ORDERS:
ORDER OF CONTEMPT
This matter is before me upon a verified Petition filed on July 17, 1998 by South Carolina
Department of Labor, Licensing, and Regulation, Real Estate Commission, alleging that Respondent
James E. MacDonald has engaged in the practice of real estate in willful violation of this tribunal's
July 2, 1998 Order. The South Carolina Real Estate Commission revoked Respondent's real estate
broker's license on September 17, 1997. The Commission's Order was upheld on appeal by Order of
Administrative Law Judge Ralph K. Anderson, III, on March 25, 1998, which implicitly prohibited
Respondent from any further practice of real estate as contemplated by S.C. Code Ann. section 40-57-20 (Supp. 1997). On June 18, 1998, Petitioner submitted a Petition for a Temporary Restraining Order
("TRO") with supporting affidavit, indicating Respondent's continued practice of real estate. This
tribunal subsequently issued a Rule to Show Cause ordering the parties to appear before it on July 1,
1998 and advising Respondent to be prepared to show cause why he should not be held in contempt.
A contempt hearing was conducted on July 1, 1998.
At the July 1, 1998 hearing, Petitioner presented evidence showing that Respondent, through
newspaper advertisements, had attempted to negotiate the sale, purchase, exchange or otherwise
dispose of real estate. Further, through these same advertisements, Respondent held himself out to the
public as being engaged in the practice of real estate. Accordingly, this tribunal found that Respondent
violated Judge Anderson's March 25, 1998 Order and warned Respondent that should he persist in the
practice of real estate, he would be subject to a fine, jail, or both. The contents of this tribunal's July
2, 1998 Order were read into the record at the hearing in the presence of Respondent and his counsel.
After receipt of Petitioner's July 17, 1998 Petition, this tribunal issued a second Rule to Show
Cause on July 20, 1998 ordering the parties to appear before it on July 28, 1998 and advising
Respondent to be prepared to show cause why he should not be held in contempt. A second contempt
hearing was conducted on July 28, 1998. Both parties were present and were represented by counsel.
At the July 28, 1998 hearing, Petitioner proved beyond a reasonable doubt the following: After
July 1, 1998, Respondent advertised for sale the property of a North Charleston resident. On July 12,
1998, Respondent provided a form contract to the sellers and the prospective purchaser, participated
in completing and executing the earnest money agreement, negotiated to receive a three (3%) percent
commission on the sale, and collected an earnest money deposit from the prospective purchaser. Prior
to July 1, 1998, Respondent agreed to serve as the real estate agent for a Goose Creek resident in the
sale of her home. Respondent advertised the property, showed it to a prospective purchaser on the
evening of July 1, 1998, and drafted an earnest money agreement on July 2, 1998. The agreement was
signed by the prospective purchaser on July 2, 1998, and later signed by the seller on July 11, 1998.
Respondent has continued to hold himself out as a broker of real estate and to market real property for
sale through Realty Associates, a company of which he serves as President.
I find that these actions fall within the scope of the practice of real estate, as defined in S.C.
Code Ann. §§ 40-57-20 and 40-57-30 (Supp. 1997). I further find that these actions were willful and
in blatant disregard of this tribunal's July 2, 1998 Order.
The Administrative Law Judge Division has the authority to enforce its own Orders through
the power of contempt. See S.C. Code Ann. § 1-23-630 (Supp. 1997)(each law judge of the
Administrative Law Judge Division has the same power at chambers or in open hearing as do circuit
court judges); State v. Kennerly, Op. No. 2853 (S.C.Ct.App. filed June 15, 1998)(Davis Adv.Sh. 22
at 49)(quoting In re Terry, 128 U.S. 289, 303 (1888))("'The power to punish for contempt is inherent
in the nature and constitution of a court. It is a power not derived from any statute, but arising from
necessity; implied, because it is necessary to the exercise of all other powers.'"); see also S.C. Code
Ann. § 14-5-320 (1976)("The circuit court may punish by fine or imprisonment, at the discretion of
the court, all contempts of authority in any cause or hearing before the same").
"Courts have no more important function to perform in the administration of justice than to
ensure their orders are obeyed." State v. Bevilacqua, 316 S.C. 122, 447 S.E.2d 213 (Ct. App. 1994).
"Nevertheless, contempt is an extreme measure and the power to adjudge a person in contempt is
not to be lightly asserted." Id. Recognizing the gravity of imposing punishment upon a party, such
punishment is necessary under the circumstances of this case, not only to vindicate the authority of
this tribunal, but also to protect the public. Cf. State v. Howell, 285 S.C. 53, 328 S.E.2d 77
(1985)(dicta)(the purpose of licensing architects is to protect the public; where defendant practiced
architecture without a license, the trial judge should have held defendant in contempt to ensure
compliance with court's earlier order enjoining him from such practice). Both imprisonment and
a fine are appropriate under the circumstances. Id.
The relationship between a real estate broker and his client is a fiduciary one. See Peoples
Federal Savings & Loan Ass'n v. Myrtle Beach Golf & Yacht Club, 310 S.C. 132, 425 S.E.2d 764
(Ct. App. 1992)(an agency is a fiduciary relationship); Designer Showrooms, Inc. v. Kelley, 304 S.C.
478, 405 S.E.2d 417 (Ct. App. 1991)(real estate broker breached fiduciary duty owed to client).
Accordingly, the practice of real estate is not a right, but a privilege to be granted only to those who
meet certain qualifications specified by the State. See S.C. Code Ann. § 40-57-20 (Supp.
1997)(prohibition on practice of real estate without a license). Respondent's privilege to practice
real estate in this State was revoked upon the Real Estate Commission's finding of Respondent's
misconduct, and that revocation has been affirmed by the Administrative Law Judge Division.
Therefore, Respondent's continued practice of real estate constitutes a threat of harm to the public
that this tribunal cannot ignore. I find and conclude that Respondent is in contempt for his willful
disregard of this tribunal's July 2, 1998 Order prohibiting his continued practice of real estate.
IT IS THEREFORE ORDERED that Respondent shall be taken into custody and confined
to the Richland County jail for a period of two days.
IT IS FURTHER ORDERED that Respondent shall also pay a $1,000 fine to the
Administrative Law Judge Division, or in lieu thereof, remain in the Richland County jail for an
additional two days, for a total of four days of confinement.
AND IT IS SO ORDERED.
____________________________________
JOHN D. GEATHERS
Administrative Law Judge
July 28, 1998
Columbia, South Carolina |
