STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL )

REGULATION, BOARD OF REAL )

ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 81-3270

)

JAMES R. SIEBERT, )

)

Respondent. )

)

RECOMMENDED ORDER

A hearing was held in the above-captioned matter, after due notice, at Ocala, Florida, on April 9, 1982, before Thomas C. Oldham, Hearing Officer.

APPEARANCES

For Petitioner: Salvatore Carpino, Esquire

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

For Respondent: Harvey R. Klein, Esquire

Klein & Klein

333 North West 3rd Avenue Ocala, Florida 32670

ISSUE PRESENTED

Whether Respondent's license as a real estate broker should be suspended or revoked, or the licensee otherwise disciplined, for alleged violation of Chapter 475, Florida Statutes, as set forth in Administrative Complaint, dated December 4, 1981.

This proceeding involves allegations by the Florida Board of Real Estate (now Florida Real Estate Commission) that Respondent, James R. Siebert, violated Subsection 475.25(1)(h) Florida Statutes, by sharing a commission with a person not properly licensed under the real estate law, and that he employed a person as a salesman who is not the holder of a valid license, in violation of Subsection 475.42(1)(c) , Florida Statutes, and therefore in violation of Subsection 475.25(1)(a), Florida Statutes.

The incident which prompted the Administrative Complaint involved an auction sale of a restaurant in Brooksville, Florida which was conducted by an auctioneer who did not have a license to practice real estate in Florida.

Respondent requested an administrative hearing and filed an answer to the Administrative Complaint admitting the occurrence of the auction, but denying that it involved the sale of real estate.

FINDINGS OF FACT

1. Respondent, James L. Siebert, is a licensed real estate broker at Orange Lake, Florida, and was so licensed at all times relevant in this proceeding. (Stipulation)

   
   

2. On several occasions prior to February 21, 1981, Respondent had gratuitously assisted Albert W. (Billy) Mitchell, an auctioneer, in conducting auctions by serving as a "ring man" and clerk. A "ring man" normally is one of several such individuals at an auction who assists the auctioneer by encouraging bidding and identifying bidders. Mitchell is not licensed under real estate laws of Florida, but operates under a local occupation license. None of the prior auctions in which Respondent assisted Mitchell involved the sale of real estate. (Testimony of Respondent, Mitchell)

   
   

3. On January 28, 1981, Mitchell entered into an "auction sale contract" with Welberta Pruitt whereby Mitchell agreed to sell at auction to the highest and best bidder:

   
   

   . . . the following described business and personal property owned by the Party of the First Part:

   
   

   Pruitts Golden Wagon Steak House Restaurant and Contents on attached inventory list and located 1702 Howell Avenue, Brooksville, in Hernando County, State of Florida.

   
   

   The terms of this sale shall be 10 percent of the amount of the purchase price to be paid on day of sale and the balance to be paid as follows: On delivery of title - There is a mortgage on the business of $67,838.20 with interest at 8 3/4 percent on the unpaid balance.

   
   

   The attachment to the contract listed various items of food supplies and restaurant furniture and equipment, plus decorative items of personal property. Pruitt and her husband had purchased the real property on which the restaurant building was located under an agreement for deed in 1979 which provided that the Pruitts would make the payments on a mortgage of about $67,000 from the sellers to the First Federal Savings and Loan Association of Citrus County and, when such mortgage was paid in full, the sellers would convey title to the property by warranty deed. The contract reflected that the total purchase price of the property was $75,000, and that a down payment had been made in the sum of

   $7,000. Mrs. Pruitt owned furniture, fixtures and equipment which she transported from Tennessee to operate a restaurant on the premises. (Testimony of W. Pruit Kelly, Mitchell, Johnston, Respondent's Exhibits 1,2)

   
   

4. It was the understanding of the parties to the auction agreement that only the personal property in and around the restaurant building would be sold to the highest bidder, and it was anticipated that the successful bidder would take up the mortgage payments on the real property. The equity which the Pruitts had acquired by prior mortgage payments was to be "given" to whoever purchased the "business" at the auction. Accordingly, on February 20, 1981, the

   day preceding the auction, Mrs. Pruitt issued a "notice" that she would sell her "entire Restaurant, business, furnishings, equipment, and Inventory at Public Auction". The notice further stated that she would give her equity in the real estate to the purchaser on which there was an existing mortgage of $67,821.36 "that you may assume". The noticewas placed on the door of the restaurant. In addition, Mitchell issued a brochure advertising the auction wherein it was stated that the "entire business, furnishings, equipment, and stock" would he sold at absolute auction and that the purchaser would have the "privilege of assuming the payments on the existing mortgage." Mitchell had Respondent's name placed at the bottom of the brochure without Respondent's knowledge because he thought it would be a good advertisement for him. (Testimony of Mitchell, W. Pruitt, Petitioner's Exhibit 3, Respondent's Exhibit 3)

   
   

5. Mitchell asked Respondent to assist at the Pruitt

   auction and told him that since Mrs. Pruitt and her attorney were having a disagreement, it might be necessary for Respondent to write the contract resulting from the auction. No fee for Respondent's services was discussed prior to the auction. (Testimony of Mitchell, Respondent)

   
   

6. On February 21, 1981, the auction was conducted at the restaurant in Brooksville, and Respondent was present to act as a "ring man". There were only about 3 individuals who entered bids at the auction. Prior to receiving bids, Mitchell announced that he was auctioning the contents of the business and that whoever bought the property would take over the payments on the mortgage. The successful bidder was Robert Shrader, who bid $9,600. He made a 20 percent down payment at the time in the amount of $1,920 which Mitchell retained as a commission on the sale. Mitchell had not described the real estate at the auction, but merely stated that he was auctioning the business and that Mrs. Pruitt would give the successful bidder her equity in the property. After accepting Schrader's bid, Mitchell gave the figures on the sale to Respondent who prepared a standard contract for sale and purchase of the real estate in the total amount of $77,421.36. The contract reflected a deposit of $1,920 to be held in escrow by Billy Mitchell and Associates, that the contract was subject to assumption of a mortgage of $67,821.36, and that there would be a balance of

   $7,680. Shrader and Mrs. Pruitt signed the agreement on February 21, 1981, which was witnessed by Mitchell and Respondent. Although no brokerage fee was listed, Respondent signed as broker on the contract. He testified at the hearing that he had done this out of habit. A real estate contract was prepared rather than merely a bill of sale of the personal property in order that the parties would have the figures they needed to close which they could take to the closing attorneys. After the auction, Mitchell gave Respondent $200 as a gift for his gasoline and other expenses on the Pruitt and prior auctions.

   Respondent testified, and Mitchell confirmed, that the latter insisted that he accept that amount as reimbursement for expenses. (Testimony of Mitchell, Respondent, Petitioner's Exhibit 1)

   
   

7. On April 6, 1981, Joseph P. Johnston, an attorney in Brooksville, closed the transaction by means of a bill of sale for the furnishings and equipment in Pruitts restaurant, and assignment of the Pruitt interest in the mortgaged real property. The closing statement reflected that a "broker's commission" in the amount of $1,920 was held by the "broker" to apply on commission, In actuality, the sum retained by Mitchell as a commission was based solely upon a percentage of the personal property sold at auction. (Testimony of Johnston, Mitchell, Petitioner's Exhibit 2)

   CONCLUSIONS OF LAW

   
   

8. Petitioner predicates its proposed disciplinary action under the following pertinent provisions of Chapter 475, Florida Statutes:

   
   

   1. Discipline. --

      1. The board . . . may suspend a license for a period not exceeding ten years, may revoke a license, may impose an administrative fine not to exceed

         $1,000 for each count or separate offense, or may issue a reprimand, if it finds that the licensee . . . has:

         1. Violated any provision of section 475.42 . .

   (h) Shared a commission with, or paid a fee or other compensation to, a person not properly licensed as a broker, broker-salesman, or salesman under the laws of this State, for the referral of real estate business, clients, prospects, or customers, or

   for any one or more of the services set forth in section 475.01(3).

   
   

9. As to its allegation of a violation of Section 475.42 which would trigger disciplinary action under Subsection 475.25(1)(a), Petitioner cites Subsection 475.42(1)(c) which provides pertinently as follows:

   
   

   1. Violations and Penalties. --

      1. Violations. --

   (c) No broker shall employ, or continue in employment, any person as a salesman who is not the holder of a valid and current license as a salesman . .

   
   

10. It is determined that none of the above grounds for discipline has been established in this proceeding. The evidence shows that, although Respondent drew up a real estate contract as a result of the auction, it was meant simply to memorialize the transaction and aid in a subsequent transfer of the personal property involved and an assignment o the Pruitt interest in the real property. Respondent was not engaged as a real estate broker by Mrs. Pruitt, or anyone else, nor was it contemplated that a sale of real property would take place at the auction. The manner in which the sale was conducted and the notice provisions clearly contemplated a sale of personal property only, with the option of the successful bidder to take over the Pruitt interest pursuant to an assignment. There was no real estate commission involved in the transaction, but only an auctioneer's commission which represented a percentage of the sale of the personal property only. The payment by the auctioneer of

    $200 to Respondent was for the purpose of reimbursing him for gasoline and other expenses incurred in assisting Mitchell in the Pruitt and prior auctions. In fact, a fair reading of the statutory provision in question leads to the

    conclusion that the "commission" referred to deals only with a real estate commission, and would arise in situations where a broker or other licensee shared or paid a portion of the commission or other fee to an unlicensed individual. In the instant case, payment was not made by Respondent, but to Respondent by the unlicensed individual, and therefore it is questionable whether the statute would apply in any event.

    
    

11. In view of the foregoing, and under the circumstances shown by the evidence, Respondent, if anyone, was "employed" by the auctioneer. It was not a situation where the Respondent had employed the auctioneer as an unlicensed salesman. Accordingly, it is further determined that no violation of subsection 475.42(1)(c), Florida Statutes was committed.

    
    

12. Although no grounds for disciplinary action have been found, it is presumed that Respondent will be cautious in the future as to engaging in transactions which well could give rise to allegations that he was performing real estate services with an unlicensed person. In short, he should studiously avoid writing real estate contracts in situations involving the sale of personal property at auctions.

RECOMMENDATION

That the Florida Real Estate Commission dismiss the charges against Respondent, James R. Siebert.

DONE and ENTERED this 3d day of June, 1982, in Tallahassee, Florida.

THOMAS C. OLDHAM

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 3d day of June, 1982

COPIES FURNISHED:

Salvatore Carpino, Esquire

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

Harvey R. Klein, Esquire Klein & Klein

333 North West 3rd Avenue Ocala, Florida 32670

Frederick H. Wilsen, Esquire Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

Mr. C. B. Stafford Executive Director

Florida Real Estate Commission Post Office Box 1900

Orlando, Florida 32801

Docket for Case No: 81-003270

Orders for Case No: 81-003270