ALJDEC decisions subject to certification as final

19F-222-REL · Department of Real Estate · 2019-03-18

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 22, 2019; hearing record held open for submissions, closed on February 25, 2019. APPEARANCES: Petitioner Joshua Fuchs (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 December 3, 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 several questions: a. the question regarding prior licenses being denied, suspended, restricted or revoked; b. the question regarding having entered into consent decrees which prohibited or restricted engaging in any profession or occupation; c. the question regarding any judgments or orders of court involving fraud, dishonesty, misrepresentation, unfair trade practices, or moral turpitude; and, d. the question regarding misdemeanor convictions in Arizona or any other state. With the Application, Petitioner submitted information identifying the above conceded information.[2] According to the court records available in the hearing record, Petitioner’s criminal history consisted of the following: a. On or about January 31, 2006, Petitioner pleaded guilty to and was convicted of Theft Third Degree, Gross Misdemeanor, in Criminal Court of King County, Washington, case number CR0026288.[3] Petitioner was sentenced to unsupervised probation for 23 months, 50 hours community service, no criminal violation for 24 months and fines in the amount of $1,285.00. b. On or about August 15, 2007, the State of Washington, Department of Financial Institutions denied Petitioner a license for the occupation of a loan originator in case No. C-07-232-07-F001.[4] The denial was based on the agency’s determination that Petitioner failed to meet the requirements in Washington Revised Code (WRC) 19.146.310(1)(d) and (g) and in Washington Administrative Code (WAC) 208-660-350(2)(a) and (c) as a result of the conviction for a gross misdemeanor involving dishonesty or financial misconduct. c. On January 10, 2017, in West Mesa Justice Court Case No. TR2016- 124636, Petitioner pleaded guilty to DUI, a Class 1 misdemeanor, committed on May 8, 2016 and was sentenced to one day in jail, unsupervised probation, participation in the MADD program, alcohol and drug treatment, fines and fees.[5] Additionally, he was required to install an ignition interlock device for six months. By letter dated December 11, 2018, the Department sent Petitioner, via certified mail, a letter of Intent to Deny Application for Original Real Estate Salesperson’s License.[6] 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 and actions detailed above herein. The Department further informed Petitioner that his conduct had violated A.R.S. §§ 32- 2153(B)(7) and (B)(10). According to the docket information regarding the 2006 conviction of Theft Third Degree, Gross Misdemeanor, in Criminal Court of King County, Washington, a request, at the time of sentencing, for a “deferred sentence,” was not available for consideration “due to prior violation.”[7]

The Department received Petitioner’s appeal on December 27, 2018.[8] Petitioner noted that he was licensed in six states by the “department of Financial Institutions” for a mortgage license.[9] Petitioner’s appeal noted that he had been in real estate “on and off for the past 18 years” and had been licensed in Washington for four years before moving from Washington. Petitioner presented a copy of an Arizona Loan Originator license certificate, LO-0944860, indicated to have been issued on June 12, 2018.[10] The summary chart provided of other states’ licensure shows: Colorado licensure as “pending-incomplete;” California licensure as terminated for failure to renew; Oregon license as inactive; and, Washington license as inactive.[11] Based solely on this information, Petitioner cannot be said to be “licensed” in six states. Petitioner submitted, post-hearing, an unsworn statement from the Washington “Department of Licensing, Real Estate Licensing” regarding his licensure as a “Salesperson” effective 09-17-05, with a license status of expiration on 01-08-09 and cancellation on 01-09-10.[12] Regarding the unavailability of the “deferred sentence” in 2006, at hearing, Petitioner indicated that there were prior violations, which he recalled as traffic tickets, recalling one perhaps for “non-insurance.” Petitioner noted that they were not listed on his driving record.[13] At hearing, Petitioner argued that all of his current licenses were in good standing and that he has taken all the required courses and has passed the national exam. Petitioner requested reconsideration of the intent to deny this license. Petitioner indicated that he would like to have both the Arizona Loan Originator license and a Real Estate Salesperson license. The Department’s position is that Petitioner had convictions in the past, including some undisclosed violations. The Department argues that the above-detailed convictions and actions demonstrate that Petitioner is not a not a person of honesty, truthfulness, or good character in violation of A.R.S. §§ 32-2153(B)(7) and (B)(10). The Department noted its overall concerns of a licensee’s truthfulness and protecting the public. CONCLUSIONS OF LAW The Department bears the responsibility to protect the public through its enforcement of licensing statutes.[14] 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.[15] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[16] 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.”[17] 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: ..… 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, substantial misrepresentation, dishonest dealing or violence against any person ….

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, in the past 10 years, Petitioner has one conviction for DUI. 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. Failure to disclose past violations remains one of the most serious issues with any application for licensure given the agency’s responsibility to protect the public. 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. 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 most recent violation, the failure to disclose past violations, and the lack of honesty and truthfulness in his characterization of current licensure. Finally, the hearing record lacked support of 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 18, 2018 /s/ Kay Abramsohn Administrative Law Judge

Transmitted electronically to:

Judy Lowe, Commissioner Arizona Department of Real Estate

----------------------- [1] Exhibit 1. [2] Although the Application indicated that he submitted a “Letter of Explanation (sic)” with the Application, it was not provided to the hearing record. [3] See Exhibit 2. [4] See Exhibits 3 and 4. [5] See Exhibit 5. [6] See Exhibit 6. [7] No violations prior to the 2006 violation were disclosed by Petitioner on the Application. [8] See Exhibit 7. [9] Petitioner presented a summary chart of the licensure. See Exhibit B. Petitioner specified that he had subsequently obtain that licensure in the State of Washington despite having previously been denied, noting that Washington had a 7-year statute of limitations. [10] See Exhibit C. [11] At hearing, Petitioner indicated that he chose not to renew the Washington license. [12] See Exhibit H. [13] Petitioner did not submit a copy of any “driving record” to the hearing record. [14] See Sigmen v. Arizona Dept. of Real Estate, 169 Ariz. 383, 388, 819 P.2d 969, 974 (Ct. App. 1991). [15] 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). [16] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [17] 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