Opinion ID: 2612572
Heading Depth: 1
Heading Rank: 4

Heading: Was Ms. Neely Exempt From the Licensing Act?

Text: One of the tenuous grounds urged by appellant is that it should not have to pay Ellen Neely her commissions (even though she earned them) for the reason that she is not exempt from the mandatory licensing provisions of the Act since she was a subdivider  and § 33-28-103, supra, denies licensing exemption from those persons who as subdividers, sell or offer for sale subdivisions. We hold that Ms. Neely was not a subdivider under the statute and therefore is not, by the subdivider language, denied her real estate license exemption. Appellant's contention in this respect vividly points to its paper-thin underpinning in this appeal because, if Ms. Neely is precluded from licensing exemption because she is a subdivider, then Battlefield is also a subdivider without a real estate license. If Battlefield's position were to be upheld, the result would be for us to take the money that Ms. Neely has earned and give it to Battlefield although, under Battlefield's theory, both are guilty of the same infraction of the law. The appellant asks a lot of the justice system when it proposes that we accept this sort of an offer, and we respectfully decline to do it for the reason that neither Ms. Neely nor Battlefield is denied the privileges of the licensing exemption statute by reason of the subdivider exception contained therein. The class excluded from licensing exemption under § 33-28-103, W.S. 1977 is subdividers who sell or offer for sale subdivisions. Fortunately, the term subdivision is defined in § 33-28-102(a)(vi), W.S. 1977 as follows: The term `subdivision' means any land or tract of land in another state which is divided or proposed to be divided into five (5) or more lots, parcels, units or interest, for the purpose of disposition as a part of a common promotional plan and where any subdivision is offered by a single developer, or a group of developers acting in concert, and such land is contiguous or is known, designated or advertised as a common unit or by a common name such land shall be presumed, without regard to the number of lots covered by each individual offering, to be a part of a common promotional plan; (Emphasis added.) The appellee satisfactorily disposes of the contention that appellant and appellee were subdividers and thus not exempt from licensing under § 33-28-103, W.S. 1977, when she says in her brief: The land which appellee offered for sale on behalf of appellant was not located in another state, hence appellant is not a subdivider nor was the land involved a subdivision for the purposes of the Wyoming Real Estate Licensing Act. The exemption from the licensing requirements is, therefore, available to both appellant and appellee. Furthermore, the exclusion of Wyoming land from definition of a subdivision for licensing requirements becomes very strong evidence that the legislature must have intended that owners of Wyoming subdivisions could enjoy the same benefits in regard to the sale of their land that the owners of unsubdivided Wyoming land enjoyed   . For the reasons given, the appellee was not offering subdivisions for sale and therefore was not affected by this exception to the licensing exemption provision.
The trial court did not err in submitting to the jury the question which asks whether Ellen Neely was a regular employee within the contemplation of the exemption statute. It seems appropriate here to call attention to the fact that no member of the public has been adversely affected by anything that Ms. Neely did. The only one complaining is the corporation who hired her knowing she was not a licensed real estate agent, and now, after she has performed for her employer, it seeks to play little statutory interpretation games in an effort to avoid paying her the commissions it promised and the commissions she has earned. We are supportive of the trial judge's comments when, denying defendant's motion for a directed verdict, he said:    The evidence further indicates that there were sales and there was benefit that accrued to Battlefield, Inc. and to the Defendants in this action. The Court does not believe that it is or ought to be the policy of Wyoming law that under those types of facts and circumstances, an owner of land, of Wyoming land, which is to be subdivided, can take advantage of a person not holding a real estate sales license, obtain the benefits when he doesn't care whether they are licensed or not, obtain the benefits of such a transaction and then utilize and manipulate the Wyoming law to his own advantage to avoid that for which he bargained. We will give it to the Jury. Since a third party has not been damaged by the actions of Ms. Neely, and since the statute is designed to protect the public  not someone standing in the shoes of Battlefield, Inc. [2]  and since the party who seeks the aid of the law has conducted itself with such good purpose as can only be described as questionable at best  we will eye the Wyoming real estate licensing exemption statute with a view that looks to see and do that which is equitable  instead of that which is inequitable.
It is the contention of the appellant that, given the condition of the record, it must be concluded  as a matter of law  the appellee was not a regular employee as conceived by § 33-28-103, W.S. 1977, and that reasonable minds could not differ on the issue. Thus, goes the argument, the court erred in presenting the question as one of fact for the jury. One of the assertions made in support of this position is that the Wyoming Real Estate Commission, in § 2, subparagraph (d) of its rules and regulations, has interpreted the term as follows: The term `regular employee,' for the purposes of this act, means one who is employed on a regular, salaried basis by the owner of real estate whose duties are performed in the ordinary course of the business or management and/or operation thereof and the investment therein, and whose acts with reference to the sale of the employer's property are incidental to his ordinary duties. Appellant alleges that § 2, subparagraph (d) is a substantive rule of the Wyoming Real Estate Commission that must be given the force and effect of law by this court. In other words, Battlefield contends that the definition of regular employee as set out in the regulation, which obviously excludes appellee Neely, is a binding legislative rule by which we must abide. Appellee Neely asserts, in the alternative, that the definition of regular employee in the regulation is merely the agency's interpretation of what the term is intended to mean, and such interpretative rules are not binding on this court. Of course, if we were bound by the commission's interpretation of the words regular employee the appellant's position would have merit  but we are not. Whether the appellee qualifies as a regular employee under the commission's interpretation of the statute is not the initial question that must be answered. Attention must first be given to this query: Assuming this court were to disagree with the commission's interpretation of the term regular employee, is that interpretation nevertheless binding upon us? In order to answer this, we turn to some general administrative law concepts having to do with administrative agencies' legislative and interpretative rule-making powers. It is said in 1 Am.Jur.2d Administrative Law § 95, Legislative and Interpretative, pp. 892-893: From the standpoint of breadth of discretion in rulemaking which is recognized by the courts, that is, the extent to which the courts will restrict themselves in overturning administrative rules or regulations, and the legal effect given to such rules or regulations, rules or regulations are often classified as `legislative' and `interpretative.' `Legislative' rules or regulations are accorded by the courts or by express provision of statute the force and effect of law immediately upon going into effect. In such instances the administrative agency is acting in a legislative capacity, supplementing the statute, filling in the details, or `making the law,' and usually acting pursuant to a specific delegation of legislative power. `Interpretative' regulations are those which purport to do no more than interpret the statute being administered, to say what it means. They constitute the administrator's construction of a statute. In such instances the administrative agency is merely anticipating what ultimately must be done by the courts; they are performing a judicial function rather than a legislative function, and interpretative regulations (in the absence of ratification by the legislature) have validity in judicial proceedings only to the extent that they correctly construe the statute and then, strictly speaking, it is the statute and not the regulation to which the individual must conform. (Emphasis added and footnotes omitted.) In Schwartz, Administrative Law, § 58, p. 154, the author says:    A substantive rule is the administrative equivalent of a statute, compelling compliance with its terms on the part of those within the agency ambit. Substantive rules are issued pursuant to statutory authority and implement the statute; they create law just as the statute itself does, by changing existing rights and obligations. An interpretative rule is a clarification or explanation of existing laws or regulations, rather than a substantive modification of them. Interpretative rules are statements as to what the agency thinks a statute or regulation means; they are statements issued to advise the public of the agency's construction of the law it administers. (Emphasis added and footnotes omitted.) See also, 2 Davis, Administrative Law Treatise, § 7:8, pp. 36-37, 42, and § 7:11, pp. 54-57. The Real Estate Commission's rule was an interpretative rule. We conclude this, because, even though the commission is granted the authority by § 33-28-105(a) and (c)(vii) to adopt rules and regulations to assist in implementing the laws, § 33-28-103 does not delegate, in any manner, the power of the commission to determine the meaning of the term regular employee as used therein. Finding no specific delegation of authority, we conclude that the commission's rule must be characterized as an interpretative rule, which under the above authorities is not necessarily binding on this court. Even so, we must still decide whether it was proper  under the law  for the court to give the jury the question as a fact issue that asks whether Ms. Neely was a regular employee of Battlefield.
Appellant admits that the issue of whether one is an employee or an independent contractor is a question of fact, unless the record contains insufficient facts to support an employer-employee relationship conclusion or unless the only inference that can be drawn from the facts is that the individual was not, under the applicable law, an employee. The appellant says in its brief: When confronted with a vicarious liability question in an auto accident involving an insurance salesman, this Court in Combined Insurance Co. of America v. Sinclair, [Wyo., 584 P.2d 1034 (1978)], noted initially that the overriding consideration in making a determination whether one is an `employee' or an `independent contractor' lies in whether or not the employer has retained the right to control the details of the work. This Court noted that this issue is ordinarily one of a question of fact for the jury but that it becomes a question of law when only one reasonable inference can be drawn from the facts, citing Barnes v. Fernandez, 526 P.2d 983 (Wyo. 1974), Tyler v. Jensen, [75 Wyo. 249] 295 P.2d 742 (1956), and Holly Sugar Corp. v. Perez, 508 P.2d 595 (Wyo. 1973). (Emphasis added.) The appellant would have us hold that, under the facts of this case, there are either insufficient facts for us to determine that Ms. Neely is an employee under the statute (§ 33-28-101, supra) or that, given the facts bearing upon the employee question, the only reasonable inference that can be drawn is that she was not. The appellant correctly identifies the test that must be satisfied in order to establish the employer-employee relationship, which is whether or not the employer retained the right to control the details of the work  and, to be sure, this is ordinarily a jury question. We said in Combined Insurance Company of America v. Sinclair, Wyo., 584 P.2d 1034, 1042 (1978):    The overriding consideration in determining whether one is an employee or an independent contractor lies in ascertaining whether or not the employer has the right to control the details of the work whereby liability is sought to be established. Stockwell v. Morris, 46 Wyo. 1, 22 P.2d 189. This issue is ordinarily a question of fact for the jury and becomes a question of law only when but one reasonable inference can be drawn. Barnes v. Fernandez, [Wyo., 526 P.2d 983]; and Tyler v. Jensen, 75 Wyo. 249, 295 P.2d 742, 749. More particularly, the extent to which an employee has the `right to control' is primarily a jury question. Holly Sugar Corporation v. Perez, Wyo., 508 P.2d 595, 598. We went on to say that when we are undertaking to decide whether a jury's finding of employer-employee relationship may be successfully attacked,    we must look to the evidence most advantageous to the appellee and give it every favorable inference., citing Rissler and McMurry Co. v. Atlantic Richfield Co., Wyo., 559 P.2d 25 (1977) and Kahler v. Martin, Wyo., 570 P.2d 720 (1977). In Combined Insurance, supra, we emphasized that the important fact to be remembered in making a determination with respect to whether one is an employee or an independent contractor is to look to whether the right to control was retained by the alleged employer and not whether the employer in fact exercised the right. We said:    The base determining factor is whether Combined retained the right of control [emphasis in text]    and not whether such control was in fact exercised [emphasis added]. Stockwell v. Morris, [46 Wyo. 1, 22 P.2d 189] supra; Brubaker v. Glenrock Lodge Intern. Order of Odd Fellows, Wyo., 526 P.2d 52 (1974); Tyler v. Jensen (1956), [75 Wyo. 249, 295 P.2d 742] supra; Fox Park Timber Co. v. Baker, 53 Wyo. 467, 84 P.2d 736, 120 A.L.R. 1020 (1938); Chatelain v. Thackery, 98 Utah 525, 100 P.2d 191, and Ludlow v. Industrial Commission, 65 Utah 168, 235 P. 884. See, also, 41 Am.Jur.2d, Independent Contractors, §§ 5 and 7. 584 P.2d at 1042. We pointed out in Combined Insurance that another indicia of the retention of the right to control and the exercise of control is whether the purported employer had the authority to fire the alleged employee without incurring liability. Combined Insurance, 584 P.2d at 1043, quoting from Lichty v. Model Homes, 66 Wyo. 347, 211 P.2d 958, 967 (1949). On the other hand, we said in Combined Insurance that an independent contractor `   is one who, exercising an independent employment, contracts to do a piece of work according to his own methods and without being subject to the control of his employer except as to the result of the work. ...' Lichty v. Model Homes, 66 Wyo. 347, 211 P.2d 958, 967. In this case, not only did the appellant through Richardson retain right of control over the details of Ms. Neely's work, but he actually exercised meticulous control over the particulars relating to her sales activities and thus Ms. Neely was never left to her own devices with respect to the details of the work which she was employed to do. Evidence of this can be seen in that: (1) Ms. Neely was in fact employed; (2) She accepted the employment; (3) She was to show the appellant's property for sale; but (4) She could not close a sale without Richardson's approval; (5) Richardson could reject all offers brought by Ms. Neely to the company; (6) Ms. Neely was to use the forms provided by appellant and was told how the forms must be filled out; (7) The appellant provided Ms. Neely with maps, price lists, and all documents which were to be utilized in selling the property; (8) Richardson exercised control over the details of appellee's advertising; (9) Richardson, in order to show Ms. Neely how to conduct her sales presentations, accompanied her on various occasions where he instructed her and controlled her manner of sale; (10) The appellant reserved the right to fire and did fire the appellee. From a review of these facts, there can be no doubt whatever that Battlefield not only retained the right to control the day-to-day detailed activity of Ms. Neely's employment obligations but, in fact, did control the details of Ms. Neely's work. Therefore the issue of whether or not Ms. Neely was an employee of Battlefield is at least a jury question  if indeed it was not so clear and unequivocal that it became a question of law which could have only been resolved in favor of the appellee's contention that she was a regular employee of Battlefield.