ALJDEC decisions subject to certification as final

14F-DI-227-REL · Department of Real Estate · 2015-03-09

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 17, 2015 APPEARANCES: Respondent Lorraine C. Shaw appeared on her own behalf. The Arizona Department of Real Estate was represented by Assistant Attorney General Liane C. Kido. ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer _____________________________________________________________________ FINDINGS OF FACT On or about May 29, 2009, the Arizona Department of Real Estate (“Department”) issued Salesperson License No. SA631520000 to Lorraine C. Shaw (“Respondent”). That license expires on May 31, 2015, and is currently inactive. Respondent was employed by Tierra Antigua Realty, LLC (“Tierra”) from April 11, 2013, through September 9, 2013. On or about February 7, 2014, the Department received a complaint from Kimberly Clifton, Designated Broker for Tierra, advising that a commission check was received by their office for a transaction not in the brokerage’s filing system. Ms. Clifton reported that Tierra received the check from Meritage Homes on January 28, 2014. Following an internal investigation, Tierra was able to determine that the commission check was issued for a July 2013 “new construction purchase” in which Respondent was involved. Ms. Clifton provided documents related to the July 2013 transaction including the following: a. New Home Purchase Agreement b. Broker Registration and Commission Addendum c. HUD-1 Final Settlement Statement d. Commission Check

The executed Broker Registration and Commission Addendum indicated that Respondent represented the Buyers. The HUD-1 Final Settlement Statement indicated the “commission paid at settlement” on January 27, 2014, to Tierra in the amount of $9,074.28. On March 3, 2014, the Department sent a notice to Respondent indicating that the Department had initiated a complaint against Respondent for alleged unlawful license activity for performing real estate activity outside your employing brokerage, Tierra. That notice was returned by the United States Postal Service with a label that read “Forward Time Exp/Rtn to Send.” The label also included an alternate address for Respondent. On March 14, 2014, an Amended Notice to include the allegation of failure to notify the Department of a change of address was sent to Respondent. On March 28, 2014, Respondent submitted a response to the Department. In the response, Respondent stated that in July 2013 she was involved in a serious motorcycle accident. Respondent asserted that at the time of the accident, she had been working with three clients including the buyers at issue. Respondent stated that in August 2013, during a three month stay in the hospital, she informed the buyers that she could no longer help them. Further, Respondent indicated that Meritage Homes told her she would have to be employed by the same broker at the time of closing. Because her employment with Tierra ended, Respondent stated that she believed she was no longer a party to the transaction. Respondent also indicated that she merely forgot to inform the Department of her change of address and did not realize the forwarding order had expired. Respondent stated she was under a doctor’s care for clinical depression and Post Traumatic Stress Disorder resulting from the accident. On April 8, 2014, the Department requested additional documentation from Ms. Clifton. In response, Ms. Clifton submitted several email communications between Respondent and Tierra staff members and a copy of the Tierra policy and procedures manual. The Tierra manual provides that “[a]ll executed contracts must be submitted to the office by the close of the following business day.” On December 24, 2014, the Department’s Assistant Commissioner issued a Notice of Hearing & Complaint that gave notice that an evidentiary hearing was scheduled before the Office of Administrative Hearings. The Notice of Hearing informed Petitioner that the Department was seeking the revocation of her salesperson’s license and the imposition of a civil penalty. At the hearing, the Department presented its case through the testimony of Linda Bevins, Investigator, and submitted eight exhibits. The Department asserted in closing argument that it was not seeking revocation of Respondent’s license but felt a $2000.00 civil penalty was appropriate given the circumstances. Petitioner testified on her own behalf and presented the testimony of Gina Mascetti. Petitioner also presented one exhibit. According to Respondent’s testimony, she suffered a severe head injury. Respondent stated she had no complaints prior to the accident and after the accident, she “slowly fell apart.” Respondent testified that she tried to go back to work following the accident, but that she was experiencing increasing confusion and needed assistance completing paperwork she had completed numerous times in the past. Respondent realized she was unable to perform her job duties and left Tierra. Respondent also recounted a series of hospitalizations and treatments for issues resulting from the motorcycle accident. Respondent indicated she has improved, but that she is no where near the person she used to be. Respondent maintained that she had not performed any activities under her real estate salesperson license since she left Tierra and has been supporting herself as a licensed cosmetician. As to Respondent’s failure to notify the Department of her change in address, Respondent testified that at the time of the mailing, she still owned the home to which the letter was sent, but she was going through a divorce and had moved into a different residence. Respondent was unaware the mail would no longer be forwarded. CONCLUSIONS OF LAW The Commissioner has jurisdiction over Respondent and the subject matter in this case. Pursuant to A.R.S. § 41-1092.07(G)(2) and A.A.C. R2-19-119(B), the Department has the burden of proof in this matter. The standard of proof is by a preponderance of the evidence. See A.A.C. R2-19-119(A). The evidence of record established that Respondent failed to maintain a complete record of each transaction because Respondent failed to notify Tierra of the executed contract in violation of A.R.S. § 32-2153(A)(18). The evidence of record established that Respondent failed to timely notify the Department within ten days of a change of residence address in violation of A.A.C. R4-28-301(E) and A.A.C. R4-28-303(D). The evidence of record established that grounds exist to discipline Petitioner’s salesperson’s license pursuant to A.R.S. § 32-2153(B)(2). Pursuant to A.R.S. § 32-2160.01(A), the Department is authorized to impose a civil penalty up to $1000.00 per violation of the applicable statutes and regulations. Based on the specific circumstances, the Administrative Law Judge believes that a $2000.00 civil penalty is excessive, but that a $200.00 civil penalty is appropriate. RECOMMENDED ORDER Within 60 days of the effective date of the Order entered in this matter, Respondent shall pay to the Department a civil penalty in the amount of $200.00, and such payment shall be made by cashier’s check or money order made payable to the Department. 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 shall be five days from the date of the certification. Done this day, March 9, 2015.

/s/ Tammy L. Eigenheer Administrative Law Judge

Transmitted electronically to:

Judy Lowe, Commissioner Arizona Department of Real Estate

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Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826