Opinion ID: 1934953
Heading Depth: 1
Heading Rank: 5

Heading: pecuniary interest

Text: The appellant argues that Loren Stein, a member of the Commission, had a substantial pecuniary interest in the proceedings because he was in direct competition with Gottschalk in the real estate business in Watertown. The only factual evidence on the issue comes from a stipulation between Gottschalk and the Commission, to-wit:    LOREN STEIN is a licensed real estate broker in South Dakota whose principal place of business is Watertown, South Dakota; that OLIVER A. GOTTSCHALK has been engaged as a real estate broker for several years with principal offices at Brookings, South Dakota, and associated as a partner with his brother in the same business with offices in Watertown, South Dakota; that the aforesaid OLIVER A. GOTTSCHALK opened a separate office in Watertown, South Dakota on January 17, 1975; and LOREN STEIN, who became a member of the Commission on July 1, 1973, is in direct competition with OLIVER A. GOTTSCHALK. The appellant also alleges a pecuniary interest in Commissioner Hegg and relies on the following stipulation: That on December 9, 1971, and February 3, 1972, PETER HEGG of the real estate firm with which he was associated in Sioux Falls, had real estate listings in the Brookings area. PETER HEGG, or the firm with which he was associated with in Sioux Falls, also occasionally advertised in the Brookings area. This court has expressed its concern that the members passing judgment in these administrative hearings be disinterested and free from any form of bias or predisposition regarding the outcome of the proceedings. Mordhorst v. Egert, 1974, S.D., 223 N.W.2d 501. This court has recognized that professional board members with a substantial pecuniary interest should not adjudicate the kind of dispute involved in these proceedings. Apoian v. State, 1975, S.D., 235 N.W.2d 641. However, absent a showing of substantial pecuniary interest by the appellant, this court will presume that the Real Estate Commission members acted fairly and impartially. The stipulation by the parties indicates a lack of any direct competition between Commissioner Hegg and the appellant which would show a substantial pecuniary interest. The operation of a partnership of Gottschalk and his brother in Commissioner Stein's hometown is of great concern. However, the appellant's main office and principal place of business was in Brookings. Gottschalk refused the opportunity to show that he received any substantial income from the Watertown partnership. He also refused to cross-examine Stein about his possible bias and interest. The stipulation of direct competition alone does not establish a substantial pecuniary interest sufficient to disqualify Commissioner Stein. Certainly, Gottschalk's mere establishment of a branch office in the same town after the proceedings were begun in 1971 is insufficient to show bias and prejudice. A contrary holding would allow a broker to disqualify all members of the Commission simply by opening a branch office in each member's hometown after disciplinary proceedings are instituted. See Brown v. State Board of Optometry, S.D., 1978, 263 N.W.2d 490. Without a stronger showing, we find no substantial pecuniary interest of the Commission members which would deprive the appellant of due process.