Vеrmont Association of Realtors, Inc. v. State of Vermont, Vermont Real Estate Commission
No. 89-048
Supreme Court of Vermont
May 24, 1991
593 A.2d 462
Present: Allen, C.J., Peck, Gibson and Dooley, JJ., and Martin, Supr. J., Specially Assigned
The Board‘s conclusion is based on its finding that “the Board of Commissioners had held several Step III grievance meetings concerning disciplinary suspensions of employees” and that in all those hearings the Union representative and involved employee were permitted to remain in the room during management‘s presentation. The evidence in support of this finding comes from two witnesses. Grievant testified that he had grieved suspensions four or five times in the past and that, in each instance, “we [grievant and the Union] all stayed in the room” and management presented its case first. The District operations supervisor stated that during Step III suspension hearings he was involved in “for the most part we normally went first getting facts and [the Union] normally went second.”
At best, the evidence showed that, at some hearings in the past, the procedure was as the Union wanted. It is far short of showing “continuity, interest, purpose and understanding” to elevate a course of action to an implied contractual status.
Jeffrey L. Amestoy, Attorney General, Marilyn Signe Skoglund, Assistant Attorney General, and John H. Chase, Montpelier, for Defendant-Appellee.
Ralph W. Hоlman, Chicago, Illinois, and Thomas F. Heilmann, Burlington, for amicus curiae National Association of Realtors.
Gibson, J. Plaintiff, Vermont Association of Realtors, Inc., appeals from the dismissal of its complaint, which challenges (1) the statutory provision establishing the composition of the Vermont Real Estate Commission and (2) various rules promulgated by the Commission. We affirm.
On appeal, plaintiff argues that the court erred (1) in upholding the constitutionality of
I.
Plaintiff first argues that
Although there is some uncertainty over the scope of the First Amendment right of association and the level of scrutiny with which to review statutes that allegedly impair associational rights, courts generally will first consider whether the governmental action infringes on First Amendment interests,
According to plaintiff, by requiring that one of the three broker members of the Commission be unaffiliated with a real estate organization,
Assuming that the statute in question has a minimal impact on plaintiff‘s associational rights, we agree with the trial court that the requirements of the statute are rationally related to the State‘s legitimate interest in creating a real estate commission with broad representation. A large percentage of the brokers and salespersons in the state are not members of a professional real estate organization. The State‘s interest in seeing that at least one person on the Commission is in a similar situation is legitimate, notwithstanding plaintiff‘s claim that such a rule will deter those who would like to serve on the Commission from joining a professional real estate organization. We conclude that summary judgment was appropriate here.
Next, plaintiff argues that the court applied the wrong standard in determining whether the Commission exceeded its statutory authority, and, further, that the court erred in concluding that the challenged rules did not exceed the authority delegated to the Commission by the Legislature. We disagree with both contentions.
This Court has consistently held that agеncy actions, including the promulgation of rules, enjoy a presumption of validity. See In re Club 107, 152 Vt. 320, 323, 566 A.2d 966, 967 (1989); Consumer Credit Ins. Ass‘n v. State, 149 Vt. 305, 308, 544 A.2d 1159, 1161 (1988); In re Agency of Administration, 141 Vt. 68, 74-75, 444 A.2d 1349, 1351-52 (1982). Here, the trial court examined the rules and determined that they were within the scope of the Commission‘s statutory authority. The court then stated that it did not have the authority “to determine whether these rules are the best way to effectuate the statute,” but rather that it must defer to the agency‘s judgment “absent a compelling indication that the Commission misinterpreted this statute.” We see no error in the standard of review applied by the court.
Nor did the court err in concluding that the rules were within the statutory grant of authority. While we presume the validity of agency actions, “an agency‘s regulations must be reasonably related to its enabling legislation in order to withstand judicial scrutiny.” In re Club 107, 152 Vt. at 323, 566 A.2d at 967-68. There must be some nexus between the agency regulation, the activity it seeks to regulаte, and the scope of the agency‘s grant of authority. Id. at 324, 566 A.2d at 968. Accordingly, we will not countenance any agency rule that exceeds the authority delegated to the agency under its enabling act. Id. at 326, 566 A.2d at 969 (Liquor Control Board exceeded its legislative authority by promulgating regulation prohibiting “obscene, lewd, or indecent entertainment“).
Under the instant enabling act, the Commission
shall adopt rules in accordance with [the APA] necessary for the perfоrmance of its duties, including:
(1) a definition of the activities which may be performed only by a licensee. . .;
(2) qualifications for obtaining licensure. . .;
(3) explanations of appeal and other significant rights given to applicants and the public;
(4) procedures for disciplinary and reinstatement cases.
Before examining the individual rules to determine whether they are within the Commission‘s authority, we point out that the word “including” in a statute is ordinarily a word of enlargement, not one of limitation.2 In re Hartman, 2 Ohio St. 3d 154, 156, 443 N.E.2d 516, 517 (1983) (common usage of word “including” implies that following list is not exhaustive); Portland Distrib. Co. v. Department of Revenue, 307 Or. 94, 97, 763 P.2d 1189, 1190 (1988) (word “including” did not limit application of statute to taxes listed). Thus, the Commission has the authority to promulgate any rule “necessary for the performance of its duties,” even if the rule is not within the scope of the four enumеrated types. Keeping this in mind, we acknowledge the fact that, generally, the purpose of a real estate licensing statute “is to regulate real estate activities so as to protect the public.” Arizona State Real Estate Dep‘t v. American Standard Gas & Oil Leasing Serv., 119 Ariz. 183, 186, 580 P.2d 15, 18 (Ct. App. 1978); see Boise Cascade Home & Land Corp. v. New Jersey Real Estate Comm‘n, 121 N.J. Super. 228, 240, 296 A.2d 545, 551 (1972) (real estate commission created under regulatory li-
We now examine the challenged rules. Plaintiff‘s most strident arguments are raised against Rules 26(c)(3) and (4), which require that a listing agreement contain
(3) Authorization for the broker to offer the property for sale, and a description of the way a prospective buyer may deliver his or her acceptance of the offer if not to the broker.
(4) The terms and conditions upon which the licensee is authorized to offer the property for sale.
Plaintiff asserts that the Commission has no authority to regulate listing agreements. Plaintiff further argues that by requiring listing agreements to specify a broker‘s authority to offer property, Rules 26(c)(3) and (4) fly in the face of the established common-law rule that listing agreements are not offers. While conceding that the Commission rules cannot be overturned merely because they entail a nontraditional approach, amicus National Association of Realtors asserts that Rules 26(c)(3) and (4) will be detrimental to the orderly transfer of real property in Vermont.
These arguments are not persuasive. The Commission has the authority to promulgate rules defining the activities performed by licensees.
Regarding plaintiff‘s argument that Rules 26(c)(3) and (4) will disrupt real estate transactions in Vermont, we point out that it is not the role of a reviewing court to impose its judgment on whether administrative regulations promulgated within the expertise of an agency are good or bad policy. See Leimbach v. Califano, 596 F.2d 300, 304 (8th Cir. 1979) (where agency chose procedure reasonably related to legitimate purpоse of enabling act, court will not substitute its view as to whether procedure is appropriate); see also In re Club 107, 152 Vt. at 325, 566 A.2d at 968 (“due deference is afforded to administrative actions which are within an agency‘s area of expertise“). Such regulations are valid as long as they are reasonably related to the purposes of the enabling act. In re Baptist Fellowship of Randolph, Inc., 144 Vt. 636, 638, 481 A.2d 1274, 1275 (1984). Rules 26(c)(3) and (4) are reasonably related to the general purpose of the enabling act: to regulate the activities of real estate brokers and salespersons in order to protect the public. Under an exclusive listing agreement in general use in Vermont, the broker has the “exclusive right to offer for sale. . . and sell the property . . . upon the terms set forth herein.” The Commission‘s attempt to regulate such activities by requiring that brokers be given the power to offer the prоperty for sale and requiring them to reveal that authorization within the listing agreements is not outside the purview or purposes of the enabling act. Moreover, Rules 26(c)(3) and (4) are not irreconcilably inconsistent with either prior Vermont contract case law or the other rules promulgated by the Commission.
Plaintiff also argues that Rule 27(b), which states that a “broker may not require as a condition of employment or association that a salesperson join any organization during any period that the salesperson is satisfying the experience requirement,” deals with matters outside the Commission‘s authority. We disagree. The Legislature explicitly gave the Commission the power to adopt rules concerning “qualifications for obtaining licensure, in accordance with section 2292.”
The other rules challenged by plaintiff—Rules 2(7), 2(9), 2(11), 30(a), 31(a), and 32—are all plainly within the Commission‘s delegated statutory authority; no further discussion of them is warranted.
III.
Plaintiff also contends that the court erred in concluding that the Commission promulgated its rules in compliance with the requirements of the Vermont Administrative Procedure Act. Plaintiff‘s principal contentions are that the Commission‘s public summaries of its proposed rules did not adequately notify real estate agents of the significance of the rules, the rules were proposed and voted on without public input, and the Commission proposed new rules after the publiс comment period ended.4 We disagree.
Upon review of the record, we conclude that the Commission promulgated the challenged rules in accordance with the requirements of the APA. Although the published summaries did not contain the text of the proposed rules, there was sufficient information to alert interested parties as to the general topic of the rules, and a telephone number was listed for interested pаrties to obtain additional information. Further, the later notices stated that the Commission had made “numerous
Affirmed.
Dooley, J., concurring and dissenting. I concur in the opinion of the Court with respect to the composition of the Vermont Real Estate Commission, the validity of Commission Rules 26(c)(3) and (4), and compliance with the procedural requirements of the Administrative Procedure Act. I conclude, however, that Rule 27(b) is beyond the rulemaking power of the Commission, and I dissent from the majority‘s оpinion upholding this rule.
Rule 27 provides:
(a) A supervising broker is responsible for the professional conduct of salespersons under his or her supervision, as shown by the records of the Commission. A principal broker is vicariously responsible for the professional conduct of all licensees employed by or associated with the licensee.
(b) A broker may not require as a condition of employment or association that а salesperson join any organization during any period that the salesperson is satisfying the experience requirement.
The experience requirement is set forth in
The Commission defends Rule 27(b) as necessary to ensure that persons who want to become brokers are not denied the opportunity to do so because they do not want to join a particu-
We require that rules be reasonably related to an agency‘s enabling legislation. In re Club 107, 152 Vt. 320, 323, 566 A.2d 966, 967-68 (1989); see also Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 208 (1988) (agency‘s power to promulgate legislative regulations is limited to authority delegated by Congress). In this case, the enabling legislation limits the Cоmmission‘s rulemaking power to those “necessary for the performance of its duties.”
I cannot find this regulation necessary for the Commission to perform its duties. The Commission admits it is based on a potential problem, not one actually found to exist. Thus, I do not believe it is reasonably related to the enabling legislation. I dissent from the decision to uphold Rule 27(b).