STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL )

REGULATION, FLORIDA REAL )

ESTATE COMMISSION, )

)

Petitioner, )

)

vs. ) CASE NO. 83-1160

) 83-2989

DONALD ALLEN and CONDO )

RESORTS MANAGEMENT,INC., )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, K. N. Ayers, held a consolidated public hearing in the above-styled cases on January 11, 1984, at Clearwater, Florida.

APPEARANCES

For Petitioner: Gary L. Printy, Esquire

Department of Professional Regulation

400 West Robinson Street Orlando, Florida 32801

For Respondents: Richard Clark, Esquire

695 Central Avenue Post Office Box 1550

St. Petersburg, Florida 33731

By Administrative Complaints filed January 25, 1983, and June 24, 1983, the Department of Professional Regulation, Division of Real Estate, Petitioner, seeks to revoke, suspend, or otherwise discipline the licenses of Donald Allen and Condo Resorts Management, Inc., as a real estate broker and corporate real estate broker. As grounds therefor it is alleged, in Case 83-1106, that Respondent, operating as a Vacation Condos International (VCI) solicited and obtained from William T. Day and Douglas H. Forsgren $60 each on his agreement to list their condominiums for rent in a catalog to be published by Respondent and sold to travel agencies, that be failed to publish such catalog, failed to return the money, and that he similarly solicited some $4,128 from other condominium owners which he failed to return, thereby violating Section 475.25(1)(b), Florida Statutes; and, in Case 83-2989 that Respondent, operating as VCI and later as Condo Resorts Management, Inc., obtained a binder from Daisy Realty, Inc. (Daisy), in the amount of $5,000 which he failed to place in escrow or return to Daisy with an accounting when demand therefor was made; and that he failed to pay Daisy commissions on condominium rentals procured by Daisy, in violation of Sections 475.25(1)(d) and (k), Florida Statutes.

At the commencement of the hearing, Respondent stipulated that he and the Condo Resorts Management, Inc., were licensed as alleged, and Petitioner dismissed Counts V and VI of the Administrative Complaint in Case 83-1106.

Subsequently, Respondent stipulated that approximately $4,128 was collected from condominium owners to have their condominiums listed in the catalog and to purchase the catalog. Thereafter, petitioner called three witnesses and Respondent testified in his own behalf. Eight exhibits were admitted into evidence.

No proposed recommended orders were submitted. At the conclusion of the hearing the parties were advised of their right to submit proposed recommended orders to the Hearing Officer but both waived that right.

FINDINGS OF FACT

1. At all times material hereto Respondents were licensed as alleged.

   
   

2. In 1980 Respondent Allen conceived the idea of setting up a computer listing service for condo owners desiring to rent their Florida condos. He formed VCI to act as an interface between the owners and travel agents or brokers desiring rental for their customers. VCI was never licensed as a real estate broker nor was it ever held out to be so licensed. Respondent mailed out forms to condo owners to complete if they wanted to have their condos placed in the exchange bank to be established by VCI (Exhibit 6). He also prepared a Computerized Reservations Handbook (Exhibit 5) which was also sent to condo owners.

   
   

3. Among those responding to this solicitation were Day and Forsgren, who sent VCI $60 each. Because the expenses of setting up VCI, mailing out material, renting computer, and renting office space far exceeded the income received from those owners accepting VCI's offer and the capital with which Respondent started VCI, the company ran out of funds before the catalog was published. The computer was repossessed in December of 1981 after having been rented for one year, thereby removing the tool which was to keep track of the condos available for lease. Some $4,128 was collected from condo owners before VCI had to be abandoned for lack of funds.

   
   

4. Ms. Gertrude Naumann, broker at Daisy Realty, Inc., saw the VCI brochure and contacted Respondent. She had contacts with Canadian travel agencies to whom she had rented condominiums in the Orlando area in the past and was interested in expanding to the Clearwater-St. Petersburg area. After receiving an advance deposit from the Canadian travel agencies, Naumann met with Respondent in her office and drafted a contract, Exhibit 1, and gave Respondent a binder check in the amount of $5,000.

   
   

5. Although Ms. Naumann testified that she understood, and specifically told Respondent, that the $5,000 deposit must be placed in escrow, the rough draft of the contract (Exhibit 4) that became Exhibit 1 when retyped, shows the words "non-interest bearing trust account" to have been deleted, and the sentence changed to read "said binder to be held in a bearing account and to be used only upon completion of rental arrangements and for telephone security, cleaning fees and not to be applied toward rents.

   
   

6. By this contract Respondent agreed to block out and have available 20 one-bedroom units and 5 two-bedroom units from January 30, 1982, to March 30, 1982, and Daisy agreed that 30 days prior to January 30, 1982, Daisy would

   notify VCI the number of units actually required so units not required could be released for renting to others.

   
   

7. By letter dated January 21, 1982 (Exhibit 3) Daisy Realty advised VCI, inter alia, that for the period January 30 to February 20 to release all units-- none would be required. Ms. Naumann testified that her office made frequent telephone calls to Respondent during December, 1981, and January, 1982, modifying the number of units desired for rental. Respondent denies receiving any such calls or that he received notice that none of the units blocked out from January 30 through February 20, 1982, would be released until he received Daisy's hand-delivered letter on January 21, 1982.

   
   

8. After receiving Exhibit 3, Respondent considered Exhibit 1 void because of the breach by Daisy but leased units to clients produced by the Canadian travel agents. These leases were conducted through Condo Resorts Management, a real estate company. The evidence was not disputed that these rentals were paid to Respondent both by the Canadian travel agencies and by Daisy. In several instances, the rental for the units came to Condo Resorts Management from or through Daisy. On at least one occasion, Daisy deducted the commission from the rental received before forwarding it to Condo Resorts Management.

   
   

9. When Naumann was unsuccessful in getting the $5,000 deposit returned, she filed a complaint with the Florida Real Estate Commission and, following an investigation, the Administrative Complaints here being considered were filed.

   
   

10. Ms. Naumann has made no attempt to recover the deposit or commissions by instituting civil proceedings against Allen.

    
    

11. The contract (Exhibit 1) provides that VCI would make available 20

    one-bedroom units and 5 two-bedroom units for the period January 30 to March 20, 1982, at a total rental of $75,048. The total rent paid Respondent based on the units actually rented was slightly more than $7,000.

    
    

    CONCLUSIONS OF LAW

    
    

12. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings.

    
    

13. In Case 83-1106 Respondent is charged with obtaining money from Forsgren and Day upon his representation that he would enter their condominiums for rent in a catalog to be printed, knowing the statement to be false when made. The evidence does not support a finding that Respondent made statements to Forsgren and Day (and others) knowing these statements to be false. To the contrary, the evidence showed that Respondent intended to print the catalog and operate a condominium availability service but economic realities caused the business to fail. No fraudulent intent on the part of Respondent was shown.

    
    

14. Case 83-2989 Involves Respondent dealing with Daisy. Respondents charged with failing to return $5,000 to Daisy, failure to place this deposit In an escrow account, and failing to pay Daisy a commission on the condominiums leased to the Canadian travel agency.

    
    

15. With respect to the $5,000 deposit, this contract specifically provided that Daisy was required to notify Respondent 30 days prior to January 30, 1982, how many of the blocked-out condominium units would be needed, and Daisy breached the contract by failing to notify Respondent prior to January 21, 1982. That deposit was paid to VCI, which is not a real estate broker and who never

    held itself out as a real estate broker. Even if VCI, or Respondent, was operating under his license, a viable contract dispute existed between him and Daisy. This is not an issue that can or should be resolved in this tribunal. As stated by the court in Fleishman v. Department of Professional Regulation,

    So.2d , 3rd DCA Case 83-1081, November, 1983, which also involved a real estate broker:

    
    

    Whether Fleishman would have been civilly required to return the deposit as an unauthorized penalty, instead

    of retaining it as liquidated damages, his failure to do so cannot be made

    accountable to the commission's regulatory authority.

    
    

16. The same situation exists with respect to the brokerage commission Daisy claims is owed it by Respondent. Here there is a dispute as to whether Daisy is entitled to any commission, and, in the absence of fraud, dishonest dealing, etc., violation of contractual rights are concerns only of the courts and may not be enforced by disciplinary action undertaken by a regulatory agency like the Real Estate Commission. Fleishman, supra.

    
    

17. Finally, the charge that Respondent failed to place the $5,000 deposit in escrow in violation of Section 475.25(1)(k) is not supported by the contract (Exhibit 1) entered into between VCI, a non-real estate broker, and Daisy Realty. That contract specifically provided that VCI would place the deposit in "a bearing account" rather than in a "non-interest bearing trust account" as the preliminary draft to the contract provided. Accordingly, there is no basis for finding Respondent violated a duty to place the deposit in an escrow account.

From the foregoing it is concluded that Respondents Donald Allen and Condo Resorts Management, Inc., are not guilty of any of the offenses alleged. It is

RECOMMENDED that the Florida Peal Estate Commission enter a Final Order dismissing all charges against these Respondents.

ENTERED this 25th day of January, 1984, at Tallahassee, Florida.

K. N. AYERS 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 25th day of January, 1984.

COPIES FURNISHED:

Gary L. Printy, Esquire Department of Professional

Regulation

400 West Robinson Street Orlando, Florida 32801

Richard Clark, Esquire 695 Central Avenue Post Office Box 1550

St. Petersburg, Florida 33731

Harold Huff, Director Division of Real Estate Department of Professional

Regulation

Post Office Box 1900 Orlando, Florida 32802

Fred M. Roche, Secretary Department of Professional

Regulation

130 North Monroe Street Tallahassee, Florida 32301

Docket for Case No: 83-001160

Orders for Case No: 83-001160