ALJDEC decisions subject to certification as final

19F-190-REL · Department of Real Estate · 2019-03-18

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: March 4, 2019 APPEARANCES: Dirk Wayne on his own behalf; Deian Ousounov, Esq. for the Department of Real Estate ADMINISTRATIVE LAW JUDGE: Thomas Shedden FINDINGS OF FACT 1. On January 7, 2019, the Arizona Department of Real Estate (“Department”) issued a Notice of Hearing and Complaint setting the above-captioned matter for hearing on February 13, 2019 at the Office of Administrative Hearings in Phoenix, Arizona. 2. The matter was continued and the hearing was conducted on March 4, 2019. 3. The Notice of Hearing provided that the hearing was being held to determine whether grounds exist to affirm the intent to deny Petitioner Dirk Wayne’s application for a real estate salesperson’s license. Mr. Wayne was formerly known as Derk Wayne Schutmaat, and is referred by that name in many of the exhibits entered into evidence. 4. Through the Notice of Hearing, the Department alleges that Mr. Wayne has violated Ariz. Rev. Stat. sections 32-2153(B)(2), (B)(5), (B)(7), and (B)(10). 5. The Department presented the testimony of senior investigator Wayne L. Jackson. Mr. Wayne appeared and responded to questions from the Department, but presented no other testimony or evidence. 6. On November 8, 2018, the Department received Mr. Wayne’s application for a salesperson’s license. 7. With his application, Mr. Wayne disclosed that he had been convicted of a felony, convicted of a misdemeanor, and that he had had professional licenses revoked or suspended. 8. On or about December 22, 2008, Mr. Wayne pleaded nolo contendre to two counts of embezzlement and one count of embezzlement, forgery, fraud or identity theft from an elderly victim in the Superior Court of California.[1] Mr. Wayne was convicted of the crimes and sentenced to 365 days in jail and five years of probation. On June 14, 2012, the Court dismissed the case and reduced the felonies to misdemeanors. 9. On May 27, 2009, the California State Bar Court issued a Recommendation of Summary Disbarment based on Mr. Wayne’s criminal convictions. Mr. Wayne was disbarred on November 19, 2009. 10. The California State Bar’s records show that in 2006 the Bar had charged Mr. Wayne with 30 counts of misconduct in nine matters, many involving misappropriating money from clients. The Bar’s records also show that in May 2001 Mr. Wayne had been suspended from the practice of law for stipulated violations involving money: failing to notify a client of the receipt of settlement funds; charging an unconscionable fee; and issuing at least 25 checks from a client trust account for expenses not related to the client. 11. Through an Order dated July 29, 2002, the California Department of Real Estate revoked Mr. Wayne’s real estate licenses based on the actions that led the California Bar to suspend his law license in May 2001. The California Department of Real Estate did allow for the issuance of a restricted real estate broker’s license to Mr. Wayne provided that he submitted an application and fees in a timely manner. 12. Through a Decision dated December 22, 2009, the California Department of Real Estate revoked Mr. Wayne’s licenses effective on January 12, 2010. 13. Through an Order Denying Reinstatement of License dated May 5, 2015, the California Bureau of Real Estate denied Mr. Wayne’s request to have his licenses reinstated. In that Order, the Bureau found that Mr. Wayne failed to take responsibility for his felony convictions, that in his application he had failed to disclose unpaid debt and tax liens, and that he was not sufficiently rehabilitated for reinstatement. 14. At the hearing, Mr. Wayne denied that he had refused to take responsibility for his felony convictions and he testified to the effect that he did not know why that finding was included in the May 5, 2015 Order Denying Reinstatement, but added that attempts to defend oneself or to offer evidence in mitigation can be taken as minimizing or denying responsibility for one’s actions. 15. Through a letter dated November 20, 2018, the Department informed Mr. Wayne that his request for a license had been denied based on his criminal convictions, his disbarment in California, and the revocation of his California real estate licenses. 16. Mr. Jackson testified as to the Department’s concerns that Mr. Wayne has engaged in a pattern of misconduct involving financial matters dating back to 1997, and that there would be a risk to the public if he was granted a salesperson’s license. 17. Mr. Wayne acknowledged that he had made mistakes in his real estate activities, but he added that he had conducted hundreds if not thousands of transactions and had as many as 100 agents working for him. As such, he felt mistakes were inevitable and his opinion was that how these mistakes were dealt with is what matters. Mr. Wayne acknowledged that he had breached fiduciary duties by depositing money into the wrong accounts. CONCLUSIONS OF LAW 1. Mr. Wayne bears the burden of persuasion. Ariz. Rev. Stat. § 41- 1092.07(G)(1). 2. The standard of proof on all issues in this matter is that of a preponderance of the evidence. Ariz. Admin. Code § R2-19- 119(A). 3. A preponderance of the evidence is: The greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other. Black’s Law Dictionary 1373 (10th ed. 2014).

4. Ariz. Rev. Stat. sections 32-2153(B) provides in pertinent part: 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: *** 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. *** 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. *** 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. 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.

5. The fact that a criminal conviction has been set aside does not render that conviction a nullity and the Department may consider Mr. Wayne’s convictions in its licensing determination. See Parsons v. Ariz. Dep’t of Health Servs., 242 Ariz. 320, 395 P.3d 709 (App. 2017). 6. Mr. Wayne was convicted of embezzlement and forgery, and he was suspended from the practice of law in California for matters including misappropriation of money from clients. Mr. Wayne has violated Ariz. Rev. Stat. sections 32-2153(B)(2), (B)(5), (B)(7) and (B)(10). 7. Consequently, the Department’s Commissioner has authority to deny Mr. Wayne’s application. 8. Considering the facts and circumstances of this matter, including that Mr. Wayne presented no character witnesses, Mr. Wayne has not met the burden of proof to show that his application should be granted. RECOMMENDED ORDER IT IS ORDERED that Dirk Wayne’s application for a real estate salesperson’s license is 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 is five days after the date of that certification.

Done this day, March 18, 2019.

/s/ Thomas Shedden Thomas Shedden Administrative Law Judge

Transmitted electronically to:

Judy Lowe, Commissioner Arizona Department of Real Estate

----------------------- [1] Some of the documents in the record show that Mr. Wayne entered a guilty plea to these charges.

-----------------------

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