STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case No. 98-5115

)

MARGARET L. PAGE, )

)

Respondent. )

)

RECOMMENDED ORDER

A hearing was held in this case in Clearwater, Florida, on August 10, 1999, before Arnold H. Pollock, an Administrative Law Judge with the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Ghunise Coaxum, Esquire

Division of Real Estate Department of Business and

Professional Regulation

400 West Robinson Street Suite N-308

Orlando, Florida 32801

For Respondent: David C. Levenreich, Esquire

406 South Prospect Avenue Clearwater, Florida 33756

STATEMENT OF THE ISSUE

The issue for consideration in this case is whether Respondent's license as a real estate salesperson in Florida should be disciplined because of the matters set forth in the Administrative Complaint filed herein.

PRELIMINARY MATTERS

By Administrative Complaint dated October 21, 1998, Henry P. Osborne, Acting Secretary of the Department of Business and Professional Regulation, charged Respondent with concealment, dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust in a business transaction by, without authority, modifying an air conditioning repair technician's recommendation to replace the air conditioning unit in a house for which she was the seller's agent, in violation of Section 475.25(1)(b), Florida Statutes. Respondent demanded formal hearing on the allegations and this hearing ensued.

At the hearing, Petitioner presented the testimony of Nancy

J. Riley, buyer's agent for the property in question; and James

E. Brown, intended purchaser of the property in issue. Petitioner also introduced Petitioner's Exhibits 1 through 8. Respondent testified in her own behalf and presented the testimony of Nancy Ann Brown, wife of James Brown and intended co-owner of the property in question; Keith S. Caldwell, former owner of the property in question; Angela Renee Evans, general manager of an air conditioning firm; and, by deposition, William

Ward, an air conditioning technician. Respondent also introduced Respondent's Exhibits A through D, of which D was the deposition of Mr. Ward.

A Transcript of the proceedings was furnished, and after the receipt thereof, both parties submitted matters in writing which

were carefully considered in the preparation of this Recommended Order.

FINDINGS OF FACT

1. At all times pertinent to the issues herein, Petitioner, Division of Real Estate, was the agency in Florida responsible for the regulation of the real estate profession and the licensing of real estate professionals within this state. Respondent was licensed as a real estate sales person and employed as such in association with Today Real Estate, Inc., a real estate corporation trading as Re/Max Today, located at

   2451-1 McMullen Booth Road in Clearwater, Florida.

   
   

2. On July 16, 1997, James E. Brown and his wife submitted an offer to purchase a house located at 9813 Palmer Drive in New Port Richey. The offer was submitted by the Browns through their real estate agent, Nancy Riley, to the sellers who were represented by Respondent. As a part of the sales package, a home inspection report was completed on July 21, 1997, which indicated that the "air conditioning does not appear to be cooling enough."

3. Thereafter, Respondent contacted Alvarez/Taylor, a plumbing and air conditioning company, to examine the unit and a representative of that company, William Taylor, went to the property on July 25, 1997, to inspect the unit. When he arrived, he found no one there and the house locked. He contacted his dispatcher who advised him to wait, and within a few minutes,

   Ms. Riley showed up. She let him in the house to do the inspection.

4. The unit was low on freon, but the big problem with the unit that Taylor found was that it was old -- about 13 years old

   -- and at that age, he contends, units usually lose freon. He made an oral report to Ms. Riley who authorized him in writing to do whatever work was necessary on the unit to get it working properly. He installed the freon but that did not completely correct the problem. He advised Ms. Riley that he felt the unit should be replaced because of its age. She did not seem concerned about it, but she did not authorize the repairman to replace it. When he had done what he could do, short of replacing the unit, she again signed the work order, indicating the work had been done, and he gave her the pink copy of the form. This form showed his recommendation that the unit be replaced.

5. According to Respondent, Ms. Riley called her after the air conditioner repairman had been at the house. She said the unit was working but was an older unit and somewhere down the line would have to be replaced. Respondent also claims that Ms. Riley told her she, Ms. Riley, had called Mrs. Brown and read her the report, and the Browns "were OK with it."

6. Respondent did not see the repairman's report until July 28, 1997. At that time, she verified the repair charge of

   $140.00, and when she saw the recommendation for replacement on

   the form, she was upset by it. Respondent claims she had not been told by Ms. Riley that there was a recommendation for replacement, and she wanted to investigate the matter. She called Ms. Riley and left a message that she wanted to talk about it, and, on the recommendation of her own air conditioning repair firm, also called Alvarez/Taylor to ask for details on the recommendation for replacement. The repairman was not available, and she was unable to speak with anyone who was aware of the problem. All she was told was that the unit was old, would need constant repair, and should be replaced. When she asked to speak with the owner, he refused to speak with her.

7. After several unsuccessful attempts to get information from Alvarez/Taylor, still on July 28, 1997, Respondent called Ms. Riley again and was told, she claims, that the situation was not so bad and the replacement recommendation was not immediate; that the Browns knew of the situation and were OK with it; and that the Browns hoped to get another year use out of the existing unit. Respondent claims she told Ms. Riley at that time she intended to remove the recommendation for replacement from the inspection report if she didn't hear back from Alvarez/Taylor, and that Ms. Riley agreed. Ms. Riley disputes this. Thereafter, she removed the recommendation for replacement from the inspection report, and on July 30, 1997, at the closing, Respondent gave the buyers an altered copy of the report of the air conditioning repairman. On this copy, the notation in the

   place reserved for recommendations that the unit was 13 years old and should be replaced was not present. The closing went forward and was consummated, and the Browns were given a copy of the altered inspection report.

8. Almost a month later, on August 26, 1997, after the closing, Alvarez/Taylor furnished the Browns with a copy of the inspection report dated July 25, 1997 which reflected, in the space reserved for recommendations, that the unit should be replaced. The unit failed, and on September 3, 1997, Alvarez/Taylor replaced the unit due to its age and condition. The replacement cost the Browns $2,315.00.

9. When the Browns started to look into the matter, and enlisted the aid of their agent, Ms. Riley, they also contacted Respondent who told them that she had altered the inspection report because she believed she had the authority to do that as a realtor.

10. Respondent claims she was not trying to hide anything by altering the inspection report, nor was she trying to limit the Browns "or their representatives" access to the unit. She further contends she did not intend for anyone to reply on the altered inspection report. She says she believed everyone who needed to know, Ms. Riley and the Browns, were aware of the actual recommendation for replacement, and she was merely trying to correct the situation since she could not get what she considered to be appropriate information from Alvarez/Taylor.

    CONCLUSIONS OF LAW

    
    

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

12. Petitioner claims that because Respondent altered the inspection report on the air conditioning unit in a house for which she was the seller's agent, she is guilty of fraud, misrepresentation, dishonest dealing, deceit, false promises, culpable negligence or breach of trust in a business transaction, in violation of Section 475.25(1), Florida Statutes, and seeks to discipline her license.

13. The burden of proof rests with Petitioner to establish Respondent's guilt by clear and convincing evidence. Department of Banking and Finance v. Osborne Stern & Co., 670 So. 2d 932 (Fla. 1996); Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987).

14. There is no doubt at all that Respondent altered a material document in a real estate transaction in which she was involved as a real estate salesperson, and that the alteration related to a material fact. It is also clear that Respondent's action was deliberate and not the result of a mistake of fact. Her reliance on the failure of the air conditioning company to respond to her inquiry and give a further explanation of the technician's reason for recommending replacement of the unit is disingenuous and totally without merit. If, as she claims, she had a sincere doubt of the need for the unit to be replaced, she

    should have made full disclosure of the recommendation and further communicated her disagreement with it. Under no circumstances could she legitimately alter an official report done as a part of the preparation for closing.

15. By the same token, her claim that she was not trying to hide anything is also without merit. She cannot reasonably rely on her belief that all interested parties were aware of the actual report with the recommendation for replacement in it, and she also cannot rely on the fact that the buyer recognized the unit was old and in poor shape. The fact is that she altered a material document involved in a real estate closing and is guilty of misconduct.

16. Whether Respondent's conduct rises to the level of fraud, misrepresentation, and dishonest dealing may be questioned. She is clearly guilty of attempted concealment and, without question, of breach of trust. However, there is no evidence that Respondent has ever been disciplined before, and the evidence indicates she is relatively new to the profession. These factors may be considered in mitigation.

17. Penalties authorized by Section 475.25(1), Florida Statutes, and Rule 61J2-24.001(3), Florida Administrative Code, range from revocation in the case of fraud, misrepresentation, or dishonest dealing, to a suspension for one year and an administrative fine of $1,000 for culpable negligence and breach of trust. These penalties are not mandatory, however, and as

    counsel for Petitioner points out in her recommendation, the penalties noted are "usual." As such, they may be modified in appropriate cases. This is one of those cases.

18. Considering the relative inexperience of Respondent, her prior unblemished record, and the fact that the buyers of this property were not completely misled by Respondent's misconduct in that they knew replacement would be necessary, but not so soon, imposition of the maximum penalty is not appropriate. However, to ensure that Respondent recognizes the requirement for absolute and scrupulous honesty and integrity in the practice of the real estate profession, exemplified by full disclosure and non-concealment, some effective penalty is called for.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Florida Real Estate Commission enter a final order finding Respondent, Margaret L. Page, guilty of concealment and breach of trust, imposing a suspension of her license as a real estate salesperson for six months under such terms and conditions as the Commission deems appropriate, and imposing an administrative fine of $500.00.

DONE AND ENTERED this 29th day of September, 1999, in Tallahassee, Leon County, Florida.

ARNOLD H. POLLOCK

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6947 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 29th day of September, 1999.

COPIES FURNISHED:

Ghunise Coaxum, Esquire Division of Real Estate Department of Business and

Professional Development

400 West Robinson Street Suite N-308

Orlando, Florida 32801

David C. Levenreich, Esquire

406 South Prospect Avenue Clearwater, Florida 33756

Barbara D. Auger, General Counsel Department of Business and

Professional Regulation Northwood Centre

1940 North Monroe Street Tallahassee, Florida 32399-0792

Herbert S. Fecker, Division Director Division of Real Estate

Department of Business and Professional Regulation

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

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 15 days from the date of 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: 98-005115

Orders for Case No: 98-005115