Pursuant to Ind.Appellate Rule 65(D),
this Memorandum Decision shall not be
regarded as precedent or cited before
any court except for the purpose of
establishing the defense of res judicata,
collateral estoppel, or the law of the case.


ATTORNEY FOR APPELLANT:                           ATTORNEYS FOR APPELLEES:

MICKEY J. LEE                                     GREGORY F. ZOELLER
Stewart & Irwin, P.C.                             Attorney General of Indiana
Indianapolis, Indiana
                                                  KATHY BRADLEY
                                                  Deputy Attorney General

                                                                                FILED
                                                  Indianapolis, Indiana

                                                                            Nov 07 2012, 9:34 am
                              IN THE
                    COURT OF APPEALS OF INDIANA                                     CLERK
                                                                                  of the supreme court,
                                                                                  court of appeals and
                                                                                         tax court




BRIAN GALE WATERS,                     )
                                       )
     Appellant-Plaintiff,              )
                                       )
            vs.                        )                  No. 49A02-1112-MI-1165
                                       )
INDIANA REAL ESTATE COMMISSION et. al, )
                                       )
     Appellees-Respondents.            )


                     APPEAL FROM THE MARION SUPERIOR COURT
                          The Honorable Theodore J. Sosin, Judge
                            Cause No. 49D02-0906-MI-30120


                                        November7, 2012

                MEMORANDUM DECISION - NOT FOR PUBLICATION

MAY, Judge
       Brian G. Waters appeals the denial of his motion for summary judgment. Waters

presents multiple issues for our review, but we find the trial court lacked subject matter

jurisdiction because Waters did not exhaust his administrative remedies before seeking

judicial review.

                      FACTS AND PROCEDURAL HISTORY

       Waters is an Indiana licensed real estate broker and the principal broker of Mentor

Listing Realty, Inc. In 2007, the Indiana Real Estate Commission (IREC) received a

consumer complaint alleging Waters: 1) violated 876 IAC 1-1-24 (the “Closing Attendance

Rule”) when he did not appear at closing; 2) violated Ind. Code § 25-1-11-5(a)(4)(A)

(prohibiting continued real estate practice when practitioner is unfit due to professional

incompetence); and 3) violated Ind. Code § 25-34.1-10-9.5(b)(1)-(3) (addressing failure to

perform minimum required duties of real estate professional). After a hearing, IREC placed

Waters’ real estate license on indefinite probation, but provided Waters could petition for

termination of probation after 180 days.

       On June 25, 2009, Waters filed a petition for judicial review of IREC’s decision. On

February 5, 2010, the trial court affirmed IREC’s decision.

       On August 24, 2010, the Attorney General’s office asked IREC to hold a hearing,

during which Waters would be required to show cause why he should not be subject to

further sanctions because he did not attend four closings in 2010. IREC scheduled a hearing

for December 15, 2010, but on December 9, Waters filed a complaint and motion for

preliminary injunction with the Marion Superior Court, challenging the Closing Attendance

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Rule as unconstitutional. On December 10, the trial court issued a Temporary Restraining

Order, which stayed the IREC proceedings. On December 14, Waters filed for consolidation

of the 2009 judicial review cause and the constitutional cause, and the trial court granted his

request on December 20. Also on December 20, the trial court lifted the Temporary

Restraining Order.

        On January 31, 2011, IREC filed a motion to dismiss Waters’ complaint. On February

16, the trial court held a hearing on IREC’s motion to dismiss and Waters’ motion for

preliminary injunction. On February 28, Waters moved for summary judgment, and on April

4, IREC responded. On April 11, the trial court dismissed Waters’ complaint for injunctive

relief and denied Waters’ motion for preliminary injunction.

        On December 2, the trial court granted summary judgment for IREC. Waters filed a

motion to reconsider on December 7, and the trial court denied that motion on December 9,

2011.

                             DISCUSSION AND DECISION

        Judicial review of administrative actions is governed by the Administrative Orders and

Procedures Act (AOPA), Ind. Code ch.4-21.5-5 when, as here, an administrative remedy is

available, those remedies must be pursued and exhausted before a court may obtain subject

matter jurisdiction over the issues. LHT Capital, LLC v. Indiana Horse Racing Comm’n, 891

N.E.2d 646, 652 (Ind. Ct. App. 2008). Exhaustion of administrative remedies “provides an

agency with an opportunity to correct its own errors, to afford the parties and the courts the

benefit of [the agency’s] experience and expertise, and to compile a record which is adequate

                                              3
for judicial review.” Johnson v. Celebration Fireworks, Inc., 829 N.E.2d 979, 982 (Ind.

2005). The circumstances under which a party may bypass administrative remedies are

narrow, and apply when a party has shown the administrative agency cannot provide a

remedy or when exhaustion would be impossible under the circumstances. LHT Capital, 891

N.E.2d at 654. The “fact that an administrative agency might refuse to provide the relief

requested does not amount to futility.” Johnson, 829 N.E.2d at 984.

       Exhaustion is required even if a party raises constitutional claims, as the agency might

resolve the case on other grounds without confronting the constitutional issues. Id. at 982.

The presentation of constitutional claims does not automatically preclude an administrative

remedy. State ex rel. Basham v. Medical Licensing Bd. Of Ind., 451 N.E.2d 691, 696 (Ind.

Ct. App. 1983), reh’g denied.

       Waters argues the facts of the instant case are akin to those in Ind. Dep’t of Envtl.

Mgmt. (IDEM) v. Twin Eagle, LLC, 798 N.E.2d 839, 844 (Ind. 2003), and Austin Lakes Joint

Venture v. Avon Utils., Inc., 648 N.E.2d 641, 644 (Ind. 1995).            Both decisions are

distinguishable.

       In Twin Eagle, our Indiana Supreme Court held Twin Eagle was not required to

exhaust its administrative remedies before seeking judicial review because “at least the first

two of these issues [brought by Twin Eagle] turn on issues of law.” Twin Eagle, 798 N.E.2d

at 844. That Court noted there were certain factual issues, specifically whether the waters

IDEM sought to regulate were within its regulatory reach, that must be reviewed at the

administrative level; the legal issues properly brought before the trial court were based on

                                              4
IDEM’s jurisdiction to regulate, not the regulations as codified.

       Our Indiana Supreme Court again held in Austin Lakes the exhaustion of

administrative remedies was not required. There, the action brought before the trial court did

not name the administrative agency as a party; instead the issue of exhaustion of

administrative remedies was used as an affirmative defense by Avon Utilities as part of the

breach of contract action by Austin Lakes. Judicial determination was appropriate because

the claim was not one alleging error by the administrative agency; it was a claim of breach of

a contractual obligation. Austin Lakes, 648 N.E.2d at 649.

       In the instant case, IREC filed an action at the administrative agency level for Waters

to show cause why he should not be sanctioned for failing to attend real estate closings

pursuant to the Closing Attendance Rule. After being granted two continuances and denied a

third, Waters filed a complaint and motion for preliminary injunction in the Marion Superior

Court. There is nothing in the record to indicate Waters argued before IREC the Closing

Attendance Rule was unconstitutional, and therefore IREC was not given the opportunity to

consider Waters’ challenge to its show cause action.

       For these reasons, we conclude Waters has not demonstrated the IREC was unable to

provide a remedy to Waters by addressing the underlying factual issues of the case in lieu of

deciding the constitutional issues he presented, Waters did not exhaust his administrative

remedies, and the trial court did not have subject matter jurisdiction. Accordingly, we

reverse and remand this matter to the trial court with instructions to dismiss Waters’

complaint for lack of subject matter jurisdiction.

                                              5
      Reversed and remanded for proceedings consistent with this opinion.

NAJAM, J., and KIRSCH, J., concur.




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