Matter of Boschee

347 N.W.2d 331
CourtNorth Dakota Supreme Court
DecidedMarch 29, 1984
DocketCiv. No. 10567
StatusPublished
Cited by13 cases

This text of 347 N.W.2d 331 (Matter of Boschee) is published on Counsel Stack Legal Research, covering North Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Matter of Boschee, 347 N.W.2d 331 (N.D. 1984).

Opinion

347 N.W.2d 331 (1984)

In the Matter of Gailyn BOSCHEE and Northern Realty, Inc.
NORTH DAKOTA REAL ESTATE COMMISSION, Appellant,
v.
Gailyn BOSCHEE and Northern Realty, Inc., Appellees.

Civ. No. 10567.

Supreme Court of North Dakota.

March 29, 1984.

*332 Dean F. Bard, Sp. Asst. Atty. Gen., Bismarck, for appellant; argued by Dean F. Bard, Bismarck.

Lundberg, Conmy, Nodland, Lucas & Schulz, Bismarck, for appellees; argued by Patrick A. Conmy, Bismarck.

PEDERSON, Justice.

This case is before us for review pursuant to the Administrative Agencies Practice Act, Ch. 28-32, NDCC. The North Dakota Real Estate Commission (hereinafter Commission) suspended the real estate broker licenses of Gailyn Boschee and Northern Realty, Inc. on the grounds that they had made false promises and engaged in conduct constituting dishonesty or fraudulent conduct contrary to the provisions of §§ 43-23-11.1(1)(c) and 43-23-11.1(1)(v), NDCC.[1] The trial court, on its review of the Commission's decision, entered judgment vacating the suspension. We reverse for the reasons stated herein and remand for entry of judgment affirming the suspension.

We will summarize the background facts to provide a better understanding of our disposition of this appeal. Boschee is, and at all pertinent times was, individually licensed as a real estate broker. He also is, and was, sole owner of Northern Realty, Inc., the possessor of a corporate real estate broker's license, and the sole owner of B & L, Inc., a construction company engaged *333 in the development of real estate. Under the circumstances of this case, for reasons which will be explained more fully later in this opinion, we will attribute all conduct to Boschee without distinguishing whether any particular act or comment is that of B & L, Inc., Northern Realty, Inc., or Gailyn Boschee.

Boschee developed and constructed Westwood Village Condominiums in the 1100 block of Jefferson Avenue in Bismarck and sold unfinished units to the various complainants in the proceeding before the Commission, orally promising that the units would be completed. The major complaint concerned the parking lot and access to the garages, which Boschee had promised would be paved at the time the units were sold to the complainants and for as long as four years thereafter. Some of the promises, particularly those relating to the paving, were made as part of the sales pitch to buyers and some were made after the units were sold, when Boschee knew, or had reason to know, that his growing financial plight made it unlikely that he could fulfill those promises. He did not disclose his financial situation, which he attributed to the economy and to his divorce, until he was unable to complete even the minor $7,000 paving project. The complainants finally arranged to have the paving done and paid for it themselves.

At the hearing before the Commission, some of the complainants testified that they assumed they were dealing with Gailyn Boschee as an individual, not as an agent of Northern Realty or B & L, Inc. The only times Boschee specified which hat he was wearing was when he referred to liability for certain acts. At no point in his testimony did he claim that he had distinguished his various capacities when he dealt with the complainants. Any disclosure to that effect may have been irrelevant, in any event, because § 43-23-11.1(1)(v), NDCC concerns a licensed broker's conduct in a capacity "within or without the pursuit of his licensed privilege."

The Commission found that Boschee had made false promises to the complainants that he would install paving, and that the promises were made to induce the complainants to buy their units. (Finding of Fact IV[2]; Finding of Fact V[3]; Finding of Fact VI[4]; Finding of Fact VII[5].) In adopting *334 a code of ethics for realtors, the Commission has not defined "false" promises or "dishonesty or fraudulent conduct." See Chapter 70-02-03, N.D.Admin.Code. The Commission held, however, that the false promises resulted in injury to the complainants, a violation of § 43-23-11.1(1)(c), NDCC, and that Boschee had engaged in conduct which was dishonest or fraudulent, a violation of § 43-23-11.1(1)(v), NDCC. (Conclusion of Law II[6]; Conclusion of Law III[7].) Pursuant to its authority under § 43-23-11.1(1), the Commission suspended the licenses of Boschee and of Northern Realty for thirty days.

Boschee appealed the Commission's decision to the district court, specifying the following grounds as required by § 28-32-15, NDCC:[8]

"1. The decision is in violation of the constitutional rights of the appellants.
"2. The provisions of Chapter 28-32 have not been complied with.
"3. The conclusions and decisions of the agency are not supported by its findings of fact."

The district court determined that fraud or misrepresentation had to be shown by clear and convincing evidence, and that there was no evidence in the record to support the Commission's findings. Accordingly, it vacated the Commission's decision. The Commission then appealed the district court's decision to this court, claiming that the district court erred in its scope of review.

In North Dakota Real Estate Commission v. Allen, 271 N.W.2d 593, 594 (N.D.1978) this court concluded that:

"Because the North Dakota Real Estate Commission is an administrative agency, our review of its decision is controlled by Chapter 28-32, N.D.C.C., the Administrative Agencies Practice Act."

The Legislature, via § 28-32-21, NDCC,[9] has directed this court to make the same review as the district court is required to make under § 28-32-19, NDCC. Therefore, we do not, in the usual sense, review the district court's decision, but, rather, we review the agency's decision on the record developed in its proceedings and under the same standard of review used by the district court.

The first question we must address concerns scope of review. Does the district court (and, subsequently this court) review only the items specified by the appellant or may it review all the items enumerated in § 28-32-19? The Commission contends *335 that because Boschee's notice of appeal, filed pursuant to § 28-32-15, does not specify as error the question of whether or not the findings of fact are supported by a preponderance of the evidence, the district court erred by exceeding the scope of review demanded by Boschee.

To support its contention, the Commission cites Haugland v. North Dakota Employment Security Bur., 218 N.W.2d 181, 184 (N.D.1974) and Application of Otter Tail Power Company, 169 N.W.2d 415 (N.D.1969). Those cases do not settle the question of whether or not the scope of review in the district court and in the Supreme Court is limited to issues specified as grounds for appeal pursuant to § 28-32-15.

The Legislature has, since 1974, made significant changes in the provisions of § 28-32-19. These changes occurred after the adoption or amendment of § 28-32-15. The requirement in § 28-32-19 that.. the court shall affirm the decision of the agency unless it shall find any of the following ...

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347 N.W.2d 331, Counsel Stack Legal Research, https://law.counselstack.com/opinion/matter-of-boschee-nd-1984.