Colorado Real Estate Commission v. Vizzi
No. 17CA2388
Colorado Court of Appeals
March 7, 2019
2019COA33
Administrative Law — Professions and Occupations — Real Estate Brokers and Salespersons — Brokerage Relationships — Transaction-brokers
The summaries of the Colorado Court of Appeals published opinions constitute no part of the opinion of the division but have been prepared by the division for the convenience of the reader. The summaries may not be cited or relied upon as they are not the official language of the division. Any discrepancy between the language in the summary and in the opinion should be resolved in favor of the language in the opinion.
SUMMARY
March 7, 2019
2019COA33
No. 17CA2388, Colorado Real Estate Commission v. Vizzi — Administrative Law — Professions and Occupations — Real Estate Brokers and Salespersons — Brokerage Relationships — Transaction-brokers
A division of the court of appeals considers whether a licensed real estate broker can contract away his statutorily required obligations as a transaction-broker under
The division also conсludes that the Colorado Real Estate Commission’s discipline of the appellant broker for failing to perform his statutory duties fell within the Commission’s statutory authority and did not violate federal antitrust laws. The division determines that the Commission’s decision not to disclose the
Accordingly, the division affirms the Commission’s final order disciplining appellant for failing to comply with the mandatory duties of a transaction-broker under
Colorado Real Estate Commission v. Vizzi
Court of Appeals No. 17CA2388
COLORADO COURT OF APPEALS
Announced March 7, 2019
2019COA33
Colorado Real Estate Commission Case No. RC 2015-0013
ORDER AFFIRMED
Division V
Opinion by JUDGE TERRY
J. Jones and Nieto*, JJ., concur
Philip J. Weiser, Attorney General, Gina M. Simonson, First Assistant Attorney General, Natalie L. Powell, Assistant Attorney General, Gina M. Cannan, Assistant Attorney General, Denver, Colorado, for Petitioner-Appellee
Montgomery Little & Soran, PC, Nathan G. Osborn, Christopher T. Carry, Greenwood Village, Colorado, for Respondent-Appellant
*Sitting by assignment of the Chief Justice under provisions of
I. Factual Background
¶ 2 Vizzi entered into contracts in 2013 and 2014 with three clients to provide unbundled real estate brokerage services in exchange for a flat fee. In one instance, he contracted only to list the client’s property on the Multiple Listing Services (MLS) list. In two other instances, he contracted only to provide a yard sign, a lock box, and centralized showing services, and to list the properties on the MLS.
¶ 3 After an anonymous informant notified the Commission of Vizzi’s practices, it investigated. As a result, the Commission
¶ 4 An Administrative Law Judge (ALJ) heard the case. She concluded that the duties listed in
¶ 5 Vizzi filed exceptions to the ALJ’s decision with the Commission. After hearing oral argument on the exceptions, the Commission issued a final agency order.
¶ 6 The Commission adopted the ALJ’s findings of fact and conclusions of law. It agreed with the ALJ’s ruling that Vizzi was required to provide to his clients all of the services listed in
II. Contentions Raised on Appeal
¶ 8 Vizzi maintains that he was permitted by statute to contract out of many of the duties imposed on transaction-brokers under
¶ 9 Invoking the United States Supreme Court’s decision in North Carolina State Board of Dental Examiners v. Federal Trade Commission, 574 U.S. ___, 135 S. Ct. 1101 (2015), Vizzi asserts that
¶ 10 He argues that the Commissiоn violated his due process rights by declining to disclose the identity of the person who notified the Commission of Vizzi’s actions in the questioned transactions.
¶ 11 And he contends that the Commission exceeded its statutory authority and thus violated his due process rights when it disciplined him more harshly than did the ALJ, and that its decision to do so was arbitrary and capricious.
¶ 12 For the reasons discussed below, we reject these contentions.
III. Legal Standards
¶ 13 We must sustain the Commission’s decision unless it is arbitrary or capricious, unsupported by the evidence, or contrary to law. Coffman v. Colo. Common Cause, 102 P.3d 999, 1005 (Colo. 2004); see also
¶ 14 The issues in this appeal are governed by state statute. Statutory interpretation presents a question of law we review de novo. Gessler v. Colo. Common Cause, 2014 CO 44, ¶ 7. It is our
¶ 15 Judicial deference to an agency’s interpretation of its governing statute is appropriate when the statute is subject to different reasonable interpretations and the issue comes within the administrative agency’s special expertise. Huddleston v. Grand Cty. Bd. of Equalization, 913 P.2d 15, 17 (Colo. 1996).
¶ 16 Our review of statutory provisions is de novo. Cowen v. People, 2018 CO 96, ¶ 11. When interpreting a statute, our primary purpose is to ascertain and give effect to the General Assembly’s intent. Id. We start by examining the plain meaning of the statutory language. Id. We give consistent effect to all parts of the statute and construe each provision in harmony with the overall statutory design. Id. at ¶ 13. Our construction must avoid or resolve potential confliсts and give effect to all legislative acts, if possible. Id.
¶ 17 Vizzi is licensed as a real estate broker, and it is uncontested that, in entering into the contracts in issue, he acted as a transaction-broker.
¶ 18 As pertinent here, “real estate broker” is defined as “any person . . . who, in consideration of compensation by fee, commission, salary, or anything of value . . . engages in . . . [l]isting, offering, attempting, or agreeing to list real estate, or interest therein, or improvements affixed thereon for sale, exchange, rent, or lease[.]”
¶ 19 Colorado law provides that a licensed real estate broker must act either as a single agent or as a transaction-broker in providing real estate services.
¶ 20 A single agent represents one party to a real estate transaction.
¶ 22 Transaction-brokers assist with a transaction but are not agents for any party.
¶ 23
A. Mandatory Duties or Default Duties?
¶ 24 The statutory duties of transaction brokers are detailed in
¶ 25 Vizzi interprets
¶ 26
¶ 27
¶ 28 The provisions of the transaction-broker statutes indicate that the term “shаll” in
¶ 29 The duties listed in
The general assembly finds, determines, and declares that the public will best be served through a better understanding of the public’s legal and working relationships with real estate brokers and by being able to engage any such real estate broker on terms and under conditions that the public and the real estate broker find acceptable. This includes engaging a broker as a single agent or transaction-broker. Individual members of the public should not be exposed to liability for acts or omissions of real estate brokers that have not been approved, directed, or ratified by such individuals. Further, the public should be advised of the general duties, obligations, and responsibilities of the real estate broker they engage.
¶ 31 Though the legislature emphasized the importance of the public’s ability to engage real estate brokers on terms that both the public and real estate brokers “find acceptable,” it also limited that ability. There are only two roles for which the public can engage a real estate broker: single agent or transaction-broker. See
¶ 32 The statutes do not say that the public can engage a real estate broker to provide unbundled brokerage services, or in any
¶ 33 Vizzi argues that the duties listed in
¶ 34 The ALJ found that in entering into certain contracts he drafted, Vizzi “intended not to act as a transaction-broker,” and manifested that intent by inserting language into the contracts disclaiming the duties of such a broker. We will not disturb those findings because they are supported by the record.
¶ 35 Allowing Vizzi to disclaim the role of transaction-broker would contravene the statutory scheme. See
B. Section 12-61-808(2)(a)(III)
¶ 36 In arguing that the
¶ 37
¶ 38 Vizzi points us to Wolford v. Pinnacol Assurance, 107 P.3d 947, 951 (Colo. 2005), which says that courts should interpret statutes to аvoid rendering words redundant or superfluous. Based on this proposition, he argues that the Commission’s interpretation that he could not modify the duties set out in
¶ 39 Could the legislature have intended to allow a transaction-broker to contract his way out of having to perform the required duties that the legislature — with great specificity — enumerated in
¶ 40 We acknowledge that the “different from” language in
¶ 41 But we do not interpret the “different from” language in
¶ 42 As the Commission argues,
¶ 43 Instead, we construe the “different from” language of
¶ 44 Thus, the parties may alter those default provisions by requiring the broker to take on duties in addition to those listed. See
¶ 45 For example, subsection (3) would allow certain information to be disclosed by a transaction-broker if all parties provide informed consent. If — but only if — suсh consent is given, the transaction-broker can deviate from the default statutory duty of nondisclosure for the following matters detailed in that subsection:
The following information shall not be disclosed by a transaction-broker without the informed consent of all parties:
(a) That a buyer or tenant is willing to pay more than the purchase price or lease rate offered for the property;
(b) That a seller or landlord is willing to accept less than the asking price or lease rate for the property;
(c) What the motivating factоrs are for any party buying, selling, or leasing the property;
(d) That a seller, buyer, landlord, or tenant will agree to financing terms other than those offered;
(e) Any facts or suspicions regarding circumstances which may psychologically impact or stigmatize any real property pursuant to section 38-35.5-101, C.R.S.; or
(f) Any material information about the other party unless disclosure is required by law or failure to disclose such information would constitute fraud or dishonest dealing.
¶ 46 If the transaction-broker entered into an agreement that allowed disclosure of any of the matters listеd above, the broker would, indeed, be permissibly contracting to “undertake[] any obligation[] or responsibilities . . . different from” the default responsibility of nondisclosure of those matters “set forth in section 12-61-807.”
¶ 47 Moreover,
¶ 48 And
¶ 49 As the ALJ and the Commission noted, Vizzi’s interpretation would also lead to absurd results, by, for example, allowing him to contract out of the statutory mandate to comply with “any applicable federal, state, or local laws, rules, regulations, or ordinances including fair housing and civil rights statutes or regulations.” See
¶ 50 We conclude that the provisions of
¶ 51 In light of our construction of the statutory provisions discussed above, we conclude that the record supports the Commission’s adoption of the ALJ’s findings that Vizzi violated
VI. Federal Antitrust Law
¶ 52 Citing Dental Examiners, 574 U.S. ___, 135 S. Ct. 1101, Vizzi argues here, as he did below, that the Commission’s policy prohibiting the provision of limited real estate services violates federal antitrust law. According to Vizzi, “the Commission’s enforcement of ‘minimum services’ does not stem from formal rulemaking or statute” but merely from an “unenforceablе position statement,” apparently referencing the Commission’s “Position on Minimum Service Requirements.” See Dep’t of Regulatory Agencies, Div. of Real Estate, CP-36 Commission Position on Minimum Service Requirements. He argues that the Commission is “dominated by market participants — three real estate brokers and two representatives of the public at large,” and that, under Dental Examiners, the Commission’s policy violates federal antitrust laws. We consider and reject these arguments.
A. Legal Standards
¶ 53 The Supreme Court in Parker v. Brown, 317 U.S. 341, 350-51 (1943), “interpreted the antitrust laws to confer immunity on anticompetitive conduct by the States when acting in their sovereign capacity.” Dental Examiners, 574 U.S. at ___, 135 S. Ct. at 1110. A state legislature may delegate the power to regulate a profession to a state agency on which a controlling number of decision-makers are active market participants in that profession, and, in some cases, the actions of that state agency will be immune to federal antitrust law. See id. at ___, 135 S. Ct. at 1111.
¶ 54 To determine whether such a state agency’s actions are considered the actions of the state in its sovereign capacity and thus shielded from federal antitrust lаw, we apply the two-part test set forth in California Retail Liquor Dealers Ass’n v. Midcal Aluminum, Inc., 445 U.S. 97, 100 (1980). Dental Examiners, 574 U.S. at ___, 135 S. Ct. at 1111-12. Under the Midcal test, a state agency’s allegedly anticompetitive conduct will be shielded by state action immunity from federal antitrust law if, “first, the State has
¶ 55 Midcal’s clear articulation requirement is satisfied “where the displacement of competition [is] the inherent, logical, or ordinary rеsult of the exercise of authority delegated by the state legislature. In that scenario, the State must have foreseen and implicitly endorsed the anticompetitive effects as consistent with its policy goals.” Fed. Trade Comm’n v. Phoebe Putney Health Sys., Inc., 568 U.S. 216, 229 (2013). Midcal’s active supervision requirement demands “realistic assurance that a private party’s anticompetitive conduct promotes state policy, rather than merely the party’s individual interests.” Patrick v. Burget, 486 U.S. 94, 101 (1988). The active supervision requirement also mandates that “the State exercise ultimate control over the challenged anticompetitive conduct.” Id.
¶ 56 We conclude that the Commission’s enforcement of the
¶ 57 The “clear articulation” prong is met by
¶ 58 The “active supervision” prong is met by
¶ 59 In Dental Examiners, the Supreme Court based its decision on a lack of proof indicating that the state legislature intended North Carolina’s Board of Dental Examiners to have oversight of tooth whitening, 574 U.S. at ___, 135 S. Ct. at 1116, and the Court’s concern that the Board’s action may have been motivated by anti-competitive animus, id. at ___, 135 S. Ct. at 1114 (“When a State empowers a group of active market participants to decide who can participate in its market, and on what terms, the need for supervision is manifest.”).
¶ 60 The considerations that motivated the Supreme Court’s decision in that case are not present here.
¶ 61 First, Vizzi’s аctions fell within the Commission’s statutory purview. It was uncontested that Vizzi’s actions, such as posting
¶ 62 Second, unlike in Dental Examiners, there is no support in the record for the notion that the Commissiоn’s enforcement actions were motivated by anticompetitive animus.
¶ 63 Thus, Dental Examiners is simply inapposite.
¶ 64 For two reasons, we reject Vizzi’s conclusory argument that “the Commission’s position conflicts with the Department of Justice’s interpretation of Colorado law.” First, we see no reason why, even if Vizzi’s contention is true, any such interpretation of Colorado law would be binding on us. Second, Vizzi does not explain this contention and instead cites only the written exceptions he filed to the Commission’s decision. See People v. Diefenderfer, 784 P.2d 741, 752 (Colo. 1989) (it is the duty of counsel for the appealing party to inform the reviewing court as to the specific
¶ 65 We thus conclude that Vizzi has not established a violation of federal antitrust law.
VII. Anonymous Complainant
¶ 66 Vizzi next maintains that the ALJ violated his due process rights by denying his motion to compel disclosure of the identity of the anonymous complainant. We are not persuaded.
¶ 67 We review discovery rulings for an abuse of discretion. Silva v. Basin W., Inc., 47 P.3d 1184, 1188 (Colo. 2002).
¶ 68 Vizzi has not shown how the complainant’s identity was relevant to his ability to defend against the Commission’s charges. Vizzi was given noticе of all of the Commission’s witnesses and exhibits — the totality of evidence which supported the charges against him. Cf. Copley v. Robinson, 224 P.3d 431, 436 (Colo. App. 2009) (resident’s due process rights were violated where he was denied a gun permit on a basis unknown to him at the time of his hearing).
¶ 69 The ALJ’s initial decision and the Commission’s final judgment stated the grounds, law, and reasoning for their respective
VIII. Imposition of Public Censure
¶ 70 Vizzi argues that the Commission exceeded its statutory authority and thus violated his due process rights when it imposed public censure after the ALJ had imposed only a fine and continuing education. Alternatively, he argues that the Commission’s decision to impose public censure, given the ALJ’s choice not to, was arbitrary and capricious. We disagree with these contentions.
¶ 71 In Colorado Real Estate Commission v. Hanegan, 947 P.2d 933, 935-36 (Colo. 1997), the Colorado Supreme Court upheld the Commission’s imposition of public censure of a real estate broker after an ALJ, in his initial decision, had imposed only a fine. The Hanegan court concluded that, “[a]s long as the record as a whole
¶ 72 Vizzi violated his statutory duties multiple times after the Commission’s December 2010 position statement put him on notice that the listing contraсts he prepared in 2013 and 2014 were improper.
¶ 73 Applying Hanegan, we conclude that the Commission acted within its statutory authority by imposing a sanction beyond that imposed by the ALJ, and that the Commission’s sanction bore some relation to Vizzi’s misconduct and to the needs of the public. See id. at 936-37; see also
¶ 74 We reach this conclusion even though the Commission did not file exceptions to the ALJ’s initial decision, because Vizzi’s sanction was still an issue рresented by the record. See
¶ 75 And the public censure penalty was sought in the original charge against Vizzi. Thus, he had a full and fair opportunity to argue about the appropriateness of this penalty.
IX. Conclusion
¶ 76 The order is affirmed.
JUDGE J. JONES and JUDGE NIETO concur.