Respondent Miller, a real estate broker, obtained an exclusive right of sale listing on a house in Ocoee, Florida, owned by Carlton and Willie Mae Hall, and recommended to the sellers that they ask no more than $53,900, from which Miller was to receive a $500 sales commission; that a contract to purchase was subsequently submitted to the Halls offering to purchase the home for $59,100, from which a 7 percent sales commission and VA points would be subtracted, but with a representation from Miller that the Halls would still net the original asking price; that the sellers actually would have received at least $2,000 less than the original asking price because of the sales commission and payment of points; and that such acts on the part of Miller constituted fraud, misrepresentation and breach of trust in contravention of Section 475.25(1)(a),
supra; (2) Respondent Stewart, a real estate salesman who presented the offer, also represented to the Halls that they would net a certain minimum amount on the transaction when in fact the net proceeds would have been at least $2,000 less; and that such act constituted fraud, misrepresentation, dishonest dealing, trick, scheme or device, culpable negligence and breach of trust in violation of Section 475.25(1)(a), supra; and (3) Respondent Stewart, acting in a capacity of broker-salesman, drew up two contracts for prospective purchasers for presentation to the Halls; that Respondent did not present such contracts to the sellers but nonetheless represented to the prospective buyers that the Halls had rejected their offers; that Respondent also incorrectly advised the prospective buyers that a second mortgage on the property in question was not assumable; and that such acts on the part of Stewart constituted fraud, misrepresentation, dishonest dealing, trick, scheme or device, and breach of trust within the purview of Section 475.25(1)(a), supra.
Respondents disputed the allegations of fact contained in the Administrative Complaint and requested a formal hearing pursuant to Section 120.57(1), Florida Statutes. On January 22, 1981, the Department forwarded the matter to the Division of Administrative Hearings and requested that a Hearing Officer be assigned to conduct a hearing. By Notice of Hearing dated March 9, 1981, the final hearing was scheduled for May 5, 1981, in Orlando, Florida.
Upon request of the Department, and with concurrence of the parties, the matter was rescheduled to May 14, 1981, at the same location.
At the final hearing Petitioner called Carlton Hall, Jr., Willie Mae Hall, Steven Day and Linda Day as its witnesses and offered Petitioner's Exhibits 1-5, all of which were received into evidence except Exhibits 4 and 5, upon which a ruling was reserved. Respondents Miller and Stewart testified on their own behalf and offered Respondents' Exhibits 1-9, each of which was received into evidence. Additionally, Respondent Stewart called Ruth Helen Stewart as his witness.
The transcript of hearing was filed on July 17, 1981. By agreement of the parties, the time for filing proposed findings of fact and conclusions of law was extended to and including August 10, 1981; however, none were timely filed.
At issue herein is whether Respondents' broker license and broker-salesman license should be revoked or suspended or whether other disciplinary action should be taken against them for the alleged violations set forth in the Administrative Complaint.
Based upon all the evidence, the following facts are determined.
At all times relevant hereto, Respondent, Jack W. Miller, was a licensed real estate broker having been issued license number 0060257 by the Petitioner, Department of Professional Regulation. Respondent, Robert D. Stewart, was a licensed real estate broker-salesman having been issued license number 0085004 by Petitioner. Miller was the broker for Jack Miller Realty, 319 Park Lake Circle, Orlando, Florida, and Stewart was employed as & broker- salesman by Systems Four, Inc., 1561 Lee Road, Winter Park, Florida (Petitioner's Exhibits 4 and 5).
Belair Woods Subdivision is located west of Orlando, Florida, within the corporate limits of Ocoee, Florida. Miller began selling homes exclusively for Belair in 1971 and continued doing so until December, 1975. In late 1973, Miller sold a home in Belair Woods to Carlton and Willie Mae Hall, husband and wife.
Miller left Belair in December, 1975 to open his own real estate firm, Jack Miller Realty, in Orlando. In January, 1977, Carlton Hall called Miller and advised him he wished to sell his home. Hall then signed an exclusive right of sale contract with Miller on January 19, 1977, to expire six months thereafter (Respondents' Exhibit 4). The contract provided for a $53,900 selling price and a 7 percent sales commission to Miller. The contract also noted that a second mortgage on the horse for a swimming pool was "net assumable" and "have (sic) to be approved". The $53,900 price was arrived at by comparing the selling prices of other new homes in the subdivision ($42,050), taking into consideration the "extras" that Hall had added to his home since its purchase, and an allowance for a 7 percent sales commission.
During the six month period that the contract remained in effect, little interest was shown in the property by prospective buyers. In fact, only one person actually expressed an interest in purchasing it, but because of financing difficulties was unable to make an offer. The contract was subsequently renewed for an additional 3 months to and including October 19, 1977 (Respondents' Exhibit 6). 2/ The extension of the agreement contained the same terms and conditions as the original exclusive right of sale contract, including the selling price and a 7 percent sales commission. There were no offers made by prospective buyers during the following 3 months, and the listing expired in October. Miller advised Hall at that time that because of the lack of interest, "he better rest on it for awhile."
On or about April 8, 1978, the Halls visited Miller's house and again requested Miller's services in selling their home. Because of a pending job transfer to another city in the state, Hall was anxious to sell his property. Miller and the Halls agreed upon a $53,900 selling price and a $500 sales commission for Miller. This agreement was embodied in an exclusive right of sale contract signed by the parties on April 8, 1978, to be effective for 6 months (Petitioner's Exhibit 1). Miller agreed to charge a $500 commission because Hall was a friend and he wished only to recoup the advertising expenses previously incurred under the prior listings. They also agreed that Miller would not have to advertise the property; however, he did place a sign in front of the house as well as list the property in the Multiple Listing Service. Miller advised Hall that if another realtor presented an acceptable offer, Hall would be liable for a sales commission which typically was 7 percent of the total sales price.
Sometime thereafter, but still in the month of April, 1978, Respondent Stewart noticed the Halls' listing in the Multiple Listing Service and called Miller to inquire if the property was still on the market. Stewart also advised that he had prospective buyers (Steven and Linda Day) for the property. Miller replied that it was for sale, but that he (Miller) had agreed to charge only a
$500 commission, and in order for another realtor to sell it, the selling price would have to be increased to compensate the Halls for a normal sales commission.
Miller then called Carlton Hall, advised him of the situation, and told him that although the commission would be greater, the sales price would also be increased. Hall told Miller to have Stewart bring out the prospective purchasers to look at the house. An appointment was then made for Stewart to show the prospective buyers the horse within the next few day. After the Days were shown the home, they decided to present an offer which was executed on April 29, 1978 (Petitioner's Exhibit 2). The contract for purchase offered
$59,100 conditioned upon the Days obtaining a $55,000 VA loan. The remainder was to be paid by cash at the closing. The offer was to expire at midnight on the same date.
In arriving at a $59,100 sales price, Stewart increased the original asking price of $53,900 in order to cover a 7 percent sales commission and to compensate Hall for VA points that he would be required to pay.
On the evening of April 29, 1978, Respondents visited the Halls to present the offer. At that time they discussed the estimated sales expense involved in the sale (Petitioner's Exhibit 3). Stewart told Hall he would receive "approximately the same as if they were selling it for fifty-three nine and paying a five hundred dollar commission." He did not tell them they would net the same amount. Miller also told Hall he would receive an amount "fairly close" to that which he would have received under the original asking price. Hall declined to sign the contract and instead requested an extension of time in which to review the offer until the next morning. This was agreed upon, and Hall retained the estimated sales expense overnight to study the figures.
At 7:00 a.m. the next morning, Stewart returned to the Halls' home with the contract. The Halls modified the contract by increasing the sales price to $59,600; they also agreed to pay a 7 percent sales commission out of the proceeds. However, after reviewing the counter-offer, the Days rejected it that same morning.
On May 18, 1978, while the listing agreement was still in effect, and unknown to the Respondents, the Halls sold their home to the Days for $55,900 (Respondents' Exhibit 7). Under the terms of their agreement, the buyer agreed to pay all closing costs while the seller agreed to pay a "real estate fee" of
$500. Hall sent a $500 check to Miller, which Miller refused to accept. Miller and Systems Four, Inc. then filed suit in circuit court against the Halls seeking reimbursement for the 7 percent sales commission. They ultimately recovered $3,253.33 and certain costs (Respondents' Exhibit 1). The judgment of the circuit court was affirmed by the District Court of Appeals. Hall v.
Systems Four, Inc., 383 So.2d 1220 (Fla. 5th DCA 1980). The Halls then filed a complaint with Petitioner that gave rise to this proceeding.
During his dealings with the Days, Stewart and the Days discussed several alternatives for buying the Halls' home but only formalized one offer in writing. This offer was presented to the Halls on April 29, 1978.
The second mortgage on the Halls' home was a home improvement loan from Winter Park Federal for a swimming pool. In order to assume that mortgage, a buyer would have to requalify with the lending institution by presenting a satisfactory financial statement. As a general rule, home improvement loans are not assumable and the representation by Stewart that the loan was not assumable was correct.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction of the subject matter and the parties thereto pursuant to Section 120.57(1), Florida Statutes.
Section 475.25(1)(a), Florida Statutes (1977) provides that a licensee may have his license revoked or suspended or be issued a reprimand if he has:
(1)(a) 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. . .
Real estate license revocation proceedings are penal in nature. State ex rel Vining v. Florida Real Estate Commission, 281 So.2d 487 (Fla. 1973). As such, "the critical matters in issue must be shown by evidence which is indubitably as 'substantial' as the consequences". Bowling v. Department of Insurance, 394 So.2d 165, 172 (Fla. 1st DCA 1981). Therefore, the evidence which is required to "substantially" support a license revocation must be greater than that required to "substantially" support conventional forms of regulatory action. Florida Department of Transportation v. J.W.C. Company Inc.,
396 So.2d 778, 789 (Fla. 1st DCA 1981). With the foregoing standards in mind, the charges which form the basis for Counts I, II and III will be examined in conjunction with the record to determine whether the evidence presented herein ". . .weighs as 'substantially' on a scale suitable for evidence as the penalty does on the scale of penalties." Bowling, supra at 172.
Count I - Petitioner contends that Respondent Miller advised ". . .the sellers when obtaining said listing that the subject property could not bring in more than $53,900"; that Miller gave ". . .assurances to sellers that Days' offer of $59,100 would net to sellers the $53,900 sellers required. . ."; and that such acts constituted fraud, misrepresentation, dishonest dealing, trick, scheme or device, culpable negligence and breach of trust within the intent and purview of Section 475.25(i)(a), supra.
The evidence discloses that Miller's advice to Carlton Hall to ask
$53,900 for the property was reasonable and proper under the circumstances, particularly in light of the selling price of other new homes in the subdivision ($42,050), and the inability to attract a single offer for the home during a previous nine-month listing at that same price. Moreover, it is undisputed that Miller explained to Hall the basis for arriving at the suggested sales price, and that Hall concurred with this advice. Obviously, the establishment of a selling price is a subjective determination by the realtor who relies upon his experience and judgment in doing so. Here there was no evidence to support the charge that Miller was fraudulent or otherwise improper in any respect in this phase of his dealings with the Halls.
The remaining charge against Miller concerns the representation made by Miller to Hall as to the amount of profit that Hall would net on the transaction. Hall claimed that Miller told him he would get "the same" under the Days' offer as he would have under the original asking price of $53,900; Miller disputed this and stated he told Hall he would merely net an amount
"fairly close" to that originally agreed upon. Hall believed he would receive approximately $1200 less under the offer that Respondents presented; however this was not substantiated. Indeed, the net amount that Hall would have received under either proposal was never disclosed. Therefore, it is concluded there is insufficient "substantial" evidence to support the charge, Bowling, supra, and the second allegation in Count I should be dismissed.
Count II - The Department has charged that Respondent Stewart made ".
. .assurances to sellers that Days' offer of $59,000 would net to sellers the
$53,900 sellers required. . ." thereby constituting fraud, misrepresentation, dishonest dealing, trick, scheme or device, culpable negligence and breach of trust in contravention of Section 475.25(1)(a), supra.
The same rationale used in dismissing an identical charge against Miller is applicable here. While the Department contends that Hall would receive "at least $2000 less" under the Days' offer as he would at the $53,900 selling price, the actual net compensation that Hall would have received under either contract was never disclosed. Then, too, the evidence was conflicting as to the representation made by Stewart to Hall, and the undersigned is persuaded that such representation by Stewart was not fraudulent, dishonest or otherwise in violation of the law. Accordingly, the charge in Count II should be dismissed.
Count III - In Count III, the Department has alleged that Respondent Stewart failed ". . .to submit prospective purchasers Days' first two offers to the seller. . ." and that he then represented to the purchasers ". . .that said offers were, in fact, rejected;" that he represented ". . .to the purchasers that the second mortgage was not assumable. . ."; and that such acts constituted fraud, misrepresentation, dishonest dealing, trick, scheme or device and breach of trust in violation of Section 475.25(1)(a), supra.
Initially, it should be pointed out that the Department offered no documentary evidence to support the contention that two offers were prepared and executed by the Days before their $59,100 offer was presented. Moreover, the Days' recollection of the offers that Stewart allegedly failed to present was hazy, conflicting and unconvincing. Then, too, if such allegation were indeed correct, it would have required the Days to discuss, prepare and execute three separate written offers within a twenty-four hour period. Accordingly, it is concluded that the first charge in Count III should be dismissed.
Finally, Stewart is alleged to have improperly told the buyers that the second mortgage on the Halls' home was not assumable. The evidence belies this contention and supports an inapposite conclusion. Even Steven Day, who ultimately purchased the Halls' property, was initially advised by the lending institution that the loan was not assumable. Therefore, the charge that Stewart misrepresented the nature of the second mortgage to the buyers should be dismissed.
Remaining at issue is the admissibility of Petitioner's Exhibits 4 and
5 upon which a ruling was reserved. Exhibits 4 and 5 are certified copies of Stewart's and Miller's registration records. 3/ Counsel for Respondents objected to the authenticity of those documents because they were certified by one other than the Executive Director of the Board of Real Estate, and that under Chapter 475, the Executive Director is the official custodian of the records. Presumably, Respondents were referring to Section 475.10, Florida Statutes, which authorizes the Chairman of the Board of Real Estate to authenticate its records. That Section provides in part that:
Copies of the. . .records. . .of the Board, and certificates purporting to relate the facts concerning such. . .records. . . signed
by the chairman and authenticated by said seal, shall be prima facie evidence thereof in all the courts of this state.
While the above statute provides one way in which to introduce documents into evidence in court proceedings, it is by no means the exclusive method.
Subsection 90.902(4), Florida Statutes, provides that:
Extrinsic evidence of authenticity as a condition precedent to admissibility is not required for:
(4) A copy of an official public record. . . authorized by law to be recorded or filed and actually recorded or filed in a public office, including data compilations in any form, certified as correct by the custodian or other person authorized to make the certification by certificate by complying with subsections (1), (2), or (3). . .
The documents in question are copies of public records certified as to their correctness by the custodian or other person authorized to make such certifications. As such, the documents qualify for self-authentication, and they are hereby received into evidence.
In light of the conclusions reached above, motions to quash made by Respondents at the outset of the hearing, and motions for a directed verdict made ore tenus at the conclusion of petitioner's case-in-chief are now moot, and are hereby denied.
