Request By:
Honorable Robert G. Stallings
General Counselor
Kentucky Real Estate Commission
100 E. Liberty Street
Suite 204
Louisville, Kentucky 40202
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: James S. Goldberg, Assistant Attorney General
This letter is in response to your correspondence of January 4, 1977, in which you ask the following question:
Does the Kentucky Real Estate Commission have the right to file lawsuits against wrongdoers to collect by way of subrogation those amounts of monies paid to aggrieved people by the commission out of the Real Estate Education Research and Recovery Fund?
As you point out in your letter KRS 324.400 creates the Real Estate Education, Research and Recovery Fund. Under KRS 324.420 it is stated:
"(3) When a final order has been entered by the circuit court or Court of Appeals, and upon certification to the commission, the aggrieved party or parties shall be paid such amount or amounts by the commission and the real estate license against whom the claim was made by the aggrieved party shall be suspended until such time as the licensee has reimbursed the Real Estate Education, Research and Recovery Fund for all amounts paid to the aggrieved party due to the violation of the licensee.
"(4) When upon the final order of the court, the commission has paid from the Real Estate Education, Research and Recovery Fund any sum to the aggrieved party, the commission shall be subrogated to all of the rights of the aggrieved party to the extent of the payment and the aggrieved party shall to the extent of the payment assign his right, title and interest in the judgment to the commission." (Emphasis added).
KRS 324.010 (c) defines 'Commission' to mean the State Real Estate Commission.
In addition, CR 54.01 states:
"A final or appealable judgment is a final order adjudicating all the rights of all the parties in an action or proceeding, or a judgment made final under Rule 54.02. Where the context requires, the term 'judgment' as used in these Rules shall be construed 'final judgment' or 'final order. '"
Under section 3 of KRS 324.420 and CR 54.01, the aggrieved party or parties cannot be paid out of the Real Estate Education, Research and Recovery Fund until a final judgment has been entered by the circuit court or Court of Appeals and certified to the commission.
Under section 4 of KRS 324.420 and CR 54.01, it is only when a final judgment is entered and the aggrieved party is paid by the commission from the Real Estate Education, Research and Recovery Fund that the commission is subrogated to all of the rights of the aggrieved party to the extent of the payment and is assigned all of the rights, title and interest in the final judgment of the aggrieved party to the extent of the payment.
Therefore, it is this Office's position that, rather than having the right to file lawsuits in order to obtain final judgments against wrongdoers for the amounts of monies paid out of the fund by the commission to these aggrieved people, section 4 of KRS 324.420 gives the commission the more desirable right, by way of subrogation and assignment, of having only to enforce the final judgment, previously obtained by the aggrieved party against these wrongdoers. The necessity and expense of instituting a lawsuit against the wrongdoers is thereby avoided and the collection process, to the benefit of the commission, is greatly expedited. Under CR 69, the "Process to enforce a judgment for the payment of money shall be a writ of execution, unless the court directs otherwise. The procedure on execution, in proceedings supplementary to and in aid of a judgment, and in proceedings on and in aid of execution shall be in accordance with the Kentucky Revised Statutes."
We hope that this will satisfactorily answer your question. If we can be of any further service, please do not hesitate to call upon us.