1105 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, DECISION
-against-
MENELAOS METALIOS
Re Max Team
Respondent.
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The above matter was heard by the undersigned, Ziedah F. Giovanni, on June 9, 2009 at the office of the Department of State located at 123 William Street, New York, New York.
The respondent, having been advised of his rights, chose to appear pro se.
The complainant was represented by Supervising License Investigator William Schmitz.
COMPLAINT
The complaint alleges the respondent solicited a particular home in violation of a cease and desist order, and also failed to supervise Huang Kuo. At hearing, the complaint was amended to include the allegation that the respondent failed to supervise Victor Kuo, in addition to Huang Kuo.
FINDINGS OF FACT
1) Notice of hearing, together with a copy of the complaint, was served on the respondent by certified mail addressed to him at his last known business address. (State’s Ex. 1).
2) Respondent Menalaos Metalios is duly licensed as a corporate broker for the period of April 10, 2009 to April 11, 2011. He represents Re/Max Team at a business address of 71-15 Northern Boulevard, Jackson Heights, NY 11372.
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3) On August 3, 2008, two flyers were left on the front door of 74-19 Caldwell Avenue, Middle Village, New York 11379. The flyers listed the names and contact information of Victor Kuo and H.L. Kuo and indicated their affiliation with Re/Max Team (State’s Ex. 3).
4) In a sworn statement, Victor Kuo stated he hired and trained staff to hand out the flyers. He gives each staff person a cease and desist list for their designated neighborhoods with instructions to avoid placing flyers at the homes on the list, and later checks for accuracy. He took responsibility for the misplaced flyers and apologized, explaining the present violation was his first in 16 years.
5) The address 74-19 Caldwell Avenue, Middle Village, New York 11379 is contained on the cease and desist list for Queens (State’s Ex. 4).
6) The respondent keeps the cease and desist list at the front desk in his office, and regularly reminds his salespersons of the importance of compliance with the list. He holds weekly meetings and does not allow his salespersons, who are all full-time, to operate from home. The respondent submitted affidavits signed by his employees, detailing the direction and instructions they received regarding the cease and desist list (Resp.’s Ex. A).
7) The respondent entered into settlement agreements with the Department of State on at least three or four previous occasions for cease and desist list violations (State’s Ex. 9).
OPINION AND CONCLUSIONS OF LAW
I - As the party which instituted the hearing, the burden is on the complainant to prove, by substantial evidence, the truthfulness of the charges contained in the complaint. State Administrative Procedure Act (SAPA) §306(1). Substantial evidence is that which a reasonable mind could accept as supporting a conclusion or ultimate fact. Gray v. Adduci, 73 N.Y.2d 741, 536 N.Y.S.2d 40 (1988). "The question...is whether a conclusion or ultimate fact may be extracted reasonably--probatively and logically." City of Utica Board of Water Supply v. New York State Health Department, 96 A.D.2d 710, 465 N.Y.S.2d 365, 366 (1983)(citations omitted).
II- Pursuant to Real Property Law (RPL) §442-h[3] the Secretary of State may establish cease and desist zones and the owners of residential property within those zones may request that their names and addresses be included on a cease and desist list, thereby expressing their wish not to be solicited by, among others, persons regularly engaged in the trade or business of buying and selling real estate. Pursuant to RPL §442-e[8], the Secretary of State is authorized to prosecute violations by such persons and assess fines for such violations.
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III- 19 NYCRR 175.17[d][1] provides that
"solicitation shall mean an attempt to purchase or rent or an attempt to obtain a listing of property for sale, for rent or for purchase. Solicitation shall include but not be limited to use of the telephone, mails, delivery services, personal contact or otherwise causing any solicitation, oral or written, direct or by agent: (I) to be delivered or presented to the owner or anyone else at the owner's home address; (ii) to be left for the owner or anyone else at the owner's home address...."
The flyers left at 74-19 Caldwell Ave are clearly proscribed solicitations.
IV- Pursuant to 19 NYCRR 175.17[b][2] and [c][4],[5], and [6] a licensed real estate broker or salesperson is deemed to have constructive notice of the written notices of property owners whose names and addresses appear on cease and desist lists.
V- A real estate broker is obligated to supervise the real estate brokerage activities of the salespersons association with him. RPL §441(1)(b), 19 NYCRR 175.21. That supervision must consist of "regular, frequent and consistent personal guidance, instruction, oversight and superintendence by the real estate broker with respect to the general real estate brokerage business conducted by the broker, and all matters relating thereto." 19 NYCRR 175.21(a).
That duty has been affirmed judicially, Division of Licensing Services v. Giuttari, 37A DOS 87, conf'd. 535 NYS2d 284 (AD 1st Dept. 1988); Friedman v Paterson, 453 NYS2d 819 (1982), aff'd. 58 NY2d 727, 458 NYS2d 546, and has been restated in numerous determinations of the Department of State. Division of Licensing Services v. Misk, 64 DOS 92; Division of Licensing Services v. Gelinas, 38 DOS 92; Division of Licensing Services v. Levenson, 52 DOS 91; Division of Licensing Services v. Capetanakis, 42 DOS 90; Division of Licensing Services v. Shulkin, 4 DOS 90. That does not mean, however, that a broker has the obligation to look over a salesperson’s shoulder constantly and to be aware of his activities every minute of the day. The evidence establishes that respondent Metalios has a clear office policy requiring that salespersons refrain from soliciting homes included on the cease and desist lists. Furthermore, salespersons are trained on the practical requirements of compliance and regularly reminded of the importance of compliance. Although the respondent has had several cease and desist order violations in the past, given the thousands of flyers distributed by respondent’s salespersons over many years, the existence of these prior violations, without additional information regarding their circumstances, does not tend to support the allegation that the respondent has breached his duty to supervise.
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DETERMINATION
WHEREFORE, IT IS HEREBY DETERMINED THAT the complaint is dismissed.
Ziedah F. Giovanni
Administrative Law Judge
Dated: November 9, 2009