Concurring opinion issued May 14, 2013

In The

Court of Appeals 

For The 

First District of Texas 

————————————

NO. 12-00563-CV

———————————

BRIAN SHANKLIN AND TODD RIMMER, Appellants

V.

BASSOE OFFSHORE (USA) INC., MIKE SMITH,

AND JONATHAN FAIRBANKS, Appellees

On Appeal from the 127th District Court

Harris County, Texas

Trial Court Case No. 2009-14340

CONCURRING OPINION

The majority’s entire discussion of Real Estate License Act standing is dicta: 

the opinion expressly acknowledges that “even if the trial court erred in concluding 

that Shanklin and Rimmer lacked standing, its subsequent findings after a bench 
2

trial preclude a reversal of the partial summary judgment.” I agree that the 

outcome of the trial on the merits is determinative of this appeal, and it requires 

that we affirm. But I do not agree with the majority’s unnecessary frolic into 

uncharted legal territory on the subject of RELA standing. 

Even if it were necessary to reach the standing issue, I disagree with the 

majority’s interpretation of the statute. The allegations brought in this case by 

appellants Shanklin and Rimmer, if true, would make them “aggrieved persons” 

for purposes of the implied right of action under the RELA. See TEX. OCC. CODE 

ANN. § 1101.754(b). These claimants are not harmed by the majority’s restrictive 

interpretation of the RELA private cause of action, but a future claimant may be. 

Accordingly, I write to explain my disagreement with the majority’s conclusion 

that to be an “aggrieved person” eligible to invoke the private cause of action, a 

person must have paid a fee to another person improperly acting as a real estate 

broker.

I. Bassoe acted as an unlicensed real estate broker

Under the RELA, a person is a “broker” if he “negotiates or attempts to 

negotiate the . . . purchase . . . of real estate” and “performs” such actions “for 

another person” and “in exchange for a commission or other valuable consideration 

or with the expectation of receiving a commission or other valuable consideration.” 

TEX. OCC. CODE ANN. § 1101.002(1)(A)(iii). The statute further provides that “[a]
3

person acts as a broker . . . under [the RELA] if the person, with the expectation of 

receiving valuable consideration, directly or indirectly performs or offers, attempts, 

or agrees to perform for another person any act described by Section 1101.002(1), 

as a part of a transaction or as an entire transaction.” Id. § 1101.004 (emphasis 

supplied). A person or business entity is prohibited from acting as a broker 

without holding a license. Id. § 1101.351(a), (a-1). 

For purposes of their standing argument, appellees Bassoe, Smith, and 

Fairbanks (hereinafter collectively referenced as “Bassoe”) concede that they were 

engaged to act as Shanklin and Rimmer’s broker in their attempt to purchase the 

Pride assets, including real property located in Huoma, Louisiana. Shanklin and 

Rimmer alleged and the trial court found that Bassoe indicated its expectation of a 

fee for brokering the transaction. But Bassoe in its capacity as business entity 

lacked a real estate brokerage license, and Smith and Fairbanks likewise lacked 

broker licenses in their individual capacities. Taking the plaintiffs’ allegations as 

true, we thus assume that Bassoe violated the RELA by acting as a broker on the 

appellants’ behalf.

II. RELA’s implementing regulations

The RELA establishes a private cause of action to remedy injuries resulting 

from violations of the prohibition against acting as a broker without a license. The 

statute provides that if “[a] person . . . receives a commission or other 
4

consideration as a result of acting as a broker . . . without holding a license or 

certificate of registration” under the RELA, that person “is liable to an aggrieved 

person for a penalty of not less than the amount of money received or more than 

three times the amount of money received.” Id. § 1101.754(a). The RELA 

imposes numerous requirements upon licensed real estate brokers, all of which 

inform the question presented in this case about who might qualify as an 

“aggrieved party” for purposes of bringing a private cause of action under the 

RELA.

To be eligible to receive a license under the RELA, a person must “satisfy 

the [Texas Real Estate Commission] as to the applicant’s honesty, trustworthiness, 

and integrity.” Id. § 1101.354(2). The applicant must “complete the required 

courses of study, including any required core real estate courses prescribed under 

[the RELA].” Id. § 1101.354(4); see also id. §§ 1101.356, .357, .359 (experience 

and education requirements to obtain a broker license). The “core real estate 

courses” include “agency law,” which subsumes as one of its subtopics “an agent’s 

duties, including fiduciary duties.” Id. § 1101.003(1)(D). To obtain a license, a

business entity must designate a managing officer who is a licensed broker as its 

agent for purposes of the RELA. Id. § 1101.355.1

 These provisions serve to 

 1 In addition, the RELA ensures the financial accountability of licensed 

business entities by requiring that they “provide proof that the entity 

maintains errors and omissions insurance with a minimum annual limit of 
5

ensure that any person or entity licensed as a broker has satisfied minimum 

standards of character and education deemed necessary to provide real estate 

brokerage services.

To facilitate the regulation of real estate brokers, the RELA established the 

Texas Real Estate Commission. See id. §§ 1101.051–.059. The general powers 

and duties of the TREC include administering the RELA and adopting and 

enforcing rules necessary to accomplish that charge. Id. § 1101.151(a)(1), (b)(1). 

The TREC is also authorized to “establish standards of conduct and ethics” for 

persons licensed under the RELA, both to “fulfill the purposes of” and to “ensure 

compliance with” the statutory scheme. Id. § 1101.151(b)(2). The TREC is 

statutorily authorized to “file a complaint and conduct an investigation as 

necessary” to enforce the RELA or rules adopted under the RELA. Id. 

§ 1101.204(a). 

The TREC has indicated that its understanding of the general legislative 

intent of the RELA “to provide protection for the public in its dealings with real 

estate agents.” TEX. REAL ESTATE COMM’N, THE HISTORY OF THE REAL ESTATE 

LICENSE ACT, available at http://www.trec.texas.gov/pdf/rela/HistoryOfRELA.pdf. 

To that end, the rules adopted by the TREC and codified in Title 22, Part 23 of the 

 

$1 million for each occurrence if the designated agent owns less than 

10 percent of the business entity.” TEX. OCC. CODE ANN. § 1101.355(a)(2).
6

Texas Administrative Code include “Canons of Professional Ethics and Conduct” 

applicable to the profession. The ethical canons include, among other things, rules 

relating to fidelity and integrity:

RULE § 531.1 Fidelity

A real estate broker or salesperson, while acting as an agent for 

another, is a fiduciary. Special obligations are imposed when such 

fiduciary relationships are created. They demand: 

(1) that the primary duty of the real estate agent is to represent 

the interests of the agent’s client, and the agent’s position, in this 

respect, should be clear to all parties concerned in a real estate 

transaction; that, however, the agent, in performing duties to the 

client, shall treat other parties to a transaction fairly;

(2) that the real estate agent be faithful and observant to trust 

placed in the agent, and be scrupulous and meticulous in performing 

the agent’s functions;

(3) that the real estate agent place no personal interest above 

that of the agent’s client.

RULE § 531.2 Integrity

A real estate broker or salesperson has a special obligation to exercise 

integrity in the discharge of the licensee’s responsibilities, including 

employment of prudence and caution so as to avoid misrepresentation, 

in any wise, by acts of commission or omission.

22 TEX. ADMIN. CODE §§ 531.1–.2 (Canons of Professional Ethics and Conduct). 

In addition, every active real estate broker licensed by the TREC is required to 

display in a prominent location in each place of business a consumer information 

form which provides a public notice designed to facilitate the submission to the 
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commission of consumer complaints about real estate brokers. TEX. REAL ESTATE 

COMM’N, CONSUMER INFORMATION FORM 1-1, available at 

http://www.trec.texas.gov/pdf/forms/miscellaneous/consumerinformationform.pdf; 

see also TEX. OCC. CODE ANN. § 1101.202(a) (“The commission by rule shall 

establish methods by which consumers and service recipients are notified of the 

name, mailing address, and telephone number of the commission for the purpose of 

directing a complaint to the commission.”); 22 TEX. ADMIN. CODE § 531.18 

(Canons of Professional Ethics and Conduct). 

“A broker who represents a party in a real estate transaction . . . is that 

party’s agent.” TEX. OCC. CODE ANN. § 1101.557(a).2

 Such a broker “shall, at a 

minimum, answer the party’s questions and present any offer to or from the party.” 

Id. § 1101.557(b)(3). The RELA also requires that a licensed broker provide a 

written notice to the represented party to a real estate transaction “at the time of the 

first substantive dialogue with the party.” Id. § 1101.558(c). The required notice 

states:

“Before working with a real estate broker, you should know that the 

duties of a broker depend on whom the broker represents. If you 

are . . . a prospective buyer or tenant (buyer), you should know that 

 2 For these purposes, “‘Party’ means a prospective buyer, seller, landlord, or 

tenant or an authorized representative of a buyer, seller, landlord, or tenant, 

including a trustee, guardian, executor, administrator, receiver, or attorneyin-fact. The term does not include a license holder who represents a party.” 

TEX. OCC. CODE ANN. § 1101.551(2).
8

the broker who lists the property for sale or lease is the owner’s agent. 

A broker who acts as a subagent represents the owner in cooperation 

with the listing broker. A broker who acts as a buyer’s agent 

represents the buyer. A broker may act as an intermediary between 

the parties if the parties consent in writing. A broker can assist you in 

locating a property, preparing a contract or lease, or obtaining 

financing without representing you. A broker is obligated by law to 

treat you honestly.

“IF THE BROKER REPRESENTS THE OWNER: The broker 

becomes the owner’s agent by entering into an agreement with the 

owner, usually through a written listing agreement, or by agreeing to 

act as a subagent by accepting an offer of subagency from the listing 

broker. A subagent may work in a different real estate office. A 

listing broker or subagent can assist the buyer but does not represent 

the buyer and must place the interests of the owner first. The buyer 

should not tell the owner’s agent anything the buyer would not want 

the owner to know because an owner’s agent must disclose to the 

owner any material information known to the agent.

“IF THE BROKER REPRESENTS THE BUYER: The broker 

becomes the buyer’s agent by entering into an agreement to represent 

the buyer, usually through a written buyer representation agreement. 

A buyer’s agent can assist the owner but does not represent the owner 

and must place the interests of the buyer first. The owner should not 

tell a buyer’s agent anything the owner would not want the buyer to 

know because a buyer’s agent must disclose to the buyer any material 

information known to the agent.

“IF THE BROKER ACTS AS AN INTERMEDIARY: A broker may 

act as an intermediary between the parties if the broker complies with 

The Texas Real Estate License Act. The broker must obtain the 

written consent of each party to the transaction to act as an 

intermediary. The written consent must state who will pay the broker 

and, in conspicuous bold or underlined print, set forth the broker's 

obligations as an intermediary. The broker is required to treat each 

party honestly and fairly and to comply with The Texas Real Estate 

License Act. A broker who acts as an intermediary in a transaction: 

(1) shall treat all parties honestly; (2) may not disclose that the owner 

will accept a price less than the asking price unless authorized in 
9

writing to do so by the owner; (3) may not disclose that the buyer will 

pay a price greater than the price submitted in a written offer unless 

authorized in writing to do so by the buyer; and (4) may not disclose 

any confidential information or any information that a party 

specifically instructs the broker in writing not to disclose unless 

authorized in writing to disclose the information or required to do so 

by The Texas Real Estate License Act or a court order or if the 

information materially relates to the condition of the property. With 

the parties’ consent, a broker acting as an intermediary between the 

parties may appoint a person who is licensed under The Texas Real 

Estate License Act and associated with the broker to communicate 

with and carry out instructions of one party and another person who is 

licensed under that Act and associated with the broker to 

communicate with and carry out instructions of the other party.

“If you choose to have a broker represent you, you should enter into a 

written agreement with the broker that clearly establishes the broker’s 

obligations and your obligations. The agreement should state how 

and by whom the broker will be paid. You have the right to choose 

the type of representation, if any, you wish to receive. Your payment 

of a fee to a broker does not necessarily establish that the broker 

represents you. If you have any questions regarding the duties and 

responsibilities of the broker, you should resolve those questions 

before proceeding.”

Id. § 1101.558(d) (emphasis supplied in italics). 

Finally, the RELA generally provides that “[a] licensed broker is liable to 

the commission, the public, and the broker’s clients for any conduct engaged in 

under this chapter by the broker.” Id. § 1101.803.

III. Interpretation of the RELA’s private cause of action for “aggrieved

persons”

The foregoing regulations demonstrate that the RELA is concerned with the 

protection of the general public and anyone who does business with a broker in a 
10

real estate transaction, not merely those who ultimately pay a commission to a 

broker. The appellants’ allegations in this case thus fall squarely within the zone 

of consumer protection that the RELA was intended to provide. Shanklin and 

Rimmer claim that after engaging Bassoe to act as their real estate broker, they 

were harmed by Bassoe’s failure to perform its duties as required under the RELA. 

Instead of timely answering questions and faithfully pursuing Shanklin and 

Rimmer’s interests, Bassoe is alleged to have actively promoted the acquisition of 

Pride’s assets on behalf of another client, Blake. Bassoe is also accused of 

misleading Shanklin and Rimmer by representing that Pride was merely too busy 

to address their offer when Bassoe knew that Pride would not consider them as 

qualified buyers. Bassoe failed to disclose this information to Shanklin and 

Rimmer, although it knew that they were not dealing with other brokers or Pride 

directly to pursue the acquisition. 

All of these allegations, if true, suggested that Bassoe acted as Shanklin and 

Rimmer’s real estate broker and breached a fiduciary duty arising from that 

relationship. See, e.g., 22 TEX. ADMIN. CODE § 531.1. If Bassoe had been a loyal 

agent, Shanklin and Rimmer contend that they could have attempted to address 

Pride’s concerns. Likewise, if Bassoe had refused to act as their broker due to their

lack of a real estate license, a loyal broker could have been engaged and injury 

possibly avoided. Thus, the alleged harm was of the kind which RELA is intended 
11

to prevent against by requiring a license for anyone who expects to receive a 

commission for the sale of real estate.

The majority nevertheless concludes that the appellants are not “aggrieved 

persons” as contemplated by the RELA, solely because the appellees ultimately 

collected their fee from another party. I disagree with the majority’s narrow

interpretation. When reading statutes, we ascertain and give effect to the 

legislature’s intent, as drawn from the plain meaning of the words of the statute. 

See, e.g., Texas Mut. Ins. Co. v. Ruttiger, 381 S.W.3d 430, 452 (Tex. 2012). 

Nothing in the text of section 1101.754 confines the concept of “aggrieved parties” 

to the parties who actually paid the consideration to the offending unlicensed 

broker.

The majority focuses upon the payment of a commission as the operative 

fact that makes one a possibly “aggrieved person.” But the text of 

section 1101.754 relies on the receipt of a commission or other compensation only 

as the predicate condition that makes a broker an eligible defendant, without 

further limitation as to the source of the payment.3

 The question presented by this 

 3 Cf. Flenniken v. Longview Bank & Trust Co., 661 S.W.2d 705, 706 (Tex. 

1983) (noting, with respect to the statutory definition of “consumer” under 

the Deceptive Trade Practices Act, that it “only describes the class of 

persons entitled to bring suit . . . it does not define the class of persons 

subject to liability,” and further noting that the “range of possible defendants 

is limited only by” specific statutory exemptions).
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appeal is more directly concerned with the class of eligible plaintiffs—i.e., who 

qualifies as an “aggrieved person”? If the legislature had intended to restrict the 

class of “aggrieved persons,” it knew how to do so explicitly, as it did for purposes 

of recoveries from the Real Estate Recovery Trust Account established in the 

RELA. In that part of the RELA, the statute expressly provides: “An aggrieved 

person is entitled to reimbursement from the trust account if a person described by 

Section 1101.601 engages in conduct described by Section 1101.652(a)(3) or (b) or 

1101.653(1), (2), (3), or (4).” TEX. OCC. CODE ANN. § 1101.602. Unlike the right 

of recovery described in Subchapter M, there is no statutory limitation on the 

general reference to an “aggrieved person” entitled to file a private right of action 

under section 1101.754.

4

 

Distinguished commentators have recently observed that “[p]erhaps no 

interpretive fault is more common than the failure to follow the whole-text canon, 

which calls on the judicial interpreter to consider the entire text, in view of its 

structure and of the physical and logical relation of its many parts.” ANTONIN 

SCALIA & BRYAN A. GARNER, READING LAW 167 (2012). Consideration of the full 

 4 See also TEX. BUS. & COM. CODE ANN. § 17.50 (confining private DTPA 

cause of action to defined class of “consumers”); Riverside Nat. Bank v. 

Lewis, 603 S.W.2d 169, 173 (Tex. 1980) (“To ignore the Legislature’s 

definition of ‘consumer,’ and permit any aggrieved person to maintain a 

private cause of action under the DTPA, ignores the well established 

presumption that legislative choice of words is such that every word has 

meaning.”).
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scope of the RELA regulatory scheme supports a broader understanding of the 

class of persons who may be considered as “aggrieved” due to the unauthorized 

practice of real estate brokerage by unlicensed persons or entities,5 and thus also 

supports a broader scope of potential liability for violating the RELA.6

 In contrast, 

the majority’s interpretation of “aggrieved person” can only be justified by reading 

section 1101.754 in complete isolation from the remainder of the RELA.

 5 See, e.g., TEX. OCC. CODE ANN. § 1101.558 (“at the time of the first 

substantive dialogue with the party,” the broker must provide written notice 

that “[a] broker is obligated by law to treat you honestly,” that “[a] buyer’s 

agent . . . must place the interests of the buyer first,” and that “[i]f you 

choose to have a broker represent you, you should enter into a written 

agreement with the broker that clearly establishes the broker’s obligations 

and your obligations”); 22 TEX. ADMIN. CODE § 531.1 (“A real estate 

broker . . . while acting as an agent for another, is a fiduciary. . . . [1] the 

primary duty of the real estate agent is to represent the interests of the 

agent’s client, and the agent’s position, in this respect, should be clear to all 

parties concerned in a real estate transaction . . . [2] the real estate agent 

[must] be faithful and observant to trust placed in the agent, and be 

scrupulous and meticulous in performing the agent’s functions . . . [3] the 

real estate agent [must] place no personal interest above that of the agent’s 

client.”); Id. § 531.2 (“A real estate broker . . . has a special obligation to 

exercise integrity in the discharge of the licensee’s responsibilities, including 

employment of prudence and caution so as to avoid misrepresentation, in 

any wise, by acts of commission or omission.”).

6 Cf. TEX. OCC. CODE ANN. § 1101.803 (establishing broker liability “to the 

commission, the public, and the broker’s clients for any conduct engaged in 

under this chapter by the broker”).
14

IV. Holloman and Dohalick are distinguishable

In reaching its conclusion about the meaning of “aggrieved person,” the 

majority relies upon two cases from other courts of appeals, both of which are 

distinguishable.

Thirty years ago the Waco Court of Appeals decided Holloman v. Denson, 

which concerned two real-estate transactions involving a subdivision owner, 

Holloman. 640 S.W.2d 417, 419 (Tex. App.—Waco 1982, writ ref’d n.r.e.). Both 

transactions also involved the Densons, who purchased one lot and sold another in 

the subdivision. Id. Despite being unlicensed to act as a real estate broker, 

Holloman collected a broker’s fee on both transactions—one from the Densons as 

sellers, and the other from the homeowner who sold his house to the Densons. Id. 

The case involved no allegation of wrongdoing or injury other than the bare fact 

that Holloman was unlicensed and therefore prohibited from collecting a fee. See 

id. at 420. The Waco court held that the Densons were entitled to recover the fee 

that they had paid to Holloman. Id. With respect to the purchase of the Densons’ 

house, for which Holloman’s fee had instead been paid by the seller, the court held 

that there was “no way the Densons could be found to be the aggrieved persons” 

when they had not been affected by the transaction. Id. They paid the price the 

seller asked for the house, and it was “no concern of theirs” whether the seller paid 

a commission. Id.
15

The present case is thus distinguishable from Holloman on the facts. If the 

appellants had neither alleged nor suffered an actual injury resulting from the 

unlicensed broker’s RELA violations, then they would not become “aggrieved 

parties” by the mere fact that another party had paid a commission to the appellees. 

But this case is not so simple; the appellants in this case allege that they retained 

the appellees to act as their agents in a proposed real estate transaction, and that 

they were injured by the appellees’ breaches of duties arising from that agreement.

The other case relied upon the majority is Dohalick v. Moody National Bank, 

a case involving the interpretation of a completely different regulatory scheme 

under the Texas Finance Code. 375 S.W.3d 537, 541 (Tex. App.—Houston [14th 

Dist.] 2012, no pet.). Construing a different provision authorizing a recovery by an 

“aggrieved person” of fees paid to an unlicensed mortgage broker, the Fourteenth 

Court reasoned:

Under the plain meaning of [Finance Code] section 156.406(b), 

the damages that an aggrieved person may recover are “damages in an 

amount that is not less than the amount of the fee or profit received 

and not to exceed three times the amount of the fee or profit received, 

as may be determined by the court.” Act of May 25, 1999, 1999 Tex. 

Gen. Laws at 4346. An “aggrieved person” may recover these 

damages based upon the mortgage broker’s receipt of “money, or the 

equivalent of money, as a fee or profit because of or in consequence 

of the person acting as a mortgage broker or loan officer without an 

active license or being exempt under [Chapter 156].” Id. Because 

this is the conduct by which the claimant is aggrieved, we conclude 

that to be an aggrieved person under section 156.406(b), the claimant 

must have paid all or part of the fee or profit to the unlicensed 

mortgage broker or loan officer.
16

Id. at 541. The court acknowledged that its interpretation of “aggrieved person” in 

that case was dependent on context, including “the action through which the person 

is aggrieved and the remedy provided to the person aggrieved.” Id. at 542. The 

Dohalick court did not address any broader regulatory considerations under the 

Finance Code which may or may not have influenced that court’s conclusion about 

whether a claimant bank could qualify as an “aggrieved party” when it alleged that 

an unlicensed mortgage broker fraudulently induced the bank to advance funds that 

the borrower then used to pay the broker’s fee. See id. at 539. Rather than 

deciding an issue under the Finance Code that is not presented by this appeal in 

order to justify relying upon Dohalick as a potentially persuasive authority to 

support the majority’s interpretation of Occupations Code section 1101.754, I 

would instead conclude that the different regulatory context of the RELA 

distinguishes the Dohalick case and justifies a different interpretation in this case.

Conclusion

The Real Estate License Act private right of action must be interpreted in 

light of the full scope of its statutory and regulatory context. That context compels 

the conclusion that the appellants alleged a direct injury of the nature that the 

RELA is intended to prevent. They alleged that Bassoe acted on their behalf as 

broker when they attempted to negotiate the purchase of real estate as part of the 

purchase of the Pride assets. Liberally construed, the petition alleged numerous 
17

violations of the RELA and its implementing regulations. Had the RELA and its 

regulations been followed, appellants never may have engaged the appellees as 

agents because they had no license to act as a broker, and if Bassoe had acted in 

accordance with RELA regulations, none of the subsequent factual background of 

this dispute may have occurred. 

The appellants are part of the class of persons intended to be protected by 

the RELA regulatory scheme. Their injury allegedly resulted from RELA 

violations. Accordingly, from the perspective of the RELA’s legislative purpose of 

protecting the public in its dealings with real estate agents, the appellants are 

“aggrieved persons,” entitled to pursue the private cause of action created under

the RELA. Accordingly, I concur only in the result without joining the opinion of 

the court.

Michael Massengale

Justice 

Panel consists of Justices Jennings, Bland, and Massengale.

Justice Massengale, concurring.