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 1104 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-


EDDIE HUGO ROSSI, real estate broker,

ROSELAND REALTY, brokerage,

EDDIE H. ROSSI, notary public,


                                                Respondents.

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            The above matter was heard by the undersigned, Ziedah F. Giovanni, on June 4, 2009, at the office of the Department of State located at 123 William Street, New York, New York.

 

            The respondents did not appear.

 

            Services (hereinafter "DLS") was represented by John Kenny, Esq.

 

    COMPLAINT

 

              The complaint charges that the respondent took deposit money from a client when he had no authority to do so, and when the apartment was not available for rent; failed to effectuate the requisite agency disclosure; accepted deposit money and failed to turn it over to the landlord; vacated his registered notary and real estate broker business addresses without properly advising the Department of State; failed to maintain a definite place a business while continuing to conduct licensed activity as a real estate broker; held himself out to be a broker associated with or located at an unrelated brokerage, and failed to cooperate with an investigation of the Department of State.    FINDINGS OF FACT

 

              

            1) On March 23, 2009, Notice of Hearing was sent, by regular and certified mail to Respondent Eddie Hugo Rossi at 92-07 Jamaica Avenue, Suite 102, Woodhaven, New York 11420. The certified mailing nor the domestic return receipt was returned by the Postal Service. The regular mailing was also not returned. On March 23, 2009, Notice of Hearing was sent by regular and certified mail to Respondent Roseland Realty at the same address noted above. The certified mailing nor the domestic return receipt was returned by the Postal Service. The regular mailing was also not returned (State’s Ex. 1).

 

            2) Since at least June 7, 2002, Respondent Rossi has been licensed as the representative broker for Roseland Realty (an assumed name of Roseland Corp.) most recently located at 92-07 Jamaica Avenue, Suite 102, Woodhaven, New York 11420 (State’s Ex. 2). He and Roseland Realty are currently licensed for the period of June 8, 2008 to June 7, 2010. Respondent Rossi is also commissioned as a notary public for the period of October 5, 2005 to October 5, 2009, with the same registered address as Roseland Realty. The tribunal takes official notice of the records of the Department of State that reflect the respondent did not renew his notary commission. 

 

            3) Respondent Rossi is not now, and has never been, associated with Zubair Realty Corp. He was not given permission to represent Zubair Realty Corp. in transactions.

 

Tieasha Watson

 

            4) On or about February 20, 2008, Ms. Tieasha Watson met Respondent Rossi at 171-22 Liberty Avenue in Jamaica, New York, the offices of Zubair Realty Corp. (hereinafter “Zubair Realty”). The respondent indicated to Ms. Watson that he worked for Zubair Realty. 

 

            5) Ms. Watson provided Respondent Rossi with a deposit of $230.00 cash for the rental of an apartment located at 523 Milford Street, Brooklyn, New York. He did not give her a receipt.

 

            6) Respondent Rossi did not turn over Ms. Watson’s deposit to the landlord or return the deposit to Ms. Watson.

 

            7) Respondent Rossi did not provide Ms. Watson with an agency disclosure form.

 

            8) Letters were sent to Respondent Rossi at his business and home addressees registered with the Department of State directing his cooperation with the investigation of Ms. Watson’s complaint. He did not respond. They were sent regular and certified mail, and returned unclaimed or undeliverable (State’s Ex. 5).

 

            9) Department of State investigator Scott McGoldrick visited Respondent Rossi’s business address registered with the Department of State. There was no real estate office at the location and the occupants were not familiar with Respondent Rossi. The respondent did not notify the Department of State of a change in address.

 

            10) Investigator McGoldrick was also unable to reach Respondent Rossi at the numbers listed on his business card (State’s Ex. 9).

 

 

                                                 

Shakira Moses

 

            14) Ms. Moses was homeless and received Respondent Rossi’s contact information from the Department of Homeless Services.

 

            15) On or about February 20, 2008, Respondent showed Ms. Moses an apartment located at 415 Kosciusko Street, Brooklyn, New York (hereinafter “Kosciusko property”). Respondent Rossi indicated to Ms. Moses the property was a rental property.

 

            16) Zubair Realty was the listing agent for the Kosciusko property. The property was in a building available for sale, not rent (State’s Ex. 14).

            

            17) On February 27, 2008, Ms. Moses gave Respondent Rossi a cash deposit of $400.00. Respondent Rossi gave Ms. Moses a receipt for her deposit on letterhead of Zubair Realty (State’s Ex. 10).

 

            18) Respondent Rossi did not provide Ms. Moses with an agency disclosure form.

 

            19) Ms. Moses requested the return of her deposit after she lost her job and could no longer afford the apartment. Respondent Rossi did not return the deposit.

 

 

                                    OPINION AND CONCLUSIONS OF LAW

 

            I- The holding of an ex parte quasi-judicial administrative hearing 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 (1970);Roy Staley v. Division of Licensing Services, 14 DOS App 01; Matter of the Application of Rose Ann Weis, 118 DOS 93.

 

            II- The Department of State retains jurisdiction to conduct this proceeding even though the respondent’s notary commission has expired. Albert Mendel & Sons, Inc. v. NYS Department of Agriculture and Markets, 90 AD2d 567, 455 NYS2d 867 (3rd Dept. 1982); Main Sugar of Montezuma, Inc. v. Wickham, 37 AD2d 381, 325 NYS2d 858 (3rd Dept. 1971).

 

            III- As the party which initiated the hearing, the burden is on the complainant to prove, by substantial evidence, the truth of the charges set forth in the complaint. State Administrative Procedure Act §306(1). Substantial evidence “means such relevant proof as a reasonable mind may accept as adequate to support a conclusion or ultimate fact... More than seeming or imaginary, it is less than a preponderance of the evidence, overwhelming evidence or evidence beyond a reasonable doubt (citations omitted).” 300 Gramatan Avenue Associates v. State Div. of Human Rights, 45 NY2d 176, 408 NYS2d 54, 56-57 (1978); Tutuianu v. New York State, 22 AD3d 503, 802 NYS2d 465 (2nd Dept. 2005). “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 AD2d 719, 465 NYS2d 365, 366 (1983), quoting 300 Gramatan Avenue Associates, supra, 408 NYS2d at 57.

 

            IV- Being an artificial entity created by law, Roseland Realty can only act through it officers, agents, and employees, and it is, therefore, bound by the knowledge acquired by and is responsible for the acts committed by its representative broker, Mr. Rossi, within the actual or apparent scope of his authority. Roberts Real Estate, Inc. v. Department of State, 80 NY2d 116, 589 NYS2d 392 (1992); A-1 Realty Corporation v. State Division of Human Rights, 35 A.D.2d 843, 318 N.Y.S.2d 120 (1970); Division of Licensing Services v. First Atlantic Realty Inc., 64 DOS 88; RPL § 442-c.

 

             V- Pursuant to Real Property Law §443, a real estate broker or salesperson must provide the owner or potential renter of a one to four family residential property with an agency relationship disclosure form at the first substantive contact with the owner or potential renter. By failing to effectuate the requisite agency disclosure in his dealings with Ms. Moses and Ms. Watson, Respondent Rossi violated this statute, and thereby demonstrated incompetency in violation of Real Property Law 441-c. Roseland Realty is equally liable for these violations.

 

            VI- When Roseland Realty, acting through Mr. Rossi, agreed to assist Ms. Watson and Ms. Moses in renting homes, it and Mr. Rossi, as the representative of Roseland Realty, became their agents in relationships which were fiduciary in nature, "...founded on trust or confidence reposed by one person in the integrity and fidelity of another." Mobil Oil Corp. v. Rubenfeld, 72 Misc.2d 392, 339 NYS2d 623, 632 (Civil Ct. Queens County, 1972). Included in the fundamental duties of such a fiduciary are good faith and undivided loyalty, and full and fair disclosure. Such duties are imposed upon real estate licensees by license law, rules and regulations, contract law, the principals of the law of agency, and tort law. L.A. Grant Realty, Inc. v. Cuomo, 58 AD2d 251, 396 NYS2d 524 (1977). Mr. Rossi accepted deposit money from Ms. Moses for the rental of an apartment not available for rent, and when he had no authority to do so. He also accepted deposit money from Ms. Watson and failed to turn it over the landlord or return it to her. Furthermore, Mr. Rossi held himself out to be associated with or working for Zubair Realty when he was not. Through these acts, the respondents demonstrated untrustworthiness and incompetency violation of RPL 441-c, and breached the fiduciary duties honesty, full disclosure, fair dealing, and due care.

 

            VII- Real Property Law §441-a(5) provides written notice must be given to the Department of State by a licensed real estate of any change in business address. Pursuant to 19 NYCRR §175.20(d), a real estate broker is not permitted to relocate his office without the prior approval of the Department of State. By vacating the registered business address and failing to advise the Department of State in a timely manner, the respondents violated that statute and regulation, and demonstrated untrustworthiness and incompetency.

 

            VIII- Pursuant to Real Property Law §441-a(3), a licensed real estate broker shall have and maintain a definite place of business within New York State. By failing to maintain a definite place of business within this state while continuing to conduct licensed activity, and particularly, by vacating the registered broker business address and engaging in licensed activity at Zubair Realty, the respondent violated this statute.

 

              IX- While there is no explicit statutory requirement that a notary public notify the Department of State when he changes his address, such a requirement is implicit in the requirements that an applicant for a notary public commission establish that he or she has an address in the State of New York (Executive Law §130) and that the notary’s identification card bear his or her address (Executive Law §131). The respondent failed to notify the Department of State when he moved, a further act of misconduct which interfered with the complainant’s investigation. By vacating the registered notary public business address and failing to properly and timely advise the Department of the change in address, Respondent Rossi violated Executive Law Article 6.

            

            X- 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. By failing to cooperate with the Department of State’s investigation of the allegations raised in the complaint, the respondent violated this statute, and further demonstrated untrustworthiness and incompetency in violation of 441-c.

 

            XI- Through his commission of multiple violations of Real Property law, including failing to cooperate with an investigation of the Department of State and failing to notify the Department of State in a change of his notary public address, Respondent Rossi demonstrated he lacks the good moral character required by Executive Law Article 6 §130.

            XII- Where a broker or salesperson has received or retained money to which he, she, or it is not entitled, that licensee may be required to return it, together with interest, as a condition of retention of the license. Donati v. Shaffer, 83 NY2d 828, 611 NYS2d 495 (1994); Kostika v Cuomo, 41 N.Y.2d 673, 394 N.Y.S.2d 862 (1977); Zelik v Secretary of State, 168 AD2d 215, 562 NYS2d 101 (1990); Edelstein v. Department of State, 16 A.D.2d 764, 227 N.Y.S.2d 987 (1962). The respondent will not be permitted to conduct activities licensed by the Department of State until he refunds all money owed to Ms. Watson and Ms. Moses.

 

                        

DETERMINATION

 

            WHEREFORE, IT IS HEREBY DETERMINED THAT respondents Eddie Hugo Rossi and Roseland Realty have violated 19 NYCRR § 175.20(d) and Real Property Law §§ 441-a(3), 441-a(5), 442-e(5) and 443. Furthermore, they have demonstrated untrustworthiness in violation of Real Property Law §441-c. Accordingly, pursuant to Real Property Law §441-c, the real estate licenses of Respondent Rossi and Roseland Realty are revoked, effective immediately. Should they ever re-apply for a real estate license, no action shall be taken on such applications until they shall have produced proof satisfactory to the Department of State that they have refunded the sum of $400.00 plus interest at the legal rate for judgments (currently 9% per year) from February 27, 2008 to Shakira Moses, and $230.00 plus interest at the legal rate for judgments (currently 9% per year) from March 1, 2008 to Tieasha Watson. They are directed to send proof of payment in full of the ordered refunds, by certified mail, to Norma Rosario, Customer Service Unit, Department of State, Division of Licensing Services, 80 South Swan Street, P.O. Box 22001, Albany, New York 12201-2201.

 

            IT IS FURTHER DETERMINED THAT Respondent Rossi has violated Executive Law Article 6 §130. His notary commission is deemed revoked, effective immediately. Should he ever re-apply for a license as a notary public, no action shall be taken on such application until he shall have produced proof satisfactory to the Department of State that he has refunded the sums above in the manner indicated above.

 

 

 

                                                                                    Ziedah F. Giovanni

                                                                              Administrative Law Judge

 

Dated: November 6, 2009