ALJDEC - Licensing
22F-170-REL · Department of Real Estate · 2024-04-03
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
In the Matter of the Real Estate License of:
GILLIS, KENNETH, holder of license number SA686819000,
Respondent
No. 22F-170-REL
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: March 20, 2024
APPEARANCES: The Arizona Department of Real Estate was represented by Raya Gardner. Respondent Kenneth Gillis appeared on his own behalf.
ADMINISTRATIVE LAW JUDGE: Adam D. Stone
EXHIBITS ADMITTED INTO EVIDENCE: Department’s Exhibit 1-13 were admitted into evidence.
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FINDINGS OF FACT
The Arizona Department of Real Estate (Department) is the duly constituted authority for licensing and regulating the practice of real estate in the State of Arizona.
On October 14, 2020, the Department received an original application for a real estate salesperson’s license from Respondent.
In the application, Respondent disclosed that, on October 26, 2012, he was convicted in the Court of Common Pleas of the 26th Judicial District in Pennsylvania of the following misdemeanor offenses: (1) Possession of Controlled Substance, 2) Disorderly Conduct, and 3) False Report. Additionally, Respondent disclosed a conviction on June 5, 2019 for 1) Criminal Trespass 3rd Degree-Property, a misdemeanor offense.
On October 29, 2020, after reviewing application, the Department issued its Decision on Application for Original Real Estate Salesperson’s License Number: SA686819000 Candidate. The Department notified Respondent it would not be offering him an unrestricted license at that time based, in part, on his criminal convictions, but rather the Department offered to grant Respondent a provisional license that would allow him to work as a real estate salesperson subject to the terms and conditions of a Consent Order. The Department attached a proposed Order to the Decision and informed Respondent that he could accept the provisional license by signing the same.
On October 29, 2020, Respondent signed the Order, and on November 3, 2020, the Department issued a provisional real estate salesperson’s license number SA686819000 which was is set to expire on November 30, 2024.
Also on November 3, 2020, the Department sent Respondent an Introduction Packet via mail and email that contained instructions for complying with the Order and advised Respondent that he was to submit sworn affidavits affirming his compliance with the Order on a quarterly basis, beginning on January 30, 2021, during the entirety of the provisional period. Additionally, the Introduction Packet provided that Respondent’s Practice Monitor Acceptance form was due on or before November 16, 2020 and any time thereafter that Respondent changed practice monitors.
On November 13, 2020, Respondent was hired by Go Big, LLC. Respondent did not submit a Practice Monitor Acceptance form when he was hired by Go Big, LLC. On March 22, 2021, Respondent severed his employment with Go Big, LLC and was hired by Hague, Inc. Respondent did not submit a Practice Monitor Acceptance form upon being hired by Hague, Inc.
8 Further, on April 7, 2021, Respondent pled guilty to an Extreme DUI, a misdemeanor conviction. Respondent did not disclose this conviction until September 28, 2021.
9. In addition, Respondent did not submit any quarterly affidavits prior to disclosing his conviction on September 28, 2021.
10. On September 24, 2021, the Department sent Respondent a Notice of Non-Compliance with Commissioner’s Order which provided that Respondent had failed to submit any quarterly affidavits or Practice Monitor Approval forms and was therefore out of compliance with the Order. The Notice further instructed Respondent to submit a Practice Monitor Approval form signed by his designated broker and an affidavit affirming his compliance with the rules and statutes covering the period of October 30, 2020 through September 15, 2021 by no later than October 4, 2021.
11. On October 5, 2021, Respondent submitted a quarterly affidavit and a blank Practice Monitor Approval form. Later that day, the Department notified Respondent that the Practice Monitor Approval form was blank and instructed him to resubmit the form. Respondent failed to do so.
12. On November 10, 2021, the Department sent Respondent a message via the message center reminding him that he had not yet submitted the Practice Monitor Approval form as required and instructed him to submit it no later than the close of business on November 12, 2021. Respondent once again failed to remit the same.
13. On November 12, 2021, the Department sent Respondent a letter via mail and email informing him that the Department considered his conduct in failing to timely disclose his criminal conviction and failing to submit documents as required under the Order to be a violation of the real estate rules and statutes warranting disciplinary action. As an alternative to initiating administrative proceedings, the Department offered to settle the matter pursuant to the terms and conditions of a new Consent Order that was attached to the letter.
14. The provisions of the second Consent Order, which superseded the previous Order, included a thirty (30) day license suspension, conditional reinstatement with a two-year provisional license, a $3,000.00 civil penalty, twelve (12) hours of continuing education, and the submission of monthly compliance affidavits. On November 26, 2021, Respondent signed the Consent Order and it became effective on December 2, 2021 upon the signature of the Commissioner.
15. As with the previous Consent Order, an Introduction Packet was sent to Respondent with instructions for Compliance with the monthly affidavits.
16. On or about November 7, 2022, the Department sent Respondent a Notice of Non-Compliance Letter.
17. On February 14, 2024, the Department issued a Notice of Hearing and Complainant and set a hearing on March 20, 2024 at the Office of Administrative Hearings, an independent state agency.
18. At hearing, the Department presented the testimony of Vivian Nunez, a legal assistant for the Department.
19. Ms. Nunez testified as to the above timeline and testified that since the commencement of the second Consent Order, Respondent submitted 18 of the required 24 affidavits.
20. Further, Ms. Nunez testified that because of the continued non-compliance with the second Consent Order, Respondent’s behavior could no longer be ignored and the Department was now seeking a revocation of Respondent’s license.
21. Ms. Nunez testified however, that she was not aware if Respondent had any complaints from the public filed against him.
22. Respondent testified that he takes his license very seriously, but acknowledged that maybe his administrative tasks were not on point. He testified though that he complied with filing affidavits for 18 of the 24 months and paid the fines and attended the continuing education as required by the second consent order.
23. Respondent testified further that timely complying with the affidavits was difficult as his broker’s business was all done on-line and out of state, and it would take up to 15 days at times for the broker to return the affidavit with his signature.
24. In addition, Respondent testified that he had handled over 85 transactions without a complaint and had a 4.5 star rating. He argued that the punishment was way above what was necessary and unjust, as he was not a harm or threat to the public simply for failing to timely file affidavits.
CONCLUSIONS OF LAW
Pursuant to A.R.S. Title 32, Chapter 20, the Department has the authority and duty to regulate all persons engaged in the business of, or acting in the capacity of, a real estate broker or salesperson, and to enforce all statutes, rules, and regulations relating to real estate. Because this matter is disciplinary in nature, the Department bears the burden of proof. The standard of proof on all issues is by a preponderance of the evidence. See A.A.C. R2-19-119.
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). It is “[e]vidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” Black’s Law Dictionary 1182 (6th ed. 1990).
Pursuant to A.R.S. § 32-2153(A)(24), the Commissioner may suspend or revoke a license if the licensee violated any condition or term of a commissioner’s order.
The evidence of record established that Respondent failed to submit the information required under the Consent Order. Therefore, the preponderance of the evidence establishes that Respondent violated A.R.S. § 32-2153(A)(24).
However, the issue becomes whether or not this failure rises to the level of revocation. While the tribunal appreciates the Department’s responsibility to protect the public, is it reasonable for Respondent to lose his livelihood over failing to timely file and in some cases, file at all the affidavits? The tribunal believes that Respondent shall be given one more chance to maintain his license.
ORDER
Based on the foregoing, it is recommended that on the effective date of the Order entered in this matter, Respondent shall be given a provisional license for an additional two years, and timely submit monthly compliance affidavits as previously ordered. Further, Respondent shall pay a $3,000.00 civil penalty within 30 days.
Pursuant to A.R.S. § 41-1092.08(I), the licensee may accept the Administrative Law Judge Decision by advising the Office of Administrative Hearings in writing not more than ten (10) days after receiving the decision. If the licensee accepts the Administrative Law Judge Decision, the decision shall be certified as the final decision by the Office of Administrative Hearings.
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 will be forty (40) days from the date of that certification.
Done this day, April 3, 2024.
/s/ Adam D. Stone
Administrative Law Judge
Transmitted by either mail, e-mail, or facsimile to:
Susan Nicolson, Commissioner
Arizona Department of Real Estate
Raya Gardner
[email redacted]
Kenneth Gillis
[email redacted]
By: OAH Staff