ALJDEC decisions subject to certification as final

19F-261-REL-RES · Department of Real Estate · 2019-09-23

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: September 3, 2019 APPEARANCES: No one appeared for Respondents; Deian Ousounov, Esq. for the Department of Real Estate ADMINISTRATIVE LAW JUDGE: Thomas Shedden FINDINGS OF FACT 1. On July 18, 2019, the Arizona Department of Real Estate (“Department”) issued a Notice of Hearing and Complaint setting the above-captioned matter for hearing at 1:00 p.m. on September 3, 2019 at the Office of Administrative Hearings in Phoenix, Arizona. 2. The Notice of Hearing provided that hearing was being held to determine whether grounds exist to revoke or suspend Respondents Sherayn Dibley’s license number BR627343000 and Key Real Estate Services LLC’s license number LC653177000. 3. No representative for Respondents appeared at the scheduled hearing time and the matter was convened in their absence at about 1:16 p.m. 4. The Department presented the testimony of investigator Linda Bevins. 5. Ms. Dibley is also known as Sherayn Allen and is referred to by that name in some of the Department’s exhibits. 6. Ms. Dibley is the designated broker for Key Real Estate Services LLC and the sole member of that LLC. 7. Respondents were selected for a random audit that was scheduled to occur on November 15, 2018. Ms. Dibley requested that the audit be rescheduled it was conducted beginning on November 19, 2018. 8. Ms. Bevins and the Department’s Wayne Jackson conducted the audit, which covered May 31, 2015 through October 31, 2018. 9. Department Exhibit 6 is Ms. Bevins’s Audit Report. 10. During the audit, Ms. Dibley acknowledged that she had commingled personal funds with client funds and that she had used Respondents’ trust account debit card for personal expenses. These are severe violations and a breach of Respondents’ fiduciary duty to clients. 11. During the audit, Ms. Dibley was unable to provide the auditors with all records that Respondents were required to maintain. Ms. Dibley was provided an opportunity to provide the Department with required documentation after the on-site audit, but she failed to do so. Exhibit 8 has a list of documents that Ms. Dibley was required to maintain, but failed to provide to the Department during or after the audit. 12. Without adequate records, the Department cannot determine whether Respondents pose a risk to the public. 13. During the audit, Ms. Dibley acknowledged that prior to 2018, her accounts were out of balance and that she had failed to perform monthly trust account reconciliations during 2018. Ms. Dibley also reported that at times there were negative balances in her accounts. 14. In a Broker Audit Declaration submitted as part of her license renewal application in December 2017, Ms. Dibley falsely reported that she was compliant with her trust account responsibilities. 15. On March 25, 2019, the Department mailed to Respondents’ business address of record Ms. Dibley’s home address of record a Cease and Desist Order. The postal service reported that the Order sent to Ms. Dibley’s home address was being held at the post office at her request. The Order sent to Ms. Dibley’s office address of record was returned to the Department as undeliverable. 16. Ms. Bevins’s opinion was that considering the nature and number of Respondents’ violations, both Respondent’s licenses should be revoked. 17. The Department alleges that Ms. Dibley violated Ariz. Rev. Stat. section 32-2151.01(A), and sections 32-2153(A)(16), (A)(17), (A)(18), (A)(21), (A)(22), and (B)(1). 18. The Department requested that Respondents’ licenses be revoked. CONCLUSIONS OF LAW 1. The Department bears the burden of persuasion. Ariz. Rev. Stat. § 41-1092.07(G)(2). 2. The standard of proof on all issues in this matter is that of a preponderance of the evidence. Ariz. Admin. Code § R2-19-119. 3. A preponderance of the evidence is: The greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.

Black’s Law Dictionary 1373 (10th ed. 2014).

4. The preponderance of the evidence shows that Ms. Dibley has violated Ariz. Rev. Stat. section 32-2151.01(A) by failing to keep records of all real estate transactions handled as a broker. 5. The preponderance of the evidence shows that Ms. Dibley has violated Ariz. Rev. Stat. section 32-2153(A)(16) by comingling client money with her own and in that she converted money for her personal use. 6. The preponderance of the evidence shows that Ms. Dibley has violated Ariz. Rev. Stat. section 32-2153(A)(17) in that she failed to produce records as required during the Department’s audit. 7. The preponderance of the evidence shows that Ms. Dibley has violated Ariz. Rev. Stat. section 32-2153(A)(18) in that she failed to maintain a complete record of each transaction. 8. The preponderance of the evidence shows that Ms. Dibley has violated Ariz. Rev. Stat. section 32-2153(A)(21) in that she failed to exercise reasonable supervision over the activities of those under her employ and in that she failed to properly supervise Key Real Estate Service LLC’s activities. 9. The preponderance of the evidence shows that Ms. Dibley has violated Ariz. Rev. Stat. section 32-2153(A)(22) in that she has demonstrated negligence in performing activities for which a license is required. 10. The preponderance of the evidence shows that Ms. Dibley has violated Ariz. Rev. Stat. section 32-2153(B)(1) in that she filed a renewal application that was false and misleading. 11. Based on the proven violations, the Department has authority to revoke Respondents’ licenses. Ariz. Rev. Stat. §§ 32-2153(A), (B) and (D). 12. Considering the facts and circumstances of this matter, Ms. Dibley’s license and Key Real Estate Service LLC’s should be revoked. ORDER IT IS ORDERED that Sherayn Dibley’s license number BR627343000 is revoked; IT IS FURTHER ORDERED that Key Real Estate Service LLC’s license number LC653177000 is revoked 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 is five days after the date of that certification. Done this day, September 23, 2019.

/s/ Thomas Shedden Thomas Shedden Administrative Law Judge

Transmitted electronically to:

Judy Lowe, Commissioner Arizona Department of Real Estate -----------------------

Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826