01-003376PL Department Of Business And Professional Regulation, Division Of Real Estate vs. Ian Wesley Ross-Johnson Status: Closed Recommended Order on Wednesday, January 9, 2002.

Summary: Material allegations that Respondent made false promise to Buyers, that Orkin had treated and issued a warranty for powder post beetles, were not proven by clear and convincing evidence. Administrative Complaint dismissed.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case No. 01 - 3376PL

)

IAN WESLEY ROSS - JOHNSON, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings

by its duly - designated Administrative Judge, Fred L. Buckine,

held a formal hearing in the above - styled cause on November 7,

2001, in Clearwater, Fl orida.

APPEARANCE

For Petitioner: Rania A. Soliman, Esquire

Department of Business and

Professional Regulation

Zora Neale Hurston Building, North Tower

400 W. Robinson Street, Suite N 308

Orlando, Flo rida 32801

For Respondent: Ian Ross - Johnson, pro se

575 Indian Rocks Road, North

Belleair Bluffs, Florida 33770

STATEMENT OF THE ISSUE

The issue is whether Respondent knew Orkin Pest Control had

neither treated nor warranted property loc ated at 16 Hibiscus

Road, Belleair, Florida, for powder post beetles and falsely

represented to buyers at closing that they had, in violation of

Section 475.25(1)(b), Florida Statutes.

PRELIMINARY STATEMENT

By Administrative Complaint dated July 18, 20 01, the

Department of Business and Professional Regulation, Division of

Real Estate (Petitioner) alleged that Ian Wesley Ross - Johnson

(Respondent) violated Subsection 475.25(1)(b), Florida Statutes.

The alleged violation is that Respondent knowingly and f alsely

represented to John and Michele DeCaprio (Buyers) that there was

a current warranty for powder post beetle treatment on the

property located at 16 Hibiscus, Belleair, Florida, when, in

fact, that statement was not true. The Respondent denied the

al legations and requested a formal hearing. On August 24, 2001,

the Department forwarded the request for hearing to the Division

of Administrative Hearings for formal proceedings pursuant to

Subsection 120.57(1), Florida Statutes. On November 7, 2001, in

C learwater, Florida, a formal hearing was conducted.

At the final hearing the Petitioner presented the testimony

of four witnesses: Lisa Rhodabeck, Agency Investigator II;

Edwin Walhbeck, Walhbeck's Termite and Pest Control; Michelle

and Michael DeCaprio, Buyers; and had Exhibits 1 - 9 admitted into

evidence. Respondent testified on his own behalf and presented

the testimony of three witnesses, Mary Ann McArthur, Manager,

Arvida Realty Services, listing agent for the Seller and

Respondent's managing Broker; Maureen Stilwell, Broker, Coldwell

Banker, Residential Real Estate, transactional agent for the

Buyers; and Kathy Ross - Johnson, Respondent's wife, and had

Exhibits 2 - 7 admitted into evidence.

A Transcript of the hearing was filed November 28, 2001.

Respon dent did not file a Proposed Recommended Order.

Petitioner's Proposed Recommended Order was filed on

December 18, 2001, and has been considered in the preparation of

the Recommended Order.

FINDINGS OF FACT

Based upon observation of the witnesses and thei r demeanor

while testifying, the documentary materials received in evidence

and the entire record complied herein, the following relevant

facts are found:

1. Petitioner is a State of Florida licensing and

regulatory agency charged with the responsibi lity and duty to

regulate the practice of persons holding real estate brokers'

and salespersons' licenses in Florida and to prosecute

administrative complaints pursuant to Section 20.165, Florida

Statutes; Chapters 120, 455, and 475, Florida Statutes; and the

rules promulgated pursuant thereto.

2. At all times material to this case, Respondent, Ian

Wesley Ross - Johnson, is and has been licensed as a real estate

salesperson, holding Florida license number 0648583 in

accordance with Chapter 475, Florida Statutes. The last license

the state issued Respondent was as a salesperson in association

with St. Joe Real Estate Services, Inc., a broker corporation

located at 19353 US Highway 19 North, Suite 100, Clearwater,

Florida 33764.

3. Michele and John DeCaprio, Buyers, during the months of

September and October in 1999, were seeking to purchase a home

and in October found 16 Hibiscus Drive, Belleair, Florida,

attractive. Buyers contacted their realtor, Maureen Stilwell,

Coldwell Banker Residential Rea lty Division, and through her

made an offer to purchase the 16 Hibiscus Drive property to the

listing agent, Arvida Realty, with whom Respondent was

associated as a salesperson.

4. Buyers, by their admissions, had brought and sold many

residential pr operties in the past and owned five other

properties before acquiring the Hibiscus property. In addition

to their agency relationship with Ms. Stilwell, they were or had

been in agency - relationships with four other Pinellas County

realtors. Buyers were a stute real estate entrepreneurs, having

gained experience with the terms and conditions of residential

real estate sales contracts; rights of buyer/seller to cancel

the contract; purchase price negotiations; set - off and damage

repair limits; terms, conditi ons and consequences of walk

through inspection prior to closing; and residential real estate

closing procedures.

5. Buyers' initial testimony and position was that they

were led to believe that a powder post beetle warranty existed

on the subject property, without specifically identifying the

documents, the party or parties who were misleading them. When

one considers Buyers' testimony in its entirety, it becomes

apparent that Buyers relied upon their interpretation of Section

8(b) of the Purchase and Sales contract that after execution of

the sales contract by the parties at closing, Seller became

legally responsible for the cost of treating the house for

powder post beetles and for providing Buyers with a powder post

beetle warranty.

6. Ho wever, as the documentary evidence demonstrated,

Buyers knew before closing that the 16 Hibiscus property had

never been treated for powder post beetles and that there was no

powder post beetle warranty in existence. Documents admitted

into evidence, when considered chronologically, revealed the

following facts.

7. On or about September 10, 1999, Mrs. Doherty (Seller)

executed a Property Disclosure Statement for Arvida Realty

Services with Respondent, Ivan Ross - Johnson, as its agent.

Through Ms. Stil well, Seller's disclosure statement was

presented to Michele DeCaprio and John DeCaprio, who

acknowledged receipt by their signatures. Seller's disclosure

statement represented that the property had no termites, had no

current warranty, and was last inspe cted and treated in

January 1999. It was later determined by a certified licensed

wood - destroying organism inspection, retained by Buyers, that

the property had, in fact, been inspected and treated for

subterranean termites and was warranted for subterra nean termite

treatment. Buyer, upon receipt of their expert's report, knew

there had been no powder post beetle treatment and, therefore,

no powder post beetle warranty on this property.

8. On or about October 29, 1999, Buyers and Seller entered

a R esidential Sales Contract for the sale and purchase of the 16

Hibiscus Drive property. Later in November, the parties

negotiated and executed an addendum to their contract recording

Sellers' reduction of the sales price by $6,000.00 with Buyer's

agent, Ms . Stilwell, contributing an additional $500.00 of her

commission toward Buyer's closing cost. This all - inclusive

maximum damage repair amount of $6,000.00 was for Buyers, in

their discretion, to select and make damage repairs.

9. Almost a month be fore the closing on or about

November 17, 1999, Buyers retained Bingham's Termite & Pest

Control, a licensed wood - destroying organism inspector/treatment

agency, to perform a wood - destroying organism inspection on the

subject property, pursuant to Section 482.226, Florida Statutes.

Every licensed inspector/treatment agent for wood - destroying

organisms, is required by Section 482.226, Florida Statutes, to

post, in the attic crawl space or other visible entrance to the

attic, a small notice of the type of w ood - destroying organism

treatment performed, date of treatment, and provide the home

owner with a warranty for the specific treatment provided. The

treatment notice must be made of material that will last not

less than three years.

10. The scope of the Bingham Termite & Pest Control's

inspection, performed by inspector Jerry Westerfield, was

limited to "wood - destroying organisms." Wood - destroying

organisms means arthropod or plant life, which damages and can

reinfest seasoned wood in a structure, na mely termites, powder

post beetles, oldhouse borers, and wood decaying fungi. The

inspection report prepared by Westerfield included the following

results, conclusions, and recommendation to Buyers.

1. Powder post beetles exit holes and

frass in attic on rafters and ceiling joist.

Subterranean termite tunnels in attic above

bathroom, subterranean termite tunnels in

tub trap. Subterranean termite swarmers in

closet by front door and in second bathroom.

2. Minor visible damage in same areas as

number one. Minor visible water rot damage

in numerous areas of overhand and north door

casing.

3. Drill marks for previous subterranean

termite treatment. Subterranean treatment

sticker for subs dated 4/30/98 Wahlbeck Pest

Control.

Recommend treatment for p owder post beetles,

if warranty is required . $3,850.00.

For property: 16 Hibiscus Road."

[emphasis added]

11. The Bingham report was sent to Buyers on or about

November 17, 1999. Buyers, after receipt and review of the

Bingham report, knew tha t the subject property had not been

treated for powder post beetles in the past three years.

Bringham did not find a treatment sticker, and, therefore, no

warranty existed for powder post beetles. Buyers were not

misled by Respondent, but rather voluntar ily chose not to follow

the recommendation of their experts and treat the property for

powder post beetles. Neither did Buyers, when negotiating their

maximum damage allocation with Seller, insist that Seller treat

the house for powder post beetles in add ition to reducing the

sale price. After concluding the negotiation, Buyers were not

misled by Respondent, but rather chose not to spend their

negotiated damage allocation of $6,000.00 for the recommended

powder post beetle treatment. Had Buyers followed their

expert's recommendation and treated the property for powder post

beetles, the servicing agency would have provided a warranty for

that specific treatment. Buyers were not lead to believe, as

they proclaimed, by this report or any other inspection re port

that there was an existing powder post beetle warranty on the

subject property.

12. On or about November 17, 1999, Buyers retained a

second licensed certified contractor, Young Home Consulting, to

complete a non - exhaustive standard visual inspec tion of readily

available areas limited to observations of apparent conditions

at that time, of the 16 Hibiscus Road property. Present for the

visual inspection by inspector Neal Fuller were Buyers, Seller,

Respondent, and Ms. Stilwell. At the site and u pon completion

of the inspection, Buyers were given a copy of the report.

13. The Young report found minor termite damage. Young

instructed Buyers to obtain all records and disclosures of

termite treatment. Attached to Young's report was the Wahlb eck

Termite and Pest Control inspection report dated April 25, 1998.

The Wahlbeck report reflected evidence of infested subterranean

termite damage in exterior, attic, joists, girders, and walls.

No damage was shown resulting from powder post beetles, but

under the key symbols, Young circled powder post beetles.

Buyers were not led, as they proclaimed, by this report to

believe that there existed a powder post beetle warranty for the

subject property.

14. Buyers after receiving a second inspection re port

reflecting the property had not been treated for powder post

beetles, and, therefore no powder post beetle warranty existed

wrote their agent, Ms. Stilwell, expressing their desire for

powder post beetle tenting treatment. At this point in the

proces s, with two reports confirming a need for powder post

beetles treatment and a powder post beetle warranty, it is clear

that Buyers were not led to believe that there was an existing

powder post beetle warranty on the subject property. Buyer's

position tha t they were led to believe a warranty existed is

inconsistent with and contrary to facts contained in the several

inspection reports.

15. On or about November 20, 1999, Buyers, Respondent and

Ms. Stilwell, each with knowledge of the contents of Sell er's

Disclosure Statement, the Bingham Inspection Report, the Young

walk - through Report, the Wahlbeck treatment report, and from

Buyers personal inspection of the subject property, met to

negotiate Buyers' maximum damage adjustment allocation to be

made by Seller. The parties agreed to reduce the purchase price

by $6,000.00. This agreement was attached to the sales contract

as an addendum.

16. After the negotiated damage allocation, Buyers

continued to maintain the position that Respondent promise d them

that: (i) he would have the house tented at seller's expense;

and (ii) he would provide them with the existing warranty for

powder post beetles. The position of Buyers is inconsistent

with known facts and the recommendations contained in the above

referenced inspection reports. The DeCaprios' testimony

regarding promises allegedly made by Respondent on these matters

is nonpersuasive and lacks credibility.

17. On or about November 26, 1999, Buyers fax a letter to

Respondent regarding Wahlbec k's April 25, 1998, report,

requesting Respondent provide them with information about a

powder post beetle warranty for their personal research.

Buyers' research request, considered in addition to the

inspectors' findings and recommendations, reduces Buye rs'

November 26 fax to a self - serving document. After securing two

inspections, both of which informed Buyers that no powder post

beetle treatment had been performed on this property and, thus,

no resulting warranty existed, Buyers' position that they wer e

led to believe a powder post beetle warranty did exist is

unconscionable. Based on the findings contained in the two

inspection reports, Buyers would have been led to the only

reasonable conclusion that no powder post beetle treatment and

no warranty ex isted on the subject property.

18. On or about December 5, 1999, Buyers met with

Respondent, the Seller, and Ms. Stilwell to negotiate the

"maximum damage" allocation to be credited to Buyers by Seller

for any and all repairs Buyers may choose to mak e on the

property. The parties agreed to reduce the purchase price by

$6,500.00 for an all - inclusive maximum damage amount. With

knowledge of their experts' recommendations, Buyers chose not to

include the cost of powder post beetle tenting treatment as a

part of or in addition to their maximum damage allowance with

Seller. The evidence does not establish that on December 5,

1999, Buyers relied on a promise from Respondent to provide them

with a powder post beetle treatment and warranty during the

negoti ations of maximum damage credit. The written statement

from Mrs. Doherty (Seller) that: "Mr. and Mrs. DeCaprio were

well aware that there was no warranty for powder post beetles,.

. ." is credible.

19. On or about December 15, 1999, Buyers, with th eir

agent, Ms. Stilwell, conducted a pre - closing walk - through

inspection of the subject property. Buyers were satisfied with

the property and signed the walk - through report accepting the

property in the "as is" condition. The parties typed at the

bottom of the walk through report a disclaimer, to wit: "The

$6,500 credit given to Buyers will remove any further claim

against this property." At this point in the sale and purchase

process, having received their experts' reports recommending

treatment for po wder post beetles, and having negotiated their

maximum damage allocation, and not having received one iota of

evidence that powder post beetle treatment and a powder post

beetle warranty existed, it is unreasonable to believe that

Buyers were led to believ e, by any form of communication that

there was a current powder post beetle warranty for treatment on

the subject property.

20. At the closing, four days later on December 19, 1999,

in the presence of Jeanne Hills, closing agent for Sunbelt

Title; M s. Stilwell, Buyers' agent; and Respondent, Seller's

agent, Buyers were given the Bringham's Termite Pest inspection

report. Buyers signed the report acknowledging receipt. At

this concluding point in the process, it is again unreasonable

that Buyers wer e led to believe that there was a current powder

post beetle warranty for treatment on the subject property.

21. From all documentary evidence admitted in evidence and

from testimony of the witnesses attending the December 19, 1999,

closing, there is no clear, precise, explicit evidence of anyone

overhearing Respondent make a promise to Buyers that Orkin had a

powder post beetle warranty on the subject property. There is

no clear, precise, explicit evidence from a witness of

overhearing Respondent make a promise to Buyers that he would

secure from Orkin a powder post beetle warranty and deliver it

to them at a later date.

22. Mrs. DeCaprio's testimony, " . . .had she asked her

agent, Maureen Stilwell, at closing to press Respondent to

produc e the (powder post beetle) warranty he wouldn't have been

able to produce the warranty because one did not exist,"

confirms the fact that Buyers knew no treatment for powder post

beetles had been performed on this property and, thus, no

warranty existed. At this point in the process, its

unreasonable to believe a warranty for powder post existed. The

position taken by Buyers that Respondent made a promise to

provide them a powder post beetle warranty from Orkin after the

closing appears to be evidence of a promise falsely made.

However, upon closer reflection it is self - serving evidence and,

thus, not credible. Mrs. DeCaprio's testimony is disingenuous

and, therefore, not credible.

23. Buyers' professed belief that Respondent, by words or

deeds, int entionally misrepresented to them the fact that a

powder post beetle warranty existed on the subject property,

when considered in light of information known to Buyers prior to

and at the closing on December 19, 1999, appears to have been

based on solely Bu yers' conjectures and suppositions. At the

closing, Buyers were fully aware of the following facts: One, no

treatment for powder post beetle had been performed on the

subject property in the preceding three years. Two, if no

powder post beetle treatment, no warranty existed for powder

post beetle treatment. Three, powder post beetle treatment

(tenting the house) would cost an estimated $3,850.00. Four,

Seller would not increase Buyers' maximum damage allocation

above the previously agreed $6,000.00. Fi ve, treatment for

subterranean termites had been performed on the property, and

the subterranean termite warranty was to be provided Buyers.

Six, Seller was ready, willing, and able to satisfy Sellers'

obligation imposed by the terms and conditions of the Purchase

Sale contract at closing. Seven, Buyers would have to pay for

the powder post beetles treatment should they decide to have the

property treated after the closing. Considering Buyers'

acknowledged experience gained from their purchase of more tha n

eight homes in the past, and Buyers' possession of the above

information, it is unreasonable that these experienced Buyers

could have been or were led to believe a powder post beetle

warranty existed on this property. Buyers were not led, as they

mainta in, by any specific conduct or specific statements made by

Respondent, to believe and reply upon the existence of a powder

post beetle warranty on the 16 Hibiscus Drive property.

CONCLUSIONS OF LAW

24. The Division of Administrative Hearings has

Juri sdiction over the subject matter and the parties to this

proceeding in accordance with Section 120.569 and Section

120.57(1), Florida Statutes.

25. The Department of Business and Professional

Regulation, Division of Real Estate, is responsible for

li censure and regulation of real estate salespersons in Florida.

Chapter 475, Florida Statutes.

26. Subsection 475.25(1)(b), Florida Statutes, is penal in

nature. As such, it must be construed strictly in favor of the

one against whom the penalty wou ld be imposed. See

Holmberg v. Department of Natural Resources , 503 So. 2d 944

(Fla. 1st DCA 1987).

27. The Standard of Proof required to discipline a

licensee is that of clear and convincing evidence. See

Department of Banking and Finance, Divisi on of Securities and

Investor Protection v. Osborne Stern and Company , 670 So. 2d 932

(Fla. 1999); Ferris v. Turlington , 510 So. 2d 292, 295 (Fla.

1987), quoting from Reid v. Florida Real Estate Commission , 188

So. 2d 846, 851, (Fla. 2nd DCA 1966) which st ated that:

The power to revoke a license should be

exercised with no less careful

circumspection than the original granting of

it. And the penal sanctions should be

directed only toward those who by their

conduct have forfeited their right to the

privil ege, and then only upon clear and

convincing proof of substantial causes

justifying the forfeiture.

28. The Court further amplified the clear and convincing

evidence standard. See In re Davey , 645 So. 2d 398, 404 (Fla.

1994), quoting, with approval , from Slomowitz v. Walker , 429 So.

2d 797, 800 (Fla. 4th DCA 1983), the Slomowitz court said:

Clear and convincing evidence requires

that the evidence must be found to be

credible; the facts to which the witnesses

testify must be distinctly remembered; the

testimony must be precise and explicit and

the witnesses must be lacking in confusion

as to the facts in issue. The evidence must

be of such weight that it produces in the

mind of the trier of fact a firm belief or

conviction, without hesi tancy, as to the

truth of the allegations sought to be

established.

29. Disciplinary action taken against a licensee may be

based only upon those offenses specifically alleged in the

Administrative Complaint. Cottrill v. Department of Insurance ,

685 So . 2d 1371 (Fla. 1st DCA 1996); Kinney v. Department of

State , 501 So. 2d 129, (Fla. 5th DCA 1987); Hunter v. Department

of Professional Regulation , 458 So. 2d 842 (Fla. 2nd DCA 1984)

30. The Administrative Complaint alleges that Respondent,

Ian Ross - Johnson, violated Section 475.25(1)(b), Florida

Statutes, when the following material allegations occurred:

At the closing on or about December 16,

1999, Respondent provided the Buyers with a

copy of the termite warranty from Wahlbeck

Termite and Pest Cont rol . . . Knowing that

Orkin Pest Control had neither treated nor

warranted the property for powder post

beetles, Respondent falsely represented to

Buyers at closing that they had. After the

closing, Buyers learned that Orkin did not

treat the property fo r powder post beetles

and therefore, did not have warranty.

31. It is this material allegation in the complaint that

Petitioner must prove by clear and convincing evidence. The

Administrative Complaint in a licensure revocation case, at a

minimum , must adequately detail the reasons or grounds and the

specific statutes and/or administrative rules alleged to have

been violated, upon which an agency would seek termination or

revocation of Respondent's real estate license. See Woods v.

Department of Transportation , 325 So. 2d 25 (Fla. 4th DCA 1976).

32. Petitioner did not allege that Respondent was guilty

of that portion of Section 475.25(1)(b), Florida Statutes,

concerning violation of a duty imposed upon him by law or by the

terms of the sale and purchase contract. However, Petitioner's

evidence, both oral and documentary, appears to have been

predicated on the principle that paragraphs 5 and/or 8(b) of the

Sale and Purchase Contract entitled Buyers to contractual rights

and/or entitlements wh ich arose after the closing. However,

there is no charge of breach of duty imposed by terms of the

contract filed against the Respondent in this cause. Therefore,

all evidence adduced by Petitioner in support thereof, is

irrelevant and immaterial.

3 3. The wrongful conduct as enumerated in Subsection

475.25(1)(b), Florida Statutes, concerning fraud,

misrepresentation, dishonest dealing by trick, of false

pretense, breach of trust, false promise, is charged in the

Administrative Complaint to have aris en from the factual

conduct, statements and the factual transactions that began in

October 1999 and continued to the closing on December 16, 1999.

Petitioner's allegation of December 16, 1999, as the date of the

closing date in the complaint is an error. All parties of

interest testified and the documentary evidence establishes the

closing date to have been December 19, 1999.

34. In order for the alleged charge of a lie to be

established, Petitioner must establish by clear and convincing

evidence so me false statement or misrepresentation of a material

fact; that Respondent had knowledge that the representation was

false; that Respondent intended that Buyers' rely on that false

representation; and that Buyers, indeed, relied on that

falsehood.

35 . It can not be reasonably inferred that Respondent

intentionally made a representation to Buyers that the

16 Hibiscus property had been treated for powder post beetles

and, therefore, had a current powder post beetle warranty.

36. Section 482.226, Florida Statutes, provides, in part:

(1) When an inspection for wood -

destroying organisms is made for purposes of

a real estate transaction, and either a fee

is charged for the inspection or a written

report is requested by the customer, a

wood - destro ying organism inspection report

shall be provided by the licensee or its

representative qualified under this Chapter

to perform such inspections. The inspection

shall be made in accordance with good

industry practice and standards as

established by rule a nd must include

inspection for all wood - destroying

organisms. The inspection findings shall be

reported to the person requesting the

inspection. The report shall be made on a

form prescribed by the department and

furnished by the licensee. A copy of the

inspection report shall be retained by the

licensee for a period of not less than 3

years.

(2)(a) The inspection report must contain

the following information and statements:

1. The licensee's name.

2. The date of the inspection.

3. The addre ss of the structure

inspected.

4. Any visible accessible areas not

inspected and the reason for not inspecting

them.

5. The areas of the structure that were

inaccessible.

6. Any visible evidence of previous

treatments for, or infestations of, wood -

destroying organisms.

7. The identify of any wood - destroying

organisms present and any visible damage

caused.

8. A statement that a notice of the

inspection has been affixed to the property

in accordance with subsection (4) or

subsection (5) and a s tatement of the

location of the notice.

(b) If any pest control treatment is

provided at the time of the inspection, the

inspection report must also provide the name

of each of the wood - destroying organisms for

which treatment was provided, the name of

the pesticide used, and all conditions and

terms associated with such treatment.

(c) An inspection report does not

constitute a guarantee of the absence of

such organisms or damage or other evidence

unless the report specifically states

therein the ex tent of such guarantee.

* * *

(4) When a wood - destroying organisms

inspection is provided in accordance with

subsection (1), the licensee shall post

notice of such inspection immediately

adjacent to the access to the attic or crawl

area of other readily accessible area of the

property inspected. This notice must be at

least 3 inches by 5 inches in size and must

consist of a material that will last at

least 3 years. It is a violation of this

chapter for anyone other than the property

owner to re move such notice at any time.

The licensee's name and address and the date

of the inspection must be stated on the

notice.

(5) In addition to the notice required by

subsection (4), any licensee who performs

control of any wood - destroying organisms

shal l post notice of such treatment

immediately adjacent to the access to the

attic or crawl area or other readily

accessible area of the property treated.

This notice must be at least 3 inches by 5

inches in size and must consist of a

material that will last at least 3 years.

It is a violation of this chapter for anyone

other than the property owner to remove such

notice at any time. The licensee's name and

address, the date of treatment, the name of

the pesticide used, and the wood - destroying

organism for which treatment and the wood -

destroying organism for which treatment was

performed must be stated on the notice. The

contract for treatment between the

licensee and consumer must state the

location of such notice.

37. The evidence in the record do es establish, however,

that Respondent and Buyers knew from the November 1999,

inspection report that 16 Hibiscus did not have a powder post

beetle treatment by Orkin Termite and Pest Control in the

preceding three years. Assuming a contrary interpretatio n of

Respondent's conversations and statements to Buyers is taken,

the record contains an abundance of evidence that Buyers had an

additional expert report dated November 26, 1999, reflecting

that no powder post beetle treatment had occurred at 16 Hibiscu s

property within the preceding three years. Therefore, it would

be unreasonable to conclude that Buyers relied on verbal

statements contrary to the written reports from their two wood -

destroying organism experts.

38. Petitioner must prove that Resp ondent's conduct was

intentional, Munch v. Department of Professional Regulation , 592

So. 2d 1136 (Fla. 1st DCA 1992). Alternatively, Petitioner may

prove a violation through the culpable negligence of Respondent

in this transaction.

39. In this cas e, Respondent was open and fair in his

relationship with Buyers. All inspection reports, both required

from Seller and those requested and paid for by Buyers, were

clear and unambiguous in their findings, conclusions, and

recommendations. The property ha d been treated for subterranean

termites. The property had a warranty for subterranean termite

treatment. The property had not been treated for powder post

beetles. The property, not having been treated for powder post

beetles, could not have a warranty for powder post beetles

treatment. Two licensed and certified wood - destroying

inspectors recommended to Buyers that they should get treatment

for powder post beetle on the subject property. Respondent

concealed no factual truth from Buyers regarding the se

determinative issues. In deed, the two inspectors retained by

Buyers gathered the aforementioned information of there having

been no powder post beetle treatment on the property within the

three years preceding the closing on December 19, 1999.

40. Assuming that Buyers, based upon their knowledge and

experience in residential real estate sales and purchases, after

their conversations with other parties of interest, and after

their inspection of the property, concluded from their

conversations wi th Respondent and believed that there existed a

valid powder post beetles warranty, such forced reasoning would

be inconsistent with the facts made known to them by their

experts.

41. The evidence in the record that could not be

reasonably interprete d, but for Buyers' uncorroborated

testimonies, that Respondent intentionally engaged in conduct

that resulted in or intended to mislead or deny Buyers access to

the house; denied or concealed from Buyers any reports of wood -

destroying organism inspections on the house, or denied Buyers

inspections of the house and many interviews with Seller before

closing.

42. Section 475.25, Florida Statutes, sets forth standards

for disciplinary actions that can be taken by the Division of

Real Estate, and provid es in relevant part as follows:

475.25 Discipline. --

(1) The commission may deny an

application for licensure, registration, or

permit, or renewal thereof; may place a

licensee, registrant, or permittee on

probation; may suspend a license,

registra tion, or permit for a period not

exceeding 10 years; may revoke a license,

registration, or permit; may impose an

administrative find not to exceed $1,000 for

each count or separate offense; and may

issue a reprimand, and any or all of the

foregoing, if it finds that the licensee,

registrant, permittee, or applicant:

* * *

(b) Had been guilty of fraud,

misrepresentation, concealment, false

promises, false pretenses, dishonest dealing

by trick, scheme, or device, culpable

negligence, or breach of trust in any

business transaction in this state or any

other state, nation, or territory; has

violated a duty imposed upon her or him by

law or by terms of a listing contract,

written, oral, express, or implied, in a

real estate transaction; has aided,

ass isted, or conspired with any other

persons engaged in any such misconduct and

in furtherance thereof; or has formed an

intent, design, or scheme to engage in any

such misconduct and committed an overt act

in furtherance of such intent, design, or

scheme. It is immaterial to the guilt of

the licensee that the victim of intended

victim of the misconduct has sustained no

damage or loss; that the damage or loss has

been settled and paid after discovery of the

misconduct; or that such victim or intended

victim was a customer or a person in

confidential relation with the licensee or

was an identified member of the general

public.

43. The wrongful conduct charged and enumerated in

Subsection 475.25(1)(b), Florida Statutes, concerning false

representation an d promise is charged to have arisen from the

factual conduct and factual transaction that occurred on

December 19, 1999, at the closing. In order for the charge of

having made a false promise to be established, Petitioner must

adduce clear and convincing evidence of some false statement or

false representation of a specific material fact, to wit:

first, that Respondent had knowledge that the representation was

false; second, that the Respondent intended that Buyers rely on

that false representation; and, third, that Buyers had indeed

relied on that falsehood.

44. The evidence in the record in this case is not clear

or convincing that Respondent intentionally made a false

statement of fact that Orkin had treated the subject property

for powder post beetle. What is clear is that the two licensed

inspectors, both retained by Buyers, did not find the legally

required treatment sticker evidencing powder post beetle

treatment on the subject property when they inspected the

property. In this case, there was never a powder post treatment

sticker posted on the subject property. For experienced buyers,

owners of more than eight homes over the years, it is not

reasonable that they would proceed to closing on a $200,000.00

home on mere oral assurances of Sell er's agent, that were

contrary to their experts' recommendations, that a warranty for

powder post beetle existed.

45. There is no clear and convincing evidence that

Respondent made a representation or promise to Buyers that Orkin

had treated the sub ject property for powder post beetle when in

fact Orkin had not done so.

46. The evidence is clear that Respondent's conduct

evidenced his intent that Buyers rely upon the documents

generated and related to this cause, such as Seller's disclosure

sta tement, the purchase and sale contract, the inspection

reports secured by both Seller and Buyers, and documents

provided by the closing agents. It is equally clear from the

testimony and documentary evidence that Buyers, Mr. and Mrs.

DeCaprio, relied upon their interpretation of Section 8(b) of

the sales contract to conclude they were entitled to a powder

post beetle warranty after the closing. The evidence in this

case demonstrates that Buyers were not misled by alleged

misrepresentations or by alleged p romises made by Respondent.

47. The evidence in the record establishes that the

Respondent performed in a truthful manner with Buyers at all

times material hereto. The evidence in the record also

establishes that Respondent was not aware that Buyers ' position

was based upon their interpretation of Section 8(b) of the sales

contract.

RECOMMENDATION

Based upon the foregoing Findings of Fact, Conclusions of

Law, and the evidence in the record, including the contents of

the exhibits admitted therein, it is, therefore,

RECOMMENDED that:

A Final Order be entered by the Department of Business and

Professional Regulations, Division of Real Estate, finding

Respondent, Ivan Ross - Johnson, did not make false

representations to Buyers and is therefore not gui lty of

violation of Subsection 475.25(1)(b), Florida Statutes, as

alleged in the Administrative Complaint filed in this cause.

DONE AND ENTERED this 9th day of January 2002, in

Tallahassee, Leon County, Florida.

_______________ ____________________

FRED L. BUCKINE

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 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 9th day of January, 2002.

COPIES FURFNISHED:

Rania A. Soliman, Esquire

Departmen t of Business and

Professional Regulation

Zora Neale Hurston Building, North Tower

400 West Robinson Street, Suite N 308

Orlando, Florida 32801

Ian Ross - Johnson

575 Indian Rocks Road, North

Belleair Bluffs, Florida 33770

Hardy L. Roberts, III, Gener al Counsel

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399 - 2202

Jack Hisey, Deputy Division Director

Division of Real Estate

Department of Business and

Professional Regulation

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 must be file d with the agency that

will issue the Final Order in this case.