ALJDEC decisions subject to certification as final

20F-267-REL · Department of Real Estate · 2020-12-22

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

In the Matter of the Real Estate Activities of:

Kimberly Murray, holder of broker license number BR117650000,

and

X.T.R. Realty, Inc., holder of entity license number CO113022000,

Respondents

No. 20F-267-REL

ADMINISTRATIVE LAW JUDGE

DECISION

HEARING: December 8, 2020

APPEARANCES: Respondents Kimberly Murray and X.T.R. Realty, Inc. failed to appear. Assistant Attorney General Holly Wan represented the Arizona Department of Real Estate. Linda Bevins testified on behalf of the Arizona Department of Real Estate.

ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella

FINDINGS OF FACT

Linda Bevins, Senior Investigator for the Arizona Department of Real Estate (“Department”), testified regarding the Department’s exhibits and the following facts:

On or September 21, 2001, the Department issued real estate broker license number BR117650000 to Kimberly Murray (“Ms. Murray”). See Department’s Exhibit. 1. That license is due to expire on September 30, 2021. Id.

On or about January 31, 1996, The Department issued real estate corporation license number CO113022000 to X.T.R. Realty, Inc. (“XTR”). See Department’s Exhibit 2. That license is due to expire on September 30, 2021. Id. Ms. Murray is and has been at all times relevant herein, the Designated Broker for XTR. Id.

XTR was incorporated in Arizona on November 21, 1995. See Department’s Exhibit 3. Ms. Murray is the Treasurer, President, Shareholder, and Director of XTR. Id.

On February 25, 2020, the Department issued a Cease and Desist Order against Ms. Murray and XTR for violations of Arizona real estate statutes and Commissioner’s rules. See Department’s Exhibit 4. Neither Ms. Murray nor XTR appealed the Cease and Desist Order.

On September 17, 2019, the Department received a Complaint against Ms. Murray and XTR from Edmund Coyne (“Mr. Coyne”), the owner of a commercial property located at 4645 East Broadway Road in Phoenix, Arizona (the “Property”). See Department’s Exhibit 5.

Coyne Complaint

In October 2014, Mr. Coyne hired Ms. Murray and XTR to manage the Property. Id.

In June 2019, Mr. Coyne terminated the property management agreement with Ms. Murray and XTR and hired ACM, LLC (“ACM”) to be the new Property manager. Id.

In his Complaint to the Department, Mr. Coyne stated that he requested Ms. Murray and XTR to transfer items related to the Property be transferred to ACM, including the following: i) all lease agreements; ii) list of all vendors; iii) 12 months of bank statements; iv) 12 months of monthly reports detailing all disbursements, transactions, and revenues; v) all insurance related documentation; vi) the most recent annual budget; and vii) and tenant communications. Id. Mr. Coyne further stated, “Despite repeated requests, XTR Realty has failed to provide almost all of the information requested which was required by our property management agreement with ACM.” Id.

On September 23, 2019, the Department sent Ms. Murray a letter requesting “a written, signed statement concerning your knowledge and actions regarding” Mr. Coyne’s Complaint. See Department’s Exhibit 6. (Emphasis in original.) The letter further requested that specific documents be produced. Id. The letter specified that the response and documents were due by October 3, 2019. Id.

Ms. Murray did not respond to the Department’s request.

On October 18, 2019, the Department issued a subpoena to Ms. Murray and XTR requiring Ms. Murray to appear and produce specific documents at an investigative interview scheduled on October 28, 2019. See Department’s Exhibit 7.

On October 28, 2019, the day of the scheduled investigative interview, Ms. Murray emailed the Department stating, “I am in receipt of a subpoena that I received on the 23rd or 24th of October. While very shocked to receive this, I also had to fly out to Wisconsin for a family emergency . . .” See Department’s Exhibit 8. Ms. Murray stated in the email that she would comply with the subpoena upon her return to Arizona in mid-November 2019. Id.

The Department granted Ms. Murray an extension to comply with the subpoena until November 18, 2019. Id.

On November 18, 2019, Ms. Murray sent an email to the Department stating that she was still out of town and that she would be back by the end of the month. See Department’s Exhibit 9. Ms. Murray requested an extension until “sometime around December 15th.” Id.

The Department granted another extension to Ms. Murray until December 15, 2019. See Department’s Exhibit 10.

Ms. Murray did not appear for the scheduled investigative interview on December 15, 2019.

On December 18, 2019, Department investigators went to XTR’s brokerage office and found the office dark and locked with a letter posted to the door. The letter dated November 22, 2019, was from the landlord addressed to Ms. Murray, and stated that the landlord had exercised the right to re-enter and take possession of the premises without terminating the lease agreement due to XTR’s default. See Department’s Exhibit 11.

On December 20, 2019, the Department sent Ms. Murray a certified letter regarding the possible abandonment of a business location without notice. See Department’s Exhibit 12. The letter advised Ms. Murray that her license would be canceled effective December 23, 2019. Id.

On December 20, 2019, Ms. Murray emailed to the Department a copy of a letter dated December 5, 2019, with documents pertaining to Mr. Coyne’s Complaint. See Department’s Exhibits 13 and 14.

The documents Ms. Murray sent with her December 20, 2019 email did not contain all of the requested documentation. Id.

On January 13, 2020, the Department sent a letter to Juanita Brooks (“Ms. Brooks”), ACM’s property manager who took over Ms. Murray’s and XTR’s property management responsibilities for Mr. Coyne’s Property. See Department’s Exhibit 15. The letter requested that Ms. Brooks submit a statement to the Department concerning her knowledge and actions regarding the transfer of property management responsibilities from Ms. Murray and XTR to ACM, as well as documents related to that transaction. Id.

On January 21, 2020, Ms. Brooks submitted her statement indicating that Ms. Murray did not provide all of the required items for the property management transfer, notwithstanding repeated requests. See Department’s Exhibit 16. Eventually, “a demand letter [was sent] to Ms. Murray to provide the requested information by August 23, 2019, to avoid Landlord taking further action.” Id. On January 9, 2020, for the first time, Ms. Murray provided ACM with bank reconciliations and tenant ledgers. Id. Ms. Brooks stated in her response to the Department, “It was also determined by reviewing the occupant ledgers that an outstanding balance remains to be received from each of the tenants appearing to be CAM reconciliation charges which we have yet to receive from Ms. Murray.” Id.

On January 13, 2020, the Department sent Ms. Murray a letter by certified mail to her home address requesting a response using the online message center no later than January 17, 2020. See Department’s Exhibit 17.

Ms. Murray failed to respond to the Department’s January 13, 2020 letter.

Ms. Murray had previously been disciplined by the Department in 2011 via Consent Order, for violating Arizona real estate statutes and rules. See Department’s Exhibit 18.

The Department argued that Respondents’ conduct constituted violations of A.R.S. § 32-2126(A); A.R.S. §§ 32-2153(A)(9), (A)(17), (A)(21, (A)(24); A.R.S. § 32-2173(B)(1); A.R.S. §§ 32-2173(C)(3) and (C)(4), and warranted the upholding of the February 25, 2020 Cease and Desist Order, and revocation of Ms. Murray’s and XTR’s licenses.

Respondents failed to appear for hearing and therefore, did not present any controverting evidence.

CONCLUSIONS OF LAW

The Commissioner has jurisdiction over Respondents 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 credible evidence of record established by a preponderance of the evidence that Respondents: i) failed to maintain a definite place of business, and failed to notify the Department of the abandonment of a place of business, in violation of A.R.S. § 32-2126(A); ii) failed to account for or to remit monies and to surrender to Mr. Coyne or ACM any documents, within a reasonable period of time, in violation of A.R.S. § 32-2153(A)(9); iii) Respondents failed or refused upon demand to produce any documents in Respondents’ possession or that Respondents were required to keep for inspection by the Department, in violation of A.R.S. § 32-2153(A)(17); iv) Ms. Murray, as a licensed broker, failed to exercise reasonable supervision and control over XTR’s activities on behalf of which she was acting as the designated broker under section 32-2125, in violation of A.R.S. § 32-2153(A)(21); v) Ms. Murray failed to appear as directed by a Commissioner’s Order, in violation of A.R.S. § 32-2153(A)(24); vi) Respondents failed, immediately upon termination of a property management agreement, to provide Mr. Coyne or ACM with originals or copies of rental agreements or related documents in Respondents’ possession, in violation of A.R.S. § 32-2173(B)(1); vii) Respondents failed to provide Mr. Coyne or ACM with a final accounts receivable and payable list within 75 days of the cancellation of the agreement, in violation of A.R.S. § 32-2173(C)(3); and viii) Respondents failed to provide Mr. Coyne or ACM with final bank accounts reconciliation within 75 days of the cancellation of the agreement, in violation of A.R.S. § 32-2173(C)(4).

Based on the above, the Department established that the Cease and Desist Order issued on February 25, 2020, against Respondents should be affirmed. The Department further established that it has grounds to revoke Respondent Kimberly Murray’s broker license number BR11765000 and Respondent X.T.R. Realty, Inc.’s entity license number CO113022000.

RECOMMENDED ORDER

IT IS ORDERED affirming the February 25, 2020 Cease and Desist Order issued by the Department.

IT IS FURTHER ORDERED revoking Kimberly Murray’s broker license number BR11765000.

IT IS FURTHER ORDERED revoking X.T.R. Realty, Inc.’s entity license number CO113022000.

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 (5) days from the date of the certification.

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-137160-45720000Done this day, December 22, 2020.

/s/ Sondra J. Vanella

Administrative Law Judge

Transmitted electronically to:

Judy Lowe, Commissioner

Arizona Department of Real Estate

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-137160-45720000