Respondents. )
Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, K. N. Ayers, held a public hearing in the above- styled case on 17 May 1982 at Miami, Florida.
For Petitioner: Harold M. Braxton, Esquire
For Respondent: David M. Rogero, Esquire
By Administrative Complaint dated 15 September 1981, the Department of Professional Regulation, Board of Real Estate, Petitioner, seeks to revoke, suspend or otherwise discipline the real estate broker's license of J. Ladd Howell and The Howell Companies, Inc., Respondents. As grounds therefor it is alleged that Respondents were employed as agents of a CPA firm to locate a building for the firm to buy, and while so engaged, found a suitable building which Respondents purchased in their own name in derogation of their agency relationship and in violation of Section 475.25(1)(b), Florida Statutes, 1979.
At the hearing Petitioner called three witnesses, including Respondent; Respondent called two witnesses, including Respondent; and nine exhibits, which included three depositions submitted by Petitioner, were admitted into evidence. Proposed findings submitted by Respondent and not included below were not deemed material to the results reached.
At all times relevant hereto J. Ladd Howell, Respondent, was registered with the Board of Real Estate as a broker and the The Howell Companies, Inc., was registered as corporate real estate broker.
Respondent was leasing agent at the Texaco Building where he had his offices and the offices of The Howell Companies, Inc., when space was leased to the firm of Blackman, Kallick and Company, a CPA firm, in 1977.
During the latter part of 1979 Arnold G. Simon And Harvey Muskat, two of the principals in the Blackman firm, mentioned to Respondent that they were interested in buying a building to move their firm into and asked him to keep a lookout for a building for them. They made this request to Respondent as a real estate broker. These conversations were sporadic and usually occurred at chance meetings in the corridors of the Texaco Building or the restaurant in that building. No written agreement was entered into and no specific requirements as to size or price were established by Simon or Muskat. No discussion regarding any fee for such services as Respondent would perform was ever held.
During the latter part of 1979 Respondent, who also invested in real property, learned that a two-story building at 136 Madeira, Coral Gables, containing approximately 5,000 square feet was on the market, and on October 5, 1979, submitted an offer to purchase this property for $175,000. This offer was rejected. Intermediate offers were made; Respondent learned others were also interested in this property; and, on December 14, 1979, Respondent made an offer to purchase this property for $213,000. This offer was accepted by the seller in February 1980 and the sale closed in June 1980.
Respondent testified that he advised Simon and Muskat of buildings for sale located at 811 Ponce De Leon Boulevard, 264 Alhambra Circle, and 116 Giralda (all in Coral Gables) but none of these buildings was acceptable. In their depositions Simon and Muskat did not recall being referred to the buildings by Respondent.
During his negotiations for the building at 136 Madeira, Respondent told Simon and Muskat he was negotiating for a building they might be interested in but would neither show them the building nor discuss the terms being negotiated.
The building at 136 Madeira contained stores on the ground floor and three apartments on the second floor. Respondent obtained plans of the building and had plans drawn to change the upper floor to office space. Respondent left a copy of these plans at the office of Simon and Muskat, but the latter, in their depositions, do not recall such plans.
In late January Respondent was advised that his offer had been accepted by the sellers and the acceptance was in the mail. He then told Simon and Muskat that the negotiations had been completed and he could show them the building. Simon and Muskat were shown the building in February 1980 and indicated interest in acquiring the building with Respondent. At the Texaco Building they occupied about 1,200 square feet of office space but they needed additional space for expansion.
After receiving the accepted contract from the sellers, Respondent called Simon and Muskat to set up an appointment to meet with them to discuss their purchase of part of the building at 136 Madeira. At the meeting Respondent advised Simon and Musket that they could purchase one-half of the building for $161,500 consisting of $80,000 cash and half of the $163,000 mortgage. No discussions occurred regarding the renovations the building required to convert the second floor to offices and refurbish the ground floor before Respondent showed Simon and Muskat his contract to purchase the building
for $213,000. At this time they became quite incensed with the idea that Respondent was being grossly unethical and unfair in attempting to make such a profit on the transaction and terminated the meeting. At a subsequent meeting between Respondent and Muskat, the latter inquired if Respondent had reconsidered his offer to sell them part of the building and, when Respondent replied that he thought $161,500 for half the building was a good deal for the CPA firm, Muskat denounced Respondent as being unethical and asked him to leave the office. Simon and Muskat subsequently filed a complaint with Petitioner and filed a civil suit against Respondent.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings.
The issue presented in this case is whether an agency relationship was created or existed between Respondent and Blackman, Kallick and Company and, if so, whether Respondent breached his duty as an agent.
As succinctly stated in 2 Fla. Jur. Section 69 Agency and Employment:
No principal of the law of agency
is more firmly established than that which forbids one who undertakes to act as agent for another from acting for himself in relation to the subject matter of the agency, or placing him- self in a position adverse to or in conflict with the interests of his principal. The two positions impose different obligations, and their union would at once raise a conflict between
interest and duty, and, in the majority of cases, duty would suffer in the struggle. An agent cannot acquire any private interest of his own in opposi- tion to that of his principal. Nor can he act for another whose interest is adverse to that of his principal. He is not allowed to assume any position inconsistent with his duty to be loyal to the principal.
The law does not permit an agent, during the continuation of the agency, to put himself in a position adverse to that of his principal where his individual interest will conflict with that of the principal, or to acquire
an interest, either directly or indirectly, in the subject matter of the agency
adverse to that of his principal without the assent of his principal.
(Footnotes omitted.)
Accordingly, if a principal and agent relationship was established between Respondents and Blackman, Kallick and Company, Respondent breached the duty owed by an agent to his principal as alleged.
The establishment of the agency relationship may be accomplished in several ways and the fact that neither written agreement existed nor compensation was provided for is not conclusive of the lack of agency relationship. As stated in 2 Fla.Jur 2d Section 6 Agency and Employment:
The creation of an agency relationship
as between principal and agent ordinarily arises from consent or agreement of the parties to the existence of such relations; an agency is created--authority is actually conferred--very much as any other contract is made, by an agreement between the principal and agent that such a relation shall exist. The minds of the parties
must meet in establishing the agency. The principal must intend that the agent shall act for him, and the agent must intend to accept the authority and act on it, and the intention of the parties must find expression either in words
or conduct between them. But it is not necessary that there be an expressed contract of appointment; agency may be inferred from the related facts of
the case, or implied from a prior course of dealings.
The relationship of principal and agent may also arise by operation of law.
Moreover, in some situations, agency may be created by necessity, that is, by an emergency arising from a par- ticular situation making it necessary or proper for the agent to act without receiving the sanction or authority
of the principal in the matter, such as, for example, in the case of the purchase of necessaries by a wife.
With respect to third persons, it may also arise from facts which lead others to believe that such a relation has been created, as by estoppel.
Even where agency is created by actual agreement no particular form is neces- sary, for most purposes an agent may be appointed by parol, even in case of
an agency to sell or convey real estate. Where a deputy sheriff without a process
or court order obtains a key to rented property and enters at the request of the landlord, and proceeds to help the landlord remove the tenant's property, an express agency of a gratuitous nature is created between the landlord and the deputy sheriff. (Citations omitted.)
The complaining witnesses aver that an agency relationship existed. However, if the agency relationship was truly established the agent would have some authority to bind his principal. Here the putative principal gave no negotiating instructions to Respondents, established no parameters in which Respondents could commit Blackman, Kallick and Company, made no offer to pay a fee for services rendered, and had not the merest suspicion that Respondents could commit them to purchase any property they did not desire to purchase. Respondents had never acted as agent for Blackman, Kallick and Company before, and there was no evidence of apparent authority to act for Blackman, Kallick and Company in this case. In short Simon and Muskat had no intention of giving Respondents authority to bind them in any way to a real estate transaction but concluded that by simply asking Respondents to keep lookout for property they might be interested in buying they thereby became entitled to Respondent giving them first right of refusal for any property he might discover and want to buy or sell to someone else. An agency relationship includes rights and obligations of both the principal and the agent. Since there was no obligation or duty on the principal, there can be none on the agent and no agency relationship was created.
Respondent exercised poor judgment in giving the impression that he was negotiating for the property at 136 Madeira on behalf of Simon and Muskat when, in fact, he was negotiating the purchase of this property in his own name with the intent of selling them an interest in this property or in his contract to purchase the property.
From the foregoing it is concluded that no principal-agency relationship was established between Respondents and Simon and Muskat and Respondents breached no duty owed to Simon and Muskat or to Blackman, Kallick and Company. It is, therefore,
RECOMMENDED that Respondents be found not guilty of all charges and these proceedings be dismissed.
ENTERED this 24 day of, 1982, at Tallahassee, Florida.
