Gruwell v. Department of Financial & Professional Regulation

943 N.E.2d 658, 406 Ill. App. 3d 283
CourtAppellate Court of Illinois
DecidedNovember 30, 2010
Docket4-09-0495
StatusPublished
Cited by18 cases

This text of 943 N.E.2d 658 (Gruwell v. Department of Financial & Professional Regulation) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gruwell v. Department of Financial & Professional Regulation, 943 N.E.2d 658, 406 Ill. App. 3d 283 (Ill. Ct. App. 2010).

Opinions

JUSTICE KNECHT

delivered the opinion of the court:

In March 2005, an administrative hearing officer found plaintiff, Carol E. Gruwell, engaged in the unlicensed practice of real estate in violation of section 20 — 10 of the Real Estate License Act of 2000 (Act) (225 ILCS 454/20 — 10 (West 2002)). In April 2005, defendant Real Estate Administration and Disciplinary Board (Board) of the Illinois Department of Financial and Professional Regulation (Department) found the same and recommended a fine of $25,000. In October 2005, defendant Daniel E. Bluthardt, Director of the Division of Professional Regulation of the Department (Director), denied plaintiffs motion for rehearing, adopted the Board’s findings and conclusions, and imposed a $25,000 civil fine. Plaintiff sought administrative review. In June 2009, the circuit court affirmed the Director’s order. Plaintiff appeals the administrative order, arguing, among other things, (1) the Director erred in finding plaintiff engaged in the unlicensed practice of real estate; (2) the $25,000 fine is excessive; and (3) the Act, as applied to plaintiff, violates the first amendment to the United States Constitution. We affirm as modified to reflect our reduction in the amount of plaintiffs fine to $7,500.

I. BACKGROUND

From September or October 2002 to October 2003, plaintiff worked as an independent contractor for Central Illinois For Sale By Owner (Central). Central’s primary business was the operation of a Web site hosting classified advertisements for a flat fee. It provided a forum for homeowners to advertise their homes for sale. By prohibiting homeowners represented by real estate agents from advertising on its site, Central ensured the homes it advertised were for sale by owner. Central’s Web site provided these home sellers with uniform advice on pricing, staging, and negotiating the sale of their homes and referred them to professionals who provided related services. Plaintiff received a commission for each advertisement she sold.

In October 2003 Central agreed to enter, and in January 2004 Central did enter, a consent order with the Department. In the order, Central admitted its activities, in the aggregate, amounted to unlicensed practice of real estate in violation of section 20 — 10 of the Act (225 ILCS 454/20 — 10 (West 2002)). Central agreed to undergo and complete the requirements to become a licensed corporate broker and to pay a $7,500 fine.

In October 2003, plaintiff discontinued working for Central. In December 2003, the Department served plaintiff with a complaint and notice of a preliminary hearing. The complaint alleged plaintiff practiced real estate without a license during her tenure with Central in violation of section 20 — 10 of the Act (225 ILCS 454/20 — 10 (West 2002)). Specifically, it alleged plaintiff unlawfully practiced real estate by (1) representing herself as a real estate agent in newspaper advertisements and radio appearances; (2) contracting with homeowners to assist them in marketing and selling their homes; (3) advising homeowners on selling their homes, setting the price, and negotiating with buyers; (4) assisting homeowners in marketing their homes by taking photographs of their homes and posting them to Central’s Internet site; (5) assisting homeowners in holding open houses; and (6) referring homeowners to professional service providers including attorneys, home lenders, and home inspectors.

In August 2004, the parties presented arguments in an administrative hearing before a hearing officer and two members of the Board. The parties stipulated to admission of several evidentiary exhibits offered by the Department, which included tapes and transcripts of eight of plaintiff’s regular radio appearances, newspaper advertisements plaintiff ran, pages from Central’s Web site, and Central’s consent order.

In her radio appearances, plaintiff and a radio host spoke about plaintiffs services with Central, including its real estate advertising services. Plaintiff said homeowners could advertise their homes for sale on Central’s Web site for a flat fee. The fee included assistance from a representative of Central in operating the advertising software and free home photography for use in the advertisement. In one appearance, plaintiff stated, “I am an Internet site and I help people sell their homes on the Internet.”

In some, but not all, of the appearances, plaintiff included disclaimers specifying she was not a real estate agent and she did not negotiate sales. In one such disclaimer, she said, “[Central is] not a real estate company[,] so there’s [sic] no hidden costs or commissions.” She said homeowners themselves were responsible for writing their advertisements and opening their houses to the public. In one appearance, plaintiff likened Central to “an extra, extra fancy newspaper where [plaintiff was] the newspaper and [homeowners were] their own editors.” She corrected the radio host once when he characterized Central as a “real estate service” by stating, “[Central is] an ad agency[,] not a real estate company.”

During these appearances, plaintiff spoke about homes for sale on Central’s Web site, sometimes describing them in the first person. She sometimes prefaced these descriptions by asking the radio host if she could “just sneak one in.” She gave the houses’ locations and asking prices, details about their layouts and amenities, and information about their neighborhoods. She told the radio host to visit one home before it sold. She invited a dentist’s clients to visit his open house. In one appearance, she said Central “sold a half a million last week.”

In the newspaper advertisements, plaintiff aggregated advertisements for several homes on one page with Central and plaintiff’s names and plaintiff’s phone number. The advertisements did not provide contact information for the homeowners whose houses were advertised. Some, but not all, of these advertisements included disclaimers specifying plaintiff and Central were not acting as a real estate agent or company. All the advertisements taken into evidence included copy advertising plaintiff or Central’s services specifically. One stated, “9 Million in Homes Sold since Jan. ’03,” and another, “12 Million Dollars Worth of Homes Listed, approx 4 Million Sold As of Jan. 2003.” One stated, “If you want to see your house SOLD,” call plaintiff.

Among the pages from Central’s Web site were a disclaimer page, a page giving contact information for Central and its representatives, pages describing Central’s services, pages giving advice to home sellers, and pages of advertisements. The disclaimer stated Central’s Web site was “strictly an advertisement venue” that was not “a real estate organization” and did not offer “professional real estate[-]related assistance.” The contact page listed plaintiff as the “local contact” for Springfield, Illinois, and the surrounding area. One page stated Central “will not advertise any particular item listed on this Web site.”

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Gruwell v. Department of Financial & Professional Regulation
943 N.E.2d 658 (Appellate Court of Illinois, 2010)

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Bluebook (online)
943 N.E.2d 658, 406 Ill. App. 3d 283, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gruwell-v-department-of-financial-professional-regulation-illappct-2010.