ALJDEC decisions subject to certification as final

10F-SD-1025-REL · Department of Real Estate · 2011-03-10

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 23, 2011 APPEARANCES: Assistant Attorney General Lynette Evans for the Arizona Department of Real Estate; Horizon Homes & Construction, Inc. Sally Ann Olsen, and Lars G. Olsen did not appear at the hearing. ADMINISTRATIVE LAW JUDGE: Lewis D. Kowal _____________________________________________________________________ PROCEDURAL BACKGROUND Prior to convening the hearing, the Arizona Department of Real Estate (“Department”) dismissed Kenneth and Donna Patch as parties to this matter. Therefore, the caption of this matter is amended accordingly. Additionally, it was noted when the hearing convened that the caption of the Findings of Fact, Conclusions of Law and Order entered in this matter by the Commissioner of the Department (“Commissioner”) reflected that Sally Ann Olsen (“Mrs. Olsen”) was the holder of license number SA031715000, while the caption in the Notice of Hearing and Complaint issued in this matter (“Notice of Hearing”) showed Mrs. Olsen as an unlicensed individual. The caption of this matter is amended accordingly to conform to the Findings of Fact, Conclusions of Law and Order. While the caption in the Notice of Hearing identifies Horizon Homes & Construction, Inc. (“Horizon Homes”), Mrs. Olsen, and Lars G. Olsen (“Mr. Olsen”) as Respondents, Mr. Olsen and Mrs. Olsen are specifically referred to in the body of the document as Respondents, and Horizon Homes is specifically referred to as the Respondent. At the outset of the hearing, the Administrative Law Judge informed the Department that harmonizing the Notice of Hearing with the Findings of Fact, Conclusions of Law and Order results in finding that Horizon Homes violated two provisions of the State’s real estate laws, as set forth in the Notice of Hearing, ¶12 at 24. At hearing, the Department did not take issue with the ruling. FINDINGS OF FACT 1. On January 19, 2011, the Department issued the Notice of Hearing setting an administrative hearing to be held with the Office of Administrative Hearings. 2. The Notice of Hearing contained allegations regarding the conduct of Horizon Homes, Mr. Olsen, and Mrs. Olsen that the Department claimed were violations of the State’s real estate subdivisions laws. Through the administrative hearing process, the Department sought to have a September 10, 2010 Cease and Desist Order upheld, and have a civil penalty imposed of not more than $1,000.00 for each violation of the State’s real estate laws.

3. On February 17, 2010, the Commissioner issued Findings of Fact, Conclusions of Law and Order deeming admitted the allegations set forth in the Notice of Hearing, upholding the September 10, 2010 Cease and Desist Order, and revoking Mrs. Olsen’s real estate license. 4. Toni Pittman (“Ms. Pittman”), a Senior Investigator with the Department, testified that with respect to the instant matter, there were three parcels of land that were divided and transferred to others involving Horizon Homes, Mr. Olsen, and Mrs. Olsen. According to Ms. Pittman, the transfers ultimately resulted in a number of lots that required Horizon Homes, Mr. Olsen, and Mrs. Olsen to comply with Arizona real estate subdivision laws, which they did not do. 5. Ms. Pittman testified that the transfers of the lots involved Horizon Homes, Mr. Olsen, Mrs. Olsen, and various former or current employees of Horizon, which established that they were acting in concert to avoid the State’s real estate subdivision laws. Ms. Pittman testified that the only individuals who were not former or current employees of Horizon Homes and/or Mr. Olsen and/or Mrs. Olsen were Kenneth and Donna Patch, who were business associates. 6. At hearing, based upon the established facts and conclusions of law, the Department sought the imposition of a $2,000.00 civil penalty against Horizon Homes and the imposition of a $7,000.000 penalty against Mr. Olsen and Mrs. Olsen. 7. No evidence was presented by Horizon Homes, Mr. Olsen, or Mrs. Olsen to refute or rebut the evidence presented by the Department with respect to the appropriate disciplinary action to be taken in this matter. CONCLUSIONS OF LAW 1. Because this matter is disciplinary in nature, the Department has the burden of proof. The standard of proof on all issues is preponderance of the evidence. See A.A.C. R2-19-119. 2. A preponderance of the evidence is “such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960). It is “evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” Black’s Law Dictionary 1182 (6th ed. 1990). 3. The Commissioner has already determined that Horizon Homes violated A.R.S. § 32-2185.01(D) and A.A.C R4-28-804, and that Mr. Olsen and Mrs. Olsen violated A.R.S. §§ 32-2181(A), 32-2183(I), 32- 2185.06, A.A.C. R4-28- 803, and A.A.C. R4-28-805, as set forth in the Notice of Hearing. [1] 4. The above-found violations of law constitute grounds for the imposition of a civil penalty not to exceed $1,000.00 per violation. See A.R.S. § 32-2185.09. 5. The Department established by a preponderance of the evidence that Horizon Home’s conduct, as determined by the Commissioner, constituted acts in violation of a real estate statute and rule as set forth above. Consequently, the weight of the evidence established that $2,000.00 is an appropriate civil penalty to be imposed against Horizon Homes. 6. The Department established by a preponderance of the evidence that the conduct of Mr. Olsen and Mrs. Olsen, as determined by the Commissioner, constituted acts in violation of real estate statutes and rules as set forth above. Consequently, the weight of the evidence established that $5,000.00 is an appropriate civil penalty to be imposed against Mr. Olsen and Mrs. Olsen. ORDER Within thirty days of the effective date of the Order entered in this matter, Horizon Homes is to pay to the Department a civil penalty in the amount of $2,000.00. Within thirty days of the effective date of the Order entered in this matter, Mr. Olsen and Mrs. Olsen are to pay to the Department a civil penalty in the amount of $5,000.00. Mr. Olsen and Mrs. Olsen are jointly and severally responsible to pay the $5,000.00 civil penalty. In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be 5 days from the date of that certification. Done this day, March 10, 2011.

/s/ Lewis D. Kowal Administrative Law Judge

Transmitted electronically to:

Judy Lowe, Commissioner Arizona Department of Real Estate

----------------------- [1] In its closing argument, the Department referred to the specific provisions of law violated by Mr. Olsen and Mrs. Olsen, including A.R.S. § 32-2185.01(D) and A.A.C. R4-28-804. However, in the Notice of Hearing those violations were alleged against Horizon Homes only and not against Mr. Olsen and Mrs. Olsen. The Commissioner’s findings of violations law were based on the Notice of Hearing. Consequently, violations of A.R.S. § 32-2185.01(D) and A.A.C. R4-28-804 were not found with respect to Mr. Olsen or Mrs. Olsen.

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