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State ex rel. West Virginia Real Estate Appraiser Licensing and Certification Board v. Chiles

State ex rel. West Virginia Real Estate Appraiser Licensing and Certification Board v. Chiles

Case No. 
14-0233
Opinion Date: 
9/18/2014
Opinion Author: 
Justice Loughry
Decision 
Writ Granted
Vote: 
Unanimous
Facts 

Petitioner, the Real Estate Appraiser Licensing and Certification Board (“the Board”), had initiated an administrative disciplinary proceeding against Respondent David Bunch’s real estate appraiser license. Respondent Bunch filed a writ of prohibition in the Circuit Court of Cabell County, seeking to halt that disciplinary proceeding.

The Board argued that it is subject to the special venue provision of West Virginia Code § 14-2-2, which requires that any lawsuit against a state agency must be filed and litigated in the Circuit Court of Kanawha County. The Board sought a Writ of Prohibition to prevent the case from proceeding in the Circuit Court of Cabell County, where it was originally filed, on the grounds that Cabell County had no legitimate authority to hear the case because West Virginia Code § 14-2-2 required it to be heard only in the Circuit Court of Kanawha County.

Respondent, David Bunch, argued that the Board is not a state agency, and therefore the matter could properly proceed in Cabell County.

Issue 

Whether the Real Estate Appraiser Licensing and Certification Board is a "state agency" for purposes of the special venue provisions contained in West Virginia Code § 14-2-2?

Analysis 

The sole issue the Court addressed was whether the Board is a “state agency” entitled to the special venue provision of West Virginia Code § 14-2-2. The Court held that the Board is a state agency, and therefore the case must proceed in the Circuit Court for Kanawha County. In reaching its conclusion, the Court first addressed the propriety of a writ of prohibition as remedy where venue issues are raised, stating that “venue issues may be resolved through a writ of prohibition . . . because of the ‘inadequacy of the relief permitted by appeal’” which exists where a case is permitted to proceed in an improper forum.

The Court began its analysis by looking to the plain language of West Virginia Code § 14-2-3, which provides the statutory definition for “state agency.” The definition expressly includes the word “board,” and the Court thereby found that the Board “unquestionably” qualifies as a state agency under this provision of the statute.

The Court went on to explain that the Board qualifies as a “state agency” under Blower v. West Virginia Educational Broadcasting Authority, which sets forth factors to be assessed when determining whether an entity is a “state agency” for purposes of W. Va. Code § 14-2-2. The two most important Blower factors are (1) whether the organization’s powers are substantially created by the state Legislature and (2) whether the entity’s governing board’s composition is prescribed by the state Legislature.

In the instant matter, the Board is created by W. Va. Code § 30-38-6, which grants the Board the powers to establish licensing and certification requirements for real estate appraisers in the state of West Virginia, and to suspend or revoke those licenses and certifications, among other powers. Additionally, the Board is granted rule-making authority by the Legislature, pursuant to the West Virginia Administrative Procedures Act, and the Board is required to report regularly to the Legislature on various matters. All of these elements led the Court to conclude that the first Blower fact was satisfied. The second Blower factor, which looks to see if the Legislature prescribes the composition of the organization’s governing body, was also satisfied. W. Va. Code § 30-38-6(a)-(b) requires that Board members be appointed by the Governor of West Virginia, with advice and consent of the state Senate, and sets forth residency and qualification requirements for each Board member as well.

Other Blower factors exist, but are given less weight. These additional factors include whether the entity can operate on a statewide basis, whether the entity is financially dependent on public funds, and whether the entity is required to deposit its funds into the state treasury. Here, the Board clearly operates on a statewide basis. Licensing or certification through the Board is a prerequisite to performing many real estate appraisal activities in West Virginia. The Board is also required to deposit money into a special fund of the State Treasury. In fact, the only Blower factor in dispute in the instant matter was whether the Board is “financially dependent” upon public funding. The Court found that, though the Board supports itself with funds collected through membership dues, this was insufficient to defeat the Board’s status as a state agency for two reasons. First, Blower does not require the entity’s funds to come directly through the State Treasury. Rather, the essential analysis is whether the entity collects funds as a part of its statutorily created functions and powers, which the Board clearly does. The Court went on to clarify, in its second reason, that even if the Board did not operate on funds collected pursuant to its statutory authority, that the absence of one Blower factor is insufficient to render an entity something other than a “state agency.” Specifically, while the Court is required to examine all of the Blower factors when assessing whether an entity is a state agency, all of the factors do not need to be established for that finding to be made.

The case relied upon by the Respondent in this matter, Mayo v. The West Virginia Secondary  Schools Activities Commission, was “easily distinguished” from the case at hand. In Mayo, the Secondary Schools Activities Commission failed to meet most of the Blower factors, whereas the Board here met all of them.

Commentary 

The Court’s opinion has clarified the appropriate weight that will be afforded to each of the various Blower factors in determining whether an entity qualifies as a “state agency” for purposes of the special venue provisions of West Virginia Code § 14-2-2. The Court will look for the presence or absence of each of the factors set forth in Blower, but will rely most heavily on whether the organization’s powers are substantially created by the Legislature and whether the entity’s governing board’s composition is prescribed by the Legislature. Furthermore, arguments which attempt to disqualify an entity based on the absence of one of the lesser Blower factors are likely to fail.

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