STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 90-3868

)

WILLIAM B. WILTSHIRE, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was conducted before Daniel Manry, a duly designated Hearing Officer of the Division of Administrative Hearings, on April 10 and September 26, 1991, in West Palm Beach, Florida.

APPEARANCES

For Petitioner: Janine B. Myrick, Esquire

Senior Attorney

Department of Professional Regulation Division of Real Estate

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802

FOR RESPONDENT: William B. Wiltshire, pro se

101 Beach Summit Court Jupiter, Florida 33477

STATEMENT OF THE ISSUE

The issue for determination in this proceeding is whether Respondent committed the acts alleged in the Administrative Complaint and, if so, what disciplinary action, if any, should be imposed.

PRELIMINARY STATEMENT

Petitioner served Respondent with an Administrative Complaint on May 25, 1990. Respondent requested a formal hearing on June 18, 1990. The matter was referred to the Division of Administrative Hearings on June 25, 1990, for assignment of a hearing officer, and assigned to Hearing Officer Linda M. Rigot on June 27, 1990. A formal hearing was scheduled for October 19, 1990, pursuant to a Notice of Hearing issued on August 9, 1990. The matter was continued to April 10, 1991, pursuant to the Third Notice of Hearing issued on January 28, 1991, and transferred to the undersigned on April 8, 1991.

At the formal hearing on April 10, 1991, Petitioner presented the testimony of three witnesses 1/ and submitted three exhibits for admission in evidence. Petitioner's Exhibits 1 through 3 were admitted in evidence without objection.

Respondent did not appear at the formal hearing conducted on April 10, 1991, and was not represented by counsel. 2/ Petitioner presented its case in chief and the formal hearing was adjourned.

A Notice of Ex Parte Communication was issued by the undersigned on April 22, 1991, with an attached copy of a letter from Respondent dated April 12, 1991. The letter from Respondent stated that he had not received notice of the formal hearing conducted on April 10, 1991. An Order To Show Cause why a de nova hearing should not be conducted was issued by the undersigned on April 22, 1991. Petitioner filed its response on May 10, 1991. An Order Reopening The Record was entered on June 28, 1991. Pursuant to a telephone conference conducted with the parties and the undersigned to establish a date for a formal hearing, a formal hearing was scheduled on September 26, 1991, in West Palm Beach, Florida.

At the formal hearing conducted on September 26, 1991, counsel for Petitioner appeared by telephone conference. Respondent appeared in person. Respondent testified in his own behalf. Other than Respondent's testimony, no new evidence was presented by either party.

A transcript of the record of the formal hearing was not ordered for either formal hearing. Proposed findings of fact and conclusions of law were timely filed by Petitioner on November 15, 1991. Respondent filed no proposed findings of fact and conclusions of law.

FINDINGS OF FACT

1. Petitioner is the state licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to the laws of the State of Florida. Respondent is now and has been at all times material to this proceeding a licensed real estate salesman in the state, holding license number 0488568. The license was issued %Tequesta Properties, Inc., 169 Tequesta Drive, Tequesta, Florida 33458 ("Tequesta").

   
   

2. On June 29, 1989, Respondent negotiated a contract for the sale and purchase of a single family residence located at 65 Willow Road, Tequesta, Florida (the "contract"). The residence was listed for sale with Tequesta. The sellers were Frank and Hilda Sceusa, and the buyers were Dale and Cathy Favre. The buyers first saw the listed property at an open house. Respondent was present at the open house because the listing agent was busy with another transaction.

   
   

3. The contract provided:

   
   

   Inspection, Repair And Maintenance: Seller warrants that as of 10 days prior to closing, the ceiling, roof

   . . . and exterior and interior walls do not have any VISIBLE EVIDENCE of leaks or water damage and that the septic tank, pool, all major appliances, heating, cooling, electrical, plumbing systems, and machinery, are in WORKING CONDITION. Buyer may, at Buyer's expense, have inspections made of those items by an appropriately Florida licensed person dealing in the construction, repair, or maintenance of those items and

   shall report in writing to Seller such items that do not meet the above standards as to defects together with the cost of repairing them prior to Buyer's occupancy or not less than 10 days prior to closing whichever occurs first. Unless Buyers report such defects within that time, Buyer shall be deemed to have waived Seller's responsibilities as to defects not reported. . . . Buyer shall be permitted access for inspection of property to determine

   compliance with this Standard.

   
   

4. Respondent failed to give the buyers a reasonable opportunity to inspect the house or to have it inspected by a professional inspector. Buyers requested a pre-closing inspection approximately three or four times. Each time the buyers made their request through Respondent. The buyers asked Respondent to arrange for their access into the property for the purpose of conducting an inspection. Respondent ultimately accompanied the buyers through the premises the night before the closing.

   
   

5. Respondent misrepresented the condition of plumbing in the house. During the walk-through the night before the closing, the buyers asked Respondent about a rag covering the goose neck under the kitchen sink. Respondent advised the buyers that the rag was left there after cleaning and that nothing was wrong with the plumbing.

   
   

6. Respondent misrepresented the provisions of a warranty that was transferred to the buyers with the sale of the house. The house was sold to the buyers with a home owners warranty ("HOW") purchased by the listing broker. Respondent told the buyers they did not have to worry about the appliances in the house, including the air conditioning, because the entire property was covered by the warranty. Respondent specifically represented that the air conditioning system was in good working order. Respondent never read the HOW contract and did not explain to the buyers exclusions for preexisting conditions, prorations for other conditions, and the requirement that the buyers pay a $100 deductible for each covered defect.

   
   

7. Respondent failed to familiarize himself with the house and failed to inquire of the sellers as to any problems that existed in the house. The kitchen sink backed up within a month after the date of closing because it was clogged with sand. The pipe was rusted completely through and there was a three inch gash in the pipe. The rag that had covered the pipe during the walk through concealed the defects in the pipe that otherwise would have been readily visible.

   
   

8. The air conditioning system failed after closing. The repairs to the air conditioning system were not covered by the HOW contract. Representatives of HOW determined that the problems with the air conditioning system were preexisting and not covered under the terms of the contract. The air conditioning unit was replaced by the buyers who were reimbursed by the listing broker.

   
   

9. The buyers experienced problems with a number of the components in the house. In addition to the previously mentioned air conditioning and plumbing problems, there were electrical problems and all of the appliances had to be replaced.

10. Respondent misrepresented the amount of known repairs. The buyers knew prior to closing that the pool needed to be re-marcited. Respondent represented that the cost of such a repair would be approximately $1,000. The actual cost was approximately $3,000.

    
    

11. Some of the problems experienced by the buyers were patent defects and some were latent defects. All of the problems, however, could have been discovered and corrected prior to closing if an inspection had been conducted by a Florida licensed person experienced in the construction, repair, and maintenance of such matters.

    
    

12. Respondent failed to carry out his responsibilities as a real estate professional. It is customary practice in the community for the selling agent to arrange for pre-closing inspections done by professional licensed inspectors. The listing agent for the residence asked Respondent the day before the closing if Respondent had scheduled the pre-closing inspection. Respondent admitted that he had forgotten to schedule the inspection. When Respondent scheduled a walk through for the buyers the night before closing, there was insufficient time for the buyers to schedule an inspection by a professional inspector. The buyers relied upon the representations of Respondent with respect to the HOW contract and the condition of the house.

    
    

    CONCLUSIONS OF LAW

    
    

13. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter in this proceeding pursuant to Section 120.57(1), Florida Statutes. The parties were duly noticed for the formal hearing.

    
    

14. The burden of proof is on Petitioner in this proceeding. Petitioner must show by clear and convincing evidence that Respondent committed the acts alleged in the Administrative Complaint and that the penalties requested by Petitioner should be imposed. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987).

    
    

15. Section 475.25(1)(b), Florida Statutes, prohibits a licensed real estate agent from committing any act or omission which constitutes fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence or breach of trust in any business transaction. Petitioner showed by clear and convincing evidence that Respondent violated Section 475.25(1)(b) by committing misrepresentation and culpable negligence.

    
    

16. Respondent misrepresented the condition of the house he sold to the buyers and the provisions of the warranty covering the house. Respondent also misrepresented the cost of repairs known to be needed for the pool. The buyers relied upon the representations made by Respondent to their detriment.

    
    

17. Respondent was guilty of culpable negligence. Culpable negligence is the reckless indifference to the rights of others, which is equivalent to an intentional violation of such rights. Jackson v. State, 100 So.2d 839, 840 (Fla. 1st DCA 1958). Respondent failed to familiarize himself with the provisions of the warranty contract on the property he sold as well as the condition of the property itself. Respondent failed to make diligent inquiry of the owners as to the condition of the house. Finally, Respondent failed to permit the buyers to have the property inspected by a licensed professional or to inspect the premises themselves at a time reasonably in advance of the closing.

18. When a licensee is found guilty of violating Section 475.25(1)(b), Florida Statutes, Section 475.25 authorizes the Florida Real Estate Commission to suspend a license for up to eight years, revoke the license, impose an administrative fine of up to $1,000 for each offense, impose a reprimand, or impose all of the foregoing penalties.

RECOMMENDATION

Based upon the foregoing Findings of Facts and Conclusions of Law, it is RECOMMENDED that Petitioner should enter a Final Order finding Respondent

guilty of misrepresentation and culpable negligence in violation of Section 475.25(1)(b), Florida Statutes, suspending Respondent's license for 90 days, imposing an administrative fine of $600, and placing Respondent on probation for one year. The Final Order should further provide that during the period of probation Respondent should complete 60 hours of post-licensure education.

DONE and ENTERED this 22nd day of January, 1992, in Tallahassee, Leon County, Florida.

DANIEL MANRY

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 23rd day of January 1992.

ENDNOTES

1/ The three witnesses were: Dale and Cathy Favre, the buyers of a single family residence; Barbara Mooney, a licensed real estate broker and expert in real estate practice; and Terry Giles, the investigator for Petitioner.

2/ The Notice of Hearing was mailed to the same address of record as that to which the Notice of Hearing was mailed for the formal hearing in September, 1991. The hearing in April, 1991, was recessed to allow Petitioner to telephone Respondent at his office. The person answering the telephone at Respondent's office said that Respondent was not in. The purpose of the call was explained to the person answering the office telephone. The person answering the office telephone unsuccessfully attempted to contact Respondent on his beeper number and at his home.

APPENDIX TO RECOMMENDED ORDER

Petitioner submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted.

The Petitioner's Proposed Findings of Fact

Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection

Respondent did not submit proposed findings of fact. COPIES FURNISHED:

Darlene F. Keller, Director Division of Real Estate Department of Professional

Regulation

400 West Robinson Street

P.O. Box 1900

Orlando, FL 32802-1900

Jack McRay, Esquire General Counsel

Department of Professional Regulation

1940 North Monroe Street Tallahassee, FL 32399-0792

Janine B. Myrick, Esquire Senior Attorney

Department of Professional Regulation

Division of Real Estate

400 West Robinson Street

P.O. Box 1900

Orlando, Florida 32802

William B. Wiltshire

101 Beach Summit Court Jupiter, Florida 33477

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: 90-003868

Orders for Case No: 90-003868