09-000207PL Department Of Business And Professional Regulation, Division Of Real Estate vs. Christine A. Saxer Status: Closed Recommended Order on Friday, March 27, 2009.

Summary: Petitioner did not prove, by clear and convincing evidence, the allegations in the Administrative Complaint.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case No. 09-0207PL

)

CHRISTINE A. SAXER, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a final hearing was conducted in this

case on February 25, 2009, in Clearwater, Florida, before

Administrative Law Judge R. Bruce McKibben of the Division of

Administrative Hearings.

APPEARANCES

For Petitioner: Patrick J. Cunningham, Esquire

Department of Business and

Professional Regulation

400 West Robinson Street, Suite N-801

Orlando, Florida 32801

For Respondent: Alfred W. Torrence, Jr., Esquire

Thorton, Torrence, P.A.

6709 Ridge Road, Suite 106

Port Richey, Florida 34668

STATEMENT OF THE ISSUE

The issue in this case is whether Petitioner, a licensed

Florida real estate associate, violated provisions of

Subsections 475.278(2) and 475.25(1)(q), Florida Statutes

(2007), 1 and, if so, what discipline should be imposed.

PRELIMINARY STATEMENT

On November 18, 2008, Petitioner, Florida Department of

Business and Professional Regulation, Division of Real Estate

(the Department), issued an Administrative Complaint against

Respondent, Christine A. Saxer. The complaint alleges

violations of provisions within the statutes and rules governing

real estate sales associates.

Saxer timely filed a request for an administrative hearing,

which was then forwarded to the Division of Administrative

Hearings (DOAH) on January 14, 2009. A final hearing was held

at the place and date set forth above. At the final hearing,

the Department called two witnesses: David Guerdan,

investigation supervisor for the Department; and Christine

Ausburn, purchaser of the subject property. The Department

offered the following exhibits into evidence, each of which was

admitted: (1) The purchase and sales contract; (2) A roof

repair estimate; (3) Saxer's real estate licensure history; and

(4) The Investigative Report. Saxer testified on her own behalf

and also called James A. Staub, a licensed real estate agent.

Saxer offered the following exhibits into evidence, each of

which was admitted: (1) The building permit for the roof

repair; (3) The property disclosure; and (4) The closing

statement.

The parties advised the undersigned that a transcript would

be ordered of the final hearing. They were given ten days from

the date the transcript was filed at DOAH to submit proposed

recommended orders. The Transcript was filed at DOAH on

March 4, 2009. Each party submitted a Proposed Recommended

Order, and they were given due consideration in the preparation

of this Recommended Order.

FINDINGS OF FACT

1. The Department is the state agency responsible for,

inter alia , licensing and monitoring real estate sales

associates within the state. Its headquarters is in

Tallahassee, Florida. The Department is charged with the

responsibility and duty to prosecute administrative complaints

concerning real estate sales associates.

2. Saxer is a licensed real estate sales associate,

holding License No. 3110487. Saxer is employed by Century 21

Palm Realty of Pasco, Inc., in New Port Richey, Florida.

3. At all times relevant hereto, Saxer was the listing

agent for a property located at 3831 Sail Drive, New Port

Richey, Florida (hereinafter referred to as the "Subject

Property"). The Subject Property is an approximately 40-year-

old house that had not been inhabited for some time. The

owners, Gary and Albert Osborne (referred to herein as the

Sellers), had inherited the house, but had never resided in it.

The Sellers were Saxer's client in the sale transaction

concerning the Subject Property.

4. Leon and Christine Ausburn (the Buyers) entered into a

Residential Sale and Purchase Contract (the Contract) to

purchase the Subject Property from the Sellers. Saxer

negotiated the contract between the Buyers and the Sellers. The

Contract was signed by the Buyers on June 8, 2007, and by the

Sellers on June 12, 2007. The Contract called for a closing on

or before June 29, 2007.

5. On April 27, 2007, when the Sellers listed the Subject

Property with Saxer's employer, the Sellers confirmed that they

knew of no roof leaks or defects. The Sellers had inherited the

property and were not living in it at that time. The Subject

Property was not inhabited at any time during the pendency of

the Contract.

6. At some time after signing the Contract, the Buyers did

an on-site inspection of the Subject Property. They noticed

several stains on the ceilings around the house and inquired of

their real estate sales agent about the stains. They received

assurance from their agent that the property would be inspected

to make sure there were no leaks or damages. The Buyers did not

follow up with their agent, nor did they ever see an inspection

report indicating his findings.

7. On or about June 14, 2007, the Sellers called Saxer to

say there appeared to be a roof leak at the Subject Property.

They asked Saxer to take care of having the roof leak repaired.

Saxer obtained an estimate from World Class Roofing Services,

Inc., for $725 to repair the roof. Saxer contracted with the

roofing company to make the necessary repair.

8. A ten-foot by ten-foot section of the Subject

Property's mansard roof was replaced by the roofing contractor. 2

The leak was in a smaller section, but more of the roof was

replaced to insure against further leaks. None of the evidence

elicited at final hearing gave any indication of what part of

the roof was repaired, i.e., whether it was over the living

room, a bedroom, or some other area of the house. The repair

estimate describes it as being over the dining room, but no

evidence was offered as to where the dining room was in relation

to the living room, garage, or other parts of the house.

9. The Contract had a purchase price of one hundred

twenty-seven thousand and five hundred dollars ($127,500).

Paragraph 5 of the Contract required the Sellers to pay for any

improvements up to 1.5 percent of the purchase price (i.e., up

to an amount of $1,912.50). The Contract also describes the

sale and purchase as an "As Is" sale for wood-destroying

organism damages.

10. Inasmuch as the cost of the roof repair was less than

the 1.5 percent threshold in the Contract, Saxer did not believe

she needed to disclose the repair to the Buyers or Buyers'

agent. She did not deem it a "material" defect affecting the

value of the Subject Property.

11. The closing was held on June 29, 2007. At the

closing, a U.S. Department of Housing and Urban Development

closing statement was used to provide the statement of actual

settlement costs for the transaction. The Buyers and Sellers

were both provided copies of the closing statement and signed an

acknowledgement of receipt. The closing statement indicates at

Line Item 1314, "Roof repairs paid by seller to World Class

Roofing Services, Inc.," and indicates the sum of $725.

12. Christine Ausburn, one of the Buyers, is a licensed

mortgage broker. She testified that she did review the closing

statement, but did not notice the line item concerning a roof

repair, because she only looked at the Buyers' side of the

statement.

13. On that same day, after finalizing the closing, the

Buyers went to visit the Subject Property. Upon entering the

home, they noticed a puddle of water on the living room floor

and a flooded garage. The water had come, it appears, from a

leaking pipe in the ceiling over the garage area. There is no

evidence that the water in the garage was caused by or related

to the roof repair done pursuant to Saxer's direction.

14. After seeing the water in the garage, the Buyers

notified Saxer that they were very upset. Saxer contacted the

entity that had performed the roof repair and sent them to the

Subject Property. Finding no one home, the roofers left a

message and contact information so that they could make any

repairs that related to their earlier work which was guaranteed.

It is not known whether the Buyers followed up with the roofers

or not.

15. The Buyers also determined after closing that the air

conditioning system for the Subject Property was not working

properly. There is no indication from the record that Saxer or

the Sellers were aware of that problem prior to closing.

16. The Buyers had visited the Subject Property prior to

closing, but did not have an inspection done to determine

potential problems or defects. They had witnessed a number of

water stains on the ceilings, but presumed them to be old in

nature. The Buyers were told by their own real estate agent

that he would "have his people check it out." The Buyers do not

know if their agent ever did so, nor did they ever see an

inspection report on the Subject Property.

17. The Buyers are completely dissatisfied with the

Subject Property due to many reasons. However, there is no

indication that Saxer was aware of any material problem extant

at the time of closing. Saxer did not consider the minor roof

repair a material defect in the Subject Property.

CONCLUSIONS OF LAW

18. The Division of Administrative Hearings has

jurisdiction over the parties to and the subject matter of this

proceeding pursuant to Section 120.569 and Subsection 120.57(1),

Florida Statutes (2008).

19. Section 475.25, Florida Statutes, is entitled

"Discipline" and states:

(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,

registration, or permit for a period not

exceeding 10 years; may revoke a license,

registration, or permit; may impose an

administrative fine not to exceed $5,000 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:

* * *

(q) Has violated any provision of

s. 475.2755 or s. 475.278, including the

duties owed under those sections.

20. Section 475.278, Florida Statutes, entitled

Authorized brokerage relationships; presumption of transaction

brokerage; required disclosures, states:

(1) BROKERAGE RELATIONSHIPS.--

(a) Authorized brokerage relationships . --

A real estate licensee in this state may

enter into a brokerage relationship as

either a transaction broker or as a single

agent with potential buyers and sellers. A

real estate licensee may not operate as a

disclosed or nondisclosed dual agent. As

used in this section, the term "dual agent"

means a broker who represents as a fiduciary

both the prospective buyer and the

prospective seller in a real estate

transaction. This part does not prevent a

licensee from changing from one brokerage

relationship to the other as long as the

buyer or the seller, or both, gives consent

as required by subparagraph (3)(c)2. before

the change and the appropriate disclosure of

duties as provided in this part is made to

the buyer or seller. This part does not

require a customer to enter into a brokerage

relationship with any real estate licensee.

(b) Presumption of transaction

brokerage . --It shall be presumed that all

licensees are operating as transaction

brokers unless a single agent or no

brokerage relationship is established, in

writing, with a customer.

(2) TRANSACTION BROKER RELATIONSHIP.--

(a) Transaction broker-duties of limited

representation . --A transaction broker

provides a limited form of representation to

a buyer, a seller, or both in a real estate

transaction but does not represent either in

a fiduciary capacity or as a single agent.

The duties of the real estate licensee in

this limited form of representation include

the following:

1. Dealing honestly and fairly;

2. Accounting for all funds;

3. Using skill, care, and diligence in

the transaction;

4. Disclosing all known facts that

materially affect the value of residential

real property and are not readily observable

to the buyer;

5. Presenting all offers and

counteroffers in a timely manner, unless a

party has previously directed the licensee

otherwise in writing;

6. Limited confidentiality, unless waived

in writing by a party. This limited

confidentiality will prevent disclosure that

the seller will accept a price less than the

asking or listed price, that the buyer will

pay a price greater than the price submitted

in a written offer, of the motivation of any

party for selling or buying property, that a

seller or buyer will agree to financing

terms other than those offered, or of any

other information requested by a party to

remain confidential; and

7. Any additional duties that are

mutually agreed to with a party.

21. Saxer had a duty to act honestly and fairly and to

disclose all known facts that materially affected the value of

the Subject Property. See Johnson v. Davis , 480 So. 2d 625

(Fla. 1985). The caveat to that holding is that disclosure is

required when a material defect is hidden or is not obvious.

22. In the present case, there has been no showing that

the roof repair was hidden or not obvious to the Buyers. No

evidence was presented as to whether the Buyers or their agent

looked at the roof (either before or after the roof repair was

disclosed in the closing statement). Further, the Buyers did

not even establish that the roof repair and the water damage to

the Subject Property were related. The roof repair was in one

part of the home, the water damage came from a broken pipe in

another part of the home. Further still, the Buyers were aware

of the ceiling stains indicating prior water damage and were,

thus, on notice. The Buyers and/or their real estate agent

failed to investigate the situation or to ascertain the extent

of the obvious problem.

23. The $725 roof repair done during the period the

Contract was in force and prior to final closing was not

indicative of a material defect affecting the value of the

property. If the Buyers had alleged and proven that the leaking

water pipe (which caused the water damage) was known by Saxer

and not disclosed, that may constitute a material defect.

However, no such evidence was presented.

24. Petitioner has the burden of proof in this matter.

Ferris v. Turlington , 510 So. 2d 292 (Fla. 1987). The standard

of proof for a licensure revocation case is clear and convincing

evidence. Osborne Stern and Co., Inc. v. Department of Banking

and Finance , 670 So. 2d 932 (Fla. 1996).

25. Clear and convincing evidence is an intermediate

standard of proof which is more than the "preponderance of the

evidence" standard used in most civil cases, but less than the

"beyond a reasonable doubt" standard used in criminal cases.

See State v. Graham , 240 So. 2d 486 (Fla. 2nd DCA 1970). Clear

and convincing evidence has been defined as evidence which:

[R]equires 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

hesitancy, as to the truth of the

allegations sought to be established.

Slomowitz v. Walker , 429 So. 2d 797, 800 (Fla. 4th DCA 1983)

(citations omitted).

26. The testimony at final hearing was clear on only one

point, that Saxer had the roof repair done and that she did not

verbally advise the Buyers or their agent about the repair.

27. Petitioner failed to meet its burden of proving, by

clear and convincing evidence, that Saxer failed to disclose a

material defect from the Buyers which negatively affected the

value of the Subject Property.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that a final order be entered by Petitioner,

Department of Business and Professional Regulation, Division of

Real Estate, dismissing the complaint against Respondent,

Christine A. Saxer.

DONE AND ENTERED this 27th day of March, 2009, in

Tallahassee, Leon County, Florida.

R. BRUCE MCKIBBEN

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone]

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 27th day of March, 2009.

ENDNOTES

1/ All further references to the Florida Statutes shall be to

the 2007 version.

2/ The repair estimate indicates replacement of a ten by ten-

foot section of roof. Saxer testified it was a five by five-

foot section, but that it was expanded to cover an area more

than just where the leak occurred.

COPIES FURNISHED :

Thomas W. O'Bryant, Jr., Director

Division of Real Estate

Department of Business and

Professional Regulation

400 West Robinson Street, Suite 802 North

Orlando, Florida 32801

Ned Luczynski, General Counsel

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-0792

Patrick J. Cunningham, Esquire

Department of Business and

Professional Regulation

400 West Robinson Street, Suite N-801

Orlando, Florida 32801

Alfred W. Torrence, Jr., Esquire

Thornton, Torrence, P.A.

6709 Ridge Road, Suite 106

Port Richey, Florida 34668

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.