ALJDEC decisions subject to certification as final

19F-403-REL-RES · Department of Real Estate · 2019-11-12

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 22, 2019 APPEARANCES: Respondent Larry Corbett appeared on his own behalf. The Arizona Department of Real Estate (Department) was represented by Assistant Attorney General Deian Ousounov. ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer _____________________________________________________________________ FINDINGS OF FACT On or about December 2, 2013, the Department issued Salesperson License No. SA650773000 to Larry W. Corbett (Respondent). The license was inactive and expires on December 31, 2019. On or about January 9, 2017, OTB Investments, LLC (OTB) was incorporated in Arizona with Respondent listed as the statutory agent and the only member. Investigation C19-000063 On or about January 22, 2019, the Department sent a demand letter to Respondent at Respondent’s mailing address advising him that the Department had received a complaint filed against him by Robert and Vivian Owens alleging substantial misrepresentation of material facts, failure to disclose information material to a real estate transaction, and false promises. The Department requested that Respondent submit to the Department by February 1, 2019, a signed, written statement responding to the complaint and providing information and supporting documentation regarding the allegations. The demand letter was also sent to Respondent via the Department’s online messaging system. The system reflected that Respondent opened the message at some point, but did not reply.[1] Respondent did not submit the requested response by February 1, 2019. On or about February 7, 2019, the Department sent a second demand letter to Respondent by certified mail at Respondent’s street and mailing addresses with a deadline to respond of February 14, 2019. The February 7, 2019 letter to Respondent at his street address was returned to the Department on February 28, 2019, marked “Return to Sender – Unclaimed – Unable to Forward.” Respondent did not provide a response to the Department as requested. Investigation C19-000124 On or about February 13, 2019, the Department sent a demand letter to Respondent at Respondent’s mailing address advising him that the Department had received a complaint filed against him by Robert and Ellen Schmitz alleging dishonest dealings and Respondent’s failure to remit rental income collected on their behalf while he acted as the property manager for their property located at 26912 N. 55th Drive, Phoenix, Arizona. The Department requested that Respondent submit to the Department by February 21, 2019, a signed, written statement responding to the complaint and providing information and supporting documentation regarding the allegations. The demand letter was also sent to Respondent via the Department’s online messaging system. The system reflected that Respondent opened the message approximately 15 minutes after it was sent, but did not reply.[2] Respondent did not submit the requested response by February 21, 2019. Subpoena On or about March 1, 2019, the Department issued a subpoena to Respondent requesting his appearance for an interview at the Department at 10:00 a.m. on March 13, 2019. The United Stated Postal Service delivered the subpoena by certified mail to Respondent’s address of record with the Department. The mailing was accepted by an unknown individual on March 4, 2019. Respondent did not appear for the March 13, 2019 interview. Procedural History On or about September 12, 2019, the Department issued a Notice of Hearing and Complaint to Respondent setting this matter for hearing detailing the alleged violations of Department statutes. The Department asserted that Respondent’s conduct constituted violations of A.R.S. § 32-2153(A)(17) and (24)[3] and A.R.S. § 32-2153(B)(11).[4] On or about October 4, 2019, Respondent submitted a response to the underlying complaints. Hearing Evidence Respondent admitted that he had seen a message from the Department around the time of the notices that were sent to him. Respondent indicated that during the time in question, he had been in contact with the Arizona Attorney General’s Office regarding the complaints and assumed that his communications with them were being forwarded to the Department. Respondent asserted that a failure to respond to the Department was “pretty low on the totem pole” of offenses that could be committed by a licensee and that his license should not be disciplined because he did not timely respond to the Department’s requests for information. 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 did not respond to any of the Department’s requests for response regarding the complaints it received. Respondent asserted the failure to respond was a minor violation of the Department’s rules and regulations and his license should not subject to significant discipline based on that failure. However, without a response from Respondent, the Department had no way to investigate the complaints and determine whether the complaints established violations of the Department’s other rules and regulations. Such communication is necessary to enable the Department to protect the public against the wrongful actions of its licensees. The Department established it had grounds to revoke Respondent’s license pursuant to A.R.S. § 32-2153(A)(17) and (24) and A.R.S. § 32-2153(B)(11). RECOMMENDED ORDER IT IS ORDERED revoking Larry Corbett’s License No. SA650773000. 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, November 12, 2019.

/s/ Tammy L. Eigenheer Administrative Law Judge

Transmitted electronically to:

Judy Lowe, Commissioner Arizona Department of Real Estate ----------------------- [1] See Exhibit 10, page 1 and 2. The second page of the printout regarding this message in particular was not included in the exhibit, but presumably would show when Respondent opened the message. [2] See Id. at page 1 and 3. The last entry on page 3 indicated when this message in particular was opened by Respondent. [3] A.R.S. § 32-2153(A) provides, in pertinent part, as follows:

A. 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 if it appears that the holder or applicant, within five years immediately preceding, in the performance of or attempt to perform any acts authorized by the license or by this chapter, has: . . . . 17. Failed or refused upon demand to produce any document, contract, book, record, information, compilation or report that is in the licensee's possession or that the licensee is required by law to maintain concerning any real estate, cemetery or membership camping business, services, activities or transactions involving or conducted by the licensee for inspection by the commissioner or the commissioner’s representative. . . . . 24. Violated any condition or term of a commissioner's order.

[4] A.R.S. § 32-2153(B) provides, in pertinent part, as follows:

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: . . . . 11. Failed to respond in the course of an investigation or audit by providing documents or written statements.

-----------------------

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