Starr v. Ohio Dept. Commerce, Div. of Real Estate & Professional Licensing
2021 Ohio 2243
| Ohio Ct. App. | 2021Background
- Appellant Rick Starr was the listing real estate salesperson for Ricardo Easley’s condominium; Starr and Easley signed an exclusive right-to-sell form on April 25, 2016 that left the property address and list price blank while a separate MLS worksheet listed the Grandwoods property's address and $114,900 price.
- On April 27, 2016 Starr (as a member of TRST, LLC) signed a purchase contract to buy the property for $82,000; the contract allowed TRST to rent for $1/month and sublease, and an agency disclosure identified Starr as a purchaser-side representative.
- Starr’s companies (Real Estate Stars Property Management and Alliance Home Services) were used to manage/repair the property; tenants were placed in the unit and later discovered Easley remained the recorded owner.
- Easley complained to the Division of Real Estate; a hearing examiner found Starr committed multiple violations, the Ohio Real Estate Commission adopted the report, revoked Starr’s salesperson license and imposed fines, and the Franklin County Court of Common Pleas affirmed.
- Starr appealed to the Tenth District, advancing seven assignments of error: defective notice/due process; denial of additional evidence; insufficiency of evidence as to Charges 1–4; and that the Commission did not consider his objections.
Issues
| Issue | Plaintiff's Argument (Starr) | Defendant's Argument (Commission/Division) | Held |
|---|---|---|---|
| 1. Notice / Due process: Did Starr receive adequate notice of Commission hearing time? | Starr says he lacked notice of the hearing time (claims a Division caller told him 1:00 p.m.; certified receipt signature not his). | Division shows certified-mail notice to Starr’s address stating June 5, 2019 at 10:45 a.m.; signed return receipt establishes prima facie service. | Court held certified-mail service created a prima facie delivery; Starr failed to rebut; no due-process violation. |
| 2. Admission of additional evidence: Should Starr’s post-hearing affidavit be admitted in the R.C. 119.12 appeal? | Affidavit relates to notice/time and was proffered to rebut service. | Additional-evidence rule allows only newly discovered evidence existing at the time of the agency hearing; Starr’s affidavit was created after the hearing. | Court affirmed denial: affidavit was newly created, not newly discovered; exclusion proper. |
| 3. Charge 1 — Exclusive listing missing address/price: Did omission violate R.C. 4735.18(A)(6)? | Starr argues the listing met statutory requirements; if contract invalid, related charges fail. | Commission: blanks on form fall below industry standards; Commission may find unprofessional conduct even if contract enforceable via extrinsic evidence. | Held: extrinsic evidence (MLS worksheet, parties’ conduct) showed parties intended the listing for the Grandwoods property at $114,900; failure to include those terms was unprofessional misconduct—Charge 1 sustained. |
| 4. Charge 2 — Dual agency / self-dealing: Did Starr create prohibited dual agency by having TRST buy while he/firm listed property? | Starr says agency disclosure showed he represented only TRST; no illegal dual agency. | Commission notes the earlier exclusive listing for Easley remained in effect; Starr did not terminate prior agency and was party to transaction as TRST member, violating R.C. 4735.71(C). | Held: Starr’s documents together showed he represented both seller and buyer while being a party to the transaction; violation of R.C. 4735.71(C) and Canons of Ethics sustained. |
| 5. Charge 3 — Misconduct: Did Starr’s agreements (purchase, rental/sublease, management/repair arrangements) breach fiduciary/ethical duties? | Starr contends private contract terms and price disparity don’t establish misconduct; offered as short-sale facilitation. | Commission relied on industry expertise: $82k purchase vs $114–119k list, $1 rent/sublease and remedy provisions advantaged Starr’s entities, and property-management terms channeled repairs to Starr-controlled contractors. | Held: Commission reasonably found these provisions created appearance of impropriety and breached ethical/fiduciary duties; Charge 3 sustained. |
| 6. Charge 4 — Tenant disclosures / threats: Did Starr fail to disclose ownership/listing status to tenants and threaten eviction for refusing to show property? | Starr points to lease language and tenant awareness; argues eviction threats lawful when tenants refuse showings. | Commission relied on tenant testimony that Starr/agents misrepresented ownership, failed to disclose listing status and assigned tenant-showing duties, and that Starr threatened eviction when tenants refused. | Held: Credible evidence supported findings Starr failed to disclose true ownership/listing and threatened eviction—Charge 4 sustained. |
| 7. Procedural: Did the Commission fail to consider Starr’s written objections? | Starr argues record indicates not all commissioners reviewed his objections. | Record presumes regularity; at hearing a commissioner stated he reviewed Starr’s objections; lack of explicit language in order doesn’t show non-consideration. | Held: Presumption of regularity applies; Commission considered objections as required by R.C. 119.09. |
Key Cases Cited
- Univ. of Cincinnati v. Conrad, 63 Ohio St.2d 108 (Ohio 1980) (standard for common pleas review of agency record)
- Our Place, Inc. v. Ohio Liquor Control Comm., 63 Ohio St.3d 570 (Ohio 1992) (definition of reliable, probative, and substantial evidence)
- Pons v. Ohio State Med. Bd., 66 Ohio St.3d 619 (Ohio 1993) (appellate review of administrative decisions limited to abuse-of-discretion)
- Richard T. Kiko Agency v. Ohio Dept. of Commerce, 48 Ohio St.3d 74 (Ohio 1990) (discipline may rest on misconduct and professional codes regardless of intent or actual harm)
- Blakemore v. Blakemore, 5 Ohio St.3d 217 (Ohio 1983) (abuse-of-discretion definition)
- Kostelnik v. Helper, 96 Ohio St.3d 1 (Ohio 2002) (meeting of the minds and essential contract terms)
- Schindler Elevator Corp. v. Tracy, 84 Ohio St.3d 496 (Ohio 1999) (interchangeability of registered and certified mail terminology)
- Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (U.S. 1950) (due-process notice standard: reasonably calculated to apprise interested parties)