Young, and Respondent Politis testified on his own behalf. Additionally, Petitioner's Exhibits numbered 1-4 were admitted in evidence. Respondent was afforded an opportunity to decide whether he wished to depose his former attorney, Douglas P. Johnson, Esquire, and file that deposition as a late-filed Exhibit. On April 13, 1994, Respondent Politis filed written notice that the deposition would not be taken.
Both Petitioner and Respondent Politis submitted post-hearing proposed findings of fact in the form of proposed recommended orders. A specific ruling on each proposed finding of fact can be found in the Appendix to this Recommended Order.
At all times material hereto, Respondent John Politis has been a licensed real estate broker in the State of Florida, having been issued license number 0069773. The last license issued to him was as a broker for Florida Mortgage & Realty Co., 1001 West Cypress Creek Road, Fort Lauderdale, Florida.
At the time of the events which are the subject of this dispute, Respondent Center Associates, Inc., was a corporation registered as a real estate broker in the State of Florida, having been issued license number 0259310. The last license issued was at the same street address and suite number as Florida Mortgage & Realty Co.
At all times, Respondent Politis has been licensed and operating as the qualifying broker, the sole officer, the sole director, and the 100 percent stockholder of Respondent Center Associates.
In approximately March of 1989, Catherine P. Young, a real estate salesperson licensed in the State of Florida, was employed by the Respondents to solicit and negotiate agreements for leases of commercial shopping center space through the Respondents. For the first three or four months of that employment, Respondents paid Young an agreed salary.
Thereafter, that salary agreement was cancelled, and a second agreement was entered into among Young and the Respondents. Under that new agreement any commissions resulting from Young's efforts were to be split so that Young received 80 percent of the commission and the Respondents received 20 percent of that commission. It was further agreed that Young would pay for her own travel expenses and her long distance calls, while Respondents would bear the expense of providing the office and paying for the local telephone service.
During the term of that second agreement, Young negotiated several commercial lease agreements to their conclusions and received the commissions to which she was entitled. In the leasing industry, one-half of the commission is paid when the lease is signed and one-half is paid when the tenant moves into the leased premises. However, the commission is owed as of the time that the lease is executed.
On or about March 2, 1990, Young terminated her employment relationship with the Respondents. On the day she left the employ of Respondents, she met with Respondent Politis and discussed with him her claim for commissions on leases already fully executed through her efforts, but which commissions had not yet been paid to Respondents. Respondent Politis agreed that she was entitled
to 80 percent of the commissions which Respondents had not yet received but which had resulted from Young's efforts. Young asked Respondent Politis to put that agreement in written form, and he agreed to do so.
When Young returned the following week to sign the agreement, Respondent Politis informed her that he had changed his mind and had decided that he would not pay her any more commissions since she was no longer employed by the Respondents. Young advised Respondent Politis that she was still entitled to commissions earned by her during her employment as a result of her efforts even though the commissions were not paid to Respondents until after she left their employment. In response to Young's anger that Respondents would refuse to pay her commissions which she had already earned, Respondent Politis told Young that she could sue him.
Thereafter, Respondents received real estate commissions on four or five transactions where commercial leases were entered into as a result of Young's efforts. Despite Respondents being aware that Young had made a claim for her share of those commissions, Respondents failed to pay Young any portion of those commissions and failed to place the disputed commissions in escrow until their dispute was resolved. Rather, when Respondents received those commissions, Respondent Politis deposited them into the operating account of Center Associates, Inc., and used those monies to re-pay himself for loans he had made to that corporation.
By letter dated February 4, 1992, Respondent Politis wrote to Petitioner advising that Respondent Center Associates was no longer in existence and would not be filing for renewal of its broker's license. Thereafter, Petitioner's records were notated to reflect that Respondent Center Associates' licensure as a real estate broker was cancelled effective March 31, 1992.
Young filed a civil lawsuit against Respondent Center Associates in the Circuit Court in Broward County. Young's complaint for damages alleged that Respondent Center Associates had failed to pay her the commission to which she was entitled on one specific transaction and also alleged that Respondent Center Associates would be receiving other commissions "over the next several months" to which Young was entitled. That complaint also alleged that Respondent Center Associates had breached its contract with Young by failing to pay Young monies due to her.
The non-jury trial on Young's complaint was conducted on February 24, 1993. The Final Judgment for Plaintiff entered by the Court on March 1, 1993, ordered Respondent Center Associates to pay Young the sum of $51,505.04. That Final Judgment also provided for interest on the amount of judgment at the rate of 12 percent per year.
By the time the Final Judgment was entered, Respondent Politis had "dissolved" the corporation and had "cancelled" the real estate broker license of Respondent Center Associates, Inc.
Neither Respondent Politis nor Respondent Center Associates has paid any monies to Young in accordance with that Final Judgment.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter hereof and over Petitioner and Respondent Politis. Section 120.57(1), Florida Statutes.
Although Petitioner had jurisdiction over Respondent Center Associates, Inc., at the time of the events complained of herein, the evidence is uncontroverted that the legal existence of Respondent Center Associates was dissolved and that corporate broker's license was cancelled, as reflected by Petitioner's own records, prior to the filing of the Administrative Complaint in this cause. Although Petitioner argues that it may be possible to re-activate the corporate existence of Respondent Center Associates under the laws regulating corporations in the State of Florida, there is no suggestion in this record that Respondent Center Associates could legally re-license itself as a real estate broker. Since Respondent Center Associates is not licensed by Petitioner, Petitioner, and therefore the Division of Administrative Hearings, does not have jurisdiction over that entity, and no disciplinary action can be taken against Respondent Center Associates in this cause.
Counts I and II of the Administrative Complaint allege that Respondent Politis and Respondent Center Associates, respectively, have violated Section 475.25(1)(b), Florida Statutes. That Section provides as follows:
(b) Has been guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme, or device, culpable negligence, or breach of trust in any business transaction in this state or any other state, nation, or territory; has violated a duty imposed upon him by law or by the terms of a listing contract, written, oral, express, or implied, in a real estate
transaction; has aided, assisted, or conspired with any other person engaged in any such misconduct and in furtherance thereof; or has formed an intent, design, or scheme to engage in any such misconduct and committed an overt act in furtherance of such intent, design, or scheme. . . .
Petitioner has proven by clear and convincing evidence that both Respondents are guilty as alleged in the Administrative Complaint.
Although aware of Young's claim to commissions to be paid to Respondents, Respondent Politis ignored that claim. Respondents received monies in excess of the amount claimed by Young, and failed to either remit those monies to her or resolve the dispute over entitlement to those monies. Rather, Respondent Politis deposited those monies into the operating account of Respondent Center Associates, paid the monies to himself, and then dissolved the corporate existence and relinquished the licensure of Respondent Center Associates to defeat Young's pending claim to commissions. Although Respondent Politis argued throughout this proceeding that Young was not entitled to the commissions she claimed, that argument has been resolved by the Final Judgment for Plaintiff entered in the Circuit Court of Broward County. Further, Respondent Politis' argument that the judgment itself was only a default judgment which did not resolve the parties' rights is not true. That judgment recites on its face that there was a trial by the Court. Respondent Politis' appropriation of Young's commissions to his own use and then terminating the existence and licensure of his corporation to prevent Young from collecting those monies was patently dishonest and constitutes a breach of trust.
Counts III and IV of the Administrative Complaint allege that Respondent Politis and Respondent Center Associates, respectively, have violated Section 475.25(1)(d)1, Florida Statutes, which provides, in part, as follows:
(d)1. Has failed to account or deliver to any person, including a licensee under this chapter, at the time which 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, any
personal property such as money, fund, deposit, check, draft,. . . or other document or thing of value, including a share of a real estate commission if a civil judgment relating to the practice of the licensee's profession has been obtained against the licensee and said judgment has not been satisfied in accordance with the terms of the judgment within a reasonable time, or any secret or illegal profit, or any divisible share or portion thereof, 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
. . . .
That Section further outlines a choice of procedures to be followed by a licensee where there is a dispute over entitlement to a real estate commission, none of which choices was followed by Respondents, and none of which choices includes appropriating the disputed funds to one's personal use.
Respondents knew on March 2, 1990, that Young was claiming a share of certain commissions to be received by Respondents. Those commissions were subsequently paid to Respondents, and Respondents placed those monies into the corporate broker's operating account and then paid those monies to Respondent Politis although they were fully aware that there was a dispute as to entitlement to those monies. When Young filed a lawsuit, which Respondent Politis told her she would have to do, Respondent Politis dissolved the corporation and turned in its real estate license, in order to defeat Young's ability to obtain the monies to which she was entitled. A year after judgment was entered in favor of Young, the civil judgment remains unpaid. At the final hearing in this cause, Respondent Politis' testimony is clear that he believes himself to have successfully prevented Young from obtaining her rightful commissions. Respondent Politis also made it clear that since the judgment was against the corporation and the corporation was dissolved, the judgment would never be paid.
Section 475.25(1), Florida Statutes, authorizes the Florida Real Estate Commission to take disciplinary action against a licensee, which action may include suspending a license, registration, or permit for a period not exceeding ten years. The Commission's disciplinary guidelines as to penalties for specific violations are contained in Rule 61J2 - 24.001, Florida Administrative Code, and provide that aggravating or mitigating circumstances may be considered in imposing a penalty. The actions of Respondent Politis taken to prevent Young from receiving her commissions were well planned and
deliberate. As such, Respondent Politis' conduct was egregious. The only mitigating evidence offered by Respondents was that Respondent Politis has been a real estate broker for twenty-five years and has "no blemishes" on his record.
Rule 61J2-24.001(3), Florida Administrative Code, establishes a recommended range of penalty of up to five years suspension or revocation for a violation of Section 475.25(1)(b), Florida Statutes, and a recommended range of penalty of up to five years suspension for a violation of Section 475.25(1)(d). As set forth above, no penalty can be imposed on Respondent Center Associates since it is not licensed by Petitioner. As to Respondent Politis, his blatant disregard of Young's claim to her commissions, together with the steps he took to defeat her claim, merits a harsh penalty. Due to Respondent Politis' lengthy licensure with no other complaints, and due to the fact that revocation is not likely to result in Respondent Politis voluntarily correcting the harm done to Young by his wrongful conduct, revocation is not the appropriate penalty in this case. Rather, it is appropriate that Respondent Politis' license be suspended for a period of five years for each of the two statutory violations, for a total of ten years, such suspension to be terminated and Respondent Politis' license to be reinstated at such earlier time as he can demonstrate restitution to Young.
