ALJDEC decisions subject to certification as final

22F-365-REL · Department of Real Estate · 2024-01-03

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

In the Matter of the Real Estate License of:

HERSHY PETTY, holder of license number SA699825000,

Respondent

No. 22F-365-REL

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: December 21, 2023

APPEARANCES: The Arizona Department of Real Estate was represented by Raya Gardner, Assistant Attorney General. Respondent failed to appear.

ADMINISTRATIVE LAW JUDGE: Amy M. Haley

EXHIBITS ADMITTED INTO EVIDENCE: Department’s Exhibits 1 through 11.

_____________________________________________________________________

FINDINGS OF FACT

On March 29, 2022, the Arizona Department of Real Estate (Department) received an original application for a real estate salesperson’s license from Hershy Petty (Respondent).

In the application, Respondent disclosed felony criminal convictions, namely: (1) grand theft of personal property and (2) forgery of a check on two counts, all occurring on or about February 27, 2004.

On April 1, 2022, after reviewing Respondent’s application, the Department issued its Decision of Application for Original Real Estate Salesperson’s License Number: SA69982500 Candidate (Decision). In the Decision, the Department notified Respondent that it would not be offering him an unrestricted license at that time based, in part, on his felony convictions and the nature thereof. In lieu of an unconditional denial, 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 (Consent Order).

The Department attached a proposed Consent Order to the Decision and informed Respondent that he could accept the provisional license by signing the attached Consent Order.

On April 12, 2022, Respondent executed the Consent Order with the Department and was granted a two-year provisional Salesperson License No. 982500.

That license is currently suspended and is set to expire on April 23, 2024.

Upon executing the Consent Order, Respondent agreed to comply with all of the terms and conditions listed therein. Among other requirements, the Consent Order required Respondent to remain law abiding and comply with the Commissioner’s rules and submit quarterly affidavits stating that he had been in compliance with the terms of the Consent Order and provisional license.

On April 13, 2022, the Department sent Respondent an Introduction Packet via mail, email, and the Department’s message center that contained instructions for complying with the Consent Order and advised Respondent that he was to submit sworn affidavits affirming his compliance with the Consent Order on a quarterly basis with the first affidavit being due on July 13, 2022. Additionally, the Introduction Packet provided, in bold print, that quarterly affidavits were still required during the entirety of the two-year provisional period, regardless of license status.

On January 12, 2023, Respondent submitted his third quarterly affidavit. Respondent has not submitted a quarterly affidavit since that date.

On January 25, 2023, the Department received a copy of a notice from the Department of Public Safety (DPS) to Respondent informing him that his Fingerprint Clearance Card had been suspended due to an arrest for Felony Assisting Human Smuggling Organization that occurred on or about January 25, 2023 in Cochise County.

On February 13, 2023, the Department sent a letter to Respondent via certified mail informing him that the Department had received notification of his suspended Fingerprint Clearance Card and informed him of his eligibility to pursue a good cause exception through the Arizona Board of Fingerprinting. Additionally, the Department requested that Respondent provide the Department with an updated Fingerprint Clearance Card within 30 days. The United States Postal Service tracking information associated with the tracking number on the letter showed that Respondent received the letter on February 15, 2023.

On March 14, 2023, Respondent sent the Department a message via the Department’s message center indicating that a good cause exemption to his Fingerprint Clearance Card was “ongoing” and asked how to handle prospective clients during this period. Respondent did not submit a copy of his updated Fingerprint Clearance Card as required in the letter from February 13, 2023.

On the same date, the Department responded with a response to his question and informed him about the letter that he had failed to respond to or address. The Department requested that Respondent submit proof that he filed for a good cause exception, information about any future hearing dates or action on his good cause exception, a narrative statement about the arrest that led to the suspension of his Fingerprint Clearance Card, and information about the case resulting from the arrest by March 17, 2023. Respondent read this message on March 14, 2023, but did not respond or submit the requested documents.

On April 13, 2023, Respondent’s fourth quarterly affidavit pursuant to the terms of the Consent Order was due to the Department. Respondent failed to submit this affidavit on or by the deadline.

On May 5, 2023, the Department sent Respondent a message through the Department’s message center informing him that he was out of compliance with the Consent Order for failure to submit a timely quarterly affidavit and extending the submission deadline to May 12, 2023. Additionally, the Department reminded him of the request for information about his Fingerprint Clearance Card to which he had not yet responded. Respondent read the message on May 6, 2023, but did not submit the requested information.

On July 11, 2023, after the Department had still yet to receive any requested information from Respondent, the Department sent him a Notice of Non-Compliance with Commissioner’s Order (Notice) via certified mail return receipt requested to his mailing address on record, email, and the Department’s message center. The Notice provided that he had failed to submit quarterly affidavits in a timely manner and failed to respond to any of the Department’s request related to his Fingerprint Clearance Card. The Notice further notified Respondent that he must submit all future quarterly affidavits by the due date and required that he submit proof of obtaining a valid Fingerprint Clearance Card by August 11, 2023. Respondent did not respond or submit the required documents.

On September 8, 2023, after submitting a records request for the information, the Department received court documents related to Respondent’s arrest. The court documents showed that on or about July 3, 2023, Respondent was found guilty in the Cochise County Superior Court under case numbers CR202300094 and CR202300324 of (1) attempt to commit participating in a human smuggling organization or operation-conceal the person from a peace officer, a class 3 felony and (2) possession of methamphetamine, a dangerous drug, a class 4 felony. Respondent was sentenced to 2.5 years of incarceration at the Arizona Department of Corrections followed by 3 years of supervised probation.

On or about September 12, 2023, the Department issued an Order of Summary Suspension and Notice of Opportunity for Hearing (Order). Respondent appealed the Order.

On November 16, 2023, the Department issued a Notice of Hearing and Complaint (Notice of Hearing), setting a hearing at 1:00 p.m. on December 21, 2023. The Department mailed copies of the Notice of Hearing to Respondent at his address of record as well as to the Arizona State Prison in which he is currently housed. It was additionally emailed to him. A November 21, 2023 order from the Office of Administrative Hearings advised the parties of how to connect to the hearing via Google Meet. The hearing was held via Google Meet on December 21, 2023.

Respondent did not request that the hearing be continued. Although the start of the hearing was delayed 15 minutes, Respondent did not appear through an attorney, on his own behalf, or otherwise. Consequently, Respondent did not present any evidence to defend his license.

The Department presented its case through the testimony of Vivian Nunez, Legal Assistant, and entered eleven exhibits.

CONCLUSIONS OF LAW

The Commissioner has jurisdiction over Respondent and the subject matter in this case.

The Notice of Hearing that the Department mailed to Respondent at his addresses of record and email address was reasonable, and Respondent is deemed to have received notice of the hearing.

The Department bears the responsibility to protect the public through its enforcement of licensing statutes. This matter lies within its jurisdiction.

Pursuant to Ariz. Rev. Stat. 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.

Pursuant to Ariz. Rev. Stat. § 41-1092.07(G)(2) and Ariz. Admin. Code 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.

“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” A preponderance of the evidence is “[t]he greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”

Pursuant to Ariz. Rev. Stat. § 32-2153, the Commissioner has jurisdiction to deny, suspend, or revoke a broker or salesperson’s license for violations of rules and regulations.

Ariz. Rev. Stat. § 32-2157(C) provides, in pertinent part, as follows:

The department may issue a summary suspension when the department receives notice that a person licensed pursuant to this chapter has been convicted of a felony offense and is currently incarcerated for the conviction, paroled or under the supervision of a parole or community supervision officer or is on probation as a result of the conviction. This subsection does not limit the commissioner's authority to seek revocation of a license or other disciplinary action pursuant to this chapter.

Respondent was convicted of a felony in a court of competent jurisdiction in this state, in violation of Ariz. Rev. Stat. §32-2153(B)(2).

Respondent violated conditions and terms of a commissioner’s order, in violation of Ariz. Rev. Stat. § 32-2153(A)(24).

Respondent has not provided the Department with a valid fingerprint clearance card, in violation Ariz. Rev. Stat. § 32-2108.01.

Respondent is currently incarcerated and cannot perform acts requiring a license as set forth in Ariz. Rev. Stat. § 32-2166.

The evidence of record established that Respondent failed to comply with the terms of his Consent Order by failing to submit timely quarterly affidavits, failing to maintain a valid fingerprint clearance card, and failing to remain law abiding.

The practice of real estate is governed by adherence to statutes and rules and requires the utmost care by a licensed real estate agent. Respondent’s actions demonstrate his unwillingness or inability to remain law abiding and comply with the Commissioner’s orders, demonstrating that Respondent cannot be regulated at this time.

The evidence of record established that grounds exist to discipline Respondent’s salesperson’s license pursuant to Ariz. Rev. Stat. § 32-2153(A)(24), and Ariz. Rev. Stat. § 32-2153(B)(2) by way of revocation.

RECOMMENDED ORDER

IT IS ORDERED upholding the summary suspension issued by the Department.

IT IS FURTHER ORDERED revoking Hershy Petty’s License No. SA699825000.

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.

-54864001

001

-137160-45720000Done this day, January 3, 2024.

/s/ Amy M. Haley

Administrative Law Judge

Transmitted by either mail, e-mail, or facsimile to:

Susan Nicolson, Commissioner

Arizona Department of Real Estate

Hershy Petty

129 N. Martin Ave.

Tucson, AZ 85719

[email redacted]

Raya Gardner

Office of the Attorney General

2005 N. Central Ave.

Phoenix, AZ 85004

[email redacted]

By: OAH Staff