IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI
NO. 2015-CA-01514-COA
ALAN DAVID RYAN APPELLANT
v.
MISSISSIPPI REAL ESTATE COMMISSION APPELLEE
DATE OF JUDGMENT: 09/16/2015
TRIAL JUDGE: HON. WILLIAM A. GOWAN JR.
COURT FROM WHICH APPEALED: HINDS COUNTY CIRCUIT COURT,
FIRST JUDICIAL DISTRICT
ATTORNEY FOR APPELLANT: PAUL E. ROGERS
ATTORNEYS FOR APPELLEE: JOHN L. MAXEY II
WILLIAM HOLCOMB HUSSEY
ELLIOTT VAUN HALLER
NATURE OF THE CASE: CIVIL - STATE BOARDS AND AGENCIES
TRIAL COURT DISPOSITION: AFFIRMED ORDER OF THE MISSISSIPPI
REAL ESTATE COMMISSION REVOKING
APPELLANT’S LICENSE
DISPOSITION: AFFIRMED - 01/31/2017
MOTION FOR REHEARING FILED:
MANDATE ISSUED:
EN BANC.
WILSON, J., FOR THE COURT:
¶1. Alan David Ryan appeals from an order of the Hinds County Circuit Court, First
Judicial District, affirming an order of the Mississippi Real Estate Commission (MREC)
revoking his real estate broker’s license. We affirm.
FACTS AND PROCEDURAL HISTORY
¶2. Ryan became a licensed real estate broker in Mississippi in 1987. In 2003, he
purchased a home in Woodville and executed a deed of trust on the home in favor of
Concordia Bank & Trust Company. Shortly thereafter, Ryan began renting the home to
Nathaniel Myers for $275 per month.
¶3. On or about January 1, 2004, Ryan entered into a handwritten “lease to own”
agreement with Myers. The agreement provided that Myers would rent the home for $325
per month and that title to the property would be transferred to Myers by warranty deed once
he had made 120 monthly rent payments. The agreement stated that Myers’s rent would
cover taxes, interest, and insurance on the home. Myers’s cousin, Eliza Broadway, signed
the agreement on Myers’s behalf and as a witness. Broadway signed for Myers because
Myers is mentally challenged and cannot read or write. Broadway testified that Ryan told
her that she could sign the agreement for Myers and encouraged her to do so because the
agreement would enable Myers to purchase the property for only $50 per month more than
he was paying in ordinary rent.
¶4. Myers made payments as required by the contract for 120 consecutive months. His
payments are documented by copies of receipts in the record. However, at the end of the ten-
year lease period, Ryan refused to transfer the property by warranty deed. Broadway testified
that Ryan told her that Myers needed to make four more payments before he could obtain
title. Broadway made those four additional payments in January, February, March, and April
2014. She testified that she did so because she was concerned that Myers would lose his
home. But Ryan still refused to transfer the property to Myers.
¶5. According to Broadway, Ryan then claimed that he still owed $16,000 on his
mortgage and refused to transfer the property to Myers unless she first paid him $16,000 and
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reimbursed him for another $10,000 in taxes and expenses. Broadway refused to pay Ryan
any additional money. In April 2014, Ryan persuaded Broadway to sign a handwritten
“amendment” to the January 1, 2004 lease-to-own agreement. This document stated that the
original agreement was “void,” “no longer in force,” “cancelled,” and “not . . . binding.” The
document further stated, “Ryan is no longer bound to [the 2004] agreement[;] he is free and
clear of all obligation to that contract.” In place of the original lease-to-own agreement,
Ryan had Broadway sign a new agreement that entitled Myers to live in the home rent-free
for ten years but did not provide for any transfer of title to him. The new agreement stated
that Myers would be responsible for utilities (as he always had been), while Ryan would
continue to make payments to Concordia and pay taxes and insurance on the home.
¶6. Ryan maintains that he told Broadway from the outset of their discussions in 2003 that
Myers’s payments would not be sufficient to pay off the mortgage and that a balloon payment
would be due in 2014, which Myers would have to pay in order to obtain title to the
property.1 However, at the hearing before the MREC, Ryan admitted that his claim was
inconsistent with the terms of the parties’ lease-to-own agreement, which did not mention
a mortgage or any additional payment by Myers. Moreover, Broadway denied that Ryan ever
mentioned a mortgage or any additional payment until the end of the ten-year lease term.
¶7. On April 30, 2014, Broadway filed a complaint against Ryan with the MREC. After
investigating Broadway’s allegations, the MREC filed a formal complaint against Ryan. The
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On May 14, 2014, Concordia notified Ryan that his loan was in default and that it
was exercising its right to accelerate the debt. Ryan was given thirty days to pay the loan
balance of $16,286.48 plus attorneys’ fees.
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complaint alleged that Ryan violated Mississippi Code Annotated section 73-35-21(1),
paragraphs (a) and (m) (Rev. 2012),2 which authorize the MREC to suspend or revoke a
broker’s license if it finds that the broker made “any substantial misrepresentation in
connection with a real estate transaction” or engaged in any other conduct that “constitutes
or demonstrates bad faith, incompetency, untrustworthiness, or dishonest, fraudulent or
improper dealing.” The complaint also alleged that Ryan failed to provide Broadway/Myers
with a “Working with a Real Estate Broker” form required by MREC Rule 4.3 (Miss. Admin.
Code § 30-1601:4.3).3
¶8. On February 10, 2015, the MREC held a hearing on the complaint. Ryan appeared
pro se. At the time of the hearing, Myers was still living in the rental property; however, he
still had not received a deed to the property. In addition to testifying to the facts set out
above, Broadway testified that Myers had been forced to pay for significant repairs to the
home, including repairs to the roof and plumbing, because Ryan had failed to make the
repairs himself. Ryan claimed that he had lost money by allowing Myers to live in the home
for $325 per month. Ryan also testified that he was not sure which disclosure forms he
provided to Broadway or Myers, but he was sure “it was the right forms.” He claimed that
their signed forms had been destroyed in a fire at his office.
¶9. Following the hearing, the MREC entered an order finding that Ryan had violated
2
The Legislature amended section 73-35-21(1) effective July 1, 2016. Paragraph (m)
was re-lettered as paragraph (n) and amended; however, the amendment is not relevant to
the facts of this case. See 2016 Miss. Laws ch. 472, § 4 (S.B. 2725).
3
The complaint noted that a licensee is not exempt from discipline when selling his
own property. MREC Rule 3.1.I (Miss. Admin. Code § 30-1601:3.1.I).
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paragraphs (a) and (m) of section 73-35-21(1) and MREC Rule 4.3. Based on these
violations, the MREC revoked Ryan’s broker’s license.
¶10. Ryan appealed the MREC’s order to the circuit court. See Miss. Code Ann. § 73-35-
25 (Rev. 2012). In the circuit court, Ryan argued that the MREC’s findings that he violated
section 73-35-21(1) and MREC Rule 4.3 were not supported by substantial evidence and
were arbitrary and capricious. He also argued that the MREC’s decision to revoke his license
was “too severe of a penalty.” On September 16, 2015, the circuit court entered an order
finding that the MREC’s decision was supported by substantial evidence, was not arbitrary
or capricious, and did not violate Ryan’s constitutional or statutory rights. Accordingly, the
circuit court affirmed. Ryan thereafter filed a timely notice of appeal.
DISCUSSION
¶11. On appeal, Ryan makes the same basic arguments as in the circuit court: (1) that there
was not substantial evidence to support the MREC’s finding that he violated section 73-35-
21(1)(a); (2) that the MREC’s finding that he violated MREC Rule 4.3 was arbitrary or
capricious; and (3) that the revocation of his license was “too severe of a penalty.” We
address these arguments in turn below.
¶12. Judicial review of a decision of the MREC “is limited.” Gussio v. MREC, 122 So. 3d
783, 786 (¶10) (Miss. Ct. App. 2013). When, as in this case, a professional license is at
stake, the MREC bears the burden of proving its case by clear and convincing evidence.
Palmer v. MREC, 14 So. 3d 67, 71 (¶13) (Miss. Ct. App. 2008). However, the MREC’s
“decision will not be disturbed on appeal absent a finding that it (1) was not supported by
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substantial evidence, (2) was arbitrary or capricious, (3) was beyond the power of the
[MREC] to make, or (4) violated some statutory or constitutional right of the complaining
party.” McDerment v. MREC, 748 So. 2d 114, 118 (¶9) (Miss. 1999) (quotation marks,
brackets omitted). Further, “great deference [is] afforded [to the MREC’s] ‘construction of
its own rules and regulations and the statutes under which it operates.’” Id. (quoting Miss.
State Tax Comm’n v. Mask, 667 So. 2d 1313, 1314 (Miss. 1995)).
¶13. As noted above, the MREC is expressly authorized to revoke the license of a broker
who has made “any substantial misrepresentation in connection with a real estate transaction”
or who has engaged in any other conduct that demonstrates “bad faith, incompetency or
untrustworthiness, or dishonest, fraudulent or improper dealing.” Miss. Code Ann. § 73-35-
21(1)(a) & (m). “In order to take or suspend the license of a real estate broker under a charge
of improper dealings, the proof need not be beyond a reasonable doubt, but the testimony
must clearly establish the guilt of the respondent.” Palmer, 14 So. 3d at 71 (¶13) (alterations
omitted) (quoting MREC v. Anding, 732 So. 2d 192, 197 (¶13) (Miss. 1999)). “Improper is
defined as ‘[n]ot suitable,’ ‘unfit,’ ‘not suited to the character, time, and place,’ or ‘not in
accordance with fact, truth, or right procedure.’” Farris v. MREC, 994 So. 2d 229, 233 (¶15)
(Miss. Ct. App. 2008) (quoting Black’s Law Dictionary 757 (6th ed. 1990)). Therefore, a
finding that a broker has engaged in “improper dealing” does not require evidence of
“fraudulent intent.” Id.
¶14. There is substantial evidence in the record to support the MREC’s findings that Ryan
made misrepresentations to Broadway/Myers and engaged in “improper dealing.” In 2004,
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Ryan entered into a lease-to-own agreement under which he clearly agreed to transfer title
to the subject property to Myers once Myers made 120 monthly payments of $325. Myers
fulfilled his end of the bargain, but Ryan refused to transfer title to the property. Broadway
testified that Ryan then promised to convey the property if Myers made four more payments.
Myers made those payments, but Ryan again reneged on his promise. Ryan maintains that
he and Broadway had an unwritten understanding that Myers would be required to make
unspecified additional payments at the end of the ten-year lease term, but the parties’ clear
written contract makes no mention of such payments, and Broadway denied that additional
payments were ever discussed. Broadway’s testimony and the documentary evidence before
the MREC constitute substantial evidence to support the MREC’s findings.
¶15. For the most part, Ryan simply argues that we should accept his testimony at face
value and reject Broadway’s testimony as not credible. But in a case such as this, “[t]he
administrative agency is the trier of facts as well as the judge of the witnesses’ credibility.”
Nelson v. Miss. State Bd. of Veterinary Med., 662 So. 2d 1058, 1062-63 (Miss. 1995). The
MREC, as the fact-finder, was entitled to reject Ryan’s testimony and find Broadway
credible. This is particularly true since Broadway’s testimony was consistent with the
parties’ original contract, whereas Ryan’s testimony was not.
¶16. Ryan also argues that “[t]he right to contract is a fundamental right of all citizens
under Mississippi law,” so the MREC was bound to respect the parties’ 2014 agreement that
purported to “cancel” and “void” their original (2004) lease-to-own agreement. We disagree.
The evidence indicated that Ryan coerced Broadway into signing the 2014 agreement by
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refusing to honor his obligation under the parties’ original agreement. This was yet more
“improper dealing” on Ryan’s part, not a defense to the charge.
¶17. Ryan next argues that he cannot be punished for failing to provide Myers/Broadway
with a “Working with a Real Estate Broker” disclosure form (MREC Rule 4.3) because
MREC Rule 3.2.G (Miss. Admin. Code § 30-1601:3.2.G) only requires a broker to keep such
documents for three years. This argument is without merit. The rule states: “A real estate
broker must keep on file for three years following its consummation, complete records
relating to any real estate transaction.” Id. The evidence was clear that the relevant real
estate transaction was not consummated in 2004 because the parties’ agreement provided for
a ten-year lease-to-own period. Thus, the MREC hearing was held well within the rule’s
three-year records retention period. Not only was Ryan unable to produce the required
disclosure forms, he was unable to say which forms he provided to Myers/Broadway—only
that he was sure “it was the right forms.” There was substantial evidence before the MREC
that Ryan failed to provide the required disclosure forms.
¶18. Finally, Ryan argues that revocation of his license was “too severe of a penalty.”
“The authority of the [MREC] to revoke the license of a broker . . . is a right given to the
[MREC] to take from the licensee the right to do business and make a living in the practice
of his profession. Such authority should be exercised with caution.” MREC v. Ryan, 248 So.
2d 790, 793 (Miss. 1971). However, the Mississippi Supreme Court has held that if there is
substantial evidence to support a finding of improper dealing by a broker, we are not “to
separately second guess [the MREC’s] imposition of sanction.” Harris v. MREC, 500 So.
8
2d 958, 963 (Miss. 1986); accord Farris, 994 So. 2d at 235 (¶23). Under our “traditional
standard of review,” once we have determined that improper dealing was established by clear
and convincing evidence, “we look no further.” Harris, 500 So. 2d at 963. In any event, in
this case, the MREC’s decision to revoke Ryan’s license was not arbitrary or capricious.
There was substantial evidence that Ryan willfully refused to honor his clear contractual
obligation to convey the property to Myers and then took advantage of the situation to coerce
Broadway into signing a new agreement that purported to cancel the original contract. There
was also substantial evidence that Ryan coerced Myers/Broadway into paying an additional
$1,300 even though he had no intention of honoring the original contract. This was sufficient
evidence to justify the MREC’s decision to revoke Ryan’s license.
CONCLUSION
¶19. The order of the MREC revoking Ryan’s license was supported by substantial
evidence and was neither arbitrary nor capricious. Accordingly, we affirm the judgment of
the circuit court affirming the order of the MREC.
¶20. THE JUDGMENT OF THE HINDS COUNTY CIRCUIT COURT, FIRST
JUDICIAL DISTRICT, IS AFFIRMED. ALL COSTS OF THIS APPEAL ARE
ASSESSED TO THE APPELLANT.
LEE, C.J., IRVING AND GRIFFIS, P.JJ., BARNES, ISHEE, CARLTON, FAIR
AND GREENLEE, JJ., CONCUR. WESTBROOKS, J., NOT PARTICIPATING.
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Alan David Ryan v. Mississippi Real Estate Commission
Combined Opinion