Clarke v. South Dakota Real Estate Commission

255 N.W.2d 67, 1977 S.D. LEXIS 161
CourtSouth Dakota Supreme Court
DecidedJune 16, 1977
DocketNos. 11999 and 12006
StatusPublished
Cited by2 cases

This text of 255 N.W.2d 67 (Clarke v. South Dakota Real Estate Commission) is published on Counsel Stack Legal Research, covering South Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Clarke v. South Dakota Real Estate Commission, 255 N.W.2d 67, 1977 S.D. LEXIS 161 (S.D. 1977).

Opinions

DUNN, Chief Justice.

This is an appeal from a decision of the Circuit Court of the Fourth Judicial Circuit affirming the decision of the South Dakota Real Estate Commission which found that appellant was guilty of making a substantial and wilful misrepresentation with reference to a real estate transaction which was injurious to the party for whom appellant acted as agent. The Commission ordered appellant’s license suspended for six months and conditioned reinstatement upon his making restitution of $1,000 earnest money in his trust account. On appeal, appellant claims the trial court erred in concluding (1) that the South Dakota Real Estate Commission, as comprised and as it [68]*68acted in appellant’s case, was not violative of appellant’s constitutional rights to due process of law, and (2) that the findings of the Real Estate Commission were supported by the evidence. Respondent cross appealed from that portion of the circuit court order requiring the Real Estate Commission to furnish a transcript for review in circuit court and from its decision refusing to assess costs and disbursements against appellant Clarke. We reverse the appeal and affirm the cross appeal.

On July 5, 1974, Dwayne Jacobson, one of the two complainants, listed his home in Madison with Clarke Realty under a sixty-day listing agreement. When no prospects were found within the sixty-day period, Jacobson signed a contract with another realtor on September 5, 1974, the agreement to go into effect the following day. On the evening of September 6th, appellant called the Jacobsons and told Mrs. Jacobson that he had a buyer. The prospective buyer Edward Madison (the other complainant) testified he had viewed the house on September 2nd and again on September 5th.

At some date on or before September 14, 1974, the Madisons signed the purchase agreement, but Madison testified that he advised that the deal could not be closed until after an auction sale at their Fulda, Minnesota, home. There is some dispute as to when Madison made the $1,000 earnest money deposit, but the most likely daté seems to be September 16th. On September 14th, the Jacobsons also signed the purchase agreement and asked appellant if he thought it would be too soon to close on September 21st. He replied that he could see no reason why the deal could not be closed within another week, or September 21st. Appellant then added the closing date to the agreement along with some other matters in regard to drapes, etc. Appellant admits that he knew that the placing of a closing date in the purchase agreement after Madison had signed the instrument was not binding on Madison until he agreed to the change.

On September 20, 1974, appellant called to advise the Jacobsons that there would be no closing on September 21st or until Madison’s sale, which would be around October 12th. Appellant testified that he offered the alternatives of keeping the earnest money or being patient and waiting for Madison to purchase the home. After September 21st, the Jacobsons did not involve appellant in the proceedings any further. Jacobson went directly to Madison and sought counsel who helped them negotiate a new agreement. The sale was eventually completed in February 1975.

Appellant contends that the findings are unsupported by substantial evidence and that the Commission’s decision was an abuse of its discretion. He relies upon his own testimony that he acted in good faith and notified Jacobson as soon as he learned of a closing date problem. His version of the transaction is that Madison desired to assume Jacobson’s mortgage note. Madison also told appellant that he was going to have a sale in Fulda; however, appellant thought Madison was going to obtain an interim loan on a personal note to cover the time period until the Fulda auction. During the week after September 14th, appellant “got wind some way or another” that Madison was having trouble with the bank and learned that Madison was not accepted because, among other things, his wife was filing for a divorce. Appellant then phoned the Jacobsons to tell them that there could be no closing on September 21st.

The Commission contends that Madison had repeatedly told appellant that there could be no closing until matters were cleared up following his auction and that the appellant had made the misrepresentation as to the closing date in order to get in under the time limit of his sixty-day listing agreement and thus obtain a commission. The Commission also found that the detriment from these misrepresentations was the substantial expense incurred by Jacobson in finally concluding the sale with Madison in February of the following year. Appellant, in turn, argues that the expenses incurred were a result of Madison’s financial and marital problems rather than any misrepresentations by appellant.

[69]*69First, the appellant claims that the Commission by its composition and by its actions violated his constitutional rights to due process of law. This court has passed on the constitutionality of the Real Estate Commission’s authority to handle disciplinary actions against brokers. Gottschalk v. Hegg, 1975, S.D., 228 N.W.2d 640. We find nothing in the record to indicate bias or a conspiracy or any special pecuniary interest as indicated in Mordhorst v. Egert, 1974, S.D., 223 N.W.2d 501. Further, we find nothing in the record to indicate that the Commission failed to give due process to the appellant in this case. In fact, it was the cross-examination of Commissioner Dohmen that brought out the crucial admission by Jacobson that he knew the placing of the closing date in the purchase agreement after Madison had signed the instrument could not be binding on Madison until he had agreed to this change. Thus, we find no basis for the claim that the Real Estate Commission as composed and as it acted in appellant’s case was violative of due process.

On the second issue, there is evidence from Mr. Madison to support the conclusion of the Commission that appellant knew there could be no closing until after the auction. The question then becomes whether failure to disclose this to the Ja-cobsons by telling them he could see no problem in closing within one week was a substantial and wilful misrepresentation to their detriment.

We will consider this matter giving every presumption in favor of the facts as presented by the complainant Mr. Jacobson and without considering any of the explanations of Mr. Clarke. The violation alleged by complainants and found by the Commission was “making a substantial and willful misrepresentation with reference to a real estate transaction which is injurious to the party for which he acts as agent,” The record has many conflicts in testimony on this crucial issue, but, at least, the record is clear that at some day on or prior to September 14, 1974, Mr. Madison and his wife signed the sales agreement. He is not sure of the date in his testimony, but all agree that it was signed when it was presented by Mr. Clarke to the Jacobsons for their signatures on September 14th. The testimony is also clear that on that date there was no closing date mentioned in the sales agreement. At this time, the following discussion occurred between Clarke and the Ja-cobsons:

“Q Stating to the best of your recollection what you stated and what he stated at that time and place, give the conversations?
“A All right. We were anxious to get the house deal closed and then in visiting with Mr.

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Related

Hurney v. Locke
308 N.W.2d 764 (South Dakota Supreme Court, 1981)
Dail v. South Dakota Real Estate Commission
257 N.W.2d 709 (South Dakota Supreme Court, 1977)

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Bluebook (online)
255 N.W.2d 67, 1977 S.D. LEXIS 161, Counsel Stack Legal Research, https://law.counselstack.com/opinion/clarke-v-south-dakota-real-estate-commission-sd-1977.