Summary
holding that real estate brokers were not professionals within meaning of § 25-222
Summary of this case from Motor Club Ins. Ass'n v. FillmanOpinion
No. 85-492.
Filed September 18, 1987.
1. Real Estate: Brokers: Limitations of Actions: Negligence: Words and Phrases. For purposes of Neb. Rev. Stat. § 25-222 (Reissue 1985), real estate brokerage is not a profession and, therefore, is not to be afforded protection under the statute of limitations governing actions for professional negligence. 2. Constitutional Law: Statutes: Presumptions. All statutes are presumed constitutional, and the party challenging the constitutionality of the statute has the burden of showing the statute is unconstitutional.
Appeal from the District Court for Platte County: JOHN C. WHITEHEAD, Judge. Reversed and remanded for further proceedings.
George H. Moyer, Jr., of Moyer, Moyer, Egley Fullner, for appellant.
Douglas R. Milbourn of Tessendorf, Milbourn Fehringer, P.C., for appellee.
Robert M. Spire, Attorney General, and Jill Gradwohl Schroeder, for amicus curiae State of Nebraska.
Thomas J. Fitchett of Pierson, Ackerman, Fitchett, Akin Hunzeker, for amici curiae National Association of Realtors and Nebraska Realtors Association.
Richard L. Boucher, for amicus curiae Nebraska Dental Association.
David R. Buntain and Kathleen A. Jaudzemis of Cline, Williams, Wright, Johnson Oldfather, for amici curiae Nebraska Medical Association, Nebraska Society of Certified Public Accountants, Nebraska Society of Architects, and Nebraska Society of Professional Engineers.
KRIVOSHA, C.J., BOSLAUGH, WHITE, CAPORALE, SHANAHAN, and GRANT, JJ., and COLWELL, D.J., Retired.
This is an appeal from the district court for Platte County. Appellant, John A. Tylle, originally brought this suit in the district court against the appellee, Cyril Zoucha, doing business as Zoucha Auction Realty Company, alleging that the appellee negligently failed to sell land the two had contracted to sell by auction.
In the fall of 1980 the parties to this appeal contracted to sell by auction land the appellant owned. The terms provided that the sale would be "with reserve," i.e., a minimum price of $3,000 per acre. In the event the price was not obtained, Zoucha Auction Realty Company was granted exclusive listing of the land until February 15, 1981. The land was not sold at the auction conducted by Zoucha, nor was it sold in a later auction conducted by another auctioneer. The appellant finally sold the property himself at a price of $2,500 per acre. Tylle filed suit against Zoucha for negligently failing to sell his property, alleging damages in the amount of $20,908.
On April 17, 1985, the defendant moved for summary judgment. The district court judge granted the motion for summary judgment on the basis that the suit against Zoucha was not brought within the applicable statute of limitations governing actions for professional negligence under Neb. Rev. Stat. § 25-222 (Reissue 1985). Zoucha was also granted his cross-claim for damages in the amount of $812.04. Tylle's motion for new trial was denied. This appeal was originally heard on January 28, 1987. A rehearing on the issue of the constitutionality of 25-222 was ordered and took place on May 28, 1987.
Appellant assigns as error that the trial court incorrectly found that the appellee was a professional and therefore was to be afforded the protection of the professional negligence statute of limitations as set out in 25-222. Appellant also contends that the trial court erred in granting the appellee's motion for summary judgment on the ground that the appellant's case was not brought within 2 years from the date of the damage caused by appellee's negligence and, finally, that the trial court erred in failing to grant appellant's motion for new trial. We reverse and remand.
Tylle's assignments of error basically revolve around the question of whether a real estate broker is a professional. From our investigation of the applicable case law we note that the question of whether a real estate broker is a professional has never been specifically addressed by this court. Looking to the law of other states, although the issue can certainly not be said to have arisen often, several cases have explicitly held that real estate brokers are not professionals. The Michigan Supreme Court, in Pennock v. Fuller, 41 Mich. 153, 155, 2 N.W. 176, 177 (1879), stated:
Real estate agencies are no more professions than any other business agencies. A commission merchant, or an agent for the sale of any particular kind of personal property acts in an analogous capacity. Any one can assume and lay down such business at pleasure, and any one can conduct it in his own way on such terms and conditions as he sees fit to adopt. There is nothing in our laws which would enable any court to draw a line between such business agencies. They are not classed as professions by popular usage or by law.
Pennock was followed in a 1977 case from the Michigan Court of Appeals. In Coats v. Uhlmann, 87 Mich. App. 385, 274 N.W.2d 792 (1978), the Michigan Court of Appeals stated that the state's malpractice statute of limitations included only licensed professionals as opposed to any licensed occupation, noting the Pennock decision. A 1912 Iowa Supreme Court decision, Cummings v. Penn. Fire Ins. Co., 153 Iowa 579, 134 N.W. 79 (1912), citing Pennock, held that real estate brokers are not professionals.
The clear majority of judicial holdings that a real estate broker is not a professional are in cases involving interpretations of zoning law. In Village of Riverside v. Kuhne, 335 Ill. App. 547, 82 N.E.2d 500 (1948), the Illinois Appellate Court held that real estate brokers were not professionals as that term is defined for purposes of Illinois zoning laws. Citing the Pennock decision, the Illinois court stated: "Real estate brokerage is not claimed to be, and at any rate is not, a `profession' within the meaning of that term as used in the zoning ordinance." 335 Ill. App. at 560, 82 N.E.2d at 506. See City of Rockford v. Eisenstein, 63 Ill. App.2d 128, 211 N.E.2d 130 (1965).
The issue of whether a real estate broker is a professional has been similarly addressed in other states, with the unanimous conclusion that real estate brokers are not professionals. Hackett v. Gale, 104 N.H. 90, 179 A.2d 451 (1962); Hancock v. Concord, 111 N.H. 413, 285 A.2d 791 (1971); Seaman v. Zoning Board of Appeals of Holliston, 340 Mass. 488, 165 N.E.2d 97 (1960); Capman v. Long Beach Tp., 95 N.J. Super. 523, 231 A.2d 852 (1967); Jones v. Robertson, 79 Cal.App.2d 813, 180 P.2d 929 (1947). Finally, in the case of Dlugos v. Zoning Bd. of Appeals of Trumbull, 36 Conn. Sup. 217, 416 A.2d 180 (1980), the Connecticut Superior Court stated: "A plethora of decisions from other jurisdictions clearly indicates that a real estate broker simply cannot be categorized as a professional person." 416 A.2d at 182. The weight of the case law is clearly against the appellee's claim that a real estate broker is a professional.
Zoucha urges upon us the definition of professional set out in the opinions of this court, the most recent of which is Overland Constructors v. Millard School Dist., 220 Neb. 220, 369 N.W.2d 69 (1985). There, we defined profession as an act or service arising out of a "`vocation, calling, occupation, or employment involving specialized knowledge, labor, or skill, and the labor or skill involved is predominantly mental or intellectual, rather than physical or manual.'" Id. at 229, 369 N.W.2d at 75. Appellee argues that real estate brokerage is an occupation which is predominantly mental or intellectual, as opposed to manual or physical. While we agree that this is true, we do not agree that this alone qualifies an occupation as being a profession. Appellee attempts to bolster his argument by citing to us Neb. Rev. Stat. § 21-2202 (Reissue 1983), the definition section of the Nebraska Professional Corporation Act, Neb. Rev. Stat. § 21-2201 to 21-2222 (Reissue 1983). Section 21-2202 states in pertinent part:
As used in sections 21-2201 to 21-2222, unless the context otherwise requires:
(1) Professional service shall mean any type of personal service to the public which requires as a condition precedent to the rendering of such service the obtaining of a license or other legal authorization and which, except for the services of a real estate broker, prior to the passage of sections 21-2201 to 21-2222 and by reason of law could not be performed by a corporation, including, but not limited to, personal services rendered by a certified public accountant, public accountant, dentist, osteopath, physician and surgeon, veterinarian, real estate broker, associate real estate broker, real estate salesperson, or attorney at law; and for purposes of sections 21-2201 to 21-2222, those professions pertaining to the diagnosis, care, and treatment of humans shall be considered to be of the same profession.
Aside from the fact that the definition of professional services is explicitly limited to use in the Nebraska Professional Corporation Act, we find this definition to also be unacceptable, as a profession is far more than the mere possession of a license to ply one's trade. Webster's Third New International Dictionary, Unabridged 1811 (1981), defines profession as:
4 a: a calling requiring specialized knowledge and often long and intensive preparation including instruction in skills and methods as well as in the scientific, historical, or scholarly principles underlying such skills and methods, maintaining by force of organization or concerted opinion high standards of achievement and conduct, and committing its members to continued study and to a kind of work which has for its prime purpose the rendering of a public service . . . .
In our opinion, this language best defines a profession. The definition stresses the long and intensive program of preparation to practice one's chosen occupation traditionally associated only with professions. It does not stress the difference between manual and intellectual labor which, while a trademark of the traditional professions, would seem to exclude some occupations commonly considered to be professions even though manual or physical. This definition also does not rely on the mere possession of a license. To rely solely on the possession of a license distorts the definition, as it would include many occupations which were traditionally not considered to be professions simply because they were licensed.
For each of these reasons we hold that a real estate broker cannot be considered to be a professional for the purpose of the professional negligence statute of limitations. By so finding, we need not address the remainder of the appellant's assignments of error. Section 25-222 provides:
Any action to recover damages based on alleged professional negligence or upon alleged breach of warranty in rendering or failure to render professional services shall be commenced within two years next after the alleged act or omission in rendering or failure to render professional services providing the basis for such action; Provided, if the cause of action is not discovered and could not be reasonably discovered within such two-year period, then the action may be commenced within one year from the date of such discovery or from the date of discovery of facts which would reasonably lead to such discovery, whichever is earlier; and provided further, that in no event may any action be commenced to recover damages for professional negligence or breach of warranty in rendering or failure to render professional services more than ten years after the date of rendering or failure to render such professional service which provides the basis for the cause of action.
On rehearing the appellant argued that the statute of limitations governing professional negligence no longer serves the purpose for which it was adopted, to prevent a crisis in the medical profession due to the rise of malpractice litigation. That need, argues the appellant, was later met by the Nebraska Hospital-Medical Liability Act. The appellant also argues that the statute is unconstitutionally vague as ordinary men are required to guess at the meaning of the word "professional."
We note that the constitutionality of 25-222 has previously been upheld on several separate occasions. In Taylor v. Karrer, 196 Neb. 581, 244 N.W.2d 201 (1976), we upheld this statute against challenges that it was unconstitutionally vague. There, we stated: "The legislative purpose is clear and although questions may arise as to who are professionals and what are professional services, we do not find the statute to be so imperfect or deficient as to render its enforcement impossible." Id. at 586, 244 N.W.2d at 204-05. In Colton v. Dewey, 212 Neb. 126, 321 N.W.2d 913 (1982), we again upheld the constitutionality of this statute against the same challenges, finding that the appellant's assignments of error were meritless. Finally, in Rosnick v. Marks, 218 Neb. 499, 357 N.W.2d 186 (1984), this statute was upheld against a challenge based on the open courts doctrine. See Williams v. Kingery Constr. Co., 225 Neb. 235, 404 N.W.2d 32 (1987).
The unconstitutionality of a statute must be clearly established. All statutes are presumed constitutional, and the party challenging the constitutionality of the statute has the burden of showing the statute is unconstitutional. Weiner v. State ex rel. Real Estate Comm., 217 Neb. 372, 348 N.W.2d 879 (1984); In re Guardianship and Conservatorship of Sim, 225 Neb. 181, 403 N.W.2d 721 (1987). As we have already passed on the issue of the constitutionality of this statute, we will not again go into an extended discussion of the constitutionality of 25-222. We conclude by holding that the statute's presumption of validity has not been overcome.
We conclude that the district court judge incorrectly applied the professional negligence statute of limitations to this case and incorrectly granted the appellee's motion for summary judgment. We therefore reverse and remand for further proceedings consistent with these findings.
REVERSED AND REMANDED FOR FURTHER PROCEEDINGS.
KRIVOSHA, C.J., not participating.