ALJDEC decisions subject to certification as final

07F-DI-127-REL · Department of Real Estate · 2007-03-15

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 27, 2007 at 1:30 p.m. APPEARANCES: The Arizona Department of Real Estate (“the Department”) appeared through Erin O. Gallagher, Esq., Assistant Attorney General; Respondent Megan Christensen appeared on her own behalf. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

The parties presented evidence on the issue of whether the Department should penalize Respondent Megan Christensen’s real estate salesperson’s license because she failed to disclose a second conviction for driving while intoxicated or to respond to the Department’s request for information and documents. Based on the entire record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order to the Commissioner of the Department. FINDINGS OF FACT On April 26, 2005, the Department issued Real Estate Salesperson’s License No. SA561662000 to Ms. Christensen. Ms. Christensen was employed by broker 1st USA Realty Professionals, Inc. The license is set to expire on April 30, 2007. On December 1, 2005, the Department received a letter from Ms. Christensen, disclosing that she had been “convicted of a second offense DUI on October 26, 2005.” Ms. Christensen’s letter disclosed numerous details about the circumstances of her arrest, sentence, and efforts to contact the Department telephonically. On December 6, 2005, the Department acknowledged receipt of Ms. Christensen’s letter and requested that she provide additional documentation, in relevant part as follows: Before your disclosure is considered complete, you are required to provide the information identified on the Document Checklist, form LI-400, copy enclosed, by the deadline date above:

1. Three character reference letters from individuals not related to you, signed, dated and phone numbers that have known you for at least one (1) year.

2. A ten (10) year work history (resume style) showing employers’ names and addresses, supervisor’s names and phone numbers, dates of employment, positions held, job descriptions and any periods of unemployment.

3. The CERTIFIED police report (including the narrative) from the arresting agency.

4. Any and all CERTIFIED court documents from the court to include the judgment & sentencing documents

Once you have provided the required documents, a decision will be made regarding your suitability for continued licensing. Failure to respond may result in administrative action being taken against your license. If you require a 30-day extension to gather all of the documents, please file a written request received or faxed by the deadline date above.

No deadline date was set forth on the Department’s December 6, 2005 letter. The Department addressed the letter to Ms. Christensen at her address of employment at 1st USA Realty Professionals 8989 E. Via Linda Suite 106, Scottsdale, AZ 85258. Ms. Christensen did not respond in writing to the Department’s December 6, 2005 letter. On February 16, 2006, the Department sent a second request for information to Ms. Christensen at her address of employment, with a deadline date of March 17, 2006, again requesting the documents identified on the December 6, 2005 letter. On March 20, 2006, the Department received Ms. Christensen’s attorney David G. Derickson’s assistant’s letter, which requested a 30-day extension to provide the documents because he had been informed by the Scottsdale City Court that the certified record would not be available for approximately three weeks and by the Scottsdale Police Department that the certified reports would be available within ten days. The Department also received a letter from Ms. Christensen, also requesting an extension of time. On March 29, 2006, the Department sent a letter to Ms. Christensen, informing her that it had extended the deadline for her to produce the requested documents to April 21, 2006. Ms. Christensen did not respond in writing to the Department’s March 29, 2006 letter. She did not provide the requested documentation. On August 1, 2006, the Department sent a fourth letter to Ms. Christensen, via certified mail, in relevant part as follows: Our case file indicates that we granted a Request for Extension to Complete Disclosure and mailed that form to your address of employment on March 29, 2006. We requested that you provide all documentation and required items as noted (copy attached). Per that letter you were required to respond to us no later than April 21, 2006. To date, we have not received your response.

Your continued refusal to cooperate in our investigation may result in formal administrative action being taken against you that could result in the loss of your license. We expect a written, signed response, with supporting documentation, from you no later than AUGUST 16, 2006.

[Emphases in original.] On August 1, 2006, the Department also sent a letter to Raymond R. White, Ms. Christensen’s designated broker, informing him of the pending complaint against Ms. Christensen, her failure to respond to the Department’s request for documentation, and his responsibility to supervise his agents under A.R.S. § 32-2153(A)(21). The Department told Mr. White that it expected to receive his statement concerning whether he had prior knowledge of the complaint no later than August 16, 2006. Ms. Christensen did not respond to the Department’s August 1, 2006 letter. On August 16, 2006, Mr. White, as designated broker at 1st USA Realty Professionals, Inc., informed the Department that his office had “made numerous attempts to contact Ms. Christensen (via e-mail, phone, and written correspondence),” but she had failed to respond. As a result, 1st USA Realty Professionals, Inc. had severed her license from the brokerage, effective immediately. The Department received Mr. White’s letter on August 18, 2006 and, on that date, reclassified Ms. Christensen’s license as inactive. The Department subsequently referred the matter to the Office of Administrative Hearings for the scheduling of a hearing in due course. On January 18, 2007, the Department issued a Complaint and Notice of Hearing, which charged Ms. Christensen with violations of A.R.S. §§ 32- 2153(A)(3), 32-2153(B)(2), (7), and (11), A.A.C. R4-28-301(F) and R4-28- 303(D), and imposed a civil penalty not to exceed $1,000.00 for each violation. Ms. Christensen did not file a written answer to the complaint. A hearing was held on February 27, 2007 at 1:30 p.m. The Department presented the testimony of Cindy Wilkinson, its Director of Education and Licensing Division, and had admitted into evidence ten exhibits, which documents are described above. Ms. Christensen testified that the DUI conviction and sentence “thoroughly mentally and emotionally exhausted” her. She was in jail, on work-release, between November 4 and December 20, 2005. She could not respond to the Department’s requests for documents. Ms. Christensen testified that she had all of the documents that the Department had requested, except one. She would like more time. She wants to move on with her life. She is undergoing counseling with numerous professionals. Ms. Christensen did not offer any exhibits into evidence. CONCLUSIONS OF LAW This matter lies within the Department’s jurisdiction.[1] The Department bears the burden of proof and must establish cause to penalize Ms. Christensen’s real estate salesperson’s license renewed by a preponderance of the evidence.[2] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[3] A preponderance of the evidence is “[t]he greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”[4] Ms. Christensen concedes that she did not disclose her DUI conviction to the Department within 10 days of its occurrence. The Department therefore has established cause to penalize her license under A.R.S. § 32-2153(A)(3)[5] and A.A.C. R4-28-301(F)[6] and R4-28- 303(D).[7] Ms. Christensen also concedes that, as of the date of the hearing, she had not provided any of the documents that the Department had requested more than fourteen months earlier. She did not offer these documents to the Department at the hearing. Therefore, the Department has established additional cause under A.R.S. § 32-2153(A)(3), A.A.C. R4-28-301(F), A.A.C. R4-28-303(D), and A.R.S. § 32- 2153(B)(11)[8] to revoke or otherwise penalize her license. A.R.S. § 32-2153(B)(7) allows the Commissioner to revoke or otherwise penalize a license if the licensee has “[n]ot shown that [she] is a person of honesty, truthfulness and good character.” A person who chooses to drive while she is under the effect of intoxicating liquors exhibits poor judgment. A person who has been convicted of DUI demonstrates that she is not a person a good character, at least insofar as she potentially endangers the public with her impaired driving. Therefore, Ms. Christensen’s second DUI conviction furnishes cause under A.R.S. § 32-2153(B)(7) for the Commissioner to penalize her license. The Maricopa County Superior Court in at least two cases has upheld license applicants’ appeals and rejected the Department’s argument that DUI constitutes a crime of moral turpitude under A.R.S. § 32-2153(B)(2).[9] DUI is a serious offense based on its potential to cause great injury. As noted above, and as recognized by the Maricopa County Superior Court,[10] a misdemeanor DUI conviction may evidence irresponsibility and a lack of good character that may support denial of a license application under A.R.S. § 32-2153(B)(7). The greater weight of authority establishes that DUI is not a crime of moral turpitude for purposes of an administrative licensing proceeding in Arizona. Therefore, Ms. Christensen’s second DUI conviction is not a conviction for a crime of moral turpitude and does not provide additional grounds for the Department to penalize her license under A.R.S. § 32- 2153(B)(2). Ms. Christensen’s failure to provide any documents that the Department requested for more than a year establishes that, at this time, she is not amenable to regulation. Revocation of her license is therefore the appropriate penalty. A.R.S. § 32-2160.01(A) provides that “[a]ny broker or sales person who is subject to the jurisdiction of the department and who has violated any provision of this chapter . . . may be assessed a civil penalty by the commissioner, after a hearing, in an amount not to exceed one thousand dollars for each infraction.” Ms. Christensen’s violations of A.R.S. § 32- 2153(A)(3) and (B)(7) and (11) furnish grounds for the imposition of a civil penalty. The Department argued that the maximum civil penalty allowed of $1,000 should be imposed for each statutory violation. Courts have recognized the impropriety of assessing multiple regulatory penalties for a single act.[11] Here, Ms. Christensen committed three separate acts that constitute statutory violations: (1) the criminal actions that led to the second DUI conviction on October 26, 2005; (2) her failure to notify the Department within 10 days of the conviction; and (3) her failure to provide the requested documentation. The Department has established grounds to assess the maximum civil penalty for each of Ms. Christensen’s acts in violation of applicable statutes and regulations. RECOMMENDED ORDER Based on the foregoing, it is recommended that the Department revoke Ms. Christensen’s License Number SA561662000. It is further recommended that Ms. Christensen be assessed a civil penalty in the amount of Three Thousand Dollars ($3,000.00), due by cashier’s check or money order made payable to the Arizona Department of Real Estate and due thirty-five (35) days after the Commissioner’s final order in this matter. Done this day, March 14, 2007.

______________________________________ Diane Mihalsky Administrative Law Judge

Original transmitted by mail this ____ day of March, 2007, to:

Department of Real Estate Samuel P. Wercinski, Commissioner 2910 North 44th Street, Suite 100 Phoenix, AZ 85018

By ___________________________ ----------------------- [1] See A.R.S. § 32-2108(A).

[2] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119; see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952).

[3] Morris K. Udall, Arizona Law of Evidence § 5 (1960).

[4] Black’s Law Dictionary at page 1220 (8th ed. 1999).

[5] This statutory subsection provides that the Commissioner of the Department may revoke or otherwise penalize the license of a licensee who has “[d]isregarded or violated any of the provisions of this chapter or any rules adopted by the Commissioner.”

[6] This administrative regulation requires license applicants, “within 10 days of each occurrence, to notify the commissioner in writing of any change in information provided under subsection (A)(1)(a) through (d) and provide documentation listed in subsection (A)(2).” A.A.C. R4-28- 301(A)(1)(a) requires an applicant to disclose “[c]onviction for a misdemeanor or felony.” A.A.C. R4-28-301(2) requires an applicant to provide the documents described in the Department’s December 6, 2005 letter, quoted supra at Finding of Fact No. 3.

[7] This administrative regulation requires licensees to “notify the Department in writing within 10 days of any change in the individual’s personal information or qualifications,” along with the documentation required in A.A.C. R4-28-301.

[8] This statutory subsection allows the Department to suspend or revoke the license of a person who has “[f]ailed to respond in the course of an investigation or audit by providing documents or written statements.”

[9] See 5/25/2006 Minute Entry in Maricopa County Superior Court Case No. LC2005-000861-001 DT (reversing in part Commissioner’s order in Case No. 05F-LI-391-REL) and 8/11/2006 Minute Entry in Case No. LC2006-000179-001 DT (reversing Commissioner’s decision in Case No. 05F-LI-428-REL). The Department did not appeal those decisions to the Arizona Court of Appeals. The Commissioner may view these minute entries at the website of the Office of Administrative Hearings, www.azoah.com , or at the website of the Maricopa County Superior Court Clerk, www.courtminutes.maricopa.gov .

[10] See 5/25/2006 Minute Entry in Maricopa County Superior Court Case No. LC2005-000861-001 DT.

[11] See, e.g., State v. Schmitt, 145 Wis. 2d 724, 429 N.2d 2d 518, 524 and n. 9 (1988), review denied, 146 Wis. 2d 875, 430 N.W.2d 918 (1988); see also Murphy Family Farms v. North Carolina Department of Environment and Natural Resources, 359 N.C. 180, 605 S.E.2d 636 (2004) (reversing Court of Appeals finding of 8 separate violations where only a single act occurred “for reasons stated in the dissenting opinion”) (citing 160 N.C. App. 338, 349, 585 S.E.2d 446, 452 (2003) (Wynn, J. dissenting) (“In this case, all the waste from the Murphy lagoon was discharged in one day from one lagoon beach.”)); see also First Nat’l Bank v. Department of Treasury, 911 F.2d 57, 65 (8th Cir. 1990) (requiring strict construction of statutory provisions involving civil penalties); Walnut Creek Manor v. Fair Employment & Housing Comm’n, 54 Cal. 3d 245, 272, 814 P.2d 704, 721, 284 Cal. Rptr. 718, 735 (1991) (“[T]he number of violations is to be determined by the number of persons to whom the misrepresentations were made, and not by the number of separately identifiable misrepresentations involved.”). The Administrative Law Judge finds these authorities to be persuasive in the absence of controlling authorities from Arizona.

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Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826