STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

Re: William L. Wescott d/b/a ) Daniel Yacht Ship Brokerage, Ltd., )

1561 S.E. 17th Street Causeway, ) Case No. 76-862 Ft. Lauderdale, Florida 33316 )

License No. 12528 )

)

and )

)

Arthur Lowe, Salesman, ) Case No. 76-863

License No. 13118. )

)

RECOMMENDED ORDER

Pursuant to notice, an administrative hearing was held before Delphene C. Strickland, Hearing Officer, Division of Administrative Hearings, Department of Administration, May 21, 1976, at 10:00 a.m. in Room 216, the Johns Building, Tallahassee, Florida.

APPEARANCES

For Petitioner: Lawrence D. Winson, Esquire

Department of Business Regulation Division of General Regulation The Johns Building

For Respondents: Gerhardt A. Schreiber, Esquire

Fourth Floor, First Federal Building 1000 Northeast First Avenue

Miami, Florida 33132

ISSUE

1. Whether the Yacht Ship Salesman License issued to Arthur Lowe should be suspended or revoked for violation of Subsections 537.96(3)(a) and (i), and Section 537.06(4)(c), Florida Statutes.

   
   

2. Whether the Yacht & Ship Brokers License issued to William L. Wescott should be suspended or revoked for violation of Section 537.06(3)(a)(1) and Section 537.06(4)(c), Florida Statutes.

FINDINGS OF FACT

1. Respondent William L. Wescott is the holder of Florida Yacht Brokers License No. 12528 and Respondent Arthur Lowe is the holder of Florida Yacht Salesman License No. 13118. Upon joint motion of the parties the two cases were consolidated for hearing.

   
   

2. On April 9, 1976, Respondents Wescott and Lowe were served Notice To Show Cause why the Yacht Ship Brokers and Salesman Licenses should not be

   suspended or revoked for violation of Chapter 537, Florida Statutes. This hearing is a result of that notice.

   
   

3. On or about February 6, 1976, James Kinard, a resident of Columbia, South Carolina, responded to an advertisement in a boating magazine placed there by Daniel Yacht & Ship Brokerage, Ltd. depicting a Morgan sailboat. By telephone Mr. Kinard was informed that the Morgan sailboat advertised was no longer available but that a 41-foot Gulfstar was available. Mr. Kinard informed the Daniel Yacht Ship Brokerage, Ltd.'s representative that he had had a Gulfstar and had been unhappy with it. He became interested, however, in the

   41-foot Gulfstar sailing yacht believing that it was designed by Sparkman and Stephens rather than Vince S. Lazzaro, the designer of the Gulfstar owned by him. Many people believe that a Sparkman and Stephens design hull is considered to be of the highest quality.

   
   

4. As a result of the communication of Mr. Kinard, Respondent Arthur Lowe, a salesman for William Wescott, broker for Daniel Yacht Ship Brokerage, Ltd., Respondent, contacted another broker, Andrew Cilla, of Frank Gordon Yacht Sales, Fort Lauderdale, Florida, who informed Respondents that he had a listing of a vessel known as "Sea Lark IV." Frank Gordon Yacht Sales delivered a specification sheet to Mr. Wescott. Mr. Wescott photostated the letterhead of Daniel Yacht Ship Brokerage, Ltd. on to the top of the Frank Gordon Yacht Sales specification document and furnished it to Mr. Kinard. Said specifications listed Sparkman and Stephens as the designer of the vessel, although in fact, the Gulfstar 41-foot yacht was designed by Vince S. Lazzaro. The Driver Associates, Inc. prepared the document with specifications on the 41-foot Gulfstar "Sea Lark IV."

   
   

5. On or about February 8, 1976, Mr. Kinard wired an offer of $45,000 to Daniel Yacht Ship Brokerage, Ltd. along with a ten percent deposit of $4,500. This amount was put in the escrow account of Daniel Yacht Ship Brokerage, Ltd. and remains in the escrow account.

   
   

6. On or about February 22, 1976, Mr. Kinard and Mr. Lowe, together with others, took the yacht "Sea Lark IV" on a sea trial. Because of inclement weather the parties present huddled beneath the covering to the cockpit during the voyage. Mr. Hugh Furman was at the controls and called out the speed of the vessel as being 8, 9, 10 and 11 knots, respectively. The knot indicator in view to most of those present indicated that the vessel was proceeding at that speed. Mr. Kinard believed that in actuality the yacht was proceeding at the speed indicated by the knot indicator and that the speed the pilot was calling out was the correct speed. Mr. Lowe, a seaman, did not believe the ship was sailing at that speed and did not believe that others aboard thought that the ship was going at that speed.

   
   

7. Mr. Kinard contends:

   
   

   1. That he believed the 41-foot Gulfstar was designed by Sparkman and Stephens; that the specifications furnished him by the Respondents indicated that Sparkman and Stephens was the designer.

      
      

   2. That he informed the Respondents that he did not like the Gulfstar he owned and did not like the designer Vince S. Lazzaro; that he believed the pilot of the ship who called out the speed of the ship and that he believed that the knot indicator on the ship was correct.

   3. That he was misled by the representations of the Respondents and by the specifications they furnished him and that he believed the ship would travel faster than it can in actuality; that the place in which he intended to use it requires a ship that will proceed faster than the "Sea Lark IV"; that he would not have put the $4,500 deposit down on the ship had he known that the hull was not designed by Sparkman and Stephens or had he known that the ship would not proceed at the rate of speed the pilot called out on the sea trial.

      
      

   4. That because he was misled he should be refunded the $4,500 that is his deposit on the "Sea Lark IV" and is in the escrow account of the Respondents.

   
   

8. Respondents Arthur Lowe and William L. Wescott, contend:

   
   

   1. That during the sea trial Respondent Lowe believed that all persons on board the vessel knew that the speed called off by Mr. Furman was erroneous, and that if the knott indicator indicated the speed called off by Mr. Furman, it was erroneous and obvious to most persons familiar with yachts that such speed was not registered or called out correctly; that it was obvious the yacht was going at a much slower rate of speed.

      
      

   2. That the misrepresentation in the folder of the designer is not a substantial misrepresentation and that such misrepresentation was not intentional; that the advertisement and circulation of the specifications was by a second broker and its distribution to Mr. Kinard was in the ordinary course of business and was not meant in any way to mislead the buyer.

   
   

9. The Petitioner Department of Business Regulation contends:

That the delivery to the prospective buyer Kinard of an erroneous publication was an intentional and fraudulent act; that Respondents had been informed by tide buyer he did not like the designer Vince Lazzaro and the seller should have determined that Vince Lazzaro was the designer of subject vessel and notified the buyer; that such actions were intentional and fraudulent and a violation of Chapter 537, Florida Statutes.

1. That the salesman and broker should have determined the true speed of the vessel and informed the prospective buyer; that failure to do so was intentional and fraudulent.

   
   

2. That the actions of Respondents should result in the suspension of their licenses.

CONCLUSIONS OF LAW

1. The Hearing Officer has jurisdiction of the parties and of the subject matter of this hearing.

   
   

2. Respondents are charged with the violation of Subsections 537.06(3)(a) and (i), Florida Statutes:

   
   

   "(3) The division nay suspend or revoke the license of a broker or salesman who commits any of the following acts:

   1. Makes a substantial and intentional misrepresentation upon which any person has relied.

      * * *

      (i) Resorts to fraud or dishonesty in the conduct of any transaction within his principal or other persons.

      The Respondents are also charged with the violation of Subsections 537.06(4) and (c), Florida Statutes:

      "(4) The division may suspend or revoke the license of a broker or salesman who within

      3 years immediately preceding has committed any of the following acts or against whom and within said period, any of the following conditions exist:

      * * *

      (c) Knowingly authorized, directed, connived, aided or otherwise participated in the publication, advertisement, distribution or circulation of any materially false statement or representation concerning his business or any transaction coming under the provisions

      of this chapter."

      
      

3. It appears that although James Kinard relied upon the conversations with the Respondents and upon the specifications as furnished him and there was no intentional misrepresentation upon the part of the salesman or broker or any intent to defraud the buyer.

   
   

4. In business transactions it is incumbent upon the seller to be honest with those with whom he deals. It is also incumbent upon a buyer to ascertain for himself the product which he buys. Parties deal at arm's length and the maximum of Caveat Emptor or "let the buyer beware" summarizes the rule that a purchaser must examine, judge and test for himself. cf., Black's Law Dictionary, Revised Fourth Edition. It appears that James Kinard did not do this and was remiss in not ascertaining for himself or selecting a knowledgeable person to determine the designer of the hull of the Gulfstar. He also should have examined the knot indicator and determined whether in fact the indicator was defective and showed an erroneous speed of the vessel. A buyer should examine the product he buys particularly when such product has been used.

   
   

5. There is no showing on the part of the Respondents that there was, in fact, intentional or fraudulent misrepresentation either as to the design of the hull or as to speed of the vessel. It also appears that the Respondents did not intentionally circulate, with the purpose of misinforming the Petitioner, the information on the specifications which showed that the design of the hull was a Sparkman and Stephens design. It does not appear that there was a connivance to mislead the Petitioner but rather a negligent and irresponsible manner of dealing with the prospective buyer and a failure to diligently and properly ascertain that the information Respondents gave to prospective buyers was in fact correct. This falls short of the charges of the State.

   
   

6. It therefore is the conclusion of the Hearing Officer that Respondents and the Petitioner both should have been more diligent in ascertaining the facts surrounding the design and the correct speed of the vessel which is the subject of this hearing. it does not appear that there has been an intentional violation of Chapter 537, Florida Statutes, and therefore subject the Respondents to revocation or suspension of their licenses No. 12528 and No. 13118.

RECOMMENDATION

Dismiss the charges.

DONE and ORDERED this 22nd day of July, 1976, in Tallahassee, Florida.

DELPHENE C. STRICKLAND

Hearing Officer

Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304

(904) 488-9675

COPIES FURNISHED:

Lawrence D. Winson, Esquire Division of General Regulation

Department of Business Regulation The Johns Building

Tallahassee, Florida 32304

Gerhardt A. Schreiber, Esquire Fourth Floor, First Federal Building 1000 Northeast First Avenue

Miami, Florida 33132

Docket for Case No: 76-000862

Orders for Case No: 76-000862