ALJDEC decisions subject to certification as final

19F-283-REL · Department of Real Estate · 2019-05-06

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: April 25, 2019 at 1:00 PM. APPEARANCES: Connor Patrick (“Petitioner”) appeared on his own behalf. Assistant Attorney General Deian Ousounov, Esq., appeared on behalf of the Arizona Department of Real Estate (“Department”) with Wayne Jackson as a witness. 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 Commissioner of the Department. FINDINGS OF FACT Petitioner’s Application 1. On or about October 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 January 29, 2019. 2. Petitioner answered “yes” to the following questions on his 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]

“Has the Applicant . . . [b]een convicted or entered into a plea agreement or a plea of NOLO CONTENDERE (no contest) to ANY misdemeanor in Arizona or any other state, whether or not the plea or verdict was set aside, judgment or sentencing was deferred, the conviction was dismissed or expunged, or has been pardoned?”[2]

(Emphasis included in original.)

3. Petitioner attached a written explanation of his “yes” answers to his application where he detailed the following: a. On November 23, 2009, Petitioner plead guilty to Possession of a Forgery Device, a class 6 undesignated felony, in Maricopa County Superior Court. Petitioner was sentenced to one year of unsupervised probation to begin on November 23, 2009[3], complete 150-hours of community service beginning November 23, 2009, ordered to pay $65.00 per month for probation fees beginning January 01, 2010, ordered to participate in a 20-hour counseling program, and ordered to pay $745.00 in fines and fees.[4] Petitioner was discharged from probation on November 02, 2010. On February 16, 2011, Maricopa County Superior Court reduced Petitioner’s conviction to a Designated Misdemeanor.[5] 4. On February 11, 2019, the Department issued an Intent to Deny Application letter to Petitioner.[6] 5. On February 25, 2019, the Department received a timely appeal letter from Petitioner.[7] 6. The Department referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. On March 20, 2019, 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 six exhibits. The Department submitted eleven exhibits and called Wayne Jackson to testify as a witness. Wayne Jackson’s testimony 8. At the hearing, the Department contended that Petitioner’s misdemeanor conviction from 2011 constituted a violation of Ariz. Rev. Stat. § 32- 2153(B)(2). The Department noted that Petitioner had not been flatly denied issuance of a real estate salesperson license, as he had been offered a provisional license; which was only dissimilar from an unencumbered real estate salesperson license due to its quarterly statement requirement for a one year period. 9. 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. 10. 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. 11. Investigator Jackson testified that he had concerns about Petitioner’s ability to be forthcoming and honest because Petitioner gave a false statement to the reporting officer in Petitioner’s misdemeanor case. Specifically, Investigator Jackson alleged that Petitioner watched a $225.43 check fall out of a woman’s purse, convinced another friend to endorse it for him, and then tried to cash the check at a bank.[8] When questioned by the responding officer, Petitioner initially claimed that the victim had given him the check, but later relented after she denied the accusation. 12. Additionally, Investigator Jackson testified that he had concerns about Petitioner’s ability to be forthcoming and honest because Petitioner failed to disclose a DUI conviction on his application.[9] 13. Investigator Jackson testified that Petitioner’s real estate salesperson’s license application was ultimately denied because Petitioner had been convicted of a misdemeanor, and the Department was not certain that he possessed the requisite good moral character for licensure. For those reasons, the Department offered Petitioner a provisional real estate salesperson’s license so that they could observe Petitioner’s judgement and so that he could have ongoing monitoring. Petitioner’s testimony 14. At the hearing, Petitioner argued his guilty plea evinced his intent to take responsibility and accept the legal consequences for his actions. Petitioner testified that he was barely eighteen years old when he committed his crime, and operated with an adolescent mind. Petitioner testified that he felt the more he tried to shed his past the more he felt it held him back. As an example Petitioner offered that he requested the court set aside his conviction in 2015[10], which was granted, yet he was still being penalized for his crime. Per Petitioner, he would be placed at a disadvantage in an already saturated market if he were to start his career with a provisional real estate salesperson’s license. 15. Petitioner testified that he did not want to enter into a Consent Order[11] for a provisional license because he did not want the discipline to be on his record forever. 16. Per Petitioner, although his father (“Father”) is a licensed broker, Father has not offered Petitioner employment or offered to monitor Petitioner if/once licensed. Notably, Petitioner has not yet received an offer of employment from an agent or brokerage. 17. Regarding his good character and veracity, Petitioner testified that he supplied a number of letters of recommendation to the Department along with his application. Additionally, Petitioner offered that in the time since his conviction he has become a certified health coach, established his own business, was issued a fingerprint clearance card[12], obtained a concealed weapons permit[13], and has also been accepted into the University of Arizona for Fall 2020. CONCLUSIONS OF LAW 1. The Department bears the responsibility to protect the public through its enforcement of licensing statutes.[14] 2. 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. 3. 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. 4. 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.[15] 5. A preponderance of the evidence is “such proof as convinces the trier of fact that the contention is more probably true than not.”[16] 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.”[17] 6. 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.

7. The legislature has charged the Department with protecting the public and consumers who deal with licensed salespersons when it issues licenses.[18] 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[19] to grant or deny a license to an applicant under Ariz. Rev. Stat. § 32- 2153(B).[20] 8. The issue in this case is, in light of Petitioner’s misdemeanor conviction nearly ten years ago and his conduct since that time, 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. 9. 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.”[21] 10. The time period required for a license applicant to establish rehabilitation is commensurate with the period of misconduct and the severity of the offenses. Just over eight years have passed since Petitioner’s forgery device possession conviction. Since that time Petitioner has become certified as a health coach, established his own business, was granted a fingerprint clearance card[22], obtained a concealed weapons permit[23], will attend college in the Fall of 2020, and has lived an irreproachable personal and professional life. Petitioner’s conduct since that time raises confidence in his ability to maintain appropriate and lawful conduct. Petitioner credibly testified that he has learned from his past mistakes. 11. Petitioner did not dispute that he was convicted of a misdemeanor on February 16, 2011. Petitioner’s explanation regarding the underlying conduct which resulted in conviction, however, is petulant and does not take full responsibility. Although it is clear from the evidence that Petitioner truthfully informed the Department regarding his conviction, and provided them with written insight for such, Petitioner’s conviction involved crimes of fraud, crimes of moral turpitude and/or dishonest dealings. 12. The facts surrounding Petitioner’s criminal history rightly gave the Department cause for concern. After closely scrutinizing the underlying conduct which resulted in Petitioner’s criminal conviction, as well as the conviction itself, and after careful consideration of Petitioner’s past and behaviors over the course of the past eight years, this Tribunal holds that Petitioner has not established by a preponderance of the evidence that he is fully rehabilitated and that the public does not need any protection from him. The Department’s offer to issue a provisional license to Petitioner is rationally based. 13. The record reflects that Petitioner is working diligently to learn from his past mistakes and grow therefrom. Having satisfied all other statutory requisites to licensure, Petitioner shall be granted a provisional real estate salesperson’s license. RECOMMENDED ORDER Based upon the foregoing findings of fact and conclusions of law, IT IS RECOMMENDED that the Commissioner affirm the Department’s February 11, 2019, Intent to Deny Application for Original Real Estate Salesperson’s License No. SA673142000. It is FURTHEr recommended that Petitioner Connor Patrick be issued a one-year provisional Real Estate 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, May 06, 2019.

/s/ Jenna Clark Administrative Law Judge

Transmitted electronically to:

Judy Lowe, Commissioner Arizona Department of Real Estate ----------------------- [1] See Department Exhibit 1. [2] Id. [3] See Department Exhibit 4. [4] See Department Exhibit 2. [5] Id.; see also Department Exhibit 5. [6] See Department Exhibit 10. [7] See Department Exhibit 11. [8] See Department Exhibit 3. [9] See Department Exhibit 7. [10] See Department Exhibit 9. [11] See Petitioner’s Exhibit A. [12] See Petitioner’s Exhibit D. [13] See Petitioner’s Exhibit E. [14] See Sigmen v. Arizona Dept. of Real Estate, 169 Ariz. 383, 388, 819 P.2d 969, 974 (Ct. App. 1991). [15] See Ariz. Admin. Code R2-19-119(A). [16] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [17] Black’s Law Dictionary 1182 (6th ed. 1990). [18] See Laws 1992, Ch. 14, § 3. [19] See Ariz. Rev. Stat. § 32-2153(B) (“The commissioner may . . . deny the issuance of a license” under certain circumstances (emphasis added)). [20] 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). [21] 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). [22] See Petitioner’s Exhibit D. [23] See Petitioner’s Exhibit E.

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