Sawyer v. Real Estate Agency

• Decision Date: 31 December 2014
• Docket Number: 200812652, 200812681,A149673.
• Citation: 342 P.3d 104,268 Or.App. 42
• Parties: Tami SAWYER, Petitioner, v. REAL ESTATE AGENCY, Respondent.
• Court: Oregon Court of Appeals

268 Or.App. 42

342 P.3d 104

Tami SAWYER, Petitioner

v.REAL ESTATE AGENCY, Respondent.

200812652, 200812681

A149673.

Court of Appeals of Oregon.

Submitted Jan. 14, 2013.

Decided Dec. 31, 2014.

Mark D. Blackman and Ransom Blackman LLP filed the briefs for petitioner.

Ellen F. Rosenblum, Attorney General, Anna M. Joyce, Solicitor General, and Cecil A. Reniche–Smith, Assistant Attorney General, filed the brief for respondent.

Before ARMSTRONG, Presiding Judge, and HADLOCK, Judge, and EGAN, Judge.

Opinion

ARMSTRONG, P.J.

The Real Estate Agency issued a final order revoking petitioner's real estate license based on her involvement in two real estate matters, referred to as the McDonald/Whitney transaction and the Middleton transactions. The agency concluded in its final order that petitioner had violated ORS 696.805(3)(a) in the McDonald/Whitney transaction and had violated ORS 696.805(3)(a), (b), (c), and (d), and OAR 863–015–0145(1) in the Middleton transactions.¹ Petitioner seeks judicial review of the agency's order, raising four assignments of error. First, she contends that the Administrative Law Judge (ALJ) erred in denying her motion to stay the proceedings or, in the alternative, to grant her use immunity, in light of criminal charges then pending against her in federal court. In her second and third assignments of error, she challenges the merits of the agency's conclusions that her conduct violated the specified statutory and rule provisions. In her fourth assignment of error, she contends that the agency erred in imposing revocation of her license as a sanction for her conduct because her license had expired during the pendency of the proceedings. We reject petitioner's second and third assignments of error without discussion. For the reasons explained below, we also reject her first and fourth assignments of error. Accordingly, we affirm.

I. BACKGROUND

We begin by describing the pertinent facts with respect to each transaction; because petitioner does not dispute the agency's findings of fact, we state the facts consistently with the agency's final order. We then describe the proceedings below.

A. The McDonald/Whitney Transaction

In January 2008, the McDonalds listed their Bend, Oregon, home for sale, with petitioner as the listing agent.² Petitioner showed the home to Whitney, whom petitioner also represented, in May of that year. The McDonalds signed a disclosure form consenting to the dual representation, though they were not aware that petitioner had a personal relationship with Whitney and had known her for several years.

On July 31, 2008, Whitney made an offer to purchase the McDonalds' home for $585,000, with an earnest money deposit of $1,000 and a closing date of October 25, 2008. In preparing the Residential Real Estate Sale Agreement, petitioner checked a box acknowledging receipt of a check for the earnest money, although petitioner had not actually received a check from Whitney. Along with the agreement, she also presented to the McDonalds a separate document entitled “Promissory Note for Earnest Money,” signed by Whitney, in which Whitney promised to pay the $1,000 earnest money ten days after mutual acceptance of the offer.

On August 1, 2008, the McDonalds rejected Whitney's offer and submitted a counteroffer for $610,000, with an earnest money deposit of $2,500. Whitney accepted and signed the counteroffer on August 5, 2008. Petitioner did not require Whitney to execute a new promissory note or otherwise set a deadline for payment of the increased earnest money. By check dated August 25, 2008, Whitney paid the earnest money amount of $2,500, and it was deposited into a client trust account. In September, Whitney decided not to proceed with the purchase and sought a refund of her earnest money; the McDonalds did not agree to release the earnest money. After negotiations with petitioner's principal broker, Whitney agreed to surrender the earnest money, and it was paid to the McDonalds on November 6.

B. The Middle ton Transactions

On October 16, 2006, Thomas Middleton executed a durable power of attorney (POA), appointing petitioner, his friend of approximately 20 years, as his agent and attorney-in-fact. On the same date, Middleton instructed his attorney, Albertazzi, to hold the POA until Middleton requested that it be provided to petitioner or until Middleton became incapacitated or incompetent.

In 2008, petitioner operated three separate business entities—Tami Sawyer PC for her real estate activities; Starboard LLC, a real estate investment company; and Genesis Futures, LLC, a property-management company. Due to the declining real estate market at that time, all three businesses “were experiencing significant financial stress and had difficulty making payments to creditors”; Starboard LLC, for example, owed more than $2,000,000 to four investors. As of January 1, 2008, Middleton had invested $250,000 in Starboard LLC.

On March 5, 2008, Middleton instructed Albertazzi to deliver the POA to petitioner. On the same date, he established the Thomas S. Middleton Revocable Living Trust (the trust), naming himself as trustee and appointing petitioner successor trustee in the event of Middleton's resignation, death, or incapacity. The trust required the trustee to sell Middleton's personal residence following his death, and the proceeds were to be added to the corpus of the trust. Petitioner's three adult sons were among the beneficiaries of the trust. On July 15, Middleton amended the trust to give the trustee the discretion to rent or sell his residence based on market conditions; he also changed some of the details regarding the distribution of the trust after his death.

On July 20, 2008, Middleton provided Albertazzi with final instructions—signed by petitioner as “[POA] for Thomas S. Middleton”—stating that he had decided to give the spa at his residence to petitioner “because my house is going to be a rental until the real estate market improves. The idea is to eliminate all liability due to injury or accidental drowning from the spa.”

Middleton died two days later, on July 22, 2008. On that morning, petitioner told Maunder, an employee of Genesis Futures, LLC, that Middleton wanted to know the rental value of his home. Maunder evaluated the home on July 22 or 23 and told petitioner that she could rent it for $995 per month. The next morning, another of petitioner's employees asked Maunder for the keys to the house because petitioner had decided to sell it rather than rent it. Petitioner listed the house for sale on July 24, with her company, Tami Sawyer PC, as the listing agent.

On September 4, an offer was accepted for the purchase of Middleton's home. Neither the Residential Real Estate Sale Agreement nor the real estate listing disclosed that petitioner was acting as a principal in the transaction in her capacity as successor trustee. In response to an e-mail note from one of Middleton's sons in early October asking about the house, petitioner told him that she had received an offer on the house and that the sale was likely to close within the week. She told another of Middleton's sons that she had tried to rent the home but “had not one call” and decided to sell it.

Petitioner, her husband, and her businesses had outstanding obligations of more than $150,000 due in September and October 2008. Petitioner told employees that the debts would be paid following the sale of Middleton's home.

On October 8, petitioner hired a company to move the spa from Middleton's home to petitioner's residence. The $550 cost to move the spa was eventually paid from the proceeds of the sale of Middleton's home; Middleton's estate was never reimbursed for that cost.

On October 9, petitioner, in her capacity as trustee of the Middleton trust, signed a statutory warranty deed conveying Middleton's home for $219,900; after deducting certain costs associated with the sale, including the costs of moving the spa, the escrow officer issued a check for $202,077.06, payable to petitioner as successor trustee of the trust. Petitioner received a commission of $4,464.85.

On October 10, Starboard LLC received a bank deposit of $202,077.06; before that deposit, the balance on the Starboard LLC account was $86.80. Also on that date, $70,000 was transferred from the Starboard LLC account to an account held by Genesis Future, LLC, and $20,000 was transferred from the Starboard LLC account to one held by Tami Sawyer PC.

A “Successor Trustee's Inventory Report” for the trust, prepared by petitioner on November 26, 2008, stated that, at the time of Middleton's death, the trust had an investment with Starboard LLC valued at $250,000. The report also stated that the trust had invested an additional $150,000 in Starboard LLC from the proceeds of the sale of Middleton's home. It also listed $52,568 as an additional asset of the trust, but did not indicate where those funds were held. The value of the trust bank account was listed as $4,563.04 on the date of Middleton's death.

C. Agency Proceedings

On December 17, 2009, the agency issued notice to petitioner that it intended to revoke her real estate license based on her conduct in the McDonald/Whitney and Middleton transactions. Petitioner had been licensed by the agency since at least 1995, and her then-current license was set to expire on April 30, 2010.

In connection with the McDonald/Whitney transaction, the notice alleged that petitioner had failed to account for earnest money in a timely manner, in violation of ORS 696.805(3)(a) and (b), ORS 696.810(3)(a) and (b), and ORS 696.815(2), and had violated ORS 696.805(3)(a) and ORS 696.810(3)(a) when she had marked the box in the agreement indicating that she had received a “check” for the earnest money deposit.

Based on petitioner's conduct in the Middleton transactions, the notice alleged that petitioner (1) had violated ORS 696.805(3)(a), (c), and (d) by removing the spa from Middleton's residence for her personal use, contrary to Middleton's instructions...