vs. ) CASE NO. 89-5532
ELIZABETH C. SEITHER AND ) EXECUTIVE INC. HOMES CONDOS AND ) INVESTMENTS, )
Respondent. )
The final hearing in this case was held on May 17, 1990, in Clearwater, Florida, before Donald D. Conn, Hearing Officer, Division of Administrative Hearings.
For Petitioner: Steven W. Johnson, Esquire
P. O. Box 1900
The issue in this case is whether the Respondents' real estate licenses should be disciplined based upon charges set forth in the Administrative Complaint which allege violations of Sections 475.25(1)(b),(d), and (e), and Section 475.42(1)(j), Florida Statutes.
At the hearing, seven witnesses were presented on behalf of the Petitioner, and the Respondent, Elizabeth C. Seither, testified on behalf of the Respondents. Eleven exhibits were introduced on behalf of the Petitioner, and twenty-two on behalf of the Respondents.
No transcript of the final hearing was filed. The parties requested and were allowed twenty days after the hearing within which to file proposed recommended orders. A ruling on each timely filed proposed finding of fact included in the parties' proposed recommended orders is included in the Appendix to this Recommended Order.
The Respondent, Elizabeth C. Seither, is now, and at all times material hereto, has been licensed as a real estate broker in State of Florida, having been issued license number 0311552. Her most recent broker's license was issued to her at Executive Inc. Homes Condos and Investments, 132 Island Way, Clearwater, Florida.
Respondent, Executive Inc. Homes Condos and Investments, is now, and at all times material hereto, has been a corporation registered as a real estate broker in the State of Florida, having been issued license number 0233230. Respondent Seither is the qualifying broker for Respondent, Executive Inc. Homes Condos and Investments.
As listing and selling brokers, Respondents solicited and obtained a
$140,000 offer to purchase certain property located at 5343 Quist Drive, Port Richey, Florida, on July 9, 1988, from Carl D. and Janice Brooks, as buyers. A
$7,000 deposit was given to the Respondents by the Brooks' with this offer. On July 11, 1988, Irene Laks, as seller, counter-offered at $144,000.
While Laks' counter-offer was pending and being considered by the Brooks', Respondent Seither ordered a survey of the subject property, although there was no fully executed contract for sale. The Brooks', as buyers, did not authorize or request a survey of the property. Janice Brooks credibly denied at hearing that she or her husband had ever authorized or ordered this survey, and Respondent Seither's testimony that Carl D. Brooks told her to order the survey is found to be lacking in credibility, based upon the demeanor of the witnesses.
On July 13, 1988, the Brooks' rejected Laks' counter-offer and sent a note to Respondents withdrawing their offer on this property. When Respondent Seither told Janice Brooks that a survey had already been ordered, Janice Brooks immediately called the survey company in an attempt to cancel the survey. However, by the time Brooks called the survey company, the survey had already been completed and the flags marking the property boundaries had been placed on the property.
The Brooks' made a verbal demand upon the Respondents, on or about July 18, 1988, for a return of their $7,000 deposit. However, the Respondents returned only $6,800 of their deposit to the Brooks', and on July 18, 1988, wrote a check to the survey company for $200 for the survey work performed on the subject property. Although the check was dated on July 18, 1988, it was not received by the survey company until September 1, 1988.
Upon receiving a partial refund of their deposit, the Brooks' made repeated verbal demands upon Respondents for a refund of the remaining $200 of their earnest money deposit. On October 22, 1988, the Brooks' made a formal written demand upon Respondents for this remaining amount, but have never received a full refund of their deposit. On October 28, 1988, Respondent Seither wrote to the Brooks' and explained the disbursement of their deposit from her escrow account. Respondents failed to notify the Florida Real Estate Commission of this escrow refund dispute.
During November, 1987, the Respondents obtained a listing agreement from Salvatore Santoro as owner to sell certain property located at 672 Harbor Island, Clearwater, Florida. Santoro was Respondent Seither's next door neighbor, and at the time of the listing this property was his principle residence and had homestead exemption. Respondent Seither placed this property in the multiple listing service (MLS) as homestead property. Without informing Seither, Santoro changed his homestead in early 1988 to another residence which he owned.
Respondent Seither prepared an information handout in conjunction with the listing and sale of Santoro's property which stated that the 1987 property taxes for 672 Harbor Island were $2,739, with a homestead exemption of $25,000. This information was accurate for 1987. Seither made no representation about taxes or homestead status of this property for 1988.
On February 12, 1988, Judith Green, as buyer, made an offer on the subject property, and on February 14, 1988, Santoro's counter-offer was accepted by Green. Although she was the listing broker on this transaction, Seither did not personally participate in the meetings and negotiations between Santoro and Green because Santoro told her that there was an apparent personality conflict between her and Green, and Green had told him she did not want Seither present. Thus, it was at Santoro's direction that Seither did not participate in the negotiations or attend the closing.
Although the listing agreement provided for a broker's commission of 7% of the sales price, which would have resulted in a commission to Respondents of approximately $10,000 on this transaction, Santoro, as seller, signed the brokerage fee section of the sales contract agreeing to pay Respondents only a
$5,000 commission. Respondents were neither informed nor consulted about this unilateral change in the terms of the listing agreement which they had with Santoro.
Green attended the closing and was also represented at closing by her attorney. She had a full opportunity to consult with her attorney at closing. Green executed a tax proration agreement at closing which stated that it was understood and agreed that the amount of taxes for 1988 could not be ascertained exactly at the time of closing, and that the proration used at closing for 1988 was an estimate based upon the best information available. Additionally, she expressly deleted the provision in the proration agreement which would have provided for a subsequent adjustment between herself and Santoro when the actual tax bill for 1988 was received. Neither Green, her attorney, or Respondents checked to determine if Santoro still had homestead exemption on this property in 1988. Santoro did not disclose the fact that he had changed his homestead to anyone involved in this transaction, although it was clear that the proration used at closing was based upon the homestead status of this property.
Respondent Seither did not attend the closing, at the request of Santoro. Due to Santoro's removal of his homestead exemption from this property for 1988, Green subsequently had to pay an additional $760.95 in taxes for 1988.
Respondent Seither consulted an attorney about Santoro's unilateral change in the terms of the broker's commission provided in their listing agreement. On March 31, 1988, the closing date of the Santoro-Green transaction, Respondents' counsel filed suit for declaratory relief and damages in the Circuit Court for Pinellas County against Santoro, as seller, and as part of this civil action her counsel filed a lis pendens against the subject property. Respondent Seither credibly denied that she had any actual knowledge
of the action her counsel took in this matter to recover her full commission due under the listing agreement with Santoro. She did not authorize him to place a lis pendens against this property in order to collect the full commission due her under the listing agreement.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties, and the subject matter in this cause. Section 120.57(1), Florida Statutes. Since this is a case in which Petitioner is seeking to discipline the licenses of Respondents, the charges set forth in the Administrative Complaint must be proven by clear and convincing evidence. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987).
The Administrative Complaint filed by Petitioner against Respondents in this action alleges that their actions, as described above, constitute violations of the following provisions of Chapter 475, Florida Statutes: (1) Section 475.25(1)(b) - fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence and breach of trust in a business transaction; (2) Section 475.25(1)(d) - failure to account for and deliver deposit; (3) Section 475.25(1)(e) - failure to notify the Florida Real Estate Commission of an escrow dispute; and Section 475.42(1)(j) - knowingly placing, or causing to be placed, any writing upon the public records which purports to affect the title of property for the purpose of collecting a commission.
From the facts established at hearing, it is concluded that the Petitioner has met its requisite burden of proof concerning Sections 475.25(1)(b),(d) and (e), Florida Statutes, as it relates to the Brooks-Laks transaction. Respondents breached their trust duty regarding the handling of the Brooks' $7,000 deposit on the Laks' property by prematurely ordering a survey of the property without the authorization of the Brooks'. When the Brooks' rejected Laks' counter-offer on July 13, 1988, and withdrew their offer, Respondent Seither concealed the fact that she had already ordered the survey, for which she retained $200 from the Brooks' earnest money deposit. As a result of this action, Respondents failed to properly account for, and deliver to the Brooks' a full refund of their deposit, which they were due, and further, failed to notify the Florida Real Estate Commission of this escrow dispute.
However, there is nothing in the Santoro-Green transaction which would establish, by clear and convincing evidence, that Respondents' actions constituted any violation of Section 475.25(1). Respondents never represented that Santoro's property was subject to homestead during 1988, but rather, correctly indicated that it was homestead property in 1987, and accurately reported the taxes for the property in 1987. While Respondent was not present at closing, Green attended and was represented at closing by counsel. She had a full opportunity to review all closing documents, including the proration of taxes agreement which acknowledged that the proration used at closing was only an estimate of 1988 taxes. Green specifically deleted the provision in that agreement which would have provided for a subsequent adjustment between her and Santoro when the 1988 tax bill was received.
Finally, Petitioner has failed to meet its burden regarding the alleged violation of Section 475.42(1)(j), Florida Statutes. Respondent Seither credibly denied any actual knowledge on her part of the action which her attorney took in filing a lis pendens against the Santoro property. There was clearly a basis for her seeking legal advice due to Santoro's unilateral change
of the terms in his listing agreement with Respondents which resulted in a substantial reduction in the commission to be paid to Respondents in connection with the Santoro-Green transaction. However, it appears that the lis pendens which her attorney filed against Santoro's property was not authorized by the Respondents.
In recommending an appropriate penalty for Respondents' violations in this matter, the disciplinary guidelines set forth in Rule 21V-24.001(3) have been considered, as well as the mitigating and aggravating factors set forth in Rule 21V-24.001(4), Florida Administrative Code.
Based upon the foregoing, it is recommended that a Final Order be issued which imposes a written reprimand and an administrative fine of $1,000 against the Respondents.
RECOMMENDED this 20th day of June 1990 in Tallahassee, Florida.
DONALD D. CONN
Filed with the Clerk of the Division of Administrative Hearings this 20th day of June, 1990.
APPENDIX TO RECOMMENDED ORDER, CAE NO. 89-5532
7. Adopted in Finding 4. 8-9. Adopted in Finding 5.
10. Adopted in Finding 4. 11-13. Adopted in Finding 6. 14-16. Adopted in Finding 7.
1-2. Adopted in Findings 1,2.
3-5. Adopted in Finding 3.
6. Rejected in Finding 4. 7-8. Adopted in Finding 5.
Steven W. Johnson, Esquire Division of Real Estate
P. O. Box 1900 Orlando, FL 32801
Kenneth E. Easley, Esquire 1940 North Monroe Street Tallahassee, FL 32399-0792
Darlene F. Keller, Director Division of Real Estate
P. O. Box 1900 Orlando, FL 32801
