Wednesday, February 6, 2013

Huber v. Shaffer (In the Matter of Ezra Huber) case brief

Huber v. Shaffer (In the Matter of Ezra Huber)
160 Misc. 2d 923

PROCEDURAL HISTORY: Respondent Secretary of the New York State Department of State charged petitioner attorney with a violation of N.Y. Real Prop. Law § 441-a(3). The administrative law judge found the attorney guilty as charged and further found that the attorney had demonstrated incompetency. The attorney filed an application by notice of petition for a judgment, pursuant to N.Y. C.P.L.R. 78.

OVERVIEW: The attorney had been licensed as a real estate broker, but he never used his license. The Secretary charged him with a violation of § 441-a(3) because the attorney did not have a sign of sufficient size at his place of licensing, which was also his home, to indicate his name and his business as a broker. The attorney argued that § 441-a(3) did not apply to attorneys, as N.Y. Real Prop. Law § 442-f exempted lawyers from application of Article 12-A of N.Y. Real Prop. Law. The Secretary argued that once the attorney became licensed as a broker, he lost control of his right to be a broker and was required to comply with all parts of Article 12-A. In vacating the judgment, the court found that the application of § 441-a(3) and § 442-f to the attorney was arbitrary and capricious, as the clear language of Article 12-A indicated that it was not the legislature's intent that a lawyer post a real estate sign in order to maintain his license status. The court found that the sign did not bear a rational relationship to the attorney's honesty or competency, as both were found to be adequate by the ALJ.

Article 12-A of N.Y. Real Prop. Law is entitled "Real Estate Brokers and Salesmen."
-N.Y. Real Prop. Law § 441-a(3) provides that except as otherwise provided in Article 12-A, each licensed real estate broker shall have and maintain a definite place of business within the state and shall conspicuously post on the outside of the building in which said office is conducted a sign of a sufficient size.
-N.Y. Real Prop. Law § 442-f, which is entitled "Saving clause", provides that the provisions of Article 12-A shall not apply to attorneys at law. 
-It is true that as an attorney one could act as a broker without a license, pursuant to N.Y. Real Prop. Law § 442-f. However, this does not mean that the individual's license as a broker is not subject to regulation by the Secretary of the New York State Department of State. As a broker, the individual is privileged to do things that he could not do as an attorney; for example, he could hire real estate salesmen, and he could advertise. And having elected to obtain a license and to act pursuant to it, he is subject to the Secretary's jurisdiction over licenses.

CONCLUSION: The court vacated the ALJ's finding that the attorney had violated the New York Real Property Article.

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