Gottschalk v. South Dakota State Real Estate Commission, No. 12065

CourtSupreme Court of South Dakota
Writing for the CourtZASTROW
Citation264 N.W.2d 905
PartiesOliver A. GOTTSCHALK, Appellant, v. SOUTH DAKOTA STATE REAL ESTATE COMMISSION, Respondent.
Docket NumberNo. 12065
Decision Date12 April 1978

Page 905

264 N.W.2d 905
Oliver A. GOTTSCHALK, Appellant,
v.
SOUTH DAKOTA STATE REAL ESTATE COMMISSION, Respondent.
No. 12065.
Supreme Court of South Dakota.
April 12, 1978.

Page 906

Lewayne M. Erickson, Brookings, for appellant.

William J. Srstka, Jr. of Duncan, Olinger & Srstka, Pierre, for respondent.

ZASTROW, Justice.

The appellant, Oliver Gottschalk (Gottschalk), a licensed real estate broker, was charged with unprofessional conduct, and a hearing on those allegations was held before the South Dakota Real Estate Commission (Commission) on September 4, 1975. The Commission entered its findings of fact and conclusions of law and decision and order on September 11, 1975, finding Gottschalk guilty of unprofessional conduct and revoking his South Dakota real estate license.

Gottschalk appealed the Commission's order to the circuit court under the Administrative Procedures Act, SDCL, Ch. 1-26. The circuit court upheld the Commission's decision. The appellant seeks review of the circuit court's decision. We affirm.

FACTS

A disciplinary action had been brought against Gottschalk following a complaint by H. O. Lund of Brookings. The hearing on that complaint, held on February 5 and April 29, 1971, involved the sale of Lund's home by Gottschalk on December 15, 1970. Lund had received a check from the Gottschalk trust account which was dishonored upon presentation to the bank. During the course of that hearing, evidence was produced which showed forty-nine overdrafts on Gottschalk's trust account between January 1, 1970 and December 30, 1970. Based upon the findings, Gottschalk's license was suspended for six months, beginning May 6, 1971.

The complaint which led to the present revocation involves the purchase of a home by Mrs. Thelma Nelson in 1969. After the death of her husband, Mrs. Nelson decided to move to Brookings. After Gottschalk had shown her several homes, she signed a purchase agreement on June 28, 1969. She made a down payment of $1,500, but advised Gottschalk that it was her desire to use the proceeds of her husband's life insurance to pay the full purchase price of the house and not to assume the mortgage. The transaction was closed on August 15, 1969, and Mrs. Nelson delivered a check for $17,042.57 to Gottschalk.

Several months later, she received a notice of delinquent mortgage payments from Prudential Insurance Company. When Mrs. Nelson discussed the matter with Gottschalk, he assured her that Prudential had made some mistake. Later, she received a similar notice and similar assurances from Gottschalk. In August of 1971, a representative of Prudential visited Mrs. Nelson and advised her she was five months behind in her house payments. Mrs. Nelson advised the representative that she had paid cash for the home. When the Prudential representative confronted Gottschalk,

Page 907

he admitted that he had been in financial difficulties and had used the money to pay personal debts. Gottschalk explained that he had attempted to cover up the conversion by making monthly payments until his financial situation made it impossible.

A complaint was made to the Commission by the Prudential representative. The disciplinary proceedings were initiated in November 1971; however, due to the appellant's institution of various court challenges, 1 the hearing was delayed until September 1975.

ISSUES

The appellant raises three issues in his appeal: (1) Is the pending action barred by the doctrine of res judicata; (2) Did the prior knowledge and pecuniary interest of the members of the Commission deny appellant due process of law; and (3) Did the combination of the functions of Commission members deny the appellant due process of law.

RES JUDICATA

The question of the applicability of the doctrine of res judicata in an administrative hearing is one of first impression in this state. Most modern authorities have applied the doctrine to contested administrative proceedings. Davis, Administrative Law (5th Ed., 1973, 1976 Supp.), Ch. 21. It appears that the rationale for the doctrine of res judicata is equally applicable to contested administrative hearings as it is to judicial proceedings. The United States Supreme Court has adopted a similar posture in United States v. Utah Constr. & Min. Co., 1966, 384 U.S. 394, 86 S.Ct. 1545, 16 L.Ed.2d 642, wherein it is stated:

"When an administrative agency is acting in a judicial capacity and resolves disputed issues of fact properly before it which the parties have had an adequate opportunity to litigate, the courts have not hesitated to apply res judicata to enforce repose. Sunshine Anthracite Coal Co. v. Adkins, 310 U.S. 381, 60 S.Ct. 907, 84 L.Ed. 1263; Hanover Bank v. United States, 285 F.2d 455, 152 Ct.Cl. 391; Fairmont Aluminum Co. v. Commissioner of Internal Revenue, 222 F.2d 622 (4 Cir.); Seatrain Lines, Inc. v. Pennsylvania R. Co., 207 F.2d 255 (3 Cir). See also Goldstein v. Doft, 236 F.Supp. 730 (D.C.), aff'd 353 F.2d 484 (2 Cir.), cert. den., 383 U.S. 960, 86 S.Ct. 1226, 16 L.Ed.2d 302, where collateral estoppel was applied to prevent relitigation of factual disputes resolved by an arbitrator.

"In the present case the Board was acting in a judicial capacity when it considered the * * * claims, the factual disputes resolved were clearly relevant to issues properly before it, and both parties had a full and fair opportunity to argue their version of the facts and an opportunity to seek court review of any adverse findings. There is, therefore, neither need nor justification, for a second evidentiary hearing on these matters already resolved as between these two parties."

See also 2 Am.Jur.2d, Administrative Law, § 496, et seq.

The doctrine of res judicata as applied to court judgments has been defined by this court.

"First, a final judgment or decree of a court of competent jurisdiction upon the merits is a bar to any future action between the same parties or their privies upon the same cause of action so long as it remains unreversed; and, second, a point which was actually and directly in issue in a former action and was there judicially passed upon and determined by a domestic court of competent jurisdiction cannot be drawn in question in any future action between the same parties or their privies whether the cause of action in the two actions be identical or different. * * * Under the first rule the res which is judicata is the cause of action. Under the second, the res which may be judicata is the particular issue or fact common to both actions." Keith v. Willers Truck Service, 1936, 64 S.D. 274 at 276, 266 N.W. 256 at 257-258.

Page 908

This court further explained the two principles of res judicata in Golden v. Oahe Enterprises, Inc., 1976, S.D., 240 N.W.2d 102:

"For purposes of res judicata, a cause of action is comprised of the facts which establish the right a party seeks to enforce through litigation. * * * A test employed by the Eighth Circuit Court of Appeals for the determination of whether a cause of action is the same for purposes of applying the res judicata doctrine is ' "whether the wrong for which redress is sought is the same for both actions." ' * * * A judgment which bars a second action upon the same claim...

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23 practice notes
  • Wheeldon v. Madison, Nos. 14387
    • United States
    • Supreme Court of South Dakota
    • September 6, 1985
    ...866 (S.D.1985); Black Hills Jewelry Mfg. v. Felco Jewel Ind., 336 N.W.2d 153 (S.D.1983); Gottschalk v. S.D. State Real Estate Comm'n, 264 N.W.2d 905 Only under exceptional circumstances that implicate the public interest will this court retain and decide a moot question on appeal. As we dec......
  • Appeal of Schramm
    • United States
    • Supreme Court of South Dakota
    • May 6, 1986
    ...(Minn.App.1985); forgery, Voorhees, supra; personal conversion of client trust funds, Gottschalk v. S.D. State Real Estate Commission, 264 N.W.2d 905 (S.D.1978); or sexual molestation of patients, c.f. State v. Schnaidt, 410 N.W.2d 539 Another exception would be where the person who holds t......
  • Rosebud Sioux Tribe v. Strain, No. 15929
    • United States
    • Supreme Court of South Dakota
    • December 29, 1988
    ...Nelson, 330 N.W.2d 151 (S.D.1983); Schmidt v. Zellmer, 298 N.W.2d 178 (S.D.1980); Gottschalk v. South Dakota State Real Estate Comm'n., 264 N.W.2d 905 (S.D.1978). Of course, the earlier court must have had jurisdiction and its decision must be final and unreversed. Keith v. Willers Truck Se......
  • Chapman v. Chapman, No. 23702.
    • United States
    • Supreme Court of South Dakota
    • April 12, 2006
    ...Nelson, 330 N.W.2d 151 (S.D.1983)); Schmidt v. Zellmer, 298 N.W.2d 178 (S.D.1980); Gottschalk v. South Dakota State Real Estate Comm'n, 264 N.W.2d 905 (S.D.1975). One purpose of res judicata is to prevent parties from being subjected twice to the same cause of action, as finality in litigat......
  • Request a trial to view additional results
23 cases
  • Wheeldon v. Madison, Nos. 14387
    • United States
    • Supreme Court of South Dakota
    • September 6, 1985
    ...866 (S.D.1985); Black Hills Jewelry Mfg. v. Felco Jewel Ind., 336 N.W.2d 153 (S.D.1983); Gottschalk v. S.D. State Real Estate Comm'n, 264 N.W.2d 905 Only under exceptional circumstances that implicate the public interest will this court retain and decide a moot question on appeal. As we dec......
  • Appeal of Schramm
    • United States
    • Supreme Court of South Dakota
    • May 6, 1986
    ...(Minn.App.1985); forgery, Voorhees, supra; personal conversion of client trust funds, Gottschalk v. S.D. State Real Estate Commission, 264 N.W.2d 905 (S.D.1978); or sexual molestation of patients, c.f. State v. Schnaidt, 410 N.W.2d 539 Another exception would be where the person who holds t......
  • Rosebud Sioux Tribe v. Strain, No. 15929
    • United States
    • Supreme Court of South Dakota
    • December 29, 1988
    ...Nelson, 330 N.W.2d 151 (S.D.1983); Schmidt v. Zellmer, 298 N.W.2d 178 (S.D.1980); Gottschalk v. South Dakota State Real Estate Comm'n., 264 N.W.2d 905 (S.D.1978). Of course, the earlier court must have had jurisdiction and its decision must be final and unreversed. Keith v. Willers Truck Se......
  • Chapman v. Chapman, No. 23702.
    • United States
    • Supreme Court of South Dakota
    • April 12, 2006
    ...Nelson, 330 N.W.2d 151 (S.D.1983)); Schmidt v. Zellmer, 298 N.W.2d 178 (S.D.1980); Gottschalk v. South Dakota State Real Estate Comm'n, 264 N.W.2d 905 (S.D.1975). One purpose of res judicata is to prevent parties from being subjected twice to the same cause of action, as finality in litigat......
  • Request a trial to view additional results

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