Austin G. Heywood Jr., Petitioner,
Department of Commerce, Division of Real Estate, Respondent.
Proceeding in this Court
L. Reiser and Adam H. Reiser, Attorneys for Petitioner
D. Reyes and Brent A. Burnett, Attorneys for Respondent
Diana Hagen authored this Opinion, in which Judges Michele M.
Christiansen and Jill M. Pohlman concurred.
In 2006, a bankruptcy court found that Austin G. Heywood Jr.,
a real estate agent, committed fraud by concealing a bona
fide purchase offer from his client so that he could force a
short sale of the property to his own investment group (the
2006 transaction). Several years later, in November 2014,
Heywood submitted an application to the Utah Department of
Commerce, Division of Real Estate (the Division) to renew his
license as a real estate sales agent. In light of the
bankruptcy court's finding, the Division found that
Heywood did not demonstrate the "honesty, integrity,
truthfulness, reputation, and competency" required for
renewal and denied his renewal application. After exhausting
his administrative review options, Heywood now petitions this
court to review the denial of his license. We decline to
disturb the Division's decision.
In 2006, Heywood acted as a real estate agent for a client
who wanted to sell her home. The client was delinquent on her
mortgage payments and had been unsuccessful in finding a
buyer. Heywood told the client that he knew of a group of
short-sale investors who were interested in purchasing her
home. Heywood did not disclose that he had a personal
interest in this group of investors, which included Heywood
and his spouse.
In March 2006, Heywood listed the client's property as
under contract, although no offer had been made at that time.
The house was ultimately sold to Heywood's investment
group for $352, 000-a price below its appraised value of
$380, 000. Prior to the short sale, Heywood had received an
offer from another buyer to purchase the property for $441,
000, but he did not disclose the offer to the client or her
lenders. The same day that the investment group purchased the
property, Heywood resold it to the other buyer for a
Shortly after the 2006 transaction, the client filed a
petition for relief under chapter 7 of Title 11 of the United
States Code in the United States Bankruptcy Court for the
District of Utah. The bankruptcy trustee eventually brought
several causes of action against Heywood, including a claim
for common law fraud. Heywood was represented by counsel and
had the opportunity to present evidence during a five-day
Following briefing and oral argument, the bankruptcy court
entered a memorandum decision in July 2009 (the 2009
Memorandum Decision), concluding that Heywood was liable to
the bankruptcy estate under common law fraud because his
conduct was "intentionally fraudulent or manifested a
knowing and reckless indifference toward and disregard of
[the client's] rights."
Heywood did not appeal the bankruptcy court's findings of
fact and conclusions of law. Instead, he elected to enter
into a settlement agreement with the bankruptcy trustee.
Heywood agreed to pay damages to the trustee in exchange for
the trustee releasing Heywood from "all claims, demands,
debts, obligations, liabilities, costs, expenses, rights of
action, causes of action, or judgments of any kind or
character whatsoever" arising out of the client's
bankruptcy estate. The bankruptcy court approved the
settlement agreement and then dismissed the case against
Heywood. In doing so, the bankruptcy court did not vacate the
2009 Memorandum Decision.
and Disciplinary Proceedings before the Division
In November 2009, the Division received a complaint about
Heywood's conduct during the 2006 transaction. The
Division notified Heywood that it had initiated an
In 2010, Heywood applied for and was issued a renewed
license. In his license renewal application, Heywood
disclosed that the Division was conducting an investigation
into the 2006 transaction.
In 2012, Heywood again applied for and was issued a renewed
license. In completing his online application, Heywood did
not disclose that the Division's investigation was still
On the same day Heywood renewed his license online, the
Division filed a notice of agency action and petition,
initiating a disciplinary proceeding against Heywood to
revoke his license. A year later, the parties stipulated to
the dismissal of the disciplinary action to allow for further
review and investigation.
In 2014, Heywood submitted another license renewal
application. This time, the Division denied his application.
Heywood subsequently filed a request for agency review.
by the Utah Real ...