The Delaware Auctioneers Association v. Delaware Real Estate Commission

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
THE DELAWARE AUCTIONEERS
ASSOCIATION,
Plaintiff,
DELAWARE REAL ESTATE
COMMISSION,
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v, ) C.A. No. Nl5C-04-0l2 JRJ
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Defendant. )
O§H_-``DER
AND NOW TO WIT, this lOth day of August, 20l6, upon consideration of
Plaintiff the Delaware Auctioneer Association’s Motion for Summary Judgmentl
and Defendant the Delaware Real Estate Commission’s response,z IT APPEARS
THAT:
l. Plaintiff the Delaware Auctioneers Association (the "Auctioneers
Association") is a trade association for auctioneers engaged
"in the business of crying sales of real and personal property" in Delaware.3 On
April l, 2015, the Auctioneers Association filed a Complaint challenging
Defendant the Delaware Real Estate Commission’s (the "Real Estate
l Plaintiff’ s Opening Brief in Support of Plaintiff’s Motion for Summary Judgment ("Pl.s’ Mot.
Summ. J.") (Trans. ID. 58967587); Plaintiff’s Reply Brief in Support of Plaintiff’s Motion for
Summary Judgment (Trans. ID. 59l28755).
2 Defendant Delaware Real Estate Commission’s Answering Brief in Opposition to Plaintiff’ s
Motion for Summary Judgment (Trans. ID. 590672l7).
3 Compl. 1111 2-3 (Trans. ID. 57005823).
Commission") authority to promulgate 24 Del. Aa'min. C. §§ 2900-1.4.1-1.4.1.3,
8.3, and 8.4.1 (the "Contested Regulations").4 The Contested Regulations concern
the scope of the "auctioneer" exemption from the licensing requirements of
Chapter 29 of Title 24 of the Delaware Code.$ The Auctioneers Association seeks
to have the Contested Regulations declared unlawful, arguing that the Real Estate
Commission lacks the statutory authority to promulgate regulations that clarify a
"complete, clear, unambiguous and blanket exemption."6
2. Pursuant to 29 Del. C. § l0l4l(a), "[a]ny person aggrieved by and
claiming the unlawfulness of any regulation may bring an action in the Court for
declaratory relief." 7 "Upon review of regulatory action, the agency action shall be
presumed to be valid and the complaining party shall have the burden of proving
. . . that the regulation, where required, was adopted without a reasonable basis on
the record or is otherwise unlawful."s Whether the adoption of the Contested
Regulations is within the Real Estate Commission’s §2906 authority to
»1 __.
4 The Auctioneers Association seeks a declaratory judgment that the Real Estate Commission did
not have statutory authority to adopt the Contested Regulations, and that the Contested
Regulations are "null and void and without force or effect." Compl. 11 22.
5 24 Del. C. § 290l(a) ("No person shall engage in the practice of providing real estate services
or hold himself or herself out to the public in this State as being qualified to practice the same; or
use in connection with that person’s narne, or otherwise assume or use, any title or description
conveying or tending to convey the impression that the person is qualified to practice real estate
services, unless such person has been duly licensed under this chapter."); 24 Del. C. § 290l(e)
r;f'ii;.t;:_»;§’t¢;‘,'g'-_;j;'h_ri__l_l not apply to . . . [a]n ‘auctioneer’ as defined in § 230l(a)(3) of Title 30.").
_I»*-'i,““s ;Ei'»zii)t. -fE~»‘-ar.nrix.i J. at 1 1.
7 24 Del. C. § 2906 requires that all rules and regulations promulgated by the Real Estate
Commission be promulgated in accordance with the Administrative Procedures Act, 29 Del. C.
§§ 10101-10161.
8 29 Del. c. § 10141(@).
promulgate rules and regulations is a matter of statutory construction and can be
decided as a matter of 1aw.9
3. Section 290l(a) of Title 24 prohibits anyone who is not duly licensed
under Chapter 29 of Title 24 from engaging "in the practice of providing real estate
services." However, § 2901(e)(4) provides that "[a]n auctioneer as defined in
§ 2301(a)(3) of Title 3()" is exempt from Chapter 29 of Title 24. Section
230l(a)(3) defines an "auctioneer" as "every person engaged in the business of
crying sales of real or personal property on behalf of other persons for profit."l°
4. The Real Estate Commission is a professional licensing board created by
the General Assembly whose "primary objective . . . is to protect the general
public . . . from unsafe practices [in the practice of providing real estate services]
and from occupational practices which tend to reduce competition or fix the price
of services rendered." Pursuant to 24 Del. C. § 2906, the Real Estate
Commission has the authority to promulgate rules and regulations that "implement
or clarify" any section of Chapter 29 of Title 24.12 In 20l5, the Real Estate
Commission promulgated the Contested Regulations, "clarifying" the auctioneer
exemption by defining the "business of crying sales" as "the public event or sale
9 Am. Ins. Ass’n v. Delaware Dep’t of Ins., 2008 WL 44322, at *5 (Del. Super. Jan. 2, 2008)
(citin§_; ,‘,»?§;.i'._ P§;_=;z'i'rf¢.£‘i;_’i§ér;zours and Co., Inc. v. Shell Oil Co., 498 A.2d 1108, 1113 (Del. 1985)).
‘° 30 aaa r::: ;z.-r'z=z‘,z-z'_§tz__;;gj_z=-g..-
“ 24 Del. C. § 2900(@1).
‘2 ld. § 2906(@1)(1).
occurring on an advertised date, when an auctioneer engages in the act of
crying . . . ."13 The Contested Regulations further specify that the exemption "shall
only apply to the day of the auction."“
5. In its Final Order promulgating the Contested Regulations, the Real
Estate Commission reasoned that the auctioneer exemption should cover the day of
the auction-the time during which auctioneers conduct auctions and "wrap up the
details of the transaction"_but auctioneers who "negotiate with other bidders after
the actual auction" would be providing real estate services outside the legitimate
scope of the exemption.l§ The Real Estate Commission found that clarifying the
scope of the auctioneer exemption protected the public by preserving the
auctioneer’s ability to conduct auctions and complete auction transactions while
ensuring that only those duly licensed provided real estate services once the
auction was complete.m
6. The Real Estate Commission acted within its authority, and the Contested
Regulations are valid. Section 290l(e)(4) provides that an auctioneer "as defined
in § 230l(a)(3) of Title 30" is exempt from Chapter 29 of Title 24’s licensing
requirements. Section 2301(a)(3) defines an "auctioneer" as "every person
13 24 Del. Admin. C. § 2900-1.4.1.1.
"‘ 1a
15 18 Del. Reg. 7 89, 792 (Apr. 20l5), available at http://regulations.de1aware. gov/documents/
April201 Sc.'ifpii.“t.``,_
16 Id. at 7£?§'»_-§?_3 ("Requiring licensure for the practice of real estate ensure accountability
pursuant to the jurisdiction of the Commission.").
4
engaged in the business of crying sales of real or personal property on behalf of
other persons for profit." Pursuant to 24 Del. C. § 2906, the Real Estate
Commission has authority to implement and clarify the provisions of Chapter 29 of
Title 24,17 and the Contested Regulations clarify that a person is "engaged in the
business of crying sales" on the day they conduct an auction.
NOW THEREFORE, for the foregoing reasons, Plaintiff the Delaware
Auctioneers Association’s Motion for Summary Judgment is DENIED.
IT IS SO ORDERED.
" E. commercial Real¢y c@rp. v_ Fusc@, 654 A.zd 833, 835 (Del. 1995) (“[A] broad grant of
authority by the General Assembly to an administrative agency is to ‘be construed so as to permit
the fullest accomplishment of the legislative intent,’ and the administrative agency is deemed to
be given all the ‘power that is reasonably necessary to execute that . . . authority."’ (quoting
Atlantis 1 Condo. Ass ’n v. Bryson, 403 A.2d 71 l, 713 (Del. 1979))).
5