Correll v. Boulware

74 N.C. App. 631 | N.C. Ct. App. | 1985

JOHNSON, Judge.

Petitioner has excepted to several of the Board’s findings of fact. He contends that these findings are not supported by substantial evidence in view of the entire record, and are arbitrary and capricious.

In reviewing the sufficiency of a board’s findings of fact, the reviewing court must examine the “whole record” to determine if there is substantial evidence in the record to support the board’s findings. Thompson v. Board of Education, 292 N.C. 406, 233 S.E. 2d 538 (1977). Substantial evidence to support a finding is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. Lackey v. Department of Human Resources, 306 N.C. 231, 293 S.E. 2d 171 (1982). It is more than a scintilla or a permissible inference. Id. The whole record test does not allow a reviewing court to replace the board’s judgment between two reasonably conflicting views, although the court could have justifiably reached a different result had the matter been before it de novo. Thompson v. Board of Education, supra. In applying the whole record test, the court must take into account evidence in the record which conflicts with or detracts from the board’s decision. Id.

With these principles in mind, we examine petitioner’s exceptions to the findings of fact. Petitioner conceded at the hearing that he did not tell Mrs. Boulware what he paid for the property, or that he was making a $10,000 profit on the deal, but he did tell her that he would have to have two to three times his normal commission “to take the risk.” There is no evidence in the record that Mrs. Boulware knew what petitioner’s normal commission was. She was not a party to the listing contract between Boxwood and the Rickards. Indeed, the evidence tends to show, as the Board found, that Mrs. Boulware was unfamiliar with real estate transactions. Mrs. Boulware did not know the difference between an installment land contract and a mortgage, she did not know what a closing or settlement statement was, and seemed to be unfamiliar with normal closing procedures. Although Mrs. Boulware had a college education, and had purchased a home before, the situation in the present case was unusual.

Petitioner also testified that the Rickards had an offer from their neighbors to purchase the property for $38,000, but that they wanted to sell to anyone but their neighbors, with whom they were having a dispute. Petitioner also testified that the Rickards were anxious to sell and move into another home. They were willing to sell for less than $38,000, as demonstrated by the sale of the property to petitioner for only $34,000. Petitioner did not tell the Rickards that he was selling the property for $44,000. He did not think he had a duty to tell the Rickards or Mrs. Boul-ware his selling and purchase price.

Mrs. Boulware testified that she did not know that petitioner was making a $10,000 profit on the transaction and that she had asked him to reduce the price. Despite her request to reduce the price and to help her purchase the property, there is no evidence that petitioner ever told her she could purchase the property for less. Mrs./Boulware also testified that she believed petitioner purchased the property to enable her to purchase the property and that she thought the Rickards were the sellers.

Based upon the foregoing, we hold the Board’s findings of fact that petitioner did not disclose to Mrs. Boulware the amount he paid for the property or that she might be able to purchase the property for less than her original offer, that Mrs. Boulware was unfamiliar with real estate transactions, that Mrs. Boulware believed petitioner was purchasing the property to facilitate her purchase of the property and that the Rickards were the true sellers and that Petitioner and Boxwood made a secret profit of $8,000 were supported by substantial evidence and were not arbitrary and capricious.

Petitioner also excepts to the findings that petitioner failed to disclose to the bank his intent to sell the property to Mrs. Boulware and that Mrs. Boulware did not know the property had been pledged in a deed of trust as security for petitioner’s borrowing of the purchase price. Even if it is assumed for the sake of argument that these findings are not supported by substantial evidence, the remaining findings support the court’s judgment. See Wachovia Bank & Trust Co. v. Bounous, 53 N.C. App. 700, 281 S.E. 2d 712 (1981). G.S. 93A-6 allows the Real Estate Licensing Board to revoke or suspend a salesman’s or broker’s license for any one of several listed misdeeds. Only one violation of one section is needed to revoke or suspend one’s license; one act may constitute a violation of more than one section of G.S. 93A-6. Edwards v. Latham, 60 N.C. App. 759, 299 S.E. 2d 819 (1983).

We now determine whether these findings support the court’s conclusions, and whether these conclusions were affected by error of law or were arbitrary and capricious.

“A real estate broker is brought by his calling into a relation of trust and confidence. Constant are the opportunities by concealment and collusion to extract illicit gains.” State v. Warren, 252 N.C. 690, 695, 114 S.E. 2d 660, 665 (1960). To protect the public from unscrupulous and dishonest real estate salesmen and brokers, the General Assembly enacted the Real Estate Law (Chapter 93A of the General Statutes) and established the Real Estate Licensing Board to license brokers and salesmen, “with due regard to the paramount interests of the public as to the honesty, truthfulness, integrity and competency of the applicant.” G.S. 93A-4(b).

The general rule is that a broker can neither purchase from, nor sell to, his principal unless the principal expressly assents or acquiesces with full knowledge of all the facts and circumstances. Real Estate Licensing Board v. Gallman, 52 N.C. App. 118, 124, 277 S.E. 2d 853, 856 (1981). In Gallman, the seller listed property for sale with the agent for an asking price of $15,000. The seller subsequently gave the agent an option to purchase the property for $11,000. A third party subsequently made an offer to the agent to purchase the property for $15,000, after the agent had falsely represented to the third party that the owner-seller had an offer to purchase the property for $14,500. The agent did not disclose to the third party that he had an option to purchase the property for $11,000 nor did he disclose to the seller that he had an offer to purchase the property for $15,000. The agent purchased the property for $11,000 and then sold it to the third party for $15,000, thereby making a secret profit of $4,000. We upheld conclusions that the agent’s actions constituted violations of G.S. 93A-6(a)(l) (making misrepresentations) and G.S. 93A-6(a)(4) (acting for more than one party without the knowledge of all). We observed with regard to the secret profit that “(t)he licensing act should not be interpreted to require a licensee to be honest as a broker or salesman while allowing him to be dishonest as an owner.” Id. at 125, 277 S.E. 2d at 857.

In the present case, the findings show that petitioner made a secret profit of $8,000, after the payment of expenses, by failing to disclose to Mrs. Boulware his purchase price of the property and by failing to disclose to the Rickards his selling price. By his concealments, petitioner made the illicit gains the Act was designed to prevent or regulate. We hold these findings support a conclusion that petitioner violated G.S. 93A-6(a)(4) and G.S. 93A-6(a)(10).

We also hold the Board’s findings support a conclusion that petitioner violated G.S. 93A-6(a)(8) (“[b]eing unworthy or incompetent to act as a real estate broker or salesman in such a manner as to safeguard the interest of the public”). In Parrish v. Real Estate Licensing Board, 41 N.C. App. 102, 254 S.E. 2d 268 (1979), we observed that “incompetency” is defined in Black’s Law Dictionary (4th ed. 1957) as: “Lack of ability, legal qualification, or fitness to discharge the required duty,” and that “unworthy”, is defined as: “Unbecoming, discreditable, not having suitable qualities or value.” Petitioner’s actions can hardly be called becoming or a credit to the real estate profession. Not only did petitioner make a secret profit by his concealments, the findings of fact show that he received $18,720.44 from Mrs. Boulware but only paid $10,858.72 of those funds to the bank on his loan. Unlike the complainant in Parrish, supra, Mrs. Boulware sustained the loss of money and her home.

Petitioner contends that G.S. 93A-6(a)(8) is unconstitutionally vague and lacks the necessary explicitness to put reasonable persons on notice as to the conduct proscribed. We disagree. We do not think the section is so vague that “men of common intelligence must guess at its meaning.” In re Hawkins, 17 N.C. App. 378, 394, 194 S.E. 2d 540, 550, cert. denied, 283 N.C. 393, 196 S.E. 2d 275, cert. denied, 414 U.S. 1001, 38 L.Ed. 2d 237, 94 S.Ct. 355 (1973), quoting from Coates v. Cincinnati, 402 U.S. 611, 614, 29 L.Ed. 2d 214, 217, 91 S.Ct. 1686, 1688 (1971).

For the foregoing reasons, we find the Board’s decision to be supported by substantial evidence, to be unaffected by error of law, and not to be arbitrary or capricious. The judgment of the superior court affirming the decision of the Board is

Affirmed.

Chief Judge Hedrick and Judge Cozort concur.