ALJDEC decisions subject to certification as final

17F-DI-256-REL · Department of Real Estate · 2017-08-07

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

In the Matter of the Application for Original Real Estate Salesperson License of:

ERIC NELMS, holder of license number SA671436000 (Candidate),

Petitioner.

No. 17F-DI-256-REL

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: July 18, 2017

APPEARANCES: Eric Nelms represented himself. Assistant Attorney General Ryan Krench represented the Department of Real Estate.

ADMINISTRATIVE LAW JUDGE: Kay A. Abramsohn

_____________________________________________________________________

Having heard the evidence and testimony and having considered the record in this matter, the undersigned Administrative Law Judge hereby makes the following Findings of Fact and Conclusions of Law and issues the following Recommended Decision to the Commissioner of the Arizona Department of Real Estate.

FINDINGS OF FACT

On May 5, 2017, Petitioner submitted an application for a real estate sales person’s license to the Arizona Department of Real Estate (“Department”).

On May 11, 2017, the Department issued Petitioner a letter informing him of its intent to deny the application on the basis of A.R.S. §32-2153(B)(2) and (B)(7).

When Petitioner appealed, the matter was set for hearing with the Arizona Office of Administrative Hearings, an independent state agency.

The Notice of Hearing indicated the Department’s position that grounds existed to deny Petitioner’s original application for a real estate salesperson’s license based on the violations of A.R.S. §32-2153(B)(2) and (B)(10).

At hearing, the Department presented the basis for its decision to deny Petitioner’s license application. The reasons include two convictions in Ohio, both in June of 2011.

The first conviction was for Assault (misdemeanor, a lesser included offense to one of the other charges). A jury trial gave a verdict on the charge of Assault but failed to convict on Aggravated Assault, Kidnapping, Menacing, and Intimidation; he was fined and released. The incident sprang from Petitioner taking his girlfriends’ car against her wishes so he could go take an exam and she got in the car with him.

The second conviction was for Trafficking (felony) and Attempted Escape (felony) After being pulled over for speeding, and marijuana being found in his car, on his guilty plea, the court sentenced Petitioner to 60 days in jail, 2 years’ probation, 6-month loss of driving privileges, 100 hours of community service, and requirements to maintain employment and maintain random drug and alcohol-free screens.

The Department alleged that Petitioner had violated state law regarding demonstrating violence against another person in violation of A.R.S. § 32-2153(B)(10) and had been convicted of a felony in violation of A.R.S. § 32-2153(B)(2).

Petitioner does not dispute the felony conviction. A court having determined a factual basis for the plea, a voluntary guilty plea to a crime establishes that the person committed the acts that constituted the crime.

At hearing, the Department argued that the license should not be granted as Petitioner was convicted of a felony and had demonstrated violence against another person. The Department requested that the license denial be upheld.

At hearing, Petitioner openly acknowledged the incidents and his youth and irresponsible behavior at those times. However, Petitioner requested consideration of his different circumstances now because those times were in the past, he was an Air Force veteran, he had turned his life around, and he had earned a mechanical engineering degree. Petitioner argued that he had obtained a fingerprint clearance card on a good cause exception and, because you had to first have the fingerprint clearance card to apply for a real estate license, he believed that this was an indication that he should be allowed to obtain a real estate license.

Petitioner indicated that he had created a property management company but that it was not yet up and running. He indicated that he had worked in that field in Ohio.

CONCLUSIONS OF LAW

This hearing was conducted in accordance with Arizona Revised Statutes (“A.R.S.”) § 41-1092.01 et seq. Petitioner has the burden of proof and the standard of proof on all issues is by a preponderance of the evidence. See Arizona Administrative Code (“A.A.C.”) R2-19-119.

A.R.S. § 32-2153 provides as follows:

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 has:

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.

7. Not shown that the holder or applicant is a person of honesty, truthfulness and good character.

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.

The Commissioner is authorized under A.R.S. § 32-2153 to deny licenses for a felony conviction, the conviction of a violent crime or in the circumstances of lack of good character. The Department’s concerns in these areas are legitimate. A person with a criminal record must be given close scrutiny and careful consideration when he or she applies for a professional license. In the event of past criminal convictions or the lack of good character, good character is not automatically regained by passage of time or self-serving testimony. The conviction of a crime is not a permanent bar to being licensed.

The Department withdrew, as one of its denial bases, the allegation of a violation of A.R.S. § 32-2153(B)(7). However, with the Notice of Hearing, two allegations remain, the felony conviction and acts of violence against another person.

Petitioner has the burden of proving by the preponderance of the evidence that he has resolved the conduct issues that led to the actions that resulted in the conviction, that the public would be protected from any such actions, and that he has sufficient good character and reputation to satisfy the statutory requirements for licensure as a real estate salesperson.

Based on the evidence presented, the Administrative Law Judge found that Petitioner has not completely met this burden. While the text of the Ohio statute regarding a misdemeanor lessor included offense is not known, the overall circumstances that led to the Ohio Assault conviction do not appear to demonstrate any particular act of violence against his then-girlfriend, and the jury did not convict of Aggravated Assault, Intimidation, Menacing or Kidnapping. With more evidence, the Tribunal might have determined that this circumstance did not fall within A.R.S. § 32-2153(B)(10). However, the more problematic of Petitioner’s circumstances to be considered in this matter is the felony conviction. There is no time limit regarding a felony conviction with regard to balancing the existence of a conviction against the possible issuance of a license. Petitioner credibly explained and described himself and his dealings since 2011, his attaining a specialized degree, and moving to Arizona. However, Petitioner brought forth no objective character references in support of Petitioner and his current character.

The fact of fingerprint clearance does demonstrate that Petitioner met the statutory requirements for a good cause exception to the initial denial; however, that fact does not equate to the considerations that the Department must undertake. For example, while a provisional license could have been considered in this matter, the hearing record provided no practice-monitoring opportunities with any particular licensed agent or broker. More is needed to assure and balance the Department’s need to regulate applicants with an applicant’s desire to better themselves through the pursuit of professional success in the real estate field.

RECOMMENDED ORDER

Based on the foregoing, it is recommended that the Department’s denial be upheld at this time and that Petitioner’s 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 7, 2017.

/s/ Kay A. Abramsohn

Administrative Law Judge

Transmitted electronically to:

Judy Lowe, Commissioner

Arizona Department of Real Estate