STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ROBERT J. CORDA, )

)

Petitioner, )

)

vs. ) CASE NO. 75-2053

)

DOUGLAS S. KENNEDY, )

)

Respondent. )

)

RECOMMENDED ORDER

This cause came on for hearing before the undersigned on March 23, 1976 in St. Petersburg, Florida, based on an administrative complaint filed by Robert J. Corda on behalf of the Florida Real Estate Commission. Douglas S. Kennedy, the Defendant, filed an answer denying the charges and allegations of the complaint in all material respects.

APPEARANCES

For Petitioner: Lewis B. Guttmann, III, Esquire

State of Florida Office Building West Morse Boulevard

Winter Park, Florida

For Respondent: Evans Crary, Jr.

Crary, Buchanan and Meginniss, Chartered

201 First National Bank Building Post Office Drawer 24

Stuart, Florida 33494 ISSUES

The issues as evidenced by the administrative complaint filed herein alleges that the Defendant violated s. 475.42(1)(b), F. S., by collecting a commission in his own name and not in the name of his employer in connection with a real estate transaction and further that he violated s. 475.42(1)(a), F. S., by operating as a real estate broker without being holder of a valid current registration certificate as a real estate broker.

The parties have filed proposed finding of fact and recommended orders with the undersigned which have been duly considered by me in preparation of this recommended order. After due consideration of the entire record in this case including the proposed findings of fact and recommended orders and my observation of the witnesses and their demeanor, I make the following:

FINDINGS OF FACT

1. This matter arose from the sale of a certain apartment building in Dunedin, Florida, known as Piper's Ten. This building was owned by two foreign

   corporations, the principals of which are represented by a Mr. Eugene Morgan of Boston, Massachusetts. Douglas S. Kennedy, Defendant, is a registered real estate salesman whose license was registered with Lockhart Realty, Inc., of Seawalls Point, Florida, the broker for which was his then wife Trude Kennedy. The Defendant and his wife were involved in domestic difficulties which eventually lead to a divorce. When the Defendant and his wife separated sometime in late 1972, he sought out his friend and business associate, Eugene Morgan, who suggested that the Defendant move to Dunedin, Florida and reside in the model apartment at Piper's Ten. The Defendant heeded the suggestion and took on the assignment as resident manager of the Piper's Ten Apartments at a final salary of approximately $1,000 per month. According to the Defendant and Mr. Morgan, his prime responsibility was seeing that Morgan and his co-investors in the property "receive a fair shake with the local people in and around Dunedin, Florida." At the time the property was registered with a real estate broker of Dunedin, Florida, whose name is Mr. Woodrow Register, and he had an exclusive listing on the sale of Piper's Ten Apartments. The initial arrangement between Morgan and the Defendant was that the Defendant would live in the apartment rent free and he would be paid an amount to defray his expenses for the management responsibility. When the Defendant became dissatisfied with this arrangement approximately 3 weeks later, he notified Mr. Morgan that he could no longer remain in Dunedin under that arrangement. This set the stage for the new arrangement referred to above whereby the Defendant was to be paid

   $1,000 per month payable out of the proceeds, when and if the building was sold. According to Morgan, this arrangement was to last for at least 4 to 5 months or until such time as a purchaser was located to purchase the apartment building.

   During April 1973, Kelly Prior Realty of Dunedin produced a proposed purchaser for the property at the purchase price of $400,000 which was the amount set by the owners who had agreed to pay a real estate commission of 5 percent. Kelly Prior Realty prepared a proposed contract of sale and purchase and submitted it to the offices of the attorney for the seller, Raymond Argyros, who after certain modifications, submitted the contract to the sellers for their approval. At the closing in May 1973, Kelly Prior, the selling broker, received a full commission of 5 percent as agreed upon by their sellers in their open listing of the property. According to attorney Argyros, the Defendant received a check for

   $5,000 as agreed upon between the Defendant and Morgan and according to him, the contract erroneously referred to such payment as a commission. It is this

   $5,000 payment which is the matter of controversy in this hearing. According to Morgan, Defendant was hired to "see if he could get Morgan and his associates a fair shake with the local people in Dunedin respecting the management of the apartment building." Originally the two story building was primarily an office space on the lower level and approximately ten apartments on the upper level.

   The plan was to rent the upper level as a condominium and to lease the office space on the lower level. Morgan was unable to sell the condominiums on the upper level based on the fact that prospective purchasers did not want to buy condominiums in a building approximately 50 percent comprised of office space. With this fact, Morgan and his associates made the decision to convert the lower level to apartments as well. When this was done, the Defendant saw to it that the building was properly managed and provided feedback to Morgan in order to keep him advised at all times of the situation with the apartment building.

   When the building was sold, Kelly Prior Realty Company received the commission of $20,000 which represented 5 percent of the total purchase price and the Defendant received $5,000 for his efforts. In this regard, the Defendant received a check drawn in the amount of $5,000 and the check bore a notation that the amount represented a commission. When the Defendant noted this, he changed the face of the check to reflect that the amount paid was intended to be an agency fee for the sale of Piper's Ten. The Defendant played no part in the drafting of the purchase and sales agreement. After the closing, the Defendant

   also was given the furniture from the model apartment and he thereafter departed for Puerto Rico.

   
   

2. Trude Kennedy, the Defendant's former wife, testified that Lockhart Realty was in no way associated with the sale of Piper's Ten. Trude Kennedy had several conversations with Mr. Morgan regarding the sales and problems which he encountered with Piper's Ten. However the basis of these statements involved other businesses which she had with Morgan regarding the sale and subdivision of other properties in and around Dunedin. Mrs. Kennedy was unaware of the amount paid to the Defendent and she made no claim for such funds when the payment was disbursed. Morgan denied that the amount in any way reflected a commission but rather was payment for the services which the Defendant rendered in the general upkeep and management of the building such that he could be fully advised at all times of the progress, if any, that the local realtors were having with the sale of the apartment building.

   
   

3. With these facts, the undersigned is of the opinion that the $5,000 sum given to Kennedy represented the amount as per the agreement he had with Morgan. There was no evidence that he participated in any way with the sale of the building other than to advise Morgan of any efforts that the other local realtors played in locating purchasers. It was noted that the check which represented payment for these services indicated that the amount originally was a commission. However, the Defendant, when noting that the designation of a commission was included on the check, immediately advised Mr. Argyros, the seller's agent, to correct that mistake by placing a designation that the amount represented was intended to be a "seller's agent" fee. This correction was made prior to the time the check was deposited and it was done with the consent of attorney Argyros. There was no evidence that the Defendant demanded such amount as a commission for his efforts as a salesman or that he showed the property to prospective purchasers as a real estate salesman. Thus it appears that the amount paid to the Defendant was an amount given him for his services as testified to by Morgan. The amount paid also appears to correspond with the arrangement as testified to by Morgan. I therefore find that the $5,000 sum paid the Defendant represented an amount for services that he rendered, not as a real estate salesman, but rather, as a property manager of the Piper's Ten Apartment building.

   
   

   CONCLUSIONS OF LAW

   
   

4. The Defendant, Douglas S. Kennedy, was at all times material to this hearing, a registered real estate salesman whose license was registered with Lockhart Realty Company, Inc. of Seawalls Point, Florida.

   
   

5. The $5,000 amount the Defendant received in May of 1973, from attorney Ray Argyros, represented payment for his services as resident manager of the premises known as Piper's Ten.

   
   

6. By collecting the $5,000 fee, the Defendant did not violate ss. 475.42(1)(a), Florida Statutes.

I therefore recommend that the administrative complaint filed herein be dismissed in its entirety.

DONE and ORDERED this 25th day of May, 1976, in Tallahassee, Florida.

JAMES E. BRADWELL, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304

(904) 488-9675

COPIES FURNISHED:

Evans Crary, Jr., Esquire

201 First National Bank Building Post Office Drawer 24

Stuart, Florida 33494

Lewis B. Guttmann, III, Esquire State of Florida Office Building West Morse Boulevard

Winter Park, Florida 32789

Robert J. Corda.

Florida Real Estate Commission 2699 Lee Road

Winter Park, Florida 32789

Docket for Case No: 75-002053

Orders for Case No: 75-002053