Case Title: Office of Professional Regulation v. McElroy

Citation: 175 Vt. 507, 2003 VT 31, 824 A.2d 567

Docket Number: 

State: vermont

Court: Vermont Supreme Court

Date: 2003-03-27T00:00:00Z

Document:
Office of Professional Regulation v. McElroy (2002-192); 175 Vt. 507;
824 A.2d 567

2003 VT 31

[Filed 27-Mar-2003]

                                 ENTRY ORDER

                                 2003 VT 31

                      SUPREME COURT DOCKET NO. 2002-192

                             JANUARY TERM, 2003

  Office of Professional Regulation	}	APPEALED FROM:
                                        }
                                        }
       v.	                        }	Washington Superior Court
                                        }	
  David M. McElroy	                }
                                        }	DOCKET NO. 414-8-01 Wncv

                                                Trial Judge: Alan W. Cheever

             In the above-entitled cause, the Clerk will enter:

       ¶  1.  This is an appeal from an order by the Real Estate Commission
  (R.E.C.) reprimanding appellant, David McElroy, for engaging in conduct as
  a real estate broker without a license.  After an Appellate Officer
  reversed the Commission's decision to reprimand, the State appealed to the
  Washington Superior Court pursuant to 3 V.S.A. § 130a(c).  The Superior
  Court reinstated the Commission's reprimand, and this appeal followed.  

       ¶  2.  McElroy contends that the stipulated facts do not support a
  finding that he was engaged as a real estate broker in a continuous course
  of conduct within this state without a license.  We agree.  We reverse the
  Superior Court's order and remand this issue for further findings of fact
  because the stipulated facts are insufficient to determine whether McElroy
  violated the statute as a matter of law.  McElroy further contends that he
  had a First Amendment right to advertise a Vermont property and may not be
  reprimanded for doing so without a license.  On this point, we agree with
  the trial court and affirm the finding that McElroy's First Amendment
  rights were not violated.

       ¶  3.  The stipulated facts state that McElroy "caused to be
  advertised and/or allowed his name to be used in the advertisement" of the
  sale of the Howard Johnson Inn in Rutland, Vermont between October 1999 and
  January 2000.  Although McElroy was a licensed broker in other states, he
  did not obtain a broker's license from Vermont until February 1, 2000. 
  Prior to obtaining his license, McElroy contacted potential purchasers and
  "was present" at the property in Rutland when the potential purchasers came
  to view the property.  On February 6, 2000, one of the contacts bought the
  property.  McElroy obtained his Vermont license before the closing, as he
  was "conscious of his obligation to receive a Vermont license prior to
  acting as a broker in Vermont."  
   
       ¶  4.  The R.E.C. found that McElroy had violated R.E.C. Rules
  2.1(a) and 2.1(b), which implement 26 V.S.A. § 2211-2212.  These statutes
  prohibit unlicensed individuals from acting as real estate brokers within
  Vermont.  The R.E.C. found that McElroy "advertised, negotiated, solicited
  and showed" the Vermont property, and therefore that his actions amounted
  to a continuous course of conduct within this state.  See 26 V.S.A. §
  2211(a)(4).  McElroy appealed to the Appellate Officer of the Vermont
  Secretary of State, Office of Professional Regulation, who reversed the
  R.E.C. on the ground that the legislative history of 26 V.S.A. § 2211(a)(4)
  indicated that actions taken in furtherance of a single act or transaction
  were exempt from regulation.  On appeal to the superior court, the court
  disagreed with the Appellate Officer's interpretation of the statute, which
  relied entirely on legislative history, because it was not based on the
  actual statutory language.  No exemption for single acts or transactions
  was specified in the statute; therefore, the court found that the principal
  acts committed within the state-advertising within the state and appearing
  at the property with the potential buyers-were sufficient to represent a
  continuing course of conduct, as required by § 2211(a)(4).  

       ¶  5.  We agree with the superior court that activities in
  furtherance of single transactions are not exempt from the statutory
  definition of real estate broker.  Id.  The statutory definition of real
  estate broker sets forth the regulated conduct that the State put in issue:

    (4) "Real estate broker" . . . shall mean any person who, for
    another, for a fee, commission, salary, or other consideration, or
    with the intention or expectation of receiving or collecting such
    compensation from another, engages in or offers or attempts to
    engage in, either directly or indirectly, by a continuing course
    of conduct, any of the following acts:

       (A) lists, offers, attempts or agrees to list real estate . . . .

       (C) offers to sell, exchange or purchase real estate . . . .

       (D) negotiates, or offers, attempts or agrees to negotiate 
       the sale. . . .

       (F) advertises or holds himself . . . out as being engaged in the
       business of buying, selling ... real estate. . . . 

  Id. § 2211(a)(4).

       ¶  6.  Nowhere in this section of the statute, or in § 2212, which
  prohibits actions taken by a "real estate broker . . . within this state,"
  is there an exemption for single transactions.  The statutory language is
  broad in the scope of conduct it reaches, limited only by the requirement
  that there be a continuing course of conduct.  The legislative history,
  which suggests that the Legislature were concerned about the scope of the
  statute reaching persons who were not actually in the real estate business
  and who might make only a single sale, is not necessarily inconsistent with
  the Legislature's plain language that the course of conduct must be
  continuing. 
      
       ¶  7.  The trial court applied a highly deferential standard of
  review.  The court noted that reviewing courts defer to an administrative
  agency's conclusions of law when these conclusions are "rationally derived
  from the findings and based on a correct interpretation of the law," Braun
  v. Bd. of Dental Exam'rs, 167 Vt. 110, 114,