STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA REAL ESTATE COMMISSION, )

)

Petitioner, )

)

vs. ) CASE NO. 79-541

)

DONALD W. GILBERT, )

)

Respondent. )

)

RECOMMENDED ORDER

This matter came on for hearing in St. Augustine, Florida, before the Division of Administrative Hearings, by its duly designated Hearing Officer, Robert T. Benton, II, on June 8, 1979. The Division of Administrative Hearings received the transcript of proceedings on June 26, 1979. Petitioner was represented by counsel:

APPEARANCES

For Petitioner: Kenneth M. Moor, Esquire

Florida Real Estate Commission

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802

For Respondent: Appeared at the hearing in propria persona.

By administrative complaint filed January 18, 1979, petitioner alleged that respondent, while registered as a real estate salesman, showed B. N. and Edith Barrows a lot owned by James V. and May B. Freeman; that respondent told the Barrowses that the lot was dry and that "the water never came up to the property" in response to their question whether the ocean tide ever encroached on the lot; that the lot is not in fact dry "but is partially flooded . . . on a periodic basis, which [respondent] knew or should have known"; that there is "no access by way of a street or roadway to the" lot; that respondent represented that the County would install a street in front of the [lot] as soon as the construction of houses began in the area"; that "the County did not build the promised street . . . because the expected flooding from high tides would erode [such a] street"; that respondent's representations were intended to induce and did induce B. N. and Edith Barrows to buy the lot; and that by virtue of the foregoing, respondent was guilty of "fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing, trick, scheme or device, culpable negligence, or breach of trust in any business transaction, in violation of Subsection 475.25(1)(a), Florida Statutes."

FINDINGS OF FACT

1. On June 21, 1975, J. V. Freeman asked respondent, who was then employed as a real estate salesman by Ancient City Realty Company, in St. Augustine, to

   represent his wife and himself in the sale of lot 13, block 11, Vilano Beach subdivision, Unit A, [the lot], in St. Johns County, Florida. Mr. Freeman and respondent did not visit the property at the time of the listing, but Mr.

   Freeman told respondent that the lot was high and dry and that the County would put in a road in front of the lot as soon as houses were constructed in the area.

   
   

2. Belden N. Barrows and Edith Evelyn Barrows, his wife, approached respondent in August of 1975. Subsequently, respondent showed Mr. Barrows the Freemans' unimproved lot. Mr. Barrows asked how he could expect to gain access to the property and respondent answered that the County would pave Viejo Street once houses were built in the area. When he gave this answer, respondent reasonably believed it to be accurate, although in fact it was not accurate.

   
   

3. At all pertinent times, Viejo Street appeared on a plot in the official records of St. Johns County. Viejo Street is platted between blocks 11 and 12. Block 12 lies between block 11 and the St. Augustine Inlet. Respondent was familiar with this plat and had been present when Ray Clark, the real estate broker for whom he worked, telephoned a county office and was told that Viejo Street would be built, as proposed. Respondent telephoned a title insurance company and was advised that there would be access to the property. The title insurance policy obtained by Mr. and Mrs. Barrows in connection with their purchase of the lot insured against a lack of access by road. Since the Barrowses' purchase of the lot, however, the Board of County Commissioners of St. Johns County has decided that the soil at the site proposed for Viejo Street is too wet too often to justify expenditure of county money for the construction of a road, although the County Commissioners have given permission to a private citizen to open and maintain a road at his own expense. When they learned that no road was likely to be built, Mr. and Ms. Barrows brought suit against the title insurance company, and prevailed in the trial court. An appeal is now pending.

   
   

4. Even though Mr. Freeman had told respondent that the lot was high and dry, respondent knew otherwise. All the houses in the general vicinity of the lot are on stilts. Respondent was familiar with the area and "knew in case of a hurricane, or high tide with a northeaster, that there would be water on [the lot]." (R. 51). Even so, in answer to questions from Mr. Barrows, respondent assured Mr. and Mrs. Barrows that the water did not come up as far as the lot. In reliance on respondent's representations, Mr. and Mrs. Barrows purchased the lot. There have been frequent encroachments on the lot since they purchased it. The entire lot has been under water. Water has covered portions of the lot as many as 10 days in a single month.

   
   

   CONCLUSIONS OF LAW

   
   

5. Respondent's prediction that the County would build and maintain a road in front of the lot he sold to Mr. and Mrs. Barrows was made in justifiable reliance on the information reasonably available to him at the time, even though the prediction proved inaccurate. Respondent's representations that water would not encroach on the lot were not made in justifiable reliance on the information reasonably available to him at the time, however. Even though respondent represented the Freemans in the transaction and even though Mr. Freeman told him that the lot was "high and dry", respondent was not at liberty to parrot Mr. Freeman's misrepresentation since he had reason to know the truth. Respondent's answers to Mr. Barrows' direct questions about how far up the water came violated Section 475.25(1)(a), Florida Statutes (1978 Supp.).

RECOMMENDATION

Upon consideration of the foregoing, it is RECOMMENDED:

That petitioner suspend respondent's license for ninety (90) days. DONE and ENTERED this 11th day of July, 1979, in Tallahassee, Florida.

ROBERT T. BENTON, II

Hearing Officer

Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301

(904) 488-9675

COPIES FURNISHED:

Kenneth M. Meer, Esquire Florida Real Estate Commission

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802

Mr. Donald W. Gilbert

66 1/2 Abbott Street

St. Augustine, Florida 32084

Docket for Case No: 79-000541

Orders for Case No: 79-000541