STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL ) REGULATION, DIVISION OF )

REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 86-3502

) DONALD L. SWAGLER and SWAGLER ) REALTY CO., )

)

Respondents. )

)

RECOMMENDED ORDER

For Petitioner: James H. Gillis, Esquire

Orlando, Florida

For Respondent: J. Michael Hussey, Esquire

North Ft. Myers, Florida

The issue in this case is whether the Florida Real Estate Commission should discipline respondents, Donald E. Swagler and Swagler Realty Company, for alleged culpable negligence in a business transaction in violation of Section 475.25(1)(b), Florida Statutes (1985).

A formal administrative hearing was held in this case in Ft. Myers on December 17, 1986. The parties asked for and received fifteen days from the filing the transcript of the hearing in which to file proposed recommended orders. The transcript was filed on January 12, 1987, making the proposed recommended orders due January 27, 1987.

FINDINGS OF FACT

1. Respondent Donald E. Swagler is now and was at all times material a licensed real estate broker or broker/salesman in the State of Florida, having been issued license number 0139756, in accordance with Chapter 475, Florida Statutes.

   
   

2. At all times alleged in the Administrative Complaint, respondent Donald

   1. Swagler was licensed and operating as a qualifying broker for and an officer of respondent Swagler Realty, Inc., which is now and was at all times material a corporation licensed as a real estate broker in the State of Florida, having been issued license number 0169035, in accordance with Chapter 475, Florida Statutes.

      
      

3. At all times material, Fern Z. Taylor was a licensed real estate broker with an office in Bonita Springs, approximately a twenty-minute drive south from the offices of Swagler Realty Company in Ft. Myers.

4. On April 10, 1980, Andrew W. Kuchmaner was working part-time as a licensed real estate salesman in the employ (as that term is defined in Section 475.01(2), Florida Statutes) of Swagler Realty Company. Kuchmaner was a new salesman and had not yet had occasion to present a buyer's purchase offer to a client seller.

   
   

5. During the early months of 1980, Kuchmaner was also working in the employ of, and receiving a salary from, Jim Walter Homes Company.

   
   

6. Philip R. and Susan B. Workman first met Kuchmaner in January or February 1980 while visiting a Jim Walter's Homes sales office in Ft. Myers where he was working in his capacity as a Jim Walter Homes salesman.

   
   

7. Kuchmaner advised the Workmans to find and purchase a lot for the Jim Walter home they had selected, and then they could purchase the Jim Walter home. Jim Walter Homes Company requires lot ownership prior to building one of their homes.

   
   

8. Prior to selecting a lot, the Workmans had already decided on the Jim Walter home they were going to purchase, and Kuchmaner was going to do the paperwork for Jim Walter.

   
   

9. Throughout the first quarter of 1980, the Workmans searched for a lot on which to construct their home in the Bonita Springs area of southern Lee County. During their search, the Workmans came upon a vacant lot with a sign saying it was for sale by Fern Z. Taylor. Upon seeing her real estate for sale sign, the Workmans went to Fern Taylor's office to inquire about the property and seek her assistance in their purchase of a lot in the Bonita Springs area.

   
   

10. Fern Taylor advised the Workmans that, in addition to the lot they had already seen bearing her sign, she had Dust that morning listed and had for sale another lot in the Bonita Springs area which they would be interested in seeing.

    
    

11. Earlier that same morning, Taylor took a long distance telephone call from a Charles A. Bennett, a resident of Arizona. Bennett said he had a lot he wanted to sell and gave Taylor the price ($7,000) and a description--Lot 20, Block E, Rosemary Park No. 2, in Bonita Springs. Bennett had not seen the property in some time and gave no landmarks or street address for Taylor's guidance.

    
    

12. Back in 1925, Rosemary Park No. 2 was subdivided into eight blocks of

    24 140' x 50' lots each and two larger blocks containing 16 larger 162' x 300' lots each. One of the smaller lots bore the legal description: "Lot 20, Block E of Rosemary Park No. 2 according to the Plat thereof recorded in Plat Book 6 at Page 30, of the Public Records of Lee County. This is the lot Bennett owned and was trying to sell. It is located on First Street.

    
    

13. In 1926, Rosemary Park No. 2 was re-subdivided. The two larger blocks of the prior subdivision were re-subdivided into eight blocks of 24 140' x 50' lots each. Unfortunately, in a stroke of singular lack of vision, the new blocks and lots were designated with the same letters and numbers already assigned to the smaller blocks and lots in the original 1925 subdivision. As a result, there is another lot in Rosemary Park No. 2 designated as Lot 20, Block E:

    
    

    Lot 20, Block E, Rosemary Park, resubdivision of the East 1/2 of No. 2,

    according to the plat thereof, as recorded in Plat Book 8, Page 32, in the Public Records of Lee County, Florida.

    
    

    This other Lot 20, Block E, is owned by the Fyfes of Maine and is on Fifth Street.

    
    

14. Taylor, who was quite busy, quickly checked a plat book in her office to locate the lot and the tax rolls to attempt far to verify Bennett's ownership and left to put her sign on the lot she thought Bennett owned and was trying to sell. Through a combination of the confusing legal description, the incomplete description and paucity of information Bennett gave Taylor, and Taylor's admitted negligence, Taylor put her for sale sign on the Fyfes' lot on Fifth Street instead of on Bennett's lot on First Street. Taylor had no listing agreement with the Fyfes, and the Fyfes' property was not for sale.

    
    

15. Fern Taylor drew a map for the Workmans providing them with directions to this purportedly newly listed lot on which she had placed her "For Sale" sign.

    
    

16. In reliance on Fern Taylor's map and representations as to her listing agreement, the Workmans drove to the Fifth Street lot and viewed the property as well as Fern Taylor's "For Sale" sign.

    
    

17. Approximately one week after seeing the Fifth Street lot, the Workmans summoned Andrew Kuchmaner to Bonita Springs to view the lot and give them his opinion as to how the Jim Walter home they had previously selected would sit on the lot.

    
    

18. The Workmans had their minds pretty well made up that they wanted to purchase the Fifth Street lot before summoning Kuchmaner.

    
    

19. Kuchmaner never took the Workmans to any property but, upon their request, traveled to Bonita Springs to meet them and was thereupon shown the Fifth Street lot.

    
    

20. While viewing the Fifth Street lot, Kuchmaner advised the Workmans that the Jim Walter's home they had selected would sit nicely on that lot. He also told the Workmans for the first time that he had a real estate license and would be glad to help them out with placing an offer for the lot on their behalf.

    
    

21. The Workmans used Kuchmaner to make their $6,000 offer on the lot to save time because it was late in the afternoon and they lived in North Ft. Myers.

    
    

22. When Fern Taylor first met Kuchmaner, he had been represented to her by the Workmans as a Jim Walter salesman.

    
    

23. Kuchmaner went to Taylor's office and requested she prepare the contract because he would have to go all the way back to Ft. Myers to write it up. Taylor provided Kuchmaner with the legal description "Lot 20, Block E, Rosemary Park #2" and advised him he would have to write his own contract.

    
    

24. Kuchmaner also proposed to Taylor that they not tell Swagler or Swagler Realty about the sale so they could divide Swagler's quarter of the 10

    percent commission ($150 of the total $600 commission). Taylor refused and told Swagler what had happened. Swagler had an angry confrontation with Kuchmaner and was about to fire him, but Kuchmaner begged for a second chance and promised not to try to cut Swagler out of a commission again. Swagler relented and kept Kuchmaner on as a salesman.

    
    

25. Kuchmaner filled out a contract on a Swagler Realty form and brought it to Donald Swagler for his review. He advised Swagler that he had gotten the legal description from Fern Taylor and had been to see the property. Swagler generally does not sell property in the Bonita Springs area and is not familiar with the area. He relied on Taylor to provide an accurate legal description of the property being sold.

    
    

26. Kuchmaner hand delivered the contract offering to purchase the Bennett parcel to Taylor. Taylor checked the contract before she sent it to Bennett to see that the legal was the same that she had, and it was. She also checked it again when it was sent back from Bennett.

    
    

27. Fern Taylor had received and checked the contract, title insurance binder, seller's closing statement and a copy of the warranty deed from Bennett to Workman prior to the closing

    
    

28. The Workmans had the property they thought they were purchasing surveyed by William R. Allen, a registered and licensed land surveyor. He received the request to survey the property from Susan Workman. Over the phone, she advised Mr. Allen she had purchased a lot in Rosemary Park, Specifically lot far 20, block E. Mr. Allen informed Mrs. Workman that there are two Block E's in Rosemary Park and that they should be careful. He inquired as to which street she had purchased property on and was told, "We're on Fifth Street." Allen surveyed the Fifth Street lot and certified his survery, using the actual legal description of the Fifth Street (Fyfes') lot. Allen never saw any document with the legal description of the Bennett lot.

    
    

29. Fern Taylor did not know that the Workmans had ordered a survey and did not see a copy of the survey until well after the closing. Although she attended the closing, she saw no discrepancies among the documents cursorily reviewed at the closing. Neither did the Workmans or the closing agent. The evidence was not clear whether there was a copy of the survey among the documents at the closing.

    
    

30. The lender (Jim Walter Homes) and the title insurance company got a copy of the survey before closing. Neither of their professionals noticed that the legal description on the survey (the Fyfe lot) did not match the legal description on the deed and other documents (the Bennett lot).

    
    

31. When a real estate broker has placed his sign ("For Sale") on a parcel of property, it is a reasonable conclusion that he is authorized to sell that parcel.

    
    

32. It is customary for a broker to rely on the listing broker to provide a correct legal description for the property they have listed.

    
    

33. At no time before the closing did Swagler or Kuchmaner have reason to suspect that the Workmans were purchasing a parcel of property different from the parcel they believed they were purchasing.

34. Neither Swagler nor Kuchmaner were at the closing of the Workmans' purchase. But their presence would not have made any difference. It is not the real estate broker's or salesman's lob to scrutinize the documents being signed to make sure the legal descriptions on all the documents match (unless he has reason to believe the legal descriptions might be wrong.) He has the right to rely on the other professionals--the listing broker (especially since Fern Taylor was familiar with the Bonita Springs area and Swagler was not), the lender's attorney, the title company, the closing agent and, if any, the surveyor and the buyer's attorney.

    
    

35. Fern Taylor and perhaps others were culpably negligent. Swagler and Kuchmaner were not. What happened to the Workmans is not their fault.

CONCLUSIONS OF LAW

1. Respondents have been charged with having violated Section 475.25(1)(b), Florida Statutes (1985), which provide in pertinent part:

   
   

   1. The Commission may deny an application for licensure, registration, or permit, or renewal thereof; may suspend a license or permit for a period not exceeding 10 years; may revoke a license or permit; may impose an administrative fine not to exceed $1,000.00 for each count or separate offense; and, may issue a reprimand, or any or all of the foregoing, if it finds that the licensee, permittee, or applicant;

      
      

      (b) Has been guilty of fraud, misrepresen- tation, 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 or any other state,

      nation, or territory;....

      
      

2. At hearing the issue was narrowed to whether respondents were culpably negligent.

   
   

3. It has been found, and must be concluded, that respondents were not culpably negligent. Under the current law and industry custom and practice, neither Swagler nor Kuchmaner had a duty to the Workmans to do more than they did or to try to make the Workmans real estate transaction "fail safe." They had a right under the circumstances to rely on the listing broker and other professionals. What happened to the Workmans is the fault of those other professionals, not the fault of Swagler or Kuchmaner.

RECOMMENDATION

Based on the foregoing Findings Of Fact and Conclusions Of Law, it is recommended that the Florida Real Estate Commission enter a Final Order dismissing the Administrative Complaint against respondents, Donald E. Swagler and Swagler Realty Company, in this case.

RECOMMENDED this 9th day of February, 1987 in Tallahassee, Leon County, Florida.

J. LAWRENCE JOHNSTON Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 9th day of February, 1987.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-3502

These rulings on proposed findings of fact are made in compliance with Section 120.59(2), Florida Statutes (1985).

1. Petitioner's Proposed Findings of Fact.

1.-4. Accepted and incorporated.

5. Rejected as contrary to facts found. (Kuchmaner did not "solicit" or "obtain" them.)

6.-14. Accepted and incorporated.

15. Rejected as contrary to facts found. (Taylor's "investigation" or "attempt" to ascertain the legal description was deficiently and negligently performed.)

16.-17. Accepted and incorporated.

1. First sentence, rejected as incomplete ("compare the deed" with what?); second sentence, rejected because it was not proved Taylor had access to a copy of the survey before the closing.

2. Rejected as unnecessary and potentially misleading. (A Final Judgment was entered; Taylor paid the portion against her; the other defendants have not paid the portions against them.)

3. Rejected. Swagler Realty Company was a defendant in the case; Donald

E. Swagler was not.

21.-24. Accepted and incorporated.

1. Rejected as not proved whether they "failed," "refused" or "neglected." (The fact is that neither has paid the Workmans any money in satisfaction of the portion of the Final Judgment against Swagler Realty Company.)

2. Accepted but unnecessary.

B. Respondents' Proposed Findings Of Fact.

1. Accepted but unnecessary.

2.-10. Accepted and incorporated.

11. Accepted but unnecessary.

12.-23. Accepted and incorporated. 24.-28. Accepted and incorporated.

29. Accepted but unnecessary. 30.-36. Accepted but cumulative.

37.-42. Accepted and incorporated, along with additional findings.

43. Accepted but unnecessary.

COPIES FURNISHED:

James H. Gillis, Esquire Division of Real Estate Post Office Box 1900 Orlando, Fl 32802

J. Michael Hussey, Esquire 3443 Hancock Bridge Parkway Suite 501

North Ft. Myers, Fl 33903

Van B. Poole Secretary

Department of Professional Regulation

130 North Monroe Street Tallahassee, Fl 32301

Wings S. Benton, Esquire General Counsel

Department of Professional Regulation

130 North Monroe Street Tallahassee, Fl 32301

Harold Huff Executive Director

Division of Real Estate Post Office Box 1900 Orlando, Fl 32802

Docket for Case No: 86-003502

Orders for Case No: 86-003502