ALJDEC decisions subject to certification as final

14F-DI-119-REL · Department of Real Estate · 2014-03-05

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 19, 2014 APPEARANCES: Respondent Shawn L. Stone appeared on his own behalf. Assistant Attorney General Lynette Evans represented the Arizona Department of Real Estate. ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella _____________________________________________________________________ FINDINGS OF FACT 1. On January 7, 2014, the Arizona Department of Real Estate (“Department”) issued a Notice of Hearing and Complaint regarding this matter (“Notice of Hearing”) setting an administrative hearing to be held with the Office of Administrative Hearings on February 19, 2014, at 8:00 a.m. On the date and at the time set for hearing, Respondent Shawn L. Stone (“Mr. Stone”) appeared on his own behalf. Assistant Attorney General Lynette Evans represented the Department. 2. The Notice of Hearing contained allegations regarding the conduct of Mr. Stone that the Department contended violated the Arizona real estate laws. Through the administrative hearing process, the Department sought to impose a civil penalty of not more than $1,000.00 for each violation of the State’s real estate laws. 3. Prior to the hearing, on February 12, 2014, the parties stipulated to the following Findings of Fact as set forth below: i) On August 4, 2005, the Department issued real estate salesperson’s license number SA565584000 to Mr. Stone. Mr. Stone’s license expired on August 31, 2013. ii) On August 22, 2012, in Scottsdale City Court, Mr. Stone pled guilty and was convicted of Criminal Littering in violation of A.R.S. § 13-1603(A)(1), a class 2 misdemeanor, and was sentenced to pay a $336.00 fine. Mr. Stone paid the fine that same day. iii) On October 8, 2013, Mr. Stone moved the Scottsdale City Court to set aside the judgment of guilt. iv) On October 18, 2013, the Scottsdale City Court granted Stone’s unopposed motion and the judgment of guilt was set aside. v) The Department was informed of the conviction by Stone on his application to renew his real estate license on November 7, 2013. vi) Mr. Stone failed to timely notify the Department of his conviction. vii) The Department informed Mr. Stone of its Intent to Deny Application for Renewal of his real estate salesperson’s license on November 19, 2013. viii) On December 18, 2013, Mr. Stone appealed the Intent to Deny Application for Renewal. 4. Mr. Stone acknowledged failing to notify the Department within ten days of his conviction. Mr. Stone argued that the imposition of a civil penalty is not warranted given the underlying circumstances surrounding his failure to report, and that it does nothing to protect the public. Mr. Stone explained that he is an attorney who was practicing with his father at the time of the conviction. Mr. Stone is very active in the community and gives freely of his time through the Volunteer Lawyers Program and the Big Brothers Big Sisters Program. Mr. Stone testified that he tried to fight the charge, however, at the time, his father was suffering from stage 4 stomach cancer and could not work. As such, Mr. Stone assumed his father’s legal caseload and he was also caring for his father, taking him to various medical appointments. Mr. Stone was the only family in Arizona able to care for his father. Mr. Stone’s father had been his defense attorney in the littering case and when he could no longer defend Mr. Stone, Mr. Stone pled guilty to the charge. 5. Mr. Stone testified that all of his energy was devoted to caring for his father who passed away on December 31, 2012. Mr. Stone further testified that he has not received a paycheck since September 2012, and has been living off of his savings. Mr. Stone asserted that a $1,000.00 civil penalty is excessive and that because the real estate statutes are in place to protect the public from unscrupulous and unqualified individuals, the imposition of a civil penalty is not appropriate in his case, because he is neither unscrupulous nor unqualified, but rather was solely focused on his father at the time of the incident in question and that disclosure was “the farthest thing from his radar.” Mr. Stone requested that the Department issue a Letter of Concern and order him to participate in additional pro bono work or community service. 6. The Department argued that Mr. Stone’s violations of A.A.C. R4-28-301(F) and A.A.C. R4-28-303(D) warrant the imposition of a civil penalty for the violations of law. However, the Department deferred the amount of the civil penalty to the discretion of the Tribunal. There was no evidence presented of any prior violations of Arizona real estate laws by Mr. Stone. The Department further advised that it is not pursuing the denial of Mr. Stone’s renewal application. CONCLUSIONS OF LAW 1. This matter lies within the jurisdiction of the Department. See A.R.S. Title 32, Chapter 20. 2. Because this matter is disciplinary in nature, the Department bears 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. 3. 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). 4. Pursuant to A.A.C. R4-28-301(F), “[e]ach salesperson . . . shall, within 10 days of each occurrence, 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).” 5. A.A.C. R4-28-303(D) requires the following: A salesperson or broker shall notify the Department in writing within days of any change in the individual's personal information or qualifications. The salesperson or broker shall include in the notice the individual's name, signature, license number, and: 1. If disclosing information required under R4-28-301, such as a criminal conviction, adverse judgment, denial or restriction of or disciplinary action against a professional or occupational license, or recovery fund payment on the person's behalf, a written statement providing detailed information and, upon request by the Department, the supporting documentation identified in R4-28-301(A)(2).

6. The Commissioner has the authority to impose a civil penalty of up to $1,000.00 for each violation of the Arizona real estate laws. See A.R.S. § 32-2160.01. 7. The Department proved by a preponderance of the evidence that Mr. Stone violated A.A.C. R4-28-301(F) and A.A.C. R4-28-303(D) for failing to disclose the above-mentioned conviction within ten days of the conviction. 8. The Administrative Law Judge concludes based on the evidence of record, that Mr. Stone disregarded or violated the provisions of A.R.S., Title 32, Chapter 20, within the meaning of A.R.S. § 32-2153(A)(3). 9. Pursuant to A.R.S. § 32-2160.01(A), grounds exist for the imposition of a civil penalty for the above-found violations, not to exceed $1,000.00 for each violation. 10. Based upon the totality of the evidence, including the familial circumstances surrounding Mr. Stone’s failure to report, Mr. Stone’s financial circumstances, and the absence of prior violations of the real estate laws, the Administrative Law Judge concludes that a total civil penalty in the amount of $200.00 against Mr. Stone for the violations found above is reasonable and appropriate under the circumstances. ORDER Within sixty (60) days of the effective date of the Order entered in this matter, Mr. Stone shall pay to the Department a civil penalty in the amount of $200.00, and such payment shall be made by cashier’s check or money order made payable to the Department. It is noted that the Department withdrew its November 19, 2013 Intent to Deny Mr. Stone’s renewal application for salesperson’s license.

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 five (5) days from the date of that certification.

Done this day, March 5, 2014.

/s/ Sondra J. Vanella Administrative Law Judge

Transmitted electronically to:

Judy Lowe, Commissioner Arizona Department of Real Estate -----------------------

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