789 DOS 09
STATE OF NEW YORK
DEPARTMENT OF STATE
OFFICE OF ADMINISTRATIVE HEARINGS
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In the Matter of the Complaint of
DEPARTMENT OF STATE
DIVISION OF LICENSING SERVICES,
Complainant,
-against- DECISION
KEVIN P. CREGO and FRANK J.
D’AMBROSIA,
Respondents.
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The above matter was heard by the undersigned, Scott NeJame, on September 9, 2008 at the office of the Department of State located at 65 Court Street, Buffalo, New York.
Respondent Frank J. D’Ambrosia (“respondent D’Ambrosia”) appeared and, having been advised of his right to be represented by an attorney, chose to represent himself. Respondent Kevin P. Crego (“respondent Crego”) did not appear.
The complainant was represented by Robert Leslie, Esq.
COMPLAINT
The complaint alleges that respondent Crego: failed to file a change of association form for respondent D’Ambrosia when he began working for respondent Crego; violated 19 NYCRR §175.13 by accepting respondent D’Ambrosia’s services without the knowledge of respondent D’Ambrosia’s previous broker; and failed to cooperate with a Department of State investigation. The complaint alleges that respondent D’Ambrosia improperly acted as a real estate salesperson associated with respondent Crego when he was not so licensed.
FINDINGS OF FACT
1) The notice of hearing scheduling the hearing for June 18, 2008 and a copy of the complaint were served on respondent Crego by certified mail at his business address as it appears in the records of the Department of State and delivered on March 11, 2008 (State's Ex. 1). The same notice of hearing and complaint were served on respondent D’Ambrosia at his home address and his former business address and both posted on February 29, 2008. The mailing to his home address was returned by the Postal Service marked “unclaimed,” and the mailing to his former business address was returned by the Postal Service marked “attempted not known.” On or about April 11, 2008, the complainant re-served respondent D’Ambrosia with the notice of hearing and complaint at his home address by regular mail. There is no evidence regarding the results of that service (State’s Ex. 1). The hearing was subsequently adjourned to September 9, 2008. Both the complainant and respondent D’Ambrosia stated that respondent Crego was aware of but did not intend to appear at the hearing.
2) Respondent Crego was licensed as an individual real estate broker for the period of June 7, 2004 to June 7, 2008 (State’s Ex. 2). The tribunal takes official notice of the records of the Department of State and finds that respondent Crego renewed his individual real estate broker’s license for the period of June 7, 2008 to June 7, 2010.
3) According to the certified license history, respondent D’Ambrosia was licensed as a real estate salesperson associated with Realty USA Rick Leasure Div. (“Realty USA”) at 1983 Empire Boulevard, Webster, New York for the period of February 7, 2006 to May 8, 2007 (State’s Ex. 2). In fact, however, respondent D’Ambrosia left the employ of Realty USA on February 6, 2007 and became associated with respondent Crego at about that time. He remained associated with respondent Crego for approximately one year. Respondent D’Ambrosia’s license automatically expired on February 7, 2008, but he became associated with Nothnagle Realtors at 1415 Monroe Ave., Rochester, New York for the period of April 24, 2009 to April 24, 2011.
4) When respondent D’Ambrosia resigned from Realty USA, he had an exit interview with Thomas deManincor, manager of and real estate broker associated with Realty USA. At that interview, Mr. DeManincor requested respondent D’Ambrosia pay $377 as office dues, part of which was for errors and omissions insurance for the upcoming year. Respondent D’Ambrosia refused to pay the office dues because he was resigning at the beginning of the year and didn’t feel he should have to pay insurance for the whole year. Either because he didn’t pay his office dues or because he didn’t sign the termination of association card, Realty USA did not send in the termination card for respondent D’Ambrosia to the Department of State until May 2007, three months after he had left (See State’s Ex. 15).
5) Respondent D’Ambrosia testified that, when he began working for respondent Crego, he gave him a check for $10 and signed a change of association card. He believed that it was respondent Crego’s responsibility from that point on to send in the form and money to the Department of State so that respondent D’Ambrosia would be properly associated with respondent Crego. Respondent Crego did not send the form in to the Department of State and it never appeared in the Department of State’s records that respondent D’Ambrosia worked for respondent Crego. Respondent D’Ambrosia did act and hold himself out as a real estate salesperson associated with respondent Crego and he did earn real estate commissions while so employed (State’s Ex. 5-8, 11-14).
6) Realty USA filed a complaint with the Department of State against the respondents and, during his investigation of the complaint, complainant’s Senior License Investigator, Ronald Schwartz (“Inv. Schwartz”), interviewed respondent Crego on October 29, 2007. Prior to the interview, Inv. Schwartz requested respondent Crego bring certain documentation with him to the interview, such as copies of listings, disclosure statements and proof of commissions paid for respondent D’Ambrosia while he worked at his brokerage, but respondent Crego failed to do so. At the interview, Inv. Schwartz asked respondent Crego again for the documentation and respondent Crego told him that he would send the material. He never sent the documentation.
OPINION
I- The holding of an ex parte quasi-judicial administrative hearing against respondent Crego was permissible, inasmuch as there is evidence that notice of the place, time and purpose of the hearing was properly served. Patterson v. Department of State, 36 AD2d 616, 312 NYS2d 300 (3rd Dept. 1970); Roy Staley v. Division of Licensing Services, 14 DOS App 01; Matter of the Application of Rose Ann Weis, 118 DOS 93; See also, Verdell v. DeBuono, 262 AD2d 812, 691 NYS2d 679 (3rd Dept. 1999); Jacoby v. New York State Board for Professional Medical Conduct, 295 AD2d 655, 743 NYS2d 192 (3rd Dept. 2002).
II- The complaint alleges that respondent Crego violated 19 NYCRR §175.13, however, that charge must be dismissed. 19 NYCRR §175.13 prohibits a real estate broker from accepting the services of, paying or influencing a non-associated salesperson without the knowledge of the salesperson’s broker. In this case, all parties were aware, including Realty USA, that respondent D’Ambrosia had left the employ of Realty USA and that he was free to become associated with respondent Crego. Realty USA failed to file respondent D’Ambrosia’s termination card with the Department of State (which it should have done so with or without respondent D’Ambrosia’s signature) and respondent Crego failed to file a change of association card. Respondent Crego’s actions in employing respondent D’Ambrosia were not done under 19 NYCRR §175.13 “without the knowledge” of Realty USA. Simply because Realty USA withheld respondent D’Ambrosia’s termination card, with the knowledge that said respondent resigned from that agency, did not mean that respondent D’Ambrosia could not work for another broker.
III- In order for a real estate salesperson to receive a license and pocket card, Real Property Law §§441(1-A) and 441-a(1) require that salesperson to be associated with a particular real estate broker. When a salesperson changes his or her association from one broker to another, Real Property Law §442-b requires the successor broker to file a change of association card with the Department of State. That statute also prohibits a salesperson from engaging in any real estate activities under Real Property Law Article 12-A until he or she has become associated with another broker.
In this case, respondent Crego violated Real Property Law §442-b and demonstrated incompetency by failing to file a change of association card for respondent D’Ambrosia. Respondent D’Ambrosia also violated that statute by working as a salesperson associated with respondent Crego without having become associated with him.
In mitigation of respondent D’Ambrosia’s violation, I have considered the fact that respondent D’Ambrosia appeared for the hearing and testified that, when he went to work for respondent Crego, he signed a change of association card and paid respondent Crego $10 so that he could be properly associated. Respondent Crego failed to submit that change of association card to the Department of State. It was respondent Crego’s responsibility to submit the change of association card to the Department of State and, in turn, the Department would have sent respondent D’Ambrosia’s new license to respondent Crego. Thus, respondent Crego was the more culpable party in the transaction.
However, it was respondent D’Ambrosia’s responsibility to either confirm with the Department of State or check online that, in fact, his association was properly changed before commencing work at his new brokerage. Even though respondent Crego would receive and hold respondent D’Ambrosia’s license, respondent D’Ambrosia would receive a pocket card to evidence his new association.
IV- Real Property Law §442-e(5) states:
The secretary of state shall have the power to enforce the provisions of this article and upon complaint of any person, or on his own initiative, to investigate any violation thereof or to investigate the business, business practices and business methods of any person, firm or corporation applying for or holding a license as a real estate broker or salesman, if in the opinion of the secretary of state such investigation is warranted. Each such applicant or licensee shall be obliged, on request of the secretary of state, to supply such information as may be required concerning his or its business, business practices or business methods, or proposed business practices or methods.
In this case, Inv. Schwartz twice requested respondent Crego to provide documentation at or subsequent to his interview on October 29, 2007, but respondent Crego failed to comply. Therefore, respondent Crego failed to cooperate with a Department of State investigation in violation of Real Property Law §442-e(5) and demonstrated untrustworthiness in violation of Real Property Law §441-c.
DETERMINATION
WHEREFORE, IT IS HEREBY DETERMINED THAT respondent Frank J. D’Ambrosia has violated Real Property Law §442-b and demonstrated incompetency in violation of Real Property Law §441-c. Accordingly, pursuant to Real Property Law §441-c, he shall pay a fine of $250 to the Department of State on or before September 15, 2009. Should he fail to pay the fine by that date, his license as a real estate salesperson shall be suspended beginning on September 16, 2009 and terminating one month after the receipt by the Department of State, by certified mail, of his license certificate and pocket card.
WHEREFORE, IT IS HEREBY DETERMINED THAT respondent Kevin P. Crego has violated Real Property Law §§442-b and 442-e(5) and demonstrated incompetency and untrustworthiness in violation of Real Property Law §441-c. Accordingly, pursuant to Real Property Law §441-c, he shall pay a fine of $2,000 to the Department of State on or before September 15, 2009. Should he fail to pay the fine by that date, his license as a real estate broker shall be suspended beginning on September 16, 2009 and terminating two months after the receipt by the Department of State, by certified mail, of his license certificate and pocket card.
The respondents are directed to send a certified check or money order for the fine payable to “Secretary of State,” or their license certificate and pocket card, by certified mail, to Norma Rosario, Department of State, Division of Licensing Services, Alfred E. Smith Building, 80 South Swan Street, 10th Floor, Albany, NY 12201.
Scott NeJame
Administrative Law Judge
Dated: August 11, 2009