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(NOTE: The status of this decision is Unpublished.) Original Wordprocessor Version (NOTE: The status of this decision is Unpublished.)

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-2561-09T1

NEW JERSEY REAL ESTATE COMMISSION,

Claimant-Respondent,

v.

ESTRELLA PIEMONTESE,

Respondent-Appellant. ________________________________ May 12, 2011 Submitted April 4, 2011 -- Decided

Before Judges Reisner and Ostrer.

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On appeal from the New Jersey Real Estate Commission.

Estrella Piemontese, appellant pro se.

Paula T. Dow, Attorney General, attorney for respondent (Lewis A. Scheindlin, Assistant Attorney General, of counsel; Kristine A. Maurer, Deputy Attorney General, on the brief).

PER CURIAM

Estrella Piemontese appeals from a December 15, 2009 order of the New Jersey Real Estate Commission (Commission) revoking her broker license for ten years and imposing a monetary penalty of $25,000. For the following reasons, we affirm the license revocation, but remand for reconsideration of the penalty in light of our conclusion that some of the Commission's findings are not supported by substantial evidence in the record. The Commission is charged "with the high responsibility of maintaining ethical standards among real estate brokers and salesmen," Goodley v. N.J. Real Estate Comm'n, 29 N.J. Super. 178, 182 (App. Div. 1954), as well as protecting the public from fraud, incompetence and unethical practices. In re Pipes, 329 N.J. Super. 391, 397 (App. Div.), certif. denied, 165 N.J. 487 (2000). Our standard of review of the Commission's final decisions is well settled. We will sustain the Commission's findings if supported by "sufficient credible evidence." See R. 2:11-3(e)(1)(D); Henry v. Rahway State Prison, 81 N.J. 571, 579-80 (1980); see also Maple Hill Farms, Inc. v. Div. of N.J. Real Estate Comm'n, 67 N.J. Super. 223, 226 (App. Div. 1961). When the Commission's conclusions are supported by adequate proof, we shall not supplant the agency by weighing the evidence anew, determining credibility of witnesses, or drawing our own inferences and conclusions from the evidence. Id. at 226-27. This case arose out of appellant's role in the sale of a house in Pompton Lakes. Appellant voluntarily absented herself from the hearing on the order to show cause charging her with violating the Real Estate License Act, N.J.S.A. 45:15-1 to -29.5, and the Commission's implementing regulations. According to the evidence presented at the hearing, appellant represented Marisol DeNegri and her mother, Grinilda Marrero (Buyers), in their search for a two-family home. DeNegri stated that appellant never discussed the nature of
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her agency relationship with her, nor could she recall whether appellant provided her with any document describing appellant's relationship to her. DeNegri wanted a house with two separate living quarters with separate entrances, so she could maintain a separate home for her family, but be close to her mother, to whom she provided care and assistance. After appellant showed DeNegri various two-family homes, appellant showed her 2 Willow Avenue in Pompton Lakes. It appeared to be a two-family home. It had two levels, with two separate entrances. The Buyers offered to purchase the house for $600,000 by signing a proposed contract dated July 12, 2004. The contract described the property as follows: "UPPER LEVEL TO BE VACANT AT TIME OF CLOSING. MOTHER/DOUGHTER [sic] TYPE OF HOUSE, LOWER LEVEL COULD BE OCCUPY [sic] BY MY NEAR RELATIVES AND MY MOTHER, AS SOON AS POSSIBLE." The contract also disclosed that the seller would pay appellant a commission of six percent plus a $1200 bonus. Appellant also entered into a commission agreement with the seller, dated July 12, 2004, providing for the six percent commission plus the $1200 bonus, based on a $600,000 purchase price. That agreement described the property as "a one family house." Appellant did not provide a copy of that agreement to the Buyers. The seller initially declined the $600,000 offer made in July, but ultimately accepted it in December 2004. To assist in consummating the transaction, appellant sent a letter to the Buyers' proposed mortgage lender on December 6, 2004. The letter stated, "THIS OFFICE CERTIFY: THE PROPERTY LOCATED AT 2 WILLOW AVE. POMPTON LAKES N.J. AND SELLER MRS. KIRIAKI FASSILIS REPRESENTED TO THE PURCHASER MISS. LUZ DENEGRI THAT THIS HOUSE IS A BILEBEL [sic] MOTHER/DAUTHGTER [sic], ONE FAMILY HOUSE." The sale closed, and the Buyers moved into the house in January 2005. In April 2005, after the house was damaged by a flood, the Buyers became aware of several significant material facts about the house: (1) a certificate of continued occupancy was required by the Borough of Pompton Lakes, but had not been obtained; (2) use of the house as a two-family home was not permitted; and (3) use of the lower level of the house violated a 1988 New Jersey Department of Environmental Protection (DEP) stream encroachment permit that had allowed construction of the house. The permit provided that the first floor of the house was to remain unenclosed and accessible to flood
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water. Ultimately, the Buyers determined that the structure needed to be demolished. The Buyers brought suit against the sellers, appellant, and the attorney who represented the Buyers in the transaction. Both appellant and the attorney defaulted, as well as an impleaded title company. Trial by the court proceeded against the sellers and judgment was entered against them, the attorney, and appellant in the amount of $479,297.61. The court allocated fifty percent against the sellers, and twentyfive percent each against appellant and the attorney. We affirmed in part and reversed in part, reducing the judgment to $391,000 after concluding that the trial court erred by including attorneys' fees and closing costs as elements of damages. DeNegri v. Fassilis, No. A-3368-08 (App. Div. Aug. 11, 2010) (slip op. at 15). We noted in our decision that the trial court found appellant negligent "because she had assumed the task of obtaining the certificate of occupancy and allowed the transaction to close without the required certificate." Id., slip op. at 8. The court also found that appellant committed fraud, consisting of "her failure to disclose the absence of the certificate." Ibid. As a result of that failure, she "withheld necessary information that permitted plaintiffs to purchase a house that could not ever meet their needs or expectations." Id., slip op. at 9. At the hearing before the Commission, a Commission investigator provided testimonial and photographic evidence that appellant conducted her real estate business from her residence, and that she lacked both a separate entrance to her office and signage indicating her place of business. The Commission also received in evidence: the July 12, 2004 contract; appellant's letter to the mortgage company; her commission agreement with the seller; the judgment in the Buyers' civil action; an October 18, 2005 letter to the Buyers from the Pompton Lakes construction official and zoning officer regarding the certificate of occupancy and permitted use of the property; and the DEP stream encroachment permit. The original order to show cause charged the appellant with three specific violations: (1) she made substantial misrepresentations in violation of N.J.S.A. 45:15-17a by "writing to the Mortgage company that the property was a mother/daughter dwelling when it was not and her conduct in stating in the contract of sale that the property was a mother/daughter dwelling"; (2) she demonstrated incompetence and unworthiness in violation of N.J.S.A. 45:15-17e "in that she should have determined that the house was regarded by the Borough as a single unit and not a mother/daughter unit as was indicated in the contract of sale"; and (3) she failed to properly maintain a home office, in violation of N.J.A.C. 11:5-4.4(b). The
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Commission also charged that her "overall conduct" violated N.J.S.A. 45:15-17t. After the hearing, the Commission amended the charges to conform to the evidence, and made the following conclusions of law: 1. Respondent Piemontese's letter to the mortgage company which advised that the Pompton Lakes property was a mother/daughter dwelling, when it was not, and her drafting of the contract of sale stating that the property was a mother/daughter dwelling, when it was not approved for use as same, constitute two substantial misrepresentations in violation of N.J.S.A. 45:15-17(a).

2. Respondent Piemontese's failure to determine whether the Pompton Lakes property was regarded by the Borough as a single unit, and not a mother/daughter unit as was indicated on the contract of sale, demonstrates incompetency and unworthiness in violation of N.J.S.A. 45:15-17(e).

3. Respondent Piemontese did not properly maintain her home office in the following respects: the office was not independent of living quarters and did not have a separate exterior entrance plainly visible from the street upon which the licensed premises shall have frontage, in violation of N.J.A.C. 11:5-4.4(b).

4. Based upon the undisputed proofs presented including the Respondent's admissions to the REC Investigator, the pleadings are hereby amended and the Commission finds that Respondent Piemontese failed to disclose her agency relationship in the contract of sale, in violation of N.J.A.C. 11:5-6.9(j)(3).

5. Based upon the undisputed proofs presented including the Respondent's admissions to the REC Investigator, the pleadings are hereby amended and the Commission finds that Respondent Piemontese received commission from a party she was not representing and Piemontese did not disclose her agency relationship or the source of her compensation, in violation of N.J.A.C. 11:57.1(d).
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The Commission imposed a single fine of $25,000 and revoked appellant's license for ten years. We affirm Conclusions 2, 3 and 4, as well as that part of Conclusion 1 that finds that appellant misrepresented the approved use of the property in the contract of sale, and that part of Conclusion 5 that finds that appellant received a commission from a party that she was not representing and did not disclose her agency relationship. They are supported by substantial credible evidence in the record. We note that appellant's pro se brief in support of her appeal includes numerous statements of fact that were not
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presented to the Commission, in effect, providing to this court appellant's version of events that she chose not to provide under oath as a witness at the hearing before the Commission. We are compelled to disregard this factual presentation, to the extent it goes beyond the hearing record. R. 2:5-4(a).
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However, we reverse that part of Conclusion 1 that finds that appellant misrepresented the approved use of the property to the mortgage lender, and that part of Conclusion 5 that finds that appellant failed to disclose the source of her compensation. We address first the finding relating to the letter to the mortgage lender. There is inadequate evidence in the record to support the conclusion that appellant made a misrepresentation when she sent the letter to the mortgage company. First, the letter to the mortgage company did not contain a representation by appellant as to the permitted use of the property; rather, it certified that the seller had made such a representation. Second, the seller's representation related to two facts: the house was a bi-level mother/daughter home; and the house was a one-family house. The second fact was true. The first was true to the extent that the house did in fact contain two separate living quarters on two levels of the sort consistent with a mother/daughter home. Yet, it conveyed a false impression, in that the first level was to remain unenclosed and unoccupied according to the DEP permit. However, there was no evidence presented in the hearing that appellant knew that the first level was to remain unenclosed and unoccupied. Conceivably, had appellant known of the limitation, then her misrepresentation could have consisted of a failure to disclose it. "The suppression of truth, the withholding of the truth when it should be disclosed, is equivalent to the expression of falsehood." Strawn v. Canuso, 140 N.J. 43, 62 (1995) (quoting Berman v. Gurwicz, 189 N.J. Super. 89, 94 (Ch. Div. 1981), aff'd o.b., 189 N.J. Super. 49 (App. Div.), certif. denied, 94 N.J. 549 (1983)), superseded by statute, L. 1995, c. 253, as recognized in Nobrega v. Edison Glen Assocs., 167 N.J. 520, 534 (2001); see also N.J. Econ. Dev. Auth. v. Pavonia Rest., Inc., 319 N.J. Super. 435, 436 (App. Div. 1998) ("Deliberate suppression of a material fact that should be disclosed is equivalent to a material misrepresentation (i.e., an affirmative false statement)."). However, there was no evidence in the record that appellant knew of the limitation, nor did the Commission so find.

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The Commission urges us to affirm its finding of misrepresentation in part based on the judgment of the court in the Buyers' civil action, which was admitted in evidence in the Commission hearing. We decline to do so. The court's finding that appellant committed fraud should not have been given collateral estoppel effect in the Commission's proceeding. See Slowinski v. Valley Nat'l Bank, 264 N.J. Super. 172, 182-85 (App. Div. 1993) (finding collateral estoppel does not bind party against whom default judgment was entered); Allesandra v. Gross, 187 N.J. Super. 96, 106 (App. Div. 1982) (quoting Restatement (Second) of Judgments

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