse purchased Lot 13 which was adjacent to the access easement as surveyed and drawn but not recorded. At the time of the purchase, Furse received a survey indicating the location of the access way. Furse had a privacy fence constructed between the access way and his property as depicted on the attachment to Petitioner's Exhibit 5.

   
   

10. Furse and the Respondent intended to create an easement for access to the water across the lot Furse purchased from J.B. and N., Inc. Closing on the sale from J.B. and N., Inc., to Furse was handled by Furse's attorney. The Respondent understood that the attorney was supposed to create the easement in the deed to Furse. Furse instructed his attorney to prepare a deed transferring the property to him to which he was to take title. Furse did not think that this included the access way.

    
    

11. Subsequently, J.B. and N., Inc., listed for sale the other lots in the subdivision with Shore to Shore Realty, Inc. The listing agents were Brice and Hanks. To induce purchasers to purchase the lots, the lots were advertised as having water access as indicated by the MLS listing, the plat, and advertising signs.

    
    

12. In October, 1984, Lot No. 6 was purchased by Lowell Ray. In November of 1984, Lot No. 3 was purchased by John Alvarez. In the summer of 1985, Lot No. 4 was purchased by Balfour and Linda Clark. All of these purchasers were told that they had access to the water. Access to the water was a major consideration in their decision to purchase.

13. Furse had a house built, centered on the lot, allowing for the access way mentioned above. During the summer of 1984, Furse divorced his wife; and thereafter, they defaulted on payments on the mortgage on the property in question. The mortgagee foreclosed on the property in 1985 and thereafter sold it to Mr. Thomas Ferguson in August of 1987. During a title search, Mr. Ferguson's attorney found that the access way had been conveyed to Furse. After purchasing the property, Mr. Ferguson removed the privacy fence separating the access way from the remainder of the property and fenced off the access way to prevent further access across his property.

    
    

14. The access way had never been deeded in the form of an easement. All of the property had been conveyed initially to Furse and thereafter to Ferguson.

    
    

15. The Respondent did not know that the easement had not been created until after Ferguson took possession of the property and restricted access. Prior to that, the Respondent thought that the easement had been created at the time of Furse's acquisition of the lot. Prior to Ferguson's restriction of the access, Ray, Alvarez, and Balfour did have access to the water over the access way as prepared by Furse.

    
    

16. Upon being notified that the access had been restricted by Ferguson, the Respondent attempted through negotiation to acquire an easement from Ferguson for the benefit of the property owners. However, Ferguson ultimately decided that he did not desire to grant such access except as a license to those property owners who had purchased the property prior to his purchase of the property.

    
    

    CONCLUSIONS OF LAW

    
    

17. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of this proceeding and this order is entered pursuant to Section 120.57(1), Florida Statutes.

    
    

18. The Division of Real Estate charges the Respondent with violation of Section 475.25(1)(b) and (c), Florida Statutes, by having made misrepresentations about access to the water in an attempt to induce people to purchase lots in a subdivision which the Respondent was developing. For the Respondent to be guilty of this offense, he must have known that such access did not exist and that he intentionally misstated the facts about the access.

    
    

19. The burden is upon the Division to establish the facts which show that the Respondent knew that the representations that he made were false and that he made these misrepresentations intentionally.

    
    

20. The Petitioner failed to prove that the Respondent represented to anyone that there was an easement of access in existence. The advertisements all spoke of access to the water. However, creation of an easement would have been consistent with the intent of Fruse and the Respondent, their directions to their surveyor, Respondent's understanding of the conveyance to Furse, and Furse's fencing off the access way from what Furse thought was his property. It was not demonstrated that the Respondent had any knowledge that Furse's attorney had failed to establish the easement until access was denied by Ferguson.

21. The facts reveal that Ray and Alvarez purchased their lots in October and November of 1984 when the property was in the possession of Furse, who had fenced off and maintained the access to the water. Although Balfour and Linda Clark purchased their lot later in the summer of 1985, all of the residents of the subdivision still had access to the water via the access way created by Furse.

    
    

22. The Respondent was not incorrect in representing to Ray, Alvarez or Clark that this access existed. Nothing had occurred to place the Respondent on notice that he and Furse had failed to create a perpetual easement. In summary, the Respondent did not know there was no easement and did not intentionally misrepresent the facts. In fact, access existed as represented until restricted by Ferguson in late 1987 or early 1988. The Department has failed to prove that the Respondent committed any act in violation of Section 475.25(1)(b) or (c), Florida Statutes.

RECOMMENDATION

Based upon the foregoing findings of fact and conclusions of law, the Hearing Officer recommends that the charges against the Respondent be dismissed.

DONE and ENTERED this 3 day of March, 1990, in Tallahassee, Florida.

STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 23rd day of March, 1990.

APPENDIX TO RECOMMENDED ORDER IN CASE NO. 89-5021

The parties submitted proposed findings of fact and conclusions of law which were read and considered. The following is a listing of the findings which were adopted and those which were rejected and why.

Respondent's Proposed Findings of Fact 1-9. Adopted.

1. Adopted, but rewritten.

2. Adopted.

3. Adopted, but rewritten. 13-19. Adopted.

1. Rejected, as irrelevant.

2. Adopted, but rewritten.

Petitioner's Proposed Findings of Fact

1-2. Adopted.

1. Rejected; corporation bought the land.

2. Adopted.

5-6. Rejected, contrary to the evidence.

1. Adopted, but rewritten.

2. Rejected, contrary to the evidence.

COPIES FURNISHED:

Steven W. Johnson, Esquire Department of Professional Regulation Division of Real Estate

Post Office Box 1900 Orlando, FL 32802

Stephen R. Moorhead, Esquire McDonald, Fleming, & Moorhead 700 South Palafox Street Pensacola, FL 32501

Darlene F. Keller, Division Director Department of Professional Regulation Division of Real Estate

Post Office Box 1900 Orlando, FL 32802

Kenneth E. Easley, Esquire

Department of Professional Regulation 1940 North Monroe Street

Tallahassee, FL 32399-0792

Docket for Case No: 89-005021

Orders for Case No: 89-005021