Michelle HOLCOMB; Fore Peaks Sales Group L.L.C., Plaintiffs/Appellants,
ARIZONA DEPARTMENT OF REAL ESTATE, Defendant/Appellee.
[Copyrighted Material Omitted]
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from the Superior Court in Maricopa County, No.
LC2017-000208-001, The Honorable Patricia A. Starr, Judge.
Holper Group, PLLC, Bozeman, MT, By Richard D. Holper,
Counsel for Plaintiffs/Appellants
Attorney Generals Office, Phoenix, By Lynette J. Evans,
Counsel for Defendant/Appellee
Judge Peter B. Swann delivered the opinion of the court, in
which Presiding Judge Kenton D. Jones and Judge David D.
Michelle Holcomb and Fore Peaks Sales Group, LLC
(collectively, "Licensees"), appeal the superior
courts decision affirming the Arizona Department of Real
Estate ("Department") Commissioners order revoking
their real estate licenses. The Licensees contend that (1)
they were denied procedural due process during the revocation
proceedings, (2) insufficient evidence supports the
Commissioners conclusions that they violated multiple
provisions of A.R.S. § 32-2153, and (3) the revocation of
their licenses was excessive and disproportionate in light of
the evidence. For reasons that follow, we affirm.
FACTS AND PROCEDURAL HISTORY
Holcomb was a licensed real estate broker and the designated
broker of Fore Peaks, a real estate brokerage in the Fountain
In October 2016, an auditor from the Department contacted
Holcomb to schedule an audit of Fore Peaks records,
explaining the scope of the audit and the documents Holcomb
would need to make available. Ten days later, the auditor
visited Fore Peaks office to conduct the audit and found the
brokerages recordkeeping was "literally a mess,"
with records not stored in "any organized fashion."
The auditor and a Department investigator randomly selected
twenty sales transactions for review, but Holcomb could not
locate the files for eight. Holcomb ultimately provided files
for twenty transactions, but eighteen did not contain earnest
money receipts, one was missing a purchase contract, and two
were missing documentation of cancelled contracts. The
auditor gave Holcomb ten days to produce the missing
documents and reminded her of the deadline via voicemail and
email, but no documents were provided. Unable to reach
Holcomb, the auditor issued a subpoena for the missing
documents, to which Holcomb did not respond.
The auditor then referred the matter to the Departments
Enforcement and Compliance manager. The Enforcement and
Compliance manager emailed and called Holcomb several times
until he received a response, in which Holcomb promised to
send the missing documents. A week later, Holcomb had not
sent the documents, so the manager warned her via email that
"[f]ailure to [cooperate with the Departments
investigation] may result in disciplinary action." Then,
approximately two weeks later, in December 2016, the manager
sent the Licensees a cease and desist order demanding that
neither Holcomb nor Fore Peaks engage in any real estate
activity "without first demonstrating full compliance
with all applicable laws."
In January 2017, the auditor and investigator visited Fore
Peaks office to find the Licensees continuing to operate in
disregard of the cease and desist order. Holcomb told the
Department officials she never received the cease and desist
order. The auditor later confirmed that the order was
delivered and signed for by a Fore Peaks employee, but had
not been opened. Holcomb blamed ...