ALJDEC decisions subject to certification as final

19F-217-REL · Department of Real Estate · 2019-03-20

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 28, 2019. APPEARANCES: Petitioner Danny Sherwood (Petitioner) appeared on his own behalf. The Arizona Department of Real Estate (Department) was represented by Assistant Attorney General Grant Pearson. ADMINISTRATIVE LAW JUDGE: Kay Abramsohn _____________________________________________________________________

FINDINGS OF FACT On or about November 27, 2018, Petitioner submitted to the Department a Salesperson Application Form (Application) to be licensed as a real estate salesperson.[1] On that Application, Petitioner answered “yes” to one question, regarding convictions or plea agreements to any felony in Arizona or any other state. With the Application, Petitioner submitted information identifying the above conceded information and a letter of explanation.[2] Petitioner noted that he had, when young, seen violent behavior and poor choices in his family and, although he found himself looking to an older relative, he was lured into drug trafficking in order to pay rent, and buy food and clothing. He explained that once released in 2008, he was back in the same situation surrounded by family and the pressures of either being homeless or making easy money in drug trafficking. He stated “I regret this period of my life and take full responsibility for my actions.” According to the court records available in the hearing record, Petitioner’s criminal history consisted of the following: a. On or about November 16, 2007, Petitioner pleaded guilty to and was convicted of two felonies in Superior Court of Washington, Pierce County: Drug Manufacture, Deliver, Possession with Intent to Deliver; and, Unlawful Possession of a Weapon.[3] The case number was 07-1-01082-5. Petitioner was sentenced to twelve (12) months in prison, fines and fees. b. On or about March 6, 2012, Petitioner was convicted of five (5) drug-related felonies and two (2) weapons-related felonies in United States District Court, Western District of Washington in case number CR0581ORBL-004.[4] He was sentenced to sixty (60) months in prison, three years of supervised release, and a fine (that was waived). By letter dated December 6, 2018, the Department sent Petitioner, via certified mail, a letter of Intent to Deny Application for Original Real Estate Salesperson’s License.[5] The Department informed Petitioner that, based on the Application, it had concluded that he did not meet the qualifications for licensure pursuant to A.R.S. §§ 32-2123, 32-2124, and 32- 2153; the Department’s conclusion was based in part, but not exclusively, on the convictions detailed above herein. The Department further informed Petitioner that his conduct had violated A.R.S. §§ 32-2153(B)(2) and (B)(7). The Department received Petitioner’s appeal on January 3, 2019.[6] Petitioner acknowledged his history but indicated that he had turned his life around and decided to make a career change from personal fitness training to become a real estate agent. Petitioner indicated that he had always been a hard worker at his jobs; he noted that he planned to “live the rest of my life without and away from most of the people that were in [his] life … Abstaining from alcohol and drugs to the greatest lengths has changed my life tremendously in the most positive of ways.” At hearing, Petitioner testified about prison activities and his goals. He went to HVAC school in prison and began building a better way of life through a SWEAT program (a cultural and prayer program), a drug treatment program, and reading self-help books. He was released from prison in 2014 and completed probation on August 30, 2016; probation had been cut to 2½ years due to good behavior). Once released, Petitioner worked at the Emerald Queen Casino in Tacoma, Washington, starting in the kitchen as a steward and working his way up to a valet position. He had to be “licensed” through the Puyallup Tribe Gaming Agency, receiving a conditional license first (due to his background) and then received a full license due to having no other infractions. Since released, he became an ordained minister in July 2016 through an online program. He was also volunteering for a food bank. He met his wife, a chef, in 2014 and since married in 2016, they started a meal preparation business, concentrating on health and nutrition for body builders. When that was not so successful, they moved to Arizona to be away from the elements of his family and for a new start. In Arizona, he has worked as a personal trainer at LA Fitness. Petitioner requested reconsideration of the intent to deny this license. Petitioner noted that the person who sold a home to his wife’s parents [Rene, with Realty One] has stayed in contact with them and that she had offered to take him on under her broker’s license; however, Petitioner noted that she is not the broker of the firm for which she works. The Department’s position is that Petitioner had serious felony convictions in the past, which demonstrate that Petitioner is in violation of A.R.S. §§ 32-2153(B)(2) and (B)(7). The Department noted its overall concerns of protecting the public. CONCLUSIONS OF LAW The Department bears the responsibility to protect the public through its enforcement of licensing statutes.[7] This matter lies within its jurisdiction. Petitioner bears the burden of proof and must establish that he meets statutory qualifications for a real estate salesperson’s license by a preponderance of the evidence.[8] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[9] A preponderance of the evidence is “[t]he 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.”[10] A.R.S. § 32-2153 provides in relevant part as follows: 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: ..… 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.

The legislature has charged the Department with protecting the public and consumers who deal with licensed salespersons when it issues licenses. The Department’s concern in this case is understandable. A person with a criminal record must be given close scrutiny and careful consideration when he or she applies for a professional license. The hearing record demonstrated that, within the past 10 years, Petitioner has serious felony convictions from 2012. While none of Petitioner’s criminal actions relate to dishonesty or fraud in the business of real estate, the convictions remain of concern as to the good character of Petitioner. Once good character is shown to be absent, it is not automatically regained by the mere passage of time or simply indicating that the past is the past; past convictions are still considered as to actions since that time and for any repetitive violations. The conviction of multiple crimes is not a permanent bar to being licensed. An applicant has the burden of proving by a preponderance of the evidence that he or she has resolved the issues that led to the actions and convictions and to establish that he or she has sufficient good character and reputation to satisfy the statutory requirement for licensure as a real estate salesperson. In this case, the Administrative Law Judge concludes that Petitioner has not met his burden at this time. Based on the hearing record, the Administrative Law Judge concludes that the Department would not fulfill its statutory mandate by licensing Petitioner as a real estate salesperson at this time due to the 2012 convictions, which are still relatively recent. Unfortunately, the hearing record lacked support of all the criteria for possibility of a provisional licensure. RECOMMENDED ORDER The Commissioner shall affirm the Department’s decision to deny Petitioner’s Application for a real estate salesperson’s license and dismiss Petitioner’s appeal. 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, March 20, 2018 /s/ Kay Abramsohn Administrative Law Judge

Transmitted electronically to:

Judy Lowe, Commissioner Arizona Department of Real Estate

----------------------- [1] Exhibit 1. [2] Petitioner’s “Letter of Explanation” is found at Exhibit 5. [3] See Exhibit 2. [4] See Exhibit 3. [5] See Exhibit 4. [6] See Exhibit 6. [7] See Sigmen v. Arizona Dept. of Real Estate, 169 Ariz. 383, 388, 819 P.2d 969, 974 (Ct. App. 1991). [8] See A.R.S. § 41-1092.07(G)(1); A.A.C. R2-19-119; see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [9] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [10] Black’s Law Dictionary at 1220 (8th ed. 1999).

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