Com., Dept. of Professional v. Lancaster

• Decision Date: 07 June 2005
• Docket Number: Record No. 1868-04-1.
• Parties: COMMONWEALTH of Virginia, DEPARTMENT OF PROFESSIONAL AND OCCUPATIONAL REGULATION, Real Estate Board v. Jamie W. LANCASTER and Christina L. Rogers, f/k/a Christina L. Lancaster.
• Court: Virginia Supreme Court

613 S.E.2d 828

45 Va. App. 723

COMMONWEALTH of Virginia, DEPARTMENT OF PROFESSIONAL AND OCCUPATIONAL REGULATION, Real Estate Board v. Jamie W. LANCASTER and Christina L. Rogers, f/k/a Christina L. Lancaster.

Record No. 1868-04-1.

Court of Appeals of Virginia, Chesapeake.

June 7, 2005.

Eric A. Gregory, Assistant Attorney General (Jerry W. Kilgore, Attorney General, M. Seth Ginther, Senior Assistant Attorney General, on briefs), for appellant.

James A. Evans; Kevin E. Martingayle (Dinsmore, Evans & Bryant; Stallings & Bischoff, P.C., on brief), Virginia Beach, for appellees.

Present: BENTON, FRANK and FELTON, JJ.

BENTON, JR., Judge.

The Department of Professional Regulation's Real Estate Board imposed sanctions on real estate agents Jamie W. Lancaster and Christina L. Lancaster for three violations that occurred during their representations of Alice Mann in real estate transactions. Following the Lancasters' appeal to the circuit court, the trial judge affirmed two of the sanctions and remanded the third sanction (Count I) to the Board for a further hearing. The Board contends the trial judge erred in remanding the proceeding for a further hearing. The Lancasters argue that the trial judge had the authority to do so, but they contend the trial judge erred by denying their motion for a judgment by default. For the reasons that follow, we hold that the trial judge's order did not address the merits of the third sanction and necessarily contemplates additional proceedings in the Board, that the order is not a "final decision" within the meaning of Code § 17.1-405, and that we lack jurisdiction to consider the appeal.

I.

Jamie W. Lancaster and Christina L. Lancaster are licensed real estate agents, whose profession is governed by the Department of Professional Regulation's Real Estate Board. Code § 54.1-2100 to § 54.1-2111. Between June 1999 through August 2000, the Lancasters represented Alice Mann, an elderly woman, in various capacities in connection with properties in the City of Chesapeake. Christina Lancaster was the listing and sales agent in some of the five separate property transactions. Jamie Lancaster was the listing agent on at least one of the transactions, and he was paid to make repairs at one of the properties. Mann lost $40,000 as a result of these transactions.

The Lancasters' dealings with Mann resulted in a civil action initiated by Mann in which she alleged the Lancasters "defrauded, stole, and converted" large sums of money from her. A jury found that "Jamie and Christina Lancaster, acting together, intentionally committed fraud upon ... Mann" and caused Mann to suffer losses. The jury awarded Mann $189,000.

Following the judgment in the civil action, Mann's son filed complaints with the Board on behalf of Mann. Based on Mann's complaints, the Board conducted an investigation of the real estate transactions and determined the evidence warranted an informal fact finding conference. At the conference, the Lancasters were represented by attorneys and had the opportunity to present evidence, respond to evidence, and to challenge the allegations in the complaints. At the conclusion of the informal conference, the presiding Board members drafted summary reports of the conference. The two reports, one concerning Christina Lancaster and the other concerning Jamie Lancaster, are virtually identical. They contain a "summation" of relevant facts, conclusions, and recommendations concerning four separate counts at issue. The reports found that the Lancasters "failed to exercise ordinary care to safeguard the interest of [the] client, Mann, who had special needs based on her elderness," in violation of Regulation 18 VAC 135-20-260(8) (Count I); that the allegation of fraud "be closed with a finding of no violation," noting that the civil fraud judgment concerned gifts unrelated to the real estate transactions (Count II); that the Lancasters failed to properly account for money and property received in connection with the real estate transactions, in violation of Code § 54.1-2132(A)(2)(d) (Count III); and that the Lancasters engaged in "improper and dishonest conduct" in violation of 18 VAC 135-20-260(9) (Count IV). The reports which were presented to the Board, recommended imposing the following sanctions for each of the Lancasters: $2,500 penalty and a one-year suspension of their licenses for Count I, $500 penalty for Count III, and $500 penalty for Count IV.

The record contains minutes of the Board meeting at which the Board considered the reports of the informal fact finding conference. The minutes reflect that the Lancasters and their attorneys were present and addressed the Board. The Board voted to accept the reports' findings that the Lancasters had committed the violations specified in Counts I, III, and IV and to accept the recommended sanctions. The Board also voted to accept the finding that the Lancasters did not commit the allegations that were dismissed in Count II.

The Lancasters appealed the Board's decision to the Circuit Court for the City of Virginia Beach pursuant to the Administrative Process Act (Code §§ 2.2-4000 to 2.2-4033). Following the filing of pleadings in the circuit court, the Lancasters filed a motion for default judgment, alleging that the Board failed to timely file responsive pleadings. The trial judge denied the motion, and the matter proceeded on the docket. At a later hearing in the circuit court, the parties argued the merits of the appeal. In part, Jamie Lancaster's attorney argued that Jamie Lancaster was only involved in one of the real estate transactions. Christina Lancaster's attorney argued that the record contained "factual errors concerning who handled what transactions" and that the Board treated both the same because Mann was elderly.

At the conclusion of the hearing, the judge made the following findings:

[T]here are two issues before the Court here, one having to do with whether or not there is substantial evidence to support the [B]oard's findings, the other is the error of law, due process argument. And, as I indicated before, [it's] not a de novo issue as to whether or not there is sufficient or substantial evidence, and the Court is not allowed to substitute its judgment for that of the [B]oard.

I am, however, convinced that it's a situation in which, quite frankly, there ought to have been more opportunity before the full [B]oard to have given these folks a chance to present their side of the case.... I am inclined to remand it back to the [B]oard for a full hearing only as to count one and specifically on the issue of the determination of failure to use ordinary care. And I don't think that it would take forever to come to ... that issue specifically before the entire [B]oard. I don't think that the other counts really amount to a whole lot as far as either side is concerned.

But the Court would be prepared to do that, unless counsel for the [Lancasters] tell me you don't want to do that, you would rather have a ruling one way or the other and take it up. But I think that's the appropriate thing to do is to remand it.

* * * * * * *

And specifically, though, as to that one count and to that one issue, because I think ... everybody has agreed that that's the issue, whether or not there was a failure to use ordinary care. And that's the standard, that's the issue, and that is what I think needs to be explored a little bit more fully and more in depth by the [B]oard.

The Board's attorney inquired whether the judge was requiring the Board to give "a full hearing," and he informed the judge that the Board "normally gives these regulants five minutes." The judge responded as follows:

[T]hey can decide whether they want to do that or not. I'm not going to try to make their rules for them. They can decide whether they want to do five minutes or more than five minutes, or whether they're going to stick to the five minutes. And then I would imagine, depending on what the outcome at that level is, it will be back up here and then we will be arguing about whether five minutes is enough. So there you are. So that's the way it will have to work.

After exploring the issue whether the suspension of the Lancasters' licenses would be stayed pending the remand, the Board's attorney reminded the judge that the Board could impose higher penalties on the Lancasters during the second hearing. The judge responded, "That's absolutely correct" and indicated that was the reason he "specifically asked [the attorney] whether or not he was making that request and he said that he was."

A discussion then ensued about whether the circuit court would retain jurisdiction over the case:

[Lancaster's attorney]: So the Court maintains jurisdiction over this matter, remands it, and then — because there's going to be this order of suspension, so obviously, as long as that's going on, the Court still has jurisdiction, but you're just sending it back to Richmond for them to figure out that part?

[Judge]: It's a Court suspension.

[Lancaster's attorney]: Yes, sir, count one, but you maintain jurisdiction. This is not a terminated proceeding. It's being sent back to Richmond.

[Judge]: That's correct

The trial judge later entered a "final order" tendered by the parties. The order decrees that "Counts 3 and 4 of the... Board's Final Opinion[s] ... are affirmed," and the order further provides as follows:

For the reasons stated on the record ... Count 1 of the Real Estate Board's Final Opinion[s] are set aside and remanded to the Board for a formal hearing, specifically, to address the issue of the [Lancasters'] failure to exercise ordinary care in respect to the client's interests in the transactions at issue in these cases, and in order to allow [the Lancasters] further opportunity to address the Board regarding that issue and in response to the findings and recommendations of the respective investigations and informal Fact Finding Conferences related thereto....