*1 their prompted fied to erect were for their
fence as a barrier livestock boundary of land. While
to mark the acted as suggests
the evidence the fence boundary, and a there is sub-
both barrier competent support
stantial and evidence finding the fence
the district court’s first Con-
served as a barrier and foremost. agree court
sequently, we with the district agreement did not form an parties
by acquiescence and that the doctrine
boundary by agreement apply. does
IV. CONCLUSION within
We find that the district court acted fact, trier of
its discretion as the and correct-
ly rejecting law in applied Idaho boundary by agreement. claim of
Anderson’s in' quieting court’s decision title district
favor is affirmed. award costs of Griffin We Respondent. SCHROEDER,
Chief Justice and Justices
EISMANN, BURDICK and JONES concur.
In the Matter of Vondean Renee Registered Agent Broker-Dealer Under (2004.). Securities Act Uniform Renee Petitioner-
Vondean
Appellant, Idaho, Department
State
Finance, Respondent.
No. 33191. Idaho,
Supreme Court of
Boise, May 2007 Term. 2007. *2 LLP, Boise, Appellant. Pursley, for
Givens argued. R. Lombardi David Wasden, Attorney Gen- Hon. Lawrence G. eral, Boise, Respondent. Joseph B. argued. Jones TROUT, Justice. appeals from a Renee Karel dis-
Vondean affirming a final court decision trict order (Department), of Finance suspension resulted in the of Karel’s have license should not as a license assigned suspended suspended. The matter ment her license for a six-month been finding testimony took period based its that Karel violat- officer who 30-14-411(d) by findings Idaho Code section refus- about business ed made detailed requested during conjunction ing Karel in -with being operated *3 investigation. hearing 2005 audit and The officer concluded her father. request for Department’s the docu-
that the pursuant to was reasonable I. ments 14-411(d), directly as the documents were FACTUAL AND PROCEDURAL suspicions that Department’s the related to BACKGROUND improperly engaged in Karel was the securi- business with an unlicensed individual. ties Karel has licensed been the hearing the officer recommended ment as a She securities since 1998. suspension of Karel’s license the Morgan Stanley at until worked Dean Witter sought Karel upheld. then 2002, father, February when she and her judicial review in the district court. Erhart, joined Milt Fi- Wachovia Securities judge the officer’s district concluded to sell nancial Network. Both were licensed correct, were findings and conclusions they securities conducted business under the Ka- he affirmed name of the “Milt Erhart & Associates.” appeals the district court’s decision. rel now She and her father had accounts combined 2005, until and shared their clients March of II. registration
when Milt Erhart’s a securi- as Thereafter, ties dealer was terminated. Ka- STANDARD OF REVIEW affiliated, agent, an rel became as with Sum- Brokerage Services, (Summit), mit Inc. but “In an from the district court’s decision, continued to work out of her father’s office acting in appellate where it was its and to conduct business under the Milt Er- in a the APA capacity [Admin review under Act], hart & Associates name. father re- Karel’s this istrative Procedure Court reviews office, mained where he conducted a independently the dis agency record real estate business. Haw Idaho State trict court’s decision.” Med., 152, 157, 902, 140 90 P.3d Bd. Idaho upon suspicion On June based 67-5279, this Pursuant that Milt conducting Erhart was judgment its for Court does substitute business with clients an despite Karel’s agency that of the administrative as unregistered agent, the investi- evidence, agency’s weight but defers gators an unannounced to Karel’s visit clearly fact findings of unless erroneous. investigators requested Ka- office. only agency’s may be order overturned produce following rel a list of documents: a) statutory it: violates or constitu where telephone clients with their addresses and b) agency’s provisions; tional exceeds the numbers; Erhart financial records for Milt e) statutory authority; was made un Associates; personal and Karel’s bank d) procedure; supported is not lawful deposited account into which she whole; evidence in the record as a substantial Although commission from Summit. checks e) arbitrary, or an capricious, is abuse documents, had Karel these she refused discretion. investigators, on her give them the based have the belief III. authority request inspect informa- As a of her turn over tion. result refusal to DISCUSSION documents, Department suspended authority request her securities license for six months. A. appeal, contending filed the De- Karel argues Department had no au-
partment did to audit Karel records it did because inspect requested, thority to the records statutes did not list those items inspection warrantless premises. of such as records Karel Burger, to maintain 482 U.S. at S.Ct. at While Karel ac- L.Ed.2d at inspection 613. This warrantless knowledges does have the will be deemed reasonable if three criteria statutory authority to conduct an audit or are met. Id. at 107 S.Ct. at inspection, argues inspection L.Ed.2d at 613. must be reasonable. She asserts reason- First, there must gov be a “substantial” inspection able must be limited to those rec- ernment interest that regulatory informs the (in ords case, which the broker-dealer this scheme to which Summit) statute to maintain. Second, made. Id. must be If investigation limited, is not so then scheme; to further regulatory argues the statutes are unconstitution- *4 last, regulatory and perform statute must ally vague right and violate her adequate the two basic functions of a warrant: it must
notice of her recordkeeping responsibilities. advise the premises owner of the commercial begin analysis We our § with being pursuant 30-14- the search is made 411(d) which states in part: properly law and has a scope, defined and it must limit the inspecting discretion of the every records of ... officer. Id. In reference to the third criteri subject ... are to such reasonable on, Supreme Court found that the statute periodic, special or inspec- other audits or provided constitutionally a adequate substi tions ... as the administrator considers tute for a warrant because it informed the appropriate public in- operators inspections business would be terest protection and for the of investors. basis, regular thus, made on a opera and An inspection audit or may any be made at tor inspections would know that would not prior time and without notice. The admin- acts, discretionary constitute but would be may copy, istrator may and remove for pursuant conducted Burger, the statute. inspection of, audit or copies all records 711, 107 2648, 482 U.S. at S.Ct. at 96 L.Ed.2d reasonably administrator considers Further, held, at 619. the Court the statute necessary or appropriate to conduct the placed adequate inspecting limits audit or by limiting officers inspection the hours of support In of her contention that therefore, inspected, and what could be inspection must be in scope spe limited Burger, the search was constitutional. 482 reach, cific in its Karel cites to New York v. 711-12, 107 2648, U.S. at S.Ct. at 96 L.Ed.2d Burger, 482 U.S. 107 S.Ct. 96 at 619-20. (1987). L.Ed.2d 601 Burger, In appel lant, Burger, legality contested the of an acknowledges that the first and inspection of his pur business that by occurred second criteria are satisfied 30-14- 411(d) suant to New York Vehicle & Traffic Law and that the was author 415-a5, inspection allows the of rec ized the statute to conduct a “reasonable during regular ords business inspection” hours “which ... audit or of her office. Karel however, to the record keeping require argues, inspection was not ments of this section and which are on the reasonable because it did not limit the discre premises.” Burger argued that the evidence tion of investigating officers. As dis suppressed above, obtained should be constitutional, because the cussed in order to be inspection was not in scope. limited in question statute an must ade Supreme United disagreed States Court quate a substitute for warrant terms of the ruled that 415-a5 satisfied certainty regularity the three crite application by of its first, ria of a “reasonable” inspection advising warrantless the owner of the commercial the Fourth premises Amendment. The pur Su that the search is made preme Court opera noted that an owner or properly suant to the law and has a defined premises tor of closely regu scope, second, commercial in a the statute must limit the industry lated expectation has a reduced inspecting discretion of the Specifi officers. privacy, may cally, to a Department, Karel contends the in con- inspection require- audit and partment’s ducting an inspection 14-411(d), logical interpretation these limit its ments. must made maintained while broker-dealers that are to be two subsections is otherwise, 30-14-411(c); recordkeeping on whom are the ones it does placed, is unconstitutional because like obligation the statute securities limit the as re- make rec- obligation discretion an Karel have quired Burger. upon reasonable ords available makes no sense to have It challenging party A a statute responsibilities on recordkeeping detailed grounds constitutional bears the burden broker-dealers, but allow the is unconstitutional proving statute (those virtually unlimited records demand strong va presumption must a overcome audit”), “necessary ... from conduct Korsen, lidity. State v. Idaho agree with Karel we give A must 69 P.3d statute records to be available it adequate people of the conduct notice required to be are those audit Korsen, proscribes. Idaho at (c). in subsection maintained statute, interpreting P.3d at 132. In appellate court an inter seek interpretation, With constitutionality. upholds its pretation that 30-14-411(d) constitutionally adequate is a *5 Cobb, P.2d 132 Idaho State required by Burg for a warrant as substitute A statute held should not be First, the statute informs the securities er. uncertainty any practical interpre if void for or that he or business broker-dealer given tation can be it. Id. “subject periodic, reasonable she is to such 30-14-411(d) above, § As noted I.C. inspections ... special or other audits or simply permits Department to conduct state, as or without this the adminis within reasonable audit and of “all rec necessary in appropriate or trator considers reasonably ords the administrator considers pri- public and time without interest necessary or audit appropriate to conduct the §to in notice.” similar 415-a5 or inspection.” Looking solely lan at this Burger, the statute informs dealers guage, it is difficult to see in how this inspections to which are agents that way inspecting limits the discretion subject discretionary not acts do constitute guidance given officials. No is what about official, government but are conducted by a may records demanded than the other Further, agree to the pursuant statute. we circuitous statement that it be those must any inspec that limits with Karel the statute in necessary records to the conduct (d) pursuant to to tions subsection documents spection; may i.e. to in the official demand recordkeeping re that are spect those he deems to records (c). in In other quirements subsection Immediately preceding this his words, only pursu a search is “reasonable” 30-14-411(c) § is entitled section I.C 30~14-411(d) § if it is limited to ant to I.C. “Recordkeeping.” That subsection sets forth requires law broker-deal recordkeeping requirements for broker-deal registered to investment advisors ers advisers, which include ers investment § pursuant make or maintain 30-14- accounts, correspondence, books and other 411(c). Thus, though even Karel was required by by the adopted rules required make or maintain the personally argument, the De Department. During oral (c), in she was outlined subsection attorney candidly acknowledged partment’s those documents required surrender are not that the records demanded Karel 30-14-411(d). inspection pursuant to I.C. among kept pursuant to be required (c). case, in obli In this recordkeeping subsection While (c) by information it placed spection prompted gation of is on broker- subsection (d) allowing dealers, Karel was suggested agents like subsection received descrip a securities business agents within its father conduct includes securities her clients, unregis- despite persons are to the De- with her tion of who JONES, appear J., tered While there to be other concurring part permit statutes which Department would dissenting part. sought, obtain the information it it cannot I concur in the opinion Court’s in all re- guise do so under the of a normal audit spects except for the conclusion that limiting request
without as indicated Department authority did not have the Department above. 30-14-411(d) request Karel’s client request those docu- list. The determined that when 30-14r-411(d). ments to I.C. investigators requested the client case, In this the district court did not Karel either had a client list or could have interpret a “reasonable” audit or produced through computerized one rec- in scope, be limited it was ords. required The client records were to be result, in error. As a li- Karel’s securities 30-14-411(c) maintained under cense should not suspended. have been Giv- obligated Karel was to surrender them interpretation statutes, en our of these we Department’s request. While it is true need not address argument Karel’s other conceded these records were that the statute unconstitutionally vague. maintained, required to be a review of applicable provisions indicates the De- Attorney’s B. fees on partment conceded too much. attorney’s ap seeks fees on correctly The Court holds that securities 12-117, peal pursuant arguing to make available to the had no reasonable basis in Department upon its reasonable interpretation fact or law for its of I.C. 30- possession those records within their 14-411. The requests attor broker-dealer law to ney’s fees and costs to I.A.R. 41 maintain. Broker-dealers are 12-117, §§ 12-121 arguing *6 records, maintain array mostly a wide of brought appeal frivolously, Karel has this (customer) dealing contracts, with client ac- unreasonably and without foundation. Given counts, and trade transactions. 30- appeal presents this a matter of first 14-411(c)(l) requires that broker-dealers impression Court, for this we find that the (which agents) does not include make and appeal pursued was neither nor defended required pursu- maintain such records as thus, frivolously, parties both are denied by ant adopted Department. to rules the attorney’s appeal. fees on (IDAPA The Rule 12.01.08.088.01) requires broker-dealers to IY. compliant make and maintain records with CONCLUSION 240.17a-3, §§ SEC rules found at 17 C.F.R. 17a-4, 15g-9 and 15c2-ll. Those SEC rules We hold that the of Finance require of primarily maintenance re- to the customers, including lated to customer con- documents it did from Karel tracts, personal their information and their 30-14-411(d), as the documents were not security example, transactions. For recordkeeping requirements 240.17a-3(a)(17)(i)(A) requires C.F.R. 30-14-411(c). Karel’s li- including maintenance of account records the suspended cense should not have been as a persons, names of customers are natural who produce result of her refusal to the records together with each tax customer’s identifica- requested by inspection, the number, address, number, telephone tion and we remand this matter to the birth, status, employment date of annual in- ment for further action in accordance with come, objectives. net worth and investment opinion. this We award costs on to A current record of this and other informa- Karel.
tion the SEC rules must be SCHROEDER, kept Chief Justice maintained Justices current for each office EISMANN and BURDICK concur. of the broker-dealer and is to exami- list, had a client during at which she admitted she by nation time busi- SEC 240.17a-3(b). Further, Exhib- provide to it. ness hours. C.F.R. but refused Karel on produced Ms. its 10 rales, on the SEC brokers-dealers Based 15, 2005, 7, 2005, indicate and June June strong carefully maintain have a incentive to computerized records she had through her Additionally, those rec- customer records. producing of clients. capability of lists of the broker-dealer’s ords are lifeblood provide a in order to She testified relationships with business and contractual to up- would need current she client agents generally customer reflect old clients. her records and eliminate date property records are the broker-deal- However, explained Karel never Ms. er, agreement The rather than the Instead, investigators. to she refused specifies, “It Summit and Karel between provide a list. agreed that all understood and books pertaining are Summit customers that Karel officer found property of Summit.” Karel further it was had a client list at time either agreed that Summit had sole discretion requested capability or that she had to conduct unannounced examinations and finding, producing one at that time. This audits of these and other records related adopted by Department, was her business. substantial, conflicting, albeit supported and should sustained. Karel’s evidence of the items that One provide customer list was a refusal sought to obtain from Karel when its obligations violation of her under the unannounced visit Karel’s office 14r411(d). was a list of clients to telephone num- include addresses argument, At Karel’s counsel acknowl- oral required bers. Karel was to surrender such edged had that she declined that Karel a list parties information investigators but contended it dispute what customer information was avail- was information to be main- 30-14-411(c). able and what should have been turned over. According tained contends acknowl- counsel, updated client list was not edged a list of customers but refused complete. list included the names to turn it over. Karel contends that she clients from her former Wa- over pertaining turned information chovia, used Karel as a was but that she customers “working provides list”. This contention no *7 a list furnish customers. Wachovia was a relief to however. and the record mainte- broker-dealer same try We need not to reconcile the conflict in production requirements per- nance hearing the evidence because the ad- officer Wachovia, applied as to Summit. tained findings, in dressed the matter her which the requires customer SEC rale Department adopted in its order. hear- for at least six information to be maintained ing acknowledged that Karel officer found years. C.F.R. 240.17a-4. Whether requested she by the requested information De- customer list, Department, including the client but de- partment pertained to Karel’s customers un- offi- clined to turn them over. she was der either cer went on find: Department to furnish information to the respect production of the With client 30-14-411(d). she Ms. Karel testified understood anyone apply to the bank ac- Department wanted a list of cur- The same does records, The re- as the holds. rently doing investment business with count Court 30-14-411(c) June, maintain quirement in Summit. testified She broker-dealers, applies list which does separate did not have a client and records gener- agents. While a broker-dealer did not know how to include indicated she books, bank system. required to maintain its check ate a client list from the ILX Her statements, recon- hearing testimony canceled checks and cash conflicts with admis- records, to 17 C.F.R. investigators in its sions to the ciliations 240.17a-4(b)(2), these are the banking sought. If the person- wished to obtain Karel’s checking al account records or the records of checking apparently owned her father (and upon which she was able draw
checks), have sought should subpoena pow- to its
er. 30-14-602. I concur
in the regarding Court’s determination
banking regard records but dissent with pertaining determination to customer in-
formation.
SUPER
Employer Account #
Employer-Appellant,
IDAHO DEPARTMENT OF
COMMERCE AND LA
BOR, Respondent.
No. 32695. Idaho,
Supreme Court of
Moscow, April 2007 Term. 2007.