WRITTEN COMMENTS
(PART ONE)
on
PROPOSED REGULATION
815 KAR 6:090
Procedures for complaints and administrative hearings
Submitted By:
STEVEN H. KEENEY, ESQ.
HI-2055
January 25, 2016
The following are written comments on proposed regulation 815 KAR 6:090. Comments are identified by numbered paragraphs for ease of reference in the Statement of Consideration and also by subsection number, with a brief heading.
Comments on each proposed regulation are submitted separately for the sake of simplicity.
Thank you for your consideration.
Summary
Overall, this regulation is a poster child for the accredition of bad habits into rules that drifted into conflict with statute and procedures contrary to the Board’s governing law.
As a result, the regulation rewrites the governing statutes in not one or two, but roundly a half dozen places – including refusing routine license renewal as a disciplinary punishment (as opposed to revoking or suspending licenses as the statute provides), pretending they can subpoena or order production of documents (when subpoena power was expressly denied the Board), trying to avoid the hearings under KRS 13B and due process, and rewriting the statutes for imaginary “registration” of education providers (nowhere in the law) instead of course approval, and then proposing to “discipline” providers, with no statutory authority whatsoever.
Not to mention ignoring basic protections in the law, such as requiring some minimum “standing” (like an injury or a negligent job), failing to notify inspectors when a Board action is on the agenda, sidestepping coordination with the inspector’s KRS 411 “right to cure,” trying to slam-dunk inspectors with shrunken time limits, and ducking coordination with the Commission on Proprietary Education for educational providers, to name just a few examples.
Unlike the other regulations, the Complaint Hearing regulation was entirely new. So you might think the Board would carefully study how other, older home inspector licensing boards do the job. Instead, the Board just made this whole regulation up. It was not built on the years of careful study and research the original Board devoted to writing regulations in roundly the first four years of the Board’s work. In fact, this regulation was built on zero research and study. Not one memo compared procedures for complaints and administrative hearings at other state home inspector licensing boards – the kind of comparative study the first Board did all the time. It is fair to say the Board writing this regulation was totally ignorant of complaint procedures for home inspectors anywhere else. The result shows it. Similarly, Board staff never produced a single memo comparing this complaint procedure with those for other Kentucky licensing boards for real estate professionals. At one Board member’s request, I produced a draft regulation basically cloning the Kentucky Real Estate Commission complaint procedures, which are long-standing and thoroughly cleaned up with years of litigation. But hardly any Board members even read it – because it was “too detailed” or “too long.” Not reading regulations, of course, is exactly the problem that caused the Board to amend and rewrite these regulations two or three times in the space of a year, and still mess up the job.
Instead, when it comes to home inspectors and education providers, the regulation asserts power the Board does not have and mainly seeks to avoid any limits on its actions at all. Time after time, this is contrary to, or inconsistent with, the statutes the Board is duty-bound to carry out.
At the same time, while there are a few improvements in actual process that applied before the regulation existed, it falls far short of its purpose – laying out the step-by-step process taken by complainants, home inspectors, and the Board in the course of adjudicating complaints.
Further, sadly, while it sets out pages of procedures to “discipline” everyone working to comply with the licensing law – including some the Board has no authority at all to “discipline” – it totally avoids coming to grips with unlicensed “wannabe” home inspectors.
The persistence of unlicensed home inspections is the largest problem discrediting the Board, not just in the eyes of home inspectors and real estate agents. But the failure to cope with it in this regulation reflects the Board’s parallel failure to take the first unlicensed home inspector off the streets in its roughly 10 years of operation. Indeed, in a bitter irony, it is still chasing the first unlicensed home inspector it ever issued a cease and desist order against, over half a decade ago – on the complaint of a home inspector now leaving his job as chairman of the Board. The whole time, the Board has steadfastly refused to learn from other functional licensing board how they succeed in taking quacks off the streets. The result is a regulation, at Sec. 8, that is nothing more than a tidbit of the statute, which the Board has failed to carry out or enforce.
Finally, when this regulation (815 KAR 6:090) initially was considered by the Board, the Board asked that I not oppose it or file written comments. I agreed, in exchange for the Board’s promise at the Oct. 14, 2014 meeting to fix the gaps in the regulation, particularly as to unlicensed home inspectors. I kept my word, but this is nowhere near the fixes any of us had in mind at that time.
Specifically, by subsections:
1. Sec. 2(1) – Sanctions Listed Exceed the Disciplinary Statute and Confuse License Renewal with Licensee Misconduct. The sanctions itemized in Sec. 2(1)(a)-(g) are inconsistent with those itemized by the statute, KRS 198B.706(12). “Denying issuance” of a license is not authorized, for example. Neither is “refusing to renew” a license.
The Board may not arrogate powers to itself not granted by the General Assembly. An administrative body has no “competent jurisdiction” other than what is conferred upon it by statute. Dept. for Nat. Res. & Environmental Protection v. Stearns Coal & Lumber Co., 563 S.W.2d 471 (Ky. 1978). “Administrative agencies are creatures of statute, and as such the statute must warrant any exercise of authority which they claim.” Curtis v. Belden Electronic Wire & Cable, 760 S.W.2d 97, 99 (Ky. App. 1988). “Any doubts concerning the existence or extent of an administrative agency’s power should be resolved against the agency.” United Sign, Ltd. v. Commonwealth, 44 S.W.3d 794, 798 (Ky. App. 2000). “Powers not conferred are just as plainly prohibited as those which are expressly forbidden.” Louisville and Jefferson County Planning Commission v. Schmidt, 83 S.W.3d 449, 460 fn.14 (Ky. 2001), quoting Allen v. Hollingsworth, 56 S.W.2d 530, 532 (Ky. App. 1933).
KRS 13A.120 states, in pertinent part:
(2) An administrative body shall not promulgate administrative regulations: ….
(d) When the administrative body is not authorized by statute to regulate that particular matter;….
(g) On any matter which is not clearly within the jurisdiction of the administrative body;….
(h) On any matter which is beyond the statutory authorization of the administrative body to promulgate administrative regulations or which is not clearly authorized by statute; and
(i) Which modify or vitiate a statute or its intent.
(4)Any administrative regulation in violation of this section or the spirit thereof is null, void, and unenforceable.”
Accordingly, these portions of the regulation are null and void, pursuant to KRS 130A.120(4) and should be eliminated.
Further, it is a serious error to blur the distinction between license issuance or renewal, and complaints about licensees. They are governed by separate statutes. Accordingly, they should be the handled under separate procedures reflecting the different criteria and statutory requirements for issuing a license or renewing a license (or denying either one) versus punishing misbehavior in disciplinary actions against licensees.
The two never should be confused.
2. Sec. 2(2) – Standing for Complaints. The requirements for a complaint against a licensee fail to require (1) any showing of damages of any kind, and (2) any relationship to the home inspector. (Compare, for example, 201 KAR 11:190 Sec. 1(1)(d), “The Complaint shall…(d) Include a completed damages claimed form, with a copy of each receipt, estimate, or other evidence of damages attached to the report.”)
In the past, the failure to require even minimal standing has allowed the Board to accept, e.g., complaints by the nephew of a client of a home inspector, with no contractual relationship to either the inspector or the home inspected and no interest of any recognizable kind in te home inspection report.
Generally, as a matter of both fundamental fairness and administrative efficiency, the regulation should be clear that the Board will not entertain complaints where the complainant is unharmed, or where the complainant has no contract with the inspector and no interest in the transaction that is materially adversely affected.
Further, the Complaint Form, KBHI-7, fails to require crucial information concerning (1) the existence of an inspector’s “right to cure process” under KRS 411.270 to 411.282 (“KRS 411″), or (2) any lawsuit or other complaint filed in any other forum (such as the Attorney General, under the Kentucky Consumer Protection Act).
Please see also comment #5 re. Sec. 2(3)(d), below.
3. Sec. 2(3) – Production of Documents Cannot Be Ordered. The Board always has been denied subpoena power by the General Assembly. Accordingly, the Board has no authority to command the production of documents by regulation, as Sec. 2(3) purports to do.
Sec. 2(3) usurps power and authority not vested in it and previously denied it by the General Assembly.
4. Sec. 2(3) — Response Time Unfairly Short. The response time provided (21 days from the date the initiating complaint was mailed – not received) – is unfair and inconsistent with, for example, Sec. 5(1)2(b), which properly uses 20 calendar days from receipt.
Under a limit as short as 20 calendar days, respondents should have not less than the full 20 days to respond. This is especially the case where, as here, the Board wishes to limit any hearing “to the specific issues identified in the request for an administrative hearing” under Sec. 12.
5. Sec. 2(3)(d) – Giving Effect to KRS 411 “Right to Cure.” This subsection partially incorporates the home inspector “right to cure” provided by KRS 411. The problem is that it fails to specify what takes place next, if the KRS 411 right to cure process is underway, if anything happens at all.
The board previously has held a complaint in abeyance pending the conclusion of a KRS 411 process or the final order in a civil lawsuit. Those provisions should be part of this regulation.
Conformity with the provisions of KRS 411 would require that the home inspector be given the opportunity – and time – provided in KRS 411 to fulfill its purposes, before any complaint is entertained. Alternatively, a rule to th same effect, holding complaint in abeyance pending completion of the KRS 411 process, would serve that purpose.
Further, as written, the subection is inconsistent with the Board vote on that subject. ______.
6. Sec. 2(4) and Sec. 2(5)(c) – Notice of Pending Board Action. Home inspectors should be notified, and have the opportunity to appear, when the “complaint screening committee” reports its “findings and recommendations” to the Board (subsection 2(4)) and when the Board acts on an investigator’s report (subsection 2(5)(c)).
Very little could be more important to a licensed home inspector than that Board vote. To fail to notify the responding home inspector, and functionally keep the Board discussion and vote secret from the licensed home inspector, is fundamentally unfair and a breach of due process. It also has encouraged personal, sometimes anti-competitive, actions. This is doubly important where there has been no “investigation,” within the meaning of Sec. 2(4)(b), which is very common. The Board currently has no “investigators,” as it did originally, under the Department of Housing, Buildings, and Construction. The regulation should be clear that a home inspector defending against a complaint has a right to address the Board before it votes.
7. Sec. 2(4) and 2(5)(d) – No Prejudice. Basic Fairness. The rule that an investigator who “is a member of the board … shall not vote on the final action” is fundamental. Otherwise, the procedure would have a “prosecutor” who already has found guilt (or innocence) judging. That could not be unprejudiced or impartial. It follows that the same rule should apply to any Board member on the “complaint screening committee” who recommends action. They already have made up their mind too. As prosecutors, they cannot judge fairly and impartially. As written, the same prejudiced result is just as inevitable, and unfair. Since a majority of the “complaint screening committee” has always been home inspectors, this rule also raises the concerns of anti-competitive, self-serving conduct described in North Carolina State Board of Dental Examiners v. Federal Trade Commission, 135 S.Ct. 1101, 191 L.Ed.3d 35 (2015). It is a mistake to go there, as Board counsel briefly explained to the Board at the December, 2015 meeting with respect to the Jones complaint.
Home inspectors and the public, alike, are entitled to a complaint process that is trustworthy for fairness and above reproach for impartiality and prejudgment.
8. Sec. 2(6) – Proposed Discipline and 13B Hearing Requirement. This subsection’s process is in conflict with KRS 198B.730(1), which requires that KRS Chapter 13B “shall govern the board’s conduct of disciplinary hearings.” One remedy might be to clarify the language so that the “notice of disciplinary action” is clearly a “proposed” disciplinary action, which requires amending this section.
Then it should also be clarified that a 13B disciplinary hearing, as required by KRS 198B.730(1) is not an “appeal” – as Sec. 2(8) labels it – inconsistently with Sec. 2(7), which correctly calls it a request for an “administrative hearing.”
This is the only hearing that even approximates any due process procedure, which is among the reasons it is required by statute.
The Board lacks any authority to rewrite, or add to, or subtract from, the statutes. Any regulation that does so is null and void. KRS 130A.120(2), (4) (quoted above).
9. Sec. 2(8) – “Effective Date.” This is the only provision giving the effective date of a disciplinary action – but it is limited to giving the effective date only for disciplinary actions where there is no hearing.
The effective date of any disciplinary action should be crystal clear. Parties should not be stabbing in the dark to guess at the date when an action takes effect.
The effective date of a disciplinary action should be either “the expiration of the time for the licensee to request an appeal” (or, more correctly, an “administrative hearing”), as subsection 2(8) provides, or – in the case of an administrative hearing, the date given in a final order after settlement (under Sec. 3) or the first day after after expiration of the appeal period for an final order entered after a hearing.
10. Sec. 2(10) – Withdrawing Complaints. The problem here is that a good idea – letting complainants withdraw complaints – gets hamstrung with counterproductive time limits for a withdrawal.
The regulation sets out the best general rule, that a “complainant may withdraw a complaint, and thereby render the complaint null, void, and without effect.” This has the salutory effect of encouraging licensees and their clients to resolve any differences efficiently. It also is a practical way to focus Board time and resources, since complainants who settle their cases almost always will not testify at hearings and also have signed confidentiality agreements.
That’s good. But the rest of this regulation counterproductively complicates the rule, for no useful purpose.
It is pointless, and contradictory, to limit the chance to withdraw a complaint to the time before an answer has been filed – as does subsection 2(10)(a). What possible purpose is served by limiting a complainant from withdrawing a complaint at practically any time?
The window to withdraw before an answer is filed would be no more than 21 days after the inspector was mailed a notice of the complaint under subsection 2(3). Does the Board really want inspectors to be discouraged from resolving complaints 22 days or more after a notice is mailed to an inspector?
As mentioned below (at Comment 21.3), this get even more hogtied because the regulation says nothing about complaints filed while there also is a lawsuit going on in court.
With that in mind, subsection 2(10)(b) is even more pointless, and only complicates things more. The time that subsection (10)(b) provides to withdraw a complaint is within the same time allowed under subsection (10)(a), but much shorter than the time in subsection 2(10)(a), for no reason at all. If a complainant can withdraw before an answer is filed, that window includes the shorter 20 day window from filing the complaint. Subsection 2(10)(b) is a useless appendage that should be deleted..
While there always is a place for the special provision in subsection 2(10)(c) – calling for Board approval to withdraw a complaint – that place is way too early in the proposed process. A better time would be the date a 13B hearing is requested, for example.
In effect, the Board is saying inspectors should give up trying to satisfy the client once the inspector files an answer to the complaint. But that cannot be in the public interest. Rather, the Board should prefer incentives for all involved to find satisfactory solutions, in part by allowing withdrawal at any time prior to a final decision.
This rule should be simplified by eliminating subsections 2(10)(a) and (b).
11. Sec. 3 – Settlement Anywhere Useful. There is no rational reason that “settlement by informal proceedings” should be limited to complaints “in Section 2.” Consequently, the rule is arbitrary and capricious. Informal proceedings should be available for all complaints, disciplinary actions, and like proceedings.
12. Sec. 4 – Disciplinary Action Limited to “Licensees.” Educational Decisions Limited to “Courses.” Sec. 4 directly contravenes the statutes. The board’s statutory authority to conduct disciplinary actions is limited to “licensees.”
There is no statutory authority for “disciplinary actions against a prelicensing provider or a continuing education provider,” as this subsection purports to create.
Indeed, there is no such thing as “the registration” of a prelicensing course provider or a continuing education provider.
Blurring in educational provider with licensees has no basis in KRS 198B.700 to 738.
“KRS 198B.738 – Disciplinary actions” provides “The board shall take disciplinary actions against or impose sanctions on a licensee” only [emphasis added].
KRS 198B.706(12) provides the powers of the board are limited to “conduct[ing] disciplinary actions against licensees….”
KRS 198B.724 provides that the “board shall promulgate regulations concerning the continuing education required for the renewal of a home inspector license and shall: (1) Establish procedures for approving organizations that provide continuing education; and (2) Prescribe the content, duration, and organization of continuing education courses that contribute to the competence of home inspectors.”
KRS 198B.706(2) provides the “board shall:…(2) Grant, deny, suspend and revoke approval of examinations and courses of study regarding home inspections.” [Emphasis added.]
That which is not expressly delegated to an administrative board is prohibited. “Any doubts concerning the existence or extent of an administrative agency’s power should be resolved against the agency.” United Sign, Ltd. v. Commonwealth, 44 S.W.3d 794, 798 (Ky. App. 2000). “Powers not conferred are just as plainly prohibited as those which are expressly forbidden.” Louisville and Jefferson County Planning Commission v. Schmidt, 83 S.W.3d 449, 460 fn.14 (Ky. 2001), quoting Allen v. Hollingsworth, 56 S.W.2d 530, 532 (Ky. App. 1933).
Accordingly, Sec. 4 is “null and void” pursuant to KRS 130A.120(2), (4).
12.2 Sec. 4. – 13B Hearings Necessary. Further, even if the Board were supposed to have some authority to “discipline” educational providers, the process described in Sec. 4, in that case, further conflicts with statute, because no 13B hearing is required under Sec. 4.
KRS 198B.730(1) expressly requires that “KRS Chapter 13B shall govern the board’s disciplinary hearings.”
12.3 Sec. 4. – Drafting Error Omits CE Providers. In addition, Sec. 4 purports to apply to “a Prelicensing Provider or Continuing Education Provider.”
But the very sentence – and then the rest of the subsection – is limited to Sec. 4(1), which omits “Continuing Education Providers.” Subsection 4(1) says “The board may deny, suspend, or revoke the registration of any prelicensing provider for” offenses list in subsections (a) through (l) – without one word about continuing education.
Perhaps it is no coincidence that a majority of the Board members who voted for this regulation are past or present officer, directors, or leadership of the same educational provider – a provider that provides only CE courses, and no prelicensing education.
12.4 Sec. 4 – Conflict with Ky Law and Other Regulation. The regulation seems to have forgotten that providers and schools are regulated by the Kentucky Commission for Proprietary Education (“CPE”), under the Kentucky educational system created by the General Assembly. It is out of order for the Board to attempt to alter that.
In fact, 815 KAR 6:040 Sec. 1(3) requires a certificate of approval from the CPE where it is required by state law for prelicense providers (but not CE providers). It is settled that the result was regulation of schools, policies, overall faculty, and the like fell under the CPE for schools licensed by it. For those providers, at least, only “courses” – precisely as KRS 198B.706(2) puts it – are subject to Board authority, and then only to the extent they are credited for home inspector licensing.
This section has multiple conflicts with state law, vastly exceeds the Board’s statutory authority, and fails to coordinate with other state laws, regulations, and commissions.
13. Sec. 5. – Administrative Hearings Do Not Equal “Appeals.” Like Sec. 4, Sec. 4 also omits a KRS Chapter 13B hearing, though it makes reference to an”administrative hearing” and an “appeal.” This closely resembles the same unclear language in Sec. 2(6).
14. Sec. 6. – Revocation Ambiguous; Grounds Unstated. If revocation of probation for a home inspector is an option, then the grounds for revocation and the consequences should be express and clear.
Yet this section fails to even suggest how revocation of probation might be initiated. It is unclear if the “Complaint Form, KBHI-7″ would be required to initiate a revocation proceeding. The Complaint Form KBHI-& is silent.
No home inspector facing revocation of probation should have to guess what the rules are, or how it works. That is fundamentally unfair and inconsistent with applicable law.
15. Sec, 6 – 13B Hearings Missing Again. Like Sec. 4 and 5, the probation revocation procedure omits mention of a KRS 13B hearing. Surely a 13B hearing would be required by KRS 198B.730(1).
16. Sec. 7. – Summary Suspension Improperly Clones Statute. The entire summary suspension regulation is nothing beyond a regurgitation of the basic statute, KRS 198B.730(2) – word for word..
This is not just pointless and specious, it is dangerous. It creates the misimpression, and temptation to believe, that the Board can amend statute by amending its carbon copy regulation.
Regulations are meant to fill in details and carry out statutes. If a board can do no more than carbon copy its own statutes, there really is no reason for the Board to exist.
Any claim that the statute “is the procedure” actually is a claim the Board is unnecessary. Come to think of it, that’s pretty much the story of the Board putting a stop to unlicensed home inspectors who are stealing business from licensees working to the following the law and simultaneously risking the safety and financial security of Kentucky home buyers, as Comment 17 below discusses a little further.
17. Sec. 8 – Unlicensed “Inspector” Procedure Mashes Civil and Criminal Enforcement. The section is little more than an inartful Mixmaster mashup of KRS 198B.730(3) and KRS 198B.732, again regurgitating statutes, as if the Board could write or rewrite state law.
Here, the rewrite is particularly convoluted, not to mention inconsistent with parts of state law where it attempts to blend a criminal statute, KRS 198B.732, with a civil proceeding, KRS 198B.730(3). This is not just awkward, it is impossible.
In this case, it is particularly offensive, because the Board has yet to put the first unlicensed home inspector out of business. Instead – under this exact statutory language, which it has shown no clue how to carry out – the Board has engaged in a Keystone Cops chase of Ray Rumancik year after year. So this regurgitation of state statute is now just meaningless, it starkly illustrates the Board’s inability to implement a process that will, in fact, carry out the command of the General Assembly to stop unlicensed practice of home inspections.
The only difference between KRS 198B.730(3) and Sec. 8 of this regulation is the opening clause of Sec. 8, requiring a “written complaint” on a “board-approved forms [sic] that require notarized statements under the penalties of perjury.”
That requirement is particularly noticeable for two reasons:
(A) First, no such form is provided or incorporated by reference – as are all the other forms mentioned in this regulation and all the other proposed regulations here. It is the only form mentioned in all the new regulations that no one bothered to write.
(B) Sitting members of the Board (and others) told the Board in regular session that they knew of other unlicensed home inspectors in their areas – and the Board did nothing, as a result, to fulfill the General Assembly’s command to end unlicensed home inspections.
A faux regulation, or mock regulation, is worse than no regulation at all.
More troubling, like the same problems with Sections 7 and 9, administrative boards that “re-enact” statutes as regulations soon come to believe they can rewrite and amend the statute, as their own regulation, entirely contrary to law.
18. Sec. 9. – Circuit Court Enforcement Improperly Amends Statute by Regulation. This provision deliberately rewrites KRS 198B.730(4). That statute provides a “cease and desist order …shall be enforceable in a Circuit Court of the Commonwealth.” The regulation would amend that statute, though without superficially contradicting it, to add the twist that all C&D orders can be enforceable in the Franklin Circuit Court (“the circuit court of the county where the board’s office is located”) or any other circuit court in the state.
This is a bold forum shopping provision, contrary to prevailing law – for either civil or criminal enforcement of the licensing law. It also is contrary to what the General Assembly must be considered to have intended when it wrote the statute. Statutes saying a law is “enforceable in a Circuit Court” are universally understood to mean they are enforceable in the circuit court where the perpetrator violated the law (unless the General Assembly specifically says otherwise).
While I might, frankly, agree that good reasons exist that make the circuit court of the county where the violation occurred a disadvantageous forum for the Board to prosecute, the General Assembly must be presumed to have understood those issues when it wrote KRS 198B.730(4). The Board is not at liberty to amend it by regulation. I support amending the statute to provide for bringing C&D enforcement actions in the Franklin Circuit, but the statute cannot be amended by regulation.
19. Sec. 11 – Use of the word “appeal” here again is a misnomer. This refers to the one and only actual “administrative hearing” for any proposed disciplinary action or sanction(s). The first hearing on any action is not an “appeal.” Sec. 2(8) makes this a necessary, since it provides the “effective date” of a proposed adverse action is the expiration date of the time to request an “appeal”/administrative hearing.
20. Sec. 12 and Sec. 2(7) – Limiting Hearing Issues Before All Issues Are Known is Unfair to Inspectors. “Appeal” and administrative hearings cannot fairly be limited to “the specific issues ..identified in the request for an administrative hearing,” as this regulation provides specially in Sec. 12, and by implication from that, in Subsection 2(7). Often, the Board has changed or expanded its statement of facts in 13B hearings, well after the “request” for hearing has been filed and an administrative law judge appointed. Equally often, the Board’s Notice of Administrative Hearing, always subsequent to the request for hearing, likewise supplies facts or assertions of law not known at the time the request for hearing must be filed.
The limitations in these two sections works principally as just one more way to take away routine protections for home inspectors in disputes with the Board. It should be removed or, alternatively, the Board should likewise be confined to the facts and law it states in the notice of proposed action that it gives a licensed inspector.
21. Silence Is Not Golden – What is Missing. On top of all those problems, this regulation fundamentally fails in its stated purpose – to provide a fair set of rules so everyone knows how it works in advance. Instead, the regulation really sets out no authentic complaint procedure at all.
In place of procedural steps from start to finish, that inspectors and the public can look up and follow, this regulation is all about the Board. Nowhere does it lay out the rights and steps taken by home inspectors facing complaints and others bringing complaints.
Home inspectors should have an absolute right to have complaints dismissed that are frivolous, or that are filed for improper purposes (like extorting money from inspectors, which I see too often). Normally, those are brought up with “motions” – but there is nothing about motions in this procedure.
Similarly, home inspectors should have an absolute right to have complaints dismissed when they injured no one (“no harm, no foul”) or when they have no contract or connection in the real estate transaction to the person filing the complaint.
Inspectors should not be put upon to waste time and lose business answering those kinds of complaints. But the regulation, as proposed, would require just that.
21.1 – Definite Standing Rules for Complainants. The regulation seems to say that, literally, anyone anywhere can bring a complaint. But this cannot be the law, or fair.
The regulation should clearly require a showing of some damage or injury to the complainant as a requirement for the Board to entertain a complaint. Otherwise, “no harm, no foul.” Compare, for example, 201 KAR 11:190 Sec. 1(1)(d) (“The Complaint shall…(d) Include a completed damages claimed form, with a copy of each receipt, estimate, or other evidence of damages attached to the report.”)
The regulation also should clearly require some meaningful relationship between a home inspector and anyone filing a complaint. There should be no doubt my grandmother cannot file a complaint against any home inspector on the Board – people she never met, never contracted with, and never engaged in a real estate transaction affected by them. There has to be a limit. A home inspection license is not a “free fire zone.”
21.2 Real Procedure & Motions. The regulation does not say a word about basic procedure in a complaint process, like filing motions and what happens when they are. A motion to dismiss, at the very beginning of a complaint, for example, is a important tool to save everybody time. The majority of complaints have been dismissed by the Board each year. Yet the regulation is completely silent on this important procedural protection.
There is not one word about motions of any kind in the entire complaint procedure regulation. As just one more example, motions to rehear a case that a party thinks is wrongly decided also serve a useful function, like motions to dismiss. Both usually save extraordinary costs in time, money, and business disruption.
Currently, the Board, more often than not, just does nothing when a home inspector files a motion to dismiss. It literally has no clue what to do – because the rules are dead silent.
21.3 Overlapping Cases. Failure to address the procedures that apply when a civil lawsuit already is going on at the time a Board complaint is filed, which is common, or when a complaint is filed in the middle of the home inspector’s statutory “right to cure” problems under KRS 411.270 to 411.282 leaves a huge hole in the “procedure.”
The regulation and procedure are fatally defective if this failure to coordinate state law and civil litigation is not expressly resolved.
Similarly, it would be wise to directly address what happens what a complaint is filed in violation of a contract right, such as an arbitration agreement.
21.4 Dismissal. The Board does not appear willing to be bound even by its own dismissal of a complaint – or is fundamentally conflicted about dismissal.
Subsection 2(11) provides that “a complaint that has been dismissed shall not be refiled or reheard.” That’s the general rule.
But then, in contrast, subsection 2(4)(a) says that the Board sometimes “shall: (a) Dismiss the complaint and notify the person making the complaint [usually known as the “complainant”] and the licensee that no further action shall be taken at the present time.”
That is like the Board speaking out of both sides of its mouth. On the left side, “dismiss” means it is over and the complaint “shall not be refiled or reheard.” On the right side, the Board seems to reserve some right to take further action at some later time. What else could that gobbeldygoop after “dismiss the complaint” mean? What does the next phrase – “no further action shall be taken at the present time” add to, or subtract from, “dismiss.”
And subsection 2(5)(e) says that once an investigation finds no violation of the statutes or regulations, “the board shall notify the person making the complaint [often known as the “complainant”] and the licensee that no further action shall be taken at the present time.”
The Board cannot have it both ways. “Dismiss” means it is over, and the regulation should create no doubt.