STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL )

REGULATION, BOARD OF )

REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 82-867

)

VIVIAN LIDE, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice this cause came on for Administrative Hearing before P. Michael Ruff, duly designated Hearing Officer of the Division of Administrative Hearings on September 1, 1982, in Miami, Florida.

APPEARANCES

For Petitioner: Theodore J. Silver, Esquire

9445 Southwest Bird Road, 2nd Floor Miami, Florida 33165

For Respondent: Harold Barkas, Esquire

600 Concord Buildings

Miami, Florida 33130

This proceeding was initiated on an Administrative Complaint filed by the Petitioner against the Respondent seeking to suspend, revoke or take other disciplinary action against the Respondent's licensure status as a licensed real estate broker in the State of Florida. It is alleged in the complaint that the Respondent was broker for the sale of property located at 10400 S.W. 155th Terrace, Miami, Florida, and obtained the sale of those premises to one Eunice McCallum. It is alleged that the Respondent took a $2,400 second mortgage from Mrs. McCallum in order for her to have enough money to purchase the property.

It is alleged that the subject $2,400 second mortgage was held by the Respondent on the subject property as mortgagee. The transaction allegedly closed on January 16, 1976. It is alleged that in late 1977, Mrs. McCallum became delinquent in her mortgage payments because of illness and marital problems and that the Respondent advised her to sell the subject house for a price of $38,000 in order to pay her delinquent installments and avoid foreclosure of the mortgage. It is alleged that she later advised Mrs. McCallum to decline an offer of $39,000 on the property from one Jack Rosha. The complaint then charges that the Respondent offered to lend Mrs. McCallum the money necessary to bring her delinquent loans current, at 9 percent interest. On February 8, 1978, the Respondent purportedly caused Mrs. McCallum to sign some papers without giving full disclosure to Mrs. McCallum of their content, such that she inadvertently signed a quit claim deed of the premises to the Respondent. It is charged, finally, that the Respondent continued to collect monthly mortgage

payments from Mrs. McCallum and refused to provide her an accounting of the monies paid or owed her under the loan agreement. In light of the above purported facts and since an order was entered by the Circuit Court of the Eleventh Judicial Circuit in and for Dade County, whereby cancelling the quit claim deed, the Petitioner maintains that the Respondent is guilty of fraud, misrepresentation, concealment and dishonest dealing in violation of Section 475.25(1)(b), Florida Statutes (1979).

At the hearing the Petitioner presented the testimony of Eunice McCallum, Jack Rosha and ten exhibits, consisting of the deed to Mrs. McCallum, the closing statement and contract for the McCallum purchase, the notes and mortgages between Mrs. McCallum, the Respondent and the Respondent's corporation, the exclusive listing contract with the Respondent and various checks, all of which exhibits were admitted into evidence. The Respondent presented three witnesses and Respondent's composite Exhibit 1 consisting of documents concerning a related Circuit Court action involving Mrs. McCallum and the Respondent which was admitted into evidence.

At the conclusion of the proceeding the parties requested the benefit of a transcript which was filed November 23, 1982. The issue to be resolved in this proceeding is whether the charges alleged in the Administrative Complaint are true, and if so, what, if any, penalty should be imposed upon the Respondent's licensure status.

FINDINGS OF FACT

1. The Respondent, Vivian Lide, is a licensed real estate broker holding license number 0157178, issued by the Petitioner.

   
   

2. The Petitioner is an agency of the State of Florida having jurisdiction over licensure of real estate salesmen, broker-salesmen and brokers and regulation of their licensure status and professional practices and operations.

   
   

3. In late 1975, or early 1976, Mrs. Eunice McCallum moved with her husband to the Miami area from Canada. When they arrived in Miami, Mrs. McCallum and her husband were referred to the Respondent by a business associate of Mrs. McCallum's husband to obtain her services in locating a home for them to purchase. They sought the Respondent's services and the Respondent located a house they liked and felt they could afford. They closed the purchase of the house in January, 1976. The McCallums were short of cash and therefore gave a second mortgage and note to the corporation of which the Respondent was a shareholder and officer for the balance of cash they needed to close the sale. After giving the second mortgage they were still $300 short of money needed to close and so Mrs. McCallum borrowed the $300 from the Respondent herself, giving back a note. That note was later satisfied. During the ensuing year, Mrs. McCallum and the Respondent became good friends. Mrs. Lide was the only friend that Mrs. McCallum had in Florida at that time and she often confided in her regarding her marital and financial problems. In later 1977, Mrs. McCallum's financial posture began to go awry and her severe marital problems culminated in her divorce. Mrs. Lide, through her friendship with Mrs. McCallum, was familiar with her financial and marital situation at this time and was a witness on her behalf in the dissolution proceeding. Because of her severe financial problems and as a result of the dissolution of her marriage, Mrs. McCallum felt that she had to sell her house in order to stabilize her financial situation. Accordingly, on December 14, 1977, she entered into an exclusive listing contract with the Respondent to sell the subject residence located at 10400 S.W. 155th Terrace, Miami, Florida. The listing contract enumerates a sale price of

   $38,000. The Respondent advised Mrs. McCallum to sell her residence because her first and second mortgage payments were both in delinquency and this was the only way she had to recoup her financial deficit. Thirty-eight thousand dollars was determined by Mrs. Lide and agreed by Mrs. McCallum to be the price which would allow her to pay off both mortgages and recoup a small amount of cash in her pocket.

   
   

4. On approximately January 10, 1978, a realtor, Jack Rosha, came to Mrs. McCallum's home with Mrs. McCallum and the Respondent present and brought an offer to purchase the property. The evidence is unclear regarding the precise amount of the offer, it was either $39,000.00 or $39,500.00. Rosha represented to the Respondent and Mrs. McCallum that he had received a deposit or binder from his client, but refused to disclose to the Respondent, who represented Mrs. McCallum, whether he had actually placed a binder deposit in his escrow account and Mrs. Lide felt that it was not truly a bona fide offer. In any event, she advised Mrs. McCallum that since it proposed a purchase financed through a Veterans Administration loan, which would require the seller paying a substantial amount of money as "points" (a fee required to be paid by the seller in order for the Veterans Administration to finance the purchase), then the offer would not allow her enough money to retire the two mortgages and have any cash for herself. After this meeting and several phone conversations this offer and a later offer were rejected for this reason and no sales transaction was ever consummated with Jack Rosha's clients.

   
   

5. Some weeks later, with Mrs. McCallum's financial difficulties unresolved as yet, Mrs. McCallum and the Respondent entered into an agreement whereby Mrs. Lide, on behalf of her corporation, would forebear requiring payments on the outstanding second mortgage, which was delinquent, and would allow Mrs. McCallum to retain possession of the property in return for which Mrs. McCallum would execute a quit claim deed to Mrs. Lide and would pay her first mortgage payments to Mrs. Lide in order for Mrs. Lide to ascertain that the property and the mortgages encumbering it were secure and that payments thereon were being kept current. As a Part of this agreement, Mrs. Lide assured Mrs. McCallum that she could redeem the property at any time when she paid off the delinquent amounts on the mortgages, thus redeeming the property without paying any additional purchase price fees or profit to Mrs. Lide. With this arrangement in mind, the parties met in late January, 1978, before a notary and executed the required transfer of title document to file with Stockton, Whatley and Davin (the first mortgagee), and Mrs. McCallum executed a quit claim deed in favor of Mrs. Lide. At this meeting, the notary duly notarized the documents and asked Mrs. McCallum if she understood the import of what she was signing and the contents thereof. Mrs. McCallum gave every indication that she understood the nature and purpose of the transaction at that time.

   
   

6. Some months later, a dispute arose as to amounts of money which remained due on the first and second mortgages between Mrs. McCallum and Mrs. Lide and Mrs. McCallum demanded an accounting of the amounts paid Mrs. Lide and the amounts remaining due, at which point relations between the two parties became strained, with the ultimate result that Mrs. McCallum filed suit against Mrs. Lide in Circuit Court. The ultimate result of the Circuit Court action was that the quit claim deed was set aside and the judge awarded a judgment in favor of Mrs. Lide for in excess of $11,000.00, representing the amounts found by the judge due to the Respondent from Mrs. McCallum, representing the first and second mortgage payments due up to that point. It was in the course of these proceedings, after the parties had become hostile to each other, that Mrs. Lide instituted the corollary eviction action against Mrs. McCallum.

7. Although Mrs. McCallum represented at the hearing that she signed the quit claim deed without knowing what she was signing and with the content of the deed concealed by another piece of paper so that she could only see the signature line, this testimony is belied by that of Mrs. Lide. Mrs. Lide disclosed the entire nature of the transaction to Mrs. McCallum and the purpose of it, which was to both protect her security interest in the property and to enable Mrs. McCallum to avoid foreclosure, to remain living in the premises and still have the opportunity to redeem the property upon bringing both mortgages current. The testimony and evidence adduced by the Respondent regarding her desire to protect her security interests and still help her former friend, to stabilize her financial situation and still have a place to live, coupled with the testimony which establishes that the notary asked Mrs. McCallum if she understood the content and import of the papers she was signing, obtaining Mrs. McCallum's assent, establishes Mrs. Lide's account of the circumstances surrounding this transaction to be more accurate and worthy of belief. The Hearing Officer finds the testimony of Mrs. McCallum to be too colored by the later hostility that arose between her and the Respondent concerning the accounting for monies owed the Respondent to constitute testimony sufficiently substantial and credible to refute the contrary testimony and evidence adduced by the Respondent.

   
   

   CONCLUSIONS OF LAW

   
   

8. The Division of Administrative Hearings has jurisdiction of the subject matter of and the parties to this proceeding. Section 120.57(1), Florida Statutes.

   
   

9. The Petitioner, in essence, has charged the Respondent with fraud, misrepresentation, concealment and dishonest dealing in violation of Section 475.25(1)(b), Florida Statutes, in that she allegedly induced Mrs. McCallum to sign some papers consisting of a quit claim deed and title transfer document without fully disclosing to Mrs. McCallum the nature and contents of these papers. The Petitioner contends that these circumstances constitute fraud, misrepresentation, concealment and dishonest dealing for purposes of the above authority.

   
   

10. Section 45.25(1)(b) provides in pertinent part that the board may deny application for licensure or renewal, may suspend or revoke a license or impose an administrative fine if a Respondent is found 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. For the charge involving fraud, misrepresentation, etc., to be sustained, the Petitioner must prove that the signing of the quit claim deed by Mrs. McCallum was induced by the Respondent through a misrepresentation of what Mrs. McCallum was to sign or otherwise failing to disclose to her what she was about to sign or the import of it. The violations of Subsection 475.25(1)(b), with which the Respondent is charged, all are charges necessarily involving the element of intent or scienter. Thus, for these charges to lie, it must have been shown that Mrs. Lide obtained Mrs. McCallum's signature on the subject deed with the intent to conceal the true nature of the transaction which it represented. The facts found above and the evidence upon which those findings are based, show that the Respondent did arrange for her and Mrs. McCallum to appear before a notary and have the subject title transfer document and quit claim deed signed and notarized, but the evidence does not establish that Mrs. Lide did so with the intent to dishonestly obtain title to Mrs. McCallum's property. Indeed the totality of the evidence in the record reflects that Mrs. Lide was making a good faith attempt to help

    Mrs. McCallum overcome her serious financial problems. The evidence establishes that Mrs. Lide entered into this transaction with Mrs. McCallum with the intent that she could redeem the property upon bringing the delinquent payments current on the first and second mortgages, and indeed Mrs. Lide further agreed to forego payment on the second mortgage on behalf of her corporation for a few months until Mrs. McCallum could achieve some financial stability and renewed ability to make those payments. Parenthetically, although concededly, Mrs. Lide benefited by this arrangement in that she avoided the necessity of incurring the expense of foreclosing her second mortgage, the fact remains that Mrs. Lide was affording Mrs. McCallum and opportunity to remain in her residence and obtain a grace period during which she might be able to defray those delinquencies and redeem her property. Mrs. Lide fully disclosed this to Mrs. McCallum and Mrs.

    McCallum agreed to the arrangement. Mrs. Lide only sought to evict Mrs. McCallum from the premises after the amount of money owed Mrs. Lide for the second mortgage and for the first mortgage payments which she was collecting from Mrs. McCallum (then in the form of rent) became in dispute and Mrs.

    McCallum filed suit in Circuit Court for an accounting of the disposition of the mortgage payments and the amounts owed. That dispute was ultimately resolved in Circuit Court and is not at issue here. Indeed in that dispute Mrs. Lide ultimately recovered a judgment from Mrs. McCallum in excess of $11,000.00. The evidence simply fails to establish that Mrs. Lide induced Mrs. McCallum to sign the quit claim deed with any fraudulent intent, nor that any representation was made to Mrs. McCallum by the Respondent, in an effort to induce her to sign the deed, with the knowledge that such representation was false. Indeed, Mrs. Lide established that Mrs. McCallum, upon being questioned by the notary at the signing, indicated that she understood the nature of the documents she was signing and Mrs. Lide established that it was her intent (which Mrs. McCallum understood) that Mrs. McCallum could redeem title to the property merely upon bringing the payments current at a future date.

    
    

11. The totality of the evidence adduced by the Respondent, especially that which established that she disclosed to Mrs. McCallum that she could have her property back upon simply bringing the mortgage payments current and continuing to make them (without charging her any additional purchase price), reveal that Mrs. Lide had no intent to make a misrepresentation at the time of the title transfer, nor any knowledge that a representation she made at the time was false. To be punishable, a misrepresentation must be made which is material and with the knowledge by the one making the misrepresentation that it is indeed false. That was not shown to be the case here. See Shelton v. Florida Real Estate Commission, 120 So.2d 191 (2nd DCA Fla. 1960). The most that can be said of Mrs. Lide's motives in arranging and engaging in that transaction is that she was attempting to protect her own financial interests in the mortgage her corporation held on the property and to also offer Mrs. McCallum a way to stabilize her financial situation and still live in her residence and avoid foreclosure. Mrs. McCallum's bare assertion that she did not know what she was signing cannot now, after all the hostility engendered by the Circuit Court dispute, in the face of the evidence to the contrary, serve to implicate the Respondent with any fraudulent intent at the time of the signing of the deed. The Respondent's evidence establishes that the nature of the deed, and the transaction surrounding it, were disclosed to Mrs. McCallum and the charges of fraud, misrepresentation and the similar charges concerning the above subsection have simply not been established.

RECOMMENDATION

Having considered the foregoing Findings of Fact and Conclusions of Law, the evidence in the record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is

RECOMMENDED:

That the Administrative Complaint filed against Vivian Lide be DISMISSED. DONE and ENTERED this 23rd day of March, 1983, in Tallahassee, Florida.

P. MICHAEL RUFF 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 23rd day of March, 1983.

COPIES FURNISHED:

Theodore J. Silver, Esquire 9445 S.W. Bird Road, 2nd Floor Miami, Florida 33165

Harold Barkas, Esquire 600 Concord Building

Miami, Florida 33130

William M. Furlow, Esquire Florida Real Estate Commission

Department of Professional Regulation Post Office Box 1900

Orlando, Florida 32802

Fred Roche, Secretary

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

Docket for Case No: 82-000867

Orders for Case No: 82-000867