STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL ) REGULATION, DIVISION OF REAL ) ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 87-3992

)

IRENE H. PIERAGOWSKI, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a hearing was a held in this cause on July 7, 1988, in Tampa, Florida, before Diane A. Grubbs, a Hearing Officer with the Division of Administrative Hearings.

APPEARANCES:

For Petitioner: Arthur R. Shell, Jr., Esquire

Senior Attorney

DPR-Division of Real Estate

400 West Robinson Street Post Office Box 1900 Orlando, Florida 323802

For Respondent: A. J. Musial, Jr., Esquire

Yado, Keel, Nelson & Bergmann, P.A. Urban Centre, Suite 750

4830 West Kennedy Boulevard Tampa, Florida 33609

ISSUE

Whether the Respondent is guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealings by trick, scheme or device, culpable negligence and breach of trust in a business transaction based on representations or remarks made by the Respondent to Mr. and Mrs. Springer.

BACKGROUND

On August 4, 1987, Petitioner filed an Administrative Complaint against Irene H. Pieragowski (Respondent). The complaint alleged that Respondent was at all times material to the complaint a licensed real estate salesman in the state of Florida; that on or before May 5, 1986, while operating as a real estate salesman in the employee of Geiger Real Estate Corporation, Respondent obtained a listing agreement from William and Beverly Walker to sell certain real property consisting of two and one-half acres improved by a single-family residence; that Respondent held an open house at which time she advised Joseph and Ceresa Springer, as interested purchasers, that a second single-family

residence could be constructed on the property; that the Springers, relying on the representation, submitted a written offer to purchase the property at which time Respondent advised Leslie A. Hammond that a second single-family residence could be constructed on the property; that the offer was accepted, that on or about July 26, 1986 the sales transaction closed but immediately prior to closing the Respondent did advise both the Springers and Leslie A. Hammond that a second single-family residence could be constructed on the property; that after closing, the Springers discovered that a building permit for the construction of the single-family residence could not be issued because the zoning would not permit such construction on the property purchased by the Springers; that the Springers entered into the sales contract and closed the transaction out of trust and reliance on the acts and statements of the Respondent; that the Respondent knew or should have know that her acts and statements were false and were made without regard to the truth or falsity thereof because Respondent did not contact any appropriate government office to determine if the local zoning or building code would prohibit the construction of a second single-family residence; and that the Springers purchased the property for the primary purpose of constructing a second single-family residence to be used by the Springers' daughter and her husband which fact the Respondent was aware of at all times. Based on the foregoing factual allegations, Respondent was charged with violating Section 475.25(1)(b), Florida Statutes.

Respondent disputed the allegations of fact contained in the Administrative Complaint and requested a formal administrative hearing. The matter was referred to the Division of Administrative Hearings on September 10, 1987.

At the hearing Petitioner presented the testimony of Joseph Lamar Springer, Jr., Cerissa R. Springer, Leslie A. Hammond, and Katherine L. Hamm.

Petitioner's Exhibits 1 through 3 were accepted into evidence. Respondent presented the testimony of Sheila Alday, Beverly Walker, William F. Mickler, Michael Zeraccas and the Respondent. Respondent's Exhibit 1 was admitted into evidence. Respondent's Exhibit 2 was not admitted into evidence.

Both Petitioner and Respondent filed Proposed Findings of Fact and Conclusions of Law, and ruling on each of the proposed findings of fact have been included in the Appendix to this order.

FINDINGS OF FACT

1. At all times relevant to this matter, Respondent, Irene H. Pieragowski, was a licensed real estate salesman employed by Geiger Real Estate Corporation. At some time prior to May 5, 1986, Respondent obtained a listing agreement from William and Beverly Walker to sell certain real property owned by the Walkers which consisted of two and one-half acres improved by a single-family residence.

   
   

2. On the Sunday before May 5, 1986, Respondent held an open house at the property. The house had been advertised, and the ad indicated that the property was a single-family residence located on a two and one-half acre tract. Joseph and Ceresa Springer saw the home advertised in a real estate booklet. When they called about the home they were advised of the open house and decided to attend.

   
   

3. The Springers were the first people to arrive at the open house. Respondent was late getting there, and she was moving about trying to open the house during the time the Springers were there. Respondent put information about the house on a counter. The information included a survey of the property and three deeds. Respondent explained that the initial acre was given to Mrs.

   Walker by Mr. Mickler, her father, and the house was built on that original acre. Subsequently, Mr. Mickler deeded to Mrs. Walker an additional one-half acre which was located in front of the home, and another acre located behind the house. Respondent explained that the house had been originally offered for sale with just one and a half acres of land, but, since the house had not sold, the additional acre of land had been included and the price had been lowered by

   $10,000. Respondent then proceeded to move about the house opening the windows and blinds. At some point, Mrs. Springer and Respondent were at the back of the house. Mrs. Springer was looking out the window and asked how far back the property went. Respondent stated that it went back to the pasture and noted that the property in the back was the extra acre. When Mrs. Springer saw how much property there was, she asked the Respondent, "Can you build back there," Respondent replied, "Yes." Mrs. Springer then mentioned that her daughter and son-in-law were going to be moving from Mobile, Alabama to the Tampa area. The entire conversation between Respondent and the Springers at the open house lasted from 5-10 minutes. The Springers did not express any real interest in the property, and Respondent got involved with other people that were at the open house.

   
   

4. When the Springers left the open house, Mrs. Springer was very excited about the property. She knew that her daughter and son-in-law would need a place to live when they moved to the Tampa area, and Mrs. Springer thought that it would ideal for them to build a house on the back acre of the property they had just seen. That night, the Springers called their daughter, and told her about the house and the possibility of the daughter and son-in-law building their home on the additional acre of land.

   
   

5. Prior to the open house, the Springers had been working with Les Hammond, a real estate salesman, in an effort to find a home. They had not been satisfied with the homes they had seen which were located on smaller residential lots. The home from which they had just moved was located on two acres of land which had been given to the Springers by Mr. Springer's mother. The two acres were part of a 16-acre tract owned by Mr. Springer's mother. Therefore, the Springers were looking for a home located on a greater amount of land than the normal subdivision lot. At the same time they were looking for a home for themselves, they also had been keeping an eye out for property for their daughter and son-in-law. However, until the open house, the Springers had not been looking for adjoining property or for a house that had additional acreage that could be used by the daughter and son-in-law to build their own residence.

   
   

6. After the open house, Mr. Springer called Mr. Hammond, who was considered by the Springers to be "their" real estate agent. Mr. Springer explained that they had found a house that they liked and asked Mr. Hammond if he could show them the house again. Mr. Hammond called Geiger Realty and got the key. Mr. Hammond took the Springers to the property the next day, May 5, 1986. At that time, the Springers explained to Mr. Hammond that a real plus on the house was that another residence could be built on the back acre of land. Mr. Hammond was made fully aware of the Springers' plan to have their daughter and son-in-law build a home on the back acre. The Springers and Mr. Hammond also discussed the work that would have to be done on the house and the repairs that would be necessary. After the Springers and Mr. Hammond left the home they went back to his office and the Springers decided to make an offer on the property. Mr. Hammond prepared the sales contract.

7. The Sales Contract contained the following provision:

   
   

   VII. RESTRICTIONS, EASEMENTS, LIMITATIONS:

   The Buyer shall take title subject to:

   Zoning, restrictions, prohibitions and other requirements imposed by governmental authority; Restrictions and matters appearing on the plat or otherwise common to the subdivision ... provided, however, that none of the foregoing shall prevent use of the Property for the purpose of AAR.

   
   

   The language is part of a standard form contract; however, Mr. Hammond inserted the letters AAR, which referred to the zoning of the property, in the blank space after "purpose of." The zoning designation AAR allows one house per 5 acres. Prior to preparing the offer, Mr. Hammond was not aware of the zoning on the property so he called the Respondent who advised him that the property was zoned AAR. Mr. Hammond did not advise the Springers that the zoning would only allow one house per five acres, and he put nothing in the contract which conditioned the offer upon the Springers being able to build a second home on the property. Mr. Hammond explained that he just assumed that another house could be built on the property, notwithstanding the zoning designation, because the Springers had told him that Respondent had told them that another house could be built on the back acre. He also relied on the fact that there were other homes built on one acre plot in that area and that the original house had been built on an acre and a half.

   
   

8. Later that night, Mr. Hammond called Respondent and said that the sales offer had been completed and asked when it could be presented to the sellers. Respondent and Mr. Hammond agreed that Respondent would go to Mr. Hammond's office and they would present the offer to the Walkers by telephone conference call. Respondent began the call stating that an offer had been on the property, and Mr. Hammond then explained the terms of the offer. During the conversation, Mr. Hammond did not mention that the Springers had any intention to build a second residence on the property. Further, Mr. Hammond did not advise Respondent of the Springers' intentions or that the Springers had attended her open house. Respondent had no way of knowing that the people who were making the offer were people she had seen at the open house.

   
   

9. The Walkers accepted the offer, and on July 26, 1986 the sales transaction closed. Respondent attended the closing as did the Springers. It was the first time that she realized the Springers were people that she had seen at the open house. She had not seen them or spoken to them since the open house.

   
   

10. There were no discussions about the viability of building a second residence on the property between the Respondent and the Springers or Mr. Hammond until after the transaction had closed. Mr. Hammond and his daughter Kathy Hamm, who is also a real estate salesperson and works with her father, testified that prior to the closing, Mr. Hammond called Respondent concerning the zoning, and she confirmed that an additional residence could be built on the property. However, Respondent testified that the only conversation she had with Mr. Hammond concerning the zoning occurred after the closing when the Springers learned that the existing zoning classification did not permit building a house on the rear acre. Respondent's testimony is more credible considering the prior inconsistent statement made by Mr. Hammond when his deposition was taken, and his vague recollection of the alleged telephone conversation.

11. The testimony of the witnesses regarding what was said at the closing was also contradictory. Ms. Walker, Ms. Alday, the closing agent, and the Respondent each testified that there was no conversation at the closing regarding constructing another house on the property. However, Ms. Hamm and Mr. Hammond testified that Mr. Springer asked Respondent about building another house on the property and Respondent responded that they could. Neither Mr. Springer nor Mrs. Springer recalled asking any question about building on the property, but testified that Respondent simply announced "and you can build on that property, too." Considering the testimony and demeanor of the witnesses, I find the testimony of the Respondent and Ms. Walker to be the most reliable.

    Ms. Walker sat next to respondent during the closing and left the room with the Respondent. Ms. Walker was in a position to hear anything that Respondent may have said, and Ms. Walker was quite certain that nothing was mentioned about building anything on the back acre of the property.

    
    

12. After the closing, Mr. Springer and his son-in-law talked to Hillsborough County building officials about obtaining a permit to construct a residence on the back acre of land and discovered that the zoning of the property was such that another residence could not be built on the property. There was no evidence presented that there were any other limitations on building on the back of the property. Indeed, on the night of the closing, Mr. Springer advised Mr. Mickler that he was thinking about building a garage/workshop in the back to house his antique automobiles. There was no evidence presented to suggest that he could not have built the garage behind the house.

    
    

13. The Respondent never marketed the property as being anything other than a single family residence and did not misrepresent its zoning limitations. The Springers simply assumed that the extra acre could be used for a second residence. The Springers never asked the Respondent whether a second residence could build on the rear acre, and she never told them that another residence could be built on the property. Although Respondent indicated to Ms. Springer at the open house that they could "build" in the back of the house, there was no intent on Respondent's part to mislead the Springers into believing that a second home could be built on the property. Ms. Springer admitted that she did not tell Respondent that what she was thinking of building was another house. Further, the Springers apparently were not certain that another house could be built on the property when they first told Mr. Hammond about the house. When Mr. Springer was asked what he mentioned to Mr. Hammond about the property, Mr. Springer replied, "Well, that we liked it okay and it was nice that there was an extra acre that we probably could build on. He was aware of our intentions." (e.s.)(T-26) Therefore, it does not appear that the Springer's relied on Respondent's comment at the open house as establishing that a second home could be built on the property. Indeed, the Springers relied on Mr. Hammond to take care of their interests, and he was the only one who knew what their plans were. Finally, Mr. Springer stated that even if he had known that another residence could not be built on the property, he didn't know whether that knowledge would have kept him from purchasing the property.

    
    

    CONCLUSIONS OF LAW

    
    

14. The Division of Administrative Hearings has jurisdiction over the parties to, and subject matter of, this proceedings. Section 120.57(1), Florida Statutes. Pursuant to Section 475.25(1), Florida Statutes, the Florida Real Estate Commission "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 for each count or separate offense; and may issue a reprimand, or any or all of the foregoing" if it finds that the licensee has committed any of the acts enumerated in Section 475.25(1). A licensee is subject to discipline if he:

    
    

    (b) Has been guilty of fraud, misrepre- sentation, concealment, false promises, false pretenses, dishonest dealing by

    trick, scheme, or device, culpable negligence, or breach of trust in any business trans- action ...

    
    

15. In the Administrative Complaint, Petitioner charged that Respondent violated Section 475.25(1)(b) by representing to the Springers and to Mr. Hammond that a second single-family residence could be built on the property they purchased. The Petitioner has the burden of establishing this charge by clear and convincing evidence. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987).

    
    

16. The evidence presented in this case failed to establish that Respondent made any misrepresentations to either the Springers or Mr. Hammond, that she concealed any information from them or that she engaged in any other way in dishonest dealing in this transaction. Further, even if Respondent's comment to Mrs. Springer at the open house, indicating that something could be built on the property, could be considered a misleading statement, that alone is not sufficient to find a violation of Section 475.25(1)(b), Florida Statutes. All of the grounds for discipline set forth in Section 475.25(1)(b), Florida Statutes, require a finding of wrongful intent or scienter, which was absent in this case. See Morris v. Department of Professional Regulation, 474 So.2d 841 (Fla. 5th DCA 1985). Therefore, Respondent has not violated Section 475.25(1)(b), Florida Statutes.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is, RECOMMENDED that a Final Order be entered dismissing the Administrative

Complaint filed against the Respondent.

DONE and ORDERED this 24th day of October, 1988, in Tallahassee, Florida.

DIANE A. GRUBBS

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 24th day of October, 1988.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-3992

Rulings on Petitioner's Proposed Findings of Fact:

1. Accepted.

2. Rejected as contrary to the evidence.

3. Rejected, to the degree that it states that Mr. Hammond was advised by Respondent that a second single-family residence could be constructed on the property, by contrary finding based on the evidence.

4. Accepted.

5. Rejected, as not supported by the evidence.

6. Accepted.

7. Rejected for the reasons previously stated.

8. Rejected as immaterial since Respondent was unaware that the Springers' desired to build a second residence on the property.

9. Rejected, to the extent it indicates that Respondent was aware of the Springers' plan, as contrary to the evidence.

Rulings on Respondent's Proposed Findings of Fact: 1.-7. Accepted, generally.

1. Accepted to the degree it constitutes a finding of

   fact.

2. Accepted, generally.

3. Accepted, generally.

4. Rejected as irrelevant.

COPIES FURNISHED:

Arthur R. Shell, Jr., Esquire DPR-Division of Real Estate

400 West Robinson Street Post Office Box 1900 Orlando, Florida 323802

A. J. Musial, Jr., Esquire Urban Centre, Suite 750 4830 West Kennedy Boulevard Tampa, Florida 33609

Lawrence A. Gonzalez Secretary

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32399-0750

Bruce D. Lamb, Esquire General Counsel

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32399-0750

Darlene F. Keller Acting Director Division of Real Estate

Department of Professional Regulation

Post Office Box 1900 Orlando, Florida 32802

Docket for Case No: 87-003992

Orders for Case No: 87-003992