ALJDEC

97A-H1911-REL · Department of Real Estate · 1997-11-24

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 7, 1997 APPEARANCES: Respondent was represented by her attorney, Michael LaVelle, and the Arizona Department of Real Estate ( \hereinafter referred to as “Complainant”) was represented by Assistant Attorney General Michael Denious. ADMINISTRATIVE LAW JUDGE: Mark A. Silver _____________________________________________________________________

Evidence and testimony were presented and, based upon the entire record, the following Findings of Fact, Conclusions of Law, and Recommended Order are made:

FINDINGS OF FACT

1. Complainant issued an original real estate salesperson’s license to Respondent on August 10, 1982. The license expires on August 31, 1998. 2. From August 4, 1989 to November 4, 1994, Respondent was employed by ProAmerica Real Estate Company, wherein Gary Nelson was the designated broker . 3. At all times material to this matter, Respondent was the president of I.V. Co. Properties, Inc. (hereinafter “I.V.”), an Arizona Corporation. 4. I.V did not hold any licenses issued by Complainant and no designated broker was employed by I.V. 5. At all times material to this matter, Respondent had a specified ownership interest in I.V. No other individuals were shown to have any ownership interest in I.V. other than Respondent. 6. At all times material to this matter, Respondent was also the president of Independent Realty, Inc. (hereinafter “Independent”), a Nevada Corporation. Independent did not hold any real estate licenses issued by either the State of Nevada or the State of Arizona. Moreover, no designated broker was employed by Independent. Although Respondent had no ownership interest in this corporation, as president of the corporation she had full access to all monies received by said corporation. 7. The following salient facts were adduced at the hearing and are important to note: a. On or about March 1994, Respondent located an apartment complex for sale, in Arizona, and executed an offer to purchase the property on behalf of I.V. b. Respondent utilized Independent for the purpose of finding another buyer for the property in question so that I.V could sell said property at a profit. c. A buyer for the aforementioned property, Sun States Financial Group and the Walnut Grove Partnership (hereinafter referred to as “Walnut”) was found by Independent, who referred said buyer to Respondent acting on behalf of I.V. d. A double escrow was set up for the sale of the property in question in March 1994 wherein I.V. closed its escrow on the purchase of said property and immediately turned around and completed the sales transaction of the property to Walnut. 8. It was undisputed that neither Pro America Realty nor Respondent’s designated broker, Gary Nelson, had any role in the above described real estate transaction or received any commissions from said real estate transaction. 9. Evidence of record demonstrated that I.V. received $200,000.00 in fees or profits from Walnut for the sale of the property in question. I.V. retained $50,000.00 from said fee and paid the remaining $150, 000.00 to Independent. 10. Respondent characterizes the aforementioned $50,000.00 paid to I.V. as “profit” and the $150,000.00 paid to Independent as a “consulting fee.” 11. Respondent was the individual whose activities directed the above-mentioned real estate transaction and payment to the respective entities. Under all of the salient facts and circumstances presented herein, it is determined that the $50,000.00 “profit” received by I.V. indirectly, if not directly, benefited Respondent. Moreover, regardless of Respondent’s contentions, the $150,000.00 payment received by Independent is found to be in the nature of a commission. Thus, the evidence of record supports a finding that Respondent effectively received compensation for her role in the real estate transaction described herein.

12. Respondent contends that she was not acting as a real estate salesperson in the above-described transaction. On the contrary, the evidence of record clearly supports a finding that Respondent, acting on behalf of I.V. and Independent was acting in a manner not dissimilar to the normal activities of a real estate salesperson. She was locating, buying, and selling property, which is what real estate salespersons do. As a licensed real estate salesperson, she is not allowed to remove her real estate license from a real estate transaction whenever it suits her personal benefit. Respondent’s conduct in this transaction is found to constitute a willful disregard of her duties and responsibilities as a licensed real estate salesperson in violation of the applicable charged sections of the State’s Real Estate laws.

CONCLUSIONS OF LAW

1. The Commissioner has jurisdiction to hear this matter. 2. Respondent accepted compensation for the performance of real estate related activities from a person other than the licensed broker she was licensed under, in violation of A.R.S. § 32-2153A (7). 3. Respondent was charged with a violation of A.R.S. § 32-2153A (10). Respondent objected to the fact that the complaint filed in this matter failed to disclose precisely what section of the real estate laws this allegation made reference to and therefore, requested a dismissal of said charge. On the contrary, notice pleading is all that is required in these license disciplinary complaints and Respondent was clearly on notice that she was being charged with receiving monies from real estate related transactions from persons other than the legally licensed broker to whom her license is issued. Therefore, she was placed on adequate notice that the section of the State’s real estate laws referenced in the allegation of a violation of A.R.S. § 32-2153A (10) is A.R.S. § 32-2155A. Evidence of record supports a finding that Respondent received profit and compensation in violation of A.R.S. § 32-2153A (10); namely A.R.S. § 32-2155A. 4. Respondent’s conduct in this matter was not shown to be negligent and therefore, no violation of A.R.S. § 32-2153A (22) is found. 5. The conduct of Respondent in not having this real estate transaction proceed through the broker under which she was licensed constitutes a dishonest dealing within the meaning of A.R.S. § 32-2153B (5). 6. The actions and conduct of Respondent as shown herein support a finding that she is not a person of honest, truthfulness, and good character within the meaning of A.R.S. § 32-2153B (7). 7. Grounds exist under A.R.S. §§ 32-2153A (7), 32-2153B (5), (7) and 32-2153A (10); namely A.R.S. § 32-2155A, to suspend, revoke, deny renewal or the right of renewal of Respondent’s real estate salesperson’s license pursuant to such statute. 8. Grounds exist for the Commissioner to assess a civil penalty against Respondent for each violation of statute found herein pursuant to A.R.S. § 32-2160.01.

RECOMMENDED ORDER

In view of the foregoing, it is recommended that Respondent’s real estate salesperson’s license be suspended for forty-five (45) days. It is further recommended that Respondent pay to the Arizona Department of Real Estate a civil penalty in the amount of $2,500.00. Done this day, November 24, 1997.

_________________________________ MARK A. SILVER Administrative Law Judge

Original transmitted by mail this ____ day of November, 1997, to:

Mr. Jerry Holt, Commissioner Department of Real Estate ATTN: Bonnie Hollon 2910 North 44th Street, Ste. 100 Phoenix, AZ 85018

By _______________________________

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Office of Administrative Hearings 1700 West Washington, Suite 602 Phoenix, Arizona 85007 (602) 542-9826