                                             COURT OF APPEALS OF VIRGINIA


              Present: Judges Petty, Chafin and O’Brien
              Argued at Williamsburg, Virginia
UNPUBLISHED




              CHANTEL RAY FINCH
                                                                             MEMORANDUM OPINION BY
              v.     Record No. 1289-18-1                                     JUDGE WILLIAM G. PETTY
                                                                                 FEBRUARY 26, 2019
              COMMONWEALTH OF VIRGINIA,
               DEPARTMENT OF PROFESSIONAL
               AND OCCUPATIONAL REGULATION,
               REAL ESTATE BOARD


                             FROM THE CIRCUIT COURT OF THE CITY OF VIRGINIA BEACH
                                              Stephen C. Mahan, Judge

                               Christopher D. Davis (Justin R. Burch; Davis Law, PLC, on briefs),
                               for appellant.

                               Elizabeth B. Peay, Senior Assistant Attorney General (Mark R.
                               Herring, Attorney General; Stephen A. Cobb, Deputy Attorney
                               General; Heather Hays Lockerman, Senior Assistant Attorney
                               General and Chief, on brief), for appellee.


                     The Real Estate Board, an agency within the Department of Professional and

              Occupational Regulation, is charged with the regulatory oversight of real estate brokers. The

              Board found that Chantel Ray Finch, a broker, was in violation of 18 VAC § 135-20-190(E)(4)

              by failing to obtain the written consent of the seller prior to advertising for sale a specific

              identifiable real estate property. Finch1 appealed the Board’s finding to the Circuit Court of

              Virginia Beach. The circuit court affirmed the Board’s finding. Now, in an appeal of that



                     
                         Pursuant to Code § 17.1-413, this opinion is not designated for publication.
                     1
                       For reasons not apparent from the record, the appellant is referred to as Ray in the
              proceedings before the Board. For clarity, we will use her last name as it appears in the record of
              this Court.
decision, she argues that the circuit court erred in affirming the Board’s decision for three

reasons: (1) “substantial evidence showed [Finch] properly complied with 18 VAC

§ 135-20-190(E)(4) because [Finch] obtained the written consent of the seller by virtue of the

REIN contract, and, even if consent was withdrawn, it was regranted by the seller’s conduct;”

(2) “the circuit court gave improper deference to, and ultimately affirmed, the Board’s finding

based on the Board’s impermissible legal interpretation that a private contract could not meet the

consent requirement of 18 VAC § 135-20-190(E)(4);” and (3) “the Board improperly placed the

burden of proof on [Finch] at the agency hearing to show that she was not in violation of 18

VAC § 135-20-190(E)(4).” Finding no error, we affirm the circuit court’s decision.

                                           BACKGROUND

       Barbara Wolcott, the complaining witness and principal broker for Berkshire Hathaway

HomeServices Towne Realty (Towne Realty) filed a complaint with the Board alleging Finch

violated 18 VAC §§ 135-20-190(E)(4) and 135-20-280.2 A presiding Board member conducted

an informal fact finding conference (IFFC). At the IFFC, the presiding member noted that the

Board defines “advertising as all forms of representation, promotion and solicitation

disseminated in any manner and by any means of communication to consumers for any purpose

related to licensed real estate activity.” Wolcott submitted documentation showing that on four

separate occasions, Finch’s real estate company, Chantel Ray Real Estate (CRRE), advertised

property for which she did not have a listing agreement. The first instance involved CRRE’s

media coordinator soliciting a Towne Realty associate offering to advertise two of Towne

Realty’s properties on social media. The second instance involved a CRRE email advertisement

sent to an associate of Towne Realty. The email included an advertisement for two properties,



       2
        The informal fact finding conference presiding member and the Board dismissed the
complaint for violation of 18 VAC § 135-20-280, so it is not before us here.
                                             -2-
one of which was a Towne Realty listing. The third instance was an advertisement of a Towne

Realty listing posted on CRRE’s Facebook page. The fourth instance was a Towne Realty listing

promoted on CRRE’s website. Each time CRRE advertised a Towne Realty listing, Wolcott

notified Finch, in writing, that CRRE was not permitted to advertise any Towne Realty listings.

       In response, Finch submitted the Real Estate Information Network (REIN) rules and

regulations. REIN is a multiple listing service which permits members to post real estate

properties they are offering for sale. Both Towne Realty and CRRE are members of REIN.

Finch argued that the rules and regulations provided that membership in REIN granted written

consent to advertise other members’ listings. Thus, she posited, because both her agency and

Towne Realty were members, Towne Realty had granted her permission to list the properties.

The IFFC presiding member pointed out REIN Rule 6.2.3.7, which states, “Broker Member must

comply with all states’ advertising requirements applicable to Licensees based on the geographic

location of the listing (e.g., Virginia Administrative Code (VAC), Title 18 (Professional and

Occupational Licensing), 135-20-190. Advertising by licensees).”

       After the IFFC, the presiding member submitted a summary of informal fact-finding

conference (Summary) to the Board. Concluding that a listing broker is granted the consent of a

seller through the listing agreement, the presiding member rejected the argument that

membership in REIN amounted to implied consent. The IFFC presiding member recommended

that Finch be found in violation of 18 VAC § 135-20-190(E)(4). Two months later, the Board

convened and voted to accept the recommendations of the presiding member. The Board found

that Finch violated 18 VAC § 135-20-190(E)(4) and imposed sanctions and monetary penalties

in the amount of $800. It further placed Finch on probation and required her to complete four

classroom hours of continuing education within six months of the effective date of the order. In

its final opinion and order, the Board stated that it “adopts the Report of Findings, which

                                               -3-
contains the facts” in the matter, and “adopts the Summary. The Report of Findings and

Summary are incorporated as part of this Order.”

                                             ANALYSIS

       The Virginia Administrative Process Act authorizes judicial review of agency decisions.

See Code § 2.2-4027. Under settled principles, the burden is upon the party appealing such a

decision to demonstrate error. Avante at Roanoke v. Finnerty, 56 Va. App. 190, 197 (2010);

Carter v. Gordon, 28 Va. App. 133, 141 (1998). “Our review is limited to determining

(1) ‘[w]hether the agency acted in accordance with law;’ (2) ‘[w]hether the agency made a

procedural error which was not harmless error;’ and (3) ‘[w]hether the agency had sufficient

evidential support for its findings of fact.’” Avante at Roanoke, 56 Va. App. at 197 (quoting

Johnston-Willis, Ltd. v. Kenley, 6 Va. App. 231, 242 (1988)).

       Accordingly, it is the duty of the reviewing court to determine whether there was

“substantial evidence” in the agency record to support the decision of the agency. Doe v.

Virginia Bd. of Dentistry, 52 Va. App. 166, 175 (2008). “Substantial evidence” is “‘such

relevant evidence as a reasonable mind might accept as adequate to support a conclusion.’ Under

this standard, applicable here, the court may reject the agency’s findings of fact ‘only if,

considering the record as a whole, a reasonable mind would necessarily come to a different

conclusion.’” Virginia Real Estate Commission v. Bias, 226 Va. 264, 269 (1983) (citations

omitted).

       Further, when reviewing claims of regulatory interpretive error in an administrative

appeal, we are to

               “give ‘great deference’ to an agency’s interpretation of its own
               regulations.” Bd. of Supervisors v. State Bldg. Code Tech. Review
               Bd., 52 Va. App. 460, 466 (2008). “This deference stems from
               Code § 2.2-4027, which requires that reviewing courts ‘take due
               account’ of the ‘experience and specialized competence of the
               agency’ promulgating the regulation.” Id. (quoting Real Estate Bd.
                                                -4-
               v. Clay, 9 Va. App. 152, 160-61 (1989)). However, “‘deference is
               not abdication, and it requires us to accept only those principles of
               agency interpretations that are reasonable in light of the principles
               of construction courts normally employ.’” Id. (quoting EEOC v.
               Arabian American Oil Co., 499 U.S. 244, 260 (1991)).

Avante at Roanoke, 56 Va. App. at 197; see also Appalachian Voices v. State Air Pollution

Control Bd., 56 Va. App. 282, 293 n.2 (2010) (“[A]n agency’s interpretation [of its own

regulations] must be given controlling weight unless it is plainly erroneous or inconsistent with

the regulation.” (alterations in original) (citations and internal quotation marks omitted)); Avalon

Assisted Living Facilities, Inc. v. Zager, 39 Va. App. 484, 503 (2002) (noting principles of

statutory construction apply with equal force “to the interpretation of regulations adopted by an

administrative agency”). We give no deference to an agency’s interpretation of its regulation

that is “arbitrary and capricious,” meaning an interpretation that is “‘unreasonable’” or “‘without

determining principle.’” Williams v. Commonwealth of Virginia Real Estate Bd., 57 Va. App.

108, 135 (2010) (quoting Sch. Bd. of the City of Norfolk v. Wescott, 254 Va. 218, 224 (1997)).

                           1. Violation of 18 VAC § 135-20-190(E)(4)

       Finch argues that the circuit court erred because “substantial evidence showed that

[Finch] properly complied with 18 VAC § 135-20-190(E)(4) because [Finch] obtained the

written consent of the seller by virtue of the REIN contract, and, even if consent was withdrawn,

it was regranted by the seller’s conduct.”3

       18 VAC § 135-20-190 regulates advertising by licensed real estate brokers. It

specifically prohibits the failure “to obtain the written consent of the seller, landlord, optionor or

licensor prior to advertising a specific identifiable property.” 18 VAC § 135-20-190(E)(4). Here

there was substantial evidence from Wolcott that Finch did not have written consent from Towne


       3
         Finch appears to confuse the “substantial evidence” standard of review for upholding a
violation with something that would instead prove her compliance. We will consider whether
the circuit court erred in finding substantial evidence to support the Board’s findings.
                                                  -5-
Realty to advertise the properties that were under a listing agreement with Towne Realty.

Although Finch took down the advertisements upon request, the Board found that she had

violated 18 VAC § 135-20-190(E)(4) by listing the specifically identifiable properties in the first

instance. The Board further concluded that membership in REIN does not, in and of itself, grant

permission to use listings of other members. As the Board noted, section 6.2.3.7 of the REIN

rules and regulations states that members “must comply with all states’ advertising requirements

applicable to Licensees based on the geographic location of the listing (e.g., Virginia

Administrative Code (VAC), Title 18 (Professional and Occupational Licensing), 135-20-190.

Advertising by licensees).” Virginia’s advertising requirements are outlined in 18 VAC

§ 135-20-190. Subsection (E)(4) of that statute requires “written consent” for each “specific

identifiable property” in order to advertise it. 18 VAC § 135-20-190(E)(4). There is no evidence

in the record that Finch ever obtained written consent from Towne Realty to advertise Towne

Realty’s listings on CRRE social media. Therefore, the circuit court did not err in finding that

substantial evidence supported the Board’s conclusion that membership in REIN does not

provide written consent (and therefore, 18 VAC § 135-20-190(E)(4) compliance).

                                    2. Deference to the Board

       Next, Finch argues that the circuit court erred because it “gave improper deference to,

and ultimately affirmed, the Board’s finding based on the Board’s impermissible legal

interpretation that a private contract could not meet the consent requirement of 18 VAC

§ 135-20-190(E)(4).”

       As noted above, we “give ‘great deference’ to an agency’s interpretation of its own

regulations” and “‘take due account’ of the ‘experience and specialized competence of the

agency’ promulgating the regulation.” Bd. of Supervisors, 52 Va. App. at 466 (quoting Clay, 9

Va. App. at 160-61).

                                               -6-
       We cannot say, based on the Board’s particularized understanding of the REIN database

and listing practices, that its interpretation of 18 VAC § 135-20-190(E)(4) was “plainly

erroneous or inconsistent with the regulation.” Appalachian Voices, 56 Va. App. at 293 n.2

(citation omitted). The interpretation was also not “arbitrary and capricious,” or

“‘unreasonable’” or “‘without determining principle.’” Williams, 57 Va. App. at 135 (quoting

Sch. Bd. of the City of Norfolk, 254 Va. at 224); see Johnston-Willis, 6 Va. App. at 244 (holding

decisions by agencies on matters within their specialized competence are entitled to “special

weight” in the courts). As noted above, the Board found that membership in REIN does not

authorize unlimited mutual advertising. Even if it did, Wolcott specifically told Finch to cease

from advertising any properties that were under a listing agreement with Towne Realty.

Therefore, the Board’s finding was not plainly erroneous or inconsistent with the regulations.

Accordingly, we affirm the circuit court.

                                       3. Burden of Proof

       In her third assignment of error, Finch argues that the circuit court erred because “the

Board improperly placed the burden of proof on Finch at the agency hearing to show that she

was not in violation of 18 VAC § 135-20-190(E)(4).” To support this argument, she contends

that the burden of proof in formal Administrative Procedure Act (APA) hearings is on the Board.

       Here, a Board member conducted an IFFC pursuant to Code § 2.2-4019. The IFFC is an

“informal conference” meant to “ascertain the fact basis” for an agency’s decision. Code

§ 2.2-4019. It is not a formal Administrative Procedure Act hearing. A formal hearing only

occurs if the “informal procedures under [Code] § 2.2-4019 have not been had or have failed to

dispose of a case by consent.” Code § 2.2-4020. Informal procedures under Code § 2.2-4019

were followed in this case, and there was no claim that the Board failed to dispose of the case by

consent. The fact that the presiding member asked Finch questions does not mean that the

                                               -7-
burden was being shifted onto Finch. The presiding member asked probing questions of both

Wolcott and Finch. We decline to hold that this fact-finding exercise was unfair treatment and/or

burden shifting. Further, we find no evidence in the record that demonstrates that the presiding

member treated Finch unfairly in her line of questioning. Having found a prima facie showing of

lack of written consent to advertise under 18 VAC § 135-20-190(E)(4), Finch was free to attempt

to overcome that showing by presenting evidence of consent. The fact that that evidence was

accepted and considered is not unfair burden shifting.

                                           CONCLUSION

       For the foregoing reasons, the decision of the circuit court is affirmed.

                                                                                        Affirmed.




                                               -8-
