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Colorado Real Estate Commission v. Vizzi

Court of Appeals of Colorado, Fifth Division

March 7, 2019

Colorado Real Estate Commission, Petitioner-Appellee,
John J. Vizzi, Respondent-Appellant.

          Colorado Real Estate Commission Case No. RC 2015-0013

          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


          TERRY JUDGE.

          ¶ 1 Can a licensed real estate broker contract away his statutory obligations as a transaction-broker under section 12-61-807(2), C.R.S. 2018? We answer "no" to this question, and therefore affirm the final agency order of the Colorado Real Estate Commission disciplining a licensed real estate broker, John J. Vizzi, for failing to fulfill those statutory obligations. We also conclude that the Commission's enforcement of that statute against Vizzi does not violate federal antitrust laws. As a result, we affirm the Commission's order.

         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 charged Vizzi with failing to fulfill his statutory duties under section 12-61-807(2) and sought to discipline him.

         ¶ 4 An Administrative Law Judge (ALJ) heard the case. She concluded that the duties listed in section 12-61-807(2) are mandatory and that Vizzi had not fulfilled them in any of the three transactions at issue. She therefore disciplined Vizzi under section 12-61-113(1)(k), C.R.S. 2018, requiring him to take twelve hours of continuing education and levying a fine of $2000 plus the statutory surcharge. Although the Commission had sought public censure, the ALJ did not impose it.

         ¶ 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 section 12-61-807(2), and that he violated the provisions of section 12-61-113(1)(k) and (n) by entering into contracts that essentially disclaimed any responsibility to provide statutorily required services.

          ¶ 7 The Commission modified the discipline imposed on Vizzi to include public censure. In doing so, the Commission relied on its issuance of a December 2010 position statement that said, in part: "A broker is not allowed to solely perform 'additional' services which require a real estate broker's license . . . without providing the minimum duties required by single agency or transaction brokerage." Dep't of Regulatory Agencies, Div. of Real Estate, CP-36 Commission Position on Minimum Service Requirements, Because the position statement was issued before Vizzi entered into the contracts at issue, the Commission concluded that he "should have known that the listing contracts he prepared in 2013 and 2014 were improper."

         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 section 12-61-807(2), and that the contracts in question successfully accomplished that goal.

         ¶ 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 the Commission's enforcement action against him violates federal antitrust law.

         ¶ 10 He argues that the Commission 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 § 24-4-106(7)(a), C.R.S. 2018 (On review of agency action, "[i]f the court finds no error, it shall affirm the agency action.").

         ¶ 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 function to interpret statutes. § 24-4-106(7)(d) ("In all cases under review, the court shall determine all questions of law and interpret the statutory and constitutional provisions involved."); El Paso Cty. Bd. of Equalization v. Craddock, 850 P.2d 702, 705 (Colo. 1993) ("An administrative agency's construction [of a statute] should be given appropriate deference but is not binding on the court.").

         ¶ 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., ¶ 13. Our construction must avoid or resolve potential conflicts and give effect to all legislative acts, if possible. Id.

         IV. Roles of Licensed Real Estate Brokers

         ¶ 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[.]" § 12-61-101(2)(a)(V), C.R.S. 2018.

         ¶ 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. § 12-61-803(1), C.R.S. 2018.

         ¶ 20 A single agent represents one party to a real estate transaction. § 12-61-802(4), C.R.S. 2018. Such an agent's duties include exercising reasonable skill and care, presenting all offers in a timely manner, and disclosing known adverse material facts to the other party in a transaction. §§ 12-61-804 to -805, C.R.S. 2018.

         ¶ 21 Section 12-61-803(2) makes transaction-broker the default role for a real estate broker who has not entered into a single-agency written agreement with the represented party.

         ¶ 22 Transaction-brokers assist with a transaction but are not agents for any party. § 12-61-807(1). Though transaction-brokers share certain statutory duties that single agents have, such as the duty to present all offers in a timely manner, § 12-61-807(2)(b)(I), their role is more limited than that of a single agent.

         ¶ 23 Section 12-61-803(1) requires a transaction-broker to disclose the "general duties and obligations arising from that relationship" to the seller and the buyer ...

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