L. A. Grant Realty, Inc. v. Cuomo

58 A.D.2d 251, 396 N.Y.S.2d 524, 1977 N.Y. App. Div. LEXIS 11864
CourtAppellate Division of the Supreme Court of the State of New York
DecidedJuly 12, 1977
StatusPublished
Cited by16 cases

This text of 58 A.D.2d 251 (L. A. Grant Realty, Inc. v. Cuomo) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
L. A. Grant Realty, Inc. v. Cuomo, 58 A.D.2d 251, 396 N.Y.S.2d 524, 1977 N.Y. App. Div. LEXIS 11864 (N.Y. Ct. App. 1977).

Opinion

Witmer, J.

In this article 78 proceeding pursuant to section 441-f of the Real Property Law, transferred to this court, petitioners seek review and annulment of the determinations by respondent Secretary of State, reprimanding petitioner L.A. Grant Realty, Inc. (Grant), as represented by petitioner Alvin Rutstein, real estate broker, for demonstrated untrustworthiness and incompetence in the supervision of salesman Arthur Fornes and suspending said Arthur Fornes for one month for demonstrated untrustworthiness as a licensed real estate salesman, pursuant to section 441-c of the Real Property Law.

The charges against petitioners grew out of a written contract, dated in March, 1974, by Lillian Cowie to sell and by Howard T. Sutton to buy certain real property situated in the City of Buffalo, New York, owned by Cowie, which contract was procured by petitioner Fornes. After prolonged delays the sale was not consummated because of Sutton’s lack of funds. Cowie eventually complained to the Better Business Bureau, the local Real Estate Board and to the Secretary of State with respect to the conduct of petitioners. After investigating the complaint, respondent Secretary of State made the charges of untrustworthiness and incompetence against petitioners, and a hearing officer conducted a full-blown hearing thereon pursuant to section 441-e of the Real Property Law, which resulted in the determinations which petitioners now seek to have annulled.

The scope of our review of respondent’s determinations herein is limited to ascertaining whether the record contains substantial credible evidence upon which respondent could reasonably conclude (1) that petitioners Grant and Rutstein demonstrated untrustworthiness and incompetence in their supervision of salesman Fornes and (2) that petitioner demonstrated untrustworthiness as a licensed real estate salesman, within the provisions of section 441-c of the Real Property Law (Kostika v Cuomo, 41 NY2d 673, 676; Matter of Lynch’s Bldrs. Rest, v O’Connell, 303 NY 408; Matter of Stork Rest, v [253]*253Boland, 282 NY 256, 267, 274; Matter of Tegeler v Department of State of State of N. Y., 23 AD2d 917; Matter of Klein v Department of State of State of N. Y., 18 AD2d 795).

Section 441-c of the Real Property Law provides in part that, "The department of state may revoke the license of a real estate broker or salesman or suspend the same, for such period as the department may deem proper, or in lieu thereof may impose * * * a reprimand * * * if such licensee has * * * demonstrated untrustworthiness or incompetency to act as a real estate broker or salesman, as the case may be”.

The record reveals substantial evidence, albeit disputed in some material respects, to support respondent’s conclusion that petitioners violated the above-quoted provisions of section 441-c of the Real Property Law. There was credible testimony that when Fornes procured Sutton’s signature to the offer to buy Cowie’s property he knew that Sutton was without financial ability to complete the purchase; that another person, Weir, was interested in the property and induced Sutton to sign the purchase offer; that Weir himself had no funds with which to complete the purchase, but hoped to realize some cash from an equity in a house on which the mortgage was being foreclosed, which house he had asked Fornes to sell. The latter transaction never materialized. Although the offer provided that Sutton pay to petitioner broker the sum of $100 and that upon its acceptance by Cowie an additional $950 would be paid as a deposit on the contract, in which Sutton would pay $17,500 for the property, Fornes received neither down payment. He did not, however, advise Cowie of this, for he hoped to receive the down payment within a few weeks; but it was not forthcoming. The contract provided for closing on March 29, 1974, but at the purchaser’s request, communicated to Cowie by Fornes, the closing date was adjourned for one month and thereafter to July 1 and then to late August. Fornes failed to advise Cowie that the purchaser was without the necessary funds, but in the summer he attributed the delay to Sutton’s illness; and in mid-August he even induced Cowie to leave unrented an apartment in the premises which had just become vacant, so that the buyer could move into it. It was not until August 30 that Cowie was advised that the sale was not being completed because the purchaser did not have the means needed to close. At this same time Cowie first learned that Sutton was only a "front” for Weir. At that late date Fornes still assured Cowie that Sutton wanted to go [254]*254through with the contract, and he arranged a September closing date, with Cowie agreeing to accept a mortgage for part of the price. This closing date was also later canceled.

Petitioner Rutstein, the representative real estate broker for Grant for which Fornes worked as a salesman, knew of this contract in March, 1974 and knew that no down payment was made thereon, although it was the policy of Grant to obtain the deposit at signing of a contract Rutstein directed Fornes to collect the down payment. On April 8, 1974 Rutstein noted in his record that Fornes had not yet obtained the down payment and that the deal was "weak”, and he suggested to Fornes that the parties cancel the contract on an exchange of releases; but Fornes assured him that the money would be forthcoming and that he wanted to carry on with the deal. During the summer of 1974 Rutstein was aware that the deal was not being closed, but he did nothing. After Grant and he were served with a summons and complaint in an action for damages because of the foregoing, he suggested to Cowie that the property be put back on the market for sale.

Although specific findings of fact were not made by the hearing officer or respondent, petitioners have not objected thereto, and they merely assert that the evidence does not support respondent’s determinations. Findings of fact should be made so that the persons charged may know the bases of the determination (Matter of New York Water Serv. Corp. v Water Power & Control Comm., 283 NY 23, 30; Matter of Parmadale Development v Planning Bd. of Town of Parma, 35 AD2d 904; Matter of Di Orio v Murphy, 20 AD2d 754). In this proceeding, however, the issue was simply as to petitioner’s trustworthiness, and respondent’s determinations actually constituted acceptance of the facts as charged and supported in the testimony. There being no prejudice to petitioners, even if objection were made to the lack of findings, we would find it unnecessary to remit to respondent to make formal findings of fact (see Matter of Fink v Cole, 1 NY2d 48, 54; Matter of New York City Housing and Redevelopment Bd. v Foley, 23 AD2d 84, affd 16 NY2d 1071; 23 Carmody-Wait 2d, NY Prac, § 145:18, p 455). The evidence clearly justifies respondent’s conclusions that petitioners violated section 441-c of the Real Property Law as charged, to wit, (1) that Fornes failed to secure a down payment on the purchase offer-contract without advising seller Cowie thereof; he deceived Cowie as to the reason for the delays in the closing and concealed the fact of [255]*255the purchaser’s financial inability to perform the contract; and he induced Cowie to sustain rental loss by leaving an apartment vacant for the purchaser when he had reason to know that there was slight chance of the deal being completed; and (2) that Rutstein failed to give competent and trustworthy supervision of Fornes, especially after being fully informed of the facts concerning the proposed transaction.

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Bluebook (online)
58 A.D.2d 251, 396 N.Y.S.2d 524, 1977 N.Y. App. Div. LEXIS 11864, Counsel Stack Legal Research, https://law.counselstack.com/opinion/l-a-grant-realty-inc-v-cuomo-nyappdiv-1977.