No. 85-503
I N THE SUPREME COURT O THE STATE O MONTANA
F F
1986
I N THE MATTER O F
M R H R. SORINIf
AT A
Licensed R e a l Estate Broker.
APPEAL PROM: D i s t r i c t C o u r t of t h e Second J u d i c i a l D i s t r i c t ,
I n and f o r t h e County o f S i l v e r BOW,
The H o n o r a b l e Mark S u l l i v a n , J u d g e p r e s i d i n g .
F o r Appel-la.nt:
R o b e r t P. M c G e e , B u t t e , Montana
For Respondent:
F. Lon M i t c h e l l , H e l e n a , Montana
S u b m i t t e d on B r i e f s : Dec. 1 9 , 1985
Decided: A p r i l 1, 1986
Filed: &'t"& .' .. (3i$i
Mr. Justice Fred J. Weber delivered the Opinion of the Court.
Ms. Sorini appeals the decision of the Butte/Silver Bow
County District Court which upheld a Board of Realty Regula-
tion decision revoking her real estate broker's license. We
affirm.
The issues are:
1. Was Ms. Sorini denied her rights at her administra-
tive hearing because the hearing examiner and the attorney
for the Board of Realty Regulation were both deputy attorneys
of the State of Montana?
2. Did the matter of Ms. Sorini's competence or trust-
worthiness become moot because the Board of Realty Regulation
was required to take those characteristics into consideration
before issuing her a real. estate broker's license?
3. Is the Board of Realty Regulation required to rule
with particularity upon the objections and exceptions filed
with it, and is their failure to issue such a ruling a depri-
vation of Ms. Sorini's rights?
4. Was the penalty imposed by the hearing examiner
based upon a finding of fact which was not an issue, and
should the decision be therefore reversed for unusual and
unwarranted punishment?
In December 1983, a complaint was filed with the Board
of Realty Regulation ("Board") a.qainst Martha Sorini, a
licensed real estate salesperson. In spring 1984, Ms. Sorini
passed the real estate broker's examination and was issued a
broker's license. The complaj-nt against her was amended to
reflect her change in status, and the matter was heard before
a hearing examiner in June 1984. Ms. Sorini was represented
by counsel and testified at the hearinq. The hearing examin-
er's proposed findings, conclusions and order recommended
that Ms. Sorini's broker" license be revoked for violations
of S 37-51-321, MCA, including failure to account for or
remit money belonging to others, failure by a real estate
salesperson to deposit money of others in a broker's trust
account, and demonstrated unworthiness or incompetence. Ms.
Sari-ni filed exceptions to these recommendations, and oral
argument was held before the full Board. Later, the Board
issued an order adopting the findings of fact, conclusions of
law and order of the hearing examiner. Ms. Sorini then filed
a petition for judicial review in District Court and obtained
a temporary restraining order suspending the revocation of
her broker's license. A hearing on that petition was con-
ducted and the court affirmed the Board's order revoking her
broker's license. Revocation of the license has again been
stayed during this appeal.
I
Was Ms. Sorini denied her rights at her administrative
hearing because the hearing examiner and the attorney for the
Board of Realty Regulation were both deputy attorneys of the
State of Montana?
Ms. Sorini argues that the independence of the hearing
examiner was impaired because he was a deputy attorney gener-
al as was the attorney representing the Board. Next, she
argues that the Board gave extra consideration to the hearing
examiner's recommendations because he was from the attorney
general's office. Fs. Sorini failed to submit any proof to
support these allegations. There is nothing in the record to
suqgest a factual basis for her position.
Section 2-4-611, MCA, establishes the manner in which a
party may file an affidavit of personal bias, lack of inde-
pendence, disqualification by law, or other disqualification
of a hearing examiner. In the absence of a request for
disqualification, it is not proper to raise the question on
appeal. As we pointed out in Western Bank of Billings v.
Mont. St. Banking (1977), 174 Mont. 331, 570 P.2d 1115, a
party may not raise on appeal a question which was not pre-
sented before the administrative agency except the validity
of the statute under which the agency is proceeding, unless
it is shown that there was good cause for failure to raise
the question before the agency. Such good cause has not been
shown here.
While we tend to agree with the District Court's obser-
vation that having a greater separation of prosecutorial and
decision-making functions would eliminate an appearance of
impropriety, we find nothing to warrant a reversal of the
District Court. We therefore affirm the conclusion of the
District Court that there was no reversible error on this
issue.
Did the matter of Ms. Sorini's competence or trustwor-
thiness become moot because the Board of Realty Regulation
was required to take those characteristics into consideration
before issuing her a real estate broker's license?
After the charges had been filed against Ms. Sorini, she
was allowed to sit for the real estate broker's examination
and was subsequently issued a real estate broker's license.
She a-rgues that her honesty, trustworthiness and competency
were considered in the licensing process, under the provi-
sions of 37-51-302(3), MCA. She therefore maintains that
the issues of her competence and. trustworthiness have been
determined so far as this case is concerned.
Clearly, the issues are not the same. The Board is
required by statute to determine that an applicant for a
broker's license meets certain standards of conduct. In the
absence of evidence that the Board considered the pending
charges aga.inst her, the determination that Ms. Sorini met
those standards of conduct is not dispositive of the pending
charges against her. There is no such evidence in the
record--in fact, there are indications that the Board did not
consider the charges because they had. not been proven.
We conclude that the issue of the competence and trust-
worthiness of Ms. Sorini as raised by these charges was not
determined by the issuance of her real esta.te broker's
license.
I11
Is the Board of Realty Regulation required to rule with
particularity upon the objections and exceptions filed with
it, and is their failure to issue such a ruling a d.eprivation
of Ms. Sorinils rights?
The proposed findings of fact, conclusions of law and
order as prepared by the hearing examiner detail the factual
basis for his conclusions that the Board had power to either
suspend or revoke Ms. Sorinils license. The hearing examiner
found that there had been a failure by Ms. Sorini to deposit
money of others in a trust account, that there had been a
failure to account for money belonging to others, and that
she had demonstrated unworthiness and incompetence. The
hearing examiner therefore recommended that her license as a
real estate broker be revoked.
Prior to her appearance before the full Board, Ms.
Sorini submitted her contentions of claimed error in these
findings and conclusions. The Board considered these conten-
tions and voted unanimously to adopt the findings of fact,
conclusions of law and recommended order of the hearing
examiner. Ms. Sorini was entitled to nothing further. The
Board was not required to specifically state in writing that
her exceptions to the proposed findings were insufficient.
We affirm the conclusion of the District Court that the
Board was not required to rule with particularity upon
Ms. Sorini's exceptions to the proposed findings.
IV
Was the penalty imposed by the hearing examiner based
upon a finding of fact which was not an issue, and should the
.
decision be therefore reversed for unusual and unwarranted
punishment? L
Ms. Sorini argues that the penalty imposed upon her is
based on the finding of the hearing examiner that the mort-
gage on her clients' home was foreclosed and the clients lost
their home because of her actions. The violations with which
Ms. Sorini was charged do not include causinq the foreclo-
sure, and she does not feel it was proven that her actions
caused the foreclosure. She maintains that she was punished
to an unusual and unwarranted degree for the viol-ations with
which she was charged.
The Board found that Ms. Sorini had violated three
statutory prohibitions under S 37-51-321, MCA. The penalty
for violation of any of the standards set out in that section
is revocation or suspension of the broker's or salesperson's
license. Revocation of Ms. Sorini's license was within the
discretion of the Board, as a penalty for her violations of
the statute. There were enough facts before the Board to
allow it to revoke Ms. Sorini's license without considering
whether she caused the foreclosure. We conclude that the
penalty was not unusual or unwarranted punishment. We affirm
the District Court's conclusion that the Board's revocation
of Ms. Sorini's broker's license was based upon her viola-
tions of the three standards set out in the complaint against
her.
Affirmed.
Mr. Justice John C. Sheehy, dissenting:
I dissent on the first issue.
I should have thought that the mere appearance of
impropriety would be sufficient for this Court, which so
lately approved the Rules of Professional Conduct (June 6,
1985) to rise and strike so anomalous a case as we have here:
a deputy attorney general acting as hearing examiner in a
case where the state agency is represented by another deputy
attorney general.
For my part, I heartily discountenance such a cozy
arrangement.
For the convenience of this Court and counsel, I point
out that Rule 1.12 (a) of the Rules of Professional Conduct
debar a lawyer fron representing a party in a matter where
the lawyer participated personally and substantially as an
adjudicative officer. Rule 1.12(c) debars any lawyer in a
firm with which the first lawyer is associated from knowingly
undertaking or continuing representation in the matter,
unless certain conditions are met, which are not met here.
The most elemental notions of due process ought to tell
us that objectivity is impossible when one party owns both
the prosecutor and the judge.
There is indeed evidence that the Board bowed to the
supposed superiority of a hearing examiner from the attorney
general's office. The minutes of the Board for August 15,
1984 reveal that John Dudis, a member of the Board! and
himself an attorney stated that if the hearing examiner "from
the attorney general's office has made his findings after
going through this from top to bottom, and you [appellant's
counsel] should have had opportuni-ties to put on witnesses
and cross-examine, I am going along with the 11ea.ring
examiner."
We should send this case back to the Board of Realty
Regulation for a new beginning.
,' I Justice
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