Indiana Real Estate Com'n v. Martin, 49A05-0406-CV-349.

• Court: Indiana Supreme Court
• Writing for the Court: May
• Citation: Indiana Real Estate Com'n v. Martin, 836 N.E.2d 311 (Ind. 2005)
• Decision Date: 28 October 2005
• Docket Number: No. 49A05-0406-CV-349.,49A05-0406-CV-349.
• Parties: INDIANA REAL ESTATE COMMISSION, Appellant-Respondent, v. Rick Edward MARTIN, Appellee-Petitioner.

Page 311

836 N.E.2d 311

INDIANA REAL ESTATE COMMISSION, Appellant-Respondent, v. Rick Edward MARTIN, Appellee-Petitioner.

No. 49A05-0406-CV-349.

Court of Appeals of Indiana.

October 28, 2005.

Steve Carter, Attorney General of Indiana, Frances H. Barrow, Deputy Attorney General, Indianapolis, for Appellant.

John E. Kolas, Slaughter Kolas & Centers, Indianapolis, for Appellee.

OPINION

MAY, Judge.

The Indiana Real Estate Commission ("Commission") appeals the trial court's reversal of the Commission's final order suspending Rick Martin's real estate license as a result of his failure to obtain approved continuing education. The Commission raises one issue: whether the court erred when it determined the Commission's decision was arbitrary and a violation of Ind.Code § 25-1-11-16, which encourages consistency in sanctions.

We reverse and remand.

FACTS AND PROCEDURAL HISTORY

In 1985, Rick Martin was licensed as a real estate broker in Kentucky. In 1996, through reciprocity, Martin became a licensed real estate salesperson in Indiana. When Martin sought to renew his real estate sales license for 2000-01, a routine audit revealed he had not obtained sixteen hours of approved continuing education required for the period January 1, 1998 through December 31, 1999. Between October 2000 and September 2001, Martin obtained forty hours of approved continuing education in an effort to remedy this deficiency and satisfy his continuing education requirements for the 2000-01 period. He obtained an Indiana real estate broker license in July 2001.¹

On September 20, 2001, the Attorney General filed a complaint alleging Martin failed to obtain sufficient continuing education for 1998-99 and asking the Indiana Real Estate Commission to impose appropriate sanctions on Martin. A three-member panel of administrative law judges held a hearing on December 5, 2001 and issued its Findings of Fact, Conclusions of Law and Order on December 18, 2001. Martin appealed to the Commission on December 27, 2001.

On April 16, 2002, after a hearing, the Commission affirmed the panel's order. The Commission's order suspended Martin's broker license "indefinitely with no right to petition the Commission for reinstatement for a period of two years." (App. at 74.) The order also required Martin to pay a $500 fine and costs of the proceedings.

On April 24, 2002, Martin sought judicial review of the Commission's decision. The court determined the "inconsistency in the application of sanctions by the Indiana Real Estate Commission and the arbitrary nature of the decision reached justifies relief on Judicial Review." (Id. at 13.) On December 22, 2003, having determined the actions of the Commission were arbitrary, the court set aside the Commission's order and ordered Martin's broker's license be reinstated.

The Commission filed a motion to correct error, which was granted. The corrected order, dated April 27, 2004, remanded the matter to the Commission but did not disturb the court's determination the Commission acted in an arbitrary manner. The Commission now appeals the trial court's order, arguing the court improperly granted Martin's petition for judicial review.

DISCUSSION AND DECISION

Judicial review of an administrative decision is limited. Review of an agency's decision is confined largely to the agency record. The court cannot reweigh the evidence and must review the record in the light most favorable to the administrative proceedings. The court may neither try the case de novo nor substitute its judgment for that of the agency. The reviewing court is to give deference to the expertise of the administrative body. The decision should be reversed only when it is (1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; (2) contrary to a constitutional right, power, privilege, or immunity; (3) in excess of statutory jurisdiction, authority, or limitations, or short of statutory right; (4) without observance of procedure required by law; or (5) unsupported by substantial evidence.

State of Indiana, Indiana Real Estate Comm'n v. C.M.B. III Enterprises, Inc., 734 N.E.2d 653, 658 (Ind.Ct.App.2000) (citations omitted), trans. denied. A decision is arbitrary and capricious when it is made without consideration of the facts and lacks any basis that may lead a reasonable person to make the decision made by the administrative agency. Indiana Dept. of Envtl. Mgmt. v. Schnippel Constr., Inc., 778 N.E.2d 407, 412 (Ind.Ct.App.2002), trans. denied.

The Indiana Real Estate Commission is charged with regulating real estate practitioners in Indiana. Ind.Code § 25-34.1-2-5. In discharging this duty, the Commission has established continuing education requirements for all licensees, consisting of a minimum of sixteen hours of approved courses taken in specific subject areas from approved course sponsors during the relevant two-year licensure period. Ind. Admin. Code, tit. 876, r. 4-2-1, et seq. Additional courses taken in one licensure period do not carry over to the next licensure period. 876 IAC 4-2-1-1(g).

When applying for a license renewal, the applicant must certify he has "complied with the continuing education requirements" set forth by the Commission. 876 IAC 4-2-6(a). The Commission may request verification of this certification. 876 IAC 4-2-6(b), (c). Failure to verify continuing education hours claimed in the renewal application "shall subject a licensee to the sanctions provided for under IC 25-1-11." 876 IAC 4-2-6(d).

Indiana Code § 25-1-11-5(a)(3) provides:

(a) A practitioner shall comply with the standards established by the board regulating a profession. A practitioner is subject to the exercise of the disciplinary sanctions under section 12 of this chapter if, after a hearing, the board finds that:

* * * * * *

(3) a practitioner has knowingly violated a state statute or rule or federal statute or regulation regulating the profession for which the practitioner is licensed.

Section 12 describes the sanctions available to the Commission:

(a) The board may impose any of the following sanctions, singly or in combination, if the board finds that a practitioner is subject to disciplinary sanctions under sections 5 through 9 of this chapter:

(1) Permanently revoke a practitioner's license.

(2) Suspend a practitioner's license.

(3) Censure a practitioner.

(4) Issue a letter of reprimand.

(5) Place a practitioner on probation status and require the practitioner to:

(A) report regularly to the board upon the matters that are the basis of probation;

(B) limit practice to those areas prescribed by the board;

(C) continue or renew professional education approved by the board until a satisfactory degree of skill has been attained in those areas that are the basis of the probation; or

(D) perform or refrain from performing any acts, including community restitution or service without compensation, that the board considers appropriate to the public interest or to the rehabilitation or treatment of the practitioner.

(6) Assess a civil penalty against the practitioner for not more than one thousand dollars ($1,000) for each violation listed in sections 5 through 9 of this chapter except for a finding of incompetency due to a physical or mental disability.

Ind.Code § 25-1-11-12. The Commission "shall seek to achieve consistency in the application of sanctions authorized in this chapter." Ind.Code § 25-1-11-16. "Significant departures from prior decisions involving similar conduct must be explained in the board's findings or orders." Id.

The Commission made the following relevant Findings of Fact:

6. Upon renewal of his license for the January 1, 2000 to December 31, 2001 period, [Martin] reported that he had completed at least 16 hours of continuing education during the January 1, 1998, through December 31, 1999 period.

7. The Commission requested verification of the continuing education hours that [Martin] reported. [Martin] failed to verify all of the continuing education hours that he claimed.

8. [Martin] did not obtain any approved continuing education during the January 1, 1998 through December 31, 1999 reporting period.

9. [Martin] admitted his misunderstanding and lack of knowledge of the continuing education requirement, which requires that sixteen (16) hours of continuing education be taken prior to renewal of a license for a salesperson.

10. [Martin] submitted proof of continuing education hours taken after and before the renewal period, but no approved hours taken during the renewal period.

(App. at 44) (emphases original).

The record supports these findings. Martin obtained a real estate sales license through reciprocity in 1996. As part of the reciprocity process, Martin was required to state he "has studied, is familiar with, and will abide by the statutes and rules of this state." Ind.Code § 25-34.1-3-5. His license expired at the end of 1997 and was renewed for two years. When that term expired, Martin sought to renew his license and certified he had completed the required continuing education. The Commission requested verification and Martin provided attendance certificates for six courses.

On review, the Commission rejected three courses taken before the relevant reporting period; two courses sponsored by unapproved providers; and one course dealing with Kentucky, not Indiana, law. Thus, Martin was unable to verify any of the continuing education hours he claimed on his license renewal application for 1998-99.

In the fall of 2000, Martin completed sixteen hours of continuing education, provided attendance certificates to the Commission and requested these hours be accepted to fulfill the previous period's requirements. Martin attended an additional sixteen hours of continuing education in January 2001 for the 2000-01 reporting period. He obtained his associate broker's license in July 2001 and attended eight hours of continuing education for his broker's license in September...