Complainant, DECISION

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, -against- Complainant, DECISION DIEGO SUCUZHANAY, SHARON PETILLO, OPEN PASSPORT REALTY, KATHERINE D ALESSANDRO, ROMEL SUCUZHANAY, PEDRO SUCUZHANAY, GIL V. PEREZ, and OPEN DEAL REALTY, LLC, Respondents X The above noted matter came on for hearing before the undersigned, Dolores Franco, on February 6, 2013 and March 11, 2013 at the office of the Department of State located at 123 William Street, New York, New York. Respondent Gil V. Perez ( respondent Perez ) did not appear on both dates, however, on March 11, 2013, he was represented by Francis A. Mainiero, Esq. and Paul Cavaliere, Esq., 26 Court Street, Suite 810, Brooklyn, New York. Respondents Diego Sucuzhanay (individually respondent Diego ), Romel Sucuzhanay (individually respondent Romel ), and Pedro Sucuzhanay (individually respondent Pedro ) (collectively respondents Sucuzhanays ) were represented by Andrew M. Tilem, Esq., 228 Montrose Ave., 2 nd floor, Brooklyn, NY. Respondents Sharon Petillo ( respondent Petillo ) and Katherine D Alessandro ( respondent D Alessandro ) were informed of their right to be represented by counsel and they chose to represent themselves. The complainant was represented by Senior Attorney Linda Cleary, Esq.

2 COMPLAINT The complaint alleges that the respondents have engaged in the following acts of misconduct: by conducting licensed activity with Alfredo Estella when there were no valid and effective real estate licenses, and accepting a commission for the leasing of an apartment to Mr. Estrella; by conducting licensed real estate activity without having current valid and effective licenses; by permitting multiple unlicensed persons to represent themselves as associated with respondent Open Passport Realty and to conduct licensed activity on behalf of respondent brokerage; by compensating respondents for activities conducted as purported licensed real estate licensees when respondents did not hold valid and effective licenses as real estate salespersons or brokers; by accepting compensation in the form of commissions from unlicensed brokers with whom they were associated, including time periods when the brokerage license had lapsed; by accepting the position of representative broker for respondent Open Passport Realty, and then not managing the business thereby resulting in inadequate supervision, respondent Petillo demonstrated untrustworthiness and /or incompetency; by allowing unlicensed or inadequately licensed individuals to manage and operate the business of respondent Open Passport Realty, respondent Petillo, who was the licensed representative broker for said respondent, availed her broker license to improper persons and demonstrated untrustworthiness and/or incompetency; by permitting unlicensed or inadequately licensed persons to hold ownership interests in respondent brokerages; and by failing to ensure that a licensed representative broker was in charge of respondent Open Deal Realty for the period 3/21/11 to 11/21/11, respondents Perez and Diego demonstrated untrustworthiness and/or incompetency pursuant to Real Property Law Article 12-A Section 441-c. FINDINGS OF FACT 1) Notice of hearing together with a copy of the complaint was mailed to respondents Sucuzhanays and Gil Perez by certified mail on October 17, The certified mail was signed by said respondents and returned to DLS by the Postal Service. Respondent Petillo was served by certified mail on October 17, 2012 and regular mail on January 16, The certified mailing was returned by the Postal Service marked unclaimed, but the regular mailing was not returned. Respondent D Alessandro was served by certified mail on October 17, 2012 and regular mail on November 14, The certified mail was returned by the Postal Service marked return to sender, but the regular mailing was not returned (State's Ex. 1). 2) Respondent Diego has the following record of licensure as a real estate salesperson (State's Ex. 2):

3 6/1/2008 to 6/09/2008 renewed real estate salesperson s license under sponsorship of La Fortuna Realty LLC., 21 Kossuth Pl, Brooklyn, NY; 6/09/2008 to 09/19/ changed business association to working under sponsorship of Open Realty International, 320 Linden St., Brooklyn, NY; 10/04/2008 to 2/05/ changed business association to working under sponsorship of Exit Realty Best, Jamaica Ave. 2 nd fl., Woodhaven, NY; 4/21/2011 to 5/25/ late renewal of real estate salesperson s license under sponsorship of Exit Realty Best, Jamaica Ave. 2 nd fl., Woodhaven, NY; and 5/25/2011 to 4/20/ changed business association to working under sponsorship of Charles Rutenberg Realty Inc., 255 Executive Drive, Plainview, NY. 3) Respondent Romel is currently licensed as a real estate salesperson under the sponsorship of respondent Open Deal Realty LLC., 320 Linden St, Brooklyn, NY for the period of 11/26/2011 through 11/25/2013 (State s Ex. 2). There is no prior record of respondent Romel being licensed as a real estate broker or salesperson from at least 1/1/2005 (State s Ex. 8). 4) There is no record of respondent Pedro being licensed as a real estate broker or salesperson from 1/1/2007 through the present (State s Ex. 2). 5) Respondent Petillo was licensed as a real estate broker representing respondent Open Passport Realty LLC., 320 Linden Street, Brooklyn, NY for the period of 7/2/2009 through 7/1/2011. She renewed her broker s license as a limited liability company representing Gato Realty LLC., 80 Beekman Street, Southbridge Plaza H, New York, NY for the period of 4/3/2009 through 4/2/2011. She also renewed her individual broker s license at a business address of th Street, South Ozone Park, NY for the period of 1/27/2012 through 1/26/2014 (State s Ex. 2). 6) Respondent D Alessandro is, and at all times hereinafter mentioned was, duly licensed as an individual real estate broker with a current address of 261 Hendrix Street, Brooklyn, NY. She renewed her individual broker s license for the period of 8/11/2012 through 8/10/2014 (State s Ex. 2). 7) By virtue of him being an attorney, respondent Gil Perez was issued a real estate broker s license as an individual broker at a business address of 320 Linden Street, Brooklyn, NY for the period of 4/14/2010 through 4/13/2012. He was issued an additional real estate broker s license representing Open Deal Realty LLC., 320 Linden Street, Brooklyn, NY for the period of 10/21/2011 through 10/20/2013 (State s Ex. 2). 8) Juan Romero was duly licensed as a real estate broker representing respondent Open Deal Realty LLC., 320 Linden Street, Brooklyn, NY for the period of 8/24/2010 through 3/11/2011. That license was in effect until he relinquished it on 3/11/2011 (State s Ex. 19).

4 9) On or about May 31, 2011, Alfredo Estrella ( Mr. Estrella ) filed a complaint with the Department of State alleging the following: he entered into a lease agreement with respondent Open Passport Realty, an unlicensed real estate company, for the rental of an apartment at 296 Schaeffer Street, Apt. 2, Brooklyn, NY ( subject property ). Mr. Estrella signed a lease agreement for one year beginning July 1, 2010 through June 30, On June 29, 2010, Mr. Estrella paid a $1,100 broker s commission, $1,100 one month s rent, and a $1,100 security deposit, for which he received three receipts (State s Ex. 4). Shortly after Mr. Estrella moved into the subject property he subsequently determined the apartment was uninhabitable, and stopped paying rent. Mr. Estrella filed a law suit against respondent Diego in United States Eastern District Court. The charges were dismissed. Mr. Estrella was evicted for nonpayment of rent. (State s Ex. 6). Investigator Lawrence Magaram 10) Department of State License Investigator Lawrence Magaram ( Inv. Magaram ) commenced an investigation initiated by the complaint filed by Mr. Estrella. Mr. Estrella provided Inv. Magaram with business cards he obtained from respondent Open Passport Realty. The business cards contain the Open Passport Realty logo, address, phone number, and company address on the face of the card. One business card has respondent Diego s picture and identifies him as a licensed RE (real estate) expert FAH consultant, the other business card has respondent Romel s picture and identifies him as a licensed real estate professional, and the last business card has respondent Pedro s picture and identifies him as a short sale expert. Services such as, a residential-commercial department, mortgage-insurance department, rental department, title search services, foreclosure and government owned properties department, and bank owned properties, are listed on the business cards (State s Ex. 5). Mr. Estrella paid a broker s fee of $1,100 to Marcelo Sucuzhanay, the brother of respondents Sucuzhanays. 11) Mr. Estrella provided Inv. Magaram with a copy of respondent Diego s profile on his LinkedIn account, an internet network for professionals, which states he is a licensed real estate broker, certified property manager, etc. at Open Passport Realty (State s Ex. 4). 12) During the investigation, Inv. Magaram determined that at no time were respondents Diego, Romel and Pedro licensed real estate brokers representing respondent Open Passport Realty nor were they licensed real estate salespersons associated with respondent Open Passport Realty (State s Ex. 2 and 8). Respondent Petillo 13) Inv. Magaram interviewed respondent Petillo and she provided a signed statement dated July 20, Respondent Petillo stated that in the summer of 2009, respondents Diego, Romel and Pedro asked her to be the broker of Open Passport Realty. She agreed, and on July 2, 2009 respondent Petillo was issued her broker s license representing respondent Open Passport Realty. The Sucuzhanay brothers offered her a percentage of any real estate business conducted however they never reached an agreement and no monies were ever exchanged. Respondent Petillo stated she had no role in operating respondent Open Passport Realty, she visited the office twice, and the only real estate business ever discussed was regarding signatures needed for

5 disclosure forms. Respondent Petillo further stated she never met or dealt with Mr. Estrella (State s Ex. 10). Respondent Diego 14) In the course of his investigation, Inv. Magaram interviewed respondent Diego to discuss the allegations contained in the complaint. Respondent Diego provided a signed statement dated July 18, 2012 in which he stated that Mr. Estrella was a walk-in client to the Open Passport office who expressed interest in the rental of the subject property. Mr. Estrella dealt with respondent Diego s brother, Marcelo, who worked part-time at the front desk, but did not work as a salesperson. After Mr. Estrella provided Marcelo with all required documents, Marcelo called Diego, who gave him authorization to rent the apartment to Mr. Estrella, and for Marcelo to sign the lease. Respondent Diego further stated that my brother Marcelo was the person who collected the money from Estrella, including the first month s rent, one month s security deposit and the broker s fee for Open Passport Realty. Marcelo is the one who issued Mr. Estrella the receipts given to the Department of State (State s Ex. 11). Respondent D Alessandro 15) During the investigation, Inv. Magaram learned that respondent Open Passport Realty closed and respondent Open Deal Realty opened at the same business location of 320 Linden Street, Brooklyn, NY. After the departure of respondent Petillo as the broker representing respondent Open Passport in July 2010, respondent Romel formed respondent Open Deal Realty. In March 2011, respondent D Alessandro was hired by respondents Romel and Pedro as an associate broker for respondent Open Deal Realty until her termination on 6/21/2011 (State s Ex. 18). However, Department of State records indicate Respondent D Alessandro was never associated with respondent Open Deal Realty as a broker or salesperson (State s Ex. 2). 16) On July 15, 2011, Respondent D Alessandro filed a complaint with the Department of State alleging respondent Open Deal Realty was conducting business without a licensed broker, respondent Romel Sucuzhanay conducted real estate business without a license, respondent Pedro Sucuzhanay as an owner of Open Deal Realty is not licensed as a broker, employees are also working as real estate agents without a license, and comport themselves unprofessionally in the office (State s Ex. 16). 17) As part of the complaint, respondent D Alessandro attached the following: an correspondence dated April 30, 2011 between respondent Pedro Sucuzhanay and Teresa Moreno regarding the availability of an apartment rental listed on 4/30/2011 by Monica and another correspondence dated May 2, 2011 from respondent Pedro Sucuzhanay to Mr. Laker discussing the availability of an apartment rental listed on May 2, 2011 by Monica (State s Ex. 16). Respondent Gil Perez 18) Inv. Magaram interviewed respondent Gil Perez, the representative broker of respondent Open Deal Realty, to discuss the allegations. The records of the Department of State

6 indicate respondent Perez is the licensed broker of respondent Open Deal Realty for the period of 10/21/2011 through 10/20/2013 (State s Ex. 2). Respondent Perez stated he did not have any connection to respondent Open Passport Realty and never dealt with Mr. Estrella. Juan Romero 19) Inv. Magaram interviewed Juan Romero and he provided a signed written statement dated July 27, Mr. Romero stated he was the licensed broker for respondents Open Passport and Open Deal Realty beginning in July 2010 until he surrendered both licenses in March He further stated that during the time he was the broker there were six or seven people working in the office, and none of them had a real estate license. After Mr. Romero repeatedly informed the employees they needed to obtain a license before they could conduct any real estate business and no one complied, he relinquished his license. Mr. Romero further stated he did not have any contact with Mr. Estrella and had no knowledge of any real estate transactions with Mr. Estrella (State s Ex. 20). Respondent Diego Testimony 20) Respondent Diego testified that in 2008, he opened respondent Open Passport Realty for tax purposes and the company never conducted real estate business. After the death of his brother, Jose, in 2008, who was the owner of the subject property, respondent took over the responsibility of managing the property. Respondent Diego testified Mr. Estrella contacted him regarding the rental of the subject property. He referred Mr. Estrella to Open Passport Realty to provide documents needed to determine his qualifications. Respondent Diego testified he did not recall who Mr. Estrella met with at Open Passport, there was a person in the front desk that received his documentation (Transcript p.82). Respondent Diego spoke with someone over the phone, authorized the rental to Mr. Estrella, and Mr. Estrella left money for the rental with the receptionist. Respondent testified he did not issue the receipts for monies paid by Mr. Estrella, he did not recognize the handwriting on the receipts or the handwriting on the lease agreement. He testified the receipts could have been written by one of the volunteers in the office. Respondent Diego testified that he and Mr. Estrella agreed on two month s security and one month s rent and he received $3, ) Respondent Diego testified he met with respondent Petillo in 2009 with the intent to start a real estate company and for her to become the real estate broker of Open Passport Realty. Due to health issues respondent Petillo was not able to register respondent Diego with the Department of State and therefore he could not conduct any real estate business. 22) Respondent testified the business cards that identify him as a licensed RE expert FAH consultant were created when he and his brothers intended to begin operating Open Passport Realty and were never used because the title was an error made by the printing company [who] decided to put that title (Transcript p. 95) on their own. Regarding the list of services indicated on the business card, respondent testified Open Passport did not provide those services but would eventually when the company was opened.

7 Respondent Romel Testimony 23) Respondent Romel testified he never worked at respondent Open Passport Realty. He assumed the management of 296 Schaeffer Street after his brother respondent Diego relinquished control over the management company. Respondent Romel was present when his brother Jose was murdered in December 2008, resulting in him leaving to Ecuador for an extended period of time. He was out of the country between 3/31/10 and 10/15/10, and from 4/11/11 through 12/6/11. Therefore, respondent Romel was out of the country when Mr. Estrella gave the deposit for the rental of the subject property and in fact, never had any dealings with Mr. Estrella. 24) Respondent Romel testified he currently works for respondent Gil Perez at respondent Open Deal Realty as a licensed real estate salesperson. He and his brother, respondent Pedro are the owners of respondent Open Deal Realty, and he admitted he and his brother are not licensed brokers. Respondent Pedro Testimony 25) Respondent Pedro testified he has never been licensed as a real estate salesperson in the State of New York. He was never employed at respondent Open Passport Realty, did not have any contact with Mr. Estrella, and did not receive any deposits from Mr. Estrella. Furthermore, respondent Pedro testified he did not recognize the deposit receipts or the handwriting on the receipts, and he did not recognize the handwriting on the lease agreement of the subject property (State s Ex. 4). 26) Regarding the business cards, respondent Pedro testified his brother Diego was in charge of producing the cards when respondent saw the error on the cards they were never distributed and never used. 27) Respondent Pedro testified he met with respondent D Alessandro about the possibility of her becoming the broker for respondent Open Dealt Realty however, shortly thereafter respondent decided the business relationship with respondent D Alessandro was not going to work, and she was terminated. 28) Respondent Pedro testified that respondent D Alessandro was terminated after several complaints were made regarding her conduct in the office. One such complaint dated May 18, 2011 written on Open Deal Realty letterhead sent to the office manager and signed by Monica Gutierrez, the receptionist and office assistant, stated in pertinent part, [s]ome of the landlords that do business with us had even complained about Mrs. Katherine (D'Alessandro). She further stated, Please be advised that all of Mrs. Katherine s actions are affecting the company s reputation (State s Ex. 18). 29) On cross-examination, respondent Pedro was asked if he recognized the name Monica Gutierrez, the person who signed as the office assistant at Open Deal Realty. He responded, [s]he was the person who was going to be hired as the receptionist after the license [was] approved (Transcript p. 30).

8 30) Regarding the business cards, respondent Pedro testified the title on the business card identifying him as a short sale expert was an error by the publishing company; the cards were never used, and were stored in the basement. He authorized his brother Diego to produce business cards identifying him as doing construction work. On cross-examination, he could not explain how Mr. Estrella came into possession of the business cards considering they are stored in the basement of respondent Open Deal Realty. 31) Respondent Pedro testified during 2011 there were no salespeople working at respondent Open Deal Realty and in fact, the office was not open for business. He said there was no broker at Open Deal Realty for the six month period of time in between respondent D'Alessandro and Mr. Perez. On cross-examination, when he responded that Open Deal Realty was not open for business during those six months, he could not explain why Monica was writing letters of complaint on Open Deal Realty letterhead as the receptionist and office assistant (regarding respondent D Allessandro) during a time when the office was not open for business. Respondent D Alessandro Testimony 32) Respondent D Alessandro testified she was hired by respondents Romel and Pedro as the associate broker of respondent Open Deal Realty at which time she was told they were both real estate brokers. She observed unprofessional conduct in the office and decided to contact the Department of State. Respondent D Alessandro was informed respondents Romel and Pedro were not licensed, there was no licensed broker representing Open Deal Realty, so she decided not to work there anymore. 33) Respondent D Alessandro testified when she visited the office to meet with respondents Romel and Pedro, she observed a sign outside the business location identifying it as Open Deal Realty and inside the business both brothers had business cards displayed (State s Ex. 16). Respondent Katherine was hired as an associate broker pending approval from the Department of State, and while awaiting approval she worked at respondent Open Deal Realty five days a week. Respondent Petillo Testimony 34) Respondent Petillo testified she had no knowledge of respondent Open Passport Realty transacting any real estate business. Respondent Petillo testified she was hired by respondent Diego, however shortly after she signed her license over to Open Passport Realty, she had a personal crisis, was unable to return, and did not notify respondent Diego. Respondent Petillo testified she did not terminate her association as a broker with respondent Open Passport Realty because she forgot she was affiliated with them because she was also associated with Gato Realty. 35) Respondent testified she never received any commissions while she was affiliated with respondent Open Passport Realty.

9 36) At the close of the hearing, counsel for respondent Gil Perez made a motion to dismiss and the tribunal reserved decision on his motion. OPINION AND CONCLUSIONS OF LAW I- 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, (1978); Tutuianu v. New York State, 22 AD3d 503, 802 NYS2d 465 (2 nd 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. II- Being an artificial entity created by law, Open Passport Realty and Open Deal Realty LLC, can only act through its officers, agents, and employees, and it is, therefore, bound by the knowledge acquired by and responsible for the acts committed by its owners, respondents Diego, Pedro and Romel Sucuzhanay, and its representative brokers, Sharon Petillo, Gil Perez, and Katherine D Alessandro, within the actual or apparent scope of their 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. Open Passport Realty III- The complaint charges that respondents conducted licensed activity with Mr. Estrella when there were no valid and effective real estate licenses and accepted commissions for the leasing of an apartment to Mr. Estrella. Pursuant to Real Property Law 440-a, it is unlawful for a person to act as a real estate broker without being so licensed. Respondent Diego violated that statute and thereby demonstrated untrustworthiness in violation of Real Property Law 441-c by acting as a real estate broker when not so licensed. At the time that respondent Diego rented the subject property to Mr. Estrella and accepted a commission for the rental, he was not licensed as a real estate broker representing respondent Open Passport Realty, and in fact, his license as a real estate salesperson had lapsed. He argued that he was the property manager of the subject property and not acting as a salesperson or broker. I find this argument unconvincing and it does not circumvent the need for a broker s license. Assuming respondent was acting in the capacity of property manager, he was engaged in licensed activity without the required real estate broker s license. For the most part, respondent Diego s testimony was not credible. He testified he opened Open Passport Realty solely for tax purposes while he was a salesperson at another realty company and Open Passport Realty was never open for business. He took over the management

10 of property owned by his brother (Jose) after his death, which included the subject property. He was contacted by Mr. Estrella regarding an apartment rental and said respondent referred him to Open Passport to provide required documents. He claims he did not recall who Mr. Estrella dealt with at Open Passport, however, when he received a call from Open Passport Realty s receptionist, he authorized the rental to Mr. Estrella and Mr. Estrella left one month s rent and two month s security with the receptionist for the respondent and was given handwritten receipts for $3,300. Respondent stated he did not know who wrote the receipts, he did not recognize the handwriting on the receipts, and did not recognize the handwriting on the lease agreement. Respondent s testimony is directly contradicted by his written statement to Inv. Magaram. In his statement, respondent Diego admitted Mr. Estrella gave his brother Marcelo, who was at Open Passport working at the front desk, paystubs and other documents, Marcelo then called respondent Diego and he authorized the rental of the subject property to Mr. Estrella and to sign the lease agreement. Marcelo collected money from Mr. Estrella, including the first month s rent, one month s security deposit and the broker s fee for Open Passport Realty, and he issued receipts to Mr. Estrella. (State s Ex. 11). In addition to conducting unlicensed real estate activities, respondent Diego represented himself as a licensed real estate broker at Open Passport Realty on the profile of his LinkedIn account and created business cards with the Open Passport logo identifying him as a licensed real estate professional at a time when he claims the company was never open for business. Additionally, his contention that his title on the business cards was an error by the printing company [who] decided to put that title (Transcript p. 95), on their own, is not only disingenuous, but further establishes that he was holding himself out as a licensed real estate broker without the benefit of a valid license and therefore, is a further act of untrustworthiness. IV- The complaint charges by accepting the position of representative broker for respondent Open Passport Realty, and then not managing the business thereby resulting in inadequate supervision, respondent Petillo demonstrated untrustworthiness and /or incompetency. A real estate broker is obligated to supervise the real estate brokerage activities of the salespersons working with her. RPL 441(1) (b), 19 NYCRR That supervision must consist of "regular, frequent and consistent personal guidance, instruction, oversight and superintendence by the real estate broker with respect to the general real estate brokerage business conducted by the broker, and all matters relating thereto." 19 NYCRR (a). That duty has been affirmed judicially, Division of Licensing Services v Giuttari, 37A DOS 87, conf'd. 535 NYS2d 284 (AD 1 st Dept. 1988); Friedman v Paterson, 453 NYS2d 819 (1982), aff'd. 58 NY2d 727, 458 NYS2d 546, and has been restated in numerous determinations of the Department of State. Division of Licensing Services v Misk, 64 DOS 92; Division of Licensing Services v Gelinas, 38 DOS 92; Division of Licensing Services v Levenson, 52 DOS

11 91; Division of Licensing Services v Capetanakis, 42 DOS 90; Division of Licensing Services v Shulkin, 4 DOS 90. In a written statement provided to Inv. Magaram by respondent Petillo, she admitted she had no role in operating Open Passport Realty and only visited the office twice (State s Ex. 10) during the two year period she was the representative broker at Open Passport Realty. Respondent Petillo testified that shortly after she was issued her broker s license, she did not return due to a personal crisis, failed to notify respondent Diego, forgot she was affiliated with Open Passport, and neglected to surrender her broker s license. Consequently, said respondent was unaware of any real estate activity which is the result of her lack of involvement with the daily operation and management of Open Passport Realty. That failure of supervision was a demonstration of incompetency and untrustworthiness in violation of Real Property Law 441-c. Open Deal Realty V- The complaint charges that respondents Gil Perez and Diego failed to ensure that a properly licensed representative broker was in charge of respondent brokerage Open Deal Realty during the period of 3/21/11 to 10/21/11 in violation of 19 NYCRR Part 175. Generally, leave to amend a pleading is freely granted in the absence of prejudice or surprise to the opposing party. Mere lateness is not a barrier to amendment. To establish prejudice, which must be significant (see Edenwald Contr. Co. v. City of New York, 60 N.Y.2d 957, 471 N.Y.S.2d 55, 459 N.E.2d 164 [1983]), there must be some indication that the opposing party will have been hindered in the preparation of its case or prevented from taking some measure to support its position (see Loomis v. Civetta Corinno Constr. Corp., 54 N.Y.2d 18, 444 N.Y.S.2d 571, 429 N.E.2d 90 [1981] ). Spitzer v. Schussel, 48 AD3d 233, 850 NYS2d 431, 432 (1 st Dept. 2008); Miles v. City of New York, 251 AD2d 667, 676 NYS2d 485 (2 nd Dept. 1998), lv. denied 92 NY2d 818, 684 NYS2d 489; Cerio v. New York City Transit Authority, 228 AD2d 676, 645 NYS2d 822 (2 nd Dept. 1996); Dougherty v. Dougherty, 256 Ad2d 714, 680 NYS2d 759 (3 rd Dept. 1998); Ford v. Martino, 281 Ad2d 587, 722 NYS2d 574 (2 nd Dept. 2001) (pleadings may be amended either before or after judgment). I am, sua sponte, amending the pleadings to conform them to the proof by charging respondents Romel and Pedro as owners of respondent brokerage Open Deal Realty for failing to ensure a licensed representative broker was in charge of respondent Open Deal Realty for the period of 3/21/11 to 10/21/11. The complainant s proof that was placed in evidence at the hearing was fully litigated by the parties and neither of the parties can be surprised nor prejudiced by what the record reflects. Based on the evidence presented and the testimony provided respondents Romel and Pedro are the owners of respondent Open Deal Realty, and as such they are required to ensure that a properly licensed broker was in charge of respondent brokerage. Alternatively as the owners of Open Deal Realty, respondents are also required to be licensed as real estate brokers, and in failing to do so respondents demonstrated untrustworthiness. Furthermore, respondent

12 Pedro has never been licensed as a real estate salesperson or broker. Accordingly, he is not entitled to any commissions earned by the brokerage and any other benefits derived therefrom. Open Deal Realty was open for business and conducting real estate activities prior to the licensure of respondent Perez as representative broker of Open Deal Realty during the period of 3/21/11 to 10/21/11. A letter of complaint on Open Deal Realty letterhead regarding respondent D Alessandro signed by Ms. Gutierrez as the office assistant dated May 18, 2011, refers to the landlords that do business with us and Ms. D Alessandro s actions are affecting the company s reputation (State s Ex. 18). This letter makes it clear that respondent Open Deal Realty is operating as a real estate company, is engaged in business with landlords, that employees are working in the company, and there is concern regarding the company s reputation in the real estate community. Respondent Pedro s argument that Ms. Gutierrez was the person who was going to be hired as the receptionist (Transcript p. 30) once the company was open for business, is not credible. Further evidence, including a letter on Open Deal Realty letterhead, signed by Mr. Bowman as Office & Operations Manager dated June 21, 2011, another letter dated June 21, 2011 signed by respondent Pedro as owner of Open Deal Realty terminating respondent D Alessandro s employment, in which he refers to our clients of Open Deal Realty, and an dated April 30, 2011 from respondent Pedro to Teresa Moreno regarding a 1 BR APT, PRICE $940, ELECTRIC HEATING SYSTEM, HOT WATER INCLUDED, this apartment will be ready to show tomorrow, all establish that real estate activity was being conducted during times in which respondent Open Deal Realty was not represented by a broker. Respondent Gil Perez is currently the representative broker of respondent brokerage Open Deal Realty for the period of 10/21/11 through 10/20/13. However, prior to his licensure there is no evidence he was responsible to ensure the proper conduct of the real estate brokerage, and therefore, the charge against him is dismissed. Further, there is insufficient evidence establishing that respondent Diego was in charge of respondent Open Deal Realty during the period of 3/21/11 to 10/21/11 and therefore required to ensure respondent brokerage had a representative broker in charge, and therefore, this charge is dismissed. Respondent D Alessandro, licensed as an individual broker, conducted real estate activities during her brief employment at respondent brokerage Open Deal Realty while she awaited approval from the Department of State as the broker or associate broker representing respondent brokerage. She did not close any deals, did not receive any compensation in the form of commissions or otherwise, and as such there is insufficient evidence to conclude she engaged in any misconduct, and therefore all charges against her are dismissed. Based on the foregoing, all remaining allegations are moot.

13 DETERMINATION WHEREFORE, IT IS HEREBY DETERMINED THAT respondents Diego Sucuzhanay and Open Passport Realty LLC., have violated Real Property Law 440-a, and demonstrated untrustworthiness in violation of Real Property Law 441-c. Accordingly, pursuant to Real Property Law 441-c his license as a real estate salesperson UID #40SU , is revoked, effective immediately. He is directed to surrender his license and pocket card by certified mail addressed to Norma Rosario, Department of State, Division of Licensing Services, One Commerce Plaza, 99 Washington Avenue, 5 th Floor, Albany, New York ; WHEREFORE, IT IS HEREBY FURTHER DETERMINED THAT respondent Romel Sucuzhanay and Open Deal Realty LLC., have violated 19 NYCRR Part 175 and demonstrated untrustworthiness in violation of Real Property Law 441-c. Accordingly, pursuant to Real Property Law 441-c his license as a real estate salesperson UID # , is revoked effective immediately. He is directed to surrender his license and pocket card by certified mail addressed to Norma Rosario, Department of State, Division of Licensing Services, One Commerce Plaza, 99 Washington Avenue, 5 th Floor, Albany, New York ; WHEREFORE, IT IS HEREBY FURTHER DETERMINED THAT respondent Sharon Petillo has violated 19 NYCRR Part 175 and demonstrated incompetence in violation of Real Property Law 441-c. Accordingly, pursuant to Real Property Law 441-c her license as a real estate broker, UID #35PE , is revoked effective immediately. She is directed to surrender her license and pocket card by certified mail addressed to Norma Rosario, Department of State, Division of Licensing Services, One Commerce Plaza, 99 Washington Avenue, 5 th Floor, Albany, New York ; WHEREFORE, IT IS HEREBY FURTHER DETERMINED THAT respondent Pedro Sucuzhanay engaged in unlicensed real estate activities requiring a real estate broker s license in violation of Real Property Law 440-a and he is ordered to cease and desist acting or holding himself out as such in the future. By copy of this decision, the tribunal is alerting the Attorney General s Office to said respondent s unlicensed conduct and/or representations pursuant to Real Property Law 442-e(8), and any commissions he received or is to receive as a result of this unlicensed practice are forfeited; and IT IS FURTHER DETERMINED that the complaint against Gil Perez and Katherine D Alessandro is dismissed. Dated: October 15, 2013 Dolores Franco Administrative Law Judge