Dean, assigned Hearing Officer of the Division of Administrative Hearings.
For Petitioner: Louis B. Guttmann, III, Esquire
St. Petersburg, Florida 33701 ISSUE
Whether Nora Hames violated Section 475.25(1)(a), Florida Statutes, by misrepresenting that a commission was not due any broker when she, as a real estate salesperson, purchased property which was subject to am oral open listing contract between the owner's agent and a real estate broker whose employee had allegedly introduced Hames to the property.
Nora Hames is a registered real estate salesperson who at the times in question was employed part time with Guardian Realty.
Gillott is a registered real estate salesman who at the time in question was employed by Yon Realty.
Zedwadski is an attorney-at-law, who as agent for his mother, had given an oral open listing to Yon Realty to sell real property located, on Anna Maria Island.
The testimony received at hearing regarding the events surrounding the transaction which is the subject of the complaint is conflicting on almost every determinative and collaborative factual issue. In summary, Hames stated that she was having a discussion with classmates during a class break while taking a real estate course in which she let it be known she was looking for some beach front property. Gillott mentioned that his office, Yon Realty, had had a listing some time before and that he thought it was still available. After several discussions of the property, Gillott called Hames and they drove to Anna Maria Island where they tried to locate the property. Gillott was unable to pinpoint the location, according to Hames, because he had not been able to find a listing or file on the property at the Yon Offices. After an unsuccessful attempt to find the property, Gillott told Hames that the only thing he could remember was that it was for sale by an attorney whose last name began with "Z." Hames said that when they returned she called the attorneys whose names began with "Z", and eventually spoke with Zedwadski. She asked Zedwadski if she could pick up the file and see the property. She saw Zedwadski, introduced herself as a real estate saleswoman referred by Gillott, picked up the file, and went back to Anna Maria Island that day. The following day she made Zedwadski am offer to buy for herself and in the discussion regarding price she asked Zedwadski if he would sell for $36,000 if there were no commission to be paid. Zedwadski said he would but that he had made a contract with Yon Realty to sell and that he thought they might be entitled to a commission, even though the listing was an open listing. Zedwadski told him that she did not think that Gillott had earned a commission by his efforts. Zedwadski suggested that she obtain a release from Gillott, which Hames attempted to do. When Gillott asserted that he claimed a commission, Hames reported this to Zedwadski and said she disagreed. Zedwadski them agreed to enter the contract for sale on the basis that (1) the contract states that Hames represented that no commissions were due, and (2) that Hames agreed to indemnify his mother if a claim for commission was made and it was adjudged that Yon Realty had earned it. The contract was prepared together with an indemnity agreement which both parties executed.
Gillott testified that Hames asked him if he knew of any beach front property for sale, and that he remembered a parcel that Yon Realty had had. She and he discussed this parcel several times, and he checked with the owner's agent to determine if it were still for sale. He picked up the papers on the property from Zedwadski, took the file with him to Anna Maria Island, and based on information in the file took Hames to see the property. After showing the property, he didn't hear from Hames again until she called to say she was buying the property, and that she wanted to pay him a small finder's fee in turn for a release. He asked his broker about accepting a finder's fee and was advised that a finder's fee was not acceptable to his broker, Yon. Subsequently he filed a complaint with the, Florida Real Estate Commission and Yon Realty sued Zedwadski on the oral contract for the commission. 1/
Zedwadski's testimony was very uncertain regarding when some of his contacts with Yon occurred relative to when he and Hames signed the contract; however, he clearly remembered that he had the papers on the property when Hames came to see him. It was also clear from Zedwadski's testimony that he was aware of the conflict between Hames and Gillott and entered the contract and closed knowing full well there would be litigation, and depending on Hames' indemnity agreement to protect his client and not Hames' conclusion regarding whether Gillott's actions earned a commission.
Yon stated that the papers had gone back to Zedwadski some time before when Zedwadski had requested them back to show another prospect. T-l46 Yon also stated he call Zedwadski for Gillott, which conflicted with Gillott's testimony,
and that he did not know if Gillott used the office file. Yon also stated that when he was advised by Gillott, that Hames wanted to give Gillott a finder's fee. Yon told Gillott that Yon Realty had no finders fees, that they split commissions.
The basic fact question is whether Gillott introduced Hames to the property. His ability to do this would have been dependent upon the data available to him. The availability of that data was dependent upon the file. There is substantial and competent evidence that the file was returned to Zedwadski prior to April 25th when Gillott and Hames went to Anna Maria Island. Zedwadski's testimony is very clear that he had the file, although someone had called about picking up the file, when Hames first came to his office. According to Hames' testimony, Zedwadski had the file and she kicked it up from
Zedwadski. The following day they entered the contract, so Gillott never had an opportunity to pick up Zedwadski's file.
According to Gillott it was from Zedwadski's file that he obtained the information he passed on to Hames. However, Zedwadski and Hames clearly pointed out that Zedwadski had the file when Hames went to his office the day the property was shown. Considering the relative disinterest of Zedwadski, and the fact that his testimony collaborates with that of Hames, the testimony of Hames is accepted and that of Gillott rejected. Further, the fact that Hames was willing to indemnify Zedwadski must be given weight in resolving the conflict because, regardless of the accuracy of her legal conclusion regarding Gillott's entitlement to a commission, she was willing to indemnify Zedwadski if her conclusion was wrong. In this case Hames acted in reliance of the representation regarding the commission, not Zedwadski who entered the contract based upon the indemnity agreement. Hames conduct in entering the indemnity agreement is inconsistent with the proposition that Hames didn't believe in the accuracy of her representation.
CONCLUSIONS OF LAW
The Florida Real Estate Commission has jurisdiction to hear this case.
Nora Hames is charged with misrepresentation in violation of Section 475.25(1)(a), Florida Statutes, of facts to Zedwadski. The record indicates that she told Zedwadski prior to the contract's execution that Gillott had not earned a commission and had not introduced her to the property. She also told Zedwadski, after tendering a finder's fee to Gillott, that Yon Realty asserted a claim to a commission. Zedwadski was aware of the controversy prior to his client's execution of the contract, and recommended entry into the contract not because of the representations made to him by Hames, but because of the indemnity agreement.
Although a person with special expertise may have an unfair advantage in an arms length transaction and be held to a higher standard of conduct, the facts here indicate that Hames was dealing in her own behalf with an attorney representing a client in the sale of the real estate. Clearly she had no fiduciary relationship with Zedwadski and cannot be presumed more knowledgeable of the law than Zedwadski. Zedwadski testified that he was not going to argue with Hames regarding her conclusion of law that Gillott's efforts were less than what were necessary to earn a commission and was not going to pass up the sale because of the commission controversy.
To constitute a misrepresentation the individual must know the statement is an error because there must be an intent to misrepresent. Although
equity recognizes a constructive fraud in which the misrepresentation need not be intentional, in order to apply this doctrine, the misrepresentation must be of a material fact which induced the person to enter a contract. Clearly, as stated above, Zedwadski did not depend upon Hames' representation about the commission but upon the indemnity agreement. Hames' execution of an indemnity agreement would indicate her belief and reliance on the belief that Gillott had not earned a commission.
Concerning Hames' representation that Cheezem, her broker, was not entitled to a commission, Cheezem asserted that Guardian Realty was entitled to a commission. Both Cheezem and Yon base this on Hames' being the procuring cause of the sale. See T-139 and T-186. This is inconsistent with the theory that Gillott was the procuring cause. Either Gillott introduced Hames to the property or Hames introduced herself to the property. Hames could not be partially introduced to the property and Gillott be the partial procuring cause of the sale. The facts indicate Gillott was not the procuring cause because he did not introduce Hames to the property, and Cheezem did not have a contract, to sell for Zedwadski. These are the minimum requirements for a commission.
The facts do not support Gillott's claim and the law does not support Guardian's claim. Therefore, the representation by Hames that a commission was not owed was true. However, assuming arguendo that Hames' statement was in error, in the absence of a showing of an intentional misrepresentation, or of an unintentional misrepresentation of a material fact which induced Zedwadski to enter the contract, there is not a violation of Section 475.25(1)(a), Florida Statutes. The record is clear that the indemnity agreement was the basis for Zedwadski's entry into the contract. He was aware of the factual controversy with Yon Realty and chose to enter the contract and let the real estate companies resolve the commission question. Hames' execution of the indemnity agreement indicates that she believed that Gillott and Yon were not entitled to a commission. Based on the foregoing, Hames did not violate Section 475.25(1)(a), Florida Statutes.
