STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA REAL ESTATE COMMISSION, )

)

Petitioner, )

)

vs. ) CASE NO. 77-047

) P.D. NO. 3113 SAM KAYE and SAM KAYE, INC., )

)

Respondents. )

)

RECOMMENDED ORDER

This case was heard on August 5, 1977, in Room 341A, Palm Beach Courthouse, West Palm Beach, Florida, by Stephen F. Dean, assigned Hearing Officer of the Division of Administrative Hearings. This case was presented on an Administrative Complaint containing two counts issued by the Florida Real Estate Commission against Sam Kaye and Sam Kaye, Inc. The first count alleges that the Respondents violated Section 475.42(1)(j), Florida Statutes, by filing or causing to be filed a notice of lis pendens against real property for the purpose of collecting a commission. The second count alleges that the Respondents violated Section 475.25(1)(e) by violating a lawful order of the Florida Real Estate Commission to remove the notice of lis pendens which they had filed.

The Florida Real Estate Commission submitted evidence that the Respondents placed or caused to be placed a notice of lis pendens for the purpose of collecting a commission allegedly due them in a real estate transaction. The Respondents admit that their attorney representing then in an action filed to collect a commission filed a notice of lis pendens against the real property involved in the transaction. The Respondents presented evidence that the trial court denied the property owner's motion to remove the notice of lis pendens.

The Florida Real Estate Commission presented evidence that the Respondents were ordered by the Florida Real Estate Commission to remove the notice of lis pendens and that the Respondents did not comply with the order prior to issuance of the Administrative Complaint. The Respondents presented evidence that they did not receive notice or have the opportunity to be heard on the facts underlying the issuance of the order by the Florida Real Estate Commission although they had a substantial interest in maintenance of the notice of lis pendens.

ISSUES

The issue in Count I is whether Section 475.42(1)(j) absolutely prohibits a broker or salesman from filing a lien or other encumberance against real property to collect a commission.

The issue in Count II is whether the Respondents violated a lawful order of the Commission by failing to remove the motion of lis pendens contrary to Section 475.25(1)(e), Florida Statutes.

APPEARANCES

For Petitioner: Bruce I. Kamelhair, Esquire

Florida Real Estate Commission 2699 Lee Road

Winter Park, Florida 32789

For Respondent: William E. Boyes, Esquire

Cone, Owen, Wagner, Nugent, Johnson & McKeown, P.A.

Post Office Box 3466

West Palm Beach, Florida 33402 FINDINGS OF FACT

1. The Florida Real Estate Commission has jurisdiction to issue the Administrative Complaint and issue a final order in this case.

   
   

2. The Respondents are registered real estate brokers holding licenses issued by the Florida Real Estate Commission.

   
   

3. The Respondents attorney filed a notice of lis pendens in Palm Beach County in conjunction with their suit filed in the Fifteenth Judicial Circuit in and for Palm Beach County against Perrin to collect a commission alleged to he due and owing on an exclusive right of sale contract between Kaye and Perrin. The Respondents admitted that they engaged the legal services of Howard Antevil, an attorney at law, to obtain the commission. Antevil filed the action referenced above and the notice of lis pendens. The Respondents further admitted that they knew that the lis pendens was filed, particularly after receipt of the "order". of the Florida Real Estate Commission in August, 1976.

   
   

4. The property owner's motion to remove a notice of lis pendens was denied by the trial court.

   
   

5. A special order of the Florida Real Estate Commission was issued on or about August 4, 1976 directing that Kaye remove the notice of lis pendens which was filed in Palm Beach County.

   
   

6. San Kaye and Sam Kaye, Inc., did not remove the notice of lis pendens.

   
   

7. Kaye stated that he received no notice of hearing on the matter of the lis pendens and it was admitted by the Florida Real Estate Commission counsel that the order issued after an ex parte proceeding before the Florida Real Estate Commission.

   
   

   CONCLUSIONS OF LAW COUNT I

8. Section 475.42(1)(j), Florida Statutes, provides as follows:

   
   

   "No real estate broker or salesman shall place, or cause to be placed, upon the public records of any county, any contract, assignment, deed, will, mortgage, lien, affidavit, or other writing which purports to affect the title of, or encumber, any

   real property, if the same is known to him to be false, void, or not authorized to be placed of record, or not executed in the form entitling it to be recorded, or the execution of recording thereof has not been

   duly authorized by the owner of the property, maliciously or for the purpose of collecting a commission, or to coerce the payment of money to the broker or salesman or other person, or for any unlawful purpose."

   
   

9. Clearly the Respondents placed or caused to be placed the notice of lis pendens in question. A notice of lis pendens is clearly an "other writing which purports to effect the title of, or encumber, any real property."

   
   

10. The Florida Real Estate Commission argues that this provision is an absolute bar to the filing of any lien for the purpose of collecting a commission. The Respondents argue that this provision is not an absolute bar and there are circumstances when a broker may file a notice of lis pendens. They also assert that the notice of lis pendens falls within the exception because the Circuit Court refused to remove the notice of lis pendens upon

    motion of the property owner. Lastly, it is argued that the notice was filed by counsel for the Respondents in good faith on an action at law and that this mitigates their action even if there was a violation.

    
    

11. The language of Section 475.42(1)(j) cannot be read to absolutely prohibit a broker from obtaining a lis pendens. When given this construction, it effectively denies brokers and salesmen access to the courts for redress of injury as provided in Article I, Section 21 of the Florida Constitution.

    
    

12. Section 475.42(1)(j) is a complex provision which is subject to two interpretations. One interpretation would prohibit a broker or salesman from filing an encumberance if the same were known to him to be false, void or not authorized by law; if not authorized to be upon the public records; if not executed in the form entitling it to be recorded; if the execution of recording thereof has not been duly authorized by the owner of the property; if maliciously (filed); if for the purpose of collecting a commission, if to coerce payment of money to the broker or salesman or other person; or if for any other unlawful purpose. This first interpretation would consider each clause a separate limitation on filing an encumberance. The facts analyzed under this interpretation do not show any knowledge by Respondents that the lis pendens was false, void or not authorized to be filed or not on a form entitling it to be recorded. The facts do not show that Respondents filed the lis pendens maliciously, for the purpose of collecting a commission, or for the purpose of coercing payment of money to the broker or salesman, or for any unlawful purpose. The nature of lis pendens would not require the owner's authorization of execution for recording. The facts show that the lis pendens was filed by Respondent's attorney in conjunction with a suit brought by the Respondents against Perrin. The record also shows that the circuit court determined that the lis pendens was recordable when it denied the motion to remove it. The notice of lis pendens was neither malicious, coercive or for the purpose of collecting the commission. The notice was for the purpose of perfecting the claim against the property for execution of the judgment if the Respondents prevailed in the suit. Executing on a judgment is different from collecting the commission or coercing payment. Under this interpretation the Respondents have not been shown to violate Section 475.42(1)(j).

13. A second interpretation would read the clause, ". . . if the same is known to to him to be false, void, or not authorized to be placed of record, or not executed in the form entitling it to be recorded, or the execution of recording thereof has not been authorized by the owner of the property. . ." as the first of two criteria to be met to establish a violation. The second criteria would consist of proof that the encumberance was recorded maliciously or for the purpose of collecting a commission, or to coerce payment of money to the broker or salesman, or for any unlawful purpose. Again the facts do not show there was knowledge by the Respondents of the falsity, or impropriety of the notice of lis pendens, as stated above. Again the facts show that the lis pendens was filed in conjunction with a law suit pending between the Respondent and the property owner, and that the court before which the action was pending refused to remove it. The file of the notice by Respondent's counsel was a legitimate method of perfecting the Respondent's claim should they prevail and obtain judgment. The facts do not indicate that the filing of the notice was malicious, coercive or for the purpose of collecting a commission. Under either interpretation, Respondents did not violate the statute.

    
    

    COUNT II

    
    

14. The Respondents are charged in Count II with violation of Section 475.25(1)(d), Florida Statutes, which provides that the registration of a registrant may be suspended for up to two years for violation of a lawful order of the Commission.

    
    

15. Clearly, the facts reveal that the Respondents had a substantial interest involved in the litigation with Perrin. The order, of the Florida Real Estate Commission to remove the notice of lis pendens substantially affected their rights in this litigation. Therefore, any final order directing Kay to remove the notice of lis pendens should have issued after an opportunity for hearing pursuant to Section 120.57, Florida Statutes. The evidence reveals that the Florida Real Estate Commission did not notice a hearing under Section 120.57, and therefore its order cannot be "lawful." The provisions of Section 475.25(1)(d) require that registrants not violate lawful orders. The Respondents have not violated Section 475.25(1)(d), Florida Statutes, by not removing the notice of lis pendens as directed by the order of the Florida Real Estate Commission.

RECOMMENDATION

Based upon the foregoing findings of fact and conclusions of law, the Hearing Officer recommends that no action be taken against the Respondent, Sam Kaye and Sam Kaye, Inc.

DONE and ORDERED this 23rd day of September 1977, in Tallahassee, Florida.

STEPHEN F. DEAN

Hearing Officer

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

(904) 488-9675

COPIES FURNISHED:

Bruce I. Kamelhair, Esquire Florida Real Estate Commission 2699 Lee Road

Winter Park, Florida 32789

William E. Boyes, Esquire Cone, Owen, Wagner, Nugent,

Johnson & McKeown, P.A. Post Office Box 3466

West Palm Beach, Florida 33402

Docket for Case No: 77-000047

Orders for Case No: 77-000047