Kennedy v. Missouri Real Estate Commission

762 S.W.2d 454, 1988 Mo. App. LEXIS 1534
Missouri Court of Appeals·Decided November 8, 1988·No. No. 54543·Published·Cited by 5 cases

Opinion

SATZ, Judge.

This is a license suspension case. The real estate license of William Kennedy (Kennedy) was suspended for one year by the Missouri Real Estate Commission (Real Estate Commission). The circuit court reversed the Real Estate Commission’s decision and remanded the case to the Administrative Hearing Commission (Hearing Commission) to determine whether cause existed to discipline Kennedy. The Real Estate Commission appeals, contending the circuit court erred in not affirming its decision. Kennedy appeals, contending the circuit court should have reversed the Real Estate Commission’s decision without remand. We affirm the judgment of the circuit court.

The basic facts are not in dispute. In 1983, Kennedy was a licensed real estate agent. In that capacity, he deposited [456] $5,000 in his escrow account as part of a real estate sale. The sale was not completed. The Real Estate Commission’s investigation of the incident included an audit of his escrow account. The audit revealed the end of the month balance in the escrow account was below $5,000 13 times in the 16 month period between June 30,1983 and October 31, 1984.

The Real Estate Commission filed a complaint with the Hearing Commission, based upon the removal of the money from Kennedy’s escrow account. § 339.100.2(1), RSMo 1986 1; 4 CSR 250-9.040(1). Before a hearing on the complaint was held, Kennedy and an attorney for the Real Estate Commission entered into an agreement entitled: “Stipulation of Facts and Waiver of Administrative Hearing Commission Hearing and Consent to a Finding of Cause for Discipline.”

In the agreement, Kennedy expressly agreed that: if the Hearing Commission “accepts” the agreement, it will find Kennedy’s “broker[s] license ... is subject to disciplinary action by the Missouri Real Estate Commission”; the “disciplinary action may include the suspension or revocation of [Kennedy’s] ... license ... ”; and the Real Estate Commission will “conduct a disciplinary hearing ... for the purpose of determining the appropriate disciplinary action....” The agreement was filed with the Hearing Commission, and the Hearing Commission subsequently issued its order stating:

Upon careful review of [the agreement] ... this Commission [finds] that all parties have knowingly and voluntarily entered into said document; that all parties, in accordance with said document, have freely waived their right to a hearing in this matter; and further, that all parties have freely consented to the informal disposition of the instant contested case in accordance with Section 536.-060, RSMo 1978.
Accordingly, the Administrative Hearing Commission consents to the terms of said STIPULATION OF FACTS AND WAIVER OF ADMINISTRATIVE HEARING COMMISSION HEARING AND CONSENT TO A FINDING OF CAUSE FOR DISCIPLINE and it is so Ordered this date.
Further, it is the Order of this Commission that Case No. RE-86-1621 be dismissed effective this date.

The Hearing Commission then sent copies of its record to the Real Estate Commission pursuant to § 621.110, and the Real Estate Commission set the date for a disciplinary hearing. At the hearing, Kennedy explained the circumstances surrounding the removal of the money, but he did not deny the money had been removed nor did he deny he had at times written checks for personal items from the escrow account. He did say these checks were always for money due to him and he was just “skipping the step” of putting the money into his personal account.

After the hearing, the Real Estate Commission issued its order suspending Kennedy’s broker’s license for one year and placing him on probation for three years after that. Kennedy appealed this order to the circuit court. The court reversed the order and remanded the case to the Hearing Commission “for reconsideration of evidence and redetermination of whether cause for discipline exists.” This appeal followed.

The parties raise several issues on appeal. We address those which are disposi-tive.

Kennedy asserts that § 621.045 requires the Hearing Commission to make an independent finding of whether cause for discipline exists. We agree.

Section 621.045, provides in part that: The administrative hearing commission shall conduct hearings and make findings of fact and conclusions of law in those cases wherein, under the law, a license issued by any of the following agencies may be revoked or suspended.... (emphasis added)

The plain meaning of this language requires the Hearing Commission to make an [457] independent assessment of the facts to determine whether cause for disciplining a licensee exists. This reading squares with the legislative purpose for creating a Hearing Commission as an administrative body separate and distinct from the licensing agency. To process a disciplinary action against a licensee prior to the creation of the Hearing Commission, the licensing agency acted as “investigator, prosecutor, judge, jury and executioner, all rolled into one.” State ex rel. Am. Inst. of Mktg. Sys., Inc. v. Missouri Real Estate Comm’n, 461 S.W.2d 902, 908 (Mo.App.1970). At best, this commingling of disparate functions created a perception of unfairness. Consequently, the legislature placed the determination of the facts and the cause for discipline in the Hearing Commission, separate and apart from the licensing agency. This was to assure the impartiality of this adjudicatory process. See, e.g. Geriatric Nursing Facility, Inc. v. Department of Social Services, 693 S.W.2d 206, 209 (Mo.App.1985). But this impartiality would be compromised if the determination of cause was not a separately and independently arrived at determination by the Hearing Commission. The necessity of a separate and independent determination is reflected in the Hearing Commission’s own rules, which now provide:

Disposition of a contested case by consent order or agreed settlement shall be made by written order of the commission but may not be made without findings of fact and conclusions of law.
1 CSR 15-2.150(1).

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Kennedy v. Missouri Real Estate Commission, 762 S.W.2d 454, 1988 Mo. App. LEXIS 1534 (Mo. Ct. App. 1988).

762 S.W.2d 454 (Kennedy v. Missouri Real Estate Commission) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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