If A Seller’s Broker Could Be Liable To Purchaser For Fraudulent Non-Disclosure In A Residential Sale, Would A Transaction Broker And/Or A Buyer’s Broker Also Be Liable?

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Is there a duty to disclose defects in a Florida real estate sale? Who is responsible for failure to disclose defects that materially affect the value of the property?

The opinion of Goodman v. Rose Realty West, Inc., 193 So.3d 86 (Fla. 4th DCA 2016) indicates that a seller’s real estate agent’s knowledge of defects that materially affect the value of the property which were not readily observable and not disclosed to the buyer could make the seller’s broker for whom the agent worked liable to the buyer.

The case has some procedural and other facts that may distinguish it when it is cited as authority, but the law cited in the case and the conclusions reached do not appear to be affected by those facts. The opinion is a reversal of a summary judgment in favor of the seller’s broker who was sued by the buyer because of unspecified issues of fact concerning the broker’s liability. The seller of the house was also the seller’s real estate agent for the transaction. The broker who employed the seller/real estate agent is a named defendant.

The opinion notes that “when the seller replaced his seller’s hat with that of a real estate agent, his knowledge about the conditions of his home remain the same” and also “the duty of disclosure announced in Johnson extends to a seller’s real estate broker.” The opinion also states, “[I]f the seller/agent withheld material information, this was done during his work as a real estate agent to facilitate a sale, which was in interest of the principal/broker, who would earn a commission.” (Emphasis supplied.)

In almost every real estate transaction in which a real estate agent is involved, either a seller’s agent, a buyer’s agent or a transactional agent, the broker(s) are looking to earn a commission and their efforts in the transaction are to facilitate a sale. I have seen a lot of closing statements that include a commission for one or more brokers. If the duty to disclose arises because of the desire to earn a commission, then it would appear that the liability is the same whether there is a seller’s, buyer’s, or transaction broker/agent involved. All brokers/agents have the same desire to earn a commission.

In a strong market where commissions are plentiful, there should be less incentive to not disclose information that could kill a sale. Weak markets do occur and an overabundance of brokers/agents even in a strong market may create incentive to remain silent so as not to kill the deal by disclosing hidden property defects.

If you have any questions or concerns about selling or buying a home or other real estate, or about the duty to disclose hidden defects in a Florida real estate sale, I recommend contacting an experienced real estate attorney. Howard P. Ross, Esq., B.C.S. has over 50 years’ experience representing clients in both residential and commercial real estate transactions.

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Changing Sun Biz Information Without The Proper Authority Can Be a Problem You Do Not Want

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By Howard Ross

During marital divorces and business divorces, people occasionally rush to change the information on the Secretary of State’s Sun Biz website without first determining whether they have the authority to do so.

Sometimes, the portions of the corporate/LLC records that grant the authority to replace officers, directors, managers, or persons with authority are not reviewed for many years preceding the dispute, even though circumstances have changed since the initial granting of the authority or elections to office. While most business owners are busy running their business, trying to make a profit, dealing with the day-to-day business activities, and other various problems, there is very little time left to review corporate/LLC records. It is easy to just file the annual report without reviewing what authority one has to make the entries that appear in the report.

Section 817.155 Florida Statutes (2016) provides:

A person may not, in any matter within the jurisdiction of the Department of State, knowingly and willfully falsify or conceal a material fact, make any false, fictitious or fraudulent statement or representation, or make or use any false document, knowing the same to contain any false, fictitious, or fraudulent statement or entry. A person who violates this section is guilty of a felony of the third degree punishable as provided in s.775.082, s 775.083, or s. 775.084.

The punishment violating the above Florida Statute can be incarceration for up to five years. Additionally, commission of a felony can trigger provisions and remedies in contracts and a violation of a criminal statute can possibly provide for relief or at least leverage in civil cases. Furthermore, the commission of a felony could affect licenses granted by the state.

While prosecution for filing false, fictitious, and fraudulent information on Sun Biz is infrequent and, to date, WestlawNext has not reported any cases under Section 817.155 Florida Statutes (2016), why become the person who is punished just because you are angry with your cheating spouse or stealing business partner.

If you want to make a changes on the information contained in the annual report or file an amendment, first, I suggest taking a deep breath and then second, making sure that you have been elected to the proper office and/or you own a sufficient majority of the business to make the change by yourself.

If you have a question as to whether you or someone else has the proper authority to change your business information on Sun Biz feel free to contact me at hross@brdwlaw.com.

Reflections on “OJ: Made in America” from a Criminal Defense Lawyer

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By Sean McQuaid

I recently watched the five-part documentary, “OJ: Made in America”, on ESPN and felt compelled to comment on it.  Was I the only one disappointed by the behavior of the lawyers during the course of the trial?  Notwithstanding the outcome and the evidence, I asked myself, “Is this how our criminal justice system really works?”

I was still in college when the trial occurred, but now that I am a criminal defense lawyer, I have a whole new perspective on what transpired. Although captivating, I couldn’t help but wonder what the general public must think about the integrity of criminal trial lawyers after watching.  Throughout the show, OJ’s lawyers bragged about how they won the case, including changing out photos of him with white people to those of him with black people before the jury visited his house. This was done in order to relate OJ to the mostly black jury.  Likewise, the lawyers chuckled about how they wore ties with African patterns also to “relate” to the black jurors.  Perhaps most shocking was the admission by OJ’s agent that OJ stopped taking his arthritis medicine two weeks before he tried on the gloves in order to make his hands swell.  Furthermore, the lawyers blatantly acknowledged using race as an issue in the case in order to exploit the bias of the community against the police.  The lawyers went so far as to call the key detective a “genocidal racist” and even compared him to Hitler in the closing argument.

While the prosecutors berated the tactics employed by the defense lawyers, their behavior was no better.  After the mostly black jury was seated, they brought in a black prosecutor the day before the trial was to begin specifically to pander to those jurors.

I asked myself whether the behavior by the lawyers in OJ’s case was normal.  Sadly, the lawyers’ cavalier attitudes about manipulation of evidence and playing the “race card” caused me to conclude that this behavior was par for the course in that trial and acceptable in their eyes.

In criminal trials, we hold law enforcement officers to a high standard and are quick to point out their flaws.  We scrutinize them if their mentality reflects that the end justifies the means.  But, when the defense lawyers and prosecutors alike fail to meet the high moral standards we expect, is there not a flaw in the system?

After reflecting on this issue, I believe that our criminal justice system really does have a process of checks and balances so that the behavior seen in the OJ trial does not persist.  When a lawyer is found to have deviated from moral standards, it is the responsibility of the judge and opposing counsel to curtail that behavior.  For example, if a criminal defense lawyer is “gaming” the system, the prosecutor’s office and the judiciary must create consequences not only in that case, but in all of the lawyer’s future cases.  As a lawyer, all one has is his/her reputation, and I cannot imagine how a lawyer who admits to manipulating evidence like those in the OJ trial could ever get a break from a prosecutor or a judge in future cases.  Perhaps because of the publicity of the OJ case and the fact that several lawyers were brought to Los Angeles from around the country, they were not concerned about the consequences of their behavior.  But, here in Tampa Bay, lawyers are not celebrated for immoral behavior.  We earn our reputation by zealously advocating for our clients within the rules, not by breaking the rules, and that is the way the judicial system is designed to work properly.

Cleaning Up The Dockets: The Judiciary’s Push For The Efficient Practice Of Law

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By Andrew R. Pardun, Esq.

It is not uncommon in the practice of law for an attorney to timely submit a motion to the court but to allow a substantial amount of time to pass before setting that motion for hearing.  Without a hearing, these motions almost never get decided and the case remains stagnant.  Perhaps this tardiness is a delay tactic or it could just as easily be the result of an honest scheduling conflict. Whatever the case, a recent ruling from Florida’s 4th District Court of Appeals suggests that perhaps attorneys should be more diligent in ensuring that their motions are timely set for hearing.

Last month, the 4th DCA released its opinion in Grosso v. HSBC Bank USA, N.A., affirming the lower court’s sua sponte (on its own) dismissal of a timely filed motion for costs and attorneys’ fees stating that the motion was abandoned after it “languished on the docket for eighteen months.” In this case, HSBC Bank voluntarily dismissed a foreclosure action that it had brought against its borrower, Grosso.  Thereafter, counsel for Grosso timely filed a motion for costs and attorneys’ fees.  The fee motion was never set for hearing, and there was no other activity in the case for eighteen months.  Upon review of the docket, the trial court judge ordered the clerk to administratively close the case stating that any pending post-trial motions not set for hearing were deemed abandoned.    While this order was without prejudice, it had the effect of precluding Grosso from recovering costs and fees, and Grosso’s motion for rehearing was subsequently denied.  On appeal, the 4th DCA affirmed the trial court’s decision holding that the trial court did not abuse its discretion as it had inherent authority to deem Grosso’s motion abandoned.  “Inherent power has to do with the incidents of litigation, control of the court’s process and procedure, control of the conduct of its officers and the preservation of order and decorum with reference to its proceedings.” Click here to read the full opinion.

Grosso v. HSBC Bank USA, N.A. is not the only indication of the judiciary’s efforts to improve efficiency in the legal system.  On October 15, 2015, the Sixth Judicial Circuit (that hears cases in Pinellas and Pasco Counties) issued Administrative Order No. 2015-056 PA/PI-CIR stating that pretrial non-evidentiary motions may be subject to review and ruling by a judge based only upon the motion along with written argument. The order also requires opposing parties to file their responsive arguments and legal memoranda complete with citations to authority within ten days of being served.  This Administrative Order is another example of the judiciary’s initiative to increase efficiency and clear up the dockets. Taking all of this into consideration, attorneys practicing in today’s legal environment may want to consider staying ahead of what appears to be a judicial push towards the efficient practice of law in the State of Florida.

If you have a civil case or motion pending in St. Petersburg, Florida or in Pinellas County, Florida and you are concerned about it languishing on the docket feel free to contact me at (727) 381-2300 or apard@brdwlaw.com.