Missouri Real Estate Com'n v. McCormick

• Citation: 778 S.W.2d 303
• Decision Date: 17 July 1989
• Docket Number: No. 16018-2,16018-2
• Parties: MISSOURI REAL ESTATE COMMISSION, Petitioner-Appellant, v. Ronnie R. McCORMICK, Respondent.
• Court: Missouri Court of Appeals

Page 303

778 S.W.2d 303

MISSOURI REAL ESTATE COMMISSION, Petitioner-Appellant, v. Ronnie R. McCORMICK, Respondent.

No. 16018-2.

Missouri Court of Appeals,

Southern District,

Division Two.

July 17, 1989.

Motion for Rehearing or Transfer to

Supreme Court Denied Aug. 22, 1989.

Application to Transfer Denied Nov. 14, 1989.

William L. Webster, Atty. Gen., Greg A. Perry, Asst. Atty. Gen., Jefferson City, for petitioner-appellant.

Kevin Kays Dunaway, Jerry L. Redfern, Neale, Newman, Bradshaw & Freeman, Springfield, for respondent.

MAUS, Judge.

This proceeding was initiated by the complaint of the Missouri Real Estate Commission (MREC) filed with the Administrative Hearing Commission (AHC). That complaint alleged licensed real estate broker-salesperson Ronnie R. McCormick (respondent) committed acts which subjected him to disciplinary action. Pursuant to a stipulation, the AHC found those acts resulted in cause for such disciplinary action under § 339.100.2(10), (15), (17) and (18). Upon the basis of that finding, following a hearing, the MREC ordered that respondent's license be suspended for one year to be followed by five years' probation. Upon judicial review, the circuit court modified the order to provide the discipline of the respondent to be one year's probation. MREC appeals.

The causes for which one holding a license issued by the MREC may be disciplined by that agency are defined by statute. § 339.100.2; Missouri Real Estate Commission v. Berger, 764 S.W.2d 706 (Mo.App.1989). The procedure whereby the MREC can suspend or revoke a license or place a licensee on probation is also succinctly prescribed by statute. See Mueller v. Ruddy, 617 S.W.2d 466 (Mo.App.1981), cert. denied, 454 U.S. 1055, 102 S.Ct. 600, 70 L.Ed.2d 591; State Board of Reg. for Healing Arts v. Masters, 512 S.W.2d 150 (Mo.App.1974). The MREC shall file a complaint with the AHC alleging the licensee has "performed or attempted to perform" one or more of the acts prohibited by § 339.100.2. It is the exclusive function of the AHC to conduct a hearing and make findings of fact and conclusions of law determining the existence of the alleged causes for discipline. § 621.045 and § 621.110. Dunning v. Board of Pharmacy, 630 S.W.2d 155 (Mo.App.1982). The AHC may make recommendations as to appropriate disciplinary action but such recommendations are not binding on the agency. § 621.110; cf. Newmann v. Director of Revenue, E.D. No. 55497, filed (Mo.App. May 23, 1989). Within thirty days of the receipt of the record of the AHC, if such cause is found to exist, the agency "shall set the matter for hearing upon the issue of appropriate disciplinary action." § 621.110. "After such hearing the agency may order any disciplinary measure it deems appropriate and which is authorized by law." § 621.110. The decision of the AHC and order of the agency are subject to judicial review. However, the decision of the AHC is not final until the order of the agency is entered. For purposes of review, the decision and order shall be treated as one decision. § 621.145

The scope of judicial review of that decision and order is also defined and limited by statute. See § 536.140. The reviewing court's disposition of the case is limited by the statutory admonition "the court shall not substitute its discretion for discretion legally vested in the agency." § 536.140.5.

"At the outset we note the well established rule that judicial review of administrative decisions pursuant to § 536.140 is such that ' * * * We may not substitute our judgment on the evidence for that of the Commissioner and we may not set aside his decision, unless it is not supported by competent and substantial evidence on the whole record, or it is not authorized by law, is arbitrary, capricious or involves an abuse of discretion. [Citations omitted.].' " Missouri Real Estate Commission v. Steger, 509 S.W.2d 47, 49 (Mo. banc 1974).

In this proceeding, the complaint in a preamble alleged the respondent had pled guilty to two charges of felony stealing. Incorporated exhibits established the two charges were that respondent converted to his own use a total of $2,985.00 paid to him for premiums on insurance policies. By Count I of its complaint the MREC charged that such conduct of the respondent subjected his license to disciplinary action under § 339.100.2(15), (17) and (18). By Count II MREC further alleged that in a renewal application respondent represented he had not been found guilty of any offense other than a traffic violation, failing to mention the two pleas of guilty. The MREC charged this conduct subjected respondent's license to disciplinary action under § 339.100.2(10) and (18). By answer, the respondent admitted the factual allegations of the complaint. He denied the conduct admitted subjected his license to disciplinary action under the cited subsections. He added that he completed the renewal application as he understood the advice of his attorney.

A hearing upon the complaint was not had before the AHC. Instead, the parties entered into a "Stipulation of Facts and Waiver of Administrative Hearing Commission Hearing and Consent to a Finding of Cause for Discipline." By this instrument the parties stipulated the respondent committed the acts alleged in the complaint. It added that in preparing the renewal application respondent acted pursuant to his attorney's advice. That advice was that as long as he complied with the conditions of his suspended sentence he was entitled to say he had no convictions on his record.

The introductory portion of the stipulation contained the following acknowledgment:

"The respondent further understands that after the Administrative Hearing Commission finds his license to be subject to disciplinary action by the Missouri Real Estate Commission, the Missouri Real Estate Commission shall thereafter conduct a disciplinary hearing pursuant to § 621.110, RSMo 1986, for the purpose of determining the appropriate disciplinary action to be taken concerning the respondent's license."

The stipulation concluded with the following paragraphs:

"9. Respondent's conduct, as established by the foregoing facts, falls within the intendments of § 339.100.2(10), (15), (17) and (18), RSMo Supp.1984.

"10. Cause exists for petitioner to take disciplinary action against respondent's license under § 339.100.2(10), (15), (17) and (18), RSMo Supp.1984."

The AHC then entered an order so finding in accordance with the stipulation and as authorized by 1 CSR 15-2.150(1); § 536.060 and § 621.135. Cf. Kennedy v. Missouri Real Estate Commission, 762 S.W.2d 454 (Mo.App.1988).

The MREC held a hearing upon the AHC order finding cause for disciplinary action. The record of the proceedings before the AHC was incorporated into the record of the MREC proceeding. The respondent produced evidence of extenuating circumstances concerning his conduct in question, his medical rehabilitation, his civic activities and his discharge from probation resulting from his pleas of guilty. He also presented two witnesses in the real estate business who attested to his competence, diligence and trustworthiness. The MREC thereafter entered an order containing appropriate recitals of the stipulation, the order of the AHC and the following disciplinary order. "The real estate broker-salesperson license of respondent is hereby suspended for one (1) year to be followed by a period of five (5) years probation (the disciplinary period)."

The respondent filed a petition for judicial review. § 536.110. Enforcement of the MREC order was stayed. § 536.120. Upon judicial review the circuit court entered judgment upon the basis of the record. That judgment included a determination the MREC could not consider respondent's conduct not connected with the real estate business "under the previous decision of Robinson vs. Missouri Real Estate Commission, 280 S.W.2d 138 (Mo.App.1955), and as such, the Disciplinary Order of August 31, 1987 was unauthorized by law, and unsupported by substantial and competent evidence." The judgment continued with the following:

"This Court finds that the rationale of Robinson applies to the facts at bar and controls Petitioner's case. Therefore, this Court finds that the conduct of the Missouri Real Estate Commission in considering Petitioner's activities outside the scope of those as a real estate broker was inappropriate, and that part of Respondent's decision and conduct is reversed."

Apparently "that part" refers to Count I of the complaint.

The circuit court also entered the following in respect to the renewal application:

"Petitioner also contended that the Respondent Missouri Real Estate Commission erred in disciplining Petitioner's real estate license for his response to questions 7(A) of the Notice to Renew because the grounds cited for discipline, Missouri Revised Statute Section 339.100.2(10) requires a specific intent to misrepresent a fact, and that the only evidence on the record is that Petitioner was at best negligent in his response and that the discipline on that basis is not supported by substantial and compentant [sic] evidence, is unauthorized by statute, is arbitrary, capricious, and/or unreasonable, and/or involves a [sic] abuse of discretion. Both Respondent and Petitioner had stipulated that Petitioner had been advised by his lawyer that a suspended imposition of sentence legally entitled him to believe he had not been convicted. It is clear from the transcript of the disciplinary hearing that Petitioner answered question 7(a) of the Notice to Renew on that basis. There is sufficient evidence that Petitioner did not clearly respond to the question in the manner which he did. As such, Respondent's action in disciplining Petitioner's license on that basis is authorized by law and supported by substantial and competent evidence. Therefore, this portion of the Disciplinary Order is affirmed."

"This portion" apparently refers to Count II of the complaint. It was...