DEPARTMENT OF STATE
OFFICE OF THE SECRETARY OF STATE
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In the Matter of
JOANNE SIMME, VICTOR L. PETERSON, and
M.J. PETERSON REAL ESTATE, INC.,
Appellants,
DECISION ON APPLICATION
-against- FOR A STAY PENDING APPEAL
45 DOS APP 09
DEPARTMENT OF STATE
DIVISION OF LICENSING SERVICES,
Respondent.
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Joanne Simme, Victor L. Peterson, and M.J. Peterson Real Estate (the Appellants) have appealed and applied for a stay pending decision on appeal of an adverse determination of the Office of Administrative Hearings (OAH) (747 DOS 09). In a decision dated July 15, 2009, following an administrative hearing held on July 10, 2008, Administrative Law Judge (the ALJ) Scott NeJame found that Appellant Joanne Simme violated Real Property Law § 440-c by acting as a real estate salesperson while unlicensed, and demonstrated incompetency in violation of Real Property Law § 441-c (747 DOS 09, at p. 12). The ALJ also determined that Appellants Victor L. Peterson and M.J. Peterson Real Estate violated Real Property Law §§ 441-c and 442-c by employing an unlicensed real estate salesperson (747 DOS 09, at p. 12-13). Pursuant to Real Property Law § 441-c, the ALJ imposed a fine of $3,000 on both Appellant Simme and Appellants Victor L. Peterson/M.J. Peterson Real Estate, to be paid on or before August 31, 2009 (747 DOS 09, at p. 12-13). The ALJ also ordered Appellants to refund the sum of $16,200 plus interest to Susan Abbatoy and Evelyn Janis for commissions found to have been received in relation to the unlicensed activities of Appellant Simme (747 DOS 09, at p. 13).
On July 30, 2009, the Secretary of State received Appellants’ request for a stay. A memorandum of law in opposition to the stay was filed by Respondent Division of Licensing Services on July 31, 2009. Thereafter, an appeal postmarked August 14, 2009 was filed by Appellants with the Secretary of State. A memorandum in opposition to the appeal has not yet been filed by Respondent Division of Licensing Services.
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 Joy H. Goldberg v. Division of Licensing Services, 41 DOS APP 09, at p. 2; 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 questions 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 (see Joy H. Goldberg v. Division of Licensing Services, 41 DOS APP 09).
Appellants contend that the ALJ’s decision was not in accord with the procedures and time periods provided by 19 NYCRR § 400.13, to which the Department of State, Division of Licensing Services is bound. Here, an administrative hearing was held and concluded on July 10, 2008 and a decision was ultimately rendered by the ALJ on July 15, 2009 (see 747 DOS 09). The rules and regulations of the Department of State, Division of Licensing Services provide that “every adjudicatory proceeding under the jurisdiction of the Secretary of State shall be brought to completion within 150 days of the date of the hearing specified in the service of the notice of hearing” (19 NYCRR § 400.13(a)). Here, over one year passed between the conclusion of the hearing and the issuance of a determination by the ALJ. It appears that the record supports the conclusion that the adjudicatory process was not completed within 150 days and no extension of that time period was obtained.
Appellants also contend that the ALJ erred in finding Appellant Simme’s activities while unlicensed between March of 2006 and August of 2006 to be in violation of law. Appellants claim that Real Property Law § 441-a(2) permitted such activities. Real Property Law § 441-a(2) provides that “a license issued or reissued under the provisions of this article shall entitle the person ... to act as a real estate salesman in this state up to and including the thirty-first day of October of the year in which the license by its terms expires.” Appellant Simme’s license as a real estate salesperson expired in March of 2006 and, therefore, pursuant to the plain language of Real Property Law § 441-a(2), she would have been entitled to act as a real estate salesperson through October 31, 2006. The ALJ determined, however, that Appellant Simme’s activities in the months of March through August of 2006, following her license’s expiration by its terms in March of 2006, constituted impermissible unlicensed activity and “decline[d] to give Real Property Law § 441-a(2) that meaning” (747 DOS 09). Appellants’ argument relies on the plain language of the law which appears to be supported by the facts, and, therefore, a likelihood of success on the merits has been demonstrated.
The decision of the ALJ imposes a financial penalty upon Appellants (747 DOS 09, at p. 12-13). Such a penalty represents a moderate, but recognizable burden. The fact that only a financial penalty was directed by the ALJ, indicates that the public welfare was determined to not be threatened by the Appellants continued operation of licensees of the Department of State. Therefore, considering the circumstances in totality, the State’s interest in the immediate imposition of the ordered financial penalty does not outweigh the hardship to Appellants that would result from a failure to grant the requested stay. Unlike immediate payment, however, there is no significant hardship accruing to Appellants 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 date for payment of the fines ordered by the ALJ 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.
Further, this determination is not to be construed as a determination on the merits.
So ordered on: August __, 2009
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Daniel E. Shapiro
First Deputy Secretary of State