STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA REAL ESTATE COMMISSION, )

)

Petitioner, )

)

vs. ) CASE NO. 77-011

) PD NO. 3115

DONALD M. MLINARICH, )

)

Respondent. )

)

RECOMMENDED ORDER

This matter came on for hearing in St. Petersburg, Florida, on March 29, 1977, before the Division of Administrative Hearings, by its duly designated Hearing Officer, Robert T. Benton, II. Petitioner and respondent appeared through their respective counsel, as follows:

Mr. Charles E. Felix, Esquire 2699 Lee Road

Winter Park, Florida 32789

Mr. Emerson L. Parker, Esquire 3835 Central Avenue

Post Office Box 15339

St. Petersburg, Florida 33733

By administrative complaint, petitioner alleged that respondent, a real estate broker, received five thousand dollars ($5,000.00) in settlement of a claim for commission; that a real estate salesman in respondent's employ, one Harry A. Bayly, demanded a 20 percent share of the settlement; and that respondent refused to pay Mr. Bayly. Respondent's answer did "not dispute the allegations of the Administrative Complaint," but respondent "request[ed] a hearing to submit evidence in mitigation." The following findings of fact are based partly on the evidence adduced at the hearing, and partly on the allegations of the administrative complaint, to which respondent stipulated.

FINDINGS OF FACT

1. Mr. Harry A. Bayly, Jr., a real estate salesman, obtained a listing for the Sails Motel in 1975, while he was employed by respondent Donald M. Mlinarich, a real estate broker. Mr. Perz, at that time co-owner with his wife of the Sails Motel, showed Mr. Bayly a piece of paper on which he had written figures which he claimed represented gross income earned and expenses incurred on account of the Sails Motel. At the same time, Mr. Perz told Mr. Bayly that the figures on the piece of paper did not agree with federal income tax returns, or with state sales tax returns which Mr. Perz had filed. Mr. Perz told Mr. Bayly that income from the motel was understated on the tax returns, but that the figures he alleged were accurate could be substantiated by examining the motel's registration slips. The discrepancy between the gross income figure reported for tax purposes for 1974 and the gross income figure Mr. Perz gave Mr.

   Bayly for 1974 was twenty thousand dollars ($20,000.00). Mr. Bayly did not tell Mr. Mlinarich about the double bookkeeping at the Sails Motel.

   
   

2. Mr. Charles George was also a real estate salesman in Mr. Mlinarich's office. Mr. George procured a purchaser for the Sails Motel, one Anton K. P. Loetschert, who signed a duly witnessed agreement to buy the motel. Before the transaction closed, however, Mr. Loetschert appeared at the Sails Motel, accompanied by an accountant, and asked to see the motel's books. Learning for the first time of the dual bookkeeping, Mr. Loetschert indicated his unwillingness to go through with the purchase. Even though the deal fell through, the broker's office obtained five thousand dollars ($5,000.00) in satisfaction of its claim for commission on the sale. Mr. Mlinarich caused half of this sum to be paid to Mr. George, in accordance with a standing agreement between Mr. Mlinarich and each of his employees.

   
   

3. Under the same standing agreement, Mr. Bayly, because he had secured the listing, had presented Mr. Loetschert's offer, and had otherwise assisted in the transaction, was entitled to one fifth of any commission, or one thousand dollars ($1,000.00). By letter dated September 23, 1975, Mr. Bayly demanded this sum, but Mr. Mlinarich refused payment at that time, on the advice of counsel. In addition to the circumstances surrounding the Sails Motel transaction, Mr. Mlinarich related the following facts to his lawyer which were proven to be true at the hearing: On at least two occasions, Mr. Bayly added provisions to listing contracts of which he did not inform Mr. Mlinarich, so that Mr. Mlinarich was lead to believe and did believe that the property owners involved had agreed to pay a broker's fee if the property were sold within 180 days of listing, while in actuality the owners contractual obligations were subject to termination earlier, and were in fact terminated early. Mr. Bayly accomplished this by writing additional contract clauses in his own hand on the sellers' copies of the contracts, while taking care that his handwriting did not appear on the realtor's carbon copies. Mr. Mlinarich and the other salesmen in his office advertised the properties and took other steps in the mistaken belief that the property owners were legally bound for the full 180 days. Mr. Mlinarich's lawyer advised him that he had a claim against Mr. Bayly for damages in excess of one thousand dollars ($1,000.00) and told Mr. Mlinarich he need not pay Mr. Bayly his share of the commission settlement, for that reason.

   
   

4. Shortly after Mr. Mlinarich learned that Mr. Loetschert wanted his earnest money back, he advised Mr. George Illi, an investigator for the Florida Real Estate Commission, of the details of the Sails Motel transaction. Mr. Mlinarich kept Mr. Illi posted as matters developed, through and including the time of the dispute between over payment of the one thousand dollars ($1,000.00). Altogether, Mr. Mlinarich spoke to Mr. Illi, on the telephone and in person, between five and ten times. He kept Mr. Illi fully apprised of every detail, including his lawyer's advice to pay Bayly.

   
   

5. When the administrative complaint was filed against Mr. Mlinarich, he caused Mr. Bayly to be paid one thousand dollars ($1,000.00) in full satisfaction of Mr. Bayly's claim.

   
   

   CONCLUSIONS OF LAW

   
   

6. Section 475.25(1)(c), Florida Statutes (1975) specifies as a ground for suspension of a real estate broker's license failure

"to account or deliver to any person, including registrants under this chapter

money . . . including a share of a

real estate commission . . . which he is not in law or equity entitle to retain

upon demand of the person entitled to such accounting and delivery;..."

The evidence at the hearing tended to raise the questions whether Mr. Mlinarich had a valid claim against Mr. Bayly, albeit in an unspecified amount; and, if so, whether this offsetting obligation made the thousand dollars ($1,000.00) money which Mr. Mlinarich was in "equity entitled to retain." Because respondent's response to administrative complaint must be construed as conceding a technical violation, however, it is unnecessary to decide these questions.

Solely on the basis of the response to administrative complaint, it is concluded that respondent Mlinarich is guilty of violating the letter of 'Section 475.25 (1)(c), Florida Statutes (1975).

RECOMMENDATION

It is strongly recommended that no disciplinary action be taken against respondent.

DONE and ENTERED this 15th day of April, 1977, in Tallahassee, Florida.

ROBERT T. BENTON, II

Hearing Officer

Division of Administrative Hearings Room 530 Carlton Building Tallahassee, Florida 32304

COPIES FURNISHED:

Charles E. Felix, Esquire Florida Real Estate Commission 2699 Lee Road

Winter Park, Florida 32789

Emerson L. Parker, Esquire 3835 Central Avenue

Post Office Box 15339

St. Petersburg, Florida 33733

Docket for Case No: 77-000011

Orders for Case No: 77-000011