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Boise Cascade Home & Land Corp. v. Division of New Jersey Real Estate Commission

Decided: November 3, 1972.

BOISE CASCADE HOME & LAND CORPORATION, A DELAWARE CORPORATION, PLAINTIFF,
v.
DIVISION OF THE NEW JERSEY REAL ESTATE COMMISSION IN THE DEPARTMENT OF INSURANCE, DEFENDANT



Seidman, J.s.c.

Seidman

On stipulated facts, each side moves for summary judgment.

Plaintiff Boise Cascade Home & Land Corporation filed a complaint for a declaratory judgment that certain telephone operations conducted by its employees do not violate the New Jersey Real Estate License Act, N.J.S.A. 45:15-1 et seq. , and that the telephone operators need not be licensed either as real estate salesmen or brokers. The complaint also seeks to enjoin defendant Real Estate Commission from interfering with the telephone procedures and from resorting to sanctions against plaintiff.

The narrow issue to be resolved is whether persons hired by the corporate owner of building lots to solicit prospective purchasers by telephone, are engaged in the real estate business so as to require their being licensed.

I

The stipulated facts are these:

Boise Cascade Home & Land Corporation (Boise Cascade), the owner and operator of a large recreation community in the Poconos known as The Hideout, is in the process of constructing recreation facilities and selling to the public over 2400 vacant lots as recreation and vacation home sites.

In November 1970 two licensed New Jersey real estate brokers received permission from the New Jersey Real Estate Commission (Commission), pursuant to N.J.S.A. 45:15-16.1, to engage in promotional sales of Hideout lots in New Jersey; and, since that date, such promotional sales activity has taken place in New Jersey under the supervision of the brokers. Boise Cascade has an office in Clifton, Passaic County, out of which operates a team of about 25 licensed real estate salesmen, employed by and under the supervision of one of the brokers. Clerical personnel and persons other than the salesmen are employees of Boise Cascade.

As a followup to its media advertising, Boise Cascade employs at the Clifton office 15 or 20 persons, mostly girls, whose function it is to make telephone calls to New Jersey residents. A prepared script is recited, reading as follows:

Good (morning-afternoon)

Mr.-Mrs. . This is calling for the Hideout. Are you familiar with the Hideout? It's Boise Cascade Corporation's newest year-round recreational community located in the Poconos of Pennsylvania. We are calling to acquaint residents of (area) with it.

We will have licensed representatives in your area and if you are interested, one could stop by for 10-15 minutes to tell you more about it. You are under no obligation -- again we are just acquainting families with what Boise Cascade Corp. has done.

Would (night) be convenient between (time) and (time) for you and your (husband-wife)? It's only for 10-15 minutes.

If the person called shows interest, an appointment is made for a visit by a licensed representative; otherwise, the

call is terminated. In the exceptional situation where a person, though interested, does not desire to make an appointment, follow-up calls are made by a licensed salesman or broker.

The telephone girls are paid by Boise Cascade at an hourly rate without regard to the number of calls made, the number of appointments made, or the number of sales ultimately consummated. The licensed New Jersey real estate representatives are paid through their employing broker on a straight commission basis on sales actually consummated, as are the Pennsylvania salesmen who show and actually sell the lots.

After an investigation of the telephone procedure with the cooperation of Boise Cascade and its broker, and after an informal conference with Boise Cascade's representatives, the Commission advised that it considered the use of unlicensed individuals making the telephone calls to be a violation of N.J.S.A. 45:15-1, 2 and 3, and that Boise Cascade, its broker and the telephone girls would be subject to the penal and administrative sanctions of N.J.S.A. 45:15-17, 18, 23 and 24 in the event the practice continued. As a result Boise Cascade halted the use of its telephone procedures in New Jersey, rather than risk prosecution.

If required to comply with the position taken by the Commission, Boise Cascade must either discontinue permanently its telephone procedures and have only licensed real estate salesmen employed by the broker perform this function, or bear the expense of financing the required schooling and licensing of its telephone operator employees.

II

The court was of the view that the stipulated facts did not sufficiently detail the operations at plaintiff's Clifton office. Unanswered were such questions as: Who operated that office? Who hired and instructed the girls? Under whose supervision did they function? What relationship was

there between plaintiff, the telephone girls, the salesmen and the brokers? At the court's request, plaintiff sought to answer these questions by producing as a witness William J. Murphy, III, its regional manager, or coordinator of sales activities, for New Jersey. There is no reason to doubt his testimony.

Murphy explained that Boise Cascade rents office space in Clifton, and that a real estate broker maintains a sub-office on the premises. All the operating expenses, including rent, electricity and telephone are paid by Boise Cascade. The telephone room manager is responsible for hiring and training the ...


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