Opinion
NO. 2015-CA-001860-MR
01-27-2017
AUGUST PROPERTIES, LLC D/B/A DEER RUN ESTATES APPELLANT v. KENTUCKY REAL ESTATE COMMISSION; MICHAEL INMAN; LINDA P. INMAN; AND MCMAHAN COLDWELL BANKER APPELLEES
BRIEFS FOR APPELLANT: Noel Mark Botts Harrodsburg, Kentucky BRIEF FOR APPELLEE KENTUCKY REAL ESTATE COMMISSION: Rhonda K. Richardson Louisville, Kentucky BRIEF FOR APPELLEES MICHAEL INMAN, LINDA P. INMAN, AND MCMAHAN COLDWELL BANKER Mark S. Fenzel Julie G. Ray Louisville, Kentucky
NOT TO BE PUBLISHED APPEAL FROM MERCER CIRCUIT COURT
HONORABLE DARREN W. PECKLER, JUDGE
ACTION NO. 15-CI-00123 OPINION
AFFIRMING
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BEFORE: COMBS, STUMBO AND THOMPSON, JUDGES. STUMBO, JUDGE: Plaintiff/Appellant August Properties, LLC d/b/a Deer Run Estates appeals from an Order of the Mercer Circuit Court granting the Motion to Dismiss filed by Defendants/Appellees Kentucky Real Estate Commission, Michael Inman, Linda P. Inman and McMahan Coldwell Banker. August Properties contends that the Commission erred in dismissing its Complaint alleging that the Inmans and McMahan Coldwell Banker improperly used August Properties' photos, images and a web site reference in their advertising in violation of the rules and regulations enforced by the Commission. For the reasons stated below, we find no error and AFFIRM the Order on appeal.
The facts are not in controversy. August Properties is the owner and developer of a residential development in Mercer County, Kentucky, called Deer Run Estates. On February 23, 2015, August Properties filed a Complaint with the Kentucky Real Estate Commission against Defendants and Appellees herein. August Properties alleged that the Inmans, in their capacity as licensed real estate agents, listed property for sale that was located in the Deer Run Estates development. It was alleged that in order to facilitate the sale, the Inmans used in their advertisements photographs and images of August Properties' signage at the development. It was also alleged that the Inmans referenced in the advertising August Properties' website. August Properties maintained that such usage was not authorized and violated the rules and regulations enforced by the Commission.
It appears from the record that August Properties also filed a civil action against Appellees. --------
The Inmans and Coldwell Banker denied August Properties' claims. Upon reviewing the Complaint, Answer and exhibits, the Commission determined that the facts did not demonstrate a prima facie violation of Kentucky Revised Statute (KRS) Chapter 324 and that no disciplinary action was warranted. Pursuant to Kentucky Administrative Regulation 201 KAR 11:190 Section 1(4)(a), the Commission dismissed the Complaint without a hearing.
Thereafter, August Properties prosecuted an appeal before the Mercer Circuit Court, alleging that the Commission's action was arbitrary, capricious, contrary to the law or otherwise unsupported by substantial evidence of record. On November 6, 2015, the court rendered an Opinion and Order Dismissing the appeal for lack of subject matter jurisdiction. In support of the Order, the court determined that KRS 324.200(2) grants the right of appeal to "[a]ny party aggrieved by the action of the commission in refusing to grant a license or in ordering any disciplinary action." The court determined that August Properties was not an aggrieved party under this provision, and accordingly granted Appellees' Motion to Dismiss. This appeal followed.
August Properties now argues that the Commission erred in dismissing the Complaint. It maintains that its sworn Complaint was meritorious and was not given due consideration. August Properties also contends that it has standing to appeal the Commission's Final Order. The substance of its claim of error is that it is an "aggrieved party" under KRS 324.200, in that it is aggrieved by the Commission's failure to make findings in its Final Order as to why no disciplinary action was taken against the Appellees. In sum, it argues that the Complaint set out serious allegations which affected and damaged August Properties, and that the Commission acted arbitrarily and without substantial evidence of record in dismissing the Complaint. It seeks an Order reversing the Mercer Circuit Court's Order rendered on November 6, 2015, and reinstating its Complaint for Judicial Review and Declaration of Rights.
In adjudicating August Properties' appeal from the Commission's dismissal, the Mercer Circuit Court determined that 1) August Properties did not have standing to prosecute the appeal, and 2) arguendo, the Commission did not abuse its discretion, act in excess of its authority or deprive Appellant of due process by sustaining Appellees' Motion to Dismiss.
As to the first issue, KRS 342.200(2) grants the right of appeal to "[a]ny party aggrieved by the action of the commission in refusing to grant a license or in ordering any disciplinary action." The circuit court found that August Properties is not an aggrieved party under the statute. We find no error in this conclusion. KRS 342.200(2) grants the right of appeal under two circumstances. The first is found when the Commission refuses to grant a license. This provision is not implicated under the present facts. The second instance exists when a party is aggrieved by the actions of the Commission "in ordering any disciplinary action." Id. It is uncontroverted that the Commission did not order any disciplinary action. We cannot conclude that the express language of KRS 342.200(2), nor its legislative intent, grants the right of appeal to complainants such as August Properties which maintain that they are "aggrieved" in some abstract sense that disciplinary action was not taken against a licensed party. While August Properties may be aggravated that the Commission failed to impose disciplinary action, it is not aggrieved in the sense contemplated by KRS 324.200(2). We must apply the word "aggrieved" only to the extent that KRS 324.200(2) allows, which is expressly limited to parties who 1) sought and were refused a license, or 2) parties subjected to disciplinary action. Because these provisions apply solely to the subjects of administrative action rather than complaining parties, we find no error in the Mercer Circuit Court Order sustaining Appellees' Motion to Dismiss.
Arguendo, even if August Properties were vested with the right to prosecute an appeal arising from the Commission's refusal to take disciplinary action against a third-party licensee, we would nevertheless find no error. KRS 324.150(1)(a) states that "[a]fter the investigation, the commission may . . . take disciplinary action against any licensee who is found in violation of KRS 324.160." (Emphasis added). We see from this provision that the Commission's actions are discretionary in that it "may . . . take disciplinary action against any licensee[.]" Even if the Commission found a violation, the disciplinary action it imposes, if any, falls squarely within the discretion of its members. KRS 324.150.
In considering the decision of an administrative agency, the reviewing court is limited to determining whether, 1) the action was in excess of the authority granted to the agency, 2) there was a lack of procedural due process, and 3) the decision was supported by substantial evidence of record. Am. Beauty Homes Corp. v. Louisville and Jefferson Cty. Planning and Zoning Comm'n, 379 S.W.2d 450, 456 (Ky. App. 1964). The Mercer Circuit Court determined that, "[t]he Commission did not abuse its discretion, act in excess of its authority, or deprive Plaintiff of due process by entering an Order of Dismissal after investigation of Plaintiff's Complaint on a finding that a prima facie case of license law violation did not exist." This conclusion is supported by the record and the law. Thus, even if August Properties could properly prosecute an appeal to the Mercer Circuit Court arising from the Commission's refusal to take disciplinary action against third-party licensees, we would find no error under the facts and law now before us.
For the foregoing reasons, we AFFIRM the Order of the Mercer Circuit Court.
COMBS, JUDGE, CONCURS.
THOMPSON, JUDGE, CONCURS IN RESULT ONLY. BRIEFS FOR APPELLANT: Noel Mark Botts
Harrodsburg, Kentucky BRIEF FOR APPELLEE
KENTUCKY REAL ESTATE
COMMISSION: Rhonda K. Richardson
Louisville, Kentucky BRIEF FOR APPELLEES
MICHAEL INMAN, LINDA P.
INMAN, AND MCMAHAN
COLDWELL BANKER Mark S. Fenzel
Julie G. Ray
Louisville, Kentucky