DEPARTMENT OF STATE

OFFICE OF THE SECRETARY OF STATE

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In the Matter of

JOY H. GOLDBERG, Trade Name Real Estate Broker

and Notary Public,

                                    Appellant,

                                                                                                DECISION ON APPLICATION

                        -against-                                                          FOR A STAY PENDING APPEAL

                                                                                                            41 DOS APP 09

DEPARTMENT OF STATE  

DIVISION OF LICENSING SERVICES,

                                    Respondent.

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            Joy H. Goldberg (the Appellant) has appealed and applied for a stay pending decision on appeal of an adverse determination of the Office of Administrative Hearings (OAH) (675 DOS 09). In a decision dated June 19, 2009, Administrative Law Judge (the ALJ) Roger Schneier found that Appellant violated Real Property Law § 441-c and Executive Law § 130, by assisting another person in facilitating a real estate transaction in which “the mortgage lender was induced to make a loan under false pretenses” (675 DOS 09, at p. 3). Pursuant to Real Property Law § 441-c and Executive Law § 130, the ALJ imposed a suspension of Appellant’s licenses as real estate broker and notary public, effective August 1, 2009, for a minimum term of 3 months and continuing thereafter until such time as Appellant produces proof satisfactory to the Department of State that she has refunded the sum of $10,475.00 (the commission received from the seller) plus interest from November 28, 2009 (the date of the closing) at the legal rate of 9 percent to the seller, Julio Alejandro, Jr. (675 DOS 09, at p. 4).  

            On July 17, 2009, the Secretary of State received Appellant’s memorandum of appeal and request for a stay. Appellant contends that the ALJ’s finding that she participated in a fraud and, therefore, demonstrated untrustworthiness was not supported by substantial evidence, went beyond the scope of the complaint, and was arbitrary and capricious (Appellant’s Memorandum of Appeal, at p. 6). On July 20, 2009, the Secretary of State received a memorandum in opposition to the request for a stay from the Division of Licensing Services (Respondent).

OPINION

            In assessing an application for a stay of the penalties imposed pending a determination on an appeal, the burden of proof is placed on the party requesting the relief. The requesting party must demonstrate, based on applicable law and the facts of the case at hand, that a likelihood of success on the merits of the appeal is present, and must demonstrate that the burden which would accrue due to a denial of the stay request will outweigh the legitimate interest of the State in ensuring the welfare of those persons who would avail themselves of the services of its licensees (see Mohan et al. v Division of Licensing Services, 05 DOS APP 09, at p. 2).

            The requirement that a party demonstrate a likelihood of success on the merits does not compel a demonstration that success on the merits is a near certainty but, rather, requires that significant issues of fact or law be presented in a manner showing that a more searching review must be conducted before a clear conclusion regarding the likely outcome of the case may be drawn. Appellant has met that burden.  

            In contending she has shown a likelihood of success on the merit, Appellant argues that the evidence in the record demonstrates nothing more than the fact that she was “standing near [an] alleged fraud” (Appellant’s Memorandum of Appeal, at p. 5). Appellant claims that the record shows that her role in the transaction was peripheral to, and without knowledge of, any fraudulent scheme. Appellant points out that evidence in the record indicates that both parties to the transaction were represented by counsel and that the primary proof of Appellant’s knowledge of and participation in the fraud is the testimony of the seller’s niece, Ms. Morales. A review of the entire record may well reveal the truth of Appellant’s claims. At this juncture, it is sufficient that she has facially shown evidence of a meritorious defense.

            If the stay request were denied, Appellant may well be harmed without a commensurate benefit to the State in ensuring the welfare of those persons who would avail themselves of the services of its licensees. Appellant is a real estate broker and a notary public. The decision of the ALJ suspends both of Appellant’s licenses for a period of three months effective August 1, 2009. Should such penalty be imposed and no stay granted, the Appellant would be deprived of the ability to earn an income in her licensed profession. Such a circumstance is a recognizable hardship that must be weighed against the legitimate interest of the State in safeguarding the welfare of its citizens who would avail themselves of the services of its licensees.

            The State interest in preventing fraudulent conduct by its licensees in interactions with the general public is paramount. Here, however, in imposing the penalty of suspension as opposed to revocation, the ALJ expressly stated that “while [Appellant’s] participation in the transaction was a serious act of untrustworthiness, there is no evidence that this was more than an isolated transaction” (675 DOS 09, at p. 4). Acknowledging the ALJ’s opinion that this incident was “isolated,” considering that Appellant has no prior violations in her licensing history, and noting that there has been no allegation that subsequent claims of impropriety have been leveled against Appellant, such factors militate against a finding that the State’s interest outweighs the prospective hardship to the Appellant.

            Considering the circumstances in totality, the State’s interest in this instance in the immediate imposition of the ordered suspension does not outweigh the hardship to Appellant that would result from a failure to grant the requested stay. Unlike license suspension, however, there is no significant hardship accruing to Appellant from a failure to stay the accrual of interest on the restitution ordered by the ALJ in the event that the ALJ’s decision is ultimately confirmed on appeal—and Appellant has made no such showing.

             Accordingly, it is hereby

            ORDERED that Appellants’ application for a stay of the suspension of Appellants’ license pending determination of this appeal is granted, subject, however, to the following condition:

            The accrual of interest on the restitution ordered by the ALJ shall not be tolled due to the issuance of this stay, should the restitution order be ultimately confirmed on appeal.

So ordered on: July 31, 2009

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                                                                                    Daniel E. Shapiro

                                                                                    First Deputy Secretary of State