ORDERS:
FINAL ORDER AND DECISION
I. Introduction
Michael Taylor (Taylor) seeks a reversal of a decision of the South Carolina Department of Labor,
Licensing, and Regulation, Real Estate Commission (Commission) which imposed a $1,000 fine and
a one year suspension of Taylor's license as a real estate broker. Taylor argues two positions in
seeking to reverse the Commission’s decision.
First, the Commission lacks the authority to impose sanctions since Taylor’s actions were performed
outside his role as a licensed real estate broker. Second, Taylor’s rights to due process were violated
since one member of the Commission exhibited bias and prejudice at the hearing below.
I disagree with Taylor’s arguments. The Commission has authority to sanction licensed real estate
brokers for wrongful conduct arising outside their roles as brokers but dealing with the sale of real
estate. Further, no bias or prejudice is established in this record. Accordingly, the Commission’s
decision is affirmed.
II. Analysis
A. Authority To Impose Sanctions
Taylor argues that the Commission’s authority to impose sanctions pursuant to S.C. Code Ann. § 40-57-145(A)(4) requires that his alleged wrongful actions occur “in the practice of real estate.” See
S.C. Code Ann. § 40-57-145(A)(4) (“the commission may . . . take disciplinary action against a
licensee who: (4) in the practice of real estate demonstrates bad faith, dishonesty, untrustworthiness,
or incompetency in a manner as to endanger the interest of the public;”). (Emphasis added). Taylor
asserts his actions were not “in the practice of real estate” since he was acting on his own behalf, not
as a real estate broker.
The Commission does not dispute Taylor’s assertion that he was not acting as a real estate broker.
Rather, the Commission agrees that Taylor was acting only in his private capacity. Respondent’s
Brief p. 4 (“[Taylor] . . . did not act in his capacity as a broker in regards to the transaction at issue
because he did not receive any compensation, or intend or expect to receive compensation, from the
Contract for Sale and Lease Purchase agreement other than the purchase price.”). Thus, the issue
is a whether the Commission can sanction a licensed real estate broker for actions involving the sale
of real estate but taken solely in a private capacity as opposed to performing as a real estate broker.
In 1976, that precise question was answered in the affirmative.
The principal issue is the appellant's contention that in all of these four transactions
he was acting not as a real estate broker, but on his own behalf. He argues that the
grounds set forth for revocation of a real estate license, as quoted hereinabove, apply
solely to activities of a broker while acting in his broker capacity. We disagree. Even
as members of the bar are subject to disciplinary procedures for conduct not strictly
related to the practice of law, relators (sic) may have their licenses revoked for
conduct not strictly related to a transaction in which they are acting as broker.
South Carolina Real Estate Commission v. Boineau, 267 S.C. 574, 230 S.E.2d 440, 441-442
(1976).
Were there nothing more, Boineau would end the instant matter and require upholding the
Commission. However, there is more. The controlling statute in the 1976 Boineau decision was
changed in 1997. See Act No. 24, § 1., 1997 Acts of the General Assembly. The question becomes
whether the change warrants a different answer to the Boineau question.
The statutory language of §56-1545.16(4) Code of Laws 1962 (Supp. 1975) that was before the
Boineau court stated that the Commission could revoke a broker’s license if he were found guilty
of “[a]ny conduct in a real estate transaction which demonstrates bad faith, dishonesty,
untrustworthiness or incompetency in such a manner as to endanger the interest of the public.”
(Emphasis added). However, the successor to §56-1545.16(4) is the current statute of §40-57-145(A)(4) provided by Act 24, 1997 Acts of the General Assembly which now provides “the
commission may . . . take disciplinary action against a licensee who in the practice of real estate
demonstrates bad faith, dishonesty, untrustworthiness, or incompetency in a manner as to endanger
the interest of the public.”) (Emphasis added). By such language did the General Assembly intend
to overrule Boineau and hold that only actions taken as a broker could be disciplined? I think not.
I do not find that the change in language from “real estate transaction” in 1975 to “practice of real
estate” in 1997 is significant. Indeed, a mere change in the language does not automatically create
a corresponding change in the law. Rather, an amendment can produce a “declaratory statute” that
does “not change existing law” but instead “operates to express what formerly was only implied or
was not clear.” (internal cite omitted). State v. Merriman, 287 S.C. 74, 337 S.E.2d 218, 227-228
(Ct. App. 1985).
Boineau left a need for clarification since that decision is somewhat cryptic in its meshing of the
terms “practice” and “transaction.”
Even as members of the bar are subject to disciplinary procedures for conduct not
strictly related to the practice of law, relators (sic) may have their licenses revoked
for conduct not strictly related to a transaction in which they are acting as broker.
(Emphasis added).
Plainly, the holding in Boineau is in parallel form. It equates two concepts. Lawyers can be
disciplined “for conduct not strictly related to the practice of law,” and realtors can also be disciplined
“for conduct not strictly related to [the practice of real estate]. Indeed, Boineau, in the second half
of its parallel statements, uses “transaction” instead of “practice” only because “transaction” was the
term then in use with the existing statute. Thus, the holding of Boineau, at least in terms of
identifying what private conduct can be disciplined, clearly places lawyer discipline and realtor
discipline on the same plane. If one can be sanctioned, so can the other.
Thus, did the General Assembly with the amendment in 1997 change the Boineau parallel conclusion
that both lawyers and realtors could be disciplined for their private conduct? No, rather than a
change, the statute as amended in 1997 does not overrule Boineau but instead is only a declaratory
statute that clarifies existing law to reaffirm Boineau. To the same effect see Town of Forest Acres
v. Seigler, 224 S.C. 166, 77 S.E.2d 900 (1953) (explaining that changes made by revision of statutes
will not be construed as altering the law, unless it is clear that such was the intention).
In addition, the interpretation reached here is consistent with the intention of the General Assembly
since it furthers the purpose of the law governing brokers. Georgia-Carolina Bail Bonds, Inc. v.
County of Aiken, 354 S.C. 18, 579 S.E.2d 334 (Ct.App. 2003) (stating the well understood rule that
a statute should be given a reasonable and practical construction consistent with the purpose and
policy expressed in the statute). In this case, the very purpose of the Commission itself “is to regulate
the real estate industry so as to protect the public's interest when involved in real estate transactions.”
S.C. Code Ann. § 40-57-10. Reading the statute as upholding Boineau furthers the stated purpose
while Taylor’s view places the public at risk. Accordingly, the Commission had authority to impose
discipline due to Taylor’s conduct involving the sale of real estate even though Taylor was not acting
in his capacity as a broker.
B. Lack of Bias
Taylor argues that at least one member of the Commission who heard this matter below was biased
against him. I cannot agree.
Agency officials who adjudicate matters are presumed to be honest, fair, and unbiased. Garris v.
Governing Bd. of South Carolina Reinsurance Facility, 511S.E.2d 48 (1998). Accordingly, one
seeking to show that a hearing body acted from bias must establish that actual bias occurred rather
than showing that a mere potential for bias existed. Felder v. Charleston County School Dist., 489
S.E.2d 191(1997).
In this record, no showing is made of actual bias or prejudice. Rather, the record shows only general
comments made by one member of the Commission with those comments made during the hearing
and being a statement of defense in which the member asserted he had not received prior information
on the matter being heard. Taylor presented no persuasive evidence demonstrating that the member
had in fact received any such information. Thus, actual bias or prejudice is simply not shown here.
Therefore, no reversal of the Commission’s decision is warranted.
IV. Order
The Commission’s decision is AFFIRMED. The Commission has authority to sanction Taylor as a
licensed real estate broker for wrongful conduct arising from the sale of real estate outside his role
as a broker. Further, no bias or prejudice is established in this record.
AND IT IS SO ORDERED
______________________
RAY N. STEVENS
Administrative Law Judge
Dated: July 31, 2003
Columbia, South Carolina |