Hirschfield v. York Board of Realtors, Inc.

59 Pa. D. & C.2d 243, 1972 Pa. Dist. & Cnty. Dec. LEXIS 271
CourtPennsylvania Court of Common Pleas, York County
DecidedMarch 9, 1972
Docketno. 9
StatusPublished

This text of 59 Pa. D. & C.2d 243 (Hirschfield v. York Board of Realtors, Inc.) is published on Counsel Stack Legal Research, covering Pennsylvania Court of Common Pleas, York County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hirschfield v. York Board of Realtors, Inc., 59 Pa. D. & C.2d 243, 1972 Pa. Dist. & Cnty. Dec. LEXIS 271 (Pa. Super. Ct. 1972).

Opinion

BUCKINGHAM, J.,

In this action, plaintiffs allege that: (1) they are licensed real estate brokers in York County; (2) defendant’s members constitute a majority of the licensed real estate brokers in York County; (3) under defendant’s rules and regulations defendant maintains a multiple listing service in which only members of defendant may participate; (4) when a member of the multiple listing service acquires an exclusive listing contract for the sale of real estate, he must enter the property on a list which is circulated to other members; (5) when a sale is made by a member other than the listing broker, the fee is split; (6) nonmembers may not sell real estate listed with the multiple listing service; (7) defendant has forbidden its members to cooperate with nonmembers in making sales of real estate; (8) cooperation with other real estate brokers is an economic necessity in York County without which plaintiffs cannot engage in the real estate business, and (9) plaintiffs had applied for .membership in defendant but were rejected without good cause and solely pursuant to section 2 of article IV of defendant’s bylaws which provides:

“Section 2.
“(a) Part-Time Salesmen.
“(1) All active members of the York Real Estate Board are required to employ only full-time salesmen.
“(2) The term full time shall mean that the salesmen’s primary employment is Real Estate and is able to serve the public during office hours of Active Member.
“(3) Active Members may, at their discretion, employ a Salesman-Trainee on part time basis for a period not to exceed six months from date of licensure [245]*245by Department of Public Instruction of the Commonwealth of Pennsylvania.
“(a) Under no circumstances shall a salesman-trainee who has served the probational six-month period, be employed as Trainee by another Active Member under like circumstances.
“(4) Salesman-Trainee is defined as individual who is engaged in employment other than Real Estate and unable to serve the public full time during office hours of Active Member.
“(Section 2 is an amendment to the By-Laws adopted May 6, 1966.)”

The complaint is divided into three counts. The first is entitled “Restraint of Trade” and alleges that the foregoing acts of defendant constitute an unlawful conspiracy in restraint of trade in real estate in York County and a conspiracy to monopolize the real estate industry in York County by means of a group boycott or a concerted refusal to deal with plaintiffs. The second is entitled “Intentional Interference xuith Business Advantage” and alleges that the foregoing acts of defendant constitute an intentional and unlawful interference with plaintiffs’ prospective business advantage and a continuing tort. Count three is entitled “False Advertising” and alleges that pursuant to the conspiracy in restraint of trade, defendant engaged in a campaign of untrue, deceptive and misleading advertising which implies that nonmembers of the multiple listing service are unreliable, unethical or dishonest, that part-time agents employed by nonmember brokers are incompetent or not as competent as those agents of defendant’s members, that defendant’s agents have received training which has not been received by nonmembers’ agents, that the multiple listing service has access to 48 offices with 200 full-time agents, that all of defendant’s agents are full-time and that listing [246]*246cards sent to members of the multiple listing service contain all factual information about a listed property. Plaintiffs allege that all of the foregoing is untrue and constitutes a violation of the Criminal Code of Pennsylvania providing criminal penalties for untrue, false and misleading advertising as set forth in the Act of June 24, 1939, P. L. 872, sec. 857, as amended, 18 PS §4857.

Plaintiffs allege in all three counts that the acts of defendant were done intentionally, willfully and maliciously with the intention to injure or cause harm to plaintiffs in their business or business relations without right or just cause; were against the public interest and, because of these acts, plaintiffs have suffered and will continue to suffer permanent and irreparable damage, loss and harm for which they have no adequate remedy at law. They ask for a decree declaring defendant and the multiple listing service an unlawful conspiracy in restraint of trade, enjoining defendant from preventing or limiting cooperation between defendant’s members and nonmembers in sales of real estate and enjoining defendant from engaging in false and misleading advertising. They also seek compensatory and punitive damages.

Defendant has filed a preliminary objection in the form of a demurrer to the complaint on the ground that none of the three counts contains a cause of action against defendant upon which relief can be granted. In considering a demurrer, every well pleaded material fact set forth in the complaint, as well as all inferences reasonably deducible therefrom, must be taken to be admitted: Hoffman v. Misericordia Hospital of Philadelphia, 439 Pa. 501 (1970).

Defendant, as a nonprofit corporation, has the power to adopt rules to regulate its membership, subject to the following provision of section 601 of the [247]*247Nonprofit Corporation Law of May 5, 1933, P. L. 289, art. VI, 15 PS §7601, which states:

“Membership in all nonprofit corporations shall be of such classes, and shall be governed by such rules of admission, retention, suspension and expulsion, as the articles or by-laws shall prescribe, except that all such rules shall be reasonable, germane to the purpose or purposes of the corporation, and eqiLally enforced as to all members of the same class.” (Italics supplied.)

The first issue is whether defendant’s rule that its members may not employ part-time salesmen is reasonable and germane to its purpose. If it is not and if it is causally connected to the alleged restraint of trade, count 1 of plaintiffs’ complaint may not be summarily dismissed.

There are only two cases in Pennsylvania involving applications for membership in nonprofit real estate broker corporations operating a multiple listing service. In Anderson v. East Suburban Multilist Real Estate Brokers, Inc., 44 D. & C. 2d 53 (Allegheny County, 1967), plaintiff alleged that she was denied membership in defendant solely because she was a woman. The court held that defendant’s informal rule (defendant had no bylaw restricting membership to men) precluding her from membership solely because of her sex, was unlawful discrimination and was not reasonable or germane to defendant’s purposes and was, therefore, in violation of section 601 of the Nonprofit Corporation Law. The court, of course, sustained plaintiff’s complaint.

In Collins v. Main Line Board of Realtors, 93 Montg. 382 (1970), which is on appeal to the Supreme Court of Pennsylvania, the court held that no one has a vested right to membership in such an organization and dismissed plaintiff’s complaint which had asked the court to compel defendant to take her in as a mem[248]*248ber.

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Bluebook (online)
59 Pa. D. & C.2d 243, 1972 Pa. Dist. & Cnty. Dec. LEXIS 271, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hirschfield-v-york-board-of-realtors-inc-pactcomplyork-1972.