Horne v. Commonwealth of Va.
| Citation | 705 S.E.2d 535,57 Va.App. 709 |
| Decision Date | 22 February 2011 |
| Docket Number | Record No. 1319–10–3. |
| Parties | Judy Carol HORNEv.COMMONWEALTH of Virginia, REAL ESTATE BOARD. |
| Court | Court of Appeals of Virginia |
OPINION TEXT STARTS HERE
Thomas P. Walk (Altizer, Walk and White, PLLC, Tazewell, on brief), for appellant.Steven P. Jack, Assistant Attorney General (Kenneth T. Cuccinelli, II, Attorney General, on brief), for appellee.Present: FRANK, HUMPHREYS and McCLANAHAN, JJ.McCLANAHAN, Judge.
In this administrative appeal, Judy Carol Horne challenges an order of the circuit court: (i) affirming the decision of the Commonwealth of Virginia's Real Estate Board (“Board”) to impose sanctions against Horne, as a “licensed real estate salesperson,” upon the Board's findings that she violated 18 VAC 135–20–310(2) (Count 2) and 18 VAC 135–20–260(10) (Count 3) by her conduct related to a certain real estate transaction; and (ii) denying Horne's request for attorney's fees, pursuant to Code § 2.2–4030, incurred in defending the two alleged violations that were ultimately rejected by the Board (Counts 1 and 4), and the two remaining alleged violations that are the subject of this appeal (Counts 2 and 3).
Concluding that the Board's findings on Counts 2 and 3 were based on arbitrary and capricious interpretations of its regulations, and supported by insufficient evidence, we reverse the judgment of the circuit court in affirming the Board's decision. We also conclude that Horne is entitled to attorney's fees in defending Counts 2 and 3, which the circuit court denied when it erroneously affirmed the Board's decision. We further conclude, however, that Horne is not entitled to attorney's fees as to Counts 1 and 4, as those counts were not the subject of an appeal to the circuit court; we thus affirm the circuit court as to that ruling. Accordingly, we remand this case to the circuit court for a determination of reasonable attorney's fees to be awarded to Horne on Counts 2 and 3.
Kris and Jessica Shreve, the prospective buyers (“buyers”), and Jerry Hawkins, the prospective seller (“seller”), entered into negotiations over the sale of certain residential property located in Pounding Mill, Virginia. Horne, as a real estate agent with Coldwell Banker Security Real Estate, Inc. (“Coldwell Banker”), represented the buyers, and Vicki England, as a real estate agent with Century 21 Prime Properties, represented the seller. After a number of offers and counter-offers were made between the buyers and the seller through their respective agents, Horne and England, the parties “ratified” a sales contract for the property on July 12, 2007.
The contract provided, inter alia, the following: (i) “upon ratification” of the contract the buyers were to pay to Coldwell Banker an earnest money deposit in the sum of $100; (ii) the buyers were to provide the seller with a “pre-approval letter from [the] lending institution of [buyers'] choice, within 10 business days from date of acceptance of contract,” or the contract would be in “default at the option of the [seller]” and the earnest money deposit would be “forfeited to the [seller]”; (iii) the contract was contingent upon the buyers obtaining financing from their lending institution for the purchase of the property; and (iv) in the event the loan to the buyers was not approved the contract could be “cancelled by the buyer(s),” and the buyers would thereby be entitled to return of the earnest money deposit.
On July 16, 2007, Horne sent to England a facsimile stating that the buyer, Kris Shreve, “is working with Tim at New Peoples Bank who is on vacation until the 23rd of this month; he will not have the [pre-approval] letter until Tim returns.” Horne also called England on July 16th and 18th and advised that Shreve had not yet delivered the earnest money deposit.
After failing to keep appointments with Horne on July 16th and July 18th for delivery of the earnest money deposit, Shreve called Horne on July 19th (the fifth business day following ratification of the contract) and explained that the bank had denied his loan request and that he therefore wished to cancel the sales contract. On the same day, Horne sent to England a facsimile stating:
[Shreve] ... did not provide me with an earnest money deposit last night as agreed. He did call me this afternoon to tell me that he had spoken with another loan officer at New Peoples Bank who told him he would have to come up with 20% of the total loan to bring to closing. He has informed me that he will not be able to provide 20% of the funding, and as of today he no longer wishes to proceed with the offer to purchase.
On July 26th, England requested that Horne provide to her, among other things, a letter from the buyers' bank stating that it had denied financing to the buyers and a “signed release of contract noting that escrow monies were not received.” Horne provided those documents to England on the following day.
The seller subsequently filed a complaint against Horne with the Virginia Department of Professional and Occupational Regulation (“Department”) 1 in regard to her conduct in representing the buyers. Following the Department's investigation, the Department prepared a report of findings dated September 22, 2008, outlining four counts of Horne's alleged violations of the Board's regulations. The Department then held an “informal fact-finding conference” on July 29, 2009. Board member Sharon Johnson conducted the hearing in which she received documentary evidence from both the Department and Horne, and heard Horne's testimony. On August 19, 2009, Johnson issued her written recommendations to the Board.
For Counts 1 and 4, Johnson recommended that “the file be closed” based on her findings that Horne had not violated 18 VAC 135–20–300(6) or 18 VAC 135–20–180(B)(1)(a), as charged in those counts, respectively.
As to Count 2, Johnson concluded Horne had violated 18 VAC 135–20–310(2), as charged, based on her finding that Horne failed to provide written notice to England in a timely manner that the buyers had not paid the earnest money deposit as required by the sales contract. For this alleged violation, Johnson recommended that a penalty of $500 be imposed and that Horne's license be placed on probation until she completed four hours of specified continuing education.
As to Count 3, Johnson concluded Horne had violated 18 VAC 135–20–260(10), as charged, based on her finding that Horne did not produce a pre-approval letter from the buyers' bank within ten days as required by the contract. For this alleged violation, Johnson recommended that a penalty of $1,000 be imposed and that Horne's license be placed on probation until she completed three hours of specified continuing education.
At a Board meeting on September 10, 2009, the Board voted to accept Johnson's recommendations and a final order of the Board to that effect was entered on the same day. Horne appealed the Board's order to the circuit court, challenging its decision as to both Counts 2 and 3, and seeking an award of attorney's fees for her defense to all four counts.
By final order dated May 21, 2010, the circuit court affirmed the Board's September 10, 2009 order “in all respects” and dismissed Horne's appeal. The court specifically found that there was “substantial evidence” to support the Board's decision and that the Board's construction of its regulations was “neither arbitrary nor capricious.” Upon rejecting Horne's challenge to the Board's disposition of Counts 2 and 3, the court made no award of attorney's fees to Horne under Code § 2.2–4030 for her defense to the alleged violations. The court also rejected Horne's request for attorney's fees on Counts 1 and 4, explaining that, even though Horne succeeded before the Board in her defense against those alleged violations, those two counts “were not at issue before the [c]ourt in this appeal.”
The Virginia Administrative Process Act authorizes judicial review of agency decisions. See Code § 2.2–4027. Under settled principles, the burden is upon the party appealing such a decision to demonstrate error. Avante at Roanoke v. Finnerty, 56 Va.App. 190, 197, 692 S.E.2d 277, 280 (2010); Carter v. Gordon, 28 Va.App. 133, 141, 502 S.E.2d 697, 700–01 (1998). “Our review is limited to determining (1) ‘[w]hether the agency acted in accordance with law;’ (2) ‘[w]hether the agency made a procedural error which was not harmless error;’ and (3) ‘[w]hether the agency had sufficient evidential support for its findings of fact.’ ” Avante at Roanoke, 56 Va.App. at 197, 692 S.E.2d at 280 (quoting Johnston–Willis, Ltd. v. Kenley, 6 Va.App. 231, 242, 369 S.E.2d 1, 7 (1988)).
On factual issues, the determination to be made by the reviewing court is “ ” John Doe v. Virginia Bd. of Dentistry, 52 Va.App. 166, 175, 662 S.E.2d 99, 103 (2008) (quoting Johnston–Willis, 6 Va.App. at 242, 369 S.E.2d at 7). See Virginia Real Estate Comm'n v. Bias, 226 Va. 264, 269, 308 S.E.2d 123, 125 (1983) .
Further, when reviewing claims of regulatory interpretive error in an administrative appeal, we are to
“give ‘great deference’ to an agency's interpretation of its own regulations.” Board of Supervisors v. State Bldg. Code Tech. Review Bd., 52 Va.App. 460, 466, 663 S.E.2d 571, 574 (2008). “This deference stems from Code § 2.2–4027, which requires that reviewing courts ‘take due account’ of the ‘experience and specialized competence of the agency’ promulgating the regulation.” Id. (quoting Real...
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