ALJDEC decisions subject to certification as final

09F-DI-268-REL · Department of Real Estate · 2009-06-24

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 23, 2009 at 9:00 a.m. APPEARANCES: Petitioner Desiree Scherer appeared on her own behalf; the Arizona Department of Real Estate appeared through Kelly LaPrade, Esq., Assistant Attorney General. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT On February 13, 1991, the Arizona Department of Real Estate (“the Department”) initially issued Real Estate Broker’s License No. BR041460000 to Petitioner Desiree Scherer. On December 1, 2008, the Department received Ms. Scherer’s renewal application. On the renewal application, Ms. Scherer indicated that she had been convicted of or had pled guilty to a misdemeanor and that she had previously disclosed the incident in writing to the Department on August 6, 2007. Ms. Scherer submitted a narrative with her renewal application. Ms. Scherer explained that, on August 5, 2007, she backed into a parked motorcycle when she was leaving a bar in Scottsdale called the Skeptical Chemist. Police had been called and she had been cited for driving under the influence (“DUI”). Afterwards, she had hired an attorney and had pled guilty to the offense. She was still paying fines and assessments. The Department notified Ms. Scherer of its intent to deny her license renewal application. Ms. Scherer requested a hearing on the intended denial. The Department referred the matter to the Office of Administrative Hearings, an independent state agency, for the scheduling of an administrative fair hearing. On April 6, 2009, the Department issued a Notice of Hearing, which charged Ms. Scherer with violations of A.R.S. § 32- 2153(A)(3) and A.A.C. R4-28-301(F) and R4-28-303(D). After one continuance at Ms. Scherer’s request, a hearing was held on June 23, 2009. The Department presented the testimony of Diane Paulsen, its Licensing Manager, and submitted three exhibits. Ms. Scherer testified on her own behalf. Ms. Scherer testified that, on August 7, 2007, she had sent via U.S. mail a letter to the Department notifying it of her arrest for DUI. Ms. Paulsen testified that, if the Department had received such a letter, it would have sent a certified letter to Ms. Scherer, notifying her of the procedures to be followed in apprising the Department of the criminal proceedings involving the DUI charge. Ms. Paulsen testified that the Department’s records contained no evidence that it had ever received a disclosure from Ms. Scherer. Ms. Paulsen testified that Ms. Scherer had submitted two letters of explanation with or after her renewal application. The Department submitted the guilty plea in Scottsdale City Court Case No. TR-[number redacted]. The plea indicated that, on December 4, 2007, Ms. Scherer had pled guilty to DUI, a Class 1 misdemeanor, in violation of A.R.S. § 28-1381(A)(1), and had been required to complete alcohol abuse screening, to serve ten days in jail, to pay $478.00 in fines and surcharges, to pay a DUI assessment of $500.00, to pay a DPS assessment of $500.00, to pay $120.00 to the Scottsdale Police Department to reimburse it for the blood sample and search warrant procedures. Ms. Scherer admitted that she had not notified the Department of her conviction pursuant to her plea agreement within ten days of having entered the agreement. The Department requested a civil penalty be imposed against Ms. Scherer’s license in the amount of $1,000.00 because she had failed to notify it of her DUI conviction within ten days, as required by regulation. The Department indicated that it was willing to enter into an installment payment agreement with Ms. Scherer or accept credit card payments. Ms. Scherer testified that she has never had a complaint made against her broker’s license before. She has never been in trouble before. The Department’s failure to grant her license renewal application has left her in limbo. She would not know where to get $1,000.00. Such a penalty would put her out of business. CONCLUSIONS OF LAW This matter lies within the Department’s jurisdiction.[1] Ms. Scherer bears the burden of proof and must establish that she meets statutory qualifications to have her real estate broker’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] A.A.C. R4-28-301(A)(1)(a) requires a license applicant to disclose misdemeanor convictions on the license application. A.A.C. R4-28-301(F) requires a licensee in writing to notify the Department of any change in the information contained on the license application within ten days of its occurrence. A.A.C. R4-28-303(D) requires the same notice from licensees who have kept their licenses through the submission of renewal license applications to the Department. A.R.S. § 32-2153(A)(3) provides that the Department may penalize the license of anyone who has “[d]isregarded or violated any of the . . . rules adopted by the Commissioner” of the Department. Ms. Scherer admits that she did not disclose her DUI conviction until she submitted her license renewal application, which was almost a year after the conviction had occurred. She stated that she did not know she was required to disclose the conviction. A.R.S. § 32-2153(A)(3) does not require proof of intent. Everyone is presumed to know the law.[5] “As a matter of public policy, all persons are charged with knowledge of law pertaining to their transactions . . . .”[6] A mistake as to the law’s requirements is no excuse for a person’s failure to meet them.[7] Applicable law made Ms. Scherer solely responsible for disclosing her DUI conviction to the Department within ten days under A.A.C. R4-28-301(F) and R4-28-303(D). 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. Scherer’s violation of A.R.S. § 32- 2153(A)(3) furnishes grounds to deny her license renewal application and for the imposition of a civil penalty. Ms. Scherer demonstrated at the hearing that she presents no danger to the public at this time. She is amenable to regulation. The Department argued that the maximum civil penalty of $1,000 should be imposed. The Arizona legislature afforded the Department discretion in the amount of the penalty to be imposed for a violation of the statutes or regulations governing licensed real estate professionals, up to a maximum of $1,000 per violation. Factors in mitigation if the penalty are Ms. Scherer’s lack of intent, absence of financial gain due to the violation, the absence of any harm to the public or a client, and the absence of any prior disciplinary history.[8] The factors in aggravation are Ms. Scherer’s ignorance of statutory requirements and supervisory status. RECOMMENDED ORDER Based on the foregoing, it is recommended that the Commissioner affirm its denial of Ms. Scherer’s application to renew real estate broker’s license no. BR041460000. It is further recommended that Ms. Scherer be issued a two-year provisional real estate broker’s license. It is further recommended that, except as provided in the Commissioner’s final order or otherwise as specifically allowed by the Commissioner in writing, only periods of active licensure shall accrue to the provisional license period. It is further recommended, as an additional requirement of the provisional license, that Ms. Scherer be required to pay a civil penalty in the amount of Eight Hundred Dollars ($800.00), in a manner that is acceptable to the Commissioner. It is further recommended that Ms. Scherer be required to remain in compliance with Title 32, Chapter 20 of the Arizona Revised Statutes, and Title 4, Chapter 28 of the Arizona Administrative Code (“the Commissioner’s Rules”). It is further recommended that, if the Commissioner determines that Ms. Scherer has failed to comply with any of the terms of the final order in this matter, as a term of the provisional license, the Commissioner may summarily suspend Ms. Scherer’s provisional real estate broker’s license and/or institute any further disciplinary proceedings the Commissioner deems appropriate. Ms. Scherer shall have the right to appeal such summary suspension under A.R.S. § 41-1092 et seq. Done this day, June 24, 2009.

______________________________________ Diane Mihalsky Administrative Law Judge Original transmitted by mail this ____ day of June, 2009, to:

Judy Lowe, Commissioner Arizona Department of Real Estate 2910 North 44th Street, Room 100 Phoenix, AZ 85018

By ___________________________ ----------------------- [1] See A.R.S. § 32-2108(A). [2] See A.R.S. § 41-1092.07(G)(1); 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] See Conway v. State Consolidated Publishing Co., 57 Ariz. 162, 171, 112 P.2d 218 (1941). [6] Turner v. State Employees Retirement System, 485 So. 2d 765 (Ala. App. 1986). [7] See Newman v. Fidelity Savings and Loan Ass’n, 14 Ariz. 354, 359, 128 P. 53 (1912). [8] See, e.g., Discover Bank v. Superior Court, 36 Cal. 4th 146, 180, 113 P.3d 1100, 1122, 30 Cal. Rptr. 3d 76, 101 (2005) (citing Cal. Bus. & Prof. Code, § 17206(b)); Rocque v. Light Sources, 275 Conn. 420, 448, 881 A.2d 230, 246 (2005) (citing Conn. Gen. Stat. § 22a-438(a)); In re AMCO Constr. Co., 633 So. 2d 727, 735 (La. App. 1993) (citing La. Rev. Stat. § 30:2025E(3)(a). The Administrative Law Judge finds these factors considered in these opinions relevant, even though the Arizona legislature has not enacted a statute specifically listing the factors to be considered in the exercise of the Commissioner’s discretion.

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