STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA REAL ESTATE COMMISSION, )

)

Petitioner, )

)

vs. ) CASE NO. 76-1709

)

KENNETH M. OLSON, JR., )

)

Respondent. )

)

RECOMMENDED ORDER

A hearing was held in the above styled cause pursuant to notice at 3500 First Avenue North, St. Petersburg, Florida, on January 24, 1977 before Stephen

1. Dean, assigned Hearing Officer of the Division of Administrative Hearings.

   
   

   This matter came on to be heard upon a 15 count Administrative Complaint alleging that Olson had failed to maintain monies which he received as a fudiciary in an escrow account in violation of Section 475.25(1)(i), F.S., that Olson had failed to properly account and pay to a registrant funds in the form of a commission in violation of Rule 21V-14.06, Florida Administrative Code, and therefore was in violation of Section 475.25(1)(d), F.S.; that Olson had failed to account for or deliver money in the form of a commission to a registrant in violation of Section 475.25(1)(c), F.S.; that Olson demanded or imposed a prerequisite to furnishing affidavit of satisfactory completion of apprenticeship and competency in violation of Rule 21V-2.25, Florida Administrative Code, and thereby violated Subsection 475.25(1)(a) and Subsection 475.25(1)(d), F.S.; and that virtue of all of the foregoing, Olson had demonstrated a course of conduct and practice which indicates that he is so incompetent, negligent, dishonest, and untrustful that money, property, transactions and rights of investors or those with whom he may sustain a confidential relationship may not be safely entrusted to him in violation of Subsection 475.25(3), F.S.

   
   

   ISSUE

   
   

   Whether Kenneth M. Olson, Jr., is guilty of the allegations alleged in the Administrative Complaint?

   
   

   APPEARANCES

   
   

   For Petitioner: Frederick Wilsen

   Florida Real Estate Commission 2699 Lee Road

   Winter Park, Florida 32789

   
   

   For Respondent: Seymour A. Gordon

   153 Central Avenue Post Office Box 265

   St. Petersburg, Florida 33731

   STATEMENT OF THE CASE

   
   

   Prior to the commencement of the hearing, the Respondent, Kenneth M. Olson, Jr., moved to quash or dismiss Counts 1, 11, 12, and 13. Said motion was denied; however, the Petitioner, Florida Real Estate Commission, dropped Count 14.

   
   

   FINDINGS OF FACT

   
   

   1. Kenneth M. Olson, Jr., is a registered real estate broker holding Certificate No. 0065634 issued by the Florida Real Estate Commission.

      
      

   2. Gary Ater, Pasquale DeLucia, John Ricker, Helen Pendleton, and Fred Snook were all real estate salesmen employed in the Fourth Street Office of Olson & Associates. On or about March 31, 1975, the aforesaid salesmen, to include the office manager, Fred Snook, left the employment of Kenneth M. Olson, Jr., without notice and became salesmen for Citrus Realty. Upon their leaving, only one full time real estate salesman was left in the Fourth Street Office. Kenneth M. Olson learned that the aforesaid real estate salesmen had left his employ when members of the public and other real estate salesmen and brokers called his other office advising that the phones at the Fourth Street Office were not being answered. Blodwen Clayton, a registered real estate salesman with Olson and who as a secretary-receptionist had organized the records and supplies for the Fourth Street Office, was sent to said office to determine what problems existed there. She determined that the aforementioned sales people were gone and the office closed and locked. Also office records, supplies, a cross listing directory which had just been purchased, and an electric typewriter were missing. Subsequent audit of the account of the Fourth Street Office indicated that certain payments had been made to Fred Snook which were inappropriate to include reimbursement for flowers sent clients and a party held in the month of February. A telephone bill for that office indicating a call from Havana, Cuba, had been billed to the telephone of the Fourth Street Office at a time when Fred Snook was manager and responsible for the office. As a result of the personnel loss, Olson chose to close the Fourth Street Office and dispose of the property. The events alleged in Counts 2 through 9 discussed in paragraphs 4 through 11, following, relate to events which occurred between Olson and the aforesaid sales personnel after they left Olson's employ.

      
      

   3. No evidence was presented by the Florida Real Estate Commission to substantiate its allegations contained in Count 1. The Petitioner argued that the admission by the Respondent in his Answer that the Commission paid to Joseph Boiros was paid by a check drawn on the Olson & Associates Real Estate operating account is sufficient to sustain the alleged violation that Olson did not hold Boiros' commission in a trust account and promptly account and pay the commission to Boiros.

      
      

   4. Gary Ater was a registered salesman employed by Olson who by virtue of negotiating and obtaining a contract for the sale of property between William and Eleanor Zeisler and Arthur and Simone Clinton earned a commission when this sale closed on or about April 10, 1975. Pursuant to the employment contract between Ater and Olson, the commission was due and payable twenty-four hours after closing period. On May 1, 1975, Gary Ater demanded payment by registered mail from Kenneth M. Olson, Jr. Ater received payment of the commission in December, 1975, after having obtained a judgment in Small Claims Court which was satisfied by Olson prior to being recorded.

   5. Pasquale DeLucia, a registered salesman employed by Olson, negotiated and obtained a deposit receipt contract for the purchase and sale of real property between Sherwood and Annie Clrk and Wayne and Theresa Costin on or about February 7, 1975. Upon the closing of said sale on or about March 31, 1975, DeLucia earned a commission due and payable within twenty-four hours under the employment contract between DeLucia and Olson. On or about May 1, 1975, DeLucia demanded payment from Olson by registered mail of said commission. DeLucia subsequently sued Olson in Small Claims Court and obtained a judgment which was satisfied by Olson prior to the judgment being recorded.

      
      

   6. On or about March 11, 1975, DeLucia negotiated and obtained a deposit receipt contract for the sale of property between Norman and Sally Hassan and Elsworth and Dora Crispin. Said transaction closed on or about June 30, 1975, whereupon DeLucia earned a commission. On or about June 23, 1975, DeLucia demanded payment of the commission. DeLucia subsequently sued Olson for the amount of commission due and received judgment in Small Claims Court which Olson paid prior to the recording of the judgment.

      
      

   7. Fred Snook was a registered real estate salesman and manager of Olson's office referred to as the "Fourth Street Office." In his capacity as a salesman, Snook obtained a listing for the sale of real property upon which David H. Gibson, a registered real estate salesman employed by Olson, negotiated a contract for sale and purchase between Hinsdale W. Woman's Clinic Profit Sharing Fund and Norman and Celia Savoy on or about July 16, 1973. This transaction closed on or about August 31, 1973, whereupon a real estate commission in the amount of $6,000.00 was paid at closing with an additional

      $12,000.00 in real estate commission being paid in monthly installments to Olson. From the $12,000.00, Snook was to be paid $45.00 per month until his commission was paid in full. Said payments were made until March, 1975, at which time Snook received no further payments.

      
      

   8. John J. Ricker, employed by Olson as a registered real estate salesman, obtained a listing on real property owned by Arthur and Simone Clinton. This property was subsequently sold by Gary A. Ater, who is also employed by Olson as a registered real estate salesman. By virtue of having obtained a listing, John

      J. Ricker was entitled to a commission upon closing of the transaction, which occurred on or about April 10, 1975. Said commission was not paid Ricker until September, 1975, when the amount of the commission was paid as settlement of of an action pending between Ricker and Olson.

      
      

   9. Helen D. Pendleton, who is employed as a registered real estate salesman by Olson, negotiated and obtained a deposit receipt contract for the purchase and sale of real property between Byron Salvin and John and Iva Blake. Said transaction closed on or about May 20, 1975, whereupon Pendleton earned a commission under her employment contract with Olson. Pendleton subsequently requested payment from Olson but was not paid. She thereafter instituted suit in Small Claims Court and obtained a judgment against Olson, which at the time of hearing had not been satisfied.

      
      

   10. Helen Pendleton also negotiated a real estate purchase agreement between Albert and Bonnie Older and Otto and Eleanor Rodeck. Said transaction closed on or about May 12, 1975, at which time the commission was earned by Pendleton pursuant to her employment agreement with Olson. Pendleton subsequently made demand for said commission. When she did not receive her commission, she instituted suit in Small Claims Court and obtained a judgment against Olson, which at the time of hearing had not bee satisfied.

   11. Further, Pendleton negotiated a deposit receipt contract for the purchase and sale of real property between Diane Hammond and Marjorie McCauly on or about March 8, 1975. This transaction closed on or about May 23, 1975, whereupon Pendleton earned a commission, which she did not receive after having made demand for payment on Olson. She sued and obtained judgment for this commission, said judgment not yet having been satisfied as of the date of hearing.

       
       

   12. On or about February 25, 1975, Helen D. Pendleton entered into an apprenticeship with Kenneth M. Olson, Jr. As a condition precedent to undertaking to be Pendleton's apprenticing broker, Olson required that Pendleton and he execute a noncompetition agreement.

       
       

   13. The Florida Real Estate Commission presented no evidence with regard to the allegations of Count 11. The Petitioner argued that the Respondent, Olson, had admitted the allegations contained in paragraphs 1, 2, 3, and 4 of Count 11 in his Answer, and that based upon those admissions Olson had violated the provisions of Rule 21V-14.06, Florida Administrative Code, and therefore was in violation of Section 475.25(1)(d), F.S.

       
       

   14. Donald A. Ehmig was employed as a registered real estate salesman by Olson. In that capacity Ehmig negotiated real estate transactions between Flannagan and Myers, Mendenhall Tsolaks and Caraway and Dickmen. These transactions were closed on January 22, January 15, and April 1, 1975, whereupon Ehmig earned a commission on each transaction pursuant to his employment agreement with Olson. Evidence was received that indicates that Olson, as co- signer of a note with Ehmig, had paid $1,172.36 of a deficiency judgment on December 5, 1974. See Exhibit 29, check to St. Pete Sports Car Center in the amount of $1,172.36 on the account of Olson & Associates. Ehmig candidly admitted that it was his intent that Olson, as co-signer, incur the financial loss upon his (Ehmig's) default of the note. The amount of monies owed Ehmig by Olson and the amount of monies owed Olson by Ehmig were approximately the same.

       
       

   15. No evidence was presented that Kenneth M. Olson, Jr., knew or had any reason to know that Allain Rimar had tendered an earnest money deposit in the amount of $500.00 on the purchase of certain real property negotiated through his saleswoman, Susan Lee Stuart. Stuart's testimony was that Jack Fulmer was the broker involved in the transaction and that to her knowledge, Olson had no knowledge of the earnest money deposit. Fulmer, who was originally charged in the Complaint, has died since issuance of the Complaint, and the charges against Fulmer and Susan Lee Stuart were dropped by the Florida Real Estate Commission.

       
       

       CONCLUSIONS OF LAW

       
       

   16. Regarding Counts 1 and 11, the issue is whether Olson was required to maintain the commissions of sales personnel in an escrow account at all times prior to payment. Under the provisions of Rule 12V-14.06, Florida Administrative Code, as it existed at the time the events alleged occurred, maintenance of commissions due sales personnel in an escrow account was required. However, just subsequent to the issuance of this Complaint, the aforesaid rule was amended to permit payment of sales commissions from a broker's operating account. Implicit in this change is the fact that commissions are no longer required to be kept in an escrow account until payment. The amended rule permits the conduct, formerly prescribed, which Olson allegedly violated. Therefore, the portion of the rule allegedly violated by Olson was repealed.

   17. The general rule regarding repeal of statutes and rules is that where a statute or rule is repealed without a reenactment of the repealed law in substantially the same terms, and there is no savings clause or general statue limiting the effect of the repeal, the repealed statute or rule is considered as if it had never existed. 73 Am. Jur. 2d, Statutes, s. 384. The unqualified repeal of a statute conferring civil rights or powers operates to deprive the citizen of all such rights or powers which are at the time of the repeal inchoate, incomplete, unperfected, or which have not vested. However, a construction is to be avoided that gives retrospective operation to a repealing statute or rule which results in the impairment of contracts. 73 Am. Jur. 2d, Statutes, s. 385. It is firmly established that there is no vested right in any particular mode of procedure or remedy, and that where a statute or rule giving a remedy is repealed, the remedy is abrogated. 73 Am. Jur. 2d, Statutes, s.

388. Similarly, the common law rule is that where a statute or rule is repealed unconditionally without a savings clause in favor of any existing pending suit, all proceedings thereunder are terminated. This is true of a law relating to procedure or of a law conferring jurisdiction where the right to proceed further is taken away. 73 Am. Jur. 2d, Statutes, s. 389. Likewise, at a common law, the repeal of statutes defining crimes and providing for their punishment nullified all proceedings pending or subsequently instituted pursuant to the repealed provision. The extinction of the statute was understood to be an indication that the sovereign power no longer desired the former crime to be punished or regarded as criminal. 72 Am. Jur. 2d, Statutes, s. 420.

1. In a recent case, the First District Court considered a Petition for Writ of Certiorari to review the final order of a Hearing Officer and a rule challenge pursuant to Section 120.56, Florida Statutes. During the pendency of the administrative proceeding the legislature amended the statute upon which the rule being challenged was based, whereupon the agency adopted a new emergency rule. The agency challenged the order of the Hearing Officer entered after the amendment interpreting the old rule and statute asserting that the amendment rendered the challenge moot. The Court stated as follows:

   
   

   "Normally while the law as it existed at the time

   of review will be applied to a pending case, in this proceeding, begun under the old law and rules adopted pursuant to it, we consider that respondents are entitled to construction of such law and rules. Their rights under contracts with the petitioner which were in existence during the life of the former statute and rule may be affected by the construction of that statute and the rules adopted pursuant to it." State Dept. of Transp. v. Pan Am. Const. Co., 338 So.2d 1291 at page 1294.

   
   

2. While the case cited above deals with a rule challenge, it clearly indicates that the Court is adhering to the general principles stated above and applying the exception to the rule that those constructions are to be avoided that give retrospective operation to a repealed statute or rule which results in the impairment of contracts. Clearly, there is no contractual interest between the parties involved in the instant case.

   
   

3. The amendment of rule 21V-14.06 indicated that the Florida Real Estate Commission, upon due consideration of the existing requirements, had found the old requirement unnecessary to the protection of the public in registrants under the act. Therefore, as the sovereign power, the Florida Real Estate Commission amended Rule 21V-14.06 without any savings clause and indicated its intent that

   the formerly prescribed conduct was no longer to be punished or regarded as contrary to the best interest of the public. All proceedings pending or subsequently instituted pursuant to the repealed provision should be considered a nullity.

   
   

4. Regarding Count 10, it is clear that prior to undertaking to be Pendleton's apprenticing broker, Olson and Pendleton entered into a non- competition agreement. However, this was not technically a prerequisite to execution of an affidavit of successful completion but rather a condition precedent to Olson undertaking the responsibilities of working with Pendleton. The Hearing Officer is unaware of any stated obligation upon a broker to serve as an apprenticing broker. From a consideration of the requirements of Rule 21V-2.24, an apprenticing broker's obligations are substantial. It would seem that a broker could refuse to so serve without violating the statute or rule.

   Likewise, Pendleton, as opposed to entering into the agreement, could have asked another broker to assist her. While clearly it would be a violation of Rule

   21V-2.25 for an apprenticing broker to require such an agreement after the apprenticeship and prior to affirming the individual's satisfactory completion, whether the rule was intended to cover the instant case is less certain.

   Considering the factors above, the Hearing Officer concludes that Olson did not violate the provisions of Rule 21V-2.25 on the basis that penal provisions of the statutes and rules should be construed narrowly.

   
   

5. Regarding Count 12, both the current and former Rule 21V-14.06 permitted lawful set offs. The evidence indicated that Ehmig owed Olson

   $1,172.36 as a result of Ehmig's default on the note Olson had cosigned. Therefore, Olson deducting funds up to $1,172.36 would have been appropriate. Olson had a valid defense to the allegations against him as charged in Count 12.

   
   

6. Regarding Count 13, the evidence was clear that Olson did not know or have any reason to know that Allain Rimar had made an earnest money deposit to Stuart, who passed it on to Fulmer. In the absence of specific knowledge that the money was received, the allegations are not proven.

   
   

7. Regarding the allegations of the remaining Counts, it is clear that Olson did not pay the commissions to the sales personnel of the Fourth Street Office who left his employ. While under the statute Olson clearly had the obligation to pay the salesmen their commissions, very little good can be said about their treatment of Olson. There was a very apparent agreement reached by these employees to lave Olson's employ prior to March 31, 1975, lead by Fred Snook, Olson's office manager. The nature of their conduct in leaving without notice to work for a competitor tends to strengthen the contention of Olson and bolster the testimony of Clayton that the office records were incomplete and certain office supplies were missing. Whatever goodwill may have existed between these employees and Olson was surely destroyed by their duplicity. The illwill generated by the manner in which these employees left appears to have been the primary basis for the delay in payment. While this does not absolve Olson of his responsibility in violating the statute, it does give one insight into Olson's reasons for withholding payment. The animus involved was isolated to the specific group of employees involved at the Fourth Street Office. In consideration of the fact that Olson's conduct was primarily in reference to this group and no evidence received indicating any other occurrences of this type, there is no basis for a finding Olson in violation of Section 475.25(3), F.S.

   
   

8. While in other circumstances the intentional withholding of commissions would be reprehensible conduct, the complaining salesmen in this

case precipitated the treatment they received by their own actions. To severely penalize Olson for his violation of the rules at this point would be unjust and give the appearance of approving the conduct of the sales personnel.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law the Hearing Officer would recommend that the Florida Real Estate Commission order Kenneth M. Olson, Jr., be directed to pay the judgment(s) obtained by Helen Pendleton, or face suspension for 30 days, and further that Olson receive a letter of official reprimand.

DONE AND ORDERED this 16th day of March, 1977, in Tallahassee, Florida.

Stephen F. Dean Hearing Officer

Division of Administrative Hearings

530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675

COPIES FURNISHED:

Frederick H. Wilsen, Esquire Florida Real Estate Commission 2699 Lee Road

Winter Park, Florida 32789

Seymour A. Gordon, Esquire

153 Central Avenue Post Office Box 265

St. Petersburg, Florida 33731

=================================================================

AGENCY FINAL ORDER

=================================================================

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA REAL ESTATE COMMISSION,

An Agency of the State of Florida,

PROGRESS DOCKET

vs.

Petitioner, NO. 2715

PINELLAS COUNTY

CASE NO. 76-1709

KENNETH M. OLSON, JR.

Respondent.

/

FINAL ORDER

At a regular meeting of the Florida Real Estate Commission held at its Executive Headquarters in Winter Park, Florida, on May 18, 1977,

PRESENT: John R. Wood, Chairman

Maggie S. Lassetter, Vice Chairman Levie D. Smith, Jr., Member

APPEARANCES: Frederick H. Wilsen, Esquire

Attorney for Plaintiff Seymour A. Gordon, Esquire Attorney for Defendant

This matter came on for Final Order upon the Hearing Officer's Recommended Order and the Plaintiff's Exceptions thereto, and upon consideration thereof, together with a review of the complete record and oral arguments of the attorney for the Plaintiff and the attorney for the Defendant, and the Commission being fully advised in the premises finds:

1.

That the Defendant, Kenneth M. Olson, Jr., is a real estate broker registered with the Commission c/o Olson & Associates Real Estate Inc., 12601 Gulf Boulevard, Treasure Island, Florida 33740.

2.

That the Plaintiff's Exceptions to the Hearing Officer's Recommended Order are well taken and should be accepted in part.

3.

IT IS THEREUPON ORDERED that:

1. The Hearing Officer's Findings of Fact and Conclusions of Law be, and the same are hereby, adopted by the Commission, but the Commission rejects the mitigating reasons for the intentional withholding of the real estate salesmens commissions;

   
   

2. That the Hearing Officer's Recommended Order to direct Kenneth M. Olson, Jr., to pay the judgment(s) obtained by Helen Pendleton, or face suspension for thirty (30) days, and further that Defendant Kenneth M. Olson, Jr. be issued a letter of official reprimand, is rejected.

4.

IT IS FURTHER ORDERED that the Defendant, Kenneth M. Olson, Jr., be, and he is hereby, found guilty of violating Subsection 475.25(1)(c), Florida Statutes, as charged in the Administrative Complaint in Counts Two through Nine thereof, and for said violations, the registration of Defendant Kenneth M. Olson, Jr. is hereby suspended for a period of ninety (90) days. However, if Defendant Kenneth M. Olson, Jr. shall satisfy said judgment(s) obtained by Helen

Pendleton, then the last forty-five (45) days of said period of suspension shall be suspended.

5.

IT IS FURTHER ORDERED that on or before the effective date of this Final Order, Defendant Kenneth M. Olson, Jr. shall surrender his registration certificate to the Commission by return mail.

May 20, 1977

Docket for Case No: 76-001709

Orders for Case No: 76-001709