Opinion ID: 1935782
Heading Depth: 2
Heading Rank: 1

Heading: whether the appellee (hennessee) was acting in a capacity so as to be subject to discipline by the mississippi real estate commission under miss. code ann. section 73-35-1.

Text: The standard of factual review for the trial court, acting as an intermediary appellate court, and ultimately this Court, for a decision by an administrative agency, such as the MREC, is familiar and well settled. The only grounds for overturning administrative agency action by the appellate process is that the state agency has acted capriciously, unreasonably, arbitrarily; has abused its discretion or has violated a vested constitutional right of the party. Melody Manor Convalescent Center v. Mississippi State Department of Health, 546 So.2d 972, 974 (Miss. 1989). In other words, as this Court noted long ago in Mississippi State Tax Commission v. Mississippi-Alabama State Fair, 222 So.2d 664, 665 (Miss. 1969): The Court will entertain the appeal to determine whether or not the Order of the administrative agency (1) was supported by substantial evidence, (2) was arbitrary or capricious, (3) was beyond the power of the administrative agency to make, or (4) violated some statutory or constitutional right of the complaining party. This rule has been thoroughly settled in this state. The aforementioned rule of law is used because this Court generally may not reweigh facts or substitute its judgement for that of the agency's. Mississippi Comm'n. On Environmental Quality v. Chickasaw County Bd. of Supervisors, 621 So.2d 1211, 1216 (Miss. 1993). Furthermore, the party challenging an administrative agency action has the burden of proof to rebut the rebuttable presumption afforded actions of an administrative agency. County Board of Education of Alcorn County v. Parents and Custodians of Students at Rienzi School Attendance Center, 251 Miss. 195, 168 So.2d 814, 818 (1964); See also Mississippi Comm'n. On Environmental Quality v. Chickasaw County Bd. of Supervisors, 621 So.2d 1211, 1215 (Miss. 1993). Likewise, where there is substantial evidence supporting the agency's decision, this Court will not overturn an agency's decision. Harris v. Miss. Real Estate Comm'n, 500 So.2d 958, 962 (Miss. 1986). Therefore, Judge Coleman must have found, as must this Court to affirm his reversal, that the decision of the MREC was not entitled to the deference of validity generally afforded it by Mississippi jurisprudence. However, this Court finds that the real issue in this case is actually a new question of law which remains to be reviewed de novo by this Court, Bank of Mississippi v. Hollingsworth, 609 So.2d 422, 424 (Miss. 1992), even though an administrative appeal is limited in that this Court does not conduct a de novo review of the facts. Mississippi State of Nursing v. Wilson, 624 So.2d 485, 489 (Miss. 1993). [7] The Contract for Sale reflects that Ruby signed the document in three capacities. She signed as the seller, the realtor, and as the listing agent for the Company. The closing statement reflects that Ruby signed the sale agreement on behalf of Queen as the seller. The closing statement also reflects that the purchase price was adjusted down $1,000 to $34,000 and applied the $500 earnest money and $3,500 down payment towards the purchase leaving a balance of $30,000. The Company received $2,040 from the sale. The MREC additionally argues that because the payment of the earnest money and the down payment occurred at Ruby's office, that this further implies that she was acting as a real estate agent. [8] Therefore, the MREC argues that because Ruby employed her real estate license to earn a commission on property that she sells, she becomes subject to regulation by the Commission. Ruby contends, however, that she did not earn a commission and gives a grab-bag possibility explanation about for what the $2,040 going to the Company was intended. In a nutshell, the following is the MREC's argument. The Commission submits that the Broker exploited her license to further her interests in this transaction. That is sufficient for the Commission to have power to take appropriate disciplinary action. This is amply demonstrated by the documents prepared by the Broker. [9] The MREC argues that these documents illustrate that although Ruby, as President of Queen, was in fact selling her own property, that she acted as and was an agent for the Company for purposes of the transaction. [10] Therefore, the MREC contends that Ruby can not be excluded from being subject to the provisions of the Real Estate Act even though it was her own property. [11] It appears that the basis for the trial court's reversal was that any act Ruby committed during the sale of the property to Jimmy and Sarah was done as the seller and not as a realtor subject to the Real Estate Act. The relevant statutes read as follows. § 73-35-3. Definitions; applicability of chapter. ... . (5) Exempt from the licensing requirements of this chapter shall be any person, partnership, association or corporation, who, as a bona fide owner, shall perform any aforesaid act with reference to property owned by them, or to the regular employees thereof who are on a stated salary, where such acts are performed in the regular course of business. Miss. Code Ann. § 73-35-3(5) (Supp. 1994). § 73-35-21. Grounds for refusing to issue or suspending or revoking license; hearing. The commission may, upon its own motion and shall upon the verified complaint in writing of any person, hold a hearing for the refusal of license or for the suspension or revocation of a license previously issued, or for such other action as the commission deems appropriate. The commission shall have full power to refuse a license for cause or to revoke or suspend a license where it has been obtained by false or fraudulent representation, or where the licensee in performing or attempting to perform any of the acts mentioned herein, is deemed to be guilty of: (A) Making any substantial misrepresentation in connection with a real estate transaction; (B) Making any false promises of a character likely to influence, persuade or induce; ... . (M) Any act or conduct, whether of the same or of a different character than hereinabove specified, which constitutes or demonstrates bad faith, incompetency or untrustworthiness, or dishonest fraudulent or improper dealing. Miss. Code Ann. § 73-35-21 (Supp. 1994) The precise issue in this case has yet to be decided by this jurisdiction creating a case of first impression for Mississippi. [12] Other jurisdictions have addressed this issue and have rejected Ruby's position. [13] See Eckels v. Arkansas Real Estate Comm'n, 30 Ark. App. 69, 783 S.W.2d 864, 868-9 (1990); Arkansas Real Estate Comm'n v. Hale, 12 Ark. App. 229, 674 S.W.2d 507, 509 (1984); Black v. Arkansas Real Estate Comm'n, 275 Ark. 55, 626 S.W.2d 954, 957 (1982); In The Matter of Perron, 437 N.W.2d 92, 94, 97 (Minn. 1989); Canada v. Kearns, 624 S.W.2d 755, 756 (Tex. 1981); Virginia Real Estate Board v. Clay, 9 Va. App. 152, 384 S.E.2d 622, 625-26 (1989); Real Estate Comm'n v. Tice, 200 Pa.Super. 553, 190 A.2d 188, 190-91 (1963); Wright v. Real Estate Comm'n, 208 Neb. 467, 304 N.W.2d 39 (1981). Therefore, the Court is presented with an opportunity to decide new law for Mississippi today. Under this Court's understanding of the dispute, the proper Query is: Is a licensed realtor subject to disciplinary actions by his state licensing commission for acts committed while selling property wholly owned by the realtor acting as the seller? The MREC offers cases from other jurisdictions as persuasive authority for the proposition that similar statutes have been strictly construed holding the realtor subject to disciplinary actions while selling his own property. See Eckels v. Arkansas Real Estate Comm'n, 30 Ark. App. 69, 783 S.W.2d 864, 868-9 (1990); Arkansas Real Estate Comm'n v. Hale, 12 Ark. App. 229, 674 S.W.2d 507, 509 (1984); Black v. Arkansas Real Estate Comm'n, 275 Ark. 55, 626 S.W.2d 954, 957 (1982); In The Matter of Perron, 437 N.W.2d 92, 94, 97 (Minn. 1989); Canada v. Kearns, 624 S.W.2d 755, 756 (Tex. 1981); Virginia Real Estate Board v. Clay, 9 Va. App. 152, 384 S.E.2d 622, 625-26 (1989). Most of the Arkansas cases, Eckels, Hale, and Black, dealt with the fact that a buyer of the misrepresented real estate had in one form or another relied upon the realtor as such, thus requiring the realtor to be bound by the state's disciplinary rules even though selling property owned individually by the realtor. Therefore, Ruby argues that because there is no evidence in the record that Jimmy and Sarah relied on her as a realtor, that the MREC's use of these authorities on this issue of first impression is inapplicable. [14] However, Ruby apparently disregards the other cases which come to the same conclusion as the Arkansas cases without necessarily requiring reliance by the buyer. See, e.g., Virginia Real Estate Board v. Clay, 9 Va. App. 152, 384 S.E.2d 622, 625-26 (1989); Sander v. Missouri Real Estate Comm'n, 710 S.W.2d 896, 899 (Mo. App. 1986); Canada v. Kearns, 624 S.W.2d 755, 756 (Tex. 1981). Consequently, we find that reliance is not necessarily required. Accordingly, we find that Ruby was subject to disciplinary action by the MREC even though she was selling private property for herself. Ruby also argues that because she did not receive a commission from the sale, that she sold the property as a private bona fide owner, and was thus not subject to the MREC disciplinary rules. The contract does reflect that no commission was paid. However, the closing statement lists the Company, Ruby's agency, as having received $2,040 for something. An identical argument was rejected in Canada v. Kearns, 624 S.W.2d 755, 756 (Tex. Ct. App. 1981), wherein the broker sold her personal home through her agency and yet did not receive a commission. The Mississippi statutes do not require that a commission be paid, just valuable consideration. Miss. Code Ann. § 73-35-3(1). In this case, the documents reflect that the house was listed and sold through her agency. Therefore, this argument does not have merit either. The purpose of the provisions regarding the qualifications for a real estate brokers license is to safeguard the interests of the public. Miss. Code Ann. § 73-35-7. With such an important public policy in mind, if this Court were to uphold the trial court's reversal, we would be disregarding the overall purpose for which the act was intended. Miss. Code Ann. § 73-35-7. While it is undisputed that had Ruby not been a real estate agent, and merely sold her property privately, that the disciplinary rules of the MREC would have been inherently inapplicable, as one is not required to have a license for doing such that would be subject to MREC disciplinary proceedings. This is the type of exemption that the legislature intended. Miss. Code Ann. § 73-35-3(5). However, such is not the case here. To allow Ruby, or any other licensed real estate broker in Mississippi, to not be held responsible for misrepresentations made during the course of the sale of property wholly owned by the broker, while simultaneously holding that a broker will be held responsible for making misrepresentations during the sale of another's property, would create logically inconsistent results. As the Pennsylvania Court in Real Estate Comm'n v. Tice, 200 Pa.Super. 553, 190 A.2d 188, 190-91 (Pa. 1963) reasoned, which was adopted in In The Matter of Perron, 437 N.W.2d 92, 94 (Minn. 1989) by Minnesota: A broker who is dishonest or incompetent in the real estate activities in which he [or she] is involved as owner, is not likely to be honest or competent in his [or her] activities which are purely brokerage in nature. Therefore, as reasoned by another Court over thirty-three years ago, and as adopted by yet another Court less than seven years ago, to permit dishonesty by a broker in their private lives, and yet condemn the same actions in their public lives, is to disregard the overall intent behind the legislation and not afford the general public the protection which the legislature has deemed worthy of protection. Accordingly, this Court finds that neither Ruby, nor any other real estate broker in Mississippi, shall be permitted to commit fraudulent misrepresentations in their private lives without disciplinary repercussions when they are not permitted to do the very same thing while representing another's property. Therefore, this case is reversed and rendered to prevent such an anomaly from occurring in this state.