MICHELLE HOLCOMB; FORE PEAKS SALES GROUP L.L.C., Plaintiffs/Appellants,
ARIZONA DEPARTMENT OF REAL ESTATE, Defendant/Appellee.
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
Arizona Attorney General's 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
court's decision affirming the Arizona Department of Real
Estate ("Department") Commissioner's 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 Commissioner's 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.
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 brokerage's 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 Department's
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 Department's
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 the holidays and a funeral
for her silence, admitting she should have responded to the
By February 2017, the Department still had not received the
missing documents, and it sent the Licensees a notice of
hearing and complaint for an administrative hearing in March.
Holcomb did not appear for the hearing or send a
representative. The Department presented testimony from a
single witness-the auditor in charge of the case. The
administrative law judge ("ALJ") ultimately found
that the Licensees violated multiple provisions of A.R.S.
§ 32-2153 and recommended revocation of their licenses,
which the Commissioner adopted in a final order. The
Licensees filed a "Motion for Rehearing or Review of
Commissioner's Final Order," and attached an
affidavit from Holcomb with new facts. The Commissioner
denied the motion, and the Licensees appealed for review to
the superior court. The court heard oral argument, denied the
Licensees' request for an additional evidentiary hearing,
and ultimately affirmed the Commissioner's final order.
The Licensees now appeal the ...