No. 85-503 INTHE SUPREME COURT OF THE STATE OF MONTANA 1986

INTHE MATTER OF MARTHA R. SORINIf Licensed RealEstate Broker.

APPEAL PROM: DistrictCourt of the Second JudicialDistrict, In and for theCounty of SilverBOW, The HonorableMark Sullivan, Judge presiding.

For Appel-la.nt: Robert P. McGee, Butte, Montana

For Respondent: F. Lon Mitchell, Helena, Montana

Submitted on Briefs: Dec. 19, 1985 Decided: April 1, 1986

..(3i$i Filed:

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# .'Mr. JusticeFredJ. Weber delivered the Opinion of the Court. Ms. Sorini appeals the decision of the Butte/Silver Bow County District Court which upheld a Board of Realty Regulation decision revoking her real estate broker's license. We affirm. The issues are: 1. Was Ms. Sorini denied her rights at her administrative hearing because the hearing examiner and the attorney for the Board ofRealty Regulationwereboth deputy attorneys of the StateofMontana? 2. Did the matter of Ms. Sorini's competence or trustworthiness becomemoot because the Board ofRealty Regulation

was required to take those characteristicsinto consideration before issuingher a real.estatebroker's license? 3. Is the Board of Realty Regulation required to rule with particularity upon the objections and exceptions filed with it,and is their failure to issue sucha ruling a deprivation ofMs. Sorini's rights? 4. Was the penalty imposed by the hearing examiner based upon a finding of fact which was not an issue, and should the decision be therefore reversed for unusual and unwarranted punishment? In December 1983, a complaintwas filed with the Board of Realty Regulation ("Board") a.qainst Martha Sorini, a licensed real estate salesperson. 

### In spring 1984,Ms. Sorini passed the real estate broker's examination and was issued a broker's license. The complaj-ntagainst her was amended to reflect her change in status,and the matter was heard before

a hearing examiner in June 1984. Ms. Soriniwas represented by counseland testified at the hearinq. The hearing examiner's proposed findings, conclusions and order recommended that Ms. Sorini's broker" license be revoked for violationsof S 37-51-321, MCA, including failure to account for or remit money belonging to others, failure by a real estate salesperson to deposit money of others in a broker's trust account,and demonstrated unworthiness or incompetence. Ms. Sari-ni filed exceptions to these recommendations, and oral argument was held before the full Board. Later, the Board issued an order adopting the findingsof fact,conclusionsof law and order of the hearing examiner. Ms. Sorini then filed

apetition for judicial review inDistrictCourt and obtained

a temporary restraining order suspending the revocation of her broker's license. A hearing on that petition was conducted and the court affirmed the Board's order revoking her broker's license. Revocation of the license has again been stayedduring this appeal. I Was Ms. Sorini denied her rights at her administrative hearingbecause thehearing examinerand the attorney for the Board of Realty Regulation were both deputy attorneys of the State ofMontana? Ms. Sorini argues that the independence of the hearing examinerwas impairedbecausehe was a deputy attorney general as was the attorney representing the Board. Next, she argues that the Board gave extra considerationto the hearing examiner's recommendations because he was from the attorney general's office. Fs. Sorini failed to submit any proof to support these allegations. There isnothing in the record to suqgesta factualbasis forher position. Section 2-4-611, MCA, establishes the manner inwhich a party may file an affidavit of personal bias, lack of independence,disqualificationby law, or other disqualification of a hearing examiner. In the absence of a request for disqualification, it is not proper to raise the question onappeal. As we pointed out in Western Bank of Billings v. Mont. St. Banking (1977), 174 Mont. 331, 570 P.2d 1115, a party may not raise on appeal a question which was not presented before the administrative agency except the validity of the statute under which the agency is proceeding, unless it is shown that there was good cause for failure to raise the questionbefore the agency. Suchgood causehas not been shownhere. While we tend to agreewith the DistrictCourt's observation that having a greater separationofprosecutorial and decision-making functions would eliminate an appearance of impropriety, we find nothing to warrant a reversal of the District Court. We therefore affirm the conclusion of the District Court that there was no reversible error on this issue.

Did the matter of Ms. Sorini's competence or trustworthiness become moot because the Board of Realty Regulation

was required to take those characteristics into consideration before issuing her a real estatebroker's license? After the chargeshad been filed againstMs. Sorini,she

was allowed to sit for the real estate broker's examination and was subsequently issued a real estate broker's license. She a-rguesthat her honesty, trustworthiness and competency
were considered in the licensing process, under the provisions of 37-51-302(3), MCA. She therefore maintains that the issues of her competence and.trustworthiness have been determined so far as this case is concerned. Clearly, the issues are not the same. The Board is required by statute to determine that an applicant for a broker's licensemeets certain standardsof conduct. In the absence of evidence that the Board considered the pendingcharges aga.insther, the determination that Ms. Sorini met those standards of conduct is not dispositive of the pending charges against her. There is no such evidence in the record--in fact,there are indicationsthat the Board did not consider the charges because they had.notbeenproven. We conclude that the issue of the competence and trustworthiness of Ms. Sorini as raised by these chargeswas not determined by the issuance of her real esta.te broker's license. I11 Is the Board of Realty Regulation required to rule with particularity upon the objections and exceptions filed with it,and is their failure to issue such a ruling a d.eprivation ofMs. Sorinilsrights? The proposed findings of fact, conclusions of law and order as prepared by the hearing examiner detail the factual basis for his conclusions that the Board had power to either suspend or revokeMs. Sorinilslicense. Thehearing examiner found that there had been a failureby Ms. Sorini to deposit money of others in a trust account, that there had been a failure to account for money belonging to others, and that she had demonstrated unworthiness and incompetence. The hearing examiner therefore recommended that her license as a real estatebroker be revoked. Prior to her appearance before the full Board, Ms. Sorini submitted her contentions of claimed error in these findings and conclusions. The Board considered these contentions and voted unanimously to adopt the findings of fact, conclusions of law and recommended order of the hearing examiner. Ms. Sorini was entitled to nothing further. The Board was not required to specifically state in writing that her exceptions to the proposed findings were insufficient.We affirm the conclusionof the District Court that the Board was not required to rule with particularity upon Ms. Sorini's exceptions to theproposed findings. IV Was the penalty imposed by the hearing examiner based upon a. findingof factwhichwas not an issue,and should the decision be therefore reversed for unusual and unwarranted punishment? L Ms. Sorini argues that the penalty imposed upon her is based on the finding of the hearing examiner that the mortgage on her clients' homewas foreclosed and the clients lost their home because ofher actions. The violations with which Ms. Sorini was charged do not include causinq the foreclosure, and she does not feel it was proven that her actions caused the foreclosure. She maintains that shewas punished to an unusual and unwarranted degree for the viol-ationswith which shewas charged. The Board found that Ms. Sorini had violated three statutory prohibitions under S 37-51-321, MCA. The penalty forviolation of any of the standards set out in that section is revocation or suspension of the broker's or salesperson's license. Revocation of Ms. Sorini's licensewas within the discretion of the Board, as a penalty for her violations of the statute. There were enough facts before the Board to allow it to revoke Ms. Sorini's license without considering whether she caused the foreclosure. We conclude that the penalty was not unusual orunwarrantedpunishment. We affirm the District Court's conclusion that the Board's revocation of Ms. Sorini's broker's license was based upon her violations of the three standards set out in the complaint against her. Affirmed.Mr. Justice JohnC. Sheehy,dissenting:

Idissent on the first issue. I should have thought that the mere appearance of impropriety would be sufficient for this Court, which so lately approved the Rules of Professional Conduct (June 6, 1985) to riseand strike so anomalousa case aswe have here:

a deputy attorney general acting as hearing examiner in a
case where the state agency is represented by another deputy attorneygeneral. For my part, I heartily discountenance such a cozy arrangement. For the convenience of this Court and counsel, Ipoint out that Rule 1.12 (a) of the Rules of Professional Conduct debar a lawyer fron representing a party in a matter where the lawyer participated personally and substantially as an adjudicative officer. Rule 1.12(c) debars any lawyer in a firmwith which the first lawyer is associated fromknowingly undertaking or continuing representation in the matter, unless certain conditions are met, which are not met here. The most elemental notions ofdueprocess ought to tell

us that objectivity is impossible when one party owns both theprosecutor and the judge. There is indeed evidence that the Board bowed to the supposed superiority of a hearing examiner from the attorney general's office. The minutes of the Board for August 15, 1984 reveal that John Dudis, a member of the Board! and himself an attorney stated that if the hearing examiner "from the attorney general's office has made his findings after going through this from top to bottom, and you [appellant's counsel] should have had opportuni-tiesto put on witnessesand cross-examine, I am going along with the 11ea.ring examiner." We should send this case back to the Board of Realty Regulation for a newbeginning.

,'I Justice 

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