STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

STATE OF FLORIDA, DEPARTMENT OF ) PROFESSIONAL REGULATION, FLORIDA ) REAL ESTATE COMMISSION, )

)

Petitioner, )

)

vs. ) CASE NO. 82-455

) BRUCE LEAZENBY and M&M REALTY, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, this cause came on for formal hearing on January 11, 1983, in Punta Gorda, Florida, before Marvin E. Chavis, duly designated Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: John Huskins, Esquire

Department of Professional Regulation Post Office Box 1900

400 West Robinson Street Orlando, Florida 32801

For Respondent: John S. Dzurak, Esquire

306 East Olympia Avenue Post Office Box 400

Punta Gorda, Florida 33951 ISSUES AND BACKGROUND

This case arises out of an administrative complaint whereby the Petitioner is seeking to suspend, revoke, or otherwise discipline the real estate licenses of the Respondents. The first count of the administrative complaint charges the Respondent, Bruce Leazenby, with dishonest dealing in violation of Florida Statute 475.25(1)(b) and a failure to account and deliver money in violation of 475.25(1)(d) . Count II realleges the various factual allegations of Count I and charges that those facts also constitute a violation by M&M Realty, Inc. of Florida Statute 475.25(1)(b) and 475.25(1)(d). Prior to the formal hearing, the Respondents filed a motion to quash the administrative complaint on the grounds that the Florida Real Estate Commission does not have jurisdiction over the subject matter alleged in the administrative complaint. That motion was renewed subsequent to the formal hearing and was taken under advisement and will be ruled upon as a part of this Recommended Order.

The Petitioner called as witnesses Mr. Orville S. "Mike" Logsdon and Ms.

Alice N. Spiteri. The Respondents called as their only witness Delores E. Leazenby. Petitioner offered and had admitted into evidence three exhibits.

Respondents had five exhibits marked, but did not offer into evidence Respondents' Exhibit 4. Respondents' Exhibits 2, 3, and 5 were admitted in their totality and Respondents' Exhibit 1 was admitted only as to columns 1, 2, and 4 of that spread sheet.

Counsel for the Petitioner and the Respondents submitted proposed findings of fact and conclusions of law to be considered by the undersigned Hearing Officer. To the extent that those proposed findings of fact and conclusions of law are not adopted in this order, they were considered by the undersigned Hearing Officer and determined to be irrelevant to the issues in this cause or not supported by the evidence.

FINDINGS OF FACT

1. The parties stipulated and it is found in (a) through (d) below:

   
   

   1. Respondent, Bruce Leazenby, is a licensed real estate broker having been issued License No. 0198529. Last known address is 130 Mandalay Road, Punta Gorda, Florida 33950.

      
      

   2. Respondent, M&M Realty, Inc., is a corporate broker having been issued License No. 0133397. Last known address is 301 West Marion Avenue, Punta Gorda, Florida 33950.

      
      

   3. At all times material herein, Respondent, M&M Realty, Inc., was a licensed real estate broker engaging in real estate activities at the address stated above.

      
      

   4. At all times material herein, Respondent, Bruce Leazenby, was the sole active broker of and for Respondent, M&M Realty, Inc., and responsible for his individual acts and of said corporation by being its active broker.

      
      

2. On August 18, 1980, Mr. Orville S. Logsdon entered into a Management Compensation Agreement with M&M Realty, Inc. (See Petitioner's Exhibit 2). Under that agreement, Mr. Logsdon agreed to act as manager of M&M Realty and to supervise and organize the sales personnel. In exchange, Mr. Logsdon was to be compensated as follows:

1. Manager shall receive ten percent of the commissions received, by Realtor,

   as a result of Real Estate transactions. Compensation shall begin with commissions received at closing as a result of Real Estate sales contracts written after August 18, 1980. Realtor shall make pay ments to Manager quarterly, beginning September 30, 1980, and at the end of each quarter thereafter, for the term of this agreement.

   
   

2. Manager shall receive, on his individual transactions, a total of seventy percent

   (70 percent) of the commissions received by Realtor; Realtor shall receive thirty

   percent (30 percent). (See Petitioner's Exhibit 2).

3. Mr. Logsdon continued as manager with M&M Realty, Inc. until August, 1981. His leaving resulted in part from an argument which arose after Mr. E. M. Leazenby, President of M&M Realty, informed Mr. Logsdon that they needed to discuss the commissions he had been receiving.

   
   

4. At the time Mr. Logsdon left M&M Realty, he had been paid all commissions due him on sales and listings in which he was personally involved as a real estate salesman.

   
   

5. Prior to his leaving M&M Realty, a dispute had arisen between Mr. Logsdon and M&M Realty as to the compensation Mr. Logsdon was due under the Management Compensation Agreement. Mr. Logsdon's interpretation of the agreement was that his compensation would be 10 percent of all commissions coming to M&M Realty. Mr. Logsdon further contended that the 10 percent override applied to all transactions including his individual transactions where he received 70 percent of the commissions received by the realtor. This would essentially give Mr. Logsdon 80 percent of the commissions coming to the realtor in Mr. Logsdon's individual transactions. This interpretation of the Management Compensation Agreement conflicts with Paragraph 2 of the agreement which provides that M&M Realty would receive 30 percent of the commission coming to M&M Realty on Mr. Logsdon's individual transactions.

   
   

6. At the time he left M&M Realty, Mr. Logsdon claimed he was owed approximately $4,070.00 based upon a work sheet he had been given by Bruce Leazenby sometime prior to his leaving. Mr. Logsdon had made no effort to independently determine what amount, if any, he was due as compensation. Shortly after Mr. Logsdon left M&M Realty, a final audit was performed by Deloris Leazenby of the year August, 1980, to August, 1981, to determine what

   amount was due Mr. Logsdon as compensation as manager. During the course of the audit, it was discovered that Mr. Logsdon had been overpaid during the year on several transactions. The numbers in Petitioner's Exhibit 3, the worksheet provided to Mr. Logsdon prior to his leaving, were also discovered to be inaccurate. The figures in Petitioner's Exhibit 3 do not comport with the percentages reflected in the contract.

   
   

7. A copy of the spread sheet prepared by M&M Realty in the course of the final accounting was provided to Mr. Logsdon. This occurred within a short time after Mr. Logsdon left M&M Realty. Mr. Logsdon made no response whatsoever to the spread sheet which reflected that he was due some $271. There was no further discussion between the parties prior to a complaint being filed with DPR sometime after the spread sheet was provided to Mr. Logsdon. There was no further demand by Mr. Logsdon for any further accounting.

   
   

8. There was also a dispute as to the terms of the contract itself. This dispute involved a question of whether the 10 percent override applied to transactions handled by the broker, Bruce Leazenby or his mother, Deloris Leazenby. Although Mr. Logsdon testified there had been no modifications to that agreement, there had been at least three modifications to the agreement subsequent to its execution. First, Mr. Logsdon had agreed to waive the requirement for regular quarterly payments in order to help M&M Realty through an extended period of cash flow problems. Secondly, Mr. Logsdon agreed to a deduction of $20.00 from each of his commissions to help M&M Realty defray the cost of a computer. Finally, there were deductions for insurance from commissions. These insurance deductions were not addressed in the Management Compensation Agreement.

9. Additionally, Logsdon had been overpaid the 10 percent fee on numerous transactions prior to March 31, 1981, the earliest date on Petitioner's Exhibit 3, and had also been overpaid on certain commissions during the course of the year.

   
   

10. In summary, it cannot be determined from this record the specific amount of compensation due Mr. Logsdon, if any. It is clear, however, that the amount due, if any, is substantially less than the $4,070 claimed by Mr. Logsdon at the time he left M&M Realty, Inc.

    
    

11. Prior to and subsequent to Mr. Logsdon leaving M&M Realty, there was a good faith reasonable dispute between Mr. Logsdon and M&M Realty as to the amount of compensation Mr. Logsdon was due as manager under the contract.

    
    

12. Prior to his leaving M&M Realty, Mr. Logsdon was made aware that there was a dispute as to how much compensation he was to receive for being manager. He had been paid all commissions he was due as a salesman. There was no evidence of any trick, scheme, device or other dishonest acts on the part of Respondents, Bruce Leazenby or M&M Realty, Inc.

    
    

    CONCLUSIONS OF LAW

    
    

13. The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this action.

    
    

14. Florida Statute Section 475.25(1) empowers the Board of Real Estate to suspend or revoke a license or impose a civil penalty when a licensee is found to have violated one of the subsections of Section 475.25.

    
    

15. Section 475.25(1)(b), Florida Statutes (1981), provides that a licensee who is guilty of fraud, misrepresentation, concealment, false pretense, dishonest dealing by trick, scheme, or device, culpable negligence, or breach of trust in any business transaction in this state may be disciplined as provided in Florida Statute 475.25(1).

    
    

16. The evidence in this case does not show dishonest dealing by trick, scheme, or device or a breach of trust by the Respondents. What the evidence does show is a contract dispute between an employer and employee and a failure on the part of both the employer and the employee to aggressively pursue a resolution of the dispute. Following the termination of Mr. Logsdon, M&M Realty performed a final audit or accounting for the entire year of employment and submitted a copy of that spread sheet to Mr. Logsdon. This spread sheet showed approximately $270.00 due Mr. Logsdon, rather than the approximately $4,070.00 which Mr. Logsdon claims as due and owing to him. Mr. Logsdon never agreed, disagreed, or responded to this accounting.

    
    

17. The argument that led to Mr. Logsdon's leaving M&M Realty began as a result of Mr. E. M. Leazenby stating to Mr. Logsdon over the phone that they needed to discuss the commissions Mr. Logsdon had been claiming. No such discussion ever took place. After he left his position as manager, Mr. Logsdon elected to not contact M&M Realty about the matter.

    
    

18. The evidence establishes a simple contract dispute between an employer and employee. Where a reasonable dispute between parties exists regarding an ambiguous contract, the civil courts are available to resolve those disputes and are the appropriate forum for such actions. See Peck Plaza Condominium v. Division of Florida Land Sales and Condominiums, Dept. of Business Regulation,

    371 So.2d 152 (Fla. 1st DCA 1979). There has been no dishonest dealing or breach of trust proven and, therefore, the Respondents have not violated Florida statute 475.25(1)(b)(1981).

    
    

19. A real estate license may also be disciplined if a licensee fails to account or deliver to any person, including a licensee under this chapter at the time that has been agreed upon or is required by law or in the absence of a fixed time, upon demand of the person entitled to such accounting and delivery of any money which has come into his hands and which is not his property or which he is not in law or equity entitled to retain under the circumstances. Florida Statutes Section 475.25(1)(d)(1981). The administrative complaint also charges the Respondents with a violation of this section.

    
    

20. Specifically, the administrative complaint charges the Respondent with failure to pay $4,070.00 which was due and owing the complainant Mr. Orville S. Logsdon. It was not proven that the Respondents did in fact owe Mr. Logsdon

    $4,070.00 The evidence in fact reveals that the Respondents may very well not owe Mr. Logsdon any sum. Without demand, the Respondents provided Mr. Logsdon, after his departure, with what they considered to be a final accounting. Mr.

    Logsdon never responded to the information he was provided. He never agreed or disagreed with the accounting. Section 475.25(1)(d) does not place the sole burden on the employer to attempt to resolve wage disputes, nor does it grant to an employee the, unqualified right to receive whatever that employee claims as compensation. The question of whether or not Mr. Logsdon was entitled to the 10 percent override on his individual transactions and the determination as to what are the final specific terms of the compensation agreement as modified can only be adjudicated by a court of competent jurisdiction as a matter of private litigation between Logsdon and M&M Realty and Bruce Leazenby. Good faith contract disputes are not the type of acts contemplated by Florida Statutes 475.25(1)(d). The Petitioner has failed to prove a failure to account and deliver a specific sum which by law or equity the Respondents were required to pay to Mr. Logsdon.

    
    

21. The facts in the case show a contract dispute between an employer and an employee and do not establish acts on the part of the Respondents which constitute violations of Florida Statute 475.25. The fact that such a dispute does not constitute a violation of the specific statutory sections charged does not go to jurisdiction as argued by the Respondents in their motion to quash. The Petitioner has jurisdiction based upon the fact that the Respondents are in fact licensed and have been charged with violating two specific sections of Chapter 475.

RECOMMENDATION

Based upon the foregoing facts and conclusions of law, it is, therefore: RECOMMENDED:

That the Respondents be found not guilty of Counts I and II of the Administrative Complaint and that such complaint therefore be DISMISSED.

DONE and ENTERED this 11th day of May, 1983, in Tallahassee, Florida.

MARVIN E. CHAVIS

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 11th day of May, 1983.

COPIES FURNISHED:

John Huskins, Esquire Department of Professional

Regulation

Post Office Box 1900

400 West Robinson Street Orlando, Florida 32801

John S. Dzurak, Esquire

306 East Olympia Avenue Post Office Box 400

Punta Gorda, Florida 33951

Mr. Fred Roche Secretary

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

Mr. Harold Huff Executive Director Post Office Box 1900

Orlando, Florida 32802

Docket for Case No: 82-000455

Orders for Case No: 82-000455