ALJDEC decisions subject to certification as final

20F-010-REL · Department of Real Estate · 2020-09-10

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

In the Matter of the Real Estate License of:

SALTZMAN, ANGELA, holder of License No. BR553144000,

Respondent

No. 20F-010-REL

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: September 1, 2020

APPEARANCES: Respondent Angela Saltzman appeared and was represented by Jay Bidwell appeared by Google Meet. Judith Harris and Paul Bruce appeared via Google Meet as witnesses for Respondent. Assistant Attorney General Lynette Evans represented the Arizona Department of Real Estate and appeared by Google Meet. Marcy Sherrill, Senior Investigator, appeared as a witness for the Arizona Department of Real Estate via Google Meet.

ADMINISTRATIVE LAW JUDGE: Adam D. Stone

_____________________________________________________________________

FINDINGS OF FACT

On July 14, 2006, the Arizona Department of Real Estate (“Department”) issued Real Estate Broker License No. BR553144000 to Angela Saltzman (“Respondent”). The current licensure expires on July 31, 2022.

On June 27, 2008, the Department issued entity license number LC627877000 to RLAKS, LLC d/b/a Realty Executives Lake Havasu City (“RLAKS”). Respondent is the designated broker and that licensure expires on July 31, 2022.

On May 3, 2019, the Department sent a letter to Respondent and RLAKS informing her that she was to participate in an Electronic Remote Sales Audit. Respondent and RLAKS’ records were to be submitted by May 15, 2019. The audit covered the time period of January 1, 2014 through January 31, 2019.

Respondent timely sent in the required documents. On May 21, 2019, the Department sent correspondence requesting that Respondent provide additional documents by June 5, 2019.

After requesting and being granted an extension of time, Respondent supplied the additional requested items to the Department.

The Department’s Audit Report on July 2, 2019, found three instances where Respondent was not in compliance with the Department’s rules and statutes.

According to the Department, Respondent failed to include language on her signage stating, “Independently Owned and Operated” or similar approved language. The Department also found that Respondent paid commissions to licensees who were using a professional limited liability company and to a professional corporation both of which were not registered with the Department. Finally, the Department found that on the Broker Audit Declaration, Respondent had answered in the affirmative that she had not paid compensation to a corporate entity not licensed with the Department.

At the hearing, Ms. Sherrill testified as to the timeline of the events described above. Ms. Sherrill also testified that the purpose of the rules and regulations was to prevent harm to the public. In addition, Ms. Sherrill testified that the electronic audits are different than other audits as there are no onsite visits and thus the decision is based upon what is supplied by licensees.

Finally, Ms. Sherrill testified as to the payments made to Ms. Harris and Mr. Bruce and how they were improper because it was determined that their corporate entities were not independently licensed by the Department.

Mr. Bruce testified that he had been a realtor in Arizona since 2014 and formed his professional corporation (PC) with the Arizona Corporation Commission in 2018. He further testified that he began working with Respondent in 2014, and once he became incorporated in 2018, he then directed Respondent to make all commissions payable to his PC. Finally, Mr. Bruce testified that while he was properly licensed with the Department, his PC was not separately licensed with the Department until June or July 2019.

Ms. Harris testified that she too requested Respondent to pay her limited liability company (LLC) for her commission checks. She also testified that her LLC was not separately licensed with the Department but she subsequently requested licensure for her LLC with the Department.

Respondent testified that she believed her signage was proper at all times and supplied photographs regarding the same.

Respondent admitted that she was aware of the statute that required all corporate entities to be separately registered with the Department, however, she did not request proof of the same from Mr. Bruce and Ms. Harris to verify licensure.

Finally, Respondent timely corrected all issues in the audit and also changed her office policy to ensure that the corporate entity issue did not re-occur.

CONCLUSIONS OF LAW

Pursuant to A.R.S. Title 32, Chapter 20, the Commissioner has jurisdiction over Respondent and the subject matter in this case. The Arizona legislature has charged the Department with protecting the public and consumers who deal with licensed salespersons when it issues licenses. Pursuant to A.R.S. § 32-2153, the Commissioner has authority to deny, suspend, or revoke the real estate license of a broker or salesperson. Pursuant to A.R.S. § 32-2160.01, the Commissioner has authority to assess a civil penalty up to $1,000.00 per violation of the real estate laws and rules.

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).

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).

The evidence of record established that Respondent disregarded or violated rules adopted by the Commissioner, in violation of A.R.S. § 32-2153(A)(3).

The evidence of record established that Respondent paid compensation or a commission to Mr. Bruce’s PC and Ms. Harris’ PLLC in violation of A.R.S. §32-2125(B) and A.R.S. § 32-2153(A)(10).

In addition, the evidence of record established that Respondent filed a false renewal application because she answered in the affirmative that she did not pay a corporation on LLC that was not properly licensed by the Department in violation of A.R.S. § 32-2153(B)(1).

In totality, the evidence of record established that grounds exist to discipline Petitioner’s broker’s license pursuant to A.R.S. § 32-2153.

Respondent admitted that she knew of the statute prohibiting payments to unlicensed corporate entities and assumed, without verifying, that Mr. Bruce and Ms. Harris had properly registered their corporate entities with the Department. While the Department’s goal is to protect the public, Respondent timely corrected all items flagged in the audit and even changed her company policy to ensure that the payment issue does not re-occur. Based on the circumstances, the Administrative Law Judge concludes that a $500.00 civil penalty is appropriate.

RECOMMENDED ORDER

Based upon the foregoing,

IT IS RECOMMENDED that within thirty (30) days of the effective date of the above Final Order entered in this matter, Respondent shall pay to the Department a civil penalty in the amount of $500.00, and such payment shall be made by cashier’s check or money order made payable to the Department.

IT IS FURTHER RECOMMENDED in the event that Respondent fails to pay the penalty, the Department take action to impose further discipline upon proper notice to Respondent.

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.

-54864001

001

-137160-45720000Done this day, September 10, 2020.

/s/ Adam D. Stone

Administrative Law Judge

Transmitted electronically to:

Judy Lowe, Commissioner

Arizona Department of Real Estate

-54864001

001

-137160-45720000