In Re Desautels Real Estate, Inc.

457 A.2d 1361, 142 Vt. 326, 1982 Vt. LEXIS 658
CourtSupreme Court of Vermont
DecidedDecember 8, 1982
Docket429-81
StatusPublished
Cited by18 cases

This text of 457 A.2d 1361 (In Re Desautels Real Estate, Inc.) is published on Counsel Stack Legal Research, covering Supreme Court of Vermont primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Desautels Real Estate, Inc., 457 A.2d 1361, 142 Vt. 326, 1982 Vt. LEXIS 658 (Vt. 1982).

Opinion

Underwood, J.

The Vermont Real Estate Commission (Commission) ordered the licenses of the appellants suspended for periods varying from 30 days up to 9 months, based upon its findings that their acts and conduct demonstrated bad faith and untrustworthiness as real estate brokers and real estate salespersons within the meaning of 26 V.S.A. § 2296(a) (3) and (8). The appellants appeal from this order pursuant to 26 V.S.A. § 2296(d) and 3 V.S.A. § 815, claiming that the Commission committed 12 claims of reversible error. We have condensed these to 6:

(1) Appellants’ motions to dismiss the charges should have been granted, because the charges leveled against them by the Commission were unconstitutionally vague and failed to apprise them of the nature of the violation of law, or the violation of the Commission’s regulation, with which they were charged.
(2) The members of the Commission should have disqualified themselves, since they initiated the complaints, prosecuted the complaints, and sat in judgment on the cases. Moreover, each member of the Commission was a practicing real estate broker.
*330 (8) The Commission erred by giving no notice by mail to the appellants of any alleged facts or conduct which would warrant the action apparently intended by the Commission prior to the institution of these proceedings, and by providing no opportunity to the appellants to show compliance with all lawful requirements for the retention of their licenses as required by 3 V.S.A. § 814(c).
(4) The Commission did not abide by the rules of evidence followed in civil cases in Superior Court, as is required in administrative hearings by 3 V.S.A. § 810(1).
(5) Certain of the Commission’s findings of fact are unsupported by the evidence.
(6) The discipline meted out by the Commission was unwarranted by the facts or the law.

A full knowledge of the factual background is essential. The Commission found that the owners of residential property at 48 Henry Street in Burlington, Vermont, had given a listing of their property to the appellant corporation, Desautels Keal Estate, Inc., d/b/a Desautels (hereinafter the Corporation) , on April 28, 1980. The listed price was $59,900 for the lot, residence, and two ranges and two refrigerators. Appellant corporation was a member of a multiple listing service, and advertised the property for sale in the multiple listing service book which is furnished to each member broker.

A member of the multiple listing service, but not associated in any way with the appellants, showed the property to prospective purchasers. After examining the property, his customers wanted to buy it but could not afford to purchase it unless their mortgage loan was approved by the Vermont Housing Finance Agency (hereinafter the Agency). The Agency makes funds available to participating banks who in turn grant low interest rate mortgage loans for the purchase of new and existing residences to persons falling below certain income limits. An additional eligibility requirement for such financing is that the purchase price of an existing house not exceed $50,000.

The Commission found that the agent who showed the property, as well as the prospective purchasers, the owners, and the appellants, all knew that the Agency would not extend *331 financing to a purchaser buying an existing residence if the price exceeded $50,000.

The prospective purchasers, through their agent, submitted an offer of $50,000 for the property, and on May 9, 1980, they tendered a proposed purchase and sale agreement to the owners and the appellant, Mary Jo Mahoney, their broker. The owners rejected the offer outright and refused to cut their listed price of $59,900. Subsequently, the prospective purchasers terminated their business relationship with their agent.

Five days later, on May 14, 1980, the prospective purchasers entered into a written purchase and sale agreement with the owners. The appellant, Craig H. Atwood, acted as the initiating broker for this sale. The agreement, drawn on the customary realtor’s preprinted forms, stated that the purchase price for the land and improvements thereon was $50,000, payable as “Cash and a Vermont Finance Agency Mortgage.” A handwritten addendum to the purchase and sale agreement bore a letterhead containing the words “Desautels Real Estate,” and the printed addresses of the appellants’ offices in Burlington, Essex Junction and Colchester appeared down the left hand margin. This addendum set forth: “Buyers to purchase personal property from sellers for a total of five thousand dollars cash. This sum to be paid to sellers on day of closing.” It was signed by the buyers, one of the sellers, and Craig H. Atwood. The addendum did not contain any description or listing of items of personal property, nor were any dollar values set forth for any specific items of personal property.

No evidence was submitted to the Commission to corroborate an independent sale of $5,000 in personal property at the time of closing, and the Commission noted that the Vermont property transfer tax return, filed subsequent to the closing, did not divulge that any personal property was transferred between the parties. It also found that the closing papers prepared by the participating bank made no reference to a sale of any personal property and that there was no closing statement at all in the sellers’ file.

On May 17, 1980, three days after the signing of the purchase and sale agreement and the addendum to that agreement, the Corporation notified the multiple listing service of *332 a change in price of the 48 Henry Street property from $59,900 to $53,000.

From these facts and the surrounding circumstances the Commission concluded that Mary Jo Mahoney and Craig H. Atwood put together a “side deal,” or scam, designed to circumvent the Agency’s $50,000 purchase price guidelines, and thereby to induce the Agency to extend financing to the purchasers so that the sale could take place. In this manner the owners would receive $55,000 for their residence, the purchasers would get the home they wanted along with a mortgage at a favorable rate of interest, and the Corporation would get its Q% commission. Because of such conduct, the Commission suspended the licenses of Mary Jo Mahoney and Craig H. Atwood for nine-month periods.

Appellant David A. Desautels was found to be vicariously liable for the conduct of Mary Jo Mahoney and Craig H. Atwood, because he was the principal broker for the Corporation. Appellant Nikki Moses was found to be directly liable because she was aware of the terms of the transaction and she was the office manager of the Burlington office of the Corporation. Consequently, the Commission ordered the suspension of the real estate broker’s licenses of David A. Desautels and Nikki Moses for 30 days each, effective October 1, 1981.

All license suspensions were stayed pending the outcome of these appeals.

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Bluebook (online)
457 A.2d 1361, 142 Vt. 326, 1982 Vt. LEXIS 658, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-desautels-real-estate-inc-vt-1982.