The Issue Whether the Respondent's license as a real estate broker should be suspended, revoked, or the licensee otherwise disciplined, for alleged violation of Chapter 475, Florida Statutes as set forth in the Administrative Complaint dated September 3, 1981. By Notice of Hearing, dated October 26, 1981, this case was set for hearing to be held on December 17, 1981. However, on December 3, 1981, another Administrative Complaint seeking to take disciplinary action against Respondent by Petitioner's Construction Industry Licensing Board was referred to the Division. In view of the fact that both complaints alleged matters arising out of the same transaction, Petitioner's Motion to Consolidate for purposes of hearing was granted and the final hearing was rescheduled for March 10, 1982. The complaint herein alleges that Respondent, a licensed real estate broker, in her capacity as a certified residential contractor and as President of CAT Development, Inc., a construction firm, contracted to build a dwelling for Jenny Soto, and received full payment under the contract, but abandoned construction prior to completion, permitted the property to deteriorate, and has not refunded monies due the purchaser. It is therefore alleged that Respondent violated Subsections 475.25(1)(b) and (d), Florida Statutes.
Findings Of Fact Respondent Catherine W. Grabhorn is a licensed real estate broker, doing business ads CAT Realty Company at East Palatka,Florida. She was so licensed at all material times alleged in the Administrative Complaint. (Testimony of Respondent) Respondent is also a certified residential contractor operating as CAT Development, Inc. at East Palatka, Florida, and was so licensed at all material times alleged in the Administrative Complaint. (Testimony of Respondent) In October, 1978, Jenny Soto, Bronx, N. Y., accompanied other prospective land purchasers to Palatka, ,Florida, where she was shown and purchased a lot for $10,000 at a development known as P & B Ranchettes. The group had traveled to Florida in a van. After the land purchase, the driver of the van took Soto and the others to Respondent's combination real estate and construction firm office where Respondent showed the group a catalog of various homes for possible construction on the lots which had been purchased. Soto saw a split level design that she liked, and Respondent told her that she could build it for $43,000, with the garage and the below ground level part of the split level to be unfinished, and without appliances. A contract was entered into between Respondent as President of CAT Development, Inc. and Soto on October 22, 1978. The contract provided for payments of $13,000 on October 24th, $25,700 on November 12th and the balance of $4,300 due on completion of the house. However, no completion date was stated in the contract. (Testimony of Respondent, Soto, Petitioner's Exhibits 16-19) On October 24, 1978, Respondent flew to New York City to obtain the initial payment under the contract. Soto met her at the airport and paid $13,000. At that time, Soto asked Respondent when house construction would commence, and Respondent indicated that she needed additional money for materials. On November 30, 1978, the parties entered into a new contract to add additional features to the house, including a finished downstairs and garage, and appliances. The new contract price was $47,600, which reflected that $13,000 had been paid, $20,000 was due on December 1, 1978, $10,000 due on January 15, 1979, and the balance of $4,600 due on completion of the house. Again, no time for completion was stated in the contract. Pursuant to the agreement, Soto paid Respondent $20,000 on December 1, 1978 in New York City where the contract was signed. At some undisclosed date thereafter, Soto decided she wanted to upgrade the carpeting and appliance allowances, and the parties entered into an oral agreement for a total contract price of $53,000. (Testimony of Respondent, Soto, Petitioner's Exhibits 19-22) On January 4, 1979, Respondent obtained a Putnam County building permit for the Soto project, and plumbing and electrical permits were obtained by subcontractors later that month. Construction commenced on the house and it was discovered that the ground water table was close to the surface of the land and that there would be drainage problems. However, Respondent told Soto that she would be able to cure the problem by pumping out the standing water in the area. On January 26, Respondent again went to New York and obtained a $10,000 payment from Soto. In February, Soto visited the construction site and observed that standing water near the house was "like a lake". Soto visited the house again in March and gave Respondent the final $10,000 payment on the contract price. At that time, the house was substantially completed and there was no apparent water damage. Respondent told Soto that it would take a couple of months to finish construction. It appeared to Soto then that the only remaining work to be done was to install carpeting, light fixtures, and appliances. Several county inspections were made as the work progressed during January and February, 1979, and it was determined, after certain minor corrective measures, that the work was being performed satisfactorily. (Testimony of Durbin, Michaels, Soto, Respondent, Petitioner's Exhibits 1-3, 23-24) During ensuing months, Soto periodically telephoned Respondent to ascertain when the home would be completed, and on these occasions Respondent promised that the house would be completed within thirty days. However, no further work has been done by Respondent, except to obtain approval of a temporary electrical pole in June, 1981. At that time, the county building inspector observed that there was a considerable amount of standing water around the house, and that the outside of the building had deteriorated. Siding was warped and pulled away, the front door was open, and some wrought iron was located in a nearby ditch. (Testimony of Soto, Resondent, Durbin, Petitioner's Exhibit 3) In response to a request by Soto in 1980 concerning the market value of the house, Respondent wrote her on July l, 1980 that the home was 90 to 95 percent complete and that completion was anticipated "as soon as possible". On May 28, 1981, the building permit was extended by the county to August 31, 1981. In July of that year, Soto visited the property and observed that a lock was missing from the door, mud was present in the lower level, sheetrock on the walls had rotted out, and the kitchen cabinets were missing, apparently due to vandalism. Soto saw the Respondent and asked her why the property was in that condition, and Respondent told her that she had no money because workmen on the project whom she had paid had "run off" with the money. During this visit, Respondent provided Soto with a written statement that the said house would be completed within sixty days, which would be September 20, 1981, unless prevented by "some act of God". (Testimony of Respondent, Soto, Michaels, Petitioner's Exhibits 14, 15, 25) On September 1, 1981, the county building official wrote to Respondent and advised her that the permit extension had expired the previous day and that new permits would be required to complete the work. The letter also stated that if substantial work was not evident within ten days from her receipt of the letter, he would be forced to conclude that she had effectively abandoned the project and he would bring the matter to the attention of the county contracting board, and to the Florida Construction Industry Licensing Board. Complaints by Soto to the building official of Putnam County resulted in a letter written to him on January 14, 1982 by Respondent wherein she stated that she had not been able to do anything about the Soto house due to her financial situation, but that she hoped to be able to finish the project in thirty to sixty days. (Testimony of Michaels, Petitioner's Exhibits 10, 11) On February 48, 1982, the county building officials went to the project site and found further evidence of deterioration, but no indication that any corrective or preservative work had been accomplished. Doors and windows were missing from the house, siding and fascia board were warped and pulled away, and several panels fallen from the side of the house. A ditch had been dug around the house and there was standing water in it. Inside, it was observed that gypsum board had been removed from the walls, and in the lower level water stains were evident sixteen to eighteen inches above the flooring. Roof trusses had been broken and structural integrity had deteriorated with rotted 2 x 4 lumber forming bearing walls. It was further noted that kitchen cabinets had been removed from the property. (Testimony of Durbin, Michaels, Petitioner's Exhibits 4-9) Although construction of the house was substantially completed at the time Respondent ceased work, the remaining cost of installing heating and air conditioner units, kitchen appliances, washer/dryer, bathroom and lighting fixtures, pump for septic tank, and carpeting is estimated at approximately $13,000. Additionally, to correct the present deficiencies and procure new windows, kitchen cabinets, and other vandalized property, would require a substantial, but unknown additional cost. Respondent estimates that it would take about $10,000 to $15,000 to complete the house. (Testimony of Michaels, Respondent) Since commencing construction on the Soto house in January, 1979, Respondent has obtained permits and completed construction on nine single family homes, the last permit being issued as recently as January 20, 1982. No complaints have been received by the Putnam County building department on these projects. (Testimony of Michaels, Petitioner's Exhibit 12) Respondent testified at the hearing and conceded that she had not completed the Soto house, but attributed her failure to "cash flow" problems which had resulted in financial inability to complete the work. Respondent had deposited all of the money paid to her by Soto in her general banking account. This account was used for expenditures on the Soto house, as well as other concurrent projects. Respondent produced a statement of expenditures on the Soto house in the amount of $47,000. However, this statement reflected that Respondent had included airplane fare for two trips in the total amount of $434,. These trips were made to pick up checks from Soto in New York. Respondent stated that other costs for fill, construction of a ditch, and rock would not have been necessary if she had followed later advice as to the water problem on the property, and installed a sump pump and "french" drains. She further stated that on various occasions she would lock the house, but each time when she went back the locks would have been stolen, and that although she reported vandalism to the police, the problem continued. Respondent admitted that she had made promises to Soto to complete the house which she had not kept, but that she had never intended to take her money and not perform the work under the contract. She underestimated the cost of building the house due in part to her unfamiliarity with the particular design of the Soto house. (Testimony of Respondent, Petitioner's Exhibits 13, 29)
Recommendation That Respondent's license as a real estate broker be suspended for a period of six months. DONE and ENTERED this 25th day of May, 1982, in Tallahassee, Florida. THOMAS C. OLDHAM Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the clerk of the Division of Administrative Hearings this 25th day of May, 1982. COPIES FURNISHED: James Quincey, Esquire Post Office Box 1900 Gainesville, Florida 32602 William N. Gambert, Esquire 630 North Wild Olive Avenue Daytona Beach, Florida 32018 Mr. C. B. Stafford Executive Director Board of Real Estate Post Office Box 1900 Orlando, Florida 32801 Frederick Wilsen, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 ================================================================= AGENCY FINAL ORDER ================================================================= MEMORANDUM December 8, 1982 TO: Harold Huff, Executive Director, Florida Real Estate Commission; Gail Rodrigues, Chief Investigator; Darlene Keller, Administrative Assistant; Renata Hedrick FROM: John Huskins, Staff Attorney SUBJECT: Final Commission Action Case No. 0011848 Catherine W. Grabhorn 0033021-1 DOAH Case No. 91-2491 You are advised that by Final Order entered July 15, 1982, the Commission ordered Respondent's license revoked (copy attached); and the Respondent took appeal from this ORDER, and that on November 9, 1982, the District Court of Appeal entered its ORDER dismissing the appeal (copy attached). Accordingly, the Commission's ORDER of revocation became effective November 9, 1982. CLOSURE CODE: PLOO Catherine W. Grabhorn, broker, Palatka, Florida; Revoked, effective November 9, 1982; fraud, misrepresentation, conceal- ment, false promises, dishonest dealing, culpable negligence, breach of trust. Attachments cc: Sandy Maston w/file Randy Schwartz JH/DM
Findings Of Fact On February 27, 1974, Pelle J. Lindquist contracted with Patrick G. Yeager to build a house on Concord Road in Ormond Beach, Florida. This contract was admitted in evidence as petitioner's Exhibit No. 1. The contract called for work to begin on March 1, 1974, and to be completed within 90 days. Work did not begin on March 1, 1974, but did begin in the latter half of March, 1974. Frequent rain in March, 1974, caused the roof to warp, so that it had to be replaced. After considerable delay in undertaking the repair, actually replacing the roof took only about a week. Replacing the roof added significantly to respondent's costs in performing under the contract. Eleven months after construction began, Mr. Yeager moved in. Because the kitchen and both bathrooms lacked wallpaper, and because the gravel yard was partly unfinished, respondent Lindquist paid Mr. Yeager $300.00, in exchange for which Mr. Yeager released Mr. Lindquist from all liability in connection with the house. The release was admitted in evidence as respondent's Exhibit No. 1. In the course of construction, Haven Vaughn, a sub- contracting carpenter, filed a notice of intent to lien on behalf of himself and his partner, Cal Fisher. As long as Mr. Lindquist was allowed draws on the construction loan, Messrs. Vaughn and Fisher were paid regularly. For reasons which were not developed in the evidence, the lender withheld part of the loan proceeds from respondent. When the draws stopped, the carpenters were not paid, and they stopped work on the Yeager house. The lender ultimately paid the carpenters in full. At the time Mr. Yeager contracted with Mr. Lindquist for the house, Mr. Lindquist entered into a separate agreement with Mr. Cameron, a real estate broker who introduced Mr. Lindquist to Mr. Yeager. Under the latter agreement, Mr. Lindquist was to pay Cameron Realty Company a brokerage fee upon "obtaining last draw from lending firm." The brokerage fee has not been paid and is currently the subject of civil litigation. On February 15, 1974, Mr. and Mrs. Horace N. Smith, Jr., contracted with respondent for the construction of a house on another lot on Concord Road in Ormond Beach, Florida. This contract was admitted in evidence as petitioner's Exhibit No. 2. The contract called for completion of the Smith house on or about June 15, 1974. After the contract was signed, the Smiths returned to New Jersey, entrusting oversight of the project to Mr. Cameron, a real estate broker who introduced Mr. Lindquist to the Smiths. As construction progressed, Mr. Cameron kept Mrs. Smith advised, and she mailed installment payments on the strength of Mr. Cameron's representations. In this fashion, Mr. Lindquist was paid 75 percent of the total contract price of $27,600.00. For reasons which were not developed in the evidence, the Smiths stopped payments under the contract, presumably at Mr. Cameron's suggestion. When the payments stopped, work on the house also stopped, and, during the ensuing hiatus in construction, vandals broke a glass door, scrawled obscenities on the walls, scraped the walls, damaged the outside doors, and ruined the wooden trim. Work had fallen far behind schedule when, in April of 1975, a lawyer retained by Mr. and Mrs. Smith wrote Mr. Lindquist to the effect that the Smiths would take over the project unless it was finished within a week. When the week had passed, the Smiths began dealing directly with the sub-contractors, the house was eventually completed at a total cost to the Smiths of $29,100.00, or $1,500.00 more than the Smiths had agreed to pay Mr. Lindquist for the job. As completed, the house lacked an electric garage door opener and a sprinkler system which Mrs. Smith guessed would cost $1,000.00, but no competent evidence as to the cost or value of either the door opener or the sprinkler system was adduced. Vandalism added significantly to the cost of the Smith house. Mr. Lindquist replaced a glass door broken by vandals. On account of the vandalism, the Smiths paid the carpenters an additional $300.00 for their labor. The front doors, the trim, and all bays had to be replaced; the cost of replacement materials was not established. At the time Mr. and Mrs. Smith contracted with Mr. Lindquist for the house, Mr. Lindquist entered into a separate agreement with Mr. Cameron. Under the latter agreement, Mr. Lindquist was to pay Cameron Realty Company a brokerage fee. The brokerage fee has not been paid and is currently the subject of civil litigation. Certified general contractors' licenses are renewable annually in June, pursuant to Section 468.108, Florida Statutes (1975). Mr. Lindquist had such a license for 1974-75. In June of 1975, he desired to renew his license, but in a fashion which would authorize him to contract on behalf of a corporation, rather than as an individual. He telephoned the Jacksonville office of the Florida Construction Industry Licensing Board and explained his situation. That office mailed him forms which he filled out and mailed back in June of 1975. In March of 1976, some nine months later, the completed forms were mailed back to respondent, but no license was issued. On March 22, 1976, Mr. Clyde Pirtle, an investigator employed in the Jacksonville office of the Florida construction Industry Licensing Board, filled out and mailed to respondent a Notice of Violation," notifying respondent that he had failed to renew his certificate during June of 1975. The same "Notice of Violation" advised respondent of his putative failure to notify the Florida Construction Industry Licensing Board of his new address, although his application papers for the 1975-76 license had been returned to the new address. On the Monday after the Friday on which respondent received the "Notice of Violation," he telephoned Mr. Pirtle's office and was told that Mr. Pirtle would contact him. On or about June 3, 1976, Mr. Pirtle did contact respondent and meet with him. At this meeting, respondent showed Mr. Pirtle the papers he had mailed to the Board in June of 1975, and which were returned to him unprocessed in March of 1976. Mr. Pirtle told respondent that the papers had been returned because the application forms were for a registered, and not for a certified, contractor's license, and furnished respondent another set of forms. Respondent filled out the new set of forms and mailed them to the Board in June of 1976. A month and a half before the hearing in this cause, respondent received 1976-1977 certified general contractor's license No. CGC007702, which is currently in force. No contractor's license for 1975-76 was ever issued to respondent. On May 3, 1976, respondent applied for and was issued a building permit to erect a new residence at 1623 Anniston Avenue in the City of Holly Hill. At that time, respondent had no current contractor's license and presented to the authorities a license which had expired.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED that disciplinary action against Respondent, if any, be limited to a reprimand. DONE and ENTERED this 6th day of April, 1977, in Tallahassee, Florida. ROBERT T. BENTON Hearing Officer Division of Administrative Hearings Room 530 Carlton Building Tallahassee, Florida 32304 COPIES FURNISHED: Mr. Barry Sinoff, Esquire 1010 Blackstone Building Jacksonville, Florida 32202 Mr. Thomas L. West, Esquire Post Office Box 1857 1030 Volusia Avenue Daytona Beach, Florida 32015 J. K. Linnan, Executive Director Florida Construction Industry Licensing Board Post Office Box 8621 Jacksonville, Florida 32211
Findings Of Fact The Respondent, Gary R. Berkson, is a licensed real estate salesman, holding license No. 034697. From September 27, 1980, until May of 1983, the Respondent as a salesman working as an independent contractor for Act Now Real Estate, Inc., a corporate broker whose active qualifying brokers and officers were Robert F. Picheny and Thelma R. Sarkas. Robert F. Picheny was subpoenaed and requested to bring with him the records of Act Now Real Estate, Inc., showing the disbursement of commissions to the Respondent. These records did not contain any entries relating to rental transactions involving the persons named in the complaint as having paid commissions to the Respondent. The only lease offered and received in evidence was between Samuel Schnur, as lessor, and lessees named Davis and Johnston. Samuel Schnur, presented as one of the Petitioner's witnesses, did not pay a rental commission to the Respondent in connection with this lease. Another lease transaction where the Respondent was alleged to have received rental commissions was between Sami Elmasri, as landlord, and Donald Bauerle, as tenant. Sami Elmasri, presented as another of the Petitioner's witnesses, testified that he paid a $300 commission, but that this was not paid to the Respondent. This commission was paid to another salesman, Wendy Corman. The final witness for the Petitioner, except for the Respondent, was Wendy Corman. She showed Mr. Elmasri's property to persons wishing to rent through a lead given by the Respondent. She was paid a $300 commission by Mr. Elmasri. The Respondent did not receive any of this commission. The Petitioner's final witness was the Respondent, who testified that he never received a commission for rental property. The only money he received in connection with rental properties was a management fee he received on some properties owned by Richard Jacobson. This fee was in payment for management services consisting of arranging for repairs to the properties such as painting it, repairs to the plumbing and the garage door, and being available to tenants with problems in the absence of the owner. These management fees continued even after the Respondent left Act Now Real Estate, Inc., until Mr. Jacobson assumed the management duties himself.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Administrative Complaint filed against the Respondent, Gary R. Berkson, be DISMISSED. This Recommended Order entered this 13th day of June, 1984, in Tallahassee, Florida. WILLIAM B. THOMAS Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 13th day of June, 1984.
Findings Of Fact At all times relevant thereto, Respondent Steven M. Frank, held real estate salesman license number 0186888 issued by Petitioner, Department of Professional Regulation, Florida Real Estate Commission. He has held a salesman license since February 28, 1978. In September, 1980, Respondent began working as a salesman for Independent Realty Associates, Inc. located at 6281 Pembroke Road, Hollywood, Florida. Alistair D. Monro was active broker and president of the firm. Monro also operated a construction firm and mortgage brokerage business at the same address. At approximately the time when Frank began his tenure with Independent, Monro entered into a non-exclusive agreement with Paul Uber to sell houses and lots in University Park, a housing project in Miramar, Florida which had been purchased by Uber from a bank in foreclosure proceedings. There were no written office procedures setting forth instructions on how contracts and deposits were to be handled. However, Frank had been orally advised by Monro to turn over all contracts and checks to Monro, or in his absence, to a newly hired office manager. There was no night depository arrangement in the office. He had also been instructed that any contracts received on University Park property could only be presented by Monro. In fact, Frank did not know Uber's address or telephone number, and had never seen or met him. An open house was held at University Park on the weekend of September 13 and 14, 1980. Frank volunteered to work at one of the six model homes in the project. Around 3:00 p.m. on Sunday, September 14, Elizabeth and Victoria Woerner executed a contract for sale and purchase in which they offered to purchase the home located at Lot 4, Block 4 in University Park for $75,000. Elizabeth Woerner gave Frank a check in the amount of $100 to be held in escrow as earnest money. The contract called for approval by the seller no later than Wednesday, September 17. At 4:00 p.m. that afternoon, Frank closed the model home and returned with the check and contract to his office. Because Monro had been absent from his office the entire weekend, Frank attempted to give the check to the office manager, Dolly Stogner. However, she would not accept the check and contract since the contract had to be presented by Monro. The following morning (Monday) Frank returned to the office and could not find Monro. He then attempted to give Monro's secretary the check and contract. She refused since the contract was not executed by the seller. He left a message for Monro with the secretary and continued to hold the contract and check. That evening he received a telephone message from Elizabeth Woerner. He was unable to reach her that evening but telephoned her the next morning. After learning she wished to withdraw her offer, he told her he would check with his broker to see how deposits were returned. Thereafter, he attempted to see Monro that day (Tuesday) but again found him absent from the office. He left a message with the office manager for Monro to call him. The call was never returned. On Wednesday, Monro received a telephone call from Elizabeth Woerner concerning her check. When Frank returned to the office that day, he was fired for failing to immediately turn over the check and contract to the broker. The $100 deposit was later returned to the Woerners. Less than a week later, Monro wrote the Department and recommended that Frank's license be suspended or revoked. He advised the Department that Frank was guilty of "failure to turn in the deposit to the broker", "failure to present an offer on the property", and "culpable negligence". He also stated that Frank was "not of a caliber that would make him an asset to the Real Estate Profession." As a result of this letter, a disciplinary proceeding against Frank was begun. The property in question eventually sold for $112,500 in November, 1980. Monro acknowledged that the Woerners' $75,000 offer was so low that it would not have been accepted. He also acknowledged that another offer had been made on the property on September 14 and was pending when the Woerners' contract was signed. Monro did not present the Woerner's contract to Uber, presumably because the Woerners wished to withdraw their offer. No monetary harm was suffered by the seller or the Woerners.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that all charges against Steven M. Frank be DISMISSED. DONE and ENTERED this 29th day of July, 1982, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of July, 1982.
Findings Of Fact Respondent Jean P. Pittenger is a licensed general contractor holding license number CGC010323 issued by the Florida Construction Industry Licensing Board and is a licensed real estate broker-salesman, holding license number 0341210. Respondent Lan Thi Tran also known as Marie J Pittenger; is a licensed real estate salesman, holding license number SLO216661. Respondent LeRoy G. Bailey is a real estate broker in the State of Florida, holding license number BKO184114. On or about December 11, 1981, the Respondents Pittenger and Tran solicited and obtained Louis and Lamquet DeWinter and J. M. Demeulemeister as purchasers and joint venturers for the purchase of a certain piece of real property in Collier County, and for the construction of a house thereon. The Respondent Pittenger was the President and qualifying agent for his construction company known as "The Pittenger Company," d/b/a Real Estate Technology Group. Jean Pittenger entered into the joint venture agreement with Louie Philippe DeWinter and the others, as president of that entity. Pursuant to this agreement, DeWinter agreed to purchase a lot at Site 51, Block A, The Pelican Bay, Unit 1, a recorded subdivision in Collier County, Florida, and Respondent Jean Pittenger agreed to construct a first-class residence" on the property for purposes of investment and resale. Respondent Jean Pittenger never qualified his company or the joint venture entity under which he intended to undertake to construct the house with the Florida Construction Industry Licensing Board. In connection with the joint venture, the DeWinters gave to Marilyn Evanish of Coral Ridge-Collier Properties, Inc., a $17,000 earnest money deposit in accordance with the sales contract calling for DeWinter to purchase the property at a total of $170,000. The DeWinters' also paid $15,000 for architectural services and $13,151 for advance construction costs, attorney's fees and the like to Respondents' Pittenger and Tran. The DeWinters' made these disbursements from their own funds in trust and reliance upon the statements, actions and representations of Respondents' Pittenger and Tran to the effect that an architect would be retained to design the residence to be built, and that construction permits would be obtained and construction would `begin at a time certain. Thereafter, on or about April 14, 1982, Pittenger and Tran, unilaterally terminated the professional services of the architect and abandoned the joint venture agreement and the construction of the residence without explanation to their fellow joint venturers, the DeWinters, who were the owners of the lot upon which the residence was to be constructed. Respondent Pittenger never returned to complete construction. This unilateral action by the Respondents resulted in the DeWinters losing the use and benefit of approximately $28,151 which they had paid to those Respondents for architectural services and construction costs, which services were never performed. Louis DeWinter made demand on the Pittengers for return of the funds. Respondents' Pittenger and Tran, however, failed to justify the abandonment of construction of the dwelling, and failed and refused to account for the funds or what services, if any, had been purchased with the funds provided them by DeWinter for development of the property. Respondents' Pittenger and Tran utilized the $13,151 for their own use and benefits or in any event, for a use and benefit not intended by their joint venture partners and clients, the DeWinters. An indefinite portion of the $15,000 attributable to architectural services was apparently paid to the architect engaged to design the house; but in any event, Pittenger and Tran terminated the professional services of the architect before he completed his design and failed to account for or deliver the $13,151 entrusted to them by the DeWinters and intended for initiation of construction. The evidence does not clearly establish what became of the $15,000 advance for architectural services, but the DeWinters never received the benefit of any architectural services purchased. On or about March 24, 1982, Respondents' Jean P. Pittenger and Lan Thi Tran solicited and obtained $5,000 from the DeWinters supposedly for the purpose of purchasing real property in Bonita Springs, Florida, for investment and resale. The DeWinters' gave $5,000 to Respondents' Jean P. Pittenger and Lan Thi Tran in trust and reliance upon the acts, representations and statements of those Respondents which were made in order to induce the DeWinters' to deliver the $5,000 to them. Thereafter, those Respondents refused and neglected to account for or deliver to the Dewinters the $5,000 after demand and they never used that sum to purchase any property on behalf of the DeWinters, their clients. On or about April 22, 1982, Respondents' Pittenger and Tran solicited and obtained a sales contract on a restaurant known as "The Elephant Walk." The property was owned by Hospitality-Condo Inn, Inc. (seller) and was listed by the real estate brokerage known as Tri-Dynamics Realty of Florida, Inc., which was the brokerage of Respondent LeRoy Bailey, who is also the President of Hospitality-Condo Inn, Inc. The property was sold to Gerlanelie, Inc. by Lee Nichols Realty, Inc., the "selling broker," pursuant to that contract. Gerlanelie, Inc., was owned by the DeWinters and Respondent Tran who in effect were the purchasers of the property. Respondent Tran was the real estate salesperson who secured and negotiated the purchase from Mr. Bailey's corporation, at which time she was a salesman for Lee Nichols Realty, Inc., the selling broker. In executing the contract, the DeWinters acted upon the advice and representations of the Pittengers, who represented that the purchase price of $850,000 was a reasonable price and- knowing that the DeWinters were foreign nationals and uninitiated in the legal aspects of real estate transactions in Florida, represented to them that it was illegal under Florida law to counter- offer for less than that purchase price, which representation the DeWinters apparently believed. At the closing, the DeWinters executed documents assigning their beneficial interests back to the sellers Bailey and Hospitality Condo-Inns Inc., as collateral and security for the mortgage and promissory note obligations by which they were to pay the purchase price, to which obligations they both corporately and personally obligated themselves. Additionally, the Respondents' Pittenger and Tran agreed to share and participate in the mortgage payments, by which $728,000 of the purchase price was to be paid, as an inducement to get the Dewinters to enter into the sales contract and close the transaction. In connection with the purchase and renovation of the restaurant, the Respondents, Pittenger and Tran solicited and obtained $104,795 from the DeWinters between May 17, 1982 and July 10, 1982. Respondent Jean Pittenger, who was to do the construction work for the renovation, originally represented that the construction work would cost no more than $75,000. In any event, very little renovation work was completed by the Respondent Pittenger, and he and Respondent Tran abandoned the project, leaving $70,000 in unpaid, recorded mechanics' and materialmens' liens and approximately $30,000 in unpaid bills for food, liquor and other expenses, which were in large part incurred by Respondents' Pittenger, Tran and their invited guests and business associates. This $30,000 amount had to be paid by the DeWinters through a loan and they had to pay the $70,000 liens as well. As a result of this unforeseen, massive expense, the DeWinters were unable to meet their August, 1982, mortgage payment, although in the first full month of operation they had grossed approximately $60,000 with the restaurant operation and it appeared to be a very viable business. Additionally, Respondents' Pittenger and Tran failed to pay their share of the mortgage payments, notwithstanding their promise to the DeWinters that they would participate in making the mortgage payments as inducement to the DeWinters entering into the purchase transaction in the first place. In any event, Respondents' Pittenger and Tran abandoned the project and left the state and were last known to be in the Atlanta, Georgia area. They thus deprived the DeWinters of the vast majority of the $104,795 to have been used to pay for renovation on their restaurant, the $70,000 in addition to that required to discharge the liens and the $30,000 expended to pay various expenses incurred by those Respondents. The former owner and mortgagee, Respondent LeRoy G. Bailey advised the DeWinters during the initial month of operation of the restaurant after the sale, that Pittenger and Tran were not to be trusted, and that they should remove them from management of the restaurant and seek legal counsel, which the DeWinters did. Respondent Bailey additionally cooperated with the DeWinters, attempting to help them make the business a successful operation, but in the ends due to the perfidy of Pittenger and Tran, and the severe financial hardship it caused the DeWinters, the DeWinters were forced to assign all of their right, title and interest in the restaurant back to Respondent Bailey, at the point of the restaurant's mortgage becoming in default, as they had earlier agreed to do. Mr. Bailey employed the DeWinters in a management capacity for a short time after the assignment, but then discharged them and operated the restaurant himself for a time until he ultimately sold it. In any event, it was not established that Bailey entered into any conspiracy or scheme with Pittenger and Tran to attempt to defraud the DeWinters, or otherwise engage in any dishonest dealing by trick, scheme, device or otherwise at the expense of the DeWinters. The financial and legal problems which befell the DeWinters were due to their naive reliance on the representations, promises and statements made by Jean Pittenger and Lan Thi Tran, his wife. All their agreements with Bailey were entered into with counsel present and upon advice of counsel. The DeWinters knew at the closing of the transaction that they had executed an assignment, in the nature of a deed in lieu of foreclosure, back to Bailey, which would be exercised should the mortgage become in default.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of records the candor and demeanor of the witnesses and the pleadings and arguments of the parties, it is, therefore RECOMMENDED that the charges against the Respondent LeRoy G. Bailey be DISMISSED and it is further, RECOMMENDED that all licenses issued by the Construction Industry Licensing Board to Jean P. Pittenger be REVOKED and that he be fined the amount of $5,000. It is further RECOMMENDED that the licenses of Jean P. Pittenger and Lan Thi Tran, also known as Marie J. Pittenger, issued by the Florida Real Estate Commission be REVOKED, and that they each be fined in the amount of $6,000. DONE and ENTERED this 20th day of November, 1985 in Tallahassee, Florida. P. MICHAEL RUFF Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 20th day of November, 1985. APPENDIX TO RECOMMENDED ORDER, CASE NOs. 84-0311 AND 84-1112 Petitioner's Proposed Findings of Fact Accepted. 4. Accepted. Accepted. 5. Accepted. Accepted. 6. Accepted. Respondent's Proposed Findings of Fact Accepted. 5. Accepted. Accepted. 6. Accepted. Accepted. 7. Accepted. Accepted. 8. Accepted. COPIES FURNISHED: James H. Gillis, Esquire Division of Real Estate Post Office Box 1900 Orlando, Florida 32802 Wesley A. Lauer, Esquire ACKERMAN, BAKST, GUNDLACH, LAUER & ZWICKEL, P.A. 515 North Flagler Drive Orlando, Florida 32802 Jean P. PITTENGER and Lan Thi Tran 235 Tallwood Terrace Roswell, Georgia 30075 James Linnan Executive Director Construction Industry Licensing Board Post Office Box 2 Jacksonville, Florida 32202 Harold Huff, Executive Director Division of Real Estate Post Office Box 1900 Orlando, Florida 32802 Fred Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
The Issue Whether Respondent, a licensed real estate salesman, is guilty, as charged, of fraud, misrepresentation, culpable negligence or breach of trust in violation of Section 475.25(1)(b), Florida Statutes.
Findings Of Fact I. At all times material to the charges, Respondent was a licensed Florida real estate salesman associated with Woodlake Realty, Inc., in Melbourne, Florida. He obtained his real estate salesman's license in 1982. On March 14, 1985, became a licensed real estate broker and now operates his own business under the name of Peter Frontiero Realty. His office is located in his residence at 3247 West New Haven Avenue, Melbourne, Florida. II. On or about April 7, 1983, while employed as a real estate salesman at Apollo Realty, Inc., Mary E. Sousa obtained a listing on a tract of land owned by John and Janet Biansco. In connection with the listing, an Exclusive Right of Sale Contract was executed. This contract contained the following legal description of the tract to be sold: Parcel of land lying in the County of Brevard in the southwest 1/4 of Sec 11, TW 28 South Range 36E more particularly described as follows: S 2/3 of the following tract: commence at SE corner of W 1/2 of Sec 11 TW 28 South Range 36E, thence along south line of said Sec 11, 589-54-14 West for 30 feet., thence north 1- 17-00E for [sic] 43 feet to the point of beginning thence south 89-54-14 west along the north R/W line Melbourne Tillman Drainage district canal #63 for 297.43 feet, thence north 1-15-49 east for 353 feet, thence north 89-54-14 east for 297.55 feet, to the west R/W line of Arizona Street; thence south 1 17-00 West along R/W line for 353.00 feet, to the point of beginning. (P-4, Admissions No. 5, 6) As so described, this tract of land measures 235.34' x 297.47' and contains approximately 1.61 acres. (Admission No. 7) Mary E. Sousa and her broker, Peter Sergis, however, incorrectly determined that the legal description described a tract of land measuring 297' x 353' feet, containing 2.4 acres. (They determined this by examining the legal description attached to the Listing Contract and relying on Mr. Biansco's representation that the tract contained 2.4 acres.) Mary E. Sousa then had the property listed in the Melbourne Multiple Listing Service (MLS) on or about April 26, 1983. The MLS listing reflected the incorrect measurements and size of the tract, as submitted by Ms. Sousa. (P-3, Admission No. 8) III. During May, 1983, Karen Dunn-Frehsee and Paul Winkler (her fiance), contacted Respondents, a real estate salesman associated with Woodlake Realty, Inc., about purchasing a home. After Respondent showed them a house they were interested in, Ms. Dunn-Frehsee and Mr. Winkler decided that what they really wanted was to buy land on which they could build a residence. They told Respondent that they would need a minimum of two acres since they had two horses: local zoning requirements required at least one acre of land per horse. (Admission No. 10, Testimony of Dunn-Frehsee) Respondent checked MLS and found the listing (containing the incorrect measurements and size) of the Biansco property. He showed the land to Ms. Dunn- Frehsee and Mr. Winkler, who liked it and decided to make an offer. (At that time, Respondent was unaware that the MLS listing erroneously described the tract to be 297' x 353', containing 2.4 acres, when in fact it was 297.47' x 235.34', containing approximately 1.61 acres.) On or about May 5, 1983, Respondent prepared a "Contract for Sale and Purchase" containing the offer of Ms. Dunn-Frehsee. After she signed it, it was presented to the Bianscos, who subsequently accepted it. (Admission No. 12, P- 1) The Contract for Sale and Purchase contained, on the attached addendum--a correct legal description of the tracts as the description was taken from the listing agreement, not the erroneous MLS listing. Prior to closing, Respondent contacted Ms. Dunn-Frehsee several times to advise her regarding efforts being made by Lawyers Title Insurance Company to locate the prior owner of the property and secure a quitclaim deed covering a 30-foot strip of land bordering Arizona Street on the east side of the property. He was still unaware of the discrepancy between dimensions of the property contained on the MLS listing and the Contract of Sale. He did not tell Ms. Dunn-Frehsee that he had personally measured the property, or that he had confirmed the accuracy of the listing information. He was concerned only with the problem of obtaining access to the property through the 30-foot strip bordering Arizona Street. Although he told Ms. Dunn-Frehsee that he thought she was getting 2.7 or 3.0 acres by virtue of the additional strip of land which was to be quitclaimed to her at no additional cost, this belief was based on his reasonable assumption that the original tract contained 2.4 acres, as represented by the listing agents (Mary Sousa and Peter Sergis of Apollo Realty) and reflected in the Multiple Listing Book. Respondent also contacted Mr. Winkler, but similarly, did not represent to him that he (Respondent) had personally measured the property or confirmed the MLS information. (Testimony of Respondent) Prior to the closing, Respondent discussed with Ms. Dunn-Frehsee the need to order a survey of the property. She then ordered a survey, which was completed a week and a half before closing. After picking it up, Respondent telephoned Ms. Dunn-Frehsee. There is conflicting testimony about the conversation which ensued. Respondent testifies that he telephoned her and asked if she would like him to deliver the survey to her house or mail it to her, or if she would like to pick it up at his office. (TR-30) Ms. Dunn- Frehsee, on the other hand, testified that Respondent telephoned her stating that he had looked the survey over and there was no reason for her to drive out to his office to pick it up, that he would bring it to the closing. (TR-48) Neither version is more plausible or believable than the other. Both Respondent and Ms. Dunn-Frehsee have a discernible bias: Respondent faces charges which could result in the revocation of his professional license; Ms. Dunn-Frehsee has sued Respondent for damages resulting from her purchase of a tract of land which was smaller than what she was led to believe. Since the burden of proof lies with the Departments, the conflicting testimony is resolved in Respondent's favor as it has not been shown with any reliable degree of certainty that Respondent told Ms. Dunn-Frehsee that he had looked the survey over and that there was no need for her to examine it before closing. Both witnesses agree, however, and it is affirmatively found that Ms. Dunn-Frehsee agreed that Respondent should bring the survey with him to the closing, which was imminent. The surveys prepared by Hugh Smith, a registered land surveyors correctly showed the property to be approximately 235.33' x 297.43', but did not indicate the size by acreage. (Admission No. 20, P-2) At closings on or about June 23, 1983, Respondent showed the survey to Ms. Dunn-Frehsee. Ms. Dunn- Frehsee questioned the measurements as not being the same as she recalled being on the MLS listing. Neither Ms. Sousa nor Respondent, both of whom were in attendance, had a copy of the MLS listing so that the measurements on the two documents were not compared. (Admission No. 22-23) Ms. Dunn-Frehsee chose to close the transaction anyway after her questions regarding the property were apparently resolved to her satisfaction by Kathleen Van Mier, the agent for Lawyers Title Insurance Company which was handling the closing. Ms. Dunn-Frehsee signed a contingency statement indicating that all contract contingencies had been satisfied and that she wished to proceed with the closing. (TR-4O-41; 77-78) Respondent was misinformed regarding the dimensions and size of the property by the listing agents, Mary Sousa and Peter Sergis of Apollo Realty, who had provided inaccurate information to the Multiple Listing Service. Respondent reasonably relied upon the listing information and the representations of the listing agents concerning the size of the property. In his discussions with Ms. Dunn-Frehsee and Mr. Winkler, he drew reasonable inferences from such (incorrect) representations. He did not intentionally mislead anyone. It has not been shown that, under the circumstances, he failed to exercise due care or that degree of care required of a licensed real estate salesman. Nor has it been shown that he violated any professional standard of care adhered to by real estate salesmen and established by qualified expert testimony at hearing.
Recommendation Based on the foregoing it is RECOMMENDED: That the administrative complaint, and all charges against Respondent be DISMISSED for failure of proof. DONE and ORDERED this 11th day of October, 1985, in Tallahassee, Florida. R. L. CALEEN, JR. Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 11th day of October, 1985.
