660-DOS-17. The respondent failed to appear. The Division of Licensing Services ( DLS ) was represented by Matthew Wolf, Esq.

Transcription

1 STATE OF NEW YORK DEPARTMENT OF STATE OFFICE OF ADMINISTRATIVE HEARINGS X In the Matter of the Complaint of DEPARTMENT OF STATE DIVISION OF LICENSING SERVICES, Complainant, DECISION Complaint No.: against- YANCY K. FOSTER, Corporate Broker, YANCY GROUP NEW YORK LTD., Corporate Brokerage, Respondents X The above matter came on for hearing before the undersigned, J. Carolina Chavez, on March 22, Hearing was held at the office of the Department of State ( Department ) located in New York City. The respondent failed to appear. The Division of Licensing Services ( DLS ) was represented by Matthew Wolf, Esq. ISSUE The issue is if the respondent proved untrustworthy and/or incompetent as a real estate broker in his dealings with the complaining witness, in violation of New York Real Property Law ( RPL ) 441-c. FINDINGS OF FACT 1) The respondent was a licensed real estate professional with the Department at all times relevant to this action (State s Ex. 2). His broker s license expired on June 4, 2016 (State s Ex. 2). 2) On December 19, 2016, Notice of Hearing and Complaint were mailed to the four addresses available to the Department in connection with the respondent s license: 192 Elizabeth Street, New York, New York, the address associated with the respondent s license; 350 Warren Street, Jersey City, New Jersey; 14 West 23 rd Street, New York, New York; and 115 West 29 th Street, New York, New York (State s Ex. 1) 1. The certified mailing to 192 Elizabeth Street was 1 Although not described in the Verified Statements of Service nor at hearing, handwritten notes on each of the return mailings indicate that the Department obtained additional addresses for the respondent in addition to the respondent s registered addresses from the Postal Service when attempting communications with the respondent

2 returned to the Department, marked unclaimed by the Postal Service. The regular mailing to 192 Elizabeth Street was returned to the Department as undeliverable. The certified mailing made to 350 Warren Street was returned by the Postal Service, marked return to sender (State s Ex. 1). The regular mailing made to 350 Warren Street was not returned as undeliverable by the Postal Service (State s Ex. 1). Both mailings sent to West 23 rd Street were returned by the Postal Service, marked unable to forward and return to sender (State s Ex. 1). Both mailings sent to 115 West 29 th Street were returned as undeliverable by the Postal Service (State s Ex. 1). 3) In October 2014, George Pantelidis, a real estate broker with Pan Brothers Associates, filed a complaint with DLS in connection with a co-broker agreement Mr. Pantelidis made with the respondent in 2013 (State s Ex. 3). Investigator Stephen Cavota was assigned to investigate the claim and prepared a report with his findings (State s Ex. 3). 4) The respondent worked as a real estate broker with Pan Brothers Associates from 2006 to 2013, when he started his own brokerage, Yancy Group New York LTD (Transcript at 8-9). In 2013, Mr. Pantelidis and the respondent entered into an agreement to co-broker a lease located at 512 Broome Street, New York, New York (State s Ex. 3; Transcript at 13). The broker agreement specified that both Mr. Pantelidis and the respondent would each be paid commission checks in two installments, one to be paid in November 2013 and a second payment to be issued by May 2014 (State s Ex. 3). As to the May 2014 commission payment, the co-broker agreement specified that each broker would receive a check in the amount of $20,400 (State s Ex. 3). 5) In January 2014, the respondent asked Mr. Pantelidis for a personal loan in the amount of $25,000 (State s Ex. 3; Transcript at 13-14). Mr. Pantelidis agreed to loan the respondent $25,000 with 7% interest, for a total amount of $25,438 due by May 1, 2014 (State s Ex. 3; Transcript at 14-15). The parties signed a Loan and Waiver of Rights Agreement, in which the respondent transferred his rights to the second commission check on 512 Broome Street to Mr. Pantelidis (State s Ex. 3; Transcript at 14-15). Per their written agreement, the respondent was to inform the client that instead of issuing two separate commission checks, the client would just issue one check for both commission amounts to Pan Brothers Associates (State s Ex. 3). 6) Following the loan transaction between Mr. Pantelidis and the respondent, there was an exchange between the attorney for the owner of 512 Broome Street, Richard L Altrelli, and the respondent (State s Ex. 3). In that exchange, Mr. L Altrelli explained that his client did not want to get involved in the arrangement between Mr. Pantelidis and the respondent (State s Ex. 3). 7) On May 5, 2014, Mr. Pantelidis forwarded Mr. L Altrelli an he received from the respondent in January 2014 (State s Ex. 3). Said purported to be a forwarded from Mr. L Altrelli, in which Mr. L Altrelli, on behalf of his client, agreed to adjust the commission check agreement to comport with the terms of the loan contract between Mr. Pantelidis and the respondent (State s Ex. 3). Mr. L Altrelli informed Mr. Pantelidis that his client never agreed to that agreement and that the checks were issued as originally intended (State s Ex. 3). Mr. L Altrelli also denied writing the presented to Mr. Pantelidis by the respondent, both in writing and to Investigator Cavota (State s Ex. 3). Although Mr. L Altrelli tried to stop payment on the commission check issued to the respondent and his brokerage after seeing the altered , the respondent had already cashed it (State s Ex. 3). prior to this proceeding and through other unspecified records checks (State s Ex. 1)

3 8) From January 2015 to May 2015, Investigator Cavota communicated with the respondent as part of his investigation into Mr. Pantelidis complaint (State s Ex. 3). In his initial interview with Investigator Cavota, the respondent conceded that he had borrowed $25,000 from Mr. Pantelidis under the circumstances described by Mr. Pantelidis (State s Ex. 3). He denied, however, ever forwarding to Mr. Pantelidis the purportedly forwarded by the respondent to Mr. Pantelidis described above in paragraph 7 (State s Ex. 3). The respondent told Investigator Cavota that he had repaid the loan and would need time to locate proof of payment (State s Ex. 3). 9) In May 2015, the respondent told Investigator Cavota that he repaid Mr. Pantelidis through other commissions and by forfeiting commissions he was owed by Mr. Pantelidis (State s Ex. 3). He provided some s, a statement, and articles that included his handwritten notes, refuting the representations made by Mr. Pantelidis (State s Ex. 3). Further, he informed Investigator Cavota that he repaid the loan in the amount of $27,800, but that he only made that repayment in connection with a verbal agreement and that he had no proof of payment (State s Ex. 3). 10) In April 2015, Investigator Cavota was informed by Mr. Pantelidis that Mr. Pantelidis had reviewed the real estate transactions the respondent made while a broker with Pan Brothers Associates (State's Ex. 3). Mr. Pantelidis believed that on at least two occasions, the respondent had forged Mr. Pantelidis signature (Transcript at 10-12). The purportedly forged documents were provided to Investigator Cavota (State s Ex. 3). 11) In May 2015, when Investigator Cavota last spoke to Mr. Pantelidis, Mr. Pantelidis informed Investigator Cavota that the respondent had not repaid the loan (Transcript at 25). OPINION AND CONCLUSIONS OF LAW I As the party who initiated this action, the complainant has the burden to prove, by substantial evidence, the truth of the charges. SAPA 306 (1). Substantial evidence is that which a reasonable mind could accept as supporting a conclusion or ultimate fact. Division of Licensing Services v. Guiterrez, 1101 DOS 08 (2008) (citing Gray v. Adduci, 73 NY2d 741, 536 NYS2d 40 (1988)). In determining whether substantial evidence has been presented by the complainant, the question is whether a conclusion or ultimate fact may be extracted reasonably probatively and logically. Division of Licensing Services v. Cirrincione, 246 DOS 98 (1998) (citing City of Utica Water Supply v. New York State Health Department, 96 AD2d 710, 465 NYS2d 365, 66 (1983)). II To obtain personal jurisdiction and bind the applicant to the agency decision, DLS must properly serve the applicant with notice of the hearing and afford him an opportunity to be heard. Service properly made in a manner reasonably calculated to provide notice of the time, date, place, manner, and nature of the proceedings is sufficient whether or not the opposing party actually receives notice. See Persad v. Division of Licensing Services, 63 DOS APP 09 (2009); Pinger v. Division of Licensing Services, 23 DOS APP 07 (2007). In this case, service of the Notice of Hearing was made by certified and regular mail to the address maintained by DLS in connection with the respondent s license. Although both those mailings were returned as undeliverable, DLS also mailed, via certified and regular mail, notice - 3 -

4 to an additional three addresses it had obtained in connection with the respondent s license. While almost all those mailings were returned as unclaimed or undeliverable, at least one regular mailing was not returned as such. Accordingly, DLS took all reasonable steps available, and inasmuch as there is evidence that notice of the place, time, and purpose of the hearing was properly served, the holding of an ex parte quasi-judicial administrative hearing was permissible. Patterson v. Dep t of State, 35 AD2d 616, 312 NYS2d 300 (3d Dep t. 1970); Roy Staley v. Division of Licensing Services, 14 DOS APP 01 (2001); Matter of Application of Rose Ann Weis, 118 DOS 93 (1993); see also Verdell v. DeBuono, 262 AD2d 812, 691 NYS2d 679 (3d Dep t. 1999); Jacoby v. New York State Board for Professional Medical Conduct, 295 AD2d 655, 743 NYS2d 192 (3d Dep t. 2002). III The expiration of the respondent s broker s license does not deprive this tribunal of jurisdiction. Mendel & Sons, Inc. v. N.Y. State Dep t. of Agriculture & Markets, 90 AD2d 567, 455 NYS2d 867 (1982); Main Sugar of Montezuma, Inc. v. Wickham, 37 AD2d 381, 325 NYS2d 858 (1971). IV In this case, there is substantial evidence that the respondent entered a loan agreement with Mr. Pantelidis under false pretenses, and then took steps to defraud Mr. Pantelidis out of the commission check waived in order to secure the loan. While none of the parties directly involved in this loan transaction testified at hearing, the documentary evidence provided and the interviews recorded by Investigator Cavota overwhelmingly show that the respondent did not abide by his agreement. Further, Mr. L Altrelli, who did not represent either Mr. Pantelidis or the respondent, had no reason to deny sending the forwarded to Mr. Pantelidis. Accordingly, the only reasonable conclusion here is that the respondent defrauded Mr. Pantelidis of $25,400, forged an in order to do it, and then defaulted on a personal loan he agreed to in connection with his co-broker agreement. In doing so, he demonstrated untrustworthiness and incompetence, in violation of RPL 441-c. V The respondent is also charged with forging two documents while in Mr. Pantelidis employment, in violation of RPL 441-c. The allegation was not fully explored at hearing nor in the course of Investigator Cavota s investigation. Rather, the accusation appears to have been one made by Mr. Pantelidis at the close of this investigation, when he was reviewing old paperwork. Accordingly, there is insufficient information to corroborate this charge at this time, and it must be dismissed

5 DETERMINATION WHEREFORE, IT IS HEREBY DETERMINED THAT Yancy K. Foster, UID # , of Yancy Group New York LTD, violated RPL 441-c (1). Accordingly, his license is deemed revoked. Further, prior to the renewal or processing of any real estate professional license for the respondent and or the brokerage Yancy Group New York LTD., the respondent must provide proof satisfactory to the Department that he has repaid George Pantelidis and or Pantelidis Brothers Associates the full amount owed, to wit, $25, , with interest calculated at a rate of 9% per annum, pursuant to CPLR The respondent may surrender his licenses and or submit proof of payment to the attention of Norma Rosario, Department of State, Division of Licensing Services, One Commerce Plaza, 99 Washington Avenue, 5th Floor, Albany, New York Dated: June 23, 2017 /s/ J. Carolina Chavez Administrative Law Judge - 5 -