Sellars v. FLORIDA REAL ESTATE COM'NSellars v. FLORIDA REAL ESTATE COM'N
Howard Hadley and Kenneth M. Meer, Orlando, for appellee.
ROBERT P. SMITH, Jr., Judge.
Sellars appeals from a Florida Real Estate Commission order revoking his real estate broker‘s license for:
(a) Violation of
(b) Violation of
(c) Violation of
(d) Violation of
We find substantial competent evidence tending to support the lengthy findings of fact prepared by a DOAH hearing officer and adopted by the Commission, supporting the Commission‘s conclusion that Sellars, whose closely-held corporation gave $1,000 for a quit-claim deed to 80 acres of Wakulla County land, sold portions of it, with actual and constructive knowledge that the corporation had no merchantable title, by means of false or misleading assurances to several purchasers.
The only substantial matter of law to be considered is whether the 1979 Legislature, by enacting chapter 79-239, Laws of Florida, terminated the Commission‘s disciplinary power over the broker who is guilty of dishonest dealing, for his own account, with property “in which he is a part owner.” Chapter 79-239 revived and made housekeeping revisions to
475.011 Exemptions. — This chapter does not apply to:
.....
(2) Any person who deals with property in which he is a part owner, unless he receives a larger share of the proceeds or profits from the transaction than his proportional investment therein would otherwise justify, such excess share being directly or indirectly the result of the service of buying, selling, exchanging, or leasing the property; ... .
Insofar as it is pertinent here, the 1979 amendment simply created a new
... nor shall the term broker or salesman be applied to a person who shall deal with property in which he is a part owner, unless said person shall receive a larger share of the proceeds or profits from the transaction than his proportional investment therein would otherwise justify, such excess share being directly or indirectly the result of the service of buying, selling, exchanging or leasing said property; ...
The 1979 act did not operate to divest the Commission of jurisdiction to discipline a registered broker who in a business transaction concerning his own real estate is guilty of dishonest dealing. Both the former and the present exemption provisions simply excuse from registration as a broker one who conducts broker-like activities for two or more owners, of whom he is one, unless he receives what is, in effect, a brokerage fee. If the 1979 Legislature had intended a substantive revision terminating the Commission‘s power to discipline registered brokers for breach of trust in activities concerning their own real estate, the legislature would have acted less ambiguously to that effect. We can conceive of no reason why, having a purpose to exempt registered brokers from discipline for objectionable conduct in their own real estate transactions, as contrasted with those of their clients, the Commission‘s disciplinary powers would have been terminated only as to the broker who was “a part owner” of the land dishonestly dealt with, not touching the Commission‘s powers over the broker who wholly owned that land. Reading the 1979 amendment with a purpose to give it the legislature‘s intended effect, we conclude that the Commission retains power to discipline for dishonest dealings brokers who so deal with property owned partly or wholly by them, and from the sale of which they receive no brokerage fee as such.
Having found that the Commission may properly revoke the license of a broker who violates
AFFIRMED.
MILLS, C.J., concurs.
MITCHELL, HENRY CLAY, Jr., Associate Judge, dissents.
MITCHELL, HENRY CLAY, Jr., Associate Judge, dissenting.
I respectfully dissent.
I would reverse the order of the Florida Real Estate Commission revoking the Appellant‘s real estate broker‘s license. It is my determination from a review of the record that the findings of fact of the commission were not based upon competent substantial evidence.
The commission filed a twenty-eight count administrative complaint against the Appellant, Sellars, alleging that he knowingly sold certain property with non-merchantable title to several purchasers without informing them of such non-merchantability, that he failed to advise these purchasers to consult an attorney on the merchantability of the title or to obtain title insurance and that he failed to pay certain real property taxes on behalf of two purchasers.
After the hearing on the complaint, the hearing officer ruled against Sellars and in favor of the commission on substantially all issues of fact and law and recommended that Sellars’ license be suspended for a period of two years. In its final order, the commission adopted the findings of fact and conclusions of law as set forth in the recommended order but rejected the recommended penalty by increasing the penalty to a revocation of Sellars’ license.
The thrust of the commission‘s complaint was based upon the sale of certain parcels of land by Sellars. The property with title problems came from Tract 3 which was one of the five tracts of land originally purchased by Sellars. The first tract of land was purchased from Kenneth Thomas after Thomas offered it for sale to Sellars. Prior to the purchase of Tract 1, Sellars retained a local attorney to examine title to this property and render a title opinion. Based upon this attorney‘s opinion that the title was clear, Sellars completed the purchase of Tract 1. Later, Sellars purchased a second tract of land from Thomas. Again, the sale was completed after Sellars received a title opinion from his attorney that the title was clear and merchantable. Sellars later purchased Tracts 3, 4, and 5, from Joyce Thomas, the wife and guardian of Kenneth Thomas who had, at this time, been declared legally incompetent. Prior to purchasing these three tracts, Sellars returned to his attorney and requested that he examine title to these properties and render a title opinion. The attorney advised Sellars that title was clear and merchantable to Tracts 3 and 5, but the title to Tract 4 was clouded. The sale of these three tracts was completed only after the guardian petitioned the court for an order approving the sale and after the sale was duly approved by the court. The petition requesting the court to allow the sale stated that one tract had title problems.
Sellars subsequently sold parcels of Tract 3 to several parties. Sellars did not advise the purchasers that they should either obtain title insurance or consult an attorney with regard to the transaction. All of the sales by Appellant, Sellars, were completed by contracts for deed and/or warranty deeds. The record reflects that Sellars crossed out provisions in the contracts for deed relating to the furnishing of abstracts. It was the agreement between Sellars and the purchasers that the purchasers would bear the cost and the responsibility of obtaining any abstracts. Thus, the provision regarding abstracts was consistently crossed out on many contracts for the sale of the property from the various tracts, and this practice was not limited to sales made from Tract 3 which later proved to have title problems.
When parcels of this property were sold under contracts for deed, Sellars and the purchasers entered into an agreement whereby Sellars would pay the real property taxes on the property on behalf of these
First, the finding of fact that Sellars should have known that title of Tract 3 was not merchantable was not supported by competent substantial evidence. The commission argues that the petition for order approving sale and the order approving sale established the price paid for Tracts 3, 4, and 5, and these documents show that Sellars had knowledge of the title problem. The petition and order reflect that a portion of the property sold had title problems which could not be cleared. There is no evidence in the record that shows that Sellars ever saw, examined or otherwise had any knowledge of these documents or that he was present at a hearing on the petition and order. The commission further relied on the fact that Sellars failed to inspect the public record of Wakulla County, Florida, which would have disclosed the title problem associated with Tract 3. This case involved the question of knowledge, and the broker cannot be found guilty of selling property with knowledge that the property had title problems when the attorney advised him that title to the property was clear and when having no contrary knowledge, he relied upon this advice. The fact that the public records may have provided constructive notice to Sellars as a subsequent purchaser has no bearing on the questions raised in the administrative proceedings. Constructive notice serves an obvious purpose in real estate transactions, but it cannot serve to impute actual knowledge for the purpose of disciplinary proceedings.
Second, the commission argues that
“(h) Rendered an opinion that the title to any property sold is good or merchantable, except when correctly based upon a current opinion of a licensed attorney at law, or failed to advise a prospective purchaser to consult his attorney on the merchantability of the title or to obtain title insurance.”
The commission contends that this chapter applies to brokers acting in transactions in which they sell for their own account. I
Third, the commission adopted the finding that the broker, Sellars, was guilty of fraud, misrepresentation concealment, false promises, false pretenses, dishonest dealing, trick, scheme, or device, culpable negligence and breach of trust in the business transaction in violation of
Finally, under Count 28 of the administrative complaint, the commission, as provided for under