Williams v. Idaho State Bd. of Real Estate Appraisers

• Decision Date: 29 October 2014
• Docket Number: No. 41193.,41193.
• Citation: 337 P.3d 655
• Court: Idaho Supreme Court
• Parties: Timothy WILLIAMS, an individual, Petitioner–Appellant–Cross Respondent, v. IDAHO STATE BOARD OF REAL ESTATE APPRAISERS, a department within the State of Idaho, Respondent–Cross Appellant.

337 P.3d 655

Timothy WILLIAMS, an individual, Petitioner–Appellant–Cross Respondent,

v.IDAHO STATE BOARD OF REAL ESTATE APPRAISERS, a department within the State of Idaho, Respondent–Cross Appellant.

No. 41193.

Supreme Court of Idaho, Boise, August 2014 Term.

Oct. 29, 2014.

Affirmed.

See also 149 Idaho 675, 239 P.3d 780. Jones Gledhill Fuhrman Gourley, P.A., Boise, for appellant. Kimbell D. Gourley argued.

Naylor & Hales, P.C., Boise, for respondent. Bruce J. Castleton argued.

J. JONES, Justice.

Idaho's Bureau of Occupational Licenses (Bureau) investigated and initiated disciplinary proceedings against Williams after it received complaints that he had engaged in various forms of professional misconduct as a licensed real estate appraiser. Ultimately, Idaho's Board of Real Estate Appraisers (Board) revoked Williams' license, imposed $4,000 in fines, and required Williams to pay the Board's attorney fees and costs. The district court, acting in an appellate capacity, affirmed the Board's decision to revoke Williams' license and to impose fines, but reversed the Board's order that Williams pay its attorney fees and costs. Williams appeals and the Board cross-appeals.

I. FACTUAL AND PROCEDURAL BACKGROUND

Timothy Williams was a licensed real estate appraiser who became the subject of a Bureau investigation and Board disciplinary proceeding.

In 1990, the legislature enacted the Idaho Real Estate Appraisers Act, Idaho Code §§ 54–4101 to 54–4119. When doing so, it created the Real Estate Appraiser Board (Board) to administer the Act's provisions. Idaho Code § 54–4106(1). The Act empowered the Board to investigate the actions of any state certified real estate appraiser and to suspend or revoke the appraiser's certification for specified reasons. Idaho Code § 54–4107(1). The Act also granted the Board the power to “authorize, by written agreement, the bureau of occupational licenses to act as its agent in its interest.” Idaho Code § 54–4106(2)(a). Pursuant to that authority, on October 18, 2004, the Board entered into a written agreement with the Bureau of Occupational Licenses (Bureau). That agreement included a provision stating that the Bureau “shall conduct investigations of complaints within the Board's authority.”

Williams v. State, Bd. of Real Estate Appraisers, 149 Idaho 675, 676, 239 P.3d 780, 781 (2010). In January 2005, the Bureau received a letter written by Brad Janoush,¹ also a real estate appraiser, which alleged that Williams had engaged in professional misconduct. Specifically, Janoush wrote that in mid–2004, he and other members of his appraisal firm, Knipe Janoush Knipe, LLC,

were made aware that the security of our computer bid system ² had been compromised. We investigated the situation and found that this was true. Based on the information discovered, it is our understanding that Tim Williams, MAI had gained access to our requests for proposals from Wells Fargo Bank and possibly others. With this ability he scrutinized our bids and then was able to use this information to under-bid our bids. It is our understanding that this happened on numerous occasions.

In September 2006, another appraiser—Tony Orman—filed a complaint with the Bureau alleging that Williams signed a misleading appraisal report regarding a property in Donnelly, Idaho. As a result of these allegations, the Bureau launched an investigation against Williams. After conducting its investigations, the Bureau concluded Williams had engaged in conduct that violated Idaho statutes and professional rules of conduct.

In November 2007, the Bureau initiated disciplinary proceedings against Williams by filing a formal complaint with the Board, and the matter was submitted to a hearing officer for a contested case proceeding.

Williams moved to dismiss those allegations in the complaint that arose from the investigation prompted by the letter.... At the time the investigation was commenced, the Act provided that the Board “shall upon a written sworn complaint or may upon its own motion investigate the actions of any state certified real estate appraiser.” Ch. 82, § 1, 1990 Idaho Sess. Laws 164, 168 (current version at Idaho Code § 54–4107(1)). Williams contended that any counts based upon an investigation that was not prompted by either a sworn complaint or a formal motion and vote by the Board must be dismissed. The Board's hearing officer recommended that the motion to dismiss be denied. The Board issued an order adopting that recommendation and stating that it was a final order.

On November 21, 2008, Williams filed a petition for judicial review asking the district court to dismiss with prejudice all claims alleged against him by the Board on the ground that the investigation into his alleged misconduct had not been initiated according to law. The district court held that the Board had properly delegated to the Bureau the discretion to initiate investigations. It affirmed the denial of Williams's motion to dismiss, and he then timely appealed to this Court.

Williams, 149 Idaho at 676–77, 239 P.3d at 781–82. The Court held the matter was not ripe because the Board had not issued a final order and the Board lacked authority to certify an interlocutory order for appeal. Id. at 679, 239 P.3d at 784.

After remand, in March 2011, the Bureau filed an Amended Complaint, alleging nine counts of wrongful conduct by Williams, which are summarized below:

1. Williams allegedly violated Idaho Code section 54–4107(1)(c) by accessing the Wells Fargo RETECHS system through the user names and passwords of his competitors.

2. Williams allegedly violated Idaho Code section 54–4107(1)(c) by certifying he had personally inspected twelve properties but had actually not conducted personal inspections of the properties.

3. Williams allegedly violated Idaho Code sections 54–4107(1)(c) and (e) and USPAP ³ (2001) Rules 1–1(c), 2–1(a), and 2–3 by certifying he had personally inspected four properties but had actually not conducted personal inspections of the properties.

4. Williams allegedly violated Idaho Code sections 54–4107(1)(c) and (e) and USPAP (2002) Rules 1–1(c), 2–1(a), and 2–3 by certifying he had personally inspected twenty properties but had actually not conducted personal inspections of the properties.

5. Williams allegedly violated Idaho Code sections 54–4107(1)(c) and (e) and USPAP (2003) Rules 1–1(c), 2–1(a), and 2–3 by certifying he had personally inspected one property but had actually not conducted a personal inspection of the property.

6. Williams allegedly violated Idaho Code sections 54–4107(1)(d) and 54–4109(3) by failing to make certain appraisal files and supporting data available to the Bureau for inspection and copying.

7. Williams allegedly violated Idaho Code sections 54–4107(1)(d) and 54–4109(3), and the USPAP (2002) Recordkeeping rule by failing to make certain appraisal files and supporting data available to the Bureau for inspection and copying.

8. Williams allegedly violated Idaho Code sections 54–4107(1)(d) and (e); IDAPA 24.18.01.700; and USPAP (2005) Rules 1–1(b), 1–2(e)(i), 1–3(a), 1–4(a), 1–4(e), 1–5(a), 2–1(a), and 2–1(b) when he signed a misleading appraisal report.

The Board agreed to dismiss Count Nine of the Amended Complaint prior to the hearing.

Hearing officer David E. Wynkoop held a four-day evidentiary hearing in August 2011 for the purpose of making a recommendation to the Board as to whether Williams' conduct violated Idaho law as alleged in the Amended Complaint. After the hearing, the Hearing Officer issued his Findings of Fact, Conclusions of Law, and Proposed Order. The Board adopted the Hearing Officer's findings in their entirety and on February 27, 2012, entered its Final Order. In addition to explicitly adopting by reference the Hearing Officer's findings, the Board in its Final Order re-stated the conclusions of law reached by the Hearing Officer.

Citing its authority under Idaho Code sections 54–4107 and 67–2609(a)(6) & (7) and IDAPA 24.18.01.525, the Board revoked Williams' license, imposed $4,000 in fines, and ordered Williams to pay the costs and fees associated with the investigation and prosecution, including the Board's attorney fees. Williams appealed to the district court from the Board's final order. The district court affirmed the Board's decision, except for vacating the part of the Board's sanction of Williams that required him to pay the Board's attorney fees. Williams then appealed from the district court's order, and the Board filed a cross-appeal.

II. ISSUES CONSIDERED ON APPEAL ⁴

1. Whether the investigation into Williams' conduct was improperly initiated.

2. Whether Williams' due process rights were violated because the Board was biased and the statute under which he was disciplined was void for vagueness.

3. Whether there was sufficient evidence to support the Board's decision.

4. Whether the Board abused its discretion when it revoked Williams' license and imposed $4,000 in fines.

5. Whether the Board had authority to recover the fees and costs it incurred in the investigation and prosecution of Williams.

6. Whether either party is entitled to attorney fees on appeal.

III. STANDARD OF REVIEW

“The Board is an ‘agency’ under the Idaho Administrative Procedure Act.” Williams, 149 Idaho at 677, 239 P.3d at 782 (citing I.C. § 67–5201(2)). “A strong presumption of validity favors an agency's actions.” Cooper v. Bd. of Prof'l Discipline of Idaho State Bd. of Med., 134 Idaho 449, 454, 4 P.3d 561, 566 (2000). Judicial review of agency action is governed by the IDAPA. I.C. § 67–5270(1). When, as is the case here, an agency is required to issue an order,⁵

the court shall affirm the agency action unless the court finds that the agency's findings, inferences, conclusions, or decisions are:

a. in violation of constitutional or statutory provisions;

b. in excess of the statutory authority of the agency;

c. made upon unlawful procedure; d. not supported by substantial...