STATE OF NEW YORK DEPARTMENT OF STATE OFFICE OF ADMINISTRATIVE HEARINGS X. In the Matter of the Complaints of

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1 STATE OF NEW YORK DEPARTMENT OF STATE OFFICE OF ADMINISTRATIVE HEARINGS X In the Matter of the Complaints of DEPARTMENT OF STATE DIVISION OF LICENSING SERVICES, Complainant, -against- PAMELA MAYS, P & P REALTY OF NEW YORK, INC., and SHIRLEY PHILLIPS, DECISION Complaint No.: & Respondents X The above noted matter came on for hearing before the undersigned, Roger Schneier, on March 10, 2016 at the office of the Department of State located at 123 William Street, New York, New York. The respondents did not appear. The complainant was represented by Linda D. Cleary, Esq. Prior to the hearing respondent Shirley Phillips entered into a stipulation of settlement with the complainant. COMPLAINTS The two complaints in the matter allege that Pamela Mays and P & P Realty of New York, Inc. (hereinafter "P & P") wrongfully retained, or delayed the refund of, unearned commissions, engaged in real estate brokerage activities after the dissolution of P & P, failed to effectuate required agency disclosure, employed Shirley Phillips as a real estate salesperson after the expiration of her license, failed to place deposit money in escrow, and failed to cooperate with the complainant's investigation.

2 FINDINGS OF FACT 1) Notices of hearing together with copies of the complaint were served on Ms. Mays and P & P as follows (State's Ex. 1, B1, and B1A): 6/11/2015- Certified and regular mail addressed to the respondents' last known business address. Both mailings were returned by the Postal Service as undeliverable. The regular mail bore a label with a post office box forwarding address; 8/14/2015- Certified and regular mail addressed to the respondents at the post office box address provided by the Postal Service. The certified mail was returned by the Postal Service marked "unclaimed," and the regular mail was returned with a Postal Service label stating "box closed, unable to forward, return to sender;" 11/5/2015- Certified and regular mail addressed to the respondents at two addresses in Syracuse for Ms. Mays which Ms. Cleary obtained by Googling her. One of those mailings was returned by the Postal Service marked "unclaimed" and "return to sender, vacant, unable to forward" and; 2/22/2016- Certified and regular mail addressed to Ms. Mays at an address in The Bronx which Ms. Cleary believes may be Ms. Mays' residence. Neither those mailings nor the return receipt have been returned by the Postal Service. 2) Pamela Mays was duly licensed as a real estate broker representing P & P at a business address of 3324 White Plains Road, Bronx, NY from March 23, 2009 until March 22, 2015, when the license expired (State's Ex. 2 and B2). 3) Pamela Mays has been duly commissioned as a notary public since sometime prior to August 2, Her commission is due to expire on August 2, 2016 (State's Ex. 2 and B2). 4) P & P filed its certificate of incorporation with the Department of State, Division of Corporations on February 3, 2009, and was dissolved by proclamation on October 26, 2011 (State's Ex. 2 and B2). 5) On February 4, 2012 Yilday Morales, a section 8 housing subsidy recipient, gave Ms. Mays and P & P $3, as the deposit on a rental of an apartment located at 2513 Radcliff Avenue, Bronx, NY. Ms. Morales and the landlord subsequently signed a one year lease commencing on March 29, 2012, contingent on the approval of the lease by the Lease Housing Department of the New York City Housing Authority (NYCHA) (State's Ex. B3). 6) When NYCHA's approval of the Morales lease was not promptly given the transaction was cancelled, and on April 19, 2012 Ms. Mays and P & P returned $1, (one half of the deposit) to Ms. Morales. It was not until after the intervention of the complainant that the balance of the deposit was refunded to Ms. Morales (State's Ex. B3).

3 7) At the time of the Morales transaction P & P had already been dissolved by 9) In February 2013 Jada C. Beard was seeking to rent an apartment. She contacted Ms. Mays, who told her that she had apartments available, and Ms. Beard gave Ms. Mays a $4, deposit, which was not deposited in an escrow or special account. When Ms. Mays was unable to provide Ms. Beard with an acceptable apartment, and Ms. Beard requested a refund. On February 27, 2013 Ms. Mays gave Ms. Beard a check for $4, drawn on P & P's JPMorgan Chase Bank checking account, but when Ms. Beard sought to deposit it the check was dishonored due to insufficient funds (State's Ex. B4). 10) Ms. Beard sued Ms. Mays and P & P in Small Claims Court, and on June 6, 2013 they entered into a stipulation of settlement providing for the payment to Ms. Beard of $4, On July 25, 2103 the complainant was advised by Ms. Beard that she had received the payment (State's Ex. B4). 11) Although one of the apartments shown to Ms. Beard was in a three family residence, Ms. Mays never provided Ms. Beard with an agency relationship disclosure form (State's Ex. B4). 12) At the time of the Beard transaction P & P had already been dissolved by 13) In November 2013 Bill K. Williams gave Ms. Mays a total of $ towards the future rental of a room. However when Ms. Mays was unable to find an acceptable room for him he requested a refund. Ms. Mays initially only refunded $ It was not until Mr. Williams filed a complaint with the Department of State that Ms. Mays refunded the remaining $ (State's Ex. B5). 14) In October 2013 Nerrette Wooten went to P & P's office and met with Shirley Phillips, whose license as a real estate salesperson had expired on July 4, 2013 and was not renewed until May 1, 2014 (State's Ex. B2). Ms. Wooten inquired about renting an apartment for herself and her fiancé, and Ms. Phillips sent Ms. Wooten to look at one. Ms. Wooten and her fiancé liked the apartment, and, in several payments, gave Ms. Phillips a deposit of $2, cash. The rental, however, was never consummated, and Ms. Wooten demanded a refund. That refund was not provided until after the Ms. Wooten had filed a Small Claims Court suit against Ms. Mays and the complainant had commenced an investigation of the transaction (State's Ex. B6). 15) Ms. Wooten's money was kept by Ms. Mays in her office safe, and was not deposited in an escrow or trust account (State's Ex. B6). 16) At the time of the Wooten transaction P & P had already been dissolved by 17) On May 9 and 10, 2014, Angelo Somwaru gave Ms. Mays, who was conducting business on behalf of P & P, a total of $2, as a deposit on the rental of an apartment which she showed him. When the rental was not consummated Mr. Somwaru requested a refund of his money, but no refund has been given (State's Ex. 3 and 3A).

4 18) On April 2, 2015 License Investigator Patrick Brilliantes sent Ms. Mays a letter requesting a statement and documents regarding the Somwaru transaction. That letter was returned by the Postal Service marked "unclaimed, unable to forward" (State's Ex. 3A). 19) At the time of the Somwaru transaction P & P had already been dissolved by 20) On May 20, 2014 Eserty Rosario gave Ms. Mays, who was doing business on behalf of P & P, $3, cash for the rental of an apartment. When the rental was not consummated Ms. Rosario requested a refund, but Ms. Mays has failed to return Ms. Rosario's money (State's Ex. 4). 21) On October 7, 2015 License Investigator Pamela Foster sent Ms. Mays, by both certified and regular mail, a letter requesting a statement regarding the Rosario transaction. Those letters were returned by the Postal Service marked "unclaimed, unable to forward" and "not deliverable as addressed, unable to forward" (State's Ex. 4). 22) At the time of the Rosario transaction P & P had already been dissolved by 23) On June 26, 2014 Hervory Jules obtained a Small Claims Court judgement against Ms. Mays and P & P in the amount of $2, for a judgement arising out of money given by Mr. Jules to Ms. Mays in a failed October 2013 apartment rental transaction. That judgment has not been satisfied (State's Ex. 5). 24) Letters sent by the complainant to Ms. Mays seeking her cooperation in its investigation of the Jules complaint were all returned by the Postal Service marked "undeliverable" (State's Ex. 5). 25) At the time of the Jules transaction P & P had already been dissolved by OPINION AND CONCLUSIONS OF LAW I- To obtain personal jurisdiction and bind the respondents to the agency decision the complainant must properly serve the respondents with notice of the hearing and a copy of the complaint and afford them the opportunity to be heard (see Siegel, New York Practice 58 (4 th ed. 2005)). Service of the notice of hearing and complaint in this matter was made by certified and regular mail addressed to the respondents at various addresses, including their last known business address, a forwarding address, and residence addresses. Most of those mailing were undeliverable. However the mailings to what may be Ms. Mays' latest residence were not returned. 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 the notice. See Persad v. Division of Licensing Services, 63 DOS APP 09; Pinger v. Division of Licensing Services, 23 DOS APP 07. As notice was properly served in this instance,

5 the hearing was permissibly conducted in the absence of the respondents. Patterson v. Department of State, 35 AD2d 616 (3d Dept. 1970); Staley v. Division of Licensing Services, 14 DOS APP 01; Department of State v Battista, 05 DOS APP 11; Roy Staley v Division of Licensing Services, 14 DOS APP 01; Matter of the Application of Rose Ann Weis, 118 DOS 93. II- The expiration of Ms. Mays and P & P's real estate broker license does not deprive the tribunal of jurisdiction. Albert Mendel & Sons, Inc. v N.Y. State Department of Agriculture and Markets, 90 AD2d 567, 455 NYS2d 867 (1982); Main Sugar of Montezuma, Inc. v Wickham, 37 AD2d 381, 325 NYS2d 858 (1971). The Department of State retains jurisdiction over a disciplinary matter and may impose disciplinary sanctions where (1) the alleged unlawful conduct occurred while the respondent was licensed and (2) the respondent was eligible to automatically renew the prior license at the time of the commencement of the action (see Divisions of Licensing Services v Akbar Yasrebi, 12 DOS 99; Division of Licensing Services v Thabit Uadah, 287 DOS 98. III- Being an artificial entity created by law, P & P can only act through it officers, agents, and employees, and it is, therefore, bound by the knowledge acquired by and is responsible for the acts committed by its representative broker, Ms. Mays, within the actual or apparent scope of her 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. IV- In conducting a real estate brokerage business a real estate broker acts in a fiduciary capacity. A fiduciary relationship is "...founded on trust or confidence reposed by one person in the integrity and fidelity of another." Mobil Oil Corp. v Rubenfeld, 72 Misc.2d 392, 339 NYS2d 623, 632 (Civil Ct. Queens County, 1972). Included in the fundamental duties of such a fiduciary are good faith and undivided loyalty, and full and fair disclosure. Such duties are imposed upon real estate licensees by license law, rules and regulations, contract law, the principals of the law of agency, and tort law. L.A. Grant Realty, Inc. v Cuomo, 58 AD2d 251, 396 NYS2d 524 (1977). The object of these rigorous standards of performance is to secure fidelity from the agent to the principal and to insure the transaction of the business of the agency to the best advantage of the principal. Dubbs v Stribling & Assoc., 96 NY2d 337, 728 NYS2d 413 (2001); Department of State v Short Term Housing, 31 DOS 90, conf'd. sub nom Short Term Housing v Department of State, 176 AD 2d 619, 575 NYS2d 61 (1991); Department of State v Goldstein, 7 DOS 87, conf'd. Sub nom Goldstein v Department of State, 144 AD2d 463, 533 NYS2d 1002 (1988). In spite of his fiduciary duties, the evidence establishes that in seven rental transactions which the respondents negotiated with potential tenants Ms. Mays and P & P either retained commissions after the rentals had not been consummated or delayed making such refunds until they were forced to do so. Their conduct was a demonstration of gross untrustworthiness. V- P & P was dissolved by proclamation but continued doing business in spite of that dissolution. In so doing it and Ms. Mays violated Business Corporation Law 1005 and, therefore, demonstrated untrustworthiness and incompetency.

6 VI- Pursuant to Real Property Law (RPL) 443 a real estate broker must provide a prospective tenant to whom the broker is offering rental property in a one to four family residential building an agency relationship disclosure form in the format set forth in the statute. By failing to do so in the Beard transaction the respondents violated that statute and further demonstrated untrustworthiness and incompetency. VII- Pursuant to RPL 440-a it is unlawful to act as a real estate salesperson with being so licensed, and pursuant to RPL 442-c, a real estate broker is liable for any unlicensed activity which it allows to be conducted on its behalf. Ms. Mays permitted Ms. Phillips to conduct a rental transaction on behalf of P & P after Ms. Phillips' license had expired. In so doing she, and through her P & P, further demonstrated untrustworthiness and incompetency. VIII- Pursuant to 19 NYCRR rental deposit money received by a real estate broker from a client or customer must be deposited in an escrow or special account. By failing to do so in the Beard and Wooten transactions Ms. Mays and P & P violated the regulation and further demonstrated untrustworthiness and incompetency. IX- The complaint alleges that by not responding to its letters Ms. Mays and P & P failed to cooperate with its investigation. As none of those letter were delivered that charge is dismissed. X- Where a broker has received money to which he is not entitled, the broker may be required to return it, together with interest, as a condition of retention, renewal, or reissuance of his or her license. Donati v Shaffer, 83 NY2d 828, 611 NYS2d 495 (1994); Kostika v Cuomo, 41 N.Y.2d 673, 394 N.Y.S.2d 862 (1977); Zelik v Secretary of State, 168 AD2d 215, 562 NYS2d 101 (1990); Edelstein v Department of State, 16 A.D.2d 764, 227 N.Y.S.2d 987 (1962). All of the commissions received and/or retained by the respondents in the transactions discussed herein were unearned for various reasons, including that all of the transactions occurred after the dissolution of P & P. XI- Pursuant to Executive Law 130 the commission of a notary public may be revoked if that notary has engaged in an act of misconduct. Ms. Mays has engaged in numerous acts of misconduct which demonstrate a fundamental lack of honesty and require a finding that she cannot be trusted to honestly perform the functions of a notary public in authenticating the execution of documents.

7 DETERMINATION WHEREFORE, IT IS HEREBY DETERMINED THAT Pamela Mays and P & P Realty of New York, Inc. violated Real Property Law 443 and 19 NYCRR 175.1, and have demonstrated untrustworthiness and incompetency, and accordingly, pursuant to Real Property Law 441-c, their license as a real estate broker is deemed revoked, effective immediately. No application for the renewal of that license, and no application for a new license by either or both of them shall be considered until they have produced proof satisfactory to the Department of State that they have refunded the sums of $2, together with interest at the legal rate for judgments (9%) from May 10, 2014 to Angelo Somwaru, and $3,010 together with interest at the legal rate for judgments from May 20, 2014 to Eserty Santos, and that they have fully satisfied the Small Claims Court Judgement granted to Hervory Jules on June 26, 2014, and IT IS FURTHER DETERMINED THAT Pamela Mays has engaged in such misconduct as to warrant the revocation of her commission as a notary public and that, therefore, her commission, UID #01MA , is revoked effective immediately. She is directed to surrender her notary identification by certified mail addressed to Norma Rosario, Customer Service Unit, Department of State, Division of Licensing Services, One Commerce Plaza, 99 Washington Avenue, 5th Floor, Albany, New York /s/ Roger Schneier Administrative Law Judge Dated: March 21, 2016