STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA REAL ESTATE COMMISSION, )

)

Petitioner, )

)

vs. ) CASE NO. 77-0276

)

HAROLD A. HECKLINGER, )

)

Respondent. )

)

RECOMMENDED ORDER

This matter came on for hearing in Sarasota, Florida, before the Division of Administrative Hearings by its duly designated Hearing Officer, Robert T. Benton, II, on May 23, 1977. Counsel represented the parties at the hearing, as follows:

For Petitioner: Mr. Bruce I. Kamelhair, Esquire 2699 Lee Road

Winter Park, Florida 32789

For Respondent: Mr. Daniel A. Carlton, Esquire

Post Office Box 3979 Sarasota, Florida 33578

By administrative complaint filed January 17, 1977, petitioner accused respondent, in count one, of "obtain[ing] his registration by means of fraud, misrepresentation and concealment, in violation of Subsection 475.25(2), Florida Statutes." Petitioner abandoned the second and final count of the administrative complaint at the hearing.

FINDINGS OF FACT

1. Since 1970 respondent Harold A. Hecklinger has been a stockholder in Farrell-Cheek Steel Company, a Delaware corporation with headquarters in Ohio. Respondent is on the board of directors of Farrell-Cheek Steel Company, is secretary of the corporation, and is the company's designated agent for service of process in Florida. Until 1973 or 1974, respondent was the only officer of Farrell-Cheek Steel Company in Florida. He is the general manager of Florida Diversified Properties, a division of Farrell-Cheek Steel Company. In this capacity, he manages Gulf Gate Mall, a shopping center in Sarasota, Florida, owned by Farrell-Cheek Steel Company. Respondent hires and supervises the mall employees, handles the mall's bills, collects rent from storekeepers and negotiates leases with storekeepers for space in the Gulf Gate Mall. He negotiated one such lease with Robert E. Peters, doing business as Koin Kleen Laundry; and another with Freedom Enterprise, Inc., doing business as Mr. Freedom-Boutique.

   
   

2. On June 14, 1973, respondent submitted an application for registration as a real estate salesman to petitioner. The application consisted of a form

   supplied by petitioner and filled out by respondent. A certified copy came in evidence as petitioner's exhibit No. 1. Question No. 12(a) has been omitted from petitioner's exhibit No. 1, but presumably asks the applicant to list business addresses and employment for the five years next preceding the filing of the application. Respondent's answer to question No. 12(a) does appear on petitioner's exhibit No. 1 and reads, in part, as follows:

   
   

   Sarasota Post Office Box 2440 Florida 1972-73 General Mgr. Florida Diversified Properties

   
   

   Question No. 18(a), which respondent answered with the word "No," reads, as follows:

   
   

   Have you, in this state, operated, attempted to operate, or held yourself out as being entitled to operate, as a real estate broker, within one year next prior to the filing of this application?

   
   

   Question No. 18(b), which respondent answered with the word "No," reads, as follows:

   
   

   Have you, in this state, operated, attempted to operate, or held yourself out as being

   entitled to operate, as a real estate salesman, within one year next prior to the filing of this application without then being the holder of a valid current registration certificate authorizing you to do so?

   
   

   Respondent has an excellent reputation for truth and veracity. In filling out his application form, he intended to answer each question truthfully.

   
   

   CONCLUSIONS OF LAW

   
   

3. Petitioner's theory of this case is that respondent, by leasing space to storekeepers in the course of performing his job as manager of the Gulf Gate Mall, "operated . . . as a real estate broker [or] . . . salesman", within the meaning of question No. 18; and that he intentionally falsified his answer(s) to question No. 18 in order to obtain a real estate salesman's license which, incidentally, is a non-active salesman's license.

   
   

4. Notwithstanding the comprehensive scope of Section 475.01(2), Florida Statutes (1975), respondent did not and does not operate as a real estate salesman or broker in Florida. In leasing space at Gulf Gate Mall, he acts and has acted as "the employee of a corporate owner of property." Florida Real Estate Commission v. McGregor, 336 So.2d 1156,1159 (Fla. 1976). The Supreme Court of Florida recently explained this distinction in these words:

   
   

   It is necessary ordinarily to regu-

   late a real estate broker or salesman be- cause misrepresentations of misconduct on his part cannot necessarily be visited upon the person or entity he represents. A mem- ber of the public who is injured by the acts or representations of a broker or salesman does not necessarily have recourse to the

   principal whom the broker or salesman repre- sents. See, e.g., Shelton v. Florida Real Estate Comm'n, 120 So 2d 191, 193 (2d D.C.

   1. Fla. 1960). But when one deals with the employee of a corporate owner of property the conduct of such employee is the respon- sibility of the employer under the doctrine of respondent superior. While sanctions which can be imposed by the Florida Real Estate Commission upon an errant broker or salesman obviously are necessary to protect the public because of his peculiar legal status and duties, no analogous argument can be maintained successfully where an injured third party has direct recourse to the

      owner for the actions of the employee.

      Florida Real Estate Com'n. v. McGregor, 336 So. 2d at 1159.

      
      

      Any "injured third party" in the present case - and none has been alleged to exist - would have direct recourse to Farrell-Cheek Steel Company.

      
      

5. Expressly excepted from the definitions of real estate salesman and real estate broker is "one officer of every corporation engaged in the sale of its own properties who shall be its president unless otherwise provided in its charter or bylaws." Section 475.01(2), Florida Statutes (1975). In holding that the corporate owner of real property could sell its property through employees who were not officers of the corporation, the Supreme Court commented on the corporate officer's exemption:

   
   

   This is purely arbitrary from the standpoint of any standard of character or fitness applicable to . . . corporate officers. There is no rational basis for a presumption that a president or other officer designated by the corporation has

   some unique quality which better suits him or her to deal with the public in trans- actions involving corporate real estate.

   It is apparent that the Legislature recog- nized that an individual has the constitutional right to deal with his own real property with- out the intervention of a licensed real estate broker or salesman and that the exceptions with respect to partnerships and corporations were inserted in the statute to place those business organizations on some sort of parity with the natural person who owns real estate.

   Florida Real Estate Com'n v. McGregor, 336 So 2d at 1159-1160.

   In the present case, respondent is an officer of Farrell-Cheek Steel Company. The evidence as to whether the bylaws of Farrell-Cheek Steel Company authorized respondent to manage the Gulf Gate Mall was unclear:

   
   

   RESPONDENT . . . At the time of the Board meeting they designated me to come down here and manage . . . this property.

   
   

   HEARING OFFICER: . . . Would that action have taken the form of a bylaw?

   
   

   RESPONDENT: In the form of what, sir?

   
   

   HEARING OFFICER: A bylaw of the corporation.

   
   

   RESPONDENT: Oh, a bylaw. Oh, yes. It's in our bylaws up there, in the minutes. I would have to ask them that, but I'm sure it's in our bylaws . . . (R53)

   
   

   Because of respondent's uncertainty, as reflected by this testimony, it has not been found as a fact that a bylaw of Farrell-Cheek Steel Company authorized him to lease space in the Gulf Gate Mall.

   
   

6. It is concluded as a matter of law, however, that petitioner had the burden to show that no bylaw of Farrell-Cheek Steel Company authorized respondent to lease space in the Gulf Gate Mall, and that petitioner failed to meet this burden. The "bylaw exception" is part of the definition of real estate salesman and is also part of the definition of real estate broker. Petitioner alleged that respondent acted as a real estate salesman and/or broker. The evidence revealed that respondent was a corporate officer who leased corporate property, and petitioner failed to prove that he was not authorized to do so by the corporate charter or bylaws. In any event, if, as McGregor holds, a corporation has a constitutional right to sell its property through its employees, a fortiori a corporation has a constitutional right to lease its property through an officer.

   
   

7. But the main difficulty with petitioner's theory is that the evidence was wholly devoid of any indication that respondent intended to defraud, misrepresent or conceal anything. Respondent did not conceal or misrepresent his occupation, but listed it in response to question No. 12. There was nothing remotely fraudulent about any of the answers respondent gave in response to the questions on the application form.

RECOMMENDATION

For the foregoing reasons, it is RECOMMENDED:

That the administrative complaint be dismissed.

DONE and ENTERED this 27th day of June, 1977, in Tallahassee, Florida.

ROBERT T. BENTON, II

Hearing Officer

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

COPIES FURNISHED:

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

Winter Park, Florida 32789

Mr. Daniel A. Carlton, Esquire Post Office Box 3979

Sarasota, Florida 33578

Docket for Case No: 77-000276

Orders for Case No: 77-000276