Sigmen v. Arizona Dept. of Real Estate
| Decision Date | 02 April 1991 |
| Docket Number | CA-CV,No. 1,1 |
| Parties | Dale A. SIGMEN, Plaintiff-Appellant, v. ARIZONA DEPARTMENT OF REAL ESTATE; Joe Sotelo, Commissioner of Real Estate; and Patricia Esser Cooper, Hearing Officer for the Arizona Department of Real Estate, Defendants-Appellees. 88-551. |
| Court | Arizona Court of Appeals |
A former real estate broker contests the Arizona Department of Real Estate's revocation of his broker's license. We find that the Department's order was supported by the evidence and appropriately affirmed by the superior court.
When Greg and Carol Wiley undertook to sell their Phoenix home and move to Utah, they contacted appellant Dale A. Sigmen. Sigmen had engaged as broker or principal in previous real estate dealings with the Wileys and their families, and they had developed what Sigmen acknowledged as a relationship of trust and confidence.
Although Sigmen prepared an agreement to list their home for sale, the Wileys wished to move immediately and agreed to sell Sigmen their equity for $1,000.00. The home was burdened with a mortgage. Equity was transferred by a quit-claim deed that Sigmen suggested and prepared.
After recording the Wileys' deed, Sigmen promptly subjected the property to a second deed of trust to secure one of his own outstanding debts. Sigmen leased out the property and received monthly rental payments of $490.00 for a period of six months, but made no mortgage payments during that time. The Wileys, contacted by the mortgagee, paid some portion of the arrearage, but the mortgagee eventually foreclosed.
The Wileys lodged a formal grievance with the Arizona Department of Real Estate, which in turn sought suspension or revocation of Sigmen's broker's license pursuant to Ariz.Rev.Stat.Ann. § 32-2153 (1984). A Department hearing officer adjudicated the matter in August 1987.
The witnesses disputed whether Sigmen had promised to assume the existing mortgage on the Wileys' home. According to testimony by Greg Wiley, corroborated by his father-in-law, Robert Stewart, Sigmen verbally agreed to prepare the necessary papers and assume 1 the debt. Wiley stated that he made clear to Sigmen that he did not wish to remain liable for the mortgage after the sale. 2
Wiley further testified that, as Sigmen fell behind in the mortgage payments and the mortgagee contacted the Wileys, Wiley repeatedly urged Sigmen to accomplish the assumption.
[A]nd he did agree that he would send us the papers or he would have some kind of excuse why things weren't working out. But he never did tell us ever that he had no intentions of assuming the loan. It was always either an excuse why he couldn't or, "I'll send them right away."
Wiley added that Sigmen eventually mailed assumption papers, which the Wileys completed and returned to their in-laws, who then forwarded the papers to Sigmen's office "so that Dale could continue the paperwork."
Sigmen gave a different account. Sigmen acknowledged telling the Wileys, "I would take the payment book and start making the payments to this property," and he acknowledged a "moral obligation" to make the payments, but he denied contracting with the Wileys to assume the mortgage on their home. He also denied sending them assumption papers. He claimed rather to have told the Wileys he would structure this transaction just as he had structured their prior real estate transactions--subject to 3 the mortgage.
Sigmen and the Wileys also disputed whether Sigmen had disclosed his financial circumstances at the time of sale. By his own testimony, those circumstances were precarious: Sigmen was engaged in a divorce, lacked substantial assets, owed creditors at least $20,000, and had recently transferred a car to his brother because he could not make the payments. Sigmen claimed to have told the Wileys of his difficulties. Greg Wiley testified, however, that Sigmen never suggested that his financial condition would inhibit his making mortgage payments as they came due.
The hearing officer resolved credibility issues against Sigmen and concluded that Sigmen had engaged in substantial misrepresentations; false promises of a character likely to influence, persuade, or induce; and fraud or dishonest dealings within the meaning of Ariz.Rev.Stat.Ann. §§ 32-2153(A)(1), (A)(2), (A)(5), and (B)(5). The hearing officer recommended that Sigmen's license be suspended or revoked, or that he be denied the right to renew his license pursuant to § 32-2153(B)(5). In accordance with the hearing officer's recommendation, the Department revoked Sigmen's license on November 20, 1987.
Sigmen first sought administrative rehearing and then filed a complaint in the superior court pursuant to Ariz.Rev.Stat.Ann §§ 12-901 to 913 (1982), seeking review of the Department's order. After the superior court affirmed revocation of his license, Sigmen initiated this appeal.
Sigmen argues first that the record lacks sufficient evidence to support the hearing officer's findings of fact. We disagree.
When the superior court reviews an agency's factual findings, it examines whether they are supported by substantial evidence. Webster v. State Bd. of Regents, 123 Ariz. 363, 365, 599 P.2d 816, 818 (App.1979). On appeal from superior court review, we do the same. Id.
Sigmen argues that the hearing officer failed to draw appropriate inferences from his contemporaneous purchase of the Wileys' car, subject to their auto loan. Sigmen testified that he informed the Wileys that he could not qualify to refinance the car. Wiley was cross-examined on this subject as follows:
Sigmen argues that the hearing officer should have inferred that the parties agreed or understood that in the house transaction, as in the car transaction, Sigmen would not assume--and lacked financial standing to assume--the underlying debt. Sigmen also argues that the hearing officer gave inadequate weight to evidence that Sigmen told the Wileys he would do business with them as in the past and that in at least one prior transaction he had purchased their property subject to a mortgage, without assumption or novation.
The hearing officer found Sigmen's testimony on these issues unpersuasive and the Wileys' evidence more credible. It is not this court's function to reweigh the evidence. Petras v. Arizona State Liquor Bd., 129 Ariz. 449, 451, 631 P.2d 1107, 1109 (App.1981). The hearing officer as trier of fact was the proper judge of witness credibility. Holding v. Industrial Comm'n, 139 Ariz. 548, 551, 679 P.2d 571, 574 (App.1984). The record, deferentially reviewed, supports the hearing officer's findings on these points.
Though we owe the Department's conclusions of law no deference and may substitute our own, Gardiner v. Arizona Dep't of Economic Security, 127 Ariz. 603, 606, 623 P.2d 33, 36 (App.1981), we find no flaw in the Department's conclusions or disposition in this case.
We examine only the question whether Sigmen could be found to have engaged in "substantial misrepresentation" pursuant to § 32-2153(A)(1), meriting revocation of his license pursuant to § 32-2153(B)(5). Because we uphold the Department's decision on this ground, we need not reach the question whether Sigmen's conduct also violated §§ 32-2153(A)(2) or (A)(5).
Sigmen argues that he made no false statement because he fully intended to make the payments on the Wiley home; the Wileys merely misunderstood his intention to make the mortgage payments--an intention frustrated by financial mishaps--for a contractual undertaking to assume the mortgage. Misrepresentation, he argues, "cannot be predicated on unfulfilled promises, expressions of intention, or statements concerning future events unless such were made without present intention ... to perform." For this proposition, Sigmen cites Staheli v. Kauffman, 122 Ariz. 380, 595 P.2d 172 (1979).
The simple answer to this argument is that the hearing officer rejected Sigmen's characterization of this transaction as a mere misunderstanding. Based upon the testimony of both Sigmen and Greg Wiley, the hearing officer found that Sigmen had a relationship of trust and confidence with the Wileys. She found that Sigmen abused that relationship by failing to explain that the property would be transferred subject to the existing encumbrance and that the transaction involved a degree of risk. She found additionally that Sigmen's failure to use a written contract of sale or escrow, "from which Wileys might have gleaned the details of the...
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