ALJDEC decisions subject to certification as final

19F-021-REL · Department of Real Estate · 2018-11-16

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 01, 2018 at 1:30 PM. APPEARANCES: Ronald Washington, Esq., appeared on behalf of Jimmie Nelson (“Petitioner”) with Petitioner as a witness. Assistant Attorney General Deian Ousounov, Esq. appeared on behalf of the Arizona Department of Real Estate (“Department”) with Wayne Jackson as a witness. Dan Jones and Susan Hack observed. ADMINISTRATIVE LAW JUDGE: Jenna Clark. _____________________________________________________________________ After review of the hearing record in this matter, the undersigned Administrative Law Judge makes the following Findings of Fact and Conclusions of Law, and issues this Recommended Order to the Director of the Registrar.

FINDINGS OF FACT Petitioner’s Application 1. On or about July 09, 2018, Petitioner filled out an application to be licensed as a real estate salesperson with the Department. It was received by the Department on July 16, 2018. 2. Petitioner answered “yes” to the following question on the application: “Has the Applicant . . . [b]een convicted and/or entered into a plea agreement and/or a plea of NOLO CONTENDERE (no contest) to ANY felony in Arizona and/or any other state, whether or not the plea or verdict was set aside, judgment or sentencing was deferred, conviction was dismissed or expunged, or has been pardoned?”[1]

(Emphasis included in original.)

3. Petitioner attached three written explanations of his “yes” answer to his application where he detailed the following: a. On March 10, 1999, Petitioner plead guilty to Unlawful Possession of a Narcotic Drug for Sale, Cocaine Base, a Class 2 Felony, in Pima County Superior Court. Petitioner was sentenced to three years of probation, ordered to pay a $3,200.00 fine, complete 360-hours of community service, complete outpatient treatment, and conduct random drug testing.[2] On December 16, 2011, Pima County Superior Court set aside Petitioner’s conviction and restored his civil rights.[3] b. On August 30, 2002, Petitioner plead guilty to Misconduct Involving Weapons, a Class 4 Felony, in Pima County Superior Court.[4] Petitioner was sentenced to three years of probation. On January 17, 2012, Pima County Superior Court set aside Petitioner’s conviction and restored his civil rights.[5] c. On November 03, 2015, Petitioner plead guilty to Driving While Under the Influence, a Class 1 Misdemeanor, in Pima County Justice Court.[6] Petitioner was sentenced to one day in jail, twelve months of unsupervised probation, ordered to complete an alcohol education and/or treatment program, attend a MADD/Victim Impact Panel, and pay a fine of $1,500.00.[7] 4. On July 20, 2018, the Department issued an Intent to Deny Application letter to Petitioner.[8] 5. On August 07, 2018, the Department received a timely appeal letter from Petitioner.[9] 6. The Department referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. On August 24, 2018, a Notice of Hearing was issued citing the issue for hearing as whether grounds exist to affirm the Department’s intent to deny Petitioner’s application for a real estate salesperson’s license. Hearing Evidence

7. Petitioner testified on his own behalf and submitted twenty-four exhibits. The Department submitted fourteen exhibits and called Wayne Jackson to testify as a witness. Petitioner’s testimony 8. At the hearing, Petitioner opined that each of his guilty pleas evinced his intent to take responsibility and accept the legal consequences for his actions. Regarding his first two convictions, Petitioner implored the tribunal to consider his socio-economic background and childhood trauma as mitigating evidence for the underlying conduct which lead to his felony conviction. Petitioner also beseeched the tribunal to consider the remoteness in time of his felony conviction. Regarding his third and final conviction, Petitioner contended that he was embarrassed and ashamed of his unlawful conduct. Petitioner testified that he felt the more he tried to shed his past the more he felt it held him back. 9. Petitioner testified that he witnessed multiple instances of domestic violence as a young child. Per Petitioner, his father was a serviceman in the United States Military and stationed abroad when he was very young. His mother relocated to the greater Tucson, Arizona area with him to escape his father’s abuse. Petitioner’s mother began to self- medicate shortly after returning stateside. Soon afterward Petitioner’s mother became a drug addict and repeat criminal offender.[10] Petitioner was sent to live with his grandparents in Jollyville, Arizona.[11] Per Petitioner, Jollyville was a crime-laden neighborhood during the time he grew up. The neighborhood was consumed by drug addiction and controlled by gang activity. Petitioner testified that even though he never belonged to a gang, if a gang member asked or instructed him to do something he would for fear of retaliation against himself or someone else he cared about if he failed to oblige them. 10. Petitioner testified that he moved out of his grandparents’ home and into his own apartment with a girlfriend shortly after graduating high school. Per Petitioner, an uncle of his would intermittently reside with them. Petitioner testified that his uncle was a drug user and occasional drug seller, and that one day the police raided their apartment in search of his uncle and his uncle’s narcotics. Although the uncle was not present, police found drugs and money inside the apartment. Petitioner was told by the police that either he or his girlfriend would be arrested for the illegal drugs. Petitioner agreed to be arrested, and later agreed to plead guilty on the drug charge. 11. Petitioner testified that while he was on probation for his felony drug conviction, a gang member asked him to deliver a gun to an acquaintance from his neighborhood. That same acquaintance was later arrested on homicide charges and told police that the weapon he had used to commit the crime was obtained from Petitioner. Although it was unclear to Petitioner whether the gun he provided Acquaintance was used in the commission of a crime, Petitioner admitted to having possessed the gun in violation of the terms of his probation. He later plead guilty to the weapons possession charge after arrest. 12. Petitioner testified that in the thirteen years that followed his weapons conviction that he behaved as a model citizen. During that time Petitioner established his own flourishing business whereby he coaches youth basketball and mentors young people.[12] Petitioner obtained a fingerprint clearance card in order to open his business, which has been in good standing ever since he got it on October 23, 2013.[13] Petitioner got married, had four children, and moved his family out of Jollyville into a single family home in the suburbs of Tucson, Arizona.[14] By his example, and with his guidance, Petitioner’s children are excelling academically, athletically, and socially. 13. Petitioner acknowledged that he exercised poor judgement in fall of 2015 whereby he drove a vehicle while impaired from alcohol. Petitioner admitted that due to his impairment from alcohol he veered out of his lane while driving, which could have resulted in harm to himself or another. Petitioner later plead guilty to a DUI charge. 14. Petitioner testified that he wanted a real estate salesperson’s license because he wanted to make a larger difference in his community and further provide for his family. To support his contention, Petitioner submitted two employment offer letters and one character reference letter.[15] The author of Petitioner’s first employment offer letter volunteered to monitor Petitioner if the Department issued Petitioner a provisional license.[16] 15. Petitioner emphatically denied that he ever lied on his real estate salesperson’s application, and that he did not understand why the Department questioned his honesty, truthfulness, or good character, as he had admitted his prior convictions and provided the Department with written explanations for each of them.[17] Petitioner testified that if the Department had asked for more information regarding his convictions, or anything else, he would have gladly provided it to them. Wayne Jackson’s testimony 16. At the hearing, the Department contended that Petitioner’s felony conviction from 1999 constituted a violation of Ariz. Rev. Stat. § 32- 2153(B)(2). The Department further contended that, while Petitioner had not lied on his application, he was not forthcoming about the underlying conduct related to his prior convictions, thus they believed he was also in violation of Ariz. Rev. Stat. § 32-2153(B)(7). As such, the Department argued that grounds existed to deny Petitioner’s application for a real estate salesperson license. 17. Mr. Jackson (“Investigator Jackson”) testified that he is a Senior Investigator with the Department. His primary job duty is to determine licensure applicant eligibility. Investigator Jackson testified that he did not originally review Petitioner’s application, but did review Petitioner’s entire file after his real estate salesperson’s license application was marked for denial. Investigator Jackson could not say whether the Department informed Petitioner that they felt his statements were insufficient and/or whether the Department afforded Petitioner an opportunity to provide a more detailed statement for each conviction prior to issuing their Intent to Deny Application letter. 18. Per Investigator Jackson, in order for an applicant for a real estate salesperson’s license to be approved for licensure the applicant must be professionally and morally qualified. Investigator Jackson testified that because licensees engage in public dealings, earnest money, and contracts, that they have to possess good moral character and be truthful. 19. Investigator Jackson testified that he had concerns about Petitioner’s ability to be forthcoming and honest because he believed the three written statements Petitioner provided along with his application were vague. Specifically, Investigator Jackson testified that statements, “lack transparency and truthfulness.” Investigator Jackson opined that each statement lacked sufficient detail for the Department to glean a clear understanding regarding the underlying conduct which resulted in each of Petitioner’s convictions. Investigator Jackson also testified that he believed Petitioner’s statements failed to take on an appropriate amount of responsibility for the underlying criminal activity Petitioner was convicted of, and attempted to minimize his involvement in the crimes and avoid accountability. Investigator Jackson accused Petitioner of being able to recall the events in greater detail than what was included in his statements, but did not provide further explanation for the basis of his contention. 20. Investigator Jackson testified that Petitioner’s real estate salesperson’s license application was ultimately denied because Petitioner had been convicted of a felony, and the Department believed he was not a truthful person. CONCLUSIONS OF LAW 1. Because at all times relevant to this matter Respondent was subject to the provisions of Title 32, Chapter 20, Arizona Revised Statutes, the Commissioner of the Department has jurisdiction over Respondent and the subject matter in this case. 2. The case was properly brought before the Office of Administrative Hearings for adjudication pursuant to Title 2, Chapter 19, Article 1, of the Arizona Administrative Code. 3. Pursuant to Ariz. Rev. Stat. § 41-1092.07(G)(2) and Ariz. Admin. Code R2-19-119(B), the Petitioner bears the burden of proof in this matter to establish that he is rehabilitated and that he meets statutory qualifications for a real estate salesperson’s license. The standard of proof is by a preponderance of the evidence.[18] 4. A preponderance of the evidence is “such proof as convinces the trier of fact that the contention is more probably true than not.”[19] 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.”[20] 5. Ariz. Rev. Stat. § 32-2153(B) provides, in pertinent parts, 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. * * * 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. * * *

6. The legislature has charged the Department with protecting the public and consumers who deal with licensed salespersons when it issues licenses.[21] An application with a criminal record must be given close scrutiny and careful consideration when one applies for a professional license. However, the conviction of a crime is not a permanent bar to being licensed. A real estate salesperson’s license is a privilege, not a right. The Department has discretion[22] to grant or deny a license to an applicant under Ariz. Rev. Stat. § 32- 2153(B).[23] 7. The issue in this case is, in light of Petitioner’s drug conviction nearly twenty years ago and the positive acts that he has performed since, whether Petitioner can be trusted at this time to be responsible in his dealings with his clients and members of the public if the Department grants him a real estate salesperson’s license. 8. The definition of what constitutes good character, or a lack thereof, is not codified by the legislature. Former United States Supreme Court Justice Frankfurter noted, “No doubt satisfaction of the requirement of moral character involves an exercise of delicate judgment on the part of those who reach a conclusion.”[24] 9. The time period required for a license applicant to establish rehabilitation is commensurate with the period of misconduct and the severity of the offenses. Nineteen years have passed since Petitioner’s drug conviction, and sixteen years have passed since his weapons possession conviction. Since that time Petitioner has established his own business for which he was granted a fingerprint clearance card, obtained monitoring agreements and job offers from several licensed real estate agents, raised a family whereby all of his children are thriving in every conceivable sense, and has lived an irreproachable and upright personal and professional life. Petitioner’s 2015 DUI conviction gives pause for concern, however, Petitioner’s conduct since that time raises confidence in his ability to maintain appropriate and lawful conduct. Petitioner credibly testified, as was corroborated by undisputed evidence, that he has learned from his past mistakes. 10. Petitioner did not dispute that he was convicted of a felony on March 10, 1999, or that he was convicted of misdemeanors on August 30, 2002, and November 03, 2015. Petitioner’s explanations of the offenses were credible. It is clear from the evidence that Petitioner truthfully informed the Department of all three of his convictions, and provided them with written insight for each one. None of Petitioner’s convictions involve crimes of fraud, dishonest dealings, or crimes of moral turpitude. 11. Petitioner’s criminal history rightly gave the Department cause for concern, but said concern should not prevented the Department from issuing a real estate salesperson’s license upon finer review. The 1999 and 2002 convictions are too remote and should not be given consideration. Although the 2015 DUI conviction is concerning, the underlying conduct appears to be isolated and not an indication that Petitioner has a problem with alcohol. 12. After closely scrutinizing the underlying conduct which resulted in Petitioner’s three criminal convictions, as well as the convictions themselves, and after careful consideration of Petitioner’s past and behaviors over the course of the past nineteen years, this tribunal holds that Petitioner has established by a preponderance of the evidence that he is fully rehabilitated and that the public does not need any protection from him. The record reflects that Petitioner is an honest and truthful man of good character, and a pillar in his community. Having satisfied all other statutory requisites to licensure, Petitioner shall be granted a real estate salesperson’s license. RECOMMENDED ORDER Based upon the foregoing facts and conclusions of law, IT IS RECOMMENDED that the Department Commissioner to reverse the Department’s July 20, 2018 Intent to Deny Application for Original Salesperson’s License No. SA678498000. It is FURTHEr recommended that Petitioner Jimmie Nelson be issued a two-year provisional salesperson’s license upon the effective date of the Final Order entered in this matter. 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, November 19, 2018.

/s/ Jenna Clark Administrative Law Judge

Transmitted electronically to:

Judy Lowe, Commissioner Arizona Department of Real Estate ----------------------- [1] See Department Exhibit 1. [2] See Department Exhibit 4. [3] See Department Exhibit 5. [4] See Department Exhibit 9. [5] See Department Exhibit 10. [6] See Department Exhibit 12. [7] See Department Exhibit 13. [8] See Department Exhibit 14. [9] See Department Exhibit 15. [10] See Petitioner Exhibit Y. [11] Jollyville, AZ was renamed Silvercroft, AZ in or around September of 2012. See https://www.tucsonaz.gov/apps/associations-and-neighborhood- maps/neighborhoods/silvercroft/NBH121. [12] See Petitioner Exhibits H-J. [13] See Petitioner Exhibit D. [14] See Petitioner Exhibits E-G and K-X. [15] See Petitioner Exhibits A-B and C, respectively. [16] See Petitioner Exhibit A. [17] See Department Exhibits 2, 6, and 11. [18] See Ariz. Admin. Code R2-19-119(A). [19] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [20] Black’s Law Dictionary 1182 (6th ed. 1990). [21] See Laws 1992, Ch. 14, § 3. [22] See Ariz. Rev. Stat. § 32-2153(B) (“The commissioner may . . . deny the issuance of a license” under certain circumstances (emphasis added)). [23] See, e.g., Matter of Rivkind, 164 Ariz. 154, 160-61, 791 P.2d 1037, 1043-44 (1990) (“[C]ourts are uniformly impressed by an attorney’s sincere efforts at rehabilitation and contrition, especially if such efforts demonstrate that the public and the legal system are unlikely to suffer a risk of future misconduct.”); Application of Spriggs, 90 Ariz. 387, 388-90, 368 P.2d 456 (1962) (where 4 years had passed since conviction for income tax evasion and evidence showed rehabilitation, applicant readmitted to bar without being required to pass bar exam again); Ulrich v. Board of Funeral Service, 289 Mont. 407, 961 P.2d 126 (1998) (“[A]n applicant whose license has been denied or revoked due to a criminal conviction . . . is entitled to apply for reinstatement and he is entitled to a full hearing . . . .”); cf. Matter of Wines, 135 Ariz. 203, 205-06, 660 P.2d 454, 456-57 (1983) (after considering circumstances of conviction as well as respondent’s poor prior record, Arizona Supreme Court did not disbar attorney but instead suspended him for a period of 5 years, with credit for 16 months interim suspension during pendency of proceedings). [24] Schware v. Board of Bar Examiners of the State of New Mexico, 353 U.S. 232, 248, 77 S. Ct. 752, 761 (1957) (citation omitted; concurring opinion).

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Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826