Opinion ID: 2069032
Heading Depth: 1
Heading Rank: 5

Heading: The Applicability of Section 45-1926 to Ashton And The Due Process Issue

Text: Ashton contends that the trial court erred in ruling that § 45-1926(c) barred its lawsuit. Ashton asserts that it is engaged in investment banking and the statute only applies to real estate businesses. Furthermore, Ashton maintains, if it was required to obtain a real estate broker's license to perform the services rendered to Federal Data, the statute is unconstitutionally vague as applied because it fails to give notice to parties such as Ashton that they must obtain a real estate license. In essence, Ashton maintains that (1) the real estate brokers' licensure statute does not apply to it; and (2) no ordinary and prudent business chance broker would be on notice that it did apply to it. We disagree. We turn first to Ashton's argument that § 45-1926(c) does not apply to it. The trial court rejected Ashton's [assertion] that it provided only `investment banking and mediation services to Federal Data,' and stated: But whatever investment banking and mediation services Ashton provided, there is no getting around the fact that Ashton attempted to bring about (and indeed, did bring about) the sale of a major portion of Federal Data  known as the I-80 Contract to General Dynamics. The papers filed in the instant case are replete with inferences, as well as direct references, to the fact that Ashton's goal was to effect a sale of a business. Moreover, the damages sought by Ashton are based upon a commission for the sale of the I-80 contract and related business opportunities. Based on our review of the statutory language, the legislative history of the statute, and the implementing regulations, we conclude that the statute applies to Ashton. As drafted in 1982, § 45-1926 clearly applied to business chance brokers and the sale of a business. [8] In 1984, the Council of the District of Columbia amended the statute to establish registration and certification procedures for resident property managers. During the process of amending the statute, the Council concluded that because the licensure requirements were identical for real estate and chance brokers, the references to chance brokers could be eliminated. Consequently, the Council deleted the words business chance broker from § 45-1926 in order to streamline the licensure process. Both categories of brokers were combined into the real estate broker's license. However, the intent was to retain the licensure requirement for business chance brokers. As the report of the Council's Committee on Consumer and Regulatory Affairs stated: DCRA [the Department of Consumer and Regulatory Affairs] recommends deleting all references to business chance brokers from the statute and eliminating the business chance broker member from the real estate board. It was their position that the licensure requirements for business chance brokers are identical to those for a real estate broker, therefore they suggested streamlining the licensure process by combining both categories into the real estate broker's license. This would provide for better control of the industry and greater protection for the consumer. Council of the District of Columbia, Committee on Consumer and Regulatory Affairs, Committee Report on Bill 5-175, The District of Columbia Real Estate Licensure Act Amendment Act of 1984, May 15, 1984, at 6. Accordingly, § 45-1926 was amended to read as follows: (a) Except as otherwise provided in this chapter, it shall be unlawful for any person to engage in conduct, advertise, or hold himself or herself out as engaging in the business of a real estate broker, real estate salesperson, or property manager within the District, unless that person holds a valid license as a real estate broker, real estate salesperson, or property manager issued pursuant to this chapter. (b)(1) For the purposes of this chapter, a person will be performing as a real estate broker if: (A) The person accepts a fee, commission, or other valuable consideration for exchanging, buying, selling, renting or leasing real estate or businesses; (B) The person negotiates a loan secured by a mortgage, deed of trust, or other encumbrance on real property or a business; (C) The person is engaged in any activity specified by § 45-1922(12). (b)(2) Any person performing any of the activities described in paragraph 1 of this subsection for or on behalf of a real estate broker will be considered a real estate salesperson for the purposes of this chapter. (c) No person engaged in or conducting the business, or acting in the capacity of a real estate broker, real estate salesperson, or property manager within the District shall bring or maintain any action in the courts of the District for the collection of compensation for any services performed in that capacity, or for the enforcement of any contract relating to real estate or business without alleging that he or she was duly licensed under this chapter. (Emphasis added). It is clear that the words business chance broker were eliminated in the 1984 amendment of the statute. Generally, in interpreting statutory language the court relies on the plain meaning of words, and `[a]bsent a clearly expressed legislative intention to the contrary, the language must ordinarily be regarded as conclusive. West End Tenants Ass'n v. George Washington Univ., 640 A.2d 718, 726 (D.C. 1994) (quoting Consumer Product Safety Comm'n v. GTE Sylvania, Inc., 447 U.S. 102, 108, 100 S.Ct. 2051, 2056, 64 L.Ed.2d 766 (1980)). We will not give effect to a plain language interpretation which is `plainly at variance with the policy of the legislation as a whole.' In re G.G., Jr., 667 A.2d 1331, 1334 (D.C.1995) (citing West End Tenants Ass'n, supra ) (quoting United States v. American Trucking Ass'ns, 310 U.S. 534, 543, 60 S.Ct. 1059, 1063-64, 84 L.Ed. 1345 (1940)). The legislative history of the 1984 amendments clearly reveals the Council's intent to continue to regulate business chance brokers. The section-by-section analysis of the bill containing the 1984 amendments said, inter alia, [t]he proposed bill recognizes that business chance brokers are licensed as real estate brokers and therefore should be identified as such. Id. at 633. Moreover, § 45-1926(b)(1)(A) and (B) confirms the Council's intent by making it clear that a person performs as a real estate broker if the person (1) accepts a fee, commission, or other valuable consideration for ... selling ... real estate or businesses ; or (2) negotiates a loan ... on real property or a business. Ashton contends that the words businesses and business refer only to the real estate business. While a quick reading of the statute might well prompt this conclusion, this reading is clearly inconsistent with the legislative history, as set forth above. See also Kassatly, supra in which the court stated: Under section 45-1926, a business chance broker is a real estate broker and is barred from bringing a lawsuit to collect a commission if the broker was not licensed at the time of the transaction. (footnote omitted). Plaintiff Kassalty was not a licensed real estate broker (or business chance broker) at any time during the Grand Hotel negotiations (1984-86). He is barred from bringing suit to collect a commission from that transaction. 739 F.Supp. at 653. Although the 1982 version of § 45-1926(b) included references to real estate or a business and real estate broker or chance broker in the same paragraph, the 1984 amendments retained the reference to real estate or business[es], added a reference to real property or a business, and deleted the words business chance broker, but described a real estate broker as engaging in activities relating to businesses or a business. Moreover, regulations implementing the Real Estate Licensure Act and codified in May 1990, also evidence the Council's intent to continue to regulate business chance brokers. Under § 2601 of the regulations, entitled Applications For Broker License, § 2601.3 states: Except as provided in § 8(e) of the Act, all applicants for licensure as a real estate or business chance broker shall furnish at the time of filing an application, evidence of having satisfactorily completed approved course(s) pursuant to § 2606. (Emphasis added). 17 DCMR § 2601.3 (1990). Therefore, we are satisfied that the Council intended to continue a licensing requirement for business chance brokers despite its 1984 amendments to the Real Estate Licensure Act, and decided to license business chance brokers as real estate brokers. The trial court made factual findings indicating that Ashton's goal was to effect the sale of a business by selling Federal Data's I-80 Contract to General Dynamics. [9] We see no need to disturb those factual findings. It is clear, therefore, that the real estate brokers' licensure statute applies to Ashton. We turn next to Ashton's contention that even if the statute applies to it, no ordinary and prudent business chance broker would be on notice as to its applicability. We disagree. Because of the Council's 1984 statutory amendment which, in part, deleted the words business chance broker from the statute, the real estate brokers' licensure act is not a model of clarity. Nonetheless, before transacting any business in the District, an ordinary and prudent business chance broker would endeavor to determine the District's law, if any, regarding business chance brokers. The broker reasonably could be expected to consult the index of the District of Columbia Code. That index has a heading, business chance brokers, which cross-references real estate and business chance brokers. Under the latter heading, the word licenses appears, and a sub-heading which reads, acting as broker or salesperson without a license. prohibited, § 45-1926. Thus, an ordinary and prudent business chance broker easily could determine that there is a licensure requirement in District law. [10] Moreover, an ordinary and prudent business chance broker reasonably could be expected to check with the local business regulatory agency, or its regulations, to ascertain whether a license is required for the performance of a business chance broker's services. A broker's search would lead to 17 DCMR § 2601.3, mentioned above, which indicates the existence of a licensure requirement for a real estate or business chance broker (emphasis added). Furthermore, the record on appeal reveals that Ashton and its major principal have had substantial business experience. Hence, they are aware that businesses must determine and meet licensure requirements in jurisdictions where they conduct business. They should also have known that the requirement of a license to render services involving the sale of businesses and business opportunities is not uncommon. [11] Here, the trial court determined that based upon their representation of Kassalty in the Kassatly case, supra, Ashton's attorneys had direct notice that § 45-1926(c) required the company to get a license to effect the sale of a business, and that the statute represented a bar to Ashton's effort to collect a commission due to its failure to obtain a license. Under these circumstances, Ashton simply did not take the precautions of an ordinary and prudent business chance broker. Accordingly, we cannot say that § 45-1926(c) is unconstitutionally vague as applied to Ashton. For the reasons set forth above, the trial court did not err in ruling that § 45-1926 imposes a licensure requirement on business chance brokers; that because Ashton was engaged in an effort to effect the sale of a business, the statute applied to it; and that Ashton had notice of its coverage under the statute. Nor did the trial court abuse its discretion in concluding that Federal Data did not waive the right to raise § 45-1926(c). Because Ashton did not allege licensure under the District's real estate licensure act, it failed to state a claim upon which relief can be granted, and its action was properly dismissed. Hence, we affirm the judgment of the trial court. [12] Affirmed.