STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 90-3229

)

HENRY J. ALBERICO, )

)

Respondent. )

)

RECOMMENDED ORDER

A hearing was held in this case in Sarasota, Florida on October 17, 1990 before Arnold H. Pollock, a Hearing Officer with the Division of Administrative Hearings.

APPEARANCES

For the Petitioner: Steven W. Johnson, Esquire

Division of Real Estate

400 West Robinson Street

P.O. Box 1900

Orlando, Florida 32802

For the Respondent: Thomas K. Marshall, Esquire

1800 Second Street, Suite 775

Sarasota, Florida 34236 STATEMENT OF THE ISSUES

The issue for consideration in this matter is whether the Respondent's license as a real estate salesman in Florida should be disciplined because of the misconduct alleged in the Administrative Complaint filed herein.

PRELIMINARY STATEMENT

On April 6, 1990, Fred Wilsen, for Larry Gonzalez, Secretary of the Florida Department of Professional Regulation, on behalf of the Division of Real Estate, filed an Administrative Complaint in this case in which the Respondent was charged with misconduct in violation of Section 475.25(1)(b), Florida Statutes. On May 4, 1990, Mr. Alberico executed an Election of Rights form on which he disputed the allegations of fact and requested a formal hearing. By letter dated May 22, 1990, the matter was forwarded to the Division of Administrative Hearings for appointment of a Hearing Officer.

Initial Orders were sent to both parties on May 31, 1990, and after response thereto by counsel for Petitioner, on June 11, 1990 the undersigned, to whom the case had been assigned in the interim, set the matter for hearing on

August 1, 1990. However, pursuant to Respondent's Motion For Continuance, the matter was postponed until October 17, 1990 at which time it was heard as rescheduled.

At the hearing, Petitioner presented the testimony of Shirley Jean Hicks, the purchaser of the property involved; James M. Maloof, Respondent's broker; Bruce B. Winter, a Realtor and Chairman of the Professional Standards Committee of the Sarasota County Board of Realtors; and John E. Harris, an investigator for the Department. Petitioner also introduced Petitioner's Exhibits 1 through

1. Respondent testified in his own behalf and presented the testimony of Lionel M. Murphy, prior owner of the property in issue; Carl Nemeth, senior mortgage representative for Barnett Bank in Southwest Florida; Jeannette Judge, a former real estate salesperson with Schlott Realty who worked with Respondent; Todd A. McCammack, a carpenter; Michael J. Buel, a broker for Reliant Mortgage Company; and by late filed deposition, Michael Scarbrough, a licensed roofer. Respondent also introduced Respondent's Exhibits A though K and M. Respondent's Exhibit L for Identification, though marked, was not offered.

   
   

   No transcript was provided. However, both parties submitted Proposed Findings of Fact which have been ruled upon in the Appendix to this Recommended Order.

   
   

   FINDINGS OF FACT

   
   

   1. At all times pertinent to the allegations contained herein, the Respondent, Henry J. Alberico, was licensed as a real estate salesman in Florida, and the Petitioner, Division of Real Estate, was the state agency responsible for the licensing and regulation of real estate professionals in this state.

      
      

   2. During the Summer of 1988, Shirley Jean Hicks, was interested in purchasing a new house in the Sarasota area. Based on the recommendation of a friend, she went to the Respondent who showed her a house listed by the Murphys located at 2311 Waldemere Street in Sarasota.

      
      

   3. After Ms. Hicks saw the property twice, she made an offer to buy it. She wanted owner financing, if possible, because she did not have a good credit rating, but she did not discuss this with the Murphys until after the contract was signed.

      
      

   4. Because some defects had been noted in the house, the contract for sale called for inspections to be done for termite infestation and of the general condition of the building as well, and Respondent indicated these would be done. The building inspection was done by Guengerich Home Inspections, whose report indicated that roof repairs were needed. Ms. Hicks told Respondent that unless the damage was repaired at no cost to her prior to closing, she would not go through with the purchase. The Guengrich report, as to the roof, stated, inter alia,:

      
      

      Several water stains are noted inside the house but probably from a previous leak.

      The flat roof over the right end of the house is also of the same type gravel roof. It appears that several small areas were repaired previously. Also several small bubbles are noted near the A/C unit, one at the front and several at

      the right of the A/C. Should be checked by a roofer. Gutters appear to be in good condition. Some gravel and leaves in the gutter.

      
      

   5. There were three different termite inspections done. The first, by Royal Exterminator on September 30, 1988, was accomplished for the real estate company. It showed evidence of dry rot and termites with visible damage on the left side, on window trim, on the right rear external panel, on a door frame and on interior trim. No live organisms were noted. The report was sent to the real estate company but reflected Ms. Hicks as the buyer.

      
      

   6. The second inspection was done by Truly Nolen on October 7, 1988, also for the realtor because Mr. Murphy was not happy with the first one. It, too, reflected evidence of termites and dry wood decay in the same areas as previously described, and again, there was no indication that live organisms were found. A copy of this report was provided to Ms. Hicks at the time of closing by the Barnett Bank, not by Respondent. Though her acknowledgment appears on the form, she does not recall having seen it.

      
      

   7. The third inspection, by Hughes Exterminating Company, was done on January 31, 1989 at the request of Ms. Hicks. The substance of this report was the same as the two prior reports. Damage was noted even though Mr. Murphy paid a carpenter, Todd McCammack, to repair this damage on October 18, 1988, shortly after the second termite inspection.

      
      

   8. Respondent indicated to Ms. Hicks that the roof repairs, identified as needed by Guengerich, had been satisfactorily completed, and the testimony by deposition of Mr. Scarbrough indicates that is true. In September, 1988, Scarbrough repaired the leaks on the back portion of the roof and regraveled the bare spots which were noted but which were not leaking.

      
      

   9. Considering the evidence as it relates to the issue of the termite damage, dry rot damage, and roofing damage in its totality, it would appear, and it is so found, that Mr. Alberico arranged for the necessary repairs to be made and they were made. It is unclear as to whether he advised Ms. Hicks that the necessary repairs were made. While doing so may have avoided some of her displeasure and dissatisfaction with his performance, and might have obviated her complaint against him, it does not appear that his failure to provide her with copies of the repair orders, in light of the fact he advised her the repairs had been made, constitutes misconduct. He told her the repairs had been made and it appears they had been made.

      
      

   10. It is clear that the relationship between Ms. Hicks and the Murphys was neither smooth nor harmonious. She claims, for example, she was not offered a walk-through inspection of the house prior to closing, but there is indication she was taken there several times, at least once with consultants, before she made her offer.

       
       

   11. Ms. Hicks financed her purchase through the local Barnett Bank. Prior to applying there, she had applied with another lender, Reliant, which offered to finance her purchase but at an unacceptably high interest rate. After her initial attempts at financing were unsuccessful, she noted to Respondent that she was getting tired of the extended financing process and was considering pulling out of the transaction. Thereafter, Respondent loaned her $6,000.00 for a part of the down payment.

   12. She also was to get $7,000.00 from an aunt, $6,000.00 from her father, and a small amount from her mother. She told Respondent she was concerned that Barnett would not approve her loan if they knew she was borrowing a part of the down payment which had to be paid back. According to her, he suggested she have her aunt give her $13,000.00 for the down payment rather than $7,000.00 and then use his $6,000.00 to pay back her aunt after the loan went through. She did this and did not tell the bank about it even though she knew it was not "on the up and up." She did it, however, because she was afraid she would lose her deposit if she backed out of the transaction, and would not get her loan if the bank knew that some of the down payment was a loan which had to be paid back.

       In that regard, however, she has not paid Respondent any of the money she borrowed from him, claiming she holds him responsible for the house's defects which include the roof, the air conditioning, and the termite damage.

       
       

   13. Mr. Alberico indicates, with regard to the financing, that after Ms. Hicks received Reliant's lending proposal with the high interest rate, he took her to two other mortgage companies, neither of which would take her. Several days later, she allegedly called him and indicated that Barnett Bank, which had held her prior mortgage, might agree to finance her. As a result, he worked with Barnett, but did very little, aside from providing the information they requested.

       
       

   14. When Ms. Hicks indicated to him that she needed more money for the down payment, Mr. Alberico offered to lend her the $6,000.00 she said she needed. The loan was to be for a short term only, and he gave her the money without a note or mortgage as evidence of the debt. However, just before closing, she told him she had lied on the income verification form. As a result, he felt he had best get some security for his loan and, after closing, asked that she give him a promissory note for the $6,000.00 he had loaned her.

       
       

   15. Mr. Alberico denies he in any way urged Ms. Hicks to lie to the bank nor did he make any representations to the bank regarding the source of her funds.

       
       

   16. As a result of this transaction, Ms. Hicks filed a complaint against the Respondent with the Sarasota Board of Realtors, and a hearing was held before that Board on July 24, 1989 concerning the conduct of the Respondent and his broker, Mr. Maloof. According to Mr. Bruce B. Winter, Chairman of the Board's Professional Standards Committee, Mr. Alberico, though fully advised in advance of his right to be represented by counsel and to call witnesses and present evidence in his own behalf, nonetheless spoke for himself and presented neither witnesses nor documentation.

       
       

   17. Having heard all the evidence presented, the panel, on August 1, 1989, filed its decision on Ms. Hicks' complaint against Mr. Alberico and his broker. The Board found that with regard to the termite inspection, Mr. Alberico did not give copies to the complainant; did not inform her that two inspections were made; misrepresented the results of the inspection to the complainant; and later told her that work had been completed when it had not. The Board's findings do not appear to be supported by the evidence presented at the instant hearing, and are not considered binding on the undersigned.

       
       

   18. With regard to the home inspection report, the Board found that Mr. Alberico told Ms. Hicks the roof work had been completed when it had not, yet evidence presented at the instant hearing shows that the work was, in fact, completed.

   19. The Board also found that Mr. Alberico loaned Ms. Hicks the money for the down payment but did not record it nor inform the lender, "because they would not have made the loan", and that he may have induced the buyer to purchase a property beyond her financial capacity. It further found that he improperly gave legal advice to Ms. Hicks by advising her not to disclose his loan for the down payment to the lender. The evidence presented at the instant hearing clearly supports the conclusion that Respondent was a party to a dishonest action on the part of Ms. Hicks regarding her application for a loan. Her dishonesty, which she denied at hearing but is, nonetheless, found to have existed, appears to have been in the falsification of her earnings statement to be submitted to the lender and her failure to disclose the true source of her down payment.

       
       

   20. The local Board made several other findings of inappropriate activity on the part of Mr. Alberico with regard to his dealing with Ms. Hicks in this case. However, they are found to be not pertinent to the allegations under consideration here, and are not considered for any purpose in the resolution of the issues currently at hand.

       
       

       CONCLUSIONS OF LAW

       
       

   21. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter in this case. Section 120.57(1), Florida Statutes.

       
       

   22. In its Administrative Complaint the Petitioner, Department, has charged the Respondent with being guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust in a business transaction, in violation of Section 475.25(1)(b), Florida Statutes, which lists such misconduct as grounds for disciplinary action against a licensee.

       
       

   23. Since Petitioner seeks to discipline the Respondent's license as a real estate professional, it must establish that the Respondent has committed the alleged violations by clear and convincing evidence of his guilt. Ferris v. Turlington, 510 So.2d 210, (Fla. 1987).

       
       

   24. To support it charge that Respondent is guilty of the offense alleged, Petitioner attempted to show that he failed to insure that required repairs to the property in question, which had been requested by the buyer and which were, under the terms of the agreement, to be made, were made and also failed to provide proof of such repairs to the buyer. Petitioner also alleges that Respondent improperly loaned the buyer a portion of the down payment and then encouraged her to misrepresent the source of those funds to the institutional lender so that she would be able to get her loan and the transaction would go through.

       
       

   25. With regard to the former allegations, concerning the repairs, rather than demonstrating the Respondent's misconduct in a clear and convincing manner, the evidence of record clearly shows that the promised repairs were made and that the buyer was advised of this though she could not remember it. It is not necessary that the Respondent have presented buyer with inspection reports or repair certificates. He told her the work was done and the evidence shows that it was done. The evidence is insufficient to support a finding of guilty of this allegation.

   26. As to the financing of the down payment, however, the situation is significantly different. Ms. Hicks advised the Respondent that she was having difficulty putting together the requisite down payment funds. He loaned her a portion of the required funds, at first without security. There is no misconduct in that. However, when he became a party to the misrepresentation made to the bank regarding the source of those funds, and participated in its concealment, whether he suggested that course of action or merely acquiesced in it, he was guilty of misrepresentation and concealment of a material fact pertinent to the financing of the transaction, and this constitutes a violation of the statute.

       
       

   27. Respondent is not alone in the misconduct represented here. Clearly, Ms. Hicks, who is clearly not the most reliable of witnesses, was a willing participant in this scheme and may well have suborned Respondent into committing his improprieties. However, the courts in this state have clearly stated that the practice of the real estate profession is not a means for less than scrupulous individuals to take advantage of those who deal honestly and in good faith. Hershey v. Keyes Company, 209 So.2d 240 (Fla. 1986)

       
       

   28. The Department has recommended that Respondent's license as a real estate salesman be suspended for two years, suggesting the evidence shows him guilty of not only Section 475.27(1)(b), but of subsections (e) and (o) as well. The first of these make it an offense to violate any provision of this chapter or Chapter 455 or any order or rule issued under either provision. The second deals with the degree of dishonesty. Here, while shown to be guilty of dishonesty to some degree, his misconduct is not so egregious as to warrant major disciplinary action.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore:

RECOMMENDED that a Final Order be issued suspending Respondent, Henry J. Alberico's license as a real estate salesman for six months and assessing an administrative fine of $500.00 against him.

RECOMMENDED this 6th day of December, 1990, in Tallahassee, Florida.

ARNOLD H. POLLOCK, Hearing Officer Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 6th day of December, 1990.

APPENDIX TO RECOMMENDED ORDER IN CASE NO. 90-3229

The following constitutes my specific rulings pursuant to S 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case.

FOR THE PETITIONER:

1.-3. Accepted and incorporated herein.

1. Accepted and incorporated herein.

2. Accepted and incorporated herein.

3. Accepted and incorporated herein, except for the fact that Ms. Hicks' viewing of the roof is not determinative of whether the required repair work was completed.

4. & 8. Accepted and incorporated herein.

9. & 10. Accepted and incorporated except that the evidence reveals she was given a copy of a termite inspection report at closing and signed for it.

1. Accepted.

2. - 14. Accepted as to the fact that three termite inspections were conducted, all of which showed termite damage. All three, however, failed to indicate live termites, and the evidence also shows that the damage done by the prior infestation was repaired prior to sale.

1. Accepted as to the fact that Respondent ordered the inspection but rejected as to his concealment.

2. & 17. Accepted and incorporated herein.

FOR THE RESPONDENT:

1. & 2. Accepted and incorporated herein.

3. - 9. Accepted and incorporated herein.

1. Not a Finding of Fact but a comment on the evidence.

2. & 12. Accepted and incorporated herein.

13. & 14. Not a Finding of Fact but a comment on the evidence.

1. Accepted and incorporated herein.

2. & 17. Accepted and incorporated herein.

1. Not a Finding of Fact but a comment on the evidence.

2. First three sentences accepted and incorporated herein. Balance merely a comment on the evidence.

3. Accepted.

4. & 22. Not Findings of Fact.

1. Accepted and incorporated herein.

2. Not a Finding of Fact, but the substance of his inspection and service report is accepted.

3. Accepted.

4. - 30. Not Findings of Fact in form but the substance is accepted.

1. Not a finding of Fact but argument based on the evidence.

2. Not a proper Finding of Fact.

3. Accepted.

4. Accepted.

5. Not a Finding of Fact but a restatement of evidence.

6. Accepted as to a lack of Respondent's contact with the Bank rejected as to misrepresentation conclusions.

7. Not a Finding of Fact.

8. & 39. Accepted and incorporated herein.

40. & 41. Accepted.

42. & 43. Accepted.

44. & 45. Accepted.

46. - 48. Accepted and incorporated herein.

49. Not a Finding of Fact but a Conclusion of Law.

COPIES FURNISHED:

Steven W. Johnson, Esquire DPR, Division of Real Estate Hurston North Tower

400 West Robinson Street Orlando, Florida 32801-1772

Thomas K. Marshall, Esquire 1800 - 2nd Street, #775

Sarasota, Florida 34236

Darlene F. Keller Division Director Division of Real Estate

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801

Kenneth E. Easley General Counsel

Department of Professional Regulation

1940 North Monroe Street Tallahassee, Florida 32399-0792

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

ALL PARTIES HAVE THE RIGHT TO SUBMIT WRITTEN EXCEPTIONS TO THIS RECOMMENDED ORDER. ALL AGENCIES ALLOW EACH PARTY AT LEAST 10 DAYS IN WHICH TO SUBMIT WRITTEN EXCEPTIONS. SOME AGENCIES ALLOW A LARGER PERIOD WITHIN WHICH TO SUBMIT WRITTEN EXCEPTIONS. YOU SHOULD CONTACT THE AGENCY THAT WILL ISSUE THE FINAL ORDER IN THIS CASE CONCERNING AGENCY RULES ON THE DEADLINE FOR FILING EXCEPTIONS TO THIS RECOMMENDED ORDER. ANY EXCEPTIONS TO THIS RECOMMENDED ORDER SHOULD BE FILED WITH THE AGENCY THAT WILL ISSUE THE FINAL ORDER IN THIS CASE.

Docket for Case No: 90-003229

Orders for Case No: 90-003229