Tuerk v. Department of Licensing , 123 Wash. 2d 120 ( 1994 )

Durham,

J. (dissenting) — Five years ago Maxine Tuerk mailed her real estate license to the Department of Licensing (Department) so that it would be re-issued to reflect her new business address. The Department has refused to issue the new license because Tuerk will not also provide her home address on the Department’s forms. Tuerk, who has previously given that information to the Department and has not changed her home address in 18 years, strongly prefers that her home address not be made public—not an unreasonable concern these days. The Department does not deny that it has Tuerk’s current home address.

The majority’s holding that WAC 308-124C-010 mandates a decision in favor of the Department is debatable at best.¹ Of far greater concern, however, is the majority’s patently erroneous holding that the Department’s refusal to process Tuerk’s license does not constitute a revocation of her license. For 5 years the Department has refused to provide the hearing clearly required by RCW 18.85.251. Additionally, the majority has also decided to create a new exception to the public records act, RCW 42.17.250. Accordingly, I dissent.

The Department clearly contends that Tuerk has violated one of its lawfully enacted rules. RCW 18.85.230(2). Such a violation can only be resolved pursuant to a hearing. RCW 18.85.251. Despite this clear and mandatory language, the Department insists, and the majority agrees, that no hearing was necessary because Mrs. Tuerk’s application was "incomplete”. The notion that the Department’s 5-year refusal to process this application is something other than a denial of the application is pure legal sophistry. Moreover, it is bad law. See Environmental Defense Fund, Inc. v. Hardin, 428 F.2d 1093, 1099 (D.C. Cir. 1970) (failure to act is the equivalent of a denial of the request); Graham v. Richmond, 272 F.2d 517, 521 (D.C. Cir. 1959) (failure to answer questions on application not fatal to agency action on application). See generally Bernard Schwartz, Administrative Law 246-47 (2d ed. 1984) (failure to renew must be treated like revocation).

Instructive on this point, and summarily dismissed by the majority, is Hall v. Scudder, 74 Cal. App. 2d 433, 168 P.2d 990 (1946). There, the California Real Estate Commission also attempted to use the license renewal process in order to discipline a broker. There, as here, the statutes distinguished between original applications for a license, renewals, and disciplinary procedures.

The scheme of the act in this respect is orderly and logical. The three matters of issuance of an original license, renewal of existing licenses, and suspension or revocation are distinct and separate. . . . There is nothing in the law which suggests an intention on the part of the Legislature to tie in the matter of renewals with the formalities of original applications or with the procedure for disciplinary action.

Hall, 74 Cal. App. 2d at 436-37. The California court held that renewal is a matter of right for the holder of an unsuspended and unrevoked license. Here, the proper course of action is for the Department to renew Mrs. Tuerk’s license and separately pursue any necessary disciplinary action due to her alleged failure to comply with WAC 308-124C-010.

The majority’s own analysis of the issues presented is confused. It states that the first issue to be decided is "whether [the Department] was authorized to require brokers to provide their current home addresses on its change of business address forms”. Majority, at 124. Broadly read, this is correct. However, the majority then engages in a purely academic discussion of implied and express authority, reiterates and approves of the Department’s reasons for wanting to be kept apprised of a broker’s resident address, and concludes its analysis of this issue by holding the Department’s "implementation of WAC 308-124C-010 to be within its statutory authority”. Majority, at 126. Not only does this holding not answer the question asked, it addresses a point that wás never at issue. Mrs. Tuerk does not challenge the validity of the regulation; moreover, she agrees with it and promises to comply with it should she ever change her current home address. See Tuerk v. Department of Licensing, 67 Wn. App. 872, 876, 841 P.2d 61 (1992); Answer to Petition for Review, at 3-4. She contends only that the regulation does not authorize the Department to withhold her license because of her refusal to supply this information on a change of business location form.

Having failed to answer the first question posed, the majority then examines whether the Department "was authorized to refuse to process the renewal of Tuerk’s license based on her failure to complete the change of business address form”. (Italics mine.) Majority, at 126. As explained above, the Department has no authority for such a refusal. See RCW 18.85.140. Nonetheless, the majority depends on language from the administrative procedure act which prohibits expiration of an existing license if a licensee has made a "timely and sufficient application” for renewal of the existing license.² Former RCW 34.04.170. According to the majority’s analysis, the Department has unbridled discretion to determine what constitutes a "sufficient” application.³ Were this so, the agency’s delegation of authority would be limitless. But see Weyerhaeuser Co. v. Southwest Air Pollution Control Auth., 91 Wn.2d 77, 80, 586 P.2d 1163 (1978) (administrative agency must adequately structure discretion through appropriate standards and safeguards). The sufficiency of Tuerk’s application is governed by RCW 18.85.200, which envisions automatic reissuance of the license upon tender of the appropriate fee and notice in writing of the new business address.

Finally, I take issue with the majority’s decision to insert a new exception in the public records act, RCW 42.17.250. Majority, at 127. Once the Department obtains a home address in the process of a change of business location application, that information becomes a public record, disclosable upon request under RCW 42.17.260. Nowhere, in either the public records act or in RCW 18.85, is there any exception for real estate license applications. "The people of this state do not yield their sovereignty to the agencies that serve them.. . . The public records subdivision of this chapter shall be liberally construed and its exemptions narrowly construed to promote this public policy.” RCW 42.17.251. The majority’s decision to judicially amend this statute is ill advised.

In sum, there is no legal reason why Maxine Tuerk should not be immediately issued her license. For all of the above reasons, I dissent.

Johnson, J., concurs with Durham, J.

Reconsideration denied February 16, 1994.

1 The statute governing a change in business location states only that notice in writing must be given to the Department of the change in business address, and that "[u]pon the surrender of the original license for the business . . . and a payment of a fee . . . the director shall issue a new license or duplicate license . . (Italics mine.) RCW 18.85.200. Similarly, the statute governing renewal of an exist ing license states simply that licenses expire on the applicant’s birthday, and that on or before that date, a renewal license fee must be paid in order to renew the license. RCW 18.85.140. However, the Department contends, and the majority apparently agrees, that the requirements of these statutes have been expanded by a regulation which states "[i]t is the responsibility of each and every licensee to keep the director informed of his or her current home address”. WAC 308-124C-010.1 do not believe that this regulation has added any additional requirements to the clear and concise statutory requirements. See State ex rel. Living Servs., Inc. v. Thompson, 95 Wn.2d 753, 759, 630 P.2d 925 (1981) (agency cannot modify or amend statute by regulation).

2 It is ironic that the majority finds that the administrative procedure act grants the Department the power to refuse this application, yet at the same time it finds that the act’s due process provisions are inapplicable. Majority, at 126.

3 Thus, by the majority’s reasoning, the Department could decide to ask for the applicant’s political affiliations, or perhaps a complete list of credit card purchases in the last year, and upon an applicant’s failure to provide such information, the Department could refuse to process the application. But see Graham, 272 F.2d at 520-22 (applicant’s refusal to answer valid questions regarding Communist affiliations not grounds for agency to refuse to process application). Notwithstanding the majority’s bald assertions, the Department does not possess such inherent authority.