ALJDEC decisions subject to certification as final

11F-DI-024-REL · Department of Real Estate · 2012-02-29

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 9, 2012 APPEARANCES: Assistant Attorney General Shelby Cuevas on behalf of the Arizona Department of Real Estate; James S. Hanson on his own behalf ADMINISTRATIVE LAW JUDGE: Lewis D. Kowal _____________________________________________________________________ FINDINGS OF FACT 1. On May 9, 2006, the Arizona Department of Real Estate (“Department”) issued Real Estate Salesperson’s License No. SA575373000 (“License”) to James Scott Hanson (“Respondent”). The License’s most recent renewal has an expiration date of May 31, 2012. 2. Robin King (“Ms. King”), the Manager of Investigations and Development Services with the Department, testified that the License is currently suspended as a result of the issuance of an Order of Summary Suspension and Notice of Opportunity for Hearing executed by the Commissioner of the Department on October 11, 2011, and issued the following day. See Exhibit 20. 3. The Order of Summary Suspension was issued based on Respondent having been convicted of two felonies, which according to Ms. King, posed serious concerns to the Department. 4. Respondent appealed the Order of Summary Suspension, which brought this matter before the Office of Administrative Hearings, an independent State agency. Felony Convictions 5. The evidence of record established that in The State of Arizona v. James Scott Hanson, Maricopa County Superior Court Case No. CR2009-005711- 001 SE (“Case #1”), Respondent pled guilty to Aggravated Assault, a Domestic Violence offense, and a class 6 felony. In that case, the Court suspended imposition of sentence and Respondent was placed on probation for years that commenced on August 28, 2009. The Court ordered Respondent to serve 9 months in the Maricopa County Jail (“jail”) as a condition of probation, and ordered him to pay restitution, fees, and assessments. 6. On March 9, 2010, in Case #1, the Court found Respondent had violated his probation and revoked his probation. The Court further ordered Respondent to be committed to the Arizona Department of Corrections to serve 1.5 years of incarceration, to commence on March 9, 2010, with credit for 195 days served. 7. The evidence of record established that in The State of Arizona v. James Scott Hanson, Maricopa County Superior Court Case No. CR2010-005794 (“Case #2”), Respondent pled guilty to Aggravated Harassment, a Domestic Violence offense, and a class 5 felony. The Court sentenced Respondent to be incarcerated with the Arizona Department of Corrections for 2 years, to commence on August 13, 2010, with credit for 167 days served. The sentence was to run concurrently with the sentence imposed in Case #1. 8. Respondent testified that on September 26, 2011, Respondent was released from the Arizona Department of Corrections. Respondent further testified that within a week of his release from prison, Respondent notified the Department of the above-mentioned convictions. Respondent represented that his release date from parole is February 28, 2012. 9. Respondent testified as to the underlying circumstances surrounding Case #1, and acknowledged that he made a mistake and was sorry for having “snapped” during an altercation with his former wife. He acknowledged that his wife at the time sustained serious injuries as a result of his violent act. 10. Respondent also testified that during his incarceration in jail, he enrolled in Alpha, a substance abuse program that also provided domestic violence classes, parenting classes, and group counseling. According to Respondent, when he had two days left to complete the program, he wrote a letter to his children that was sent to his former wife’s residence where the children resided. The letter contained the message “Tell mommy happy anniversary, I wish it was under different circumstances”. 2/9/12 Hearing Record 47:31-5. Subsequently, Respondent was found to have violated probation while an indictment was pending on an Aggravated Harassment charge in Case #2. Respondent was placed in maximum security in jail. 11. Respondent explained that initially the Aggravated Harassment charge was a class 6 felony, and he was faced with the choice of either pleading guilty to Aggravated Harassment, a class 5 felony, or face a withdrawal and resubmission of the charge that would result in six more months in maximum security. 12. Respondent testified that he has had no criminal violations other than the above-mentioned felony convictions. Continuing Education 13. Ms. King testified that at all times relevant to this matter, the Department required salesperson licensees and brokers (“licensees”) to complete 24 hours of continuing education (“CE”) every two years. 14. The Department’s records show that Respondent was employed at Team Realty, LLC (“Team Realty”) until being severed on July 21, 2010, which is the date the Department received notification form Team Realty. See Exhibit 25. 15. Ms. King testified that licensees must provide to the Department proof of completion of the required CE classes and input their CE classes online into the Department’s database. 16. Ms. King further testified that though not required, the Department sends courtesy letters to real estate licensees and their employing brokers reminding them of the deadline to complete the required CE. 17. Ms. King testified that on June 7, 2010, the Department sent a letter to Respondent at his business address of record, informing him that as of May 31, 2010, he had not completed his CE requirements. See Exhibit 22. The letter informed Respondent that he had 30 days from the date of the letter to comply with the law or disciplinary action might ensue and a penalty may be imposed. The letter also provided Respondent with three options: (1) upload his CE requirements online; (2) place the License on inactive status; or 3) do nothing and be in non-compliance, which could result in summary suspension of the License. A copy of that letter was sent to Team Realty. 18. Ms. King testified that on July 19, 2010, the Department sent another letter to Respondent at his business address of record relating to his failure to complete the requisite CE. See Exhibit 24. The Department advised Respondent that as of May 31, 2010, and as of the date of the letter, Respondent had failed to complete the required CE and that his failure to respond to the letter in writing would be considered a violation that may result in further disciplinary action. 19. The Department’s records regarding Respondent show that he has not completed the requisite CE that was required to be completed as of May 31, 2010, and at hearing, Respondent did not dispute that fact. 20. Respondent explained that while incarcerated in jail and prison, he was unable to access a computer or call or write to the Department. Respondent testified that his contact with the “outside world” was extremely limited, that he did not have the Department’s address or telephone number, and was therefore unable to contact the Department regarding his convictions, unable to take CE courses, unable to access the Department’s public database, and unable to request a waiver of the CE requirements. 21. Respondent represented that while in jail and prison, and during his parole, he has not been written up for any improper conduct and that is evidence of his good character. Summation of Each Party’s Position 22. Based on Respondent having violated the State’s real estate laws, as more fully set forth below, the Department requested that the License be revoked, the Order of Summary Suspension be upheld, and that a civil penalty of $3,000.00 be paid within 30 days of the Order entered in this matter. 23. Respondent did not dispute that the Department had grounds to revoke the License or to issue a civil penalty but presented evidence in mitigation of the proposed discipline to be imposed. Respondent represented that he is homeless and penniless, and is unable to pay a civil penalty. 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 “[e]vidence 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. The Department proved by a preponderance of the evidence that Respondent was convicted in a court of competent jurisdiction of two felonies, in violation of A.R.S. § 32-2153(B)(2). 4. The Department proved by a preponderance of the evidence that Respondent violated a state law that involved violence against another person, in violation of A.R.S. § 32-2153(B)(10). 5. The Department proved by a preponderance of the evidence that Respondent violated the terms of his probation in Case #1, as ordered by the Court, in violation of A.R.S. § 32-2153(B)9). 6. The Department proved by a preponderance of the evidence that Respondent is not a person of good character within the meaning of A.R.S. § 32-2153(B)(7), based on the nature of the felony convictions and underlying acts, and the fact that he has recently been released form prison and still on parole. It is noted that Respondent did not present any character reference letters or witnesses to vouch for his good character. 7. The Department proved by a preponderance of the evidence that grounds existed for issuance of the Order of Summary Suspension. See A.R.S. §§ 32- 2157 (B), (C), 32-2153, and 41-1092.11. 8. Licensees are required to present to the Department evidence of attendance of CE courses prescribed and approved by the Commissioner of the Department (“Commissioner”), at a school certified by the Commissioner, in the amount of 24 credit hours during each 24 month period of licensure. See A.R.S. § 32-2130(A). 9. For license renewal, a licensee must complete 24 credit hours of CE with a minimum of three credit hours in each category specified in A.A.C. R4-28-402(A)(5)(a) through (A)(5)(f). See A.A.C. R4-28-402(A)(2). 10. The Commissioner may waive all or a portion of CE requirements if good cause is shown. See A.R.S. § 32-2130(A). However, there was no evidence presented that Respondent sought a waiver of the CE requirements or that a waiver was granted by the Commissioner. 11. The Department proved by a preponderance of the evidence that Respondent failed to comply with the CE requirements set forth in A.R.S. § 32-2130(A). However, although Respondent failed to comply with the CE requirements, Respondent’s circumstances made it virtually impossible for him to contact the Department, take CE classes, or seek a waiver. Though the Department provided that Respondent could send and receive mail, Respondent credibly testified that he did not have the necessary information or ability to contact the Department with respect to CE. Consequently, though grounds exist to find the violation, the Administrative Law Judge finds the circumstances warrant mitigation of any penalty to be imposed with respect to Respondent’s failure to comply with the CE requirements. 12. The Department proved by a preponderance of the evidence that Respondent did not timely disclose to the Department the above-mentioned convictions, as required by A.A.C. R4-28-301(F) and R4-28-303(D). The same analysis and conclusion determined by the Administrative Law Judge in the preceding paragraph with respect to CE applies to the disclosure of convictions, and warrants mitigation of any penalty to be imposed for violating the disclosure requirements. 13. By engaging in the conduct as found in the above Findings of Fact, Respondent disregarded or violated the provisions of A.R.S., Title 32, Chapter 20, and the Department’s rules within the meaning of A.R.S. § 32- 2153(A)(3). 14. Grounds exist to revoke, refuse to renew, or suspend the License pursuant to A.R.S. §§ 32-2153(B)(2) (B)(7), (B)(9), and (B)(10), and 32- 2153(A)(3), A.A.C R4-28-301(F) and R4-28-303 (D). 15. The above-found violations of law constitute grounds for the imposition of a civil penalty not to exceed $1,000.00 per violation. See A.R.S. § 32-2160.01. 16. The Administrative Law Judge concludes that due to the convictions being recent, the nature of the underlying conduct, and the fact that Respondent is still on parole, (though it is noted that his parole may end on February 28, 2012), the Department raised valid concerns as to Respondent's character. The nature and gravity of the offense with respect to Case #1 and that Respondent violated his probation and subsequently was convicted of another criminal offense in Case #2 cannot be overlooked, and it is reasonable and appropriate for the Department to consider them in requesting revocation and seeking the imposition of civil penalties. 17. The Administrative Law Judge concludes that Respondent did not attempt to hide the convictions from the Department. Due to the situation Respondent found himself in, as set forth above, though grounds exist to revoke the License and impose civil penalties, discretion should be exercised, and no civil penalty should be imposed in this matter. ORDER The Order of Summary Suspension is upheld. On the effective date of the Order entered in this matter, License No. SA575373000 shall be revoked.

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, February 29, 2012.

/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