ALJDEC decisions subject to certification as final

21F-225-REL · Department of Real Estate · 2021-06-15

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

In the Matter of the Application for Original Real Estate License of:

JOSHUA PAUL MANKA, holder of License No. SA689827000 (Candidate),

Petitioner.

No. 21F-225-REL

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: May 27, 2021 at 1:00 PM.

APPEARANCES: Assistant Attorney General Holly Wan, Esq. appeared on behalf of the Arizona Department of Real Estate (“Department”) with Steven Hooper as a witness. Joshua Manka (“Petitioner”) appeared on his own behalf.

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

Background and Procedure

On or about February 16, 2021, Petitioner filled out an application to be licensed as a real estate salesperson with the Department. On February 22, 2021, the Department received Petitioner’s application.

Petitioner answered “yes” to the following questions on the application:

(13) “Has the Applicant/Is the Applicant . . . Been 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, or the conviction is being appealed?”

CONVICTIONS – DUI AND/OR RECKLESS DRIVING, EITHER MISDEMEANOR OR FELONY, MUST BE DISCLOSED. (Emphasis in original.)

Petitioner attached a written explanation of his “yes” answer to his application where he detailed the following, in pertinent parts:

Petitioner “underestimated the frequency” of his legal violations until he reviewed them in preparation for his explanation to the Department. His infractions were “all fun and games” at the time.

Petitioner was raised in an impoverished household whereby he was responsible for looking after his siblings. When he matriculated to college he became “one of the cool kids” and believed he needed to rearrange his priorities in order to maintain his popularity, thereby acquiescing to peer pressure.

Petitioner began drinking alcohol during Friday night parties, which quickly turned into “weekend benders” and days of skipping class to “day drink.” Because other students allegedly participated in said behavior, Petitioner believed such was normal.

Petitioner left his collegiate studies after being promoted to a management position at a hotel during his freshman year. He was terminated in 2010 for letting an intoxicated employee sleep in a vacant room.

After his termination, Petitioner admittedly fell back into a “routine” of having fun and binge drinking with friends for any reason or no reason at all. Petitioner chose to honor his relationships with his peers rather than make more appropriate and lawful choices. Per Petitioner, it was only after he had been incarcerated several times that he realized he had put himself at risk for friendships that were not reciprocal.

Petitioner did not specifically detail each arrest, charge and/or criminal conviction on his record, but instead noted that he had “not been on the wrong side of the law” since August 2013.

Forty-eight hours after Petitioner’s “last stint in jail” he relocated to Arizona and began paying off court fines and restitution with income from new employment. Petitioner also enrolled at a local community college and took a real estate course, which inspired his underlying application for licensure.

In separate narrative statements dated February 16, 2021, Petitioner offered additional information which was also corroborated by the Department’s investigation:

In July 2008, Petitioner was convicted of Trespassing, a misdemeanor, in the Douglas County Court, Nebraska. Petitioner was fined $50.00.

In August 2009, Petitioner was convicted of Driving During Suspension, a misdemeanor, in Douglas County Court, Nebraska. Petitioner was fined $200.00.

In February 2010, Petitioner was convicted of Driving During Suspension, a misdemeanor, in Sarpy County Court, Nebraska. Petitioner’s license was suspended for six (6) months and he was fined $100.00.

In February 2011, Petitioner plead guilty to and was convicted of Driving Under the Influence (“DUI”), a misdemeanor, in Douglas County Court, Nebraska. Petitioner was sentenced to ten (10) days in a work release program, assessed a $500.00 fine, and placed on supervised probation for six (6) months.

In April 2011, Petitioner plead guilty to and was convicted of DUI, a misdemeanor, in Douglas County Court, Nebraska. Petitioner was sentenced to ten (10) days of a work-release program, six (6) months of probation, and six (6) months license suspensions for the current and prior DUI. Petitioner was also fined $400.

In May 2013, Petitioner plead guilty to and was convicted of Operation Vehicle While Intoxicated – 1st Offense, a misdemeanor, in Iowa District Court. Petitioner was sentenced to seven (7) days in jail, placed on unsupervised probation for one (1) year, and fined $1,250.00.

In May 2013, Petitioner plead guilty to and was convicted of DUI – 3rd Offense, a misdemeanor, in Douglas County Court, Nebraska. Petitioner was also found guilty of being in violation of his probation. Petitioner was sentenced to thirty (30) days in jail, placed on thirty-six (36) months of unsupervised probation, his license was suspended for six (6) months, and he was fined $1,000.00.

In October 2013, Petitioner plead no contest to and was convicted of Domestic Assault 3rd Degree, a misdemeanor, in the District Court of Douglas County, Nebraska. Petitioner was sentenced to one (1) year in jail.

During his incarceration Petitioner attended Alcoholics Anonymous (“AA”) meetings.

On March 29, 2021, the Department issued an Intent to Deny Application letter to Petitioner, based on nine (9) misdemeanors Petitioner incurred between 2008 and 2013, which held that Petitioner was ineligible for licensure due to alleged violations of Arizona Revised Statutes (“Ariz. Rev. Stat.”) §§ 32-2123, 32-2124, and 32-2153(B)(7), (B)(9), and (B)(10).

On March 29, 2021, the Department received a timely appeal letter from Petitioner which besought the Department to reconsider its decision “with less focus on what I have done in the past and more on what I have done to better myself and who I will become.”

On March 29, 2021, the Department referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. On April 22, 2021, 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 pursuant to Ariz. Rev. Stat. § 32-2153(B)(7), (B)(9), and (B)(10).

Hearing Evidence

The Department called Steven Hooper (“Investigator Hooper”) as a witness and submitted Exhibits 1-18. Petitioner testified on his own behalf and submitted Exhibit A. The Notice of Hearing was also admitted into the record as its own exhibit. The substantive facts are as follows:

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. Because licensees engage in public dealings, earnest money, and contracts, they have to possess good moral character and be truthful.

Answering “yes” to any of the questions on the Board’s real estate salesperson application is not an automatic disqualification for licensure, but may, where appropriate, trigger an investigation by the Board. As it did in Petitioner’s case.

The Department’s primary concerns, when determining whether to grant Petitioner’s request for a real estate salespersons license, were Petitioner’s admitted and repeated statutory violations which mirror conduct outlined in Ariz. Rev. Stat. §§ 32-2153(B)(7), (B)((9), and (B)(10). The Department offered, based on Petitioner’s prior conduct, that it would be difficult, if not impossible, for the Department to regulate Petitioner and his actions.

At the time of the hearing, Petitioner did not have a written offer of employment and/or practice monitoring from a licensee in good standing with the Department.

Petitioner provided thirty-three (33) letters of recommendation attesting to his good character and professionalism from friends, colleagues, and clients who all conferred their general support for his underlying appeal.

Petitioner offered that he “rarely drinks” and no longer attends AA meetings.

Closing Arguments

In closing, Petitioner argued that his character has evolved and he is fully rehabilitated from his past. Petitioner attested that he is susceptible to regulation by the Department. Petitioner further argued that if he were to be given a provisional license, he would be able to secure employment and a practice monitor.

In closing, the Department argued that it had a duty to scrutinize Petitioner’s criminal history, and that what it discovered create serious concerns for public safety. The Department noted that when Petitioner was convicted of his third DUI offense he also violated a probation agreement and was also subsequently convicted of third degree domestic assault. The Board applauded the number of letters of recommendation Petitioner was able to procure, but noted that none of them directly spoke to the evolution, if any, of Petitioner’s fitness since his last criminal conviction. Because Petitioner did not possess a valid offer of employment and/or practice monitor, it argued that it would be a staggering lack of oversight to issue a provisional license to Petitioner at this time. As such, the Department asked that its denial of Petitioner’s application for licensure be upheld.

CONCLUSIONS OF LAW

Because at all times relevant to this matter Petitioner was subject to the provisions of Title 32, Chapter 20, Ariz. Rev. Stat., the Commissioner of the Department has jurisdiction over Petitioner and the subject matter in this case.

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 (“Ariz. Admin. Code”).

Pursuant to Ariz. Rev. Stat. § 41-1092.07(G)(2) and Ariz. Admin. Code R2-19-119(B), Petitioner bears the burden of proof in this matter to establish that he is rehabilitated and meets statutory qualifications for a real estate salesperson’s license. The standard of proof is by a preponderance of the evidence.

A preponderance of the evidence is “such proof as convinces the trier of fact that the contention is more probably true than not.” 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.”

Ariz. Rev. Stat. § 32-2153(B) provides, in pertinent parts, as follows:

The commissioner may deny the issuance of a license under this chapter if 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.

* * *

(9) Violated the terms of any criminal or administrative order, decree or sentence.

(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.

(Emphasis added.)

The legislature has charged the Department with protecting the public and consumers who deal with licensed salespersons when it issues licenses. Therefore, Department has discretion to deny the issuance of a license under Ariz. Rev. Stat. § 32-2153(B) as a real estate salesperson’s license is a privilege, not a right.

The issue in this case, in light of Petitioner’s criminal convictions that occurred between 2008 and 2013, is 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.

The time period required for a license applicant to establish rehabilitation is commensurate with the period of misconduct and the severity of the offense(s).

The definition of what constitutes good character, or a lack thereof, is not codified by the legislature. 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.”

The material facts in this matter are clear.

Petitioner has had five (5) relevant criminal convictions, either by plea or no contest, in the last ten (10) years: Domestic Assault – 3rd Degree (October 2013), DUI – 3rd Offense (May 2013); during which time Petitioner was found to be in violation of his probation, Operation; Vehicle While Intoxicated – 1st Offense (May 2013); DUI (April 2011); and DUI (February 2011). Thusly, violations of Ariz. Rev. Stat. § 32-2153(B)(7), (B)(9), and (B)(10) have been established.

Therefore, the only remaining issue to address is whether Petitioner offered sufficient mitigating evidence to overcome the Board’s evidence and establish his qualifications for a real estate salesperson license. Neither Petitioner’s honesty nor propensity for truth telling is at issue here, rather Petitioner’s good character or “fitness” has been aptly called into question based on his aforementioned record. Petitioner did not offer sufficient evidence of his willingness to be regulated by the Department. While it is clear that Petitioner is remorseful and embarrassed by his criminal record, the record does not reflect the alleged “growth” Petitioner professed occurred since his last conviction. Although Petitioner credibly testified that he has paid all of his court-related fines and restitution, and provided numerous letters of recommendation regarding his character and professionalism, there is no evidence in the record suggests that Petitioner successfully completed an alcohol treatment program or prerequisite real estate educational courses in the past decade. Nor does the record reflect that Petitioner currently possesses an offer of employment as a real estate salesperson by a licensee in good standing who is willing to serve as a practice monitor for Petitioner.

After closely scrutinizing the evidentiary record, the undersigned Administrative Law Judge concludes that Petitioner has not sustained his burden of proof in this matter by a preponderance of the evidence. Grounds exist for the Department to deny issuance of a real estate salesperson license to Petitioner in accordance with Ariz. Rev. Stat. §§ 32-2153(B)(7), (B)(9), and (B)(10).

Petitioner is encouraged to apply for licensure as a real estate salesperson with the Department in the future.

RECOMMENDED ORDER

Based upon the foregoing,

IT IS RECOMMENDED that the Commissioner affirm the Department’s determination to deny Petitioner’s application for a Real Estate Salesperson License pursuant to Ariz. Rev. Stat. § 32-2153(B).

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 will be five (5) days from the date of that certification.

Done this day, June 15, 2021.

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Judy Lowe, Commissioner

Arizona Department of Real Estate