STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 95-1798

)

DIANA C. VERDI and REALTEC ) GROUP, INC., t/a RE/MAX REALTEC ) GROUP, )

)

Respondents. )

)

RECOMMENDED ORDER

A hearing was held in this case in Clearwater, Florida on August 8, 1995, before Arnold H. Pollock, a Hearing Officer with the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Daniel Villazon, Esquire

Department of Business and Professional Regulation

400 West Robinson Street, N-308 Post Office Box 1900

Orlando, Florida 32802

For Respondent: Diana C. Verdi, pro se

3474 Tampa Road

Palm Harbor, Florida 34684 STATEMENT OF THE ISSUES

The issue for consideration in this matter is whether Respondents' licenses as real estate salesperson and real estate broker, respectively, should be disciplined because of the matters alleged in the Administrative Complaint filed herein.

PRELIMINARY MATTERS

By Administrative Complaint dated February 24, 1995, Steven D. Feldman, Chief Attorney, on behalf of the Secretary of the Department of Business and Professional Regulation, charged both Respondents herein with misrepresentation, concealment, false pretenses, culpable negligence or breach of trust in a business transaction because Respondent, Verdi, as salesperson for Respondent, Realtec Group, (Realtec), failed to secure and provide to the buyer of property sold by them a seller's disclosure statement, and thereafter failed to pay a judgement secured against them until the buyer filed a lien against Verdi's

personal property. Thereafter, Respondents requested formal hearing and this hearing ensued.

At the hearing, Petitioner presented the testimony of James Herhold, purchaser of the property in question, and Marta Shank, listing realtor for the property. Petitioner also introduced Petitioner's Exhibits 1 through 5.

Respondent, Verdi, testified in her own behalf and presented the testimony of Albi Kissner, an employee of Respondent's firm, and Ernest Scarati, Jr., a licensed assistant to Respondent. Respondent did not introduce any documents.

No transcript of the proceedings was filed. Subsequent to the hearing, however, counsel for Petitioner submitted Proposed Findings of Fact which have been accepted and incorporated in this Recommended Order. Respondent did not file any Proposed Findings of Fact.

FINDINGS OF FACT

1. At all times pertinent to the allegations herein the Division of Real Estate was the state agency responsible for the licensing of real estate sales persons and brokers and the regulation of the real estate profession in Florida. Respondent, Diana C. Verdi, was licensed as a real estate salesperson under license number 0545114, and Respondent, Realtec Group, Inc., was licensed as a real estate broker under license number 0273784. Respondent, Verdi, was employed by Respondent, Realtec, at its office at 3474 Tampa Road, Palm Harbor, Florida.

   
   

2. On October 23, 1993, Respondent Verdi, while working for Respondent, Realtec, solicited and obtained an offer from James and Maureen Herhold, to purchase residential property owned by J. and K. Griffin. The contract called for the placement of a $50,000 non-refundable deposit with Realtec, and allowed the Herholds to move in on October 30, 1993, with closing to be held on November 30, 1993. The contract also provided that once the Herholds moved into the house, the Griffins would no longer be responsible for any repairs or maintenance needed by the property.

   
   

3. Prior to moving in, the Herholds requested that Respondent, Verdi, obtain for them a seller's disclosure statement which would list any material defects in the property known to the sellers. In that regard, the Griffins' listing agent, Marta Shank, had previously requested they prepare such a statement. The statement was prepared on August 20, 1993, and reflected that the only known defect was a shower leak which had purportedly been fixed and a shower wall which had purportedly been replaced.

   
   

4. Notwithstanding the Herholds repeatedly requested the disclosure statement from Respondent, Verdi, and notwithstanding such a statement had been prepared by the Griffins, the statement was not furnished to Respondent, Verdi, by Ms. Shank and, thereafter, to the Herholds until after they moved into the property. Consistent with the terms of the contract, the Herholds were required to pay for the repairs to the shower and shower wall which, it appears, were not properly repaired prior to their move into the property. At closing the Herholds requested the Griffins reimburse them for the cost of the repairs, which was not done.

   
   

5. In the interim, however, and before the Herholds moved into the property, Respondent, Verdi, as was her custom in all residential sales, insisted that the Herholds obtain an independent inspection of the home. Mr. Herhold admits she did this. She claims she would not sell a home without this

   being done. This inspection, conducted by an inspector of the Herholds' choosing, failed to disclose any defect in the shower or shower wall.

   Respondent, Verdi, also suggested that since her repeated efforts to obtain the disclosure statement were unsuccessful, Mr. Herhold contact the Griffins or their agent directly. She also suggested to him that if he were not satisfied with the condition of the house, or if he had any qualms about moving in without the disclosure statement, he should not move in until he received it. This was verified by Ms. Kissner. Herhold elected not to do this, however, because he feared he might lose his deposit.

   
   

6. Respondent, Verdi, represents herself as being an experienced and successful real estate salesperson, and there appears little reason to doubt that representation. She contends that though she never went to Shank's office to pick one up, she repeatedly asked Ms. Shank, the selling agent, for a disclosure statement as she always does, and her testimony in this regard is supported by that of both Ms. Kissner and Mr. Scarati. Both repeatedly tried to contact the selling office to obtain a disclosure statement but their calls were either nonproductive or not returned. There is some indication that when Ms. Verdi asked Ms. Shank for a disclosure statement, she was told that none existed.

   
   

7. After the closing, when Mr. Herhold was unable to obtain a reimbursement from the Griffins for the cost of repairs, he filed suit against Realtec, Verdi, Shank and her agency, Coldwell Banker and his own inspection service. He admits that, at court, when he was asked by the judge who he believed was responsible, he did not know. He sued Verdi because he had asked her for a disclosure statement which she did not give him. He claims the sale was not an "as is" sale. At hearing, he was awarded $835.20 plus costs against Verdi and Realtec. She did not pay right away and sought the advice of counsel. When Herhold found she was listing her own home for sale, he filed a lien against it. As a result of that action, because she determined that fighting the lien would cost more than the amount involved, she paid the judgement even though she believed the judgement to be in error. Realtec paid nothing. No evidence was presented as to exactly when the judgement was satisfied.

   
   

   CONCLUSIONS OF LAW

   
   

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

   
   

9. Petitioner seeks to discipline Respondent, Verdi's, license as a real estate salesperson, it is alleged, because of her failure to obtain for the purchaser of property a disclosure statement from the seller. It is also alleged she thereafter failed to pay a judgement obtained against her in Small Claims Court as a result of the buyer's claim against her, her agency, the seller, the seller's agent and agency and the independent inspector who examined the property before the buyer took possession. The Department claims she is, thereby, guilty of "misrepresentation, concealment, false pretenses, culpable negligence or a breach of trust in any business transaction", in violation of section 475.25(1)(b), Florida Statutes. It also alleges the same violation as to Realtec, Verdi's broker, with no additional evidence presented as to the agency.

   
   

10. The burden of proof rests on the Petitioner to establish its allegations against the Respondents by clear and convincing evidence. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987). In the instant case, the evidence show

    that Respondent, Verdi, was asked to obtain a disclosure statement for the buyer and made every reasonable effort to do so. In addition, however, she also recommended to the buyer that he have an independent inspection of the property done by someone of his own choosing, which resulted in no defect being discovered. She also suggested that the buyer not move into the property if he had any qualms about its condition, but this recommendation was disregarded by the buyer. It would appear that Respondent, Verdi, did all that could be expected of her without going to the selling agent's office and physically taking the disclosure statement from the selling agent's files. It should be noted that this statement, dated prior to the buyer's move into the property, showed no un-corrected defect.

    
    

11. The Respondents, as Petitioner points out, had a duty to disclose to the buyers all facts known to them that materially affected the value of the property which were either not known to or readily observable by the buyers. This is stated in Section 475.25(1), Florida Statutes. Taken together the evidence indicates Respondents did this and it does not come close to demonstrating, by clear and convincing evidence, a lack of trustworthiness, misrepresentation, concealment, false pretenses culpable negligence or any other misconduct on the part of Respondent, Verdi, or of Realtec.

    
    

12. As to the Respondents' initial failure to satisfy the Small Claims Court judgement immediately upon entry, the expiration of approximately seven months between entry of the judgement and the filing of the Administrative Complaint, after the judgement had been satisfied, does not seem to be an unreasonable delay, especially in light of Verdi's seeking of legal counsel regarding it.

RECOMMENDATION

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

RECOMMENDED that the Administrative Complaint filed in this matter against Respondents Diana C. Verdi and Realtec Group, Inc., t/a Re/Max Realtec Group, be dismissed.

RECOMMENDED this 6th day of September, 1995, 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 September, 1995.

COPIES FURNISHED:

Daniel Villazon, Esquire Department of Business and

Professional Regulation Division of Real Estate

400 West Robinson Street, N-308 Post Office Box 1900

Orlando, Florida 32802

Diana C. Verdi 2474 Tampa Road

Palm Harbor, Florida 34684

Realtec Group, Inc. percentRe/Max Realtec Group

3474 Tampa Road

Palm Harbor, Florida 34684

Lynda L. Goodgame General Counsel

Department of Business and Professional Regulation

1940 North Monroe Street Tallahassee, Florida 32399-0792

Darlene F. Keller Division Director Division of Real Estate

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

NOTICE OF RIGHT TO SUBMIT EXCEPTIONSNOTICE OF

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 consult with the agency which will issue the Final Order in this case concerning its rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency which will issue the Final Order in this case.

Docket for Case No: 95-001798

Orders for Case No: 95-001798