ALJDEC decisions subject to certification as final

14F-DI-234-REL · Department of Real Estate · 2015-05-29

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: May 11, 2015 APPEARANCES: Respondent Kirsten McCaffrey was represented by Patrick MacQueen. The Arizona Department of Real Estate was represented by Assistant Attorney General Lynette Evans. ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer _____________________________________________________________________ FINDINGS OF FACT On or about August 25, 2011, the Arizona Department of Real Estate (“Department”) issued Salesperson License No. SA640979000 to Kirsten McCaffrey (“Respondent”). That license is currently active and expires on August 31, 2015. On or about October 7, 2011, Respondent signed a rental lease with Bourquin Residential Group/Keller Williams Realty Biltmore Partners. On or about November 12, 2012, Respondent signed a Notice of Lease Change. On or about March 7, 2014, Scott Kiburz, a designated broker for Keller Williams Realty Biltmore Partners, submitted to the Department a Self- Report of Violations. In the report, Mr. Kiburz stated the following: a. Respondent began working as a bookkeeper for Will and Terri Bourquin, Bourquin Residential Group (“BRG”), in March 2010. b. In April 2012, BRG joined Keller Williams Realty Biltmore, and Respondent went with them as a bookkeeper. c. Respondent was a bookkeeper for Keller Williams Realty Biltmore from April 2012 to August 2013. d. In August 2013, Respondent left her position as a bookkeeper to become a full-time salesperson. e. The person who took over Respondent’s duties noticed some discrepancies in Respondent’s monthly rental payments. f. Following an internal audit of Respondent’s rental payments, journal entries, owners’ operating trust account, and the property management account assigned to Respondent, Mr. Kiburz determined that Respondent had made a “series of journal adjustments to divert funds” from the operating trust account to cover Respondent’s monthly rental payments. g. Respondent failed to make her monthly rental payments over a period of several months and the total amount of the diversion was $14,818.94. h. Respondent repaid the trust account in full by August 2013 prior to leaving her position. i. On December 13, 2013, Mr. Kiburz and Will and Terri Bourquin met with Respondent. During that meeting, Respondent admitted that she had diverted funds and created false journal entries to cover up her actions. On April 1, 2014, the Department sent a letter to Respondent requesting a written statement responding to Mr. Kiburz’ report. On April 4, 2014, the Department received a statement from Respondent. In the statement, Respondent admitted that she had falsely receipted her monthly rent payments from April 2012 through January 2013 and did not deposit the payments totaling $14,818.94 until July 2013. Respondent asserted that she recorded the shortage as unreconciled deposits when BRG changed banks to ensure that she could keep track of how much she owed. Respondent indicated that her husband was going through a job change and she knew she was unable to change jobs until she repaid the full amount she owed. Respondent stated that she was “extremely remorseful” for her actions and “found [herself] on a slippery slope” after she “allowed an extreme financial crisis to cloud [her] better judgment.” In July 2013, Respondent deposited three cashier’s checks into the trust account to make it whole. On November 12, 2014, the Department’s Assistant Commissioner issued a Notice of Hearing in Docket No. 14F-DI-234-REL that gave notice that an evidentiary hearing was scheduled before the Office of Administrative Hearings. In the Notice of Hearing, the Department alleged violations of A.R.S. § 32-2153(A)(3); A.R.S. § 32-2153(A)(16); and A.R.S. § 32- 2153(B)(7). The Notice of Hearing informed Respondent that the Department was seeking the revocation of her salesperson’s license and the imposition of a civil penalty. At the hearing, the Department indicated it was only going forward with the alleged violation of A.R.S. § 32-2153(B)(7). The Department presented its case through the testimony of Wayne Jackson, Senior Investigator, and submitted ten exhibits. Respondent testified on her own behalf and presented the testimony of Dale Chandler, Joan Kilbey, and Susan Paul as character witnesses. Respondent also presented seven exhibits. According to Respondent’s testimony, she never meant to miss more than one month’s rent and always intended to repay the funds. Respondent asserted that she had no idea her actions as a bookkeeper would have any effect on her real estate salesperson license. Respondent testified that she had been involved with approximately 15 transactions as a real estate salesperson since the incident with no complaints or allegations of wrongdoing. Dale Chandler, Designated Broker with Above and Beyond Realty, testified that Respondent explained the situation to him before he hired her and that he believed it “took a lot of guts to admit I screwed up.” Mr. Chandler stated he would rehire Respondent given an opportunity. Joan Kilbey, Managing Broker with Move Time Realty, testified that Respondent explained the situation to her before she was hired. Ms. Kilbey stated that she was very impressed with Respondent’s talent and dedication. Ms. Kilbey volunteered to serve as a practice monitor if Respondent were given a provisional license. Ms. Kilbey stated that Respondent was not a threat to consumers. Susan Paul, Designated Broker with Move Time Realty, testified that Respondent admitted everything during her interview and was very forthcoming. Ms. Paul stated that Respondent was an active agent and did not engage in any property management duties and did not come in contact with any client funds. 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 falsely receipted rent payments from April 2012 through January 2013 totaling $14,818.94 and did not deposit those funds until July 2013. While Respondent was not acting as a real estate salesperson at the time, her actions reflect negatively on her character. Contrary to Respondent’s assertion, this was not a one-time event. The practice of real estate is governed by adherence to statutes and rules and requires the utmost care by a licensed real estate agent. Respondent’s actions demonstrate her unwillingness or inability to appreciate the consequences of her actions. The evidence of record established that grounds exist to discipline Respondent’s salesperson’s license pursuant to A.R.S. § 32-2153(B)(7).[1] 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 circumstances, the Administrative Law Judge believes that a $1000.00 civil penalty is appropriate. RECOMMENDED ORDER Respondent’s real estate salesperson’s license shall be revoked on the effective date of the Order entered in this matter. 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 $1000.00, 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, May 29, 2015.

/s/ Tammy L. Eigenheer Administrative Law Judge

Transmitted electronically to:

Judy Lowe, Commissioner Arizona Department of Real Estate

----------------------- [1] A.R.S. § 32-2153(B) provides:

B. The commissioner may suspend or revoke a license, deny the issuance of a license, issue a letter of concern to a licensee, issue a provisional license or deny the renewal or the right of renewal of a license issued under this chapter when it appears that the holder or applicant has: . . . . 7. Not shown that the holder or applicant is a person of honesty, truthfulness and good character.

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