ALJDEC decisions subject to certification as final

15F-DI-196-REL · Department of Real Estate · 2015-08-20

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 6, 2015 APPEARANCES: David Williams, Petitioner’s Attorney; Eric M. Jacob, Petitioner; Roberto Pulver, Attorney for the Department of Real Estate; W.F. Hatmaker, Nancy Bills, Kathy McElvain, Wayne L. Jackson, Dr. Paul Wondra, witnesses; Gary Thompson, Heather Hatmaker, Virginia Jacobs, observers ADMINISTRATIVE LAW JUDGE: Dorinda M. Lang _____________________________________________________________________ FINDINGS OF FACT 1. On May 7, 2015, Petitioner submitted an application to the Department of Real Estate (“the Department”) for a real estate Statesperson’s License, pending license number SA657252000. In his application, Petitioner disclosed his history of 2 felonies and 4 misdemeanors. When the application was denied, Petitioner appealed. 2. At the hearing, the Department offered the testimony of its Senior Investigator, Wayne L. Jackson, who testified that the application was denied because insufficient time has passed to allow Petitioner to establish that he has changed. He said his review of the information provided by Petitioner led him to find that Petitioner does not have a bad character but does have bad judgement in that all of his offenses concern the use of substances. 3. Petitioner’s history for the 10 years prior to the application included aggravated assault on March 30, 2004, aggravated assault on April 11, 2006 for which he spent 3 years in prison with 6 months of parole, DUI on April 30, 2011 for which he had his driver’s license suspended and had 3 years of unsupervised probation, driving on a suspended license on November 27, 2012, criminal trespass on March 7, 2013 and reckless driving in February 2006.[1] 4. Mr. Jackson testified that he did not make the decision to deny the license. However, he stated that the Department is concerned about the pattern of conduct that Petitioner displayed and found it relevant because the business of real estate can involve having to deal with people who are at times very upset and difficult to manage. He agreed that Petitioner’s history of six years of steady employment can be persuasive, but Petitioner had an offense while in probation, a time when people are generally more careful to avoid trouble. 5. Mr. Jackson testified that he considered Petitioner’s appeal letter[2] but found that it was not convincing. He said he did not understand why Petitioner referred to the crimes as mistakes of youth because he was an adult when he did them. 6. Mr. Jackson testified that Petitioner’s second aggravated assault charge was considered a crime of moral turpitude because a weapon was used. He said he was not aware of Petitioner’s work with mentally ill people prior to the hearing and he acknowledged that the Commissioner has the authority to grant provisional licenses if the licensee has been licensed before. He said he has heard of the Department requiring licensees to have a practice monitor before. 7. Petitioner testified that he has a daughter who was 18 months old at the time of the hearing. He testified about his involvement in football, baseball, basketball, and student government in high school. 8. Petitioner testified that his 2004 aggravated assault charge arose from an incident in which he was at a house party where the police had come to the door just as he was leaving and he bumped into a police officer, resulting in being charged with aggravated assault. He offered no objective evidence of the facts behind the charges, but he testified that he received 3 years of probation for this offense. 9. He said in February 2006 he was speeding on the way to work and was charged with reckless driving for which he received 30 days sentence as “time served”. 10. He testified that his second aggravated assault charge occurred when he had an argument with his then girlfriend when she decided to walk home at about 3:00 a.m. He said he followed her as they continued the conversation and a neighbor came out of his house with a broom, threatening his girlfriend. He said he stepped in and threw some punches but he never touched the broomstick. However, when he was charged with aggravated assault, he was offered two settlement options, and the one with the lower jail sentence required pleading to aggravated assault with a deadly weapon. He also said that this assault was a probation violation with a 1 year prison term that ran at the same time. 11. Petitioner testified that in 2011 he received a DUI after attending a baseball game with his father and girlfriend and drinking two beers at the game. He said in 2012, he drove on a suspended license because it was hard to take the bus to work from where he was living at the time. He said in March 2012, he was cited for criminal trespass because he was celebrating at a club and was asked to leave because he was “dancing belligerently.” He said he waited in another area for his friends but he was still on the property so he received a $250 fine. 12. Petitioner stated that while in prison, he enrolled in classes such as for substance abuse and “men in recovery” and he attended church. 13. Petitioner described his work history, which included working at Biltmore Properties with clients who were in the Arizona Seriously Mentally Ill program and who were often difficult to deal with. He worked there from 2011 to 2014 when he began working for Dr. Paul Wondra, who still employs him. He still works with challenging clients for Dr. Wondra. He has had his civil rights restored and has obtained his fingerprint card under a good cause exception. 14. Petitioner stated that he feels comfortable working in real estate, he enjoys the positive energy, and he feels it is a calling for him. He acknowledged that he used poor judgment when he drove under the influence in 2011. He said he has no issues with alcohol. 15. Dr. Paul Wondra, owner of North Star Properties, testified that Petitioner works for him coordinating maintenance on his property and other tasks. He said he wants Petitioner to get his license so he can expand Petitioner’s duties. He said Petitioner can diffuse escalating situations with clients like no one else and his current position requires a great deal of patience. He said Petitioner is professional, reasonable, and rational and he calls for advice when appropriate. He said Petitioner makes very few mistakes. 16. Dr. Wondra stated that Petitioner disclosed his legal history when he was hired and he held nothing back. He said he hired Petitioner on a trial basis and it turned out to be one of his best decisions. He said Petitioner’s past involves the type of thing that he himself might have done as a college student. He said he knowns of two realtors with worse histories than Petitioner so the license denial surprised him. Under cross examination, he stated that it isn’t rational to commit a crime while on probation but it is common. 17. Nancy Bills testified in support of Petitioner as well. She stated that she is Vice President of Biltmore Properties. She noted that Petitioner was honest about his legal history. She hired Petitioner as a Housing Specialist and his job was to work with very challenging clients. Thanks to her contract with a Regional Behavioral Health Authority, Petitioner handled about 250 mentally ill, low income clients and did so extremely well. She found Petitioner to be compassionate and a strong advocate for his clients. She noted his excellent performance and said that she would hire him again if she could. She stated that she believes Petitioner to be of good character and responsible enough to have his license. On cross examination, she acknowledge that since Petitioner started at Biltmore Properties in 2011, she had not known about the criminal trespass or the driving while on a suspended license and that it was not good judgment to commit a criminal act while on probation, but she said in the real world people make mistakes. 18. Kathy McElvain, Special Services Coordinator for Biltmore Properties, testified that she supervised Petitioner when he worked there. She noted that he had an exceptional relationship with the Seriously Mentally Ill clients. She said he was able to work with difficult, volatile people and he was good at de-escalating angry clients. She said Petitioner was very kind to the clients and helped them do their paperwork. She was aware of all of Petitioner’s legal history except for one of the aggravated assault charges, and yet she would have no problem hiring him again. She said she would trust him to do real estate transactions for herself and had no concerns if he was to obtain his license. 19. Walter Hatmaker, the father of Petitioner’s co-parent, testified that he has known Petitioner for about two years and finds that he shows promise at an early age. He said Petitioner is a good listener and he has observed him using good judgment. He said he was aware of Petitioner’s legal history but he has never observed those traits in him and the offenses seem out of character for Petitioner. He said he would like to hire 20 people just like him and would trust Petitioner enough to buy or sell a home through him. CONCLUSIONS OF LAW 1. The Commissioner has jurisdiction over the subject matter in this case. Pursuant to A.R.S. § 41-1092.07(G)(2) and A.A.C. R2-19- 119(B), the Petitioner has the burden of proof in this matter. The standard of proof is by a preponderance of the evidence. See A.A.C. R2-19-119(A). 2. A.R.S. § 32-2153 provides as follows: | | | | | | | |32-2153. Grounds for denial, suspension or revocation of licenses; letters of concern; | | | | |provisional license; retention of jurisdiction by commissioner; definitions | | | | |A. The commissioner may suspend or revoke a license, deny the issuance of a license, issue a | | | | |letter of concern to a licensee, issue a provisional license or deny the renewal or the right of| | | | |renewal of a license issued under this chapter if it appears that the holder or applicant, | | | | |within five years immediately preceding, in the performance of or attempt to perform any acts | | | | |authorized by the license or by this chapter, has: | | | | |1. Pursued a course of misrepresentation or made false promises, either directly or through | | | | |others, whether acting in the role of a licensee or a principal in a transaction. | | | | |2. Acted for more than one party in a transaction without the knowledge or consent of all | | | | |parties to the transaction. | | | | |3. Disregarded or violated any of the provisions of this chapter or any rules adopted by the | | | | |commissioner. | | | | |4. Knowingly authorized, directed, connived at or aided in the publication, advertisement, | | | | |distribution or circulation of any material false or misleading statement or representation | | | | |concerning the licensee's business or any land, cemetery property, subdivision or membership | | | | |campground or camping contract offered for sale in this or any other state. | | | | |5. Knowingly used the term "real estate broker", "cemetery broker" or "membership camping | | | | |broker" without legal right to do so. | | | | |6. Employed any unlicensed salesperson or unlicensed associate broker. | | | | |7. Accepted compensation as a licensee for the performance of any of the acts specified in this | | | | |chapter from any person other than the licensed broker to whom the licensee is licensed, the | | | | |licensed professional corporation of which the licensee is an officer and shareholder or the | | | | |licensed professional limited liability company of which the licensee is a member or manager. | | | | |8. Represented or attempted to represent a broker other than the broker to whom the salesperson | | | | |or associate broker is licensed. | | | | |9. Failed, within a reasonable time, to account for or to remit any monies, to surrender to the | | | | |rightful owner any documents or other valuable property coming into the licensee's possession | | | | |and that belongs to others, or to issue an appraisal report on real property or cemetery | | | | |property in which the licensee has an interest, unless the nature and extent of the interest are| | | | |fully disclosed in the report. | | | | |10. Paid or received any rebate, profit, compensation or commission in violation of this | | | | |chapter. | | | | |11. Induced any party to a contract to break the contract for the purpose of substituting a new | | | | |contract with the same or a different principal, if the substitution is motivated by the | | | | |personal gain of the licensee. | | | | |12. Placed a sign on any property offering it for sale or for rent without the written authority| | | | |of the owner or the owner's authorized agent. | | | | |13. Solicited, either directly or indirectly, prospects for the sale, lease or use of real | | | | |property, cemetery property or membership camping contracts through a promotion of a speculative| | | | |nature involving a game of chance or risk or through conducting lotteries or contests that are | | | | |not specifically authorized under this chapter. | | | | |14. Failed to pay to the commissioner the renewal fee as specified in this chapter promptly and | | | | |before the time specified. | | | | |15. Failed to keep an escrow or trust account or other record of funds deposited with the | | | | |licensee relating to a real estate transaction. | | | | |16. Commingled the money or other property of the licensee's principal or client with the | | | | |licensee's own or converted that money or property to the licensee or another. | | | | |17. Failed or refused upon demand to produce any document, contract, book, record, information, | | | | |compilation or report that is in the licensee's possession or that the licensee is required by | | | | |law to maintain concerning any real estate, cemetery or membership camping business, services, | | | | |activities or transactions involving or conducted by the licensee for inspection by the | | | | |commissioner or the commissioner's representative. | | | | |18. Failed to maintain a complete record of each transaction which comes within this chapter. | | | | |19. Violated the federal fair housing law, the Arizona civil rights law or any local ordinance | | | | |of a similar nature. | | | | |20. Tendered to a buyer a wood infestation report in connection with the transfer of residential| | | | |real property or an interest in residential real property knowing that wood infestation exists | | | | |or that the wood infestation report was inaccurate or false as of the date of the tender or that| | | | |an inspection was not done in conjunction with the preparation of the wood infestation report. | | | | |21. As a licensed broker, failed to exercise reasonable supervision over the activities of | | | | |salespersons, associate brokers or others under the broker's employ or failed to exercise | | | | |reasonable supervision and control over the activities for which a license is required of a | | | | |corporation, limited liability company or partnership on behalf of which the broker acts as | | | | |designated broker under section 32-2125. | | | | |22. Demonstrated negligence in performing any act for which a license is required. | | | | |23. Sold or leased a property to a buyer or lessee that was not the property represented to the | | | | |buyer or lessee. | | | | |24. Violated any condition or term of a commissioner's order. | | | | |25. Signed the name of another person on any document or form without the express written | | | | |consent of the person. | | | | |26. As a licensed school, failed to exercise reasonable supervision over the activities for | | | | |which a license is required for an owner, director, administrator or instructor in the school's | | | | |employ. | | | | |B. The commissioner may suspend or revoke a license, deny the issuance of a license, issue a | | | | |letter of concern to a licensee, issue a provisional license or deny the renewal or the right of| | | | |renewal of a license issued under this chapter when it appears that the holder or applicant has:| | | | |1. Procured or attempted to procure a license under this chapter for the holder or applicant or | | | | |another by fraud, misrepresentation or deceit, or by filing an original or renewal application | | | | |which is false or misleading. | | | | |2. Been convicted in a court of competent jurisdiction in this or any other state of a felony or| | | | |of any crime of forgery, theft, extortion, conspiracy to defraud, a crime of moral turpitude or | | | | |any other like offense. | | | | |3. Made any substantial misrepresentation. | | | | |4. Made any false promises of a character likely to influence, persuade or induce. | | | | |5. Been guilty of any conduct, whether of the same or a different character than specified in | | | | |this section, which constitutes fraud or dishonest dealings. | | | | |6. Engaged in the business of a real estate, cemetery or membership camping broker or real | | | | |estate, cemetery or membership camping salesperson without holding a license as prescribed in | | | | |this chapter. | | | | |7. Not shown that the holder or applicant is a person of honesty, truthfulness and good | | | | |character. | | | | |8. Demonstrated incompetence to perform any duty or requirement of a licensee under or arising | | | | |from this chapter. For the purposes of this paragraph, "incompetence" means a lack of basic | | | | |knowledge or skill appropriate to the type of license the person holds or a failure to | | | | |appreciate the probable consequences of the licensee's action or inaction. | | | | |9. Violated the terms of any criminal or administrative order, decree or sentence. | | | | |10. Violated any federal or state law, regulation or rule that relates to real estate or | | | | |securities or that involves forgery, theft, extortion, fraud, substantial misrepresentation, | | | | |dishonest dealings or violence against another person or failure to deal fairly with any party | | | | |to a transaction that materially and adversely affected the transaction. This paragraph applies | | | | |equally to violations of which the licensee was convicted in any lawful federal or state | | | | |tribunal and to any admissions made in any settlement agreement by the licensee to violations. | | | | |11. Failed to respond in the course of an investigation or audit by providing documents or | | | | |written statements. | | | | |C. A judgment based on a court's finding or stipulation of fraud by a licensee following a trial| | | | |on the merits or a criminal conviction of a licensee that results in a payment from the real | | | | |estate recovery fund is prima facie evidence of a violation and grounds for discipline under | | | | |this section. | | | | |D. The commissioner may deny, suspend or revoke the issuance of a license upon application by a | | | | |corporation, a limited liability company or a partnership if it appears that an owner, officer, | | | | |director, member, manager, partner, stockholder owning ten per cent or more of the stock in the | | | | |corporation or limited liability company or person exercising control of the entity is a current| | | | |or former licensee whose license as a broker or a salesperson has been denied, suspended or | | | | |revoked. | | | | |E. The lapsing or suspension of a license by operation of law or by order or decision of the | | | | |commissioner or a court of law or the voluntary surrender of a license by a licensee shall not | | | | |deprive the commissioner of jurisdiction to do any of the following: | | | | |1. Proceed with any investigation of or action or disciplinary proceeding against the licensee. | | | | |2. Render a decision suspending or revoking the license, or denying the renewal or right of | | | | |renewal of the license. | | | | |3. Assess a civil penalty pursuant to section 32-2160.01. | | | | |F. For the purposes of this section: | | | | |1. "Letter of concern" means an advisory letter to notify a licensee that, while the conduct or | | | | |evidence does not warrant other disciplinary action, the commissioner believes that the licensee| | | | |should modify or eliminate certain practices and that continuation of the activities may result | | | | |in further disciplinary action against the licensee. | | | | |2. "Provisional license" means a license that the department issues and that allows a licensee | | | | |to practice subject to either a consent order as prescribed in section 32-2153.01 or the | | | | |commissioner's terms, conditions and restrictions. | | | | | | | | | | | | | | | | | | | | | | | | |[pic] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

3. The evidence of record established that Respondent’s legal history includes two assaults and numerous alcohol related incidents, yet Petitioner does not acknowledge having any issues with alcohol. Further, Petitioner’s explanation of each incident was notably lacking any documentary support. It seems very unlikely that an aggravated assault charge would go as far as a conviction and 3 years of probation if it arose from accidentally bumping into a police officer, even at a party. It seems equally unlikely that, after arguing with his girlfriend at 3:00 a.m. and following her down the street, his confrontation with the neighbor was as innocent as he made it sound. While Petitioner’s version of the events may well be true, he had the burden[3] to establish his case and he offered no evidence to corroborate it. While Petitioner clearly has some qualities that would recommend him, his numerous experiences with encountering conflict while using alcohol indicate that the potential liabilities that holding a license can impose could result in a situation that would place Petitioner in the position of suffering even further disruption of his life after he has tried so hard to get it back on track. 4. Petitioner has not established that awarding a provisional license would afford sufficient protection to him because it would not be appropriate to take the steps that would be necessary to prevent him from drinking alcohol nor would it be possible to monitor him so closely that a conflict could be prevented from erupting should he reach the stress level that exceeds his patience. For Petitioner’s own sake and the sake of his future, it is recommended that this appeal be denied. RECOMMENDED ORDER Based upon the foregoing considerations, the undersigned Administrative Law Judge hereby recommends to the Arizona Department of Real Estate Commissioner that this appeal be denied.

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 shall be five days from the date of the certification. Done this day, August 20, 2015.

/s/ Dorinda M. Lang Administrative Law Judge

Transmitted electronically to:

Judy Lowe, Commissioner Arizona Department of Real Estate ----------------------- [1] See Department Exhibit 2. [2] Department Exhibit 4. [3] See A.R.S. § 41-1092.07(G)(1).

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