St. Pierre v. State ex rel. S.D. Real Estate Comm'n

Decision Date04 April 2012
Docket NumberNo. 26112.,26112.
Citation813 N.W.2d 151,2012 S.D. 25
PartiesCheri ST. PIERRE, Plaintiff and Appellee, v. STATE of South Dakota, ex rel. SOUTH DAKOTA REAL ESTATE COMMISSION, Defendant and Appellant.
CourtSouth Dakota Supreme Court


Robert C. Riter, Jr., Lindsey Riter–Rapp of Riter, Rogers, Wattier & Brown, LLP, Pierre, South Dakota, Attorneys for defendant and appellant.

Kenneth E. Barker of Barker Wilson Law Firm, LLP, Belle Fourche, South Dakota, Attorneys for plaintiff and appellee.

ZINTER, Justice.

[¶ 1.] By written company policy, First Choice Realty prohibited its broker associates from signing documents on behalf of buyers and sellers in real estate transactions the company was handling. Cheri St. Pierre, a licensed broker associate with First Choice, violated the policy by signing a real estate listing release on behalf of three sellers she was representing. St. Pierre did not indicate on the signature line that she had signed the release on behalf of the sellers. When initially confronted by First Choice about the matter, she not only failed to disclose that she had signed the document, she attempted to cover up the fact that she had signed the sellers' names. In a subsequent disciplinary proceeding, the South Dakota Real Estate Commission found that St. Pierre had engaged in unprofessional conduct involving dishonesty. The Commission suspended her license for one year, but held the suspension in abeyance on conditions, including the payment of a penalty and repayment of the Commission's attorney's fees. The circuit court reversed the Commission's conditional suspension. We reverse the circuit court and reinstate all terms of the Commission's conditional suspension except the provision requiring the repayment of the Commission's attorney's fees.

Facts and Procedural History

[¶ 2.] St. Pierre worked as a broker associate for First Choice. First Choice had a written policy that its associates could not sign a contract or real estate form of any kind on behalf of a party in a transaction First Choice was handling. The policy also prohibited associates from acting as an attorney-in-fact for such parties.1 St. Pierre was aware of the policy and did not express disagreement with it.

[¶ 3.] In 2007, St. Pierre was First Choice's associate for three sellers: Robert Pagan of Rapid City and his business partners, Keith and Julie Huffman of California.There were two separate listing agreements for the Pagan–Huffman property. The first listing was for the property as an unimproved lot. The second listing was for the same property with a house to be built on the lot. The property was ultimately sold as an unimproved lot under the first listing.

[¶ 4.] After the sale was closed, compliance staff at First Choice reviewed the transaction to determine what documentation was left to be completed before St. Pierre could be given her commission. The compliance staff told St. Pierre that she needed to obtain signatures from the three sellers on a company-mandated form releasing the second listing. St. Pierre thought the release was unnecessary and was unhappy about having to obtain the signatures. Twenty to thirty minutes after she was given the release, St. Pierre returned it to First Choice with what appeared to be Pagan's and the Huffmans' signatures. St. Pierre did not initially disclose to the compliance staff or indicate on the face of the document that she had signed the release on behalf of Pagan and the Huffmans.

[¶ 5.] The compliance staff, however, became suspicious about the signatures because of the short amount of time that had expired, the fact that the Huffmans lived in California, and the absence of fax markings on the release. Additionally, the signatures did not match the sellers' signatures on other documents. The staff also found a crumpled release form in St. Pierre's waste basket with “Wite-out” correction fluid at the end of one of the signatures.

[¶ 6.] When confronted by First Choice management about the signatures, St. Pierre first explained the lack of a fax number by claiming that she had e-mailed the document. However, St. Pierre could not produce an e-mail, and she ultimately admitted that she had replicated Pagan's and the Huffmans' signatures. She stated that Pagan had authorized her to sign the release. Nevertheless, First Choice's management believed that St. Pierre's replication of the signatures violated company policy, constituted forgery, and constituted misconduct under the Commission's rules. At First Choice's request, St. Pierre reported the incident to the Commission.

[¶ 7.] Before the Commission's disciplinary proceedings were commenced, St. Pierre obtained a written statement from Pagan stating that he authorized her to sign the release on behalf of all three sellers. Pagan would, however, later concede at the hearing that he had no authority to authorize a signature on behalf of Julie Huffman. St. Pierre also obtained an after-the-fact written statement from the Huffmans. In that statement, the Huffmans authorized Pagan to sign on their behalf and indicated the authorization pertained to past transactions.

[¶ 8.] In December 2007, the Commission started informal disciplinary proceedings. SeeARSD 20:69:05:03 (allowing the Commission to conduct an informal consultation to resolve a disciplinary action without the necessity of a formal hearing). In 2008, St. Pierre executed an “assurance of voluntary compliance” agreement with the Commission to resolve the matter. SeeARSD 20:69:05:04 (providing that the Commission may accept an assurance of voluntary compliance to resolve a disciplinary action). Under the agreement, St. Pierre agreed to complete education courses, pay a penalty of $1,000, and reimburse the Commission's costs of $1,508.75. Because St. Pierre did not fulfill the education conditions of the voluntary compliance agreement, the Commission initiated formal disciplinary proceedings in 2010. The complaint described the incident and alleged that St. Pierre acted dishonestly within the meaning of SDCL 36–21A–71(15) and fraudulently within the meaning of SDCL 36–21A–71(32) by “sign[ing] on behalf of all three sellers without their prior written authorization so that she would receive her commission for this transaction.”

[¶ 9.] Some testimony at the hearing focused on St. Pierre's authority to sign the release on behalf of the sellers. St. Pierre testified that she understood she had oral authority from Pagan to sign all three names. Pagan testified that St. Pierre called him and asked him to sign the release form. Pagan, however, had been at First Choice two times to sign documents that day, and he was across town when St. Pierre called. The evidence reflects that Pagan was frustrated at signing so many documents, he thought the release was unnecessary, and he would not go back to sign the release himself. Pagan told St. Pierre to “do whatever you got to do, sign the thing and we're done.” Pagan testified that he had an “expectation” that St. Pierre would also sign the Huffmans' names on the release. Pagan, however, admitted that he did not have authority to authorize St. Pierre to sign Julie Huffman's signature.

[¶ 10.] The evidence at the hearing also focused on St. Pierre's candor in dealing with First Choice about the signatures. St. Pierre admitted that she did not sign her name as an agent of Pagan and the Huffmans because she knew the company policy prohibited her from signing as an agent. She also testified that she anticipated if she had disclosed she signed the sellers' names, the managing broker at First Choice would have thought that she violated company policy. When asked whether she believed that she was dishonest in any way, St. Pierre testified: “I guess I was—I felt dishonest to [the managing broker].” When asked whether she “tried to deceive” First Choice's compliance staff, St. Pierre stated: “I wouldn't say I tried to deceive her, I guess. I wouldn't put it that way.” St. Pierre was then asked: “Well, you wouldn't? Did you tell her that you had signed it?” St. Pierre responded: “I didn't intentionally deceive her. I don't know. No, I did not tell her I signed it.”

[¶ 11.] The Commission found that St. Pierre did not violate SDCL 36–21A–71(32) by committing fraud or forgery with respect to obtaining the signatures. The Commission did, however, find that St. Pierre violated SDCL 36–21A–71(15) by being dishonest with First Choice about the source of the signatures. The Commission found that St. Pierre “intended to deceive or mislead the compliance personnel into thinking that the Huffman[s] and Pagan had signed the document.” The Commission further found that St. Pierre “made the choice to be dishonest and represent her signature as the Huffman[s'] and Pagan's even though she knew this was not allowed. She was not forthright in saying she was signing for [the Huffmans and Pagan] or that she had their permission to sign.” The Commission suspended St. Pierre's license, but held the suspension in abeyance for six months. The Commission allowed St. Pierre to avoid the suspension on condition that she complete certain education courses, reimburse the Commission's attorney's fees of $8,047.99, and pay a $1,000 penalty.

[¶ 12.] The circuit court reversed the Commission's decision. The court concluded that the Commission failed to present clear and convincing evidence that St. Pierre committed acts rising to the level of dishonesty.2

[¶ 13.] We consider the following two issues raised by the Commission in this appeal:

1. Whether St. Pierre engaged in unprofessional conduct (dishonesty) within the meaning of SDCL 36–21A–71(15).

2. Whether the Commission had authority to order St. Pierre to reimburse the Commission for its attorney's fees and pay a $1,000 penalty as a condition of avoiding a suspension.

Unprofessional Conduct

[¶ 14.] We review agency decisions the same as the circuit court; there is no presumption...

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