Kostika v. Cuomo
| Decision Date | 05 May 1977 |
| Citation | 394 N.Y.S.2d 862,41 N.Y.2d 673,363 N.E.2d 568 |
| Parties | , 363 N.E.2d 568 Miriam KOSTIKA, Respondent, v. Mario CUOMO, as Secretary of State, et al., Appellants. |
| Court | New York Court of Appeals Court of Appeals |
Louis J. Lefkowitz, Atty. Gen., New York City (David L. Birch, Brooklyn, and Samuel A. Hirshowitz, New York City, of counsel), for appellants.
Benjamin H. Segal, New York City, for respondent.
The sole issue presented in this case is whether the penalty imposed by the Secretary of State against the petitioner real estate broker was " 'so disproportionate to the offense, in light of all the circumstances, as to be shocking to one's sense of fairness' " (Matter of Pell v. Board of Educ., 34 N.Y.2d 222, 233, 356 N.Y.S.2d 833, 841, 313 N.E.2d 321, 326, quoting Matter of Stolz v. Board of Regents, 4 A.D.2d 361, 364, 165 N.Y.S.2d 179, 182). The Appellate Division found that the secretary's $200 fine was an adequate punishment but that his direction that, as a condition for the removal of the suspension of petitioner's real estate broker's license, the broker be compelled to repay the $15,050 profit she made on the resale of certain property was an excessive sanction and, therefore, should be set aside. We are of the opinion that the Appellate Division erred in setting aside the secretary's determination that the $15,050 profit be returned.
In April, 1974, the petitioner, Mrs. Miriam Kostika, sold a three-family residence which she owned in Forest Hills, New York, to Mr. and Mrs. Hanel. Mrs. Kostika was at that time a licensed real estate broker, although she never informed the purchasers of that fact and indeed used her maiden name, Miriam Schwecky, in all her dealings with the Hanels, despite the fact that Mrs. Hanel had on several occasions asked petitioner if she was a real estate broker. In addition, in connection with her attempts to sell the premises in question, during the winter of 1973-1974 Mrs. Kostika placed an advertisement in the New York Times. This advertisement did not indicate either Mrs. Kostika's name or the fact that she was a licensed real estate broker or dealer in real property.
On April 1, 1974, title passed to Mrs. Kostika from the Rubegold Realty Co. for the purchase price of $61,000. At a simultaneous closing, Mrs. Kostika transferred title to the same premises to the Hanels for a purchase price of $76,050. It was not until this point that the Hanels became aware that Mrs. Kostika was a real estate broker.
Subsequently, the Hanels complained about Mrs. Kostika's conduct to the Department of State and an investigation by the Division of Licensing Services ensued. A hearing was convened pursuant to section 441-e of the Real Property Law to determine the validity of the alleged violations raised in a formal complaint filed by the investigator. Mrs. Kostika was charged with having violated both section 175.6 of the Rules and Regulations of the Department of State promulgated pursuant to article 12-A of the Real Property Law (19 N.Y.C.R.R. 175.6) and with a violation of section 396-b of the General Business Law.
Section 175.6 of the Rules and Regulations of the Department of State clearly requires that "(b)efore a real estate broker sells property in which he owns an interest, he shall make such interest known to the purchaser." Section 396-b of the General Business Law requires: "Any person, firm, corporation or association, or agent or employee thereof, hereinafter called person, who, being engaged in the business of dealing in any property, makes, publishes, disseminates, circulates or places before the public or causes, directly or indirectly, to be made, published, disseminated, circulated or placed before the public, in this state, any advertisement respecting any such property, in any newspaper, magazine, or other publication, or over any radio station or television station, unless it is stated in any such advertisement that the advertiser is a dealer in such property or from the context of any such advertisement, it plainly appears that such person is a dealer in such property so offered for sale in any such advertisement * * * is guilty of a misdemeanor."
Mrs. Kostika appeared in person at the hearing and was represented by counsel. Both sides were given the opportunity to present witnesses and offer evidence, and at the conclusion of the hearing, the hearing officer found that Mrs. Kostika had demonstrated untrustworthiness. Pursuant to section 441-c of the Real Property Law the hearing officer declared that Mrs. Kostika's license be "suspended for a period of three months or in lieu thereof to pay a fine to the department (of State) in the sum of $200". The officer further determined that "(a)t the end of the period of suspension or upon payment of the fine the aforementioned license shall be further suspended until such time as the respondent (Mrs. Kostika) has present proof satisfactorily to the Department that she has returned to Mr. and Mrs. Hanel the sum of $15,050."
The Secretary of State confirmed the...
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