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
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