STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

RONALD L. MYERS, )

)

Petitioner, )

)

vs. ) CASE NO. 75-1117

)

ROBERT I. KRINZMAN, et al, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings by its duly designated Hearing Officer, James E. Bradwell, held a final hearing in this cause on December 17, 1976 in Coral Gables, Florida.

APPEARANCES

For Petitioner: Manuel E. Oliver, Esquire

2699 Lee Road

Winter Park, Florida 32789

For Respondents, Richard H. Olsen, Esquire Golodetz, Heims Prunty, Ross, DeLoach & Olsen Keyes National 837 City National Bank Building Investors, Inc.: Miami, Florida 33130

For Respondent: Edward C. Tietig, Esquire

Robert I. Dadeland Towers North, Suite 505 Krinzman Miami, Florida 33156

The Florida Real Estate Commission (Commission hereafter) through its nominal Plaintiff and representative, Ronald L. Myers, Plaintiff hereinafter, filed an information on January 21, 1975; the information alleges in pertinent part that the Defendant, Robert I. Krinzman, has registered with the Commission as a broker and president and active firm member of Keyes National Investors (a corporation registered with the Commission) that the Defendant, Edward Golodetz, is registered with the Commission as broker and executive vice president and active member of the firm of Keyes National Investors, Inc., and that the Defendant, Sanford B. Heims, has registered with the Commission as a broker and secretary and active firm member of Keyes National Investors, Inc.; and that Defendant Keyes National Investors, Inc., has registered with the Commission as a corporate broker and that the Defendants individually were employed with Keyes during dates pertinent to the allegations of the information filed herein.

It is alleged that on or about November 17, 1970, Gordon Higginbotham, a registered real estate salesman, was employed by the Defendant, Keyes National Investors, Inc., and was to be compensated by a forty percent (40 percent) share of commission received by KEYES of all real estate transactions for which he was the listing and/or selling salesman. Higginbotham, on November 17, 1970, sold

under contract to Kimco, Inc. an apartment complex known as Westover Village, located in Fort Worth, Texas for the purchase price of $3,500, 000.00. As a result of this sale, it is alleged that KEYES, as broker, received a total real estate commission of $80,000.00 and Higginbotham demanded his full share of the commission which, according to his employment contract, was $32,000.00. Of this amount, Higginbotham received $24,000.00 when the real estate transaction closed and it was alleged that he never received the balance of $8000.00 after having demanded such. It is thus alleged that the Defendants failed to account or deliver upon demand to Gordon Higginbotham his share of a real estate commission which had come into Defendant's hands and which was not their property or to which they were not in law or equity entitled, all in violation of 475.25(1)(c), Florida Statutes. In Count II, it is alleged that the Defendants received the full commission and that they deposited said monies into the firm's operating account and converted such to their own use or some other use for which it was entrusted, without the knowledge, consent, or authorization of Gordon Higginbotham. It is thus alleged that the Defendants are guilty of fraud, misrepresentation, dishonest dealing, trick, scheme, device or breach of trust in a business transaction in violation of 475.25(1)(e), Florida Statutes. The Plaintiff thus alleges that the Defendants, Edward Golodetz, Sanford B. Heims, Robert I. Krinzman and Keyes National Investors, Inc., broker's registration should probably be revoked or suspended if the allegations are proven.

The Defendants filed sworn answers to the information on March 19, 1975, denying the allegations as stated in Paragraph 4 of the information or that they had violated the licensing law in any manner as alleged. As an affirmative defense, the Defendants alleged further that the commissions received from the subject transaction were of a discounted amount and that the prorata share of the discounted commissions were offered to Higginhotham by Irving Rill, a director of Keyes and chairman of its executive committee, and that said prorata share of the commission was refused by Higginbotham.

FINDINGS OF FACT

Based upon my observation of the witnesses and their demeanor while testifying, I make the following:

1. Defendants, Robert I. Krinzman, Edward Golodetz, and Sanford B. Heims, are registered real estate brokers with the Florida Real Estate Commission and Defendant Keyes National Investors, Inc., is a registered corporate broker with the Commission. On November 17, 1970, Gordon R. Higginbotham, a registered real estate salesman was in the employ of the Defendant Keyes, and was to be compensated by a share of the commission received by Keyes from all real estate transactions for which he was the listing or selling salesman. Under the term of Higginbotham's employment agreement with Keyes, forty percent (40 percent) of the commissions collected by Keyes would go to Higginbotham as selling salesman. Evidence reveals that on or about November 17, 1970, Higginbotham sold under contract to Kimco, Inc. an apartment complex known as Westover Village for the purchase price of $3,500,000.00. Based on this transaction, Keyes, as broker, earned a real estate commission of $91,700.00. Of the earned commission, Keyes received $60,000.00 at closing from which Higginbotham received forty per cent (40 percent). The balance of the commission $31,700.00, was pursuant to an agreement, deferred for five years and was to be paid on or about November, 1975.

   
   

2. During the course of the hearing, evidence was introduced that at a board meeting of Keyes on September 11, 1972, Keyes hired the Faril Corporation to handle the fiscal management of Defendant Keyes corporation. Irving R. Rill,

   the sole stockholder and president of the Faril Corporation, who was also a director of Keyes and was subsequently elected to the position of chairman of its executive committee and acting president, handled all fiscal matters relative to Keyes Corporation. Evidence revealed further that at a director's meeting of Keyes held on or about September 24, 1973, the board of directors approved a proposal to arrange for the discounting of the balance of the commission due from the sale of Westover Village. Shortly thereafter, the

   $31,700.00 commission balance was discounted and the Defendant, Keyes, received

   $20,000.00 as full payment.

   
   

3. Irving Rill testified that, with the $20,000.00 in the bank, he offered to pay Higginbotham $8,000.00 as his portion of the deferred but discounted commission. This offer was relayed to Royal Jonas, Higginbotham's attorney, who rejected it and demanded payment of $12,680.00, which was forty percent (40 percent) of $31,700.00, or the full commission Rill testified further that, by the terms of the agreement, the commission was not due until November 17, 1975, so as a compromise he gave Higginbotham a corporate note for the full commission payable in 1975, when due. Be further testified that he drafted a note and directed Edward Golodetz, as executive vice president, to sign it on behalf of the corporation. Evidence revealed that all negotiations for payment of the discounted commission to Higginbotham were conducted by Rill for Defendant Keyes with Jonas, Higginbotham's attorney. There was no testimony introduced during the course of the hearing that Defendant Goldetz, Heims or Krinzman had any involvement in or control of business negotiations. Respecting Defendant Krinzman's conduct as president of Keyes, evidence reveals that on March 7, 1973, a Mr. Zeeman became president of Keyes and Defendant Krinzman resigned.

   Of course, this was some seven months prior to the actions here complained of. Rill testified that Higginbotham, through Attorney Jonas, rejected both the

   $8,000.00 discounted commission and the corporate note for $12,680.00 and demanded, in lieu thereof, the immediate payment of $12,680.00, which testimony remains uncontradicted on the record. Defendants Golodetz and Heims testified that they acted at all times under the direction of financial consultant Irving Rill relative to all fiscal matters pertaining to Keyes. There was no evidence introduced to indicate that either Defendants Krinzman, Golodetz, or Rill had any control over the fiscal policy of the corporation or control of its finances. The Defendants further testified that there was never any intent on their part to deny Higginbotham his share of commissions due from the sale of the Westover Village apartment complex. Nor was there any evidence which would indicate that the expenditure of the $20,000.00 which was received from the Westover Village commissions were used for any purposes other than for corporate purposes.

   
   

4. Chapter 475, Florida Statutes (the real estate licensing law), requires a real estate dealer to be open, honest and establish a fair relationship with his client such as is normally expected of a businessman of sound integrity. Where there is no concealment or no misleading statements there is no conduct on the part of a personal charge sufficient to substantiate a violation of the statute. (See, for example, Rivard v. FREC, 212 So.2nd, 672, 674 and in Brod v. Jernigan, 188 So.2nd 275, a case involving a charge of fraud and dishonest dealings. The court there said that "scienter is made a necessary element of the violation". In this case there is no proof of any participation by the named Defendants of fraud, conversion or misdeed.

   
   

5. Based on the evidence, I conclude that Irving R. Rill controlled the Defendant Keyes Corporation in his capacity as the acting president, the chairman of the executive committee and as its management and fiscal consultant; that Defendant Keyes offered Higginbotham $8,000.00 as the then due commission

   or, in the alternative, a corporate note for $12,680.00 payable when the full commission would have been due; that Higginbotham rejected both the payment and the corporate note; that the $20,000.00 commission received by Defendant Keyes was used for corporate purposes; that there was no evidence to show or otherwise infer an intent to defraud Higginbotham; that neither Defendant Krinzman, Golodetz or Heims, were the corporate treasurers nor did they control corporate funds or had any control either directly or indirectly with the negotiations with Higginbotham. It is therefore concluded that neither Defendants Robert I. Krinzman, Edward Golodetz, Sanford B. Heims or Keyes National Investors, Inc., are guilty of the charges as alleged.

   
   

   CONCLUSIONS OF LAW

   
   

   Based on the above findings and conclusions, I hereby make the following:

   
   

6. The parties were noticed pursuant to the notice provisions of Chapter

   120 and 475, Florida Statutes.

   
   

7. The authority of the Commission is derived from Chapter 475, Florida Statutes.

   
   

8. Defendants Edward Golodetz, Sanford Heims, and Robert I. Krinzman are real estate brokers and Defendant, Keyes National Investors, Inc., is a registered real estate corporate broker.

   
   

9. Defendants Krinzman, Golodetz, Heims and Keyes National Investors, Inc., have not failed to account and/or deliver funds to the parties entitled thereto, nor are they guilty of fraud, misrepresentation, dishonest dealing, trick, scheme or device or breach of trust in a business transaction in any manner as alleged in the information filed herein on January 21, 1975.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is hereby recommended:

1. That the information filed herein be dismissed in its entirety.

DONE and ENTERED this 4th day of March, 1977, in Tallahassee, Florida.

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

(904) 488-9675

COPIES FURNISHED:

Edward C. Teitig, Esquire Richard H. Olsen, Esquire Manuel E. Oliver, Esquire

Docket for Case No: 75-001117

Orders for Case No: 75-001117