ALJDEC decisions subject to certification as final

20F-195-REL · Department of Real Estate · 2020-07-02

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

In the Matter of the Real Estate License of:

BROWN, ANETTE, holder of License No. BR652927000,

Respondent.

No. 20F-195-REL

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: June 25, 2020

APPEARANCES: Respondent Anette Brown, appeared on her own behalf. Assistant Attorney General Lynette Evans represented the Arizona Department of Real Estate. Bret Biesenthal, Senior Investigator, appeared as a witness for the Arizona Department of Real Estate.

ADMINISTRATIVE LAW JUDGE: Adam D. Stone

_____________________________________________________________________

FINDINGS OF FACT

On June 5, 2018, the Arizona Department of Real Estate (“Department”) issued Real Estate Broker License No. BR65292700 to Anette Brown (“Respondent”). The current licensure expires on June 30, 2020.

Respondent is married to Chris Brown, owner of Christopher David Design and Development, LLC (“CDD”). CDD was incorporated from September 10, 2015, until April 25, 2018, when the business terminated.

On January 20, 2018, a Consent to Limited Representation (“Consent”) was signed stating that Respondent represents both buyer, namely Benjamin Dorman, and seller, CDD. The Consent contained no written disclosure of Brown’s relationship to the seller. See Exhibit 4.

Also on January 20, 2018, a purchase contract for the property located at 13009 S. Warpaint Dr., Phoenix, Arizona 85044, was signed. The contract contained no written disclosure of Respondent’s relationship to the seller. See Exhibit 5.

On January 23, 2018, a lis pendens was recorded on the property. See Exhibit 10. The lis pendens was the result of a mechanic lien that was filed by Associated Finishes, Inc. See Exhibit 9. The mechanics lien, and presumably the lis pendens, were addressed and mailed to both Respondent and CDD.

On February 6, 2018, Mr. Brown on behalf of CDD signed the Seller’s Property Disclosure Statement (“SPDS”). See Exhibit 6. Mr. Brown checked “No” next to the question, “Are you aware of any pending or anticipated disputes or litigation regarding the Property of the association(s)?”

On the Addendum 1 attached to the SPDS, at line 13 it reads, “Buyer is aware that seller’s agent is related to seller.” See Exhibit 6.

On October 23, 2019, Mr. Dorman submitted a complaint to the Department alleging, among other items, that Respondent failed to disclose that she was married to the seller. See Exhibit 3.

At the hearing, Respondent testified that she had completed two real estate transactions prior to the one in question. She also testified that she had never failed to disclose before or after this transaction.

Respondent admitted that she failed to initially disclose the familial relationship in writing until it was included on the Addendum 1, but testified that the buyer had prior knowledge of the same.

Respondent also testified that as to the mechanic’s lien, the only reason she was mentioned in the same was that she had obtained bids on behalf of CDD. She also testified that she never received any written notice of the lien(s); and was adamant that she had no reason to know that the lien and subsequently the lis pendens were in existence on the property until the title search was conducted.

Bret Biesenthal testified that the written familial disclosure should have been made before the purchase contract was executed. He also testified that he believed that Respondent had knowledge of the lien(s) and lis pendens, based upon the mailing certificates and failed to disclose the same.

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 failed to appropriately timely disclose her familial relationship in writing prior to the execution of the purchase contract, in violation of A.A.C. R4-28-1101(E)(2).

In addition, the evidence of record established that Respondent failed to disclose in writing the existence of a lien or encumbrance on the property being transferred, in violation of A.A.C. R4-28-1101(B)(4).

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

Based on the circumstances, the Administrative Law Judge concludes that a $2,000.00 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 $2,000.00, 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, July 2, 2020.

/s/ Adam D. Stone

Administrative Law Judge

Transmitted electronically to:

Judy Lowe, Commissioner

Arizona Department of Real Estate

-54864001

001

-137160-45720000