Miss. Real Estate Comm'n v. McCaughan
| Docket Number: | 2003-CC-01153-COA Linked Case(s): 2003-CT-01153-SCT |
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| Oral Argument: | 05-26-2004 | |
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| Court of Appeals: |
Opinion Link Opinion Date: 11-02-2004 Opinion Author: Chandler, J. Holding: Reversed and Rendered |
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| Additional Case Information: |
Topic: Suspension of real estate license - Due process - Harshness of penalty - Section 73-35-21(1) - Substantial evidence Judge(s) Concurring: King, C.J., Myers and Ishee, JJ. Judge(s) Concurring Separately: Specially Concurring Opinion: Irving, J. Votes: Chandler, J., joins this opinion. Non Participating Judge(s): Bridges, P.J. Dissenting Author : Griffis, J. Dissent Joined By : Lee, P.J., and Barnes, J. Procedural History: Admin or Agency Judgment Nature of the Case: CIVIL - STATE BOARDS AND AGENCIES |
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| Trial Court: |
Date of Trial Judgment: 05-12-2003 Appealed from: Rankin County Circuit Court Judge: Samac Richardson Disposition: REVERSED ORDER OF THE MISSISSIPPI REAL ESTATE COMMISSION Case Number: 2002-297 |
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| Party Name: | Attorney Name: | |||
| Appellant: | Mississippi Real Estate Commission |
JOHN L. MAXEY
CHARLES RICHARD SALTZMAN |
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| Appellee: | Sarah Marie McCaughan, Broker | STANLEY T. INGRAM |
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Synopsis provided by:  If you are interested in subscribing to the weekly synopses of all Mississippi Supreme Court and Court of Appeals hand downs please contact Tammy Upton in the MLI Press office. |
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| Topic: | Suspension of real estate license - Due process - Harshness of penalty - Section 73-35-21(1) - Substantial evidence |
| Summary of the Facts: | The Mississippi Real Estate Commission suspended Sara McCaughan’s real estate broker’s license for six months. McCaughan appealed, and the circuit court overturned that order. The Mississippi Real Estate Commission appeals. |
| Summary of Opinion Analysis: | Issue 1: Due process The circuit judge found that McCaughan was not provided with proper or adequate notice of the Commission’s allegation of failure to supervise because the MREC failed to allege any supervisory misconduct in its complaint against McCaughan. McCaughan argues that she was denied due process of law since nowhere in the original complaint was she charged with failure to supervise and she was left to speculate as to what went wrong. McCaughan’s initial response to the complaint and her testimony before the Commission both demonstrate that she was well aware of her duty as the responsible broker and of the possible sanctions that could be imposed should she be cited for the failure to supervise, and she prepared her defense accordingly. The circuit judge compared the notice requirement in the MREC hearing to notice requirements in criminal cases. However, administrative proceedings are not held to the same due process standards as criminal cases. McCaughan was charged with violating specific statutes. She had adequate time to prepare a defense, and if she were unclear as to the specific conduct that led to the complaint against her, she had time to inquire why a complaint was filed against her. In addition, the Mississippi Supreme Court has upheld the constitutionality of the type of notice and hearing provided for in this case. Issue 2: Suspension McCaughan argues that her six month suspension of her license is unduly harsh, believing that any punishment she may receive should be remedial rather than punitive. Section 73-35-21(1) gives the MREC the authority to suspend McCaughan’s license. McCaughan also argues that she was denied due process for receiving the same penalty as Burton, even though McCaughan was less culpable. However, Burton’s real estate license was suspended for six months, and she was placed on probation for another six months, while McCaughan received no order of probation. Issue 3: Substantial evidence McCaughan argues that Lanthrip did not violate any laws or rules or regulations and that all parties were aware of the change in sales price and agreed to it, and that Lanthrip sought full and complete disclosure through the addendum to the real estate contract. Although these facts are true, the MREC found that Lanthrip made substantial misrepresentations and conducted himself in a manner that demonstrates bad faith, incompetency or untrustworthiness. This holding of the MREC was based on substantial evidence. Article IV.(A)(2) of the Rules and Regulations of the Mississippi Real Estate Commission states that the responsible broker shall at all times be responsible for the actions of the affiliated broker to the same extent as though that licensee were a salesperson. Therefore, McCaughan violated the law in her supervisory capacity. The evidence shows that the MREC found Lanthrip’s actions to be improper, and McCaughan can be guilty of her misrepresentation as a result of these actions. McCaughan also argues that there was no substantial evidence for the MREC to suspend her license because the MREC made no findings of fact that she was absent at a time when she should have been; that she was not thorough in her requirements of her salespersons; or that she was not responsible in choosing not to conduct the closing herself. It is not necessary for the MREC to make such specific findings to hold McCaughan responsible for the actions of Lanthrip, and there was sufficient evidence to hold McCaughan responsible for her failure to supervise. McCaughan’s firm should have prohibited an inexperienced agent who had completed only one other real estate transaction to undertake such a difficult real estate closing without supervision. |
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