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1
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OPINION
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EXTRACTED KEY WORDS
LICENSE REAL PROPERTY LAW ROBERTS SUSPENSION CORPORATE BROKER STATUTORY SALES HOMES REAL ESTATE WATER NY2D SUBDIVISION INTERPRETATION AGENT SALESPERSON APPELLATE EMPLOYEES REVOCATION INCOMPETENCE CONTRACT RESPONSIBILITY DEMONSTRATED UNTRUSTWORTHINESS PURCHASERS INDIVIDUAL BROKERS PURPOSES ALBANY COUNTY ORCHARD PARK AUTHORITY JUDGE |
IN THE MATTER OF ROBERTS REAL ESTATE, INC., ET AL., RESPONDENTS, v. NEW YORK
STATE DEPARTMENT OF STATE, DIVISION OF LICENSING SERVICES, APPELLANT.
80 N.Y.2d 116, 603 N.E.2d 242, 589 N.Y.S.2d 392 (1992).
October 20, 1992
3 No. 201
Decided October 20, 1992
_________________________________________________________________
This opinion is uncorrected and subject to revision before publication
in the New York Reports.
John McConnell, for Appellant.
Michael T. Wallender, for Respondents.
BELLACOSA, J.:
The New York State Department of State ("Department") seeks a judicial
interpretation of Real Property Law § 442-c that would allow it to
suspend or revoke a corporate broker's license based on interpreting
"actual knowledge" to include imputed knowledge of
employee-salespersons. We agree with the Appellate Division that the
Department's theory and proffered interpretation of the governing
words of the statute are not supportable. We thus affirm that court's
order modifying the Department's determination suspending the license
of the corporate broker, Roberts Real Estate, Inc. ("Roberts Inc.") on
the basis of untrustworthiness and incompetence under Real Property
Law §§ 441-c(1) and 442-c. Because the absence of actual knowledge
does not insulate real estate brokers from disciplinary measures less
severe than license suspension or revocation, however, there must be a
remand to the Department for consideration of an appropriate lesser
sanction, if any.
The Department found Roberts Inc. guilty of untrustworthiness and
incompetence in failing to inform purchasers of the presence of
methane gas in the well water available to their newly-constructed
homes. The sanction was suspension of its real estate broker's license
for a definite period of three months or the payment of a $3000 fine.
We granted leave to appeal to the Department from the Appellate
Division's annulment of that determination. The Department also found
the corporate broker and two of its individual brokers guilty of
failure to properly supervise and manage the business or activities of
its licensed sales staff. We denied petitioners-respondents' cross
motion for leave to appeal with respect to these other aspects of the
Department's determination (79 NY2d 755). Thus, only the
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