ALJDEC decisions subject to certification as final

19F-180-REL · Department of Real Estate · 2019-02-14

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 25, 2019 APPEARANCES: Tracy Bensch represented herself. Assistant Attorney General Deian Ousounov 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 1. On November 7, 2017, Petitioner submitted an application for a real estate salesperson’s license to the Arizona Department of Real Estate (“Department”).[1] 2. On November 14, 2018, the Department issued Petitioner a letter informing her of its intent to deny the application on the basis of A.R.S. §32-2153(B)(7) and (B)(10).[2] 3. When Petitioner appealed,[3] the matter was set for hearing with the Arizona Office of Administrative Hearings, an independent state agency.[4] 4. 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 alleged violations of A.R.S. § 32-2153(B)(7) and (B)(10). 5. At hearing, the Department presented the basis for its decision to deny Petitioner’s license application. The reasons include criminal complaints, pleas, judgments and probation periods (not yet ended) from the time frame of May 2014 through October 2016.[5] 6. In May 2014, Petitioner pled guilty to and was convicted of Extreme DUI, a misdemeanor in Lake Havasu Consolidated Court, Case MTR201400611.[6] She was sentenced to three years of probation, 30 days in jail, counseling, and fines and fees. 7. In June 2014, Petitioner pled guilty to and was convicted of Interfering with Judicial Proceedings, a misdemeanor in Lake Havasu City Consolidated Court, Case MTR201400777.[7] She was sentenced to two years of probation and a fine. 8. In June 2014, Petitioner pled guilty and was convicted of DUI with BAC of .08 or more, a misdemeanor in Lake Havasu City Consolidated Court, Case MTR201401589.[8] She was sentenced to five years of probation, jail time, counseling, community service, and fines and fees. 9. In October 2016, Petitioner pled guilty and was convicted of Assault/DV, a misdemeanor, and of Disorderly Conduct/DV, a misdemeanor, in Lake Havasu Consolidated Court, Case MCR201601161.[9] She was sentenced to three years of probation, jail time, and fines and fees. 10. Petitioner does not dispute the pleas or convictions. 11. 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. 12. 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, through those actions, demonstrated that she was not a person of good character in violation of A.R.S. § 32-2153(B)(7).

13. At hearing, the Department argued that the license should not be granted as Petitioner was convicted of DUIs and Assault and Disorderly Conduct, thus documenting violence against another person. The Department expressed concern that Petitioner would not follow applicable law and regulatory requirements for real estate agents because she had not followed the court-ordered condition about not drinking intoxicating liquors at any time during a probation period. The Department requested that the intent to deny licensure be upheld. 14. At hearing, Petitioner openly acknowledged the 2014 and 2016 incidents. Petitioner also admitted that, in approximately 1991, when she turned 21, she had had a DUI offense in another state; however, she credibly related that it was her understanding that prior offense was now “closed” and “off the record” after seven years and, based on that understanding, that was why she had not described it with her application.[10] 15. Petitioner requested consideration of the circumstances then versus the changes and recovery she has made in her life since the 2016 incident. Petitioner included with her original application several handwritten pages explaining the 2014 and 2016 incidents, regarding she and her husband’s move to Lake Havasu City, her husband’s infidelity, her divorce, her deep depression and drinking from such circumstances, and her sister dying in January 2017.[11] 16. Since the 2016 incident and her sister’s death, Petitioner has turned her life around; she no longer drinks. She no longer associates with the persons with whom she previously drank alcohol and she has new friends through new relationships and church. She has performed community service, attended counseling programs, learned about skills to control her drinking, and continues to have individual counseling. 17. Petitioner has been working since October 2017 in a real estate business, Londonderry Realty Inc., as an assistant.[12] Because the person is retiring in June of this year, Petitioner hopes to be licensed so that she may become the Association Manager with Londonderry Realty, Inc. The Realtor for that company recommended that Petitioner be given a license.[13] 18. Petitioner obtained a fingerprint clearance card; it was obtained on a good cause exception. A fingerprint clearance card is required for the application. At hearing, she provided copies of references she had utilized in that process, one of which was from the current Property Manager at Londonderry Realty, Inc.[14] CONCLUSIONS OF LAW 1. 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. 2. 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. 3. 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 because the Department relies on the person, once licensed, to follow any and all applicable laws and rules. Generally, 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. However, the conviction of a crime is not a permanent bar to being licensed. 4. Petitioner has the burden of proving by the preponderance of the evidence that she has resolved the conduct issues that led to the actions that resulted in the convictions, that the public would be protected from any such actions, and that she has sufficient good character and reputation to satisfy the statutory requirements for licensure as a real estate salesperson. 5. The Department alleged that Petitioner violated A.R.S. § 32- 2153(B)(10) through violence against another person and violation of A.R.S. § 32-2153(B)(7) through actions of continued drinking and driving, allegedly demonstrating that she was not a person of good character.[15] 6. There are no allegations of, or convictions of, felonies involving forgery, theft, extortion, or conspiracy to defraud. Such actions are possible bases for license denial, as set forth in A.R.S. § 32- 2153(B)(2). 7. There are no allegations of, or any violations relating to, any of the following: real estate or securities; forgery, theft, extortion, fraud, substantial misrepresentation or dishonest dealings; or, a failure to deal fairly with any party to a transaction that materially and adversely affected the transaction. Such actions are possible bases for license denial as set forth in A.R.S. § 32-2153(B)(10). 8. Based on the evidence presented, the Administrative Law Judge concludes that the incidents regarding the alcohol consumption and ensuing DUIs, and the one incident that involved pushing and/or shoving another person, were not due to lack of good character on the part of Petitioner but due to the circumstances and her, then, lack of a skill set combined with the concurrent mental status of depression, to more appropriately deal with those circumstances. The existence, or not, of a possible “pattern” of behavior as to DUIs was not demonstrated to be anything other than the same set of circumstances Petitioner was faced with. Further, the hearing record shows no felonious activity, such as those specifically itemized above in Conclusion of Law #7 that are set forth in A.R.S. § 32-2153(B)(10) or those felonies that are set forth in A.R.S. § 32-2153(B)(2), the recent nature of which would clearly call for a licensure to be denied in the absence of any redeeming changes. 9. Based on the foregoing, the Administrative Law Judge concludes that Petitioner has met her burden to demonstrate, by a preponderance of the evidence, that she has resolved the conduct issues that led to the actions that resulted in the aforementioned convictions, that she has sufficient good character and reputation to satisfy the statutory requirements for licensure, and that the public would now be protected from any such actions in the event that Petitioner is given a provisional licensure as a real estate salesperson. 10. Such a conclusion should not be read to be condoning the use of alcohol and downplaying the existence of the DUI pleas and convictions in considering whether or not a license denial was appropriate. However, the totality of the evidence, including the credible testimony regarding changes in Petitioner’s life, attitude, and circumstances, leads the Administrative Law Judge to conclude that Petitioner could be granted a provisional license with extensive conditions set forth, emphasizing the violations of which could result in termination of a licensure.[16] RECOMMENDED ORDER Based on the foregoing, it is recommended that the Department’s denial be reversed and that the Department grant Petitioner’s appeal only in so far as the issuance of a provisional licensure, with the conditions and requirements determined by the Commissioner to be necessary for protection of the public, in the event that Petitioner obtains a practice monitor. 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, February 14, 2019.

/s/ Kay A. Abramsohn Administrative Law Judge

Transmitted electronically to:

Judy Lowe, Commissioner Arizona Department of Real Estate

----------------------- [1] See Exhibit 1. The pending application was given the license number of SA681507000. [2] See Exhibit 14. [3] See Exhibit 15. [4] See Administrative Record. [5] At hearing, Petitioner indicated that her probation period ends in June of 2019. [6] See Exhibits 3 and 4. [7] See Exhibits 5, 6, and 7. At hearing, Petitioner explained that this charge resulted from her refusal to take a breathalyzer test at the time of the first DUI. [8] See Exhibits 8, 9, and 10. [9] See Exhibits 11, 12, and 13. At hearing, Petitioner explained that she had been out drinking, had run into her ex-husband with his new girlfriend and, after various comments were exchanged, she had become disorderly, pushed someone and broke an ashtray; she had noted that the six various charges were, essentially, gathered into the two charges of assault and disorderly conduct. See Exhibits 11 and 13. [10] For consideration purposes, the Department’s concern is that Question #13 on the application is quite specific in seeking disclosure of any and all convictions or pleas in any state. [11] The Department split up these pages among Exhibits 1, 2, 5, 8, and 11.

[12] See Exhibit A. [13] Id. [14] See Exhibit I. [15] Based on the hearing testimony regarding a 1991 drinking incident and conviction, the Department also raised concerns at hearing regarding Petitioner’s truthfulness in not disclosing the 1991 conviction. However, the Administrative Law Judge concluded that this failure was simply her misunderstanding of what she believed to be the status of that 1991 matter as “closed” and, therefore, not relevant. [16] Petitioner’s current employer did not offer, in her recommendation letter, to be a practice monitor for Petitioner for a provisional licensure. Petitioner is required to have a practice monitor in order to obtain a provisional licensure.

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