Opinion ID: 1119218
Heading Depth: 2
Heading Rank: 2

Heading: application of the consumer protection act to sales of real property

Text: We begin by addressing the State's contention that the trial court's judgment can be affirmed under the Unfair Trade Practices and Consumer Protection Act, AS 45.50.471-45.50.561. We address this argument first because, as the State points out, AS 45.50.501 specifically authorizes the Attorney General to bring suit to enjoin violations of the Act, and expressly empowers the court in such cases to award restitutory relief. [7] As noted earlier, the State's original complaint alleged that Brown's Windsong activities violated the Consumer Protection Act. The lower court dismissed that complaint on the basis of the exemption contained in AS 45.50.481(1). [8] Later, however, in rendering its final decision, the court held that the Act does not apply at all to the sale of real property, a conclusion which the State claims is erroneous. For the reasons discussed below, we agree with the lower court's decision. AS 45.50.471(a) provides: Unfair methods of competition and unfair or deceptive acts or practices in the conduct of trade or commerce are declared to be unlawful. Standing alone, this language could be construed as prohibiting misrepresentations made by sellers of real property. Added by way of amendment to the Act in 1974, see Ch. 53, § 1, SLA 1974, subsection (a) was intended to make the prohibitory language ... of the present Act more responsive to the needs of the Alaskan consuming public and the business community. [9] And, because the Act is remedial, we are mindful that its provisions are to be liberally construed. State v. O'Neill Investigations, Inc., 609 P.2d 520, 528 (Alaska 1980). Nevertheless, we are persuaded that the entire thrust of the Consumer Protection Act is directed at regulating practices relating to transactions involving consumer goods and services. Immediately following AS 45.50.471(a) is a list of twenty-five specific acts or practices which are expressly prohibited as unfair methods of competition and deceptive acts or practices. AS 45.50.471(b). Of these, thirteen concern practices relating to transactions involving goods or goods and services generally. [10] The remaining twelve deal with practices involving the sale of particular types of goods [11] or services, [12] or relate to certain types of activities commonly associated with consumer goods and services transactions. [13] While subsection (b) makes clear that this list is not exclusive, none of the enumerated prohibited acts mentions real property. Nor do any other provisions of the Act suggest that the legislature intended the sale of real property to come within the Act's purview. [14] It is our judgment that the trial court properly invoked the rule of ejusdem generis to construe the language of AS 45.50.471(a). [W]hen particular words are followed by general terms, the latter will be regarded as referring to things of a like class with those particularly described. Chugach Electric Ass'n v. Calais Co., 410 P.2d 508, 509-10 (Alaska 1966). The doctrine is equally applicable when, as here, specific words comprehending a class of activity follow a more general description. 2A C. Sands, Sutherland Statutory Construction § 47.17, at 103 (4th ed. 1973). In our view, real property falls outside of the class particularly described, i.e., goods and services. The list of proscribed activities found in AS 45.50.471(b) suggests that the Act is directed solely at regulating transactions involving products and services sold to consumers in the popular sense. Neveroski v. Blair, 141 N.J. Super. 365, 358 A.2d 473, 480 (N.J. 1976). In Neveroski, the court was called upon to construe the word merchandise, which was defined in the New Jersey Consumer Fraud Act to include anything offered, directly or indirectly, to the public for sale. Id. 358 A.2d at 479. Because that language was preceded by the words objects, wares, goods, commodities, [and] services, the court invoked the doctrine of ejusdem generis to hold that misrepresentation by a real estate broker in connection with the sale of real property was not actionable under the New Jersey Act. Id. 358 A.2d at 479-81. The broad language of AS 45.50.471(a), like that involved in Neveroski, can logically be attributed to a legislative desire to incorporate other consumer transactions which may not be regulated by the specific prohibitions found in subsection (b). Neveroski, 358 A.2d at 480. This construction of subsection (a) also finds support in other provisions of the Act. AS 45.50.561(6) defines a consumer as a person who seeks or acquires goods or services by lease or purchase. (Emphasis added). Moreover, AS 45.50.531(a) grants a private right of action only to [a] person who purchases or leases goods or services and thereby suffers an ascertainable loss ... as a result of another person's act or practice declared unlawful by AS 45.50.471. (Emphasis added). That the section authorizing the Attorney General to sue to enjoin violations of AS 45.50.471 contains no comparable limitation, see AS 45.50.501, does not, in our opinion, indicate that the scope of the Act enlarges when suit is instituted by the State. In sum, we hold that the sale of real property is not within the regulatory scope of the Consumer Protection Act. Accordingly, Brown's liability for restitution to Windsong lot purchasers could not properly be predicated on asserted violations of that Act.