ALJDEC decisions subject to certification as final

08F-LI-275-REL · Department of Real Estate · 2008-05-07

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: April 28, 2008 APPEARANCES: Kirk Spykerman on his own behalf; Assistant Attorney General Liane Kido on behalf of the Arizona Department of Real Estate ADMINISTRATIVE LAW JUDGE: Lewis D. Kowal _____________________________________________________________________

FINDINGS OF FACT 1. On October 9, 2001, the Arizona Department of Real Estate (“Department”) issued a real estate salesperson’s license to Kirk Spykerman (“Mr. Spykerman”). The license expired on October 31, 2003. 2. On December 27, 2007, Mr. Spykerman submitted an application for a real estate salesperson’s license (“Application”) to the Department. 3. Mr. Spykerman responded “Yes” to Question 1, on page one of the Application, which asked “In the past 10 years, have you had a professional or occupational license or registration of any kind denied, suspended, restricted or revoked?” 4. Mr. Spykerman disclosed to the Department that an auto dealership license he had in California had been suspended. 5. Mr. Spykerman answered ”Yes” to Question 2, page one of the Application, which asked “In the past 10 years, have you had an administrative order or any other disciplinary action taken against any license issued to you by any local, state, or federal regulatory agency?” 6. Mr. Spykerman disclosed to the Department that he had been subject to an Order relating to his auto dealership license in California. 7. Mr. Spykerman responded “Yes” to Question 11, page 2 of the Application, which asked: “Have you ever been convicted of any felony in Arizona or any other state?” (Emphasis in original). 8. Mr. Spykerman disclosed to the Department that he had a felony drug conviction. 9. Mr. Spykerman responded “Yes” to Question 12, page 2 of the Application, which asked: “In the past 10 years, have you ever been convicted of any misdemeanor in Arizona or any other state?” (Emphasis in original). 10. Mr. Spykerman disclosed to the Department that he had been convicted in California of driving under the influence. 11. In a letter dated February 21, 2008, the Department notified Mr. Spykerman of its intent to deny the Application based in part on the above- mentioned felony conviction, the subsequent probation, and administrative disciplinary actions. 12. On February 28, 2008, Mr. Spykerman filed a request for a hearing regarding the denial of the Application, resulting in the instant hearing being held before the Office of Administrative Hearings. Misdemeanor Conviction 13. On February 14, 1998, Mr. Spykerman was arrested for DUI after he was observed driving his vehicle erratically. 14. On March 3, 1998, a Misdemeanor Complaint was issued in People of the State of California v. Kirk M. Spykerman, Case No. 8VN00834, charging Mr. Spykerman with violating section 23152(A)/29 of the California Vehicle Code, driving under the influence of an alcoholic beverage, a misdemeanor. 15. Mr. Spykerman entered a plea of no contest to the above-mentioned charge on May 11, 1998. Imposition of sentence was suspended for 36 months subject to the following conditions: payment of a $390.00 fine by September 8, 1998, enrollment in an alcohol program and a 90 day restriction his driver’s license. 16. On January 8, 2008, an Order for Expungement of conviction was issued in Case No. 8VN00834.

California Administrative Proceedings 17. Mr. Spykerman disclosed to the Department that he held an auto dealership license in California from March 7, 1994 to March 18, 2000, when the licensee expired. 18. On February 14, 2003, the California Office of Administrative Hearings consolidated three matters, cases numbered DMV No. D-99-0136, OAH No. L1999090058 (“DMV No. D-99-0136”), DMV No. DD-99-0092 & OAH No. L1999090063 (“DMV No. DD-99-0092“) and DMV No. D-99-0093 & OAH No. L1999090064 (“DMV No. D-99-0093”). 19. Administrative Law Judge Paul Hogan with the California Office of Administrative Hearings determined the following: DMV-D-99-0136 a. From January 1, 1997 through December 16, 1998, Mr. Spykerman was doing business as Kirk Matthew Spykerman dba Carco Auto Wholesale under dealer license and special plates No. D-23520. b. On April 7, 1997, Mr. Spykerman sold a used vehicle but failed to submit to the California Department of Motor Vehicles a valid initial application for registration, or transfer of registration within 50 days of the date of the sale, in violation of the California Vehicle Code. c. Due to cancellation of Mr. Spykerman’s bond, the license and special plates were canceled on December 6, 1997. d. The California DMV received the transfer application on or about December 21, 1998. Further, Mr. Spykerman did not provide the purchaser of the used vehicle with a valid smog certificate prior to or at the time of delivery of the used vehicle in violation of the California Vehicle Code. e. The license and special plates should be suspended pursuant to Vehicle Code section 114705. Subsequently, due to cancellation of bond, the license and special plates were canceled.

DMV D-9-0092 and DMV D-9-0093 f. As of April 3, 1998, Mr. Spykerman was doing business as Carco Wholesale dba Obo Auto Sales with dealer license and special plates No. D-34499. g. Mr. Spykerman sold used vehicles but failed to submit registrations or transfers of registration of the vehicles within 50 days of the sales in violation of the California Vehicle code and failed to provide the purchasers with valid smog certificates. h. Mr. Spykerman’s license and special plates were suspended for five days, and he was ordered to pay to the California DMV a $500 monetary penalty and $1,000.00 for investigative costs. Mr. Spykerman was required to continue to pay his employees’ wages and full benefits during the suspension period. Felony Drug Conviction 20. On March 6, 2002, in the United States of America v. Kirk Spykerman, et al., Case No. SA CR00-165 (A)-AHS, Mr. Spykerman was charged with four counts of possession with intent to distribute methylenedioxymethamphetamine (“MDMA”), distribution and aiding and abetting, 21. On November 8, 2002, Mr. Spykerman entered into a plea agreement in Case No. SA CR00-165 (A)-AHS wherein he pled guilty to count 1 of the First Superseding Indictment, possession of MDMA with intent to distribute and being a member of a conspiracy to accomplish it, a felony. 22. On May 19, 2003, in Case No. SA CR00-165 (A)-AHS , Mr. Spykerman was adjudged guilty and sentenced to 27 months incarceration, fined $5,000.00 and ordered to pay a $100.00 special assessment. Mr. Spykerman was placed on supervised release for three years upon completion of imprisonment and required to comply with the rules and regulations of probation, complete an outpatient substance abuse treatment, submit to drug and alcohol testing and abstain from using illicit drugs, alcohol or abusing prescriptions.

23. It is undisputed that Mr. Spykerman paid his fines and fees in Case No. SA CR00-165 (A)-AHS. 24. On October 12, 2007, Mr. Spykerman contacted Judge Alice Marie H. Stotler via a letter requesting early termination from release for probation citing hardship in securing employment. The Government filed a response wherein it did not object to the request. 25. On November 14, 2007, the U.S. District Court issued an Order Terminating Supervised Release for Mr. Spykerman in Case No. SA CR00-165 (A)-AHS. 26. In a letter dated November 28, 2007, Mr. Spykerman was informed that effective November 14, 2007, he was no longer on supervised probation or parole supervision but that he still had a felony conviction. 27. Janet Blair (“Ms. Blair”), the Assistant Commissioner of Licensing, Professional Education and Auditing Division of the Department, testified that the Department denied the Application based on above-mentioned convictions, the acts underlying the above-mentioned convictions and the prior California DMV administrative action taken against Mr. Spykerman. 28. According to Ms. Blair, the Department was concerned that Mr. Spykerman’s felony conviction was serious in nature and, that as a licensee of the California DMV, Mr. Spykerman had disciplinary action taken against his auto dealer licenses, he had not demonstrated to the Department that he is a person of good character, trustworthiness and honesty. However, she did acknowledge that Mr. Spykerman’s prior criminal and administrative disciplinary history did not involve dishonesty or show that he was a person who is not truthful. Ms. Blair also testified that a real estate license stands in a fiduciary relationship with the agent’s clients and must be of good character so as to be a responsible person. 29. Ms. Blair testified that the Department considered all of the documents and information provided by Mr. Spykerman in reaching the determination to deny the Application. 30. Mr. Spykerman testified: a. He is a changed person and of different character than he was when the acts underlying the above-mentioned convictions occurred. b. Mr. Spykerman attended rehabilitation for his substance abuse. c. He has been clean since and does not use illegal substances. d. He was previously licensed by the Department after he had disclosed the above-mentioned misdemeanor DUI conviction. While licensed by the Department and by the California Department of Real Estate, he did not have any complaints or administrative disciplinary action taken against his real estate licenses; and e. He successfully completed the terms of his probation and was released early. 31. With the submission of the Application, Mr. Spykerman presented character letters and at hearing presented additional character letters in support of his position that he currently possesses the requisite good character required of a licensee of the Department. However, other than his wife, he did not present any character witnesses. In all of the above-mentioned letters of character, the authors represented in essence that Mr. Spykerman is a reliable and trustworthy person who would make a good real estate agent. 32. Mr. Spykerman testified as to the differences between an auto dealer and a real estate agent to show that the activities of an auto dealer do not relate to his ability to act as a real estate agent and are not reasonably related to such activities. 33. Mr. Spykerman testified and presented evidence showing that his civil rights were restored. CONCLUSIONS OF LAW 1. Mr. Spykerman bears the burden of proof and the standard of proof on all issues is by a preponderance of the evidence. A.A.C. R2-19-119. 2. A preponderance of the evidence is “evidence of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” Black’s Law Dictionary 1182 (6th ed. 1990). 3. The evidence of record established that Mr. Spykerman was convicted in a court of competent jurisdiction of possession of MDMA with intent to distribute and acting as a co-conspirator with intent to distribute, a felony within the meaning of A.R.S. § 32-2153(B)(2). 4. The evidence of record established that Mr. Spykerman was convicted of a misdemeanor, DUI involving alcohol, a violation of A.R.S. § 32-2153 was not separately raised in the Notice of Hearing as grounds for denial with respect to that conviction. It is noted that the conviction is just about ten years old and was not an impediment to Mr. Spykerman obtaining his Arizona real estate license in October 2001 and is raised in the Notice of Hearing is in regard to Mr. Spykerman’s good character as required by A.R.S. § 32-2153(B)(7). 5. The Department contended that Mr. Spykerman’s convictions and the conduct underlying the convictions and the prior administrative proceedings in California show that he does not possess the qualifications and character to have a real estate license in Arizona. 6. The evidence of record established that Mr. Spykerman has been the subject of prior administrative proceedings involving his licensure as an auto dealer which involved his failure to register with the California DMV used vehicles within 50 days of their sale and failure to provide smog certificates. 7. In mitigation, Mr. Spykerman established that he had subsequently provided the smog certificates and had paid the fines and fees assessed against him. 8. Mr. Spykerman presented testimony showing why he did not appear at the above-mentioned DMV hearings and let that license expire. However, effect has to be given the decision made in the consolidated OAH-DMV matters in California, which were shown to be final decisions. 9. Mr. Spykerman estlabished that he served prison time as sentenced and was released from supervised probation early and has had his civil rights restored. Mr. Spykerman established that he underwent drug counseling and satisfied the terms of his probation in Case No. SA CR00-165 (A)-AHS and has remained drug free. 10. The evidence of record established that at the time when the conduct underlying the above-mentioned felony conviction occurred, Mr. Spykerman was not a person of good character within the meaning of A.R.S. § 32- 2153(B)(7). The Department had sufficient grounds to question the character of Mr. Spykerman. 11. Mr. Spykerman attempted to demonstrate through his and his wife’s testimony and letters of character that he is presently a person of honesty, truthfulness, and of good moral character. Further, due to the content of some of the letters, the extent of information known by the authors of the letters, and certain relevant details concerning Mr. Spykerman could not be discerned from the letters nor could such information be explored because the authors of the letters did not appear at the hearing. The letters of character are given little weight because the authors of the letters did not testify at the hearing and were not subject to cross-examination by the Department’s counsel nor questioned by the Administrative Law Judge and could not be observed by the Judge. 12. Although Mr. Spykerman claims to be a different person from the past, he has the burden of establishing that. The character of an applicant is determined on a case by case basis based upon the evidence presented at hearing. In this case, the Administrative Law Judge is convinced that Mr. Spykerman believes he is a person of good character. The evidence does not establish that Mr. Spykerman is rehabilitated but does show that Mr. Spykerman has made a concerted effort towards rehabilitation. However, due to the short passage of time since his release from probation and lack of character witnesses, at this point in time, Mr. Spykerman failed establish the good character required by the Department of a licensee within the meaning of A.R.S. § 32-2153(B)(7). 13. The Administrative Law Judge finds that the duties of a real estate salesperson require a person of good character and that A.R.S. § 13-904(E) did not preclude the Department from considering Mr. Spykerman’s felony conviction as a factor in reaching its determination to deny the Application. The Department considered the above-mentioned felony and misdemeanor convictions in conjunction with Mr. Spykerman’s prior administrative proceedings, and the short time since he has been released from probation in reaching its denial determination. 14. Mr. Spykerman did not establish by a preponderance of the evidence that he is a person of good character within the meaning of A.R.S. § 32- 2153(B)(7). 15. The evidence of record established that pursuant to A.R.S. §§ 32- 2153(B)(2) and (B)(7), the Department had grounds to deny the Application based on the above-mentioned felony conviction, the activities underlying that conviction, and the above-mentioned California DMV administrative actions. 16. Mr. Spykerman failed to establish by a preponderance of the evidence that the denial of the Application should be reversed or that, at this point in time, a provisional license should be issued. ORDER The Department’s decision to deny the Application is affirmed. Done this day, May 16, 2008.

______________________________________ Lewis D. Kowal Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2008, to:

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

By ___________________________

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