ALJDEC decisions subject to certification as final

09F-SD-254-REL · Department of Real Estate · 2011-11-23

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 9, 2011 APPEARANCES: Assistant Attorney General Lynette Evans for the Arizona Department of Real Estate; Verne C. Scholl on his own behalf ADMINISTRATIVE LAW JUDGE: Lewis D. Kowal _____________________________________________________________________ FINDINGS OF FACT 1. The Arizona Department of Real Estate (“Department”) issued a Notice of Hearing and Complaint on August 8, 2011 (“Notice of Hearing”), setting an administrative hearing to be held with the Office of Administrative Hearings, an independent State agency. 2. The Notice of Hearing contained allegations regarding the conduct of Verne C. Scholl (“Respondent”) that the Department claimed were violations of the State’s real estate laws. Through the administrative hearing process, the Department sought to have Respondent’s real estate broker’s license number BR527368000 (“License”) revoked, and to impose a civil penalty of not more than $1,000.00 for each violation of the State’s real estate laws. 3. In Findings of fact, Conclusions of Law and Order dated September 13, 2011, the Commissioner of the Department deemed admitted the allegations set forth in the Notice of Hearing, and revoked Respondent’s broker’s license. The allegations deemed admitted involved Respondent’s failure to comply with the terms of a Consent Order that was entered into in Case No. 08F-LI-217-REL, wherein Respondent was required to attend three additional hours of approved continuing education (CE) classes. 4. Connie Johnson (“Ms. Johnson”), the Department’s Compliance Officer, explained that the License could be renewed for one year after its expiration and after that time period, the License would be terminated. Ms. Johnson testified that the License expired on May 31, 2011, but the expiration of the License did not affect Respondent’s requirement to comply with the Consent Order because the License did not terminate and the Department had continuing jurisdiction over Respondent and the License. 5. Respondent testified regarding his belief that the License should have expired on May 9, 2009, and he did not intend to use the License in Arizona. Respondent questioned how the License was renewed when it should have expired. 6. Ms. Johnson explained that, in the past, real estate licenses were for a two year term but that the law changed the license term for a period of time to 4 years, and subsequently, another change in the law resulted in having the license term become 2 years. 7. Ms. Johnson explained that a licensee was required to have 24 hours of CE for every 24 month period of licensure and that requirement did not change regardless of whether a licensee held a four year license or a two year license. Ms. Johnson further testified that Respondent held a four year license, which could explain why Respondent questioned why the License did not expire after 2 years of its most recent renewal. 8. Respondent testified briefly about the circumstances that led to the Consent Order, that he had conducted real estate business from California, that individuals who lost monies due to the conduct underlying Case No. 08F- LI-217-REL were fully paid, and that he paid the fine that was imposed. 9. Respondent argued financial hardship claiming that his real estate business in Arizona had been destroyed and that his only source of income is from Social Security. / / / / / / / / /

CONCLUSIONS OF LAW 1. Because this matter is disciplinary in nature, the Department has the burden of proof. The standard of proof on all issues is by a preponderance of the evidence. See A.A.C. R2-19-119. 2. A preponderance of the evidence is “such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960). It is “evidence which is 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. Respondent stipulated that he violated A.R.S. § 2153(B)(9), violating the term of an administrative order. The Department sought a civil penalty of a $1,000.00 to be paid within 60 days of entry of the Order issued in this matter. Respondent argued that due to financial hardship a civil penalty should not be imposed. 4. The above violation of law constitutes grounds for the imposition of a civil penalty not to exceed $1,000.00 per violation. See A.R.S. § 32- 2160.01. 5. The Administrative Law Judge concludes that the facts and arguments presented by Respondent do not warrant mitigation of the amount of civil penalty to be imposed. The nature of Respondent’s violation of law warrants the imposition of a $1,000.00 civil penalty. The Department’s request that the civil penalty be paid within 60 days of the effective date of the Order entered in this matter is found to be reasonable and appropriate under the circumstances. ORDER Within 60 days of the effective date of the Order entered in this matter, Respondent is to pay to the Department a civil penalty in the amount of $1,000.00.

In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be 5 days from the date of that certification. Done this day, November 23, 2011.

/s/ Lewis D. Kowal Administrative Law Judge

Transmitted electronically to:

Judy Lowe, Commissioner Arizona Department of Real Estate

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