Daily Development for Thursday, May 11, 2000

By: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
randolphp@umkc.edu

Technically, this is an administrative law case, not a real estate case at all. But we haven't reported a broker's case in quite a while, and we rarely report any in which the broker's win. So, brokers, here's a little gift for your continued loyalty. Your lawyers may want to study the case as well.

BROKERS; LICENSING; REGULATION: Failure of Real Estate Licensing Commission to conduct hearings on broker reprimand charge in a timely fashion results in dismissal of the reprimand on judicial appeal.

Royer v. Ohio Real Estate Commission, 722 N.E.2d 172 (Ohio App., 1999)

The listing broker was contacted by a prospective buyer and had the a dual agency disclosure statement signed by the seller, but the buyer failed to return the dual agency consent form. The closing fell through because of an argument about a ditch assessment, and the buyer sent a letter to the commission complaining about the ditch assessment, but not about the dual agency. (The commission failed to include the letter in the record of the proceedings to the court.)

On May 2, 1996 the commission notified the broker of the complaint, and on May 15, 1996 the broker requested a hearing. Although the law states that the broker was entitled to a hearing within 15 days after requesting the same, it was not until June 13 that the commission scheduled a hearing for December 12. The December 12 hearing was continued to January 17, 1997, and finally took place in September of 1997. (The commission's failure to provide the court with the procedural history handicapped the court in determining more about the reasons for continuances.)

The broker was sanctioned for failure to attach the dual agency consent form to the dual agency disclosure form, and he appealed to the common pleas court, which affirmed. The Court of Appeals reversed.

The time for scheduling the hearing had expired 14 days prior to the commission's action in even setting a date, and the hearing was not set for 211 days. Ohio law specifically limits the continuance to thirty days and requires good cause to be shown. Failure of the agency to comply within the time allowed, upon motion, shall cause the court to enter a finding in favor of the party adversely affected. Further, the law requires that the commission certify to the court a complete record of the proceedings in the case.  The record of this case lacked all history of the proceedings, including the initial complaint letter, the notice to the broker, all documents establishing the commission's jurisdiction, and the reason for the extreme delay. Since the purpose of review by the trial court is to determine if the commission's judgment is supported by reliable, probative, and substantial evidence, and is in accordance with the law, the trial court must have access to everything that the commission was permitted to view, including the complaint.

Comment 1: With regulatory and licensing agency proceedings, sometimes the best tactic is just to let the process run and let the agency stub its toes. Unfortunately, it is difficult to predict whether a court will hold the agency to the appropriate due process standard, as the court did here. The court refused to listen to the agency's argument that the broker had received a full hearing with adequate opportunity to defend. In the court's view, timing is part of due process, and can affect the ability to defend.

Comment 2: The editor's view is that sometimes timing issues affect the ability to defend one's case, but more often the short time periods in these regulatory proceedings are put there to insure that the agency doesn't draw things out and unnecessarily impose a cloud over the professional reputation of an accused party. The court's approach to enforcement of such timing requirements refusal to uphold an agency finding may seem a little severe akin to releasing an axe murderer because of a technicality concerning the confession. But how otherwise does the court get the agency's attention?

Readers are urged to respond, comment, and argue with the daily development or the editor's comments about it.

Items in the Daily Development section generally are extracted from the Quarterly Report on Developments in Real Estate Law, published by the ABA Section on Real Property, Probate & Trust Law. Subscriptions to the Quarterly Report are available to Section members only. The cost is nominal. For the last six years, these Reports have been collated, updated, indexed and bound into an Annual Survey of Developments in Real Estate Law, volumes 1‑6, published by the ABA Press. The Annual Survey volumes are available for sale to the public. For the Report or the Survey, contact Maria Tabor at the ABA. (312) 988 5590 or mtabor@staff.abanet.org

Items reported here and in the ABA publications are for general information purposes only and should not be relied upon in the course of representation or in the forming of decisions in legal matters. The same is true of all commentary provided by contributors to the DIRT list. Accuracy of data and opinions expressed are the sole responsibility of the DIRT editor and are in no sense the publication of the ABA.

Parties posting messages to DIRT are posting to a source that is readily accessible by members of the general public, and should take that fact into account in evaluating confidentiality issues.

ABOUT DIRT:

DIRT is an Internet discussion group for serious real estate professionals. Message volume varies, but commonly runs 5 ‑ 10 messages per workday.

Daily Developments are posted every workday.

To subscribe to Dirt, send an e-mail to:

To:

ListServ@listserv.umkc.edu

Subject:

[Does not matter]

Text in body of message

Subscribe Dirt [your name]

To cancel your subscription to Dirt, send an e-mail to:

To:

ListServ@listserv.umkc.edu

Subject:

[Does not matter]

Text in body of message

Signoff Dirt

For information on other commands, send the message Help to the listserv address.

DIRT has an alternate, more extensive coverage that includes not only commercial and general real estate matters but also focuses specifically upon residential real estate matters. Because real estate brokers generally find this service more valuable, it is named “Brokerdirt.” But residential specialist attorneys, title insurers, lenders and others interested in the residential market will want to subscribe to this alternative list. If you subscribe to Brokerdirt, it is not necessary also to subscribe to DIRT, as Brokerdirt carries all DIRT traffic in addition to the residential discussions.

To subscribe to Brokerdirt, send an e-mail to:

To:

ListServ@listserv.umkc.edu

Subject:

[Does not matter]

Text in body of message

Subscribe Brokerdirt [your name]

To cancel your subscription to Brokerdirt, send an e-mail to:

To:

ListServ@listserv.umkc.edu

Subject:

[Does not matter]

Text in body of message

Signoff Brokerdirt

DIRT is a service of the American Bar Association Section on Real Property, Probate & Trust Law and the University of Missouri, Kansas City, School of Law. Daily Developments are copyrighted by Patrick A. Randolph, Jr., Professor of Law, UMKC School of Law, but Professor Randolph grants permission for copying or distribution of Daily Developments for educational purposes, including professional continuing education, provided that no charge is imposed for such distribution and that appropriate credit is given to Professor Randolph, DIRT, and its sponsors.

DIRT has a WebPage at: http://www.umkc.edu/dirt/