Realtor Working Despite Criminal Case, Suits Over Forged Deed

As an active member of the San Fernando Valley Board of Realtors, Edie Kelly specialized in ethics. She sat on three committees dealing with the subject.

But as a real estate broker--she practices in Encino--Kelly’s ethics are being questioned. In January, she pleaded no contest to a criminal forgery charge in Van Nuys Superior Court, and she is the subject of two lawsuits by investors who say the 51-year-old woman swindled them out of more than $375,000.

Police said Kelly was charged in October, 1984, with forging a trust deed, an IOU secured by real estate, for which she later made restitution. But, when charges were about to be dropped, another investor came forward with a similar complaint, and the new allegation led to Kelly’s plea, police said. Other charges were dropped.

Kelly, who declined to be interviewed, faces sentencing today after nearly two years on bail. Yet her state real estate license hasn’t been revoked and she hasn’t been ejected from the Valley Board of Realtors. In fact, she is still working as a real estate agent, a board executive said.

License Confirmed

Robert C. Arnold, who heads the southern regulatory area for the state Department of Real Estate, confirmed that Kelly’s license remains in force but wouldn’t comment on whether his agency is considering lifting it, except to say that he is aware of Kelly.

Because the state has not acted, the Valley board has taken no action, said Temmy Walker, the board’s president. The real estate board is a trade group that sets professional standards, runs the Multiple Listing System on which nearly all real estate agents depend and performs some regulatory duties for members.

Ethics fall within the board’s purview, and realtors have been striving to establish themselves as professionals, like lawyers or accountants. In the Valley, Kelly has played an active role in the board’s ethics activities.

At various times she has been on the board’s grievance committee, which investigates complaints against realtors; the professional standards committee, which tries complaints, and the ethics and arbitration policy committee, which sets policy on ethics matters, Walker said.

Remains a Board Member

She said Kelly remains a board member despite her conviction because it is extremely difficult to exclude a legally licensed real estate agent from the board. Robert Adamson, the board’s executive vice president, confirmed that Kelly is working as a real estate agent.

The criminal case and the lawsuits center around a commercial property at 16614 Ventura Blvd. in Encino that was owned by Mary B. Rabellino of Topanga. Kelly still has her real estate business, a Red Carpet franchise, on the site.

In the criminal case, Kelly originally was charged with forging a trust deed purchased in November, 1983, by businessmen Michael Rice and Buddy Hunsinger for $40,000, according to Los Angeles Police Detective Russ Pungrchar.

Police said the businessmen thought that, with their trust deed, they were making a loan secured by the Ventura Boulevard property but, in fact, the document they got never was signed by Rabellino. Her signature was forged, police said, and Kelly apparently kept the money.

Repaid Investors

After Kelly was charged, she repaid the two investors, Pungrchar said, and the case was about to be settled without criminal proceedings when Karen Anderson came forward with another forged trust deed on the same property.

Anderson, also a licensed real estate agent, is suing Kelly for fraud in Los Angeles Superior Court. Now a resident of Saratoga, Calif., she said she formerly worked for Kelly in Encino.

In court papers, Anderson said Kelly asked her to lend Rabellino $49,500 in August, 1984, through a four-month deed of trust against the Ventura Boulevard property. Rabellino, 66, said she learned of the transaction from a suspicious Anderson, and never got any money from it.

Police said Kelly apparently kept the money, and Anderson is suing to recoup the $49,500, plus $1,500 for an extension of the loan and $1 million in damages. Kelly apparently hasn’t filed an answer to the suit.

Kelly Her Tenant

Rabellino also is suing Kelly in Superior Court for fraud, breach of contract, breach of fiduciary obligations, conspiracy and negligence. The suit doesn’t cite specific damages, but Rabellino said in an interview that her losses exceed $329,000.

In court papers, Rabellino said Kelly was her tenant but broke her lease in June, 1982, and then agreed to make up for it by selling the property for Rabellino without commission. But, Rabellino’s suit says, Kelly didn’t tell Rabellino that she got an offer in November, 1982, and instead told Rabellino that she would buy the property herself.

That deal never went through, however. Consequently, last September Rabellino, then under financial pressure, sold the property to a different buyer for $625,000, $125,000 less than its appraised value, according to court papers, in a deal brokered by Kelly. Rabellino also charges in the suit that she loaned Kelly $140,000, and that, since January, 1985, she has received payment on only $20,000 of that debt.

There also were thousands of dollars more in fees, commissions, interest and other outlays for which Rabellino blames Kelly.

Kelly has denied the allegations in court papers, and her attorney, Stuart Meadows, said: “It’s a bunch of hogwash.”

Kelly has been in court before. In 1982, she filed for bankruptcy, listing assets of $83,000 against liabilities of $1.85 million.