Judges: SHARYN L. SMITH
Agency: Department of Business and Professional Regulation
Latest Update: Mar. 26, 1984
Summary: Petitioner didn't prove Respondent knowingly violated statutes concerning distribution of commissions. Hearing Officer recommends dismissal.
83-2509STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF PROFESSIONAL )
REGULATION, Florida Real Estate ) Commission, )
)
Petitioner, )
)
vs. ) CASE NO. 83-2509
)
SHELDON GREENE and SHELDON )
GREENE & ASSOCIATES, INC., )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Sharyn L. Smith, held a formal hearing in this case on December 7, 1983, in Miami, Florida. The following appearances were entered:
APPEARANCES
For Petitioner: Fred Langford, Esquire
Department of Professional Regulation
400 West Robinson Street Orlando, Florida 32801
For Respondent: Donald M. Klein, Esquire
KLINE MOORE & KLEIN, P.A.
407 Lincoln Road
Miami Beach, Florida 33139
The issue for determination at final hearing was whether the Respondents' licenses should be revoked, suspended, or otherwise disciplined for allegedly failing to account and deliver to a registered real estate salesman in the Respondents' employ the salesman's share of certain real estate commissions in violation of Section 475.25(1)(d), Florida Statutes.
At the final hearing, Henry Berman, the complainant, Seymour Deutsch, the owner of a hotel sold by the complainant and the Respondents, and Andres Herrada, the purchaser of the hotel owned by Deutsch, testified for the Petitioner. Sheldon Greene, Donald Mitchell, a subsequent purchaser of the hotel, Bernard Bastacky, a salesman for the Respondent Sheldon Greene & Associates, Inc., and Nancy Prieto, an employee of Sheldon Greene & Associates, Inc., testified for the Respondents. Petitioner's Exhibits 1-5 and Respondents' Exhibit 1 were offered and admitted into evidence.
Proposed Recommended Orders containing findings of fact have been submitted by the parties and considered in the preparation of this Recommended Order.
When the parties' findings of fact were consistent with the weight of the credible evidence introduced at final hearing, they were adopted and are
reflected in this Recommended Order. To the extent that the findings were not consistent with the weight of the credible evidence, they have been either rejected, or when possible, modified to conform to the evidence. Additionally, proposed findings which were subordinate, cumulative, immaterial or unnecessary have not been adopted.
FINDINGS OF FACT
Respondent Sheldon Greene & Associates, Inc., is a corporate real estate broker having been issued license number 0133685. The Respondent Sheldon Greene is the licensed real estate broker of record for Sheldon Greene & Associates, Inc., and holds license number 0033812.
Henry Berman, a registered real estate salesman was employed as an associate by the Respondents between July 10, 1980 and July 2, 1982.
Shortly after commencing his employment, Berman entered into a written agreement with the Respondents which set forth the division of real estate commissions earned by Berman and the firm on future sales. The agreement covered three distinct categories and included:
When Berman listed and sold property entirely by his efforts, the commission split would be 60 percent to Berman and 40 percent to the firm;
When Berman either had the listing or the buyer and the firm had the other,
the commission split would be 50 percent to Berman and 50 percent to the firm;
When Berman listed and sold property and the firm was involved in the sale through participation in negotiations, preparation of the submittal and the like, the commission split would be 50 percent to Berman and 50 percent to the firm.
During the period of Berman's employment by the Respondents, a Memorandum was circulated among all of the salespersons of Associates covering the division of commissions earned by Associates in situations in which more than one salesperson employed by Associates was involved in a single transaction. Berman was furnished a copy of this Memorandum and was aware of its contents.
While in the employ of Respondents, Berman obtained a verbal open listing from Seymour Deutsch to sell the Metropole Hotel at 635 Collins Avenue, Miami Beach, Florida.
Thereafter, on or about November 4, 1980, Berman procured a written sales contract for the purchase of the Metropole Hotel by Andres Herrada upon terms and conditions satisfactory to Deutsch.
The sales contract between Deutsch and Herrada failed to provide, however, for the amount of the commission payable to Associates as compensation for its services as the broker in the transaction.
Following unsuccessful negotiations between Greene and Deutsch, Associates commenced suit against Deutsch in the Circuit Court of Dade County,
Florida, Case No. 81-5133, claiming a commission in the amount of $40,000 based upon the verbal agreement of Berman and Deutsch, which action resulted in the entry of a Final Judgment in favor of Associates and against Deutsch in the amount of $40,000 plus interest. As a result of a post-judgment settlement entered into under threat of an appeal by Deutsch, Associates agreed to accept the sum of $25,000 in cash and the sum of $17,455.28 plus interest at the rate of 14 percent per annum in 35 monthly installments of $596.59 each, commencing on July 15, 1982 and ending on May 15, 1985.
Prior to instituting suit against Deutsch, Associates, through its President, Greene, entered into a verbal agreement for the purpose of rearranging the terms of the letter agreement dated July 14, 1980, for the purpose of imposing upon Associates the obligation of bearing all legal fees and litigation expenses in the event the outcome of the suit against Deutsch were unsuccessful. In consideration thereof, Berman agreed that in the event of a successful outcome (i.e., a judgment in the amount of $40,000), Associates would be entitled to retain 75 percent and Berman only 25 percent of the net commission after deducting legal fees and litigation expenses.
During the pendency of the litigation involving Deutsch, on or about October 16, 1981, Berman obtained a written exclusive listing from Herrada authorizing Associates to sell the Metropole Hotel once again.
Pursuant to this listing, Berman procured a written contract on behalf of Donald Mitchell to purchase the Metropole Hotel subject, however, to certain contingencies, primarily, the sale by Mitchell of another property as part of a multi-party, multi-property, tax-free exchange.
Thereafter, Berman failed to participate further in performing the duties normally incumbent upon a real estate salesman between the date of contract and date of closing. During this period, it became necessary for Bernard Bastacky, another salesman employed by Associates, to perform those duties normally incumbent upon Berman in such transaction, which services proved to be instrumental in bringing the transaction to a successful conclusion. In addition, Greene, personally performed services in the preparation of the listing brochure and with respect to subsequent negotiations between the parties which led to substantial modifications in the terms of the original sales contract procured by Berman.
On or about April 30, 1982, the sale from Herrada to Mitchell was closed. On or about May 15, 1982, Associates received its share of the commission from the Herrada/Mitchell sale in the approximate amount of $27,000.
Thereafter, Greene asked Berman and Bastacky to meet, personally, for the purpose of reaching an amicable arrangement as to the division of the salesman's share of the commission. When Berman and Bastacky were unable to resolve their dispute, Greene deposited their share in an interest-bearing account to await a resolution of the dispute between them.
Shortly thereafter, the $25,000 portion of the commission earned from the Deutsch/Herrada transaction became available as a result of the entry of the Final Judgment and post-judgment Stipulation between Associates and Deutsch, and Associates began to receive the monthly installments of the deferred portion of the commission. These sums were initially deposited to the Associates operating account from which were disbursed legal fees and litigation expenses totaling approximately $12,400.
When efforts to resolve Berman's proper share of the Deutsch/Herrada commission failed, Berman instituted suit against Associates in the Circuit Court of Dade County, Case No. 82-15570, claiming 60 percent of the commissions received by Associates on each of the two sales of the Metropole Hotel. In its Answer, Associates alleged that Berman was entitled to 25 percent of the Deutsch/Herrada commission in accordance with the verbal agreement between Greene and Berman, and to 25 percent of the Herrada/Mitchell commission, based upon the involvements of Greene and Bastacky in that transaction.
Associates has deposited the disputed portions of each of the commissions in controversy in special interest-bearing accounts pending a resolution of the pending civil action and has listed the amount of Berman's claim as a liability on its books.
In reliance upon his attorney's advice and interpretation of the statute under which Respondents have been charged in these proceedings, Respondents did not seek to obtain a disbursement order from the Florida Real Estate Commission as to the funds in dispute between Berman and the Respondents.
The civil action instituted by Berman against Associates is still pending and has not yet been scheduled for trial. Berman acknowledges that he instructed his attorney to allow that action to become temporarily inactive while the administrative action was prosecuted in hopes that it would compel Associates to enter into a favorable settlement in his favor.
All issues in dispute between Associates and Berman are capable of being finally resolved in the pending civil action.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this dispute. Section 120.57(1), Florida Statutes.
The Administrative Complaint failed in this case alleges that the Respondents are guilty of violating Section 475.25(1)(d), Florida Statutes, by failing to account and deliver to the complainant monies owed for commissions on two sales involving the Metropole Hotel.
The Petitioner has failed to demonstrate by clear and convincing evidence that the commissions in dispute were owed to the complainant or that the Respondent knowingly violated Section 475.25(1)(d), Florida Statutes.
The Respondents, on advice of counsel, did not seek a disbursement order pursuant to Section 475.25(1)(d), Florida Statutes, since counsel was of the opinion that the disputed commission was never required to be placed in an escrow or trust account and, therefore, was outside the scope of the statute.
It is undisputed, however, that the contract dispute between the complainant and the Respondents is presently pending in circuit court in Dade County. All of the issues of this case are capable of adjudication by the circuit court proceeding. Under these circumstances, one of the "escape clauses" found in Section 475.25(1)(d), Florida Statutes, has been triggered in this case, albeit by the complainant rather than the Respondents, and accordingly, no violation of Section 475.25(1)(d), Florida Statutes, as it relates to disbursement orders was shown. See Fleischman v. Department of Professional Regulation, 441 So.2d 1121 (Fla. 3d DCA 1983), in which the court noted that the Commission's disciplinary
powers did not extend to simple disputes, ordinarily resolvable in civil proceedings, over who is entitled to a given sum of money.
RECOMMENDATION
Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED:
That a Final Order be entered by the Florida Real Estate Commission dismissing the Administrative Complaint filed against the Respondents.
DONE and ENTERED this day of March, 1984, in Tallahassee, Florida.
SHARYN L. SMITH
Hearing Officer
Division of Administrative Hearings The Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32301
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 26th day of March, 1984.
COPIES FURNISHED:
Fred Langford, Esquire Department of Professional
Regulation
400 West Robinson Street Orlando, Florida 32801
Donald M. Klein, Esquire KLINE MOORE & KLEIN, P.A.
407 Lincoln Road
Miami Beach, Florida 33139
Harold Huff, Executive Director Florida Real Estate Commission Post Office Box 1900
Orlando, Florida 32802
Frederick M. Roche, Secretary Department of Professional Regulation
130 North Monroe Street Tallahassee, Florida 32301
Docket for Case No: 83-002509
Orders for Case No: 83-002509
| Issue Date |
Document |
Summary |
|
Mar. 26, 1984 |
Recommended Order
|
Petitioner didn't prove Respondent knowingly violated statutes concerning distribution of commissions. Hearing Officer recommends dismissal.
|
