Two Manhattan appraisers will have a second chance to fight against the revocation of their licenses, which had been set for tomorrow, after a top official with the New York State Department of State found a judge’s earlier ruling may have been flawed.
The determination came in response to a December ruling from a DOS administrative law judge, as The Real Deal previously reported. The judge took the rare step and ruled to revoke the licenses of the top executives at Mitchell, Maxwell & Jackson: Steven Knobel, president, and Jeffrey Jackson, chairman. Before the real estate bust, the firm was one of the most active appraisers in the city.
Daniel Shapiro, first deputy secretary of state, indicated in his determination issued on Tuesday that the judge may not have properly interpreted the DOS appraisers’ licensing law.
The administrative law judge ruled to revoke Knobel’s and Jackson’s licenses based on allegations that Knobel was “aware in general” and Jackson was aware in at least one instance that the firm used the electronic signature of its former employee and appraiser, Marianne Mueller, without her consent. She was with the company from 2003 to 2010, rising to executive vice president.
In response, Knobel and Jackson filed a 47-page application on Jan. 22 seeking to temporarily halt and ultimately overturn the decision.
Shapiro granted their requests, finding the appeal justified in part because the judge relied on a legal standard for real estate brokers, which is not the same standard for appraisers.
The appraisers’ filing claimed the decision to revoke their licenses was arbitrary and capricious and also had the “appearance of impropriety.” Furthermore, if the licenses are pulled, “the entire company will fold and 35 people will lose their livelihood,” Knobel and Jackson claimed.
“I think that finally someone in Albany is realizing what Mueller is trying to do,” Knobel told The Real Deal, alleging she was a disgruntled former employee who had urged the DOS to pursue the charges of bogus signatures. He compared the case to a witchhunt.
Mueller declined to comment.
Her attorney in a related civil action in New York State Supreme Court, Adam Russ, a partner at the law firm Wasser Russ, said in a statement that, “We remain confident that the Department of State will ultimately arrive at an appropriate result.”
At issue on appeal is whether Knobel and Jackson should be responsible as the heads of the company for an alleged wrongdoing that they did not commit. In brokerage licensing, the head of a company who holds a corporate license is legally responsible for the proper conduct of each employee. In contrast, each appraiser, whether the head of a company or simply an employee, is responsible only for his or her own actions.
However, the judge cited the real estate broker law in his decision, in part to affix blame on the heads of the company for the conduct of subordinate employees.
Shapiro provided other reasons to stay the revocation. For instance, he said he needed to take into consideration the dire negative consequences if the DOS revoked the license but later reversed that decision.
Officials at the DOS have until Feb. 21 to file opposition papers to the appeal.