STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

STATE OF FLORIDA, DEPARTMENT OF ) PROFESSIONAL REGULATION, ) FLORIDA REAL ESTATE COMMISSION )

(formerly Board of Real Estate), )

)

Petitioner, )

)

vs. ) CASE NO. 81-2947

)

GARY STEINMAN, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, James E. Bradwell, held a public hearing in this case on April 21, 1982, 1/ in Tampa, Florida.

APPEARANCES

For Petitioner: Bruce D. Lamb, Esquire

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

For Respondent: Robert L. McDonald, Jr., Esquire

4612 West Kennedy Boulevard Tampa, Florida 33609

ISSUE

Whether Respondent, based on conduct which will be set forth hereinafter in detail, is guilty of fraud, misrepresentation, false promises, and dishonest dealing, as more specifically alleged in the Administrative Complaint filed herein on September 30, 1981.

FINDINGS OF FACT

1. Based upon my observation of the witnesses and their demeanor while testifying, the documentary evidence received and the entire record compiled herein, the following relevant facts are found.

   
   

2. Based on admissions, Gary Steinman, Respondent herein, is a registered real estate salesman and holds license number 0084567. During times material to the allegations alleged in the Administrative Complaint filed herein, Respondent was a registered real estate broker/salesman. During the period from November, 1974, until February of 1977, Respondent was employed by Suncoast Highland

   Corporation (Suncoast), an owner/developer. From February 25, 1977, and extending through June of 1978, Respondent was employed by Suncoast Highland Realty Corporation, a licensed real estate corporation. For purposes herein, the two (2) corporations are the same. (Tr. 150) 2/

   
   

3. From November of 1974 through June of 1978, in his efforts to induce prospective purchasers to buy lots in a Suncoast development known as Shadow Run, Respondent, in his capacity as a salesman for Suncoast, made the following verbal representations pertaining to the parcels in Shadow Run:

   
   

   1. Underground utility connections would be used exclusively in the sub- division;

   2. That a recreation area would be constructed, including tennis courts and a concrete boat ramp; and

   3. That a central water system would be installed by the developer.

      
      

4. In November of 1974, Suncoast opened and offered for sale individual residential lots in Shadow Run.

   
   

5. Respondent, during his employment with Suncoast is not now nor has he ever served as an officer or director of that corporation. Nor did Respondent formulate or participate in the formulation of policy or development decisions for the corporation. (Testimony of Respondent and C. Thomas Peterson, the President of Suncoast since 1964.)

   
   

6. To summarize, Respondent is charged with making certain representations to purchasers or prospective purchasers of lots in Shadow Run Subdivision which allegedly Respondent knew or should have known were false. As stated, one such representation was that underground utilities (electric and telephone) would be installed for all lots in Shadow Run. The testimony and exhibits produced in evidence reveal and Respondent admits, without dispute, that the developer, Suncoast, did make such promises and representations in its initial public offering statement dated September 16, 1974. That public offering statement was in effect when Shadow Run Subdivision opened in November of 1974. The evidence reveals, and Respondent admits that he first learned, on January 15, 1975, that the developer decided not to install underground utilities and therefore would have conventional overhead utilities. C. Thomas Peterson verified that the decision to change utilities was not communicated to Respondent until January 15, 1975. (Tr. 119-120) This fact was also verified by another Suncoast salesman, William Mayer. (Tr. 139)

   
   

7. Sue Reed and her husband purchased a lot in Shadow Run during December of 1974, and Respondent was the salesman. Respondent admits and the evidence reveals that Respondent represented to the Reeds, prior to the sale, that underground utilities would be installed in the development.

   
   

8. Alfred Vetrano also purchased a lot in Shadow Run and again Respondent was the salesman. Mr. Vetrano first viewed Shadow Run during early 1976. At that tine, the decision had been made by Suncoast not to install underground electric utilities. In fact, overhead utility lines were completely installed in Shadow Run Subdivision at that time. Mr. Vetrano, a trained, licensed plumber, admits that he saw the overhead lines and power poles prior to the time that he purchased his lot sometime during 1976. (Tr. pp. 51-52)

9. Chester C. Fennell also purchased a lot in Shadow Run during approximately March of 1976. (Tr. 92) Respondent sold Mr. Fennell his lot, although from Mr. Fennell's own testimony, he was also receiving certain information about the property in Shadow Run from another salesman, whose name he (Fennell) could not recall.

   
   

10. When Mr. Fennell purchased his lot, the decision had been made by Suncoast not to install underground utilities. In fact, Mr. Fennell admits to seeing the overhead electric utilities.

    
    

11. James Dovin also purchased a lot in Shadow Run on April 25, 1975. Respondent and another salesman, whose name Mr. Dovin could not recall, sold Mr. Dovin his lot. (Tr. pp. 107-108)

    
    

12. According to Dovin, Respondent represented to him during his sales presentation, on or about April 25, 1975, that all underground utilities would be utilized in the development and that a park or recreation facility, including a tennis court and a boat dock and ramp would be built on the property.

    
    

13. Mr. Dovin could not recall precisely whether Respondent or another unnamed salesman made representations to him during April of 1975. (Tr. 110-

    111) Also, Mr. Dovin could not recall from which of the two (2) offices that were selling lots in Shadow Run, that he obtained the information concerning the subdivision. Nor, in view of the seven (7) year hiatus between the time he purchased the lot and the subject hearing, could Mr. Dovin recall with any specificity, exactly what took place and who made what representations. (Tr. pp. 111-114)

    
    

14. Mr. Dovin, like other purchasers who had been told that a central water system would be utilized in the Shadow Run Subdivision, was offered by Suncoast a $1,000.00 credit toward the purchase price for the installation of a well.

    
    

15. Concerning the representations allegedly attributed to Respondent respecting the construction of the recreation area with a boat ramp and the tennis courts, Respondent admits to having made these representations. Suncoast's president Peterson indicated his intention to install a boat ramp and tennis courts at the subdivision; however, the actual construction date for these facilities has been postponed on several occasions. In this regard, the evidence reveals that Respondent relayed these representations to prospective purchasers as they were told to him by officials of Suncoast. William Mayer, another Suncoast salesman who was involved in the day-to-day sales presentations at Shadow Run, corroborates Respondent's testimony on the above points.

    
    

16. From the outset, it also appears, and the evidence reflects, that the developer in fact intended to construct a central water system for the subdivision. To accomplish their purpose, Suncoast purchased the pipe for transmission of the water to the various lots but later abandoned its efforts to construct a central water system based on cost prospectives and other factors. As a result, Suncoast resold the pipe it had bought to complete the central water system at a loss to the developer. (Testimony of president Peterson) Finally, as noted above, Suncoast gave a $1,000.00 credit to all property owners who had been told that a central water system would be constructed, as a means to help defray the costs of the homeowners in getting a well drilled.

    CONCLUSIONS OF LAW

    
    

17. The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this action. Chapter 120.57(1), Florida Statutes.

    
    

18. The parties were duly noticed pursuant to the notice provisions of Chapter 120, Florida Statutes.

    
    

19. The authority of the Petitioner is derived from Chapter 475, Florida Statutes (1977 and 1979).

    
    

20. During times material herein, Respondent was a licensed real estate broker/salesman and as such is subject to the disciplinary procedures contained in Chapter 475.25, Florida Statutes (1977 and 1979).

    
    

21. Chapter 475.17, Florida Statutes, imposes a duty upon a real estate licensee to act in an open and honest manner with those with whom he deals. In this regard, a finding that a licensee is guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing, culpable negligence or breach of trust in a business transaction; or that the licensee has aided, assisted or conspired with any other person engaged in any such misconduct and in the furtherance thereof; or has formed an intent, design or scheme to engage in any such misconduct and has committed an overt act in furtherance of such intent, design, or scheme, in violation of the provisions of Subsection 475.25 (1)(a), Florida Statutes (1977), renumbered Subsection 475.25 (1)(b), Florida Statutes (1979), as alleged, must be based upon competent and substantial evidence. Chapter 120.57(1) (b)(9), Florida Statutes. Using those standards and criteria, the evidence herein reveals that Respondent immediately notified all of the complaining witnesses herein of the decisions which, by the way, were independently made by the officers and directors of Suncoast. In this regard, the evidence reveals that Respondent communicated the changes to the Reeds as soon as he learned of the decision from Suncoast. Moreover, the Reeds had purchased their property prior to the time that Suncoast announced and Respondent learned of the development change, on January 15, 1975. Likewise, the testimony of witnesses Vetrano, Fennell and Dovin, when viewed as a whole, indicates that Respondent did not mislead them hut rather dealt with them in an open and candid fashion. For example, Mr. Vetrano, who is a trained and licensed plumber admitted that he noticed the overhead utilities when he purchased his property but states that he thought that they would be removed and underground utilities would be installed. The record fails to support Mr. Vetrano's belief in this regard. Likewise, the testimony of witness Chester Fennell must also be discredited to the extent that it differs from the version offered by Respondent. Witness Fennell also noticed the overhead utilities but "thought that they would be coming down when the underground utilities were installed." Noteworthy was the fact that Mr. Fennell also was dealing with another salesman and was unclear as to which salesman made what representations. Respondent's testimony is therefore credited to the extent that it differs from the version offered by Mr. Fennell.

22. Respondent openly admitted to having made statements to prospective purchasers which later proved to be untrue when the developer changed its plans respecting the construction of the underground utilities and the central water system. Then these changes were relayed to Respondent by Suncoast. Respondent immediately made these changes known to other salesmen who he was in charge of and to subsequent prospective purchasers. Based thereon, and the entire record compiled herein, insufficient evidence was offered herein to establish that the Respondent violated any of his duties as a real estate licensee as alleged.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is hereby

RECOMMENDED:

That the Administrative Complaint filed herein against Respondent, Gary Steinman, be DISMISSED.

RECOMMENDED this 30th day of June, 1992, in Tallahassee, Florida.

JAMES E. BRADWELL, Hearing Officer Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 30th day of June, 1982.

ENDNOTES

1/ This Division received a transcript of the proceedings herein on May 9, 1982. The parties waived the requirement that the undersigned issue a recommended order within thirty (30) days following the close of the hearing. The parties were afforded leave through May 17, 1982, to submit proposed memoranda respective of their positions. Said memoranda have been received and were considered by me in preparation of this recommended order. To the extent that the proposed findings and conclusions contained in the parties' memoranda are not incorporated in this recommended order, they were deemed either irrelevant, immaterial or unsupported by record evidence.

2/ Although the allegations herein are grounded under Chapter 475.25(1)(b), Florida Statutes (1979), the parties agreed that the acts involved herein occurred prior to the 1979 amendments to Chapter 475, and for that reason, the parties agreed that Respondent's conduct should be reviewed in light of the earlier 1977) statute. (Tr. 5 & 6)

COPIES FURNISHED:

Bruce D. Lamb, Esquire Department of Professional

Regulation

130 North Monroe Street Tallahassee, Florida 32301

Robert L. McDonald, Jr., Esquire 4612 West Kennedy Boulevard Tampa, Florida 33609

C. H. Stafford, Executive Director Florida Real Estate Commission Post Office Box 1900

Orlando, Florida 32802

Samuel R. Shorstein, Secretary Department of Professional

Regulation

130 North Monroe Street Tallahassee, Florida 32301

Frederick H. Wilsen, Esquire Department of Professional

Regulation

130 North Monroe Street Tallahassee, Florida 32301

Docket for Case No: 81-002947

Orders for Case No: 81-002947