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New Jersey Real Estate Commission v. Peter Petridis

November 1, 2011

NEW JERSEY REAL ESTATE COMMISSION, COMPLAINANT-RESPONDENT,
v.
PETER PETRIDIS, LICENSED NEW JERSEY REAL ESTATE SALESPERSON AND MARGARET STEADMAN, FORMERLY KNOWN AS MARGARET SCHWABE, LICENSED NEW JERSEY REAL ESTATE BROKER-SALESPERSON, RESPONDENTS-APPELLANTS.



On appeal from the New Jersey Real Estate Commission, Department of Banking and Insurance, Docket No. ATL-09-031.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted October 12, 2011

Before Judges Carchman, Baxter and Nugent.

Peter Petridis, a licensed real estate salesperson, and his supervisor Margaret Steadman, a licensed real estate broker/salesperson, appeal from a February 1, 2011 final agency decision and order of the New Jersey Real Estate Commission (Commission). The order in question suspended their respective licenses due to their violation of portions of the New Jersey Real Estate Brokers and Salesperson Act (Act), N.J.S.A. 45:15-1 to -29.5, and applicable regulations. Because the Commission's findings of fact are supported by the record, and the penalties imposed by the Commission were neither arbitrary nor capricious, we affirm.

I.

Petridis and Steadman were licensed realtors employed by Prudential Fox & Roach Realtors (Prudential), located in Brigantine. In October 2006, Osprey Estates, L.L.C. (Osprey) signed a listing agreement with Prudential designating Prudential as its exclusive agent for the sale of building lots and homes in an Osprey development on West Riverside Drive in Atlantic City. Petridis was designated as the listing agent and Steadman was Prudential's broker/salesperson on the Osprey listing agreement. The listing agreement permitted Prudential to act as a disclosed dual agent if the opportunity arose.

On November 17, 2007, Petridis prepared an offer on behalf of Richard Vizzi to purchase one of the Osprey properties. Vizzi was an investor who had been Petridis's client for many years prior to the signing of the November 17, 2007 offer. On November 26, 2007, Osprey and Vizzi executed an agreement of sale under which Vizzi agreed to purchase the property for the sum of $440,000, with a 4% sales commission due to Prudential. The closing was scheduled to take place no later than December 31, 2007; however, on that date, the parties executed an agreement extending the settlement date to January 18, 2008. The closing occurred as scheduled on the latter date.

On January 1, 2008, before the Osprey/Vizzi transaction closed, Petridis met with an individual named Yishai Kedar, who expressed interest in purchasing a property in the Osprey development. At the time, all of the constructed Osprey homes were under contract, and Kedar was unwilling to wait five to six months for a home to be constructed. He expressed interest in buying the property on West Riverside Drive that was under contract to Vizzi.

Petridis never told Osprey of Kedar's interest in purchasing a property. Instead, he contacted Vizzi to determine if he would be interested in selling the property to Kedar. Vizzi expressed an interest in doing so.

In early January 2008, Petridis and Steadman discussed how to proceed, in light of the fact that Vizzi would be contracting to sell the property to Kedar before he, Vizzi, took title. Petridis and Steadman reached the following conclusions: they had no duty to disclose to Osprey Kedar's interest in purchasing the property that Vizzi had agreed to purchase from Osprey; Vizzi was entitled to sign a contract agreeing to sell the property to Kedar, even though at the time of execution of any contract, Vizzi would be merely an "equitable owner" without legal title; the agreement of sale between Vizzi and Kedar need not reveal that Vizzi did not yet have legal title; and Petridis and Steadman could act as dual agents in the Vizzi/Kedar transaction.

Consequently, on January 7, 2008, before the Osprey/Vizzi transaction closed, and before Vizzi actually owned the property, Petridis prepared a contract of sale for the subject property with Kedar agreeing to purchase the property from Vizzi for the sum of $575,000. The contract identified Vizzi as the seller, but did not disclose that Vizzi did not hold title to the property. Neither did either Petridis or Steadman notify Osprey, or its managing partner, Daniel Sawicki, of Kedar's interest in an Osprey Estates property. Nor did either of them notify Osprey of the contemplated Vizzi/Kedar transaction prior to the closing of the transaction. Because no other real estate broker was involved in either the Osprey/Vizzi or the Vizzi/Kedar sales, Prudential and Petridis received commissions on the two sales of the same property, in the amounts of $17,600 on the first transaction, and $14,300 on the second.

Upon learning of the two transactions, and realizing that neither Petridis nor Steadman had advised Osprey of the second transaction, Sawicki filed a complaint with the Commission, charging Petridis and Steadman with unethical practices and violations of the Act. After a preliminary investigation, the Commission filed a complaint against the two, followed by a hearing on May 11, 2010, during which Sawicki, Petridis and Steadman testified, along with Glen Flores, an investigator employed by the Commission.

On February 1, 2011, the Commission issued its final order, accompanied by a thirty-three page decision setting forth the Commission's findings of fact and conclusions of law. In relevant part, the Commission reached the following conclusions:

1. Respondent Petridis is in violation of N.J.S.A. 45:15-17(a), making a substantial misrepresentation, in that he prepared a contract of sale naming Richard Vizzi as the seller of [the property] when he knew that Vizzi had not yet taken title to the premises; and

2. Respondent Petridis is in violation of N.J.S.A. 45:15-17(e), incompetency, in that he prepared a contract of sale naming Richard Vizzi as the seller of [the property] when he knew that Vizzi had not yet taken title to the premises and failed to include a contingency in the contract regarding closing of title on the first transaction (Osprey/Vizz[i]);

3. Respondent Petridis is in violation of N.J.A.C. 11:5-6.4(a) and N.J.S.A. 45:15-17(t) by failing to deal fairly with all parties and by placing his own interest above that of this principal as set forth above; and

4. Respondent[s] Petridis and Steadman are in violation of N.J.S.A. 45:15-17(e) [by engaging in] conduct demonstrating unworthiness, bad faith and dishonesty and 45:15-17(t) for failing to inform Sawicki and Osprey Estates of the Kedar offer on [the property] and of the Vizzi/Kedar transaction; and

5. Respondents Petridis and Steadman are in violation of N.J.A.C. 11:5-6.9(b) and N.J.S.A. 45:15-17(t) (2 counts) in that they failed to obtain separate written informed consents to disclosed dual agency on the Osprey/Vizzi transaction; and

6. Respondent Steadman is in violation of N.J.A.C. 11:5-4.5 (2 counts) in that as branch office manager of Prudential . . . she failed to properly supervise the actions of respondent Petridis and failed to properly oversee the Osprey/Vizzi and Vizzi/Kedar transactions.

In sum, the Commission concluded that Petridis and Steadman violated portions of the Act and the implementing regulations by: failing to strictly comply with the principles governing fiduciary relationships; performing incompetently; and misrepresenting the status of a party to a real estate transaction. The Commission also concluded that Steadman failed to properly supervise the activities of Petridis. For these violations, the final order suspended Petridis's salesperson's license for two months; downgraded Steadman's broker/salesperson's license to a salesperson's license for four months; imposed a $5000 fine on both Petridis and Steadman; required that they complete a thirty-hour remedial course within one year; and placed them on probation for a period of one year after their respective licenses were to be reinstated.

On appeal, in their joint brief, Petridis and Steadman raise the following claims:

I. THE NEW JERSEY REAL ESTATE COMMISSION'S CONCLUSIONS OF LAW ARE ENTITLED ONLY TO LIMITED DEFERENCE AND THEIR FINDINGS OF FACT MUST ...


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