Rick E. Starr, Appellant-Appellant, v. Ohio Department of Commerce Division of Real Estate & Professional Licensing, Appellee-Appellee.
No. 20AP-47
IN THE COURT OF APPEALS OF OHIO TENTH APPELLATE DISTRICT
June 30, 2021
2021-Ohio-2243
BROWN, J.
(C.P.C. No. 19CV-5149); (REGULAR CALENDAR)
Rendered on June 30, 2021
On brief: Maguire Schneider Hassay, LLP, and Mark R. Meterko, for appellant. Argued: Mark R. Meterko.
On brief: Dave Yost, Attorney General, and Hilary R. Damaser, for appellee. Argued: Hilary R. Damaser.
APPEAL from the Franklin County Court of Common Pleas
BROWN, J.
{1} Appellant, Rick E. Starr, appeals from a judgment of the Franklin County Court of Common Pleas affirming an adjudication order of appellee, the Ohio Real Estate Commission (“Commission“). For the reasons which follow, we affirm.
{2} Appellant was a real estate salesperson licensed by the Ohio Department of Commerce, Division of Real Estate and Professional Licensing (“Division“). Ricardo Easley owned a condominium located at 2985 Grandwoods Circle, Dublin, Ohio (“Grandwoods property” or “the property“). In 2016, appellant‘s employee contacted Easley regarding the Grandwoods property and arranged for Easley to meet appellant.
{4} Appellant and Easley executed an exclusive right to sell listing contract and a Multiple Listing Service (“MLS“) residential work sheet by hand at their April 25, 2016 meeting. The exclusive right to sell contract granted appellant and appellant‘s brokerage, Realty World, the exclusive right to sell the Grandwoods property from April 25, 2016 to April 25, 2018, and provided that Easley would pay appellant‘s brokerage 10 percent of the selling price of the property. The MLS residential work sheet stated that the list price for the Grandwoods property would be $114,900. Appellant listed the Grandwoods property for sale on the MLS on April 26, 2016. Appellant originally listed the property for $114,900 but then increased the list price to $119,000.
{5} On April 27, 2016, appellant and Easley executed an agency disclosure statement and a real estate purchase contract electronically. The purchase contract stated that TRST, LLC (“TRST“) would purchase the Grandwoods property from Easley for $82,000. The agency disclosure statement identified appellant as a member of TRST. The purchase was “contingent upon the seller‘s lender approving of a short sale on this property.” (State‘s Ex. I.) The purchase contract provided that TRST could rent the property from Easley for $1 per month through the time of closing and “sublease the property if desired.” (State‘s Ex. I.) On May 4, 2016, appellant sent Easley a check for $8 as payment for eight months rent at the Grandwoods property. Easley did not cash the check.
{7} On May 16, 2016, Jared Gibbons and his fiancee Rosa Krichbaum executed a month-to-month lease agreement for the Grandwoods property. The lease identified TRST as the lessor of the property. Kim Forrester, appellant‘s employee, signed the lease agreement on behalf of TRST. The lease specified that the monthly rent of $1,070 was payable to Real Estate Stars Property Management.
{8} On May 26, 2016, appellant and Easley signed a residential property management agreement for the Grandwoods property electronically. The May 26, 2016 property management agreement similarly employed Real Estate Stars Property Management to manage the Grandwoods property, but identified both Easley and TRST as owners of the Grandwoods property. Easley stated that he signed the documents appellant sent to him without reading them because he believed appellant was his “agent” and acting in Easley‘s “best interests.” (Hearing Tr. at 159-60.)
{9} Although Gibbons and Krichbaum were not contractors, Gibbons did “cosmetic” work on the Grandwoods property in exchange for credit toward rent. (Hearing Tr. at 193.) Gibbons explained that he “patch[ed] the walls, paint[ed], fix[ed] cabinets[.] * * * Just the basic all-around maintenance.” (Hearing Tr. at 193.) Forrester instructed Gibbons to submit a bill for the work he performed on the property to Alliance Home Services Property Management (“Alliance Home Services“). Appellant owned Alliance Home Services.
{10} Easley discovered that Gibbons and Krichbaum were living in the Grandwoods property when he drove by the property and saw people inside. Easley went to the door and identified himself as the property owner. Gibbons informed Forrester that an individual named Easley had stopped by the property and identified himself as the owner. Forrester told Gibbons “not to talk to [Easley]” and that Easley did not “have any rights in the property.” (Hearing Tr. at 214.) Gibbons believed appellant or appellant‘s company owned the Grandwoods property.
{12} Easley eventually provided Gibbons with a letter stating that appellant “had been fired from any kind of agreement” regarding the Grandwoods property. (Hearing Tr. at 218-19.) Gibbons and Krichbaum moved out of the property in early September 2016. Appellant eventually sent Easley an invoice from Alliance Home Services for repairs made to the Grandwoods property. Easley did not pay the bill. TRST never purchased the property from Easley.
{13} Easley filed a complaint against appellant with the Division. Division Investigator Sandra Gagle investigated the complaint. On September 21, 2018, the Division sent appellant a notification of formal hearing. The notification informed appellant that the Division‘s investigation revealed reasonable and substantial evidence of acts in violation of
{14} On February 4, 2019, a hearing examiner held a hearing on the charges. Counsel for the Division presented testimony from Gagle, Easley, and Gibbons along with documentary evidence. Appellant appeared at the hearing pro se. Appellant cross-examined the Division‘s witnesses, but did not testify or present any evidence.
{15} The hearing examiner issued a report on March 22, 2019 containing findings of fact and conclusions of law. While the hearing examiner found it “not believable that Easley would rely on a person [appellant] whom he just met * * * without paying more attention to the documents that were presented to him,” the hearing examiner found that appellant “acted improperly” as he “blurred the lines and overreached” and “failed to properly represent Easley‘s interests.” (Hearing Examiner Report at 14.) The hearing examiner concluded that appellant committed the violations as alleged in the notification of formal hearing. Appellant filed objections to the hearing examiner‘s report.
{17} Appellant filed a timely
{18} Appellant appeals, assigning the following seven assignments of error for our review:
[I.] The Trial Court erred in concluding that the Real Estate Commission‘s adjudication order was in accordance with law because Starr‘s due process rights were violated due to a lack of notice and/or incorrect notice about the time of the hearing before the Real Estate Commission.
[II.] The Trial Court erred in denying Starr‘s motion to admit additional evidence.
[III.] The Trial Court erred in concluding that the Real Estate Commission‘s adjudication order was supported by reliable, probative and substantial evidence and that the adjudication order was in accordance with law as to Charge 1 of the Schedule A of the Notification of Formal Hearing.
[IV.] The Trial Court erred in concluding that the Real Estate Commission‘s adjudication order was supported by reliable, probative and substantial evidence and that the adjudication order was in accordance with law as to Charge 2 of the Schedule A of the Notification of Formal Hearing.
[V.] The Trial Court erred in concluding that the Real Estate Commission‘s adjudication order was supported by reliable, probative and substantial evidence and that the adjudication order was in accordance with law as to Charge 3 of the Schedule A of the Notification of Formal Hearing.
[VI.] The Trial Court erred in concluding that the Real Estate Commission‘s adjudication order was supported by reliable,
probative and substantial evidence and that the adjudication order was in accordance with law as to Charge 4 of the Schedule A of the Notification of Formal Hearing. [VII.] The Trial Court erred in concluding that the Real Estate Commission‘s adjudication order was in accordance with law where the record indicates that not all members of the Real Estate Commission reviewed Starr‘s written objections.
{19} In an administrative appeal pursuant to
(1) “Reliable” evidence is dependable; that is, it can be confidently trusted. In order to be reliable, there must be a reasonable probability that the evidence is true. (2) “Probative” evidence is evidence that tends to prove the issue in question; it must be relevant in determining the issue. (3) “Substantial” evidence is evidence with some weight; it must have importance and value.
Our Place, Inc. v. Ohio Liquor Control Comm., 63 Ohio St.3d 570, 571 (1992).
{20} The trial court‘s “review of the administrative record is neither a trial de novo nor an appeal on questions of law only, but a hybrid review in which the court ‘must appraise all the evidence as to the credibility of the witnesses, the probative character of the evidence, and the weight thereof.’ ” Lies v. Ohio Veterinary Med. Bd., 2 Ohio App.3d 204, 207 (1st Dist.1981), quoting Andrews v. Bd. of Liquor Control, 164 Ohio St. 275, 280 (1955). The trial court “must give due deference to the administrative resolution of evidentiary conflicts,” although “the findings of the agency are by no means conclusive.” Conrad at 111. The common pleas court conducts a de novo review of questions of law, exercising its independent judgment in determining whether the administrative order is ” ‘in accordance with law.’ ” Ohio Historical Soc. v. State Emp. Relations Bd., 66 Ohio St.3d 466, 471 (1993), citing
{21} An appellate court‘s review of an administrative decision is more limited than that of the common pleas court. Pons v. Ohio State Med. Bd., 66 Ohio St.3d 619, 621 (1993). The appellate court is to determine only whether the common pleas court abused its
{22} Appellant‘s first assignment of error asserts the common pleas court erred in finding the Commission‘s adjudication order in accordance with law because the administrative proceedings failed to comply with due process. Due process rights guaranteed under the United States and Ohio Constitutions apply in administrative proceedings. MacConnell v. Ohio Dept. of Commerce, 10th Dist. No. 04AP-433, 2005-Ohio-1960, {24}. ” ‘Although due process is flexible and calls for such procedural protections as the particular situation demands, the basic requirements of procedural due process are notice and an opportunity to be heard. (Citations omitted.).’ ” Edmands v. State Med. Bd. of Ohio, 10th Dist. No. 14AP-778, 2015-Ohio-2658, {23}, quoting Fairfield Cty. Bd. of Commrs. v. Nally, 143 Ohio St.3d 93, 2015-Ohio-991, {42}. “[N]otice must be ‘reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections. (Citations omitted.).’ ” Id., quoting Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950).
{23} Appellant contends he was deprived due process because he did not receive notice of the time the Commission would hear his case on June 5, 2019. Shortly after the administrative proceedings began, appellant sent the Division an e-mail titled “Updated Home Address for Rick Starr.” (State‘s Ex. D.) The e-mail identified appellant‘s home address as Ballantrae Place, Dublin, Ohio. On May 15, 2019, the Division sent a notice of review to appellant‘s Ballantrae Place address via certified mail. The notice informed appellant that the Commission would review his case on “June 5, 2019 at 10:45 a.m.” (Emphasis sic.) (May 15, 2019 Notice of Review.) The certified mail return receipt for the notice of review was signed and returned to the Division.
{25} The presumption of valid service “is rebuttable by sufficient evidence demonstrating non-service.” New Co-Operative at {9}. To determine whether a party has sufficiently rebutted the presumption of valid service, the trial court may “assess the credibility and competency of the submitted evidence of non-service.” Id., citing Taris v. Jordan, 10th Dist. No. 95APE08-1075 (Feb. 20, 1996). “An affidavit, by itself, stating that appellant did not receive service, may not be sufficient to rebut the presumption without any other evidence of a failure of service.” Id., citing Oxley v. Zacks, 10th Dist. No. 00AP-247 (Sept. 29, 2000). See Ross v. Olsavsky, 7th Dist. No. 09 MA 95, 2010-Ohio-1310, {17} (stating that a trial court “is not bound to accept the sworn statement” in a “self-serving affidavit asserting that the party did not receive the complaint“). An appellate court reviews a trial court‘s decision regarding the sufficiency of service of process for an abuse of discretion. New Co-Operative at {7}, citing C & H Investors, Inc. v. Liquor Control Comm., 10th Dist. No. 98AP-1519 (Dec. 9, 1999).
{26} Although the common pleas court denied appellant‘s motion to admit his affidavit as additional evidence, the court considered the affidavit in its analysis of
{27} The court determined that the statement in appellant‘s affidavit acknowledging the hearing would occur sometime on June 5, 2019 “implicitly admit[ted] to the fact that [appellant] had notice of the Commission‘s hearing.” (Decision & Entry Denying Appellant‘s Request for Admission of Add. Evid. at 3.) Thus, the court stated that appellant‘s affidavit conflicted with appellant‘s contention that he did not receive notice of the Commission‘s hearing. The court found appellant‘s statement claiming that someone called and told him the Commission would hear his case at 1:00 p.m. was “not an acknowledged fact.” (Decision & Entry Affirming the June 12, 2019 Adjudication Order of the Commission at 13.) The court concluded that appellant could not “claim lack of notice when the certified record and his own assertions point to the fact that he had actual notice of the hearing and its start time.” (Decision & Entry Affirming the June 12, 2019 Adjudication Order of the Commission at 13.) The common pleas court‘s statements demonstrate the court found appellant‘s affidavit lacked credibility.
{28} We find no abuse of discretion in the common pleas court‘s assessment of appellant‘s affidavit. The affidavit fails to explain how appellant was aware the Commission would review his case on June 5, 2019, but unaware of the time. The May 15, 2019 notice of review informed appellant both that the hearing would occur on June 5, 2019 and at 10:45 a.m. Furthermore, the certified record demonstrates the Division served numerous documents to appellant‘s Ballantrae Place address throughout the administrative
{29} As the record demonstrates appellant received notice of the date and time of the Commission‘s hearing, appellant fails to demonstrate he was deprived of due process in the administrative proceedings. Appellant‘s first assignment of error is overruled.
{30} Appellant‘s second assignment of error asserts the common pleas court erred in denying his motion to admit additional evidence. In an
{31} “The decision to admit additional evidence lies within the discretion of the court of common pleas, but only after the court has determined that the evidence is newly discovered.” Cincinnati City School Dist. v. State Bd. of Edn., 113 Ohio App.3d 305, 317 (10th Dist.1996), citing Ganley, Inc. v. Ohio Motor Vehicle Dealers Bd., 10th Dist. No. 93APE12-1646 (Sept. 29, 1994). ” ‘Newly discovered’ evidence under
{32} Appellant‘s affidavit was notarized on October 28, 2019, well after the administrative hearing in the present case. Accordingly, the common pleas court did not abuse its discretion in denying appellant‘s motion to admit additional evidence. Appellant‘s second assignment of error is overruled.
{33} Appellant‘s third assignment of error asserts the common pleas court erred in finding the Commission‘s adjudication order was supported by reliable, probative, and substantial evidence and in accordance with law as to Charge 1. Charge 1, as stated on the notification of formal hearing, provided as follows:
On or about April 25, 2016, you entered an exclusive right to sell contract with Ricardo Easley that failed to contain a list price or an address for the subject property. Accordingly, you violated
Ohio Revised Code Section 4735.18(A)(6) , misconduct.
(State‘s Ex. A, Notification of Formal Hearing.)
{34} The exclusive right to sell contract was a pre-printed standard form contract containing blank spaces for the parties to fill in. Although appellant and Easley filled in several of the blank spaces on the agreement, they did not fill in the spaces for the property address or the proposed list price for the property. The common pleas court found the Commission‘s conclusion that the missing terms amounted to “a violation of the code of conduct” of the real estate industry “not an unreasonable or repugnant interpretation.” (Decision & Entry Affirming the June 12, 2019 Adjudication Order of the Commission at 11.)
{35}
{36} As the right to engage in the real estate business is in the nature of a privilege granted by the state, the state has an interest in promoting the character, honesty, and intellectual competence of real estate licensees. Boggs v. Ohio Real Estate Comm., Div. of Real Estate & Professional Licensing, 186 Ohio App.3d 96, 2009-Ohio-6325, {31} (10th Dist.), citing Richard T. Kiko Agency at 76. “To ensure these standards are met, the General Assembly authorized the [C]ommission to regulate the real estate profession and also adopt Canons of Ethics by which real estate professional are to abide.” Stone v. Ohio Real Estate Comm., 10th Dist. No. 20AP-96, 2021-Ohio-809, {14}, citing Boggs at {31}. “In a disciplinary action, the [C]ommission may rely on its own expertise in deciding whether a licensee engaged in conduct that violates the laws, rules or standards of the real estate industry.” Boggs at {33}. A reviewing court must accord deference to the Commission‘s determination that certain conduct is contrary to law or a standard of practice in the real estate industry. Id. Accord Glover v. Ohio Dept. of Commerce, 10th Dist. No. 09AP-91, 2009-Ohio-6987, {23, 25}.
{37} Appellant contends the Commission‘s finding as to Charge 1 was contrary to law because the exclusive right to sell contract satisfied the requirements of
{39} However, the Commission is under no obligation to “list every possible real estate brokerage [or salesperson] violation before it could enforce its responsibilities.” Hughes v. Ohio Real Estate Comm., 8th Dist. No. 74480 (July 22, 1999). Indeed, because it “would be impossible for lawmakers and rulemakers to spell out in detail every type of conduct that constitutes misconduct by a real estate broker [or salesperson],” the “Commission must be given considerable discretion in determining whether certain conduct is violative of the standard of practice in the industry.” Id. In Hughes v. Ohio Real Estate Comm., the court concluded that, although there was “no specific regulatory provision prohibiting [the licensee‘s] conduct,” as the licensee “failed to show” his conduct was “an acceptable practice,” the Commission‘s conclusion that the conduct constituted misconduct was in accordance with law. See also Barlow v. Ohio Dept. of Commerce, 10th Dist. No. 09AP-1050, 2010-Ohio-3842, {22, 24}.
{40} Appellant fails to demonstrate that it was an acceptable practice for a real estate salesperson to enter into an exclusive right to sell contract which failed to identify the property to be sold or the list price for the property. Moreover, a person of ordinary intelligence would not require notice informing them the blank spaces on a standard form contract are to be filled in. The Commission could rely on its expertise of the real estate industry to conclude that appellant‘s failure to include the address and list price terms in the exclusive right to sell contract violated the standards of practice for the real estate industry.
{41} Finally, the Commission asserts that an exclusive right to sell contract “cannot be valid without the essential subject matter of the contract, including the property to be sold and the price for which it will be sold.” (Appellee‘s Brief at 24.) In response, appellant contends if the failure to include the address and price terms render the exclusive
{42} “A meeting of the minds as to the essential terms of the contract is a requirement to enforcing the contract.” Kostelnik v. Helper, 96 Ohio St.3d 1, 2002-Ohio-2985, {16}, citing Episcopal Retirement Homes, Inc. v. Ohio Dept. of Indus. Relations, 61 Ohio St.3d 366, 369 (1991). The construction of a written contract is a matter of law. Alexander v. Buckeye Pipe Line Co., 53 Ohio St.2d 241 (1978), paragraph one of the syllabus. “[J]udicial examination of [a] contract begins with the fundamental objective of ascertaining and giving effect to the intent of the parties at the time they executed the agreement.” CosmetiCredit, LLC v. World Fin. Network Natl. Bank, 10th Dist. No. 14AP-32, 2014-Ohio-5301, {13}. The parties’ intent is generally presumed to reside in the language the parties chose to use in the agreement. Huff v. FirstEnergy Corp., 130 Ohio St.3d 196, 2011-Ohio-5083, {12}. When the language of the contract is clear, courts look no further than the contract to find the intent of the parties. Westfield Ins. Co. v. Galatis, 100 Ohio St.3d 216, 2003-Ohio-5849, {11}. “Only when the language of a contract is unclear or ambiguous, or when the circumstances surrounding the agreement invest the language of the contract with a special meaning will extrinsic evidence be considered in an effort to give effect to the parties’ intentions.” Shifrin v. Forest City Ents., Inc., 64 Ohio St.3d 635, 638 (1992), syllabus.
{43} The exclusive right to sell contract granted appellant and appellant‘s brokerage the right to sell an unidentified property at an unidentified price. Accordingly, the failure to include the address and price terms in the contract rendered the contract ambiguous and extrinsic evidence could be considered to explain what the parties intended the missing terms to state. See Young v. Louisville Title Agency, Inc., 6th Dist. No. 91WD097 (Jan. 15, 1993) (concluding the parties’ failure to fill in a blank space on a pre-printed real estate purchase agreement created an “ambiguity on the face of the contract” and thus extrinsic evidence could be considered to ascertain the parties’ intent).
{44} The MLS residential worksheet identified the address for the Grandwoods property and stated that the list price for the property would be $114,900. Appellant and Easley executed the MLS residential worksheet and the exclusive right to sell contract during their April 25, 2016 meeting. See Edward A. Kemmler Mem. Found. v. 691/733 E. Dublin-Granville Rd. Co., 62 Ohio St.3d 494, 499 (1992) (holding that it is a “general
{45} Thus, the extrinsic evidence demonstrates the parties intended for the exclusive right to sell contract to apply to the Grandwoods property and for the list price to be $114,900. Accordingly, the exclusive right to sell contract was an enforceable agreement. While principles of contract law demonstrate the exclusive right to sell contract was enforceable despite the missing terms, the Commission could rely on its expertise of the real estate industry to conclude that appellant‘s failure to include the address and price terms in the contract amounted to unprofessional conduct in violation of
{46} The common pleas court did not abuse its discretion in finding the Commission‘s adjudication order was supported by reliable, probative, and substantial evidence and in accordance with law as to Charge 1. Appellant‘s third assignment of error is overruled.
{47} Appellant‘s fourth assignment of error asserts the common pleas court erred in finding the Commission‘s adjudication order was supported by reliable, probative and substantial evidence and in accordance with law as to Charge 2. Charge 2 provided as follows:
On or about April 27, 2016, you created an illegal dual agency for your brokerage when you submitted an offer to purchase the subject property for TRST LLC, a LLC, which you were an officer or member, while your brokerage remained [the] listing brokerage for the subject property. Accordingly, you violated
Ohio Revised Code Section 4735.18(A)(9) as that section incorporatesOhio Revised Code Section 4735.71(C) or you violatedOhio Revised Code Section 4735.18(A)(6) , misconduct as that section incorporates the Canons of Ethics for the Real Estate Industry, Section I, Article 1.
(State‘s Ex. A, Notification of Formal Hearing.)
No salesperson or broker licensed under this chapter shall participate in a dual agency relationship in which the licensee is a party to the transaction, either personally or as an officer or member of a partnership, association, limited liability company, limited liability partnership, or corporation that has an interest in the real property that is the subject of the transaction or an entity that has an intention of purchasing, leasing, or exchanging the real property.
{49} A “dual agent” is defined as a licensee or a brokerage that “represents both the purchaser and the seller as clients in the same real estate transaction.”
Licensing as a real estate broker or salesman indicates to the public at large that the individual so designated has special expertise in real estate matters and is subject to high standards of conduct in the licensee‘s business and personal affairs. The licensee should endeavor to maintain and establish high standards of professional conduct and integrity in dealings with members of the public as well as with fellow licensees and, further, seek to avoid even the appearance of impropriety in any activities as a licensee.
https://www.com.ohio.gov/documents/RE_canons_of_ethics.pdf (accessed June 29, 2021).
{50} The Commission adopted the hearing examiner‘s conclusion that appellant violated
{51} Appellant contends he did not participate in an illegal dual agency because the agency disclosure statement disclosed he represented only TRST in the purchase
{52} Appellant contends that, by signing the agency disclosure statement, Easley gave his informed written consent for appellant to change who he represented in the purchase transaction. Appellant notes that the agency disclosure statement stated the parties “consent[ed] to the above relationships as [they] enter[ed] into this real estate transaction.” (State‘s Ex. H.)
{53} Thus, in the absence of a statement terminating appellant‘s pre-existing representation of Easley, appellant remained Easley‘s agent for the Grandwoods property. The exclusive right to sell contract, agency disclosure statement, and purchase contract demonstrated appellant was representing both Easley and TRST in the purchase transaction for the Grandwoods property, and that appellant was a party to the transaction due to his membership in TRST. As
{54} Appellant further contends that Charge 2 impermissibly sought to hold him responsible for the actions of his brokerage. However, appellant signed the exclusive right to sell agreement, the agency disclosure statement, and the purchase contract. The exclusive right to sell contract granted appellant and his brokerage the exclusive right to sell the Grandwoods property, and the agency disclosure statement stated that appellant and his brokerage represented TRST in the purchase transaction. Thus, Charge 2 held appellant responsible for his actions which created an illegal dual agency, not the actions of his brokerage.
{55} Charge 2 alternatively stated that appellant‘s conduct violated Section I, Article 1 of the Canons of Ethics for the Real Estate Industry. The conflicting statements in the various documents regarding who appellant was representing in the purchase transaction created an appearance of impropriety and failed to maintain high standards of professional conduct. Indeed, the statement in the agency disclosure statement indicating that Easley was unrepresented directly conflicted with the exclusive right to sell contract. Even after signing the agency disclosure statement, appellant never attempted to terminate his representation of Easley. Appellant remained the listing agent for the Grandwoods property on the MLS and continued to seek an independent purchaser for the property throughout the summer of 2016. The Commission could rely on its expertise of the industry to conclude that appellant‘s conduct described in Charge 2 violated Section I, Article 1 of the Canons of Ethics.
{56} The common pleas court did not abuse its discretion in finding the Commission‘s adjudication order was supported by reliable, probative, and substantial evidence and in accordance with law as to Charge 2. Appellant‘s fourth assignment of error is overruled.
Between on or about April 25, 2016 and on or about September 1, 2016, you failed to maintain high standards of professional conduct and integrity in dealings with members of the public, or you failed to avoid the appearance of impropriety as a licensee by and through your agreements with Ricardo Easley related to the selling, purchasing, managing, leasing and/or repairing of the subject property.
This conduct includes the conduct outlined in charge 1 and charge 2 and includes the following: You, Rick Starr, or a company owned or controlled by you, attempted to purchase the subject property for $82,000.00 when you advertised the subject property in the MLS on 4/26/16 for an original list price of $114,900 and a list price of $119,000.00.
On 4/27/16, executed an agency disclosure statement identifying, you or a company that you owned or controlled as the purchaser, and you or a company you owned or controlled, as the agent for the purchaser in conflict with the Exclusive Right to Sell Agreement executed on 4/25/16.
The Right to Remedy and the Agreement to Remedy Period in the purchase contract for the subject property ran simultaneously, which did not provide the seller with a reasonable opportunity to cure or further negotiate the contract terms.
The purchase contract for the subject property permitted you, or a company owned or controlled by you, to lease the property for $1.00 and to sublease the subject property with rental proceeds going to you or a company owned or controlled by you.
You, or a company owned or controlled by you, entered into a property management agreement with Easley, the owner of the subject property, and falsely portrayed yourself, or a company you owned or controlled by you, as the owner of the property.
The property management agreement with Real Estate Stars Property Management, a company that you owned or
controlled, and Ricardo Easley, permitted another company, Alliance Home Services, a company that you owned or controlled, to take advantage of Easley by overcharging for services rendered. Accordingly, you violated
Ohio Revised Code Section 4735.18(A)(6) , misconduct as that section incorporates the Canons of Ethics for the Real Estate Industry, Section 1, Article 1.
(State‘s Ex. A, Notification of Formal Hearing.)
{58} Appellant asserts that “all parts of Charge 3 should fail because the charge is essentially attempting to regulate the terms of the * * * private agreements between TRST and Easley.” (Appellant‘s Brief at 40.) However, a person holding a real estate license “is held to a higher standard of competency and fairness than is a lay member of the public in the market place.” Richard T. Kiko Agency at 76. Moreover, as Easley‘s agent, appellant owed Easley fiduciary duties when the parties executed the purchase contract and the property management agreement. See
{59} The Commission adopted the hearing examiner‘s conclusion that appellant violated Section I, Article 1 of the Canons of Ethics by the conduct described in Charge 3. The common pleas court found the Commission‘s adjudication order was supported by reliable, probative, and substantial evidence and in accordance with law as to Charge 3. Pursuant to our analysis of appellant‘s third and fourth assignments of error, we find the portion of Charge 3 incorporating the same conduct as Charges 1 and 2 supported by reliable, probative, and substantial evidence and in accordance with law.
{60} The rental provision in the purchase contract permitted TRST to sublease the Grandwoods property for any amount, while renting the property from Easley for the nominal amount of $1 per month. The remedy provisions in the purchase contract stated that TRST had until closing to inspect the property and submit a request to remedy to Easley, and provided that the contract would terminate if the parties did not reach an
{61} Appellant contends the difference between the $119,000 list price and the $82,000 purchase price could not support a finding of misconduct, as there was no evidence of the actual market value of the Grandwoods property. However, the Commission could rely on its expertise of the real estate industry to conclude that appellant‘s company‘s offer to purchase the Grandwoods property for $37,000 less than the list price, while appellant was the seller‘s agent for the property, failed to maintain high standards of professional conduct, and amounted to an appearance of impropriety. See Gibson v. Real Estate Comm., 10th Dist. No. 81AP-811 (Apr. 22, 1982) (finding the Commission‘s order suspending a broker‘s license supported by reliable, probative, and substantial evidence as the broker “accepted a six-month exclusive listing to sell a house for $20,000” and then induced the seller “to sell the property to [the broker‘s] corporation * * * for $12,832“).
{62} Appellant also asserts that the $82,000 offer did not amount to misconduct because an offer “was necessary to get the ball rolling on the short sale process with Easley‘s lender.” (Appellant‘s Brief at 34.) While appellant told Gagle that the $82,000 purchase price was “an offer in order to get the ball rolling with the bank,” Gagle never discovered “any proof that [the $82,000 offer] actually went to the bank.” (Hearing Tr. at 53, 75.) There was no evidence in the record demonstrating that appellant ever sought approval from Easley‘s financial lender to do a short sale on the Grandwoods property. The common pleas court stated that, as appellant admitted the purchase contract “was only there to prime the pump with the bank,” appellant admitted to his own “willingness to engage in unethical conduct.” (Decision & Entry Affirming the June 12, 2019 Adjudication Order of the Commission at 12.)
{63} Appellant contends the property management agreement did not falsely portray TRST as an owner of the property because TRST was an equitable owner of the Grandwoods property pursuant to the purchase contract. The purchaser ” ‘under an enforceable contract * * * is regarded in equity as the owner, with legal title held in trust for
{64} However, “an executory contract for the purchase of land ‘does not convey, or purport to convey, or legally to incumber or affect any estate or interest in land.’ ” HIN, L.L.C. v. Cuyahoga Cty. Bd. of Revision, 124 Ohio St.3d 481, 2010-Ohio-687, {21}, quoting Churchill v. Little, 23 Ohio St. 301, 307 (1872). See Norris v. Dudley, 10th Dist. No. 07AP-425, 2007-Ohio-6646, {31}, quoting Black‘s Law Dictionary at 321 (7th Ed.1999) (defining an executory contract as a ” ‘contract that remains wholly unperformed or for which there remains something still to be done on both sides’ “). Thus, ” ‘as a general rule, the purchaser, under a contract for the sale of land, before conveyance, has “neither a legal nor equitable right, as against the seller, until he pay the purchase money.” ’ ” HIN, L.L.C. at {21}, quoting McCombs v. Howard, 18 Ohio St. 422, 436 (1868), quoting 1 Hilliard, The Law of Vendors and Purchasers of Real Property (1858) 9. See also Coggshall v. Marine Bank Co., 63 Ohio St. 88 (1900), paragraph one of the syllabus (stating that the “interest of the vendee of land, before conveyance, is an equitable estate in the land, equal to the amount of the purchase money paid“); McCombs at 436 (observing that the seller “held title in trust for the price agreed to be paid for the land,” and “[s]ince, then, the price remained wholly, or substantially unpaid, [the seller], at the time of the attachment, held both the legal and equitable title to the land“).
{65} TRST never paid any portion of the $82,000 purchase price to Easley. Accordingly, TRST was not an equitable owner of the Grandwoods property when Easley signed the May 26, 2016 property management agreement. Thus, the property management agreement falsely portrayed TRST as an owner of the Grandwoods property.
{66} Appellant contends the last part of Charge 3, stating that the property management agreement permitted Alliance Home Services to overcharge Easley for services, was not supported by reliable, probative, or substantial evidence. The May 26, 2016 property management agreement granted Real Estate Stars Property Management
{67} Appellant asserts this portion of Charge 3 fails because there was no evidence demonstrating whether the charges from Alliance Home Services were normal and customary. However, this portion of Charge 3 concerned the terms of the property management agreement, not the actual charges for the repairs. Appellant further asserts this portion of Charge 3 fails because the property management agreement referenced only the Realty Alliances network and not Alliance Home Services. However, by obligating Easley to use only contractors from within appellant‘s Realty Alliances network, the agreement permitted any contractor from within that network to overcharge Easley for services. Appellant informed the hearing examiner that Alliance Home Services was a contractor. Thus, the property management agreement permitted Alliance Home Services to overcharge Easley for repairs done to the Grandwoods property. The Commission could rely on its expertise of the real estate industry to find that the terms of the property management agreement which benefitted appellant‘s various companies at Easley‘s expense failed to maintain high standards of professional conduct and created an appearance of impropriety in violation of Section I, Article 1 of the Canons of Ethics.
{68} The common pleas court did not abuse its discretion in finding the Commission‘s adjudication order was supported by reliable, probative, and substantial evidence and in accordance with law as to Charge 3. Appellant‘s fifth assignment of error is overruled.
{69} Appellant‘s sixth assignment of error asserts the common pleas court erred in finding the Commission‘s adjudication order was supported by reliable, probative, and substantial evidence and in accordance with law as to Charge 4. Charge 4 provided as follows:
Between on or about April 25, 2016 and on or about September 1, 2016, you failed to maintain high standards of professional conduct and integrity in dealings with members of the public, or you failed to avoid the appearance of impropriety as a licensee by and through your agreements with Jared Gibbons related to the selling, purchasing, managing, leasing and/or repairing of the subject property.
This conduct includes:
Failing to disclose the true ownership of the subject property
Failing to disclose that the subject property was the subject of an Exclusive Right to Sell Agreement and that the tenant would be responsible for showing the property
Threatening eviction when the tenant refused to show the subject property
Accordingly, you violated
Ohio Revised Code Section 4735.18(A)(6) , misconduct as that section incorporates the Canons of Ethics for the Real Estate Industry, Section 1, Article I.
(State‘s Ex. A, Notification of Formal Hearing.)
{70} Appellant asserts the Commission‘s conclusion he committed the violation stated in Charge 4 was contrary to law as the hearing examiner did not make a conclusion of law specific to Charge 4. The hearing examiner concluded that appellant “committed the violations as alleged in the Notification of Formal Hearing.” (Hearing Examiner Report at 14.) Thus, the hearing examiner necessarily concluded that appellant committed the violation set forth in Charge 4. Moreover, as the common pleas court in “deciding an administrative appeal * * * must give consideration to the entire record before the [C]ommission,” any “alleged deficiency by the [C]ommission in failing to set forth the reasons” for its decision does not “impair the common pleas court‘s function.” Beef & Beer Keowee v. Liquor Control Comm., 10th Dist. No. 97APE09-1272 (Aug. 20, 1998). See also Rutledge v. Ohio Dept. of Ins., 8th Dist. No. 87372, 2006-Ohio-5013, {31}. The common pleas court independently reviewed the record and found the violation in Charge 4 was supported by reliable, probative, and substantial evidence and in accordance with law.
{71} Appellant contends he did not fail to disclose the true ownership of the Grandwoods property to Gibbons, as Gibbons was aware appellant did not own the
{72} Thus, while Gibbons was aware appellant did not own the Grandwoods property on the day Gibbons signed the lease, appellant never told Gibbons that Easley owned the property. Appellant‘s statements caused Gibbons to believe that appellant became the owner of the property shortly after Gibbons signed the lease. Gibbons independently discovered that Easley owned the property. Accordingly, the evidence supported the Commission‘s conclusion that appellant failed to disclose the true ownership of the property to Gibbons.
{73} Appellant states the lease agreement “belied” the conclusion that he committed misconduct by failing to disclose to the tenants that they would be responsible for showing the property. (Appellant‘s Brief at 42.) In the lease, the tenants “agree[d] that Lessor, Lessor‘s agents and or employees, may enter the Premises at any reasonable time to inspect, repair, or show the Premises to prospective Lessees, etc.” (State‘s Ex. M, Lease Agreement at section 7.) Thus, while the lease informed the tenants that TRST could enter at a reasonable time to show the property, the lease did not inform the tenants they would be responsible for showing the property. Gibbons testified that appellant initially did not tell him the Grandwoods property “was still actually up for sale” or that Gibbons “would have to [show the property].” (Hearing Tr. at 216, 227.) Gibbons explained that he and Krichbaum were eventually “asked to show [prospective purchasers] the property,” noting “[w]e were asked to allow them in and show them the property.” (Hearing Tr. at 244.)
{74} Appellant asserts the portion of Charge 4 stating that appellant committed misconduct by failing to disclose the exclusive right to sell contract to the tenants was contrary to law, as there is no statutory provision in Ohio obligating a landlord to disclose the existence of a listing agreement to a tenant. However, the Commission determined appellant violated the Canons of Ethics for the Real Estate Industry by failing to disclose the exclusive right to sell contract to the tenants, not some independent statutory provision. We defer to the Commission‘s conclusion that appellant‘s failure to disclose the exclusive right to sell contract violated the standards of practice for the real estate industry.
{75} Appellant asserts the Commission‘s finding he committed misconduct by threatening to evict the tenants when the tenants refused to show the property was contrary to law, because a tenant may be evicted for refusing to allow a landlord to enter a property for a showing. See
{76} The common pleas court did not abuse its discretion in finding the Commission‘s adjudication order was supported by reliable, probative, and substantial evidence and in accordance with law as to Charge 4. Appellant‘s sixth assignment of error is overruled.
{77} Appellant‘s seventh assignment of error asserts the common pleas court erred in finding the Commission‘s adjudication order in accordance with law as the record indicates that not all members of the Commission reviewed appellant‘s objections to the hearing examiner‘s report.
{78} ” ‘An appellate court must presume the regularity of administrative proceedings.’ ” Cowans v. Ohio State Racing Comm., 10th Dist. No. 13AP-828, 2014-Ohio-1811, {39}, quoting Houser v. Dir., Ohio Dept. of Job & Family Servs., 10th Dist. No. 10AP-116, 2011-Ohio-1593, {20, 21}. Thus, “[w]here the record is silent, we must presume the Commission reviewed objections before adopting the hearing examiner‘s order, ‘absent an affirmative showing to the contrary.’ ” Id. at {39}, quoting Perry v. Joseph, 10th Dist. No. 07AP-359, 2008-Ohio-1107, {20}. “The mere fact that the Commission did not explicitly state on the record that it had considered appellant‘s objections does not mean that it did not consider the entire record of proceedings, including appellant‘s objections, before rendering its decision.” Id. at {40}. See Houser at {21}; Howard v. Ohio State Racing Comm., 10th Dist. No. 18AP-349, 2019-Ohio-4013, {37}.
{79} Appellant contends the Commission‘s adjudication order demonstrates the Commission did not consider appellant‘s objections, as the order states the Commission “review[ed] the hearing examiner‘s report and testimony” but does not state the Commission reviewed appellant‘s objections. (Adjudication Order.) The adjudication order, however, does not affirmatively demonstrate that the Commission did not consider appellant‘s objections. Notably, at its June 5, 2019 hearing, Commissioner McLinden stated that he had “reviewed the record with [appellant‘s] objections that he wrote to us” and that the Commission had “gone over the record, very in depth.” (Commission Hearing Tr. at 10-11.) Presuming regularity in the administrative proceedings, we find the Commission complied with its
{80} Having overruled appellant‘s seven assignments of error, the judgment of the Franklin County Court of Common Pleas is affirmed.
Judgment affirmed.
KLATT and BEATTY BLUNT, JJ., concur.