I thought the California Department of Real Estate, would want to know of the conduct of its licensees, and we had enough documented evidence and information to warrant license suspensions or revocations.
On May 5, 1994, within the three-year statute of limitations for filing complaints with the California Department of Real Estate against real estate agents and brokers, I filed complaints against Betty Palacio and Bonnie McConnell.
After filing my complaint with the Department of Real Estate, I received a letter from Clark Wallace, the Commissioner of the Department of Real Estate, that stated in part:
Regrettably, the filing of your complaint at this time puts the Department at a disadvantage, as the Statute of Limitations barring our jurisdiction appears to be July 31, 1994. For a case as complex as you have described, this leaves the Department very little time to complete an investigation.
I sent him another letter to clarify some of the issues he raised:
The Department informed us we had three years to file a complaint -- not that the Department’s investigation of the complaint had to be completed within three years.
Escrow closed on September 17, 1991. It seems logical the Statute of Limitations would expire three years from that date, not from the date we made our offer.
Even though he made it clear that time was of the essence and stated someone would contact us shortly, no one had contacted us since his letter of six weeks earlier.
We received a letter from Mr. Wallace dated July 12, 1994. This was the first responsive letter received from anyone! Mr. Wallace stated, in part:
Time continues to be of the essence, and it is because of that I must apologize for the district office oversight in not contacting you sooner. The assigned Deputy, Janice A. Waddell, inadvertently started working your complaint thinking the district office manager would be contacting you, which is the usual procedure. Because of time constraints....
Janice Waddell telephoned the same day Mr. Wallace’s letter arrived, and it finally appeared someone was going to take some action. She asked for copies of the depositions of Bonnie McConnell and Betty Palacio with the exhibits attached. I told her I had copies of the depositions but not the attachments, and she would need to contact my attorney for those. I explained that because of the bankruptcy, I was not allowed to contact him; and I gave her his telephone number. She stated she was going to go through the court records in Yuba City and would stop by the house.
Ms. Waddell telephoned again and told me she couldn’t make it to Yuba City after all and that she had attempted to get the depositions from my attorney, but he was not cooperative.
I received a letter from Ms. Waddell dated August 4, 1994, which stated:
The complaint you filed against the above licensee, et. al. is still under investigation. I will not be able to complete the investigation until after my return to the office on August 24, 1994.
Mr. Wallace had made it very clear that time was of the essence. Our complaint was put on hold for twenty days while Ms. Waddell was on vacation?! Why wasn’t it assigned to someone else?
The next communication was a letter from Ms. Waddell, which was dated September 15, 1994 but not postmarked until two weeks later -- September 29. Could it be that while she was out of the office the statute expired -- probably September 17 -- and their letter was predated by two weeks to make it appear they reached their conclusion before the statute expired?
In her letter, Ms. Waddell stated, in part:
The investigation initiated as a result of your complaint has been completed. The information gathered has been reviewed and we have concluded that there is insufficient evidence of a violation that would warrant disciplinary action against either Respondent.
Oh, I see. It’s okay with the Department of Real Estate for real estate brokers to falsely advertise property, to misrepresent square footage and amenities, to not disclose any defect or inoperable item, to alter documents after they have been signed, to deny buyers their contractually-guaranteed buyer walk-through inspection, to commit perjury in their deposition testimonies -- provable with Sutter County records, to do absolutely nothing to protect the buyers, and to put buyers through absolute hell!
During our investigation, in addition to the information obtained from you, we interviewed the escrow officer and reviewed the escrow file; interviewed the buyer on the first accepted offer; interviewed Jack LaRosa; interviewed the seller’s mother; interviewed both Palacio and McConnell and reviewed their files.
I certainly hope that if anyone ever files a complaint against me that the only ones interviewed are my family, friends, and people with a vested interest. Why didn’t they interview our witness, Frank LaBella, or look at the house?
None of the information obtained either separately or together constitutes clear and convincing evidence that either Respondent failed to disclose facts know to them concerning the status of the property or altered any documents.
What about the “Respondent’s” own contradictory and provably-perjurious deposition testimonies? What about the documents themselves? How does the DRE explain our copies being different than the broker’s copies? Does the DRE think each document was partially completed, a copy photocopied for us, and then completed?
A Department of Real Estate license inquiry of Betty Palacio and Bonne McConnell (aka Bonnie McConnell) states: “No disciplinary action” and “No other public comments.” Now, if I were involved in an automobile accident, a license inquiry of my license with the Department of Motor Vehicles would reveal that fact, regardless of whose fault the accident was. Why, then, aren’t lawsuits and complaints filed against real estate agents/brokers disclosed? Upon reading “No other public comments,” a reasonable person would mistakenly think there have been no complaints or lawsuits filed against that agent. This is a misrepresentation of the facts by a State of California agency and misleads the public! I am certain there are a lot of honest, reputable real estate agents and brokers who have had no complaints or lawsuits filed against them. Unfortunately, based on the DRE’s failure to post complaints or lawsuits, who can tell?
It’s absolutely no wonder both real estate brokers conducted business in the manner they did. They both knew from the prior lawsuits and complaints against them what they can do to get away with misrepresentations and deceptive business practices and that the Department of Real Estate won’t do anything about it!
An article published May 4, 1998, in Sacramento Bee, “California Trends: Department of Real Estate - A meek watchdog,” states:
Indeed, the DRE could do a better job generally of attacking the problem of real estate fraud. As the market heats up, real estate scams will escalate and consumers need protection.
The DRE is a state bureaucracy that spends significant resources helping agents obtain and keep their real estate licenses. But while the agency is run by a well-regarded group of professionals who understand the real estate business, it is not an aggressive consumer watchdog.