Mississippi Real Estate Com'n v. Hennessee

• Decision Date: 11 April 1996
• Docket Number: No. 92-CC-01230-SCT,92-CC-01230-SCT
• Citation: 672 So.2d 1209
• Parties: MISSISSIPPI REAL ESTATE COMMISSION v. Ruby HENNESSEE.
• Court: Mississippi Supreme Court

Page 1209

672 So.2d 1209

MISSISSIPPI REAL ESTATE COMMISSION v. Ruby HENNESSEE.

No. 92-CC-01230-SCT.

Supreme Court of Mississippi.

April 11, 1996.

Appeal No. 9272197 from Judgment dated October 27, 1992, William F. Coleman Ruling Judge, Hinds County Circuit Court, First Judicial District.

John L. Maxey, II, Maxey Pigott Wann & Begley, Jackson, Lindsay C. Patterson, Ott Purdy & Scott, Jackson, for appellant.

Ronald G. Peresich, Page Mannino Peresich Dickinson & McDermott, Biloxi, Gina L. Bardwell, Colingo, Williams Heidelberg Steinberger & McElhaney, Pascagoula, for appellee.

Before PRATHER, P.J., and JAMES L. ROBERTS, Jr., and MILLS, JJ.

JAMES L. ROBERTS, Jr., Justice, for the Court:

INTRODUCTION

This case involves the reversal by the Hinds County Circuit Court of a Mississippi Real Estate Commission (hereinafter MREC) license suspension of Ruby Hennessee (hereinafter Ruby). The MREC ruled that Ruby had violated three licensing requirement sections during the sale of a home owned by her corporation and sold by her. The misrepresentations involved an undelivered termite certification for the home.

The MREC ruled that Ruby was subject to disciplinary actions for failing to deliver a termite inspection certificate as she had promised prior to the sale of the home. However, the circuit court found that "the record fails to reveal any substantial evidence that the appellant as a realtor made any representations that were misleading or false on the issue of termite inspection or certification" and reversed the MREC. (emphasis added). Accordingly, the MREC appealed the reversal and seeks to have the license suspension reinstated.

The issue on appeal is a first impression question of law in Mississippi as to whether or not a broker selling property wholly owned by the broker is subject to licensing disciplinary actions while doing so. The MREC argues that Ruby is subject to licensing disciplinary actions while selling property owned by her and that there was substantial evidence to support the suspension. Ruby argues the exact opposite, naturally. We find the MREC is correct, and therefore reverse the circuit court's ruling to reinstate

the suspension properly imposed by the MREC.

STATEMENT OF THE CASE

The procedural history of this case began on January 13, 1992 with the filing of a sworn complaint by Jimmy D. Davis (hereinafter Jimmy) and Sarah L. Scott (hereinafter Sarah) with the Mississippi Real Estate Commission against real estate broker Ruby Hennessee. Jimmy and Sarah's complaint was investigated by the MREC which conducted a hearing on April 14, 1992. The MREC heard testimony from David Griffith ¹, Jimmy, and Sarah. Ruby made a brief closing statement to the MREC, but did not "testify" nor was she subjected to cross-examination. Ruby cross-examined Jimmy, but not Sarah. Upon hearing the aforementioned testimony, the MREC made the following ruling.

Ms. Hennessee, the commission has considered the evidence and the exhibits and all the statements and has concluded that you're in violation of Mississippi Real Estate Brokers License Act 1954. Specifically, 73-35-21(a)(b) and (m). Our recommendation to you is that you comply with paragraph 13 on the Contract of Sale dated March 7th, 1991. ² It's known as Exhibit 2 for the purpose of this hearing.

Because of the above mentioned violations, we are suspending your license for a period of three months, followed by nine months probation. And we are dismissed.

Aggrieved by the MREC's ruling, Ruby appealed to the Hinds County Circuit Court with the Honorable William F. Coleman presiding. ³ After reviewing the April 14, 1992 disposition and proceedings with the MREC, and acting as an intermediate appellate court, Judge Coleman entered an Order and Opinion on October 27, 1992 reversing the decision of the MREC.

Judge Coleman's Order and Opinion addressed two issues. The first issue was whether the MREC had jurisdiction to investigate and conduct a hearing on the Complaint filed by Jimmy and Sarah against Ruby. He found that jurisdiction was proper because "[t]he Complaint charged several acts of misrepresentation that occurred during the negotiations for the sale. Thus, the Complaint and the evidence in the record were sufficient to give the Commission jurisdiction to investigate and conduct a hearing."

The second issue was whether or not there was substantial evidence to support the MREC's finding of the three violations by Ruby. As for this issue, Judge Coleman found that:

At the conclusion of the hearing the Commission announced its findings that Appellant was in violation of §§ (a), (b), and (m) of its License Act of 1954 and further recommended "that you comply with paragraph 13 of the Contract of Sale". This paragraph provides that the seller furnish a certificate of termite inspection and provides for treatment at the seller's expense if active infestation is found.

In its Order under "Findings of Fact" the Commission found "the purchaser, Davis, was told by respondent that she had a termite certificate" and "throughout the investigation, respondent states that she would get a copy of the termite certificate but failed to forward one".

There is unrebutted proof by Appellant that her records on the property were destroyed by fire and further that she attempted to have the property inspected and any termite damage repaired but was prevented from doing so by the purchaser.

This Court is well aware that it must not substitute its judgment from that of the Board but a review of the record fails to reveal any substantial evidence that the Appellant as a realtor ⁴ made any representations that were misleading or false on the issue of termite inspection or certification.

To the contrary the purchaser's statement indicates that they were well aware that Appellant was acting as the seller in any statement concerning termites.

IT IS THEREFORE ORDERED that the Order dated April 22, 1992 be and is hereby reversed.

Dated, this the 27th day of October, 1992.

William F. Coleman

CIRCUIT COURT JUDGE

(emphasis added).

Aggrieved by the trial court's reversal of the Commission's three month license suspension with a nine month probation period for Ruby, the Commission appeals requesting review of two issues.

The issues according to the Commission are:

I. WHETHER THE APPELLEE (RUBY HENNESSEE) WAS ACTING IN A CAPACITY SO AS TO BE SUBJECT TO DISCIPLINE BY THE MISSISSIPPI REAL ESTATE COMMISSION UNDER MISS.CODE ANN. SECTION 73-35-1.

II. WHETHER THERE IS SUFFICIENT EVIDENCE ADDUCED TO SUPPORT VIOLATIONS BY THE BROKER OF MISS.CODE ANN. SECTION 73-35-21(a)(b)(m).

STATEMENT OF THE FACTS

The facts of this case began on March 6, 1991 when Jimmy and Sarah made an offer of $35,000 on a home located at 1915 25th Avenue in Meridian, Mississippi. The owner of the home was Queen City Construction Company, Inc., a Mississippi corporation (hereinafter Queen). The President of Queen is Ruby. Ruby is also a realtor for Mississippi Real Estate Company (hereinafter Company).

Jimmy and Sarah deposited $500 as earnest money with Ruby as the realtor for the Company and paid $3,500 as the down payment on the property. The $500 earnest money was received by the Company through Ruby at her real estate office. ⁵ The property was owner financed by Queen at ten percent for fifteen years. Subsequently, the property was transferred by warranty deed on March 16, 1991. The Contract of Sale, paragraph No. 9, indicates that the payment of a commission was not applicable.

The Contract for Sale reflects that Ruby signed the document in three capacities. She signed as the seller, the realtor, and as the listing agent. The closing statement reflects that Ruby signed the sale agreement on behalf of Queen as the seller/president of Queen. The closing statement also reflects that the purchase price was adjusted down $1,000 to $34,000 and applied the $500 earnest money and $3,500 down payment towards the purchase leaving a balance of $30,000.00. The Company received $2,040 from the sale, although it is unclear for what exactly as the Contract of Sale, paragraph No. 9, provides that the payment of a commission was not applicable. Thus, Ruby argues that she cannot be subject to discipline because she did not receive a commission from the sale and claims that the "figure could represent numerous other, non-commission, aspects of the transaction." However, she fails to give anything other than speculation as to for what the money received by the Company was intended. Rather, she espouses that it is "possible" that the money "could" be for something non-commission under this "interpretation."

Ruby cross-examined Jimmy during the hearing before the MREC and contended that the $1,000 reduction in sale price at the time of closing was so that Jimmy would accept the property "as-is". Jimmy answered Ruby's contention here by stating that this was not true and that even after the $1,000 reduction was made that Ruby still guaranteed that the home was free of termites, had a new roof and wiring, and was totally remodeled. The record reflects that Ruby did not pursue this rebuttal by Jimmy and instead began to try and illustrate that the cause for the termites was Jimmy's installation of a window air conditioner unit which released condensation and the installation of a concrete sidewalk beside the home trapping the water. However, Commissioner Linley, who previously served as a sales manager for Mississippi Termite Control, did not believe from his past experience that the existence of termites in Jimmy and Sarah's home was caused by the air conditioner and sidewalk as not enough time had elapsed for the termites to colonize.

As part of the Contract for Sale, paragraph No. 13 provided that the seller would furnish the purchaser with a certification from a bonded and licensed firm showing that there were no visible signs of termite infestation. According to Jimmy and Sarah, Ruby told them prior to the sale...