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OAH 61-1005-20133-2 |
STATE OF
OFFICE OF ADMINISTRATIVE HEARINGS
FOR THE DEPARTMENT OF COMMERCE
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In the Matter of
Real Estate Salespersons’ Licenses of Colleen Pearl Cole (f/k/a Wallin) and
Renee M. Manning; the Real Estate Licenses of DMW Properties, also known as
DMW Homestead LLC; Progressive Homes Services, Inc.; Homestead of Delano LLC;
and Homestead of Brooklyn Park LLC |
FINDINGS OF FACT,CONCLUSIONS, AND RECOMMENDATION |
The above matter came on for hearing
before Administrative Law Judge M.
Michael J. Tostengard, Assistant
Attorney General,
The issue is whether the Department
should revoke, suspend, and/or subject to civil penalties the real estate
licenses of the Respondents as provided for in Minn. Stat. § 45.027, subd.
6 (2006).
Based on the evidence in the record, the Administrative Law Judge makes the following:
1.
Under Minn. R.
1400.6000, a contested case may be decided adversely to a party who
defaults. On default, the allegations of
or the issues set out in the Notice of Administrative Hearing or other pleading
may be taken as true or deemed proved without further evidence. The Respondents are in default herein as a
result of the failure to appear at the hearing. Findings 2 through 7 are deemed true and
proved without further evidence.[1]
2.
Respondent
Colleen Wallin is currently licensed as a real estate salesperson, license no.
20077580. Respondent Renee Manning was
licensed as a real estate salesperson, license terminated as of January 23,
2008. Respondent DMW Properties has a
corporate real estate license, license no. 20051400. Respondents Wallin and Manning own and control
DMW Properties. Respondents Homestead of
Delano LLC and Homestead of Brooklyn Park LLC are not licensed. These companies are also owned and controlled
by Wallin and Manning. At all material
times, Respondents acted in concert with Joseph Cole and IPM Realty, whose
licenses were revoked by the Department in 2006.[2]
3.
In April 2004,
Homestead of Brooklyn Park purchased eight acres of property in the City of
4.
Numerous other
investors paid what were intended to be the full amount to purchase condominium
units. Those investors are summarized as follows:
|
Name of
Investor |
Amount
Invested |
|
Eileen Nygard |
135,000 |
|
Richard and Vivian Gwin |
$540,000 |
|
Ron and Sandy Stone |
$135,000 |
|
Scott and Patty Olson |
$270,000 |
|
Tim Johnson |
$270,000 |
Kaufman/Cole/Nissi |
$135,000 |
|
Dan Randunz |
$135,000 |
|
Eric Ostigaard |
$135,000 |
|
Jim Gillen |
$135,000 |
|
Peter Skupeko |
$135,000 |
|
David Johnson |
$270,000 |
|
Total |
$2,295,000 |
Numerous purchase agreements, however, were fraudulent
because they listed non-existent units for purchase.[4]
5.
The Respondents
failed to complete the condominium development project and defaulted on their
loan with Dougherty Funding in Spring 2007, at which point Dougherty Funding
foreclosed on the property. None of the
investors have had their monies refunded nor have any of the purchasers had any
interest in any of the units recorded.[5]
6.
Another
complainant, L-Car-LLC of Bradenton, Florida, invested $145,000 in Homestead of
Delano LLC. DMW Properties also entered
property management contracts with 2H Properties of
7.
On December
19, 2007, the Department issued an Order to Appear to Respondents. Respondents failed to appear at the Department
as ordered.[7]
8.
On December
17, 2008, the Department issued an Order for Hearing, Order for Prehearing
Conference, Order to Show Cause, and Statement of Charges, requiring
Respondents to appear before an Administrative Law Judge for a Prehearing
Conference on February 6, 2009. None of
the correspondence sent to Respondent was returned as undeliverable. Respondent Progressive Home Services, Inc., failed
to attend the Prehearing Conference or notify the Department or the
Administrative Law Judge that it would be unable to attend.[8]
9.
Respondent
Progressive Home Services, Inc., failed to respond to the Department’s February
10, 2009, Motion for a Default Order, which was mailed to its last known
address and not returned.[9]
10.
On February
13, 2009, June 17, 2009, and September 25, 2009, Prehearing Orders and Orders
for Continued Hearing (“Orders”) were sent via first class mail to Respondents,
the last of which set the date of the hearing for November 17, 2009, all by
agreement of the parties not in default.[10] These were sent to the last known addresses of
Respondents on file with the Department and the Administrative Law Judge. None were returned as undeliverable.
11.
The Third Prehearing
Order and Order for Hearing set certain deadlines for discovery, documents and
responses, none of which were met by the Respondents.
12.
On November 4,
2009, the Department and Respondent Renee M. Manning entered into a Consent
Order, wherein Ms. Manning admitted to none of the charges set forth in
Findings 2 – 7 herein and Ms. Manning’s Real Estate Salesperson’s License was
retroactively revoked.[11]
13.
On the
afternoon of November 16, 2009, Respondent Colleen P. Cole f/k/a Wallin faxed
to the Administrative Law Judge a request for another continuance because of
her: “severe lack of finances and dealing with a severe illness I was unable to
seek council”; and because she “also need the time to summons seven boxes of
evidence still in the bankruptcy trustee possession since my chapter 7
Bankruptcy discharge.”
14.
The
Respondents did not appear at the hearing.
15.
The
Respondents did not request any relief after the hearing.
16.
The Notice
contained the following informational warning:
1. Respondents’ failure to appear at the prehearing conference may result in a finding that Respondents are in default, that the Department’s allegations contained in the Statement of Charges may be accepted as true, and its proposed action may be upheld.
2. If any party has good cause for requesting a delay of the prehearing conference, the request must be made in writing to the Administrative law Judge at least five days before the prehearing conference. A copy of the request must be served on the other party.
17.
Because
Respondents Colleen Pearl Cole f/k/a Wallin, DMW Properties, Progressive Home
Services, Inc., Homestead of Delano LLC, and Homestead of Brooklyn Park LLC all
failed to appear at the hearing, they are in default.
18.
Pursuant to
Minn. R. 1400.6000, the allegations contained in the Notice of Administrative
Hearing or any other pleading may be taken as true and incorporated by
reference into these Findings of Fact.
19.
On November
20, 2009, the Department served Respondents with its letter motion for default.
Respondents did not respond to the Department’s motion.
20.
The
allegations contained in the Notice are deemed to be and are taken as true and
correct, and are incorporated as Findings 1 through 9.
Based on these Findings of Fact, the
Administrative Law Judge makes the following:
1.
The
Administrative Law Judge and the Department of Commerce have jurisdiction in
this matter based upon Minn. Stat. §§ 14.50, 148.262, 214.03 and 214.10.
2.
The Department
gave proper notice of the prehearing conference in this matter, and has
fulfilled all relevant substantive and procedural requirements of statute and
rule. This matter is, therefore,
properly before the Department and the Administrative Law Judge.
3.
Under Minn. R.
1400.6000, a contested case may be decided adversely to a party who defaults. On default, the allegations of or the issues
set out in the Notice of Administrative Hearing or other pleading may be taken
as true or deemed proved without further evidence. The Respondents are in default herein as a
result of the failure to appear at the hearing.
4.
Minn. R.
1400.7500, regarding the granting of continuances, provides in applicable part:
Requests for a
continuance of a hearing shall be granted upon a showing of good cause. Unless time does not permit, a request for
continuance of the hearing shall be made in writing to the judge and shall be
served upon all parties of record and the agency if it is not a party. In determining whether good cause exists, due
regard shall be given to the ability of the party requesting a continuance to
effectively proceed without a continuance. A
request for a continuance filed within five business days of the hearing shall
be denied unless the reason for the request could not have been earlier
ascertained . . . (emphasis added).
5.
Respondents’
November 16, 2009, request for a fourth continuance was untimely and for
reasons that could have been ascertained weeks, if not months, before it was
sent.
6.
The
Respondents have offered for sale unregistered securities in violation of Minn.
Stat. § 80A.08 (2006).[12]
7.
By failing to
return the invested monies, the Respondents violated Minn. Stat. § 82.41, subd.
13(11) (2006).[13]
8.
By promising a
return on the purchase of real estate, the Respondents violated Minn. Stat. §
82.41, subd. 11 (2006).[14]
9.
The
Respondents have engaged in a fraudulent, deceptive or dishonest practice in
violation of Minn. Stat. § 82.35, subd. 1(b) (2006).[15]
10.
The
Respondents have demonstrated untrustworthiness and financial irresponsibility
in violation of Minn. Stat. § 82.35, subd. 1(f) (2006).[16]
11.
The
Respondents have made material misrepresentations in violation of Minn. Stat. §
82.41, subd. 13(9) (2006).[17]
12.
The
Respondents have made false or misleading statements in violation of Minn.
Stat. § 82.41, subd. 13(10) (2006).[18]
13.
By failing to
appear as ordered by the Department, the Respondents violated Minn. Stat. §
45.027, subds. 1, 1a and 2 (2006)
14.
An order by
the Department taking disciplinary action against the Respondents Colleen Pearl
Cole f/k/a Wallin and DMW Properties licenses is in the public interest.
15.
An order by
the Department imposing civil penalties
against Respondents Colleen Pearl Cole f/k/a Wallin, DMW Properties,
Progressive Home Services, Inc., Homestead of Delano, LLC, and Homestead of
Brooklyn Park, LLC is in the public interest.
16.
The
Administrative Law Judge adopts as Conclusions any Findings that are more
appropriately described as Conclusions, and as Findings any Conclusions that
are more appropriately described as Findings.
Based
upon these Conclusions the Administrative Law Judge makes the following:
RECOMMENDATION
The
Administrative Law Judge respectfully RECOMMENDS that the Commissioner take
such adverse licensure action against and impose such civil penalties on each
of the Respondents as may be appropriate under the circumstances.
Dated: December 18,
2009
s/M.
|
M.
KEVIN SNELL Administrative
Law Judge |
Reported: Digitally
recorded; no transcript prepared.
NOTICE
This report is a recommendation, not a final decision. The Commissioner of the Department of
Commerce (the Commissioner) will make the final decision after a review of the
record. The Commissioner may adopt, reject or modify these Findings of Fact,
Conclusions, and Recommendations. Under Minn. Stat. § 14.61, the final decision
of the Commissioner shall not be made until this Report has been made available
to the parties to the proceeding for at least ten days. An opportunity must be
afforded to each party adversely affected by this Report to file exceptions and
present argument to the Commissioner. Parties should contact Glenn Wilson,
Commissioner of Commerce, 85th
If the Commissioner fails to issue a final decision within
90 days of the close of the record, this Report will constitute the final agency
decision under Minn. Stat. § 14.62, subd. 2a. The record closes upon the filing of
exceptions to the Report and the presentation of argument to the Commissioner,
or upon the expiration of the deadline for doing so. The Commissioner must notify the parties and
the Administrative Law Judge of the date on which the record closes.
Under Minn. Stat. § 14.63, subd. 1, the agency is required
to serve its final decision upon each party and the Administrative Law Judge by
first class mail or as otherwise provided by law.
[1] Notice of and Order for Hearing, Order for Prehearing Conference, Order to Show Cause, and Statement of Charges.
[2]
[3]
[4]
[5]
[6]
[7]
[8]
[9] February 11, 2009, Aff. of Service of J. Gates.
[10] Order for Prehearing Conference and Order for Continued Hearing, Second Prehearing Order and Order for Hearing, Third Prehearing Order and Order for Hearing.
[11] Consent Order.
[12] Notice of and Order for Hearing, Order for Prehearing Conference, Order to Show Cause, and Statement of Charges.
[13]
[14]
[15]
[16]
[17]
[18]