Insurance company failed to file sinkhole document to warn Spring Hill buyers

SPRING HILL, FL (WFLA) – 8 On Your Side uncovered public documents that show Citizens Property Insurance Co. failed to file a sinkhole certification on a Spring Hill home in 2009. The company slipped the form into county records five years later- in Sept. 2014 – after questions from 8 On Your Side.

If that form had been filed, as required by Florida law, the new homeowners would have been warned about the sinkhole. Instead, Kelly Magbee and her family, including five children, bought the house and then later moved out after a crack opened in the living room. Then they found out about the sinkhole.

Citizens paid out a claim in 2009 to previous homeowners Glenn and Kathryn Jasen. But that couple cashed the check and decided not to fix the hole. They mislead Magbee about the sinkhole, checking “no” on questions about sinkhole activity on real estate disclosure forms.

Citizens tells 8 On Your Side that its failure to file the form was an “oversight.”

Meanwhile, the Jasens face a federal jury next week. Here’s some background:

At first, Glenn Jasen agreed to plead guilty to federal wire fraud charges, but then in June he hired a new attorney and decided to fight the charges. That lead prosecutors to file new charges, also naming his wife in the federal indictment.

Well-known Tampa Criminal Defense Attorney Victor Martinez is on the case. He says this is a “civil matter” and filed a motion to dismiss the whole case. But U.S. District Judge James Whittemore isn’t buying the argument and denied the motion.

“Common sense recognizes that a seller who lies to a buyer about a defect in real property which impairs the value of the property has committed a fraudulent mispresentation,” Whittemore wrote in his order.

This is a case that is getting a lot of attention in the legal community because it is the first case of its kind – federal charges for lying on real estate disclosure forms. It could set precedent and could signal to other home sellers that they could also face federal charges for lying about a sinkhole.

“Suddenly this false statement takes on a life of it own and before you know it the (defendant) is looking at time in the federal penitentiary,” Martinez said.

Martinez says home sellers lie all of the time. When caught, they usually face a civil lawsuit, not 20 years in prison.
The trial is set to begin on Monday.

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