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RONALD C. SMITH v. COMMONWEALTH PENNSYLVANIA (09/17/82)

decided: September 17, 1982.

RONALD C. SMITH, D/B/A CENTURY 21, R. C. SMITH, PETITIONER
v.
COMMONWEALTH OF PENNSYLVANIA, STATE REAL ESTATE COMMISSION, RESPONDENT



Appeal from the Order of the State Real Estate Commission in case of In the Matter of the Suspension or Revocation of Real Estate License No. RB-023912-A, Issued to Ronald C. Smith, d/b/a Century 21, R. C. Smith.

COUNSEL

Mark Yaskin, for petitioner.

Joseph S. Rengert, Counsel, with him James J. Kutz, Assistant Counsel, and David F. Phifer, Chief Counsel, for respondent.

Judges Rogers, Blatt and Craig, sitting as a panel of three. Opinion by Judge Blatt.

Author: Blatt

[ 69 Pa. Commw. Page 109]

Ronald C. Smith, d/b/a Century 21, R. C. Smith (petitioner) appeals an order of the Real Estate Commission (Commission) suspending his license for one year for knowingly making substantial misrepresentations to a customer and engaging in conduct in connection with a real estate transaction which demonstrated incompetency, bad faith or dishonesty.*fn1

[ 69 Pa. Commw. Page 110]

The following is a summary of the relevant facts found by the Commission. In the spring of 1977, Lydia Gravesen engaged the petitioner to sell her house in connection with a property settlement agreement, and soon thereafter he sold the house to his alleged business associate, Eric Lipnak. Following this sale, the petitioner approached Ms. Gravesen about selling her a house which he and his wife owned. Ms. Gravesen outlined her requirements for a new home and specified that the home had to be in good condition because she had no ability to make repairs and further noted that the home must have a good roof.*fn2 The petitioner assured Ms. Gravesen that "he had just the house . . . that he and Mr. Lipnak were neighbors and they fixed houses up and they would fix (this one) up to (her) needs." He also said that the roof was in "A-one condition." Ms. Gravesen inspected the property, which had been freshly painted white throughout, approximately four times before she purchased it. On September 1, 1977, she entered into an agreement of sale with the petitioner for a total price of $42,000 which included, as set forth in the agreement, $2000 earmarked for the installation of a driveway. The petitioner then hired a contractor to install a driveway but the work was never completed although the petitioner did pay $688 of the $2000 to the contractor. The petitioner refused to refund the balance to Ms. Gravesen, and within two months after settlement, the roof began leaking and ultimately required $1300 worth of repairs to correct.

Our scope of review in this matter is limited to a determination of whether or not the order of the Commission was supported by substantial evidence in the

[ 69 Pa. Commw. Page 111]

    record or an error of law was committed. Yingling v. State Real Estate Commission, 8 Pa. Commonwealth Ct. 556, 304 A.2d 524 (1973). The petitioner first argues that substantial evidence does not exist in the record sufficient to support the suspension of his license. Our review of the record leads us to agree with this argument only as to an absence of substantial evidence to support the Commission's finding that he had, under Section 10(a)(1) of the Act, " knowingly [made] any substantial misrepresentations," Id. Although it is undisputed that he made a "substantial misrepresentation," the only evidence in the record which the Commission argues proves he knowingly did so is: testimony by Mr. Lipnak that he and another workman hired by the petitioner, Paul Houghealing, were "concerned about a couple of loose shingles" prior to the sale; testimony by a person who resided in the house prior to the petitioner's purchasing it that some brown water marks or wet spots were noticeable; testimony by the broker who sold the house to the petitioner that he had noticed some water marks but assumed that they were from open windows; and, testimony by a roofing expert who, after examining the roof approximately two years after Ms. Gravesen purchased it, stated that it had needed work for a "few" years but that he could not specify exactly how long the problem had existed.

Initially, we note no evidence in the record which indicates that the petitioner ever inspected the roof, had otherwise worked upon the house, or had ever resided there. Concerning Mr. Lipnak's testimony, even though the Commission found that some ...


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