DEPT. OF BUSINESS REG. v. Smith

471 So. 2d 138
CourtDistrict Court of Appeal of Florida
DecidedJune 7, 1985
DocketAV-399
StatusPublished
Cited by4 cases

This text of 471 So. 2d 138 (DEPT. OF BUSINESS REG. v. Smith) is published on Counsel Stack Legal Research, covering District Court of Appeal of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
DEPT. OF BUSINESS REG. v. Smith, 471 So. 2d 138 (Fla. Ct. App. 1985).

Opinion

471 So.2d 138 (1985)

DEPARTMENT OF BUSINESS REGULATION, DIVISION OF FLORIDA LAND SALES AND CONDOMINIUMS, Appellant,
v.
LeBrun N. SMITH and Condoshare Group, Inc., Appellees.

No. AV-399.

District Court of Appeal of Florida, First District.

June 7, 1985.

*139 Thomas A. Bell, Dept. of Business Regulation, Tallahassee, for appellant.

J. Lofton Westmoreland of Sherrill, Moore, Hill & Westmoreland, Pensacola, for appellees.

ZEHMER, Judge.

On June 30, 1983, appellees, LeBrun N. Smith and Condoshare Group, Inc., filed a declaratory judgment action to determine whether section 721.20, Florida Statutes (1983), violates their constitutional rights to due process and equal protection. U.S. Const. amend. XIV, § 1, and Art. 1, §§ 2, 9, Fla. Const. The Department of Business Regulation, Division of Florida Land Sales and Condominiums (Department) was named as defendant. The circuit court entered final judgment holding section 721.20 unconstitutional as violative of due process and enjoining its enforcement by the Department. We reverse.

Appellee Smith owns a time-share condominium project known as Sailfish Yacht Club, and appellee Condoshare Group, Inc., a Florida corporation wholly owned by Smith, owns a time-share condominium project known as Steamboat Landing. Time-share interval units are, in essence, condominiums divided into weekly units and sold to individuals for one or more weeks during the year. Both appellees sell time-share units. Condoshare Group, Inc., uses its employees as sales personnel and telephone operators, but several such employees are not licensed to sell real estate pursuant to chapter 475, Florida Statutes (1983). All unlicensed employees who engage in sales activities are paid a regular salary without sales commissions.

Chapter 475, Florida Statutes, governs the licensing of persons engaged in the sale of real estate in Florida. Prior to 1979, section 475.01(2) required that all employees of a corporation engaging in the sale of corporate real estate, except for one appointed officer, be licensed real estate brokers or salesmen.[1] This statutory requirement *140 was held unconstitutional as a violation of equal protection in Florida Real Estate Commission v. McGregor, 336 So.2d 1156 (Fla. 1976), and Florida Real Estate Commission v. Johnson, 362 So.2d 674 (Fla. 1978). In 1979, chapter 475 was amended to exempt all employees of corporate property owners from the licensing requirement of chapter 475 if such employees were paid on a regular-salary basis rather than a commission basis. § 475.011(2), Fla. Stat. (1979).[2]

In 1981, the legislature enacted the Florida Real Estate Time Sharing Act, chapter 81-172, Laws of Florida. Section 721.20, Florida Statutes (1981), provided that all sellers of a time-sharing plan must be licensed real estate salesmen, brokers, or broker-salesmen pursuant to chapter 475, unless they fit within the exemptions to chapter 475 provided in section 475.011, Florida Statutes (1981).[3] The effect of section 721.20, therefore, was to exempt from the licensing requirements all employees of a corporation engaged in selling corporate time-share plans who were paid strictly on a salary basis.

Effective July 1, 1983, section 721.20 was amended to eliminate the reference to the exemptions set forth in section 475.011. Chapter 83-264, Laws of Florida.[4] As amended, section 721.20 required that "[a]ny seller of a time-share plan shall be a licensed real estate salesman, broker, or broker-salesman, as defined in section 475.01 or its successor" and that "[n]o seller or developer may employ a person for the purposes of offering time-share periods for sale unless such person is a licensed salesman, broker, or broker-salesman as defined in section 475.01 or its successor."

Appellees initiated this declaratory judgment proceeding to determine whether section 721.20, Florida Statutes (1983), was unconstitutional. Throughout the proceeding, the Department has taken the position that it was construing section 721.20 as not requiring licensing for individual owners of property who wished to sell their own property as time-share plans but would require licensing for employees of corporate property owners who engage in the selling of *141 time-share plans. Appellees contend that "[t]he new provisions of § 721.20 create an unreasonable and impermissible classification and thus violate Appellee's rights to due process and equal protection as guaranteed under the Florida and United States Constitutions" (appellees' answer brief, p. 4). The circuit court entered a final judgment declaring section 721.20 to be unconstitutional because:

It is well established under Florida case law, specifically on the authority of Florida Real Estate Commission v. McGregor, 336 So.2d 1156 (Fla. 1976) and Florida Real Estate Commission v. Johnson, 362 So.2d 674 (Fla. 1978) that an individual and a corporation and their respective employees have the constitutional right to deal with his and its respective real property without the intervention or requirement of the utilization of a licensed real estate broker or salesman.

The court explicitly found that the statute "denies Plaintiffs due process of law" on the authority of McGregor and Johnson and permanently enjoined the Department from enforcing the provisions of section 721.20.

Initially, we note that while this case has been on appeal the Florida Legislature has amended section 721.20 to, among other things, reinstate the specific reference to the exemptions provided in section 475.011, Florida Statutes (1983). Chapter 84-256, Laws of Florida.[5] Currently the employees of a corporate property owner who are paid on a regular-salary basis and conduct selling activities for time-share plans need not be licensed pursuant to chapter 475. We are not called upon in this case to review the constitutionality of section 721.20 as it presently exists but, rather, as it existed in 1983. Because section 721.20 as it then existed is potentially enforceable against sellers of time-share plans that were unlicensed at that time, the question before us has not become moot. We do not, as was suggested on appeal, consider the 1984 amendment a clarification of legislative intent as to the meaning of the statute in 1983. The legislature specifically amended section 721.20 in 1983 to require licensing of all sellers of time-share plans, and that was obviously its *142 intended purpose. It defies logic to assume that the 1984 amendment reinstating the exemptions for corporate employees was merely to clarify the intent of the substantially different 1983 amendment.

Throughout this judicial proceeding, in the court below and on appeal, the Department has taken the position that it will not attempt to enforce the licensing requirements of section 721.20 against individual owners of time-share plans, but will enforce the provisions only against employees of corporate owners. We conclude, however, that this construction substantially alters the plain meaning of the language used in the statute. Section 721.20, by its very terms, applies to all sellers of time-share plans, without limitation or exclusion, whether individual or corporate owners and their employees. It is this statutory meaning that we review for lack of constitutionality.

The trial court held section 721.20 unconstitutional in specific reliance upon the Supreme Court's opinions in McGregor and Johnson.

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Bluebook (online)
471 So. 2d 138, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dept-of-business-reg-v-smith-fladistctapp-1985.