vs. ) CASE NO. 81-2524
Respondent. )
Pursuant to notice, an administrative hearing was held before Diane D. Tremor, Hearing Officer with the Division of Administrative Hearings, on February 9, 1982, in the Broward County Courthouse, Ft. Lauderdale, Florida. The issue for determination at the hearing was whether disciplinary action should be taken against the Respondent's license as a real estate sales person for violations of Section 475.25(1)(b), Florida Statutes (1979).
For Petitioner: Robert F. Jordan
Ft. Lauderdale, Florida 33302
JANSEN & DE GANCE, P.A.
Ft. Lauderdale, Florida 33304 FINDINGS OF FACT
Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found:
At all times pertinent to this proceeding, respondent Christine Kindratiw was a licensed real estate sales person, holding license number 0327421, and was employed in such capacity by All Realty Service, Inc. in Ft. Lauderdale, Florida.
On or about July 9, 1980, Mr. and Mrs. V. J. Zottola entered into an exclusive listing agreement with All Realty Service, Inc., for the sale of their residence in Ft. Lauderdale. (Petitioner's Exhibit 1) All Realty Service was represented by the respondent, who showed the home to several prospective buyers.
On August 27, 1980, the Zottolas accepted a deposit receipt contract by which Jonathan D. Morse, Jr. proposed to purchase the subject property. (Petitioner's Exhibit 2) The purchaser Morse was represented by Jean-Marie Auguste, a real estate salesman with the Keyes Realty Company. The deposit receipt contract provided for a purchase price of $77,500, an immediate down payment of $1,500 and the payment by the buyer of an additional deposit of
$6,000 by September 22, 1980. All deposits were to be refunded to the buyer in the event he failed to quality for an FHA mortgage. The contract further provided that closing of the transaction should occur within seventy (70) days from delivery or tender to the buyer of a complete abstract.
On September 4, 1980, the proposed buyer Morse made application for an FHA mortgage loan through Florida Southern Mortgage Corporation. On or about September 22, 1980, Florida Southern Mortgage Corporation received from Mr. Morse's employer a return to its "request for verification of employment." This return remarked that "we do not know what his status will be with this company until the outcome of our company merger to take place on October 10, 1980." On October 10, 1980, Florida Southern Mortgage prepared the paperwork to submit Mr. Morse's file to the Federal Housing Administration for mortgage approval. (Petitioner's Exhibit 4) It appears from the Florida Southern Mortgage file that this packet of materials was never sent.
The additional $6,000 deposit became due on September 22, 1980. By letter dated September 24, 1980, addressed "to whom it may concern," Mr. Morse advised that he was a commodities broker and had in his possession
"in excess of twenty-thousand dollars in Physical Gold and Silver that I will liquidate at such time as necessary to make the closing sale on the property. . ." (Petitioner's Exhibit 3)
This letter was made available to respondent through Jean-Marie Auguste, the salesman who represented Mr. Morse in the subject transaction. Respondent sent a copy of this letter to the Zottolas on September 25, 1980, and advised them that they could either terminate the contract or accept the representations made in Morse's September 24th letter and waive the requirement for the $6,000 deposit. From conversations with Mr. Auguste and the mortgage company, respondent believed that Morse's chances of obtaining FHA financing were good, and she so advised the Zottolas.
Respondent was advised by the Zottolas that Mrs. Zottola desired to go to Virginia to locate and purchase new property. Respondent referred Mrs. Zottola to a real estate agent in Virginia, and advised Mrs. Zottola that if she found property in Virginia she wished to purchase, she should be sure that the purchase contract contained a contingency for the closing of the Morse transaction in Florida. Mrs. Zottola did travel to Virginia in early October, 1980, and did enter into a contract for the purchase of property there. The broker in the Virginia transaction called respondent and respondent advised him that the Morse transaction was all in order except for the employment
verification. The Virginia contract to purchase did provide that it was contingent upon the closing of the Florida transaction.
When Mrs. Zottola returned from Virginia, she felt assured from statements made by the respondent that there would be no problem with the Morse closing. The Zottolas began to sell items of personal property and Mrs. Zottola quit her job in preparation for the move to Virginia.
A few days prior to November 12, 1980, respondent learned for the first time that a problem had developed with respect to Mr. Morse obtaining FHA financing. She advised Mrs. Zottola of this fact and told her that Mr. Morse was attempting to locate a co-signer for the loan. On November 12, 1980, respondent was advised that Mr. Morse's application for a mortgage loan had been denied, and she notified the Zottolas of that fact on the same date.
The "Statement of Credit Denial, Termination, or Change" issued by Florida Southern Mortgage Corporation on November 12, 1980 indicates that Mr. Morse's loan application was denied because of "insufficient income, based on new position." (Petitioner's Exhibit 5). The file does not indicate that any further response was ever received from Mr. Morse's employer after the company merger which was to occur on October 10, 1980.
After being notified that Mr. Morse's loan application had been rejected, Mrs. Zottola was able to cancel the contract on the Virginia property. As of the date of the hearing, she continued to reside on the Florida property which was the subject of the Morse deposit receipt contract.
On at least five occasions, respondent telephoned Florida Southern Mortgage Corporation and attempted to obtain information on the status of the Morse FHA loan application. She also contacted Jean-Marie Auguste, the agent of Mr. Morse, on several occasions to inquire of the progress being made on the loan application.
By an Administrative Complaint filed on September 9, 1981, respondent is charged with a violation of Section 475.25(1)(b), Florida Statutes (1979). The pertinent specific factual allegations of the Complaint are:
"5. That Respondent advised Mrs. Zottola that there would be no problem concerning the prospective buyers, the Morses, qualifying for financing, and that she, Mrs. Zottola should
go ahead and move her family and furnishings up to Virginia where they planned to relocate.
That the 'agreement to purchase' contract signed by Mrs. Zottola and the Morses required that the Morses deposit $6,000.00 on the 35th day of the contract, but that Respondent advised Mrs. Zottola not to request that deposit because the transaction was almost complete and there would be no trouble, with the buyer's obtaining financing.
That Respondent did not notify Mrs. Zottola until the 69th day of the 70 day contract that the Morses had failed to qualify for financing.
That as a result of Respondent's aforementioned actions, Mrs. Zottola was injured. Mrs. Zottola's purchase of a new home had closed, and Respondent's false reassurances and withholding of information damaged Mrs. Zottola."
CONCLUSIONS OF LAW
The petitioner is authorized to take disciplinary action against a licensee who has been found guilty of misrepresentation, concealment false promises, false pretenses, culpable negligence or breach of trust. Florida Statutes, Section 475.25(1)(b). Respondent has been charged with these violations in this proceeding. If proven by competent, substantial evidence at the hearing, the factual allegations the Administrative Complaint (as set forth in paragraph 11 of the Findings of Fact above) would constitute a violation of Section 475.25(1)(b), Florida Statutes. However, the allegations of the Complaint were not proven at the hearing and were, in fact, specifically refuted by the petitioner's own witness, Mrs. Zottola, as well as by the respondent herself.
The evidence adduced at the hearing demonstrates that respondent advised Mrs. Zottola that if she found suitable property in Virginia, she should be certain to place a clause in the purchase contract which would make the Virginia purchase contingent upon the closing of the Florida transaction. Such advice is inconsistent with the charge contained in paragraph 5 of the Complaint that respondent advised Mrs. Zottola "that there would be no problem concerning the prospective buyers, the Morses, qualifying for financing, and that she, Mrs. Zottola should go ahead and move her family and furnishings up to Virginia where they planned to relocate." Instead, the advice from respondent to add a contingency clause is equivalent to a statement on respondent's behalf that there was a possibility that Mr. Morse would not be able to qualify for the financing contemplated by the deposit receipt contract. The Zottolas originally agreed that should that event occur, all monies were to be refunded and both parties were to be relieved of all liability under that deposit receipt contract.
It was also apparent from the testimony that respondent advised the Zottolas that they had the option to terminate their contract with Mr. Morse upon his failure to remit the $6,000 additional deposit on September 22, 1980. Respondent immediately furnished to the Zottolas the only evidence she had at that time regarding Mr. Morse's financial capability.
The evidence further illustrates that respondent immediately notified the Zottolas both when the first indication came that problems attended the Morse loan application and again when she received word that the Morse loan application was formally rejected. This did not occur on the "69th day of the
70 day contract" as charged in paragraph 7 of the Complaint. The seventy days began to run from the delivery to the purchaser of a complete abstract, and not from the date of execution of the deposit receipt contract. No evidence was adduced at the hearing as to the date of delivery of the abstract.
Finally, although damages or losses are not essential to a finding of guilt of violations of Section 475.25(1)(b) Florida Statutes, the allegations of paragraph 8 of the Complaint are simply not substantiated by the evidence. The facts adduced at the hearing demonstrate that no information was withheld by respondent from Mrs. Zottola and that the purchase of the Virginia property did
not close. Instead, the facts illustrate that respondent promptly notified the Zottolas of all information she possessed concerning the prospective buyer's application for an FHA mortgage loan and that, upon respondent's advice, the Virginia property closing was contingent upon completion of the Florida transaction.
In conclusion, petitioner failed to adequately demonstrate that respondent misrepresented or concealed facts or that she made false promises or pretenses to the Zottolas regarding the sale of their property to Mr. Morse.
The Zottolas voluntarily agreed that the sale to Mr. Morse was contingent on his ability to obtain FHA financing. Respondent, who was not the agent for the buyer and thus not privy to all information concerning his financial status, provided the Zottolas in a timely fashion with all the information she had concerning the progress of the Morse loan application. Neither culpable negligence nor breach of trust on respondent's part have been demonstrated in this proceeding.
The parties have submitted to the undersigned proposed findings of fact and proposed conclusions of law. To the extent that the parties' proposals are not incorporated in this Recommended Order, they are rejected as being either not supported by competent, substantial evidence adduced at the hearing, or irrelevant and immaterial to the issues for determination in this proceeding.
Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that the Administrative Complaint filed against the respondent on September 9, 1981 be DISMISSED.
Respectfully submitted and entered this 11th day of May, 1982, in Tallahassee, Florida.
DIANE D. TREMOR, Hearing Officer Division of Administrative Hearings The Oakland Building
Filed with the Clerk of the Division of Administrative Hearings this 11th day of May, 1982.
Robert F. Jordan, Esquire CONRAD, SCHERER & JAMES
Ft. Lauderdale, Florida 33302
Philip Jansen, Esquire JANSEN & DE GANCE, P.A.
Ft. Lauderdale, Florida 33304
Mr. C. B. Stafford Executive Director
Frederick H. Wilsen, Esquire Assistant General Counsel
