STATE OF NEW YORK
DEPARTMENT OF STATE
OFFICE OF ADMINISTRATIVE HEARINGS
720 DOS 05
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RICHARD J. CONLEY,
Applicant for a License as a Real Estate Broker,
-against- DECISION
DIVISION OF LICENSING SERVICES,
Objector.
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DIVISION OF LICENSING SERVICES,
Complainant,
-against-
RICHARD J. CONLEY,
Real Estate Salesperson,
Respondent.
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Applicant and respondent, Mr. Richard J. Conley, was represented by Michael Aronow, Esq., at the hearing held January 11, 2005. Mr. Conley appeared pro se at the hearing held June 15, 2005.
Objector and complainant, Division of Licensing Services, was represented by Kristen Goussous Casey, Esq., Assistant Litigation Counsel.
Under provisions of Real Property Law, §441-e, Administrative Procedure Act, Articles 3 and 4, and 19 New York Codes, Rules and Regulations, Part 400, applicant requested a hearing to review the Division of Licensing Services' proposed decision to deny his application submitted on March 14, 2004, for a license as a real estate broker. The Division of Licensing Services granted Mr. Conley thirty points toward the experience prerequisite.
A hearing commenced on January 11, 2005, was continued to allow Mr. Conley an opportunity to submit additional information to the Division of Licensing Services in support of the application for licensure.
On March 7, 2005, Division of Licensing Services filed a notice of motion for leave to file an amended complaint. In its amended complaint, Division of Licensing Services contends that the applicant lacks the experience required by Real Property Law, §441, and further alleges that the applicant engaged in acts of untrustworthiness and incompetence because he submitted to Division of Licensing Services fraudulent documentation in support of his license application.
The tribunal deems the State's amended complaint as a supplemental complaint because: (1) the complaint brings to the notice of both the tribunal and the applicant events alleged to have occurred since the pleading sought to be supplement; and (2) the complaint both alleges an allegation and seeks a relief not alleged or sought in the original pleading.
Considering all the circumstances and without reaching the merits of the matter and without objection of respondent, the State's motion for leave to supplement the pleadings is granted. The substantial rights of the applicant are not materially affected or prejudiced. Both questions posed, the question of experiential competency and the question of untrustworthiness and incompetence, present common, factual issues.
Consolidation of the hearings, that requested by applicant to review the proposed denial of the application with that brought by Division of Licensing Services alleging disciplinary charges, permits the parties to litigate all questions affecting their respective interests and aids the tribunal in the efficient and expeditious disposition of the adjudicative matters (State Administrative Procedure Act, §301.5; 19 New York Codes, Rules and Regulations, §400.3[d]; Application of Cosine, 75 DOS 85 [1985]).
Certified records of Division of Licensing Services denote Mr. Richard J. Conley's license history as a real estate salesperson as follows: May 14 to June 14, 2002, Coldwell Banker Surf; June 18 to July 5, 2002, Thompson Realty Inc.; July 8 to August 23, 2002, Century 21 Prevete Hirsh Realty; January 2 to March 1, 2003, ReMax West; April 1 to October 27, 2003, Prudential Galeria Real Estate; and July 1, 2004, to July 1, 2005, Jerry Leonard Associates Inc.
At the hearing held on January 11, 2005, Mr. Conley testified that he was also associated as a real estate salesperson with the following real estate brokers: November 8 to December 29, 2003, Manor Gate Realty Inc.; January 2 to January 11, 2004, Century 21 Annette's Real Estate; January 12 to January 18, 2004, Wickert Realtor Dallow Agency; and February 18 to March 11, 2004, Century 21 Your Home.
Sometime in January 2005 and after the hearing held January 11, 2005, Mr. Conley submitted approximately 1,848 documents to Division of Licensing Services in support of his application for license as a real estate broker. Essentially, the documents are identical in form. Each is a one-page document with printed matter on both sides of the page (two pages of information). Mr. Conley submitted the documents to Division of Licensing Services as evidence of open listings obtained by him as a real estate salesperson while associated with various real estate brokers.
Page one (the front) of each of the documents bear the logo of the Multiple Listing Service of Long Island Inc., a form identification "MLS-LI-2 (4/93)", the designation "OPEN LISTING CERTIFICATION" and is addressed "TO: MULTIPLE LISTING SERVICE OF LONG ISLAND, INC.".
Page 2 (the back) of each document is a copy of a computer-generated "Stratus Reports", downloaded on December 1, 2004, from "http://www.mlsstratus.com/Public Records..." and indicates "Prepared by Richard Conley" for "Jerry Leonard Assoc.".
The Stratus Reports are public records of the sale of residential real property. A report lists a property's address and tax, deed, and listing history information. Each Stratus report advises, "Information supplied by third parties and not by Multiple Listing Service of Long Island, Inc."
The following, a copy of one of the 1,848 documents submitted to Division of Licensing Services by Mr. Conley as an open listing obtained by him, illustrates the form used by Mr. Conley for all the claimed open listings.
INSERTED EXHIBIT FOR PAGE 4 GOES HERE
INSERTED EXHIBIT FOR PAGE 5 GOES HERE
Mr. Conley's written and testimonial statements offered into evidence essentially assert the following: Each purported open listing is submitted on a legitimate form of Long Island Board of Realtors. Each purported open listing was obtained by him from the database of Multiple Listing Services of Long Island (MLSLI). He copied each open listing form from a sponsoring broker, and he filled in the blanks. Because most brokers do not allow open listings to be placed in their computers, he "...spit them out on...(his) computer." The purported open listings were submitted to MLSLI. He views himself to be an independent agent and both considers and does not consider himself to be an independent contractor.
By letter dated February 1,2005, Mr. James Spear, Vice President, Operations, MLSLI, responded to an inquiry by the Division of Licensing Services regarding the MLS' policy on open listings. Mr. Spear stated, in part, "Only exclusive listings may be submitted to the MLS. Open listings are not accepted."
Subsequently, Division of Licensing Services sent to Mr. Spear a copy of an "OPEN LISTING CERTIFICATION" submitted to Division of Licensing Services by Mr. Conley. In an affidavit dated May 25, 2005, Mr. Spear, on behalf of the MLSLI, confirmed:
"I am employed by the Multiple Listing Service of long Island, Inc. ('MLSLI') and hold the position of vice president in charge of operations. I make this Affidavit to report the results of certain investigations made by me at the request of the New York State Department of State.
"On May 3, 2005, I was supplied a copy of a document purportedly addressed to MLSLI dated January 11, 2003, a copy of which is annexed to this Affidavit as Exhibit 1.
"MLSLI has no record of ever receiving this document. Furthermore, I would highly doubt that such a document would be sent to the MLSLI since it is the certification that the homeowner has elected not to list their house on multiple listing but rather to enter into an open listing with the broker. There is no rule in the MLSLI that requires such a certification where a broker is taking an open listing. Furthermore, the MLSLI does not accept open listings and, therefore, their placing such a listing on MLS would violate our rules."
During presentation of his case, Mr. Conley testified regarding a folder containing seventy-two documents of the 1,848 documents submitted by him to Division of Licensing Services in January 2005. Mr. Conley's testimony regarding those documents reveals the following information.
1. In the duration of time from October 2, 2002, to October 3, 2005, Mr. Conley claims to have obtained property 106 Delaware Avenue, Long Beach, as a one-year, open listing on three separate occasions: (a) on October 2, 2002 (ending October 2, 2003), for Thompson Realty; (b) on March 3, 2004 (ending March 3, 2005), for Century 21 Your Home Real Estate; and (c) on October 3, 2004 (ending October 3, 2005), for Jerry Leonard Associates Inc.
The records of the Division of Licensing Services disclose that Mr. Conley's association as a real estate salesperson with Thompson Realty Inc. terminated on July 5, 2002, almost three months before the proffered listing date of October 2, 2002.
Mr. Donald C. Scanlon, real estate broker representing Century 21 Your Home, wrote to the Division of Licensing Services on January 29, 2005: "Please be advised that at NO TIME was Richard J. Conley ever licensed to Century 21 Your Home. He interviewed with us on February 19, 2004 and filled out a 'Change of Association Card' and a Money order to the DOS that was never submitted. He did no business that we authorized or were aware of as a representative of Century 21 Your Home. Attached is our copy of a letter we sent to him, along with a copy of his License that he originally left with us pending our approval of his association."
The letter referred to by Mr. Scanlon, addressed to Mr. Conley and dated March 8, 2004, states: "Enclosed please find your license and money order. In view of the fact that you elected not to pay your LIBOR dues, both AL & I feel that you wold not fit in with our operation. We both wish you success in your Real Estate career."
Responding to a letter from Division of Licensing Services, Mr. Leonard Shumsey, broker representing Jerry Leonard Associates Inc., provided the following information on February 23, 2005: "In response to the attached letter dated January 26, 2004 please be advised that during the short time that Mr. Conley was associated with my firm he did not submit any listings of any kind, I did not issue him any commission checks and have not submitted any W-2 forms or 1099 forms to Mr. Conley. I do not posess any documentation of any real estate transactions while he was associated with my firm because I am not aware of any transactions that he performed."
2. In the duration of time from June 3,2003, to August 2, 2005, Mr. Conley contends to have obtained property, 74 Minnesota Avenue, Long Beach, as a one-year, open listing five times: (a) on June 3, 2003 (ending June 3, 2004), for Prudential Galeria Real Estate; (b) December 5, 2003 (ending December 5, 2004), for Manor Gate Realty Inc.; (c) on March 2, 2004 (ending March 2, 2005), for Century 21 Your Home Real Estate; (d) on March 10, 2004 (ending March 10, 2005) for Century 21 Your Home Real Estate; and (e) on August 2, 2004 (ending August 2, 2005), for Homestead Act Realty Inc.
Division of Licensing Services contacted the real estate brokers listed by Mr. Conley on the documents. The brokers' responded as follows:
On May 24, 2004, Mr. John Berookhim of Prudential Galeria Real Estate wrote: "During the period that Mr. Richard Conley was associated with Prudential Galeria Real Estate, he did not secure any listing, or write any binder that the office was aware of. Overall, our office does not have any documentation regarding Mr. Conley's real estate transactions. Moreover, our office did not issue him any checks or tax forms."
Mr. Floyd Earl, owner/broker of Manor Gate Realty Inc., sent Division of Licensing Services a copy of a letter dated December 29, 2003, addressed to Mr. Conley, in which Mr. Earl asserts that Mr. Conley has never been associated as a real estate salesperson with the broker: "I had hoped to see you at the Wantagh office in the past two weeks to discuss your association with Manor Gate Realty. I am enclosing your Libor dues notice, Department of State rejection of your Change of Association, your $10 check and your Real Estate License. I have decided to terminate any association you might have with Manor Gate Realty. The State Department has rejected your Change of Association, so acutely you have never been licensed at Manor Gate Realty. Effective immediately, you are not to represent yourself as an agent of Manor Gate Realty in any way."
Century 21 Your Home's assertion that Mr. Conley was never associated with the company as a real estate salesperson was previously hereinabove discussed.
On January 31, 2005, Mr. James Faulkner, owner/broker of the Homestead Act Realty Inc., stated in a letter to Division of Licensing Services: "In regards to your letter dated January 26, 2005 regarding Richard J. Conley & Homes America Homestead Realty, nothing transpired with Mr. Conley. After 2 hours of observation, I asked him to remove himself from my office. He was doing work on the computer and speaking to my sales associate of how he intended to market and sell homes. I found his attitude and approach were not within the standards required in real estate. Mr. Conley has no open listings; no commissions were paid and had no transactions."
Mr. Faulkner attempted to file a termination of association notice dated August 10, 2004, with the Division of Licensing Services. The notice was rejected by Division of Licensing Services by a Real Estate Rejection Notice dated October 15, 2004, noting: "The card and fee are not required. The salesperson's record already reflects the information as stated on the returned card. Already terminated from your agency as of 09/07/2004."
Mr. James Faulkner testified as follows: Mr. Conley was associated with Homestead Act Realty Inc. for about two hours. After observing Mr. Conley's behavior, Mr. Faulkner terminated the association and asked Mr. Conley to leave the office. During the two-hour association, Mr. Conley did not perform any real estate transactions, including obtaining open listings, and was not paid any compensation.
3. In the duration of time from January 8, 2004, to May 7, 2005, Mr. Conley claims to have obtained one-year, open listings for property, 107 East Market Street, Long Beach on five occasions: (a) on January 8, 2004 (ending January 8, 2005), for Century 21 Your Home Real Estate; (b) on February 12, 2004 (ending February 12, 2005), for Weichert Realtors, The Dallow Agency; (c) on November 2, 2004 (ending November 2, 2005), and on November 24, 2004 (ending November 24, 2005), for Jerry Leonard Associates Inc.; (d) on February 19, 2004 (ending February 19, 2005) for Century 21 Your Home Estate; and (e) on May 7, 2004 (ending May 7, 2005), for Homestead Act Realty Inc.
Division of Licensing Services' records do not record an association by Mr. Conley as a real estate salesperson with Weichert Realtors The Dallow Agency. The other brokers listed by Mr. Conley in this duration of time were previously hereinabove discussed.
4. In addition to the brokers listed in the documents examined above, the packet of seventy-two documents also contains purported open listings claimed to have been obtained by Mr. Conley while associated with the following, additional, real estate brokers: Century 21 Wittney Estates, two listings, August 17 and August 22, 2004; Coldwell Banker Surf, one listing on June 26, 2002; Precise Building Technologies Corp., three listings, March 10 to September 17, 2004; ReMax West, one listing on February 26, 2003.
Mr. Richard M. Witt, President of Century 21 Wittney Estates, replied on February 7, 2005, to an inquiry by Division of Licensing Services. He stated: "Mr. Conley was associated with our firm for less than three days. During that time I received two phone calls from homeowners complaining about him and subsequently terminated him. He submitted no documentation pertaining to any listings during that three day period. He had no transactions nor earnings."
In an affidavit dated May 31, 2005, sent to Division of Licensing Services, Mr. Witt restated the remarks made in his letter of February 7, 2005. He avers: "I am licensed as a real estate broker representing Century 21 Wittney Estates.... On or about August 19, 2004, I hired Richard Conley to work as a real estate agent associated with Century 21 Wittney Estates. As a result of this association, I am familiar with Mr. Conley. Mr. Conley was employed as a real estate agent with Century 21 Wittney Estates for less than three days. While he was associated with Century 21 Wittney Estates, two homeowners telephoned me with complaints about him, and I was forced to terminate his employment with Century 21 Wittney Estates. During the brief time period that Mr. Conley was associated with Century 21 Wittney Estates, he did not have any listings, open or exclusive, nor did he earn any commissions."
Division of Licensing Services received a letter on February 23, 2005, from Mr. Kevin M. Leatherman, broker representing Coldwell Banker Surf, in which the broker states: "In response to your letter of January 26th, 2005, I hereby report the following concerning Richard J. Conley, my former Sales Agent: No Open Listings were brought into our office by Richard J. Conley - No Commission Checks were issued to Richard J. Conley - No 1099 or W-2 Tax Forms were issued to Richard J. Conley - No real estate transactions were executed by Richard J. Conley."
Mr. Leatherman's testimony emphasized and amplified the statements made in his letter of February 23, 2005. In addition, as a member of the Board of MLSLI, Mr. Leatherman both: (1) testified that the documents purported to be open listings from the database of MLSLI were not MLSLI forms and would not have been accepted or placed in the MLSLI's database as open listings; and (2) confirmed the statements made in the affidavit dated May 25, 2005, of Mr. James Spear that was previously offered into evidence.
Mr. Scott A. Arenella, broker representing Precise Building Technologies Corp., also replied to Division of Licensing Services' inquiry both by letter and by affidavit. In his letter received by Division of Licensing Services on February 3, 2005, he states: "I am writing you in response to your letter dated January 26, 2005. The information you are requesting regarding Mr. Richard J. Conley does not exist. On August 27, 2004, Mr. Conley approached me to be associated with my brokerage and I sent the Change of Association card with the $10.00 fee to NYDOS. I also contacted my local LIBOR office to set-up Mr. Conley under my brokerage for MLS. The LIBOR office informed me that they have received the same information from Coldwell Banker Custom Real Estate on August 25, 2004 regarding Mr. Conley. They also informed me that he was just associated with Homestead Act Realty and they expressed some concerns about him. I approached Mr. Conley about this and after several attempts to get a straight answer, I informed him that he must find another Brokerage to work with. Mr. Conley did not conduct any business under my brokerage and I sent the Termination of Association card along with the $10.00 fee on September 15, 2004."
Mr. Arenella states in his affidavit dated May 10, 2005: "On or about August 27, 2004, Mr. Conley contacted me about becoming associated as a real estate agent with Precise Building Technologies Corp. Shortly thereafter, I mailed the change of association form to the Department of State. In addition, I also contacted my local Long Island Board of Realtors office to set up Mr. Conley under my brokerage for the Multiple Listing Service. After I sent the Change of Association card to the New York Department of State with the requisite fee, I attempted to address certain concerns I had with Mr. Conley and his employment with other real estate agencies. I was unable to properly address my concerns with Mr. Conley, and as a result, I instructed him to find another brokerage company with which to be associated. At no time did Mr. Conley conduct any business under my brokerage company, nor he obtain any listings from Precise Building Technologies Corp. Precise Building Technologies Corp. never paid any commissions to Richard Conley. On September 15, 2004, I mailed the Termination of Association card for Mr. Conley with the requisite fee to the Department of State."
ReMax West, through its broker/owner Mr. Otto E. Lugo, by letter dated May 19, 2004, informed Division of Licensing Services as follows: "As per your request, Richard Conley procured two listings while associated with Re/Max West. The first one is 3 Gerard Avenue New Hyde Park, NY 11040 and the second one is 20 Merritt Street Lindenhurst, NY 11757. Enclosed you will find copies of the listing agreements and disclosure forms regarding the aforementioned properties. Mr. Conley did not have any sales contracts or binders for these properties and was never issued any commission checks and therefore did not receive a 1099 tax form from this company. Mr. Conley did not have any open listings while associated with Re/Max West."
Mr. Conley objects to the tribunal's acceptance of the letters and affidavits as hearsay evidence and contends that the tribunal should not give any weight to the hearsay evidence.
Hearsay evidence is admissible in a quasi-judicial, administrative hearing.
The hearsay evidence is relevant: It is not misleading, not confusing, and not conflicting; there is a relation between the evidence and the facts material to the determination of the action.
The hearsay evidence consists of affidavits and letters sent by real estate brokers to the Division of Licensing Services in response to the agency's requests for information during its investigation of Mr. Coney's application for licensure as a real estate broker. The repetitive recitals of homogeneous statements both in the letters and in the affidavits form a litany of consistent and accordant facts.
The hearsay evidence is probative: It consists of coordinating factors of fact and reason that tend to prove ultimate facts that may be properly proved in the administrative action.
The hearsay evidence is given much weight. It is sufficiently relevant and probative to constitute substantial evidence that prove Mr. Conley's misconduct: He submitted to Division of Licensing Services documents containing false information regarding his experience acquired as a real estate salesperson. That substantial evidence from which Mr. Conley's misconduct is determined is both patently inconsistent with his innocence and exclude to a moral certainty every other reasonable hypothesis.
The hearsay evidence is substantiated by additional evidence of a different character to the same issues, i.e., testimony of real estate brokers with whom the respondent was associated corroborates the hearsay evidence.
The substantial evidence manifestly proves: (1) Mr. Coney did not obtain open listings when associated as a real estate salesperson with Coldwell Banker Surf, or with Century 21 Wittney Estates, or with Prudential Galeria Real Estate, or with ReMax West. (2) Mr. Conley was not lawfully associated as a real estate salesperson with Century 21 Your Home, or with Homestead Act Realty Inc., or with Manor Gate Realty Inc., or with Precise Building Technologies Corp. (3) Consequently, he did not obtain any open listings as a real estate salesperson associated with those real estate brokers. (4) The purported MLSLI form on which respondent submitted information to Division of Licensing Services is not an official MLSLI form. And (5) Mr. Conley did not obtain the purported open listings from the MLSLI database and did not submit open listings to MLSLI for placement on its database.
Mr. Conley argues inefficaciously that examination of the seventy-two documents during the hearing does not credit or account for the remainder of the 1,848 documents that he submitted to Division of Licensing Services.
As an aid in weighing the evidence, the tribunal applies the maxim, "falsus in uno, falsus omnibus." The seventy-two documents submitted by Mr. Conley and his testimony concerning both those documents and the other purported open listing documents are willfully false on the material issue of experience. Thus, the tribunal finds Mr. Conley's testimony not to be credible and considers all documents submitted by Mr. Conley as open listings to be false.
Assuming, arguendo, that Mr. Conley obtained the claimed, one-year, open listings when associated as a real estate salesperson with the listed real estate brokers, the listings would have to be discounted.
The documents submitted to Division of Licensing Services by Mr. Conley are repletory with duplicate listings of properties. The majority of the purported one-year, open listings submitted by Mr. Conley consists of duplicate addresses of properties with overlapping listing dates obtained under different brokers within a one-year duration of time. That behavior both breaches the fiduciary relationship that exists between a real estate broker and an associated real estate salesperson and violates 19 New York Codes, Rules and regulations, §175.14
On June 29, on July 22, and on July 25, 2005, Mr. Conley attempted ex parte and post-hearing to offer into evidence numerous documents. The tribunal refused to accept or to consider the documents and returned the documents to Mr. Conley with notice to Division of Licensing Services of the tribunal's action.
A licensed real estate salesperson performs regulated, real estate activities as an agent of and under the supervision of a licensed real estate broker. This means on a practical level that a real estate salesperson: must be associated with a licensed real estate broker before engaging in activities described in the provisions of Real Property Law, §440 (Real Property Law, §442-b); is prohibited from acting as or holding himself out as a real estate broker prior to licensure as a broker (Real Property Law, §440-a); is forbidden from conducing real estate brokerage activities in any place not indicated in the license of the sponsoring broker; is a fiduciary agent of the sponsoring broker; and obtains all clients and real estate business on behalf of and subject to the control and supervision of the sponsoring broker.
The regulation prescribes: "A real estate salesperson shall, upon termination of his association with a real estate broker, forthwith turn over to such broker any and all listing information obtained during his association whether such information was originally given to him by the broker or copied from the records of such broker or acquired by the salesperson during his association." (§175.14).
Based on the foregoing findings of fact and opinion and as a matter of law, I conclude:
Applicant, Mr. Richard J. Conley, failed to prove by substantial evidence that he possesses the experiential prerequisite prescribed in Real Property Law, §441, for a license as a real estate broker.
Respondent, Mr. Richard J. Conley, demonstrated untrustworthiness and incompetence in that he submitted to Division of Licencing Services documents containing false information or false statements concerning the material issue of experience in support of his application for licensure as a real estate broker.
Based on the foregoing findings of fact, opinion, and conclusion of law and under the provisions of Real Property Law, §§441-c and 441-e:
I ORDER the application of Mr. Richard J. Conley for a license as a real estate broker (35CO0951517) is denied.
I FURTHER ORDER the real estate salesperson license issued to respondent, Mr. Richard J. Conley, under provision of Real Property Law, Article 12-A (40CO0951517) is revoked effective immediately.
I FURTHER ORDER under provisions of Real Property Law, §441-c(2), that within five (5) days of receipt of a copy of this decision, respondent, Mr. Richard J. Conley, deliver in person or by certified mail to Ms. Yvette Carter-Kreczko, Customer Service Unit, Department of State, Division of Licensing Services, 84 Holland Avenue, Albany, NY 12208, all licenses and pocket cards issued to him under the provisions of Real Property Law, Article 12-A, as a real estate salesperson, or alternatively, file an affidavit in form prescribed by the Division of Licensing Services if the failure to return all licenses and pocket cards is due either to the documents' loss or destruction.
SO ORDERED: August 31, 2005
Felix Neals
Supervising Administrative Law Judge