ALJDEC decisions subject to certification as final

22F-244-REL · Department of Real Estate · 2022-05-10

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

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

STEVE FANTO, License No. SA699489000 (Candidate),

Petitioner.

No. 22F-244-REL

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: April 28, 2022 at 1:00 PM.

APPEARANCES: Steve Fanto (“Petitioner”) appeared on his own behalf. Assistant Attorney General James Rolstead, Esq. appeared on behalf of the Arizona Department of Real Estate (“Department”) with Bret Biesenthal as a witness. Susan Hack observed.

ADMINISTRATIVE LAW JUDGE: Jenna Clark.

_____________________________________________________________________

Having heard the evidence and testimony and having considered the record in this matter, the undersigned Administrative Law Judge hereby makes the following Findings of Fact and Conclusions of Law and issues the following Recommended Decision to the Commissioner of the Department.

FINDINGS OF FACT

Procedure and Background

On or about November 12, 2021, Petitioner filled out an application to be licensed as a real estate salesperson with the Department. On January 05, 2022, the Department received Petitioner’s application.

Petitioner answered “yes” to the following questions on the application’s Disciplinary Actions Disclosure form:

“Has the Applicant/Is the Applicant . . . Had a professional or occupational license or registration in any stated, of ANY? Kind, denied, suspended, restricted, or revoked?

(Emphasis in original.)

During its review of Petitioner’s application, the Department received a copy of the Department of Public Safety’s (“DPS”) November 03, 2021, Notice of Denial regarding Petitioner’s Fingerprint Clearance Card application. The Notice of Denial notes, in pertinent parts, that Petitioner’s application was denied based on an arrest for Misdemeanor Assault in violation of Arizona Revised Statutes (“Ariz. Rev. Stat.”) §§ 13-1203, 41-1758.03(C), and 41-1758.07(C), and Misdemeanor Domestic Assault in violation of §§ 13-3601, 41-1758.03(C), and 41-1758.07(C).

On December 15, 2021, after an advisement from the Department, Petitioner submitted a written explanation regarding his denied Fingerprint Clearance Card application, where he detailed the following, in pertinent parts:

On July 22, 2003, Petitioner was arrested by the Scottsdale Police Department after he attempted to restrain his then girlfriend during a “manic episode.”

Petitioner completed all court-ordered classes, probation, and paid all related fees.

Attached to the letter, Petitioner provided a Response to Request for Court Information letter from Scottsdale City Court, which advised that the clerk was unable to locate any Petitioner-related cases in the court’s database due to the age of the matter(s) at issue, they fell outside the system’s record retention policy. The notice also provided that in order for the record to be purged, it could have only been a misdemeanor case where all monetary obligations had been resolved to the court’s satisfaction.

On January 07, 2022, submitted an amended real estate salesperson license application to the Department, whereby he changed his answers for questions #5 and #15 from “no” to “yes” as follows:

(5) “Has the Applicant/Is the Applicant . . . Entered into ANY consent decree, and/or had an injunction (either temporary or permanent), a suspension, an order and/or a judgment issued which prohibited or restricted them from engaging in ANY profession or occupation?

(15) “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, sealed, judgment or sentencing was deferred, the conviction was dismissed or expunged, or had been pardoned, or the conviction is being appealed?

CONVICTIONS – DUI AND/OR RECKLESS DRIVING EITHER MISDEMEANOR OR FELONY, MUST BE DISCLOSED.

Minor traffic citations do not constitute a misdemeanor or felony offense.

(Emphasis in original.)

On an unknown date the Department received a copy of a July 11, 2017, Interim Consent Agreement for Practice Restriction (“Practice Restriction”) issued by the Arizona Medical Board (“Board”), regarding four (4) separate complaints. Overall, the Board determined that Petitioner deviated from the standard of care for the prescription of opioids to patients, which created an unreasonable risk for potential harm regarding abuse, addiction, diversion, and unintentional overdose. The Practice Restriction noted, in pertinent parts, as follows:

Pursuant to A.A.C. R4-16-504, the Executive Director may enter into an Interim Consent Agreement when there is evidence that a restriction is need to mitigate imminent danger to the public’s health and safety.

Petitioner has read and understands this Interim Consent Agreement as set forth herein, and has had the opportunity to discuss this Interim Consent Agreement with an attorney or has waived the opportunity to discuss this Interim Consent Agreement with an attorney. Petitioner voluntarily enters into this Interim Consent Agreement and by doing so agrees to abide by all of its terms and conditions.

Petitioner acknowledges and agrees that upon signing this Interim Consent Agreement and returning it to the Board’s Executive Director, Petitioner may not revoke his acceptance of this Interim Consent Agreement or make any modifications to it. Any modifications of this original documents is ineffective and void unless mutually approved by the parties in writing.

Petitioner is prohibited from engaging in the practice of medicine in the State of Arizona as set for in A.R.S. § 32-1401(22) until he applies to the Board and receives permission to do [so]. [sic]

On November 11, 2021, the Department received a letter of explanation from Petitioner whereby he alleged that in 2016 he was labeled a “drug dealer,” despite being Board certified in pain management and physical medicine and rehabilitation, and that his practice was a “sacrificial lamb” in the Governor’s opioid crisis declaration. Per Petitioner, he “voluntarily” gave up his license to practice medicine and admitted to signing the Practice Restriction. Petitioner noted that he was “still in limbo” and wanted to “move forward in a different career.”

On January 13, 2022, the Department issued an Intent to Deny Application for Original Salesperson’s License No. SA699489000 letter to Petitioner, based on Petitioner’s failure to disclose his conviction for Assault on is original application as well as the underlying findings of fact and conclusions of law in the Practice Restriction, which held that Petitioner was not qualified for licensure due to alleged violations of Ariz. Rev. Stat. §§ 32-2123, 32-2124, and 32-2153(B)(1), (B)(3), and (B)(7).

On January 24, 2022, the Department received a timely appeal letter from Petitioner which besought the Department to reconsider its decision because his lack of disclosure was a “misunderstanding” and that he was “forced to sign the [Practice Restriction].””

On January 25, 2022, the Department referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. On February 09, 2022, a Notice of Hearing was issued citing the issue(s) for hearing are 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)(1), (B)(3), and (B)(7).

Hearing Evidence

The Department called senior investigator Bret Biesenthal (“Investigator Biesenthal”) as a witness and submitted Exhibits 1-11. 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:

Sometime between November 2019 and January 2022, Petitioner obtained a fingerprint clearance card via exemption from DPS.

Petitioner submitted approximately two hundred (200) letters of recommendation, from clients and colleagues, with his appeal to the Department.

Each of the complaints that lead to the restriction on Petitioner’s medical license stemmed from insurance company and pharmacy complaints, not from patients, employers or colleagues.

The Board afforded Petitioner 24hrs to sign the Practice Restriction. The Practice Restriction is an interim order, which means that temporary and pending final judgment. To that end, as of the date of the hearing, there has been no administrative hearing scheduled regarding Petitioner’s appeal of the Practice Restriction.

In closing, the Department argued that its denial of Petitioner’s real estate salesperson licensure request was based on reasonable assumptions based upon available information, and supported by its foremost duty to protect the public. The Department conceded that Petitioner’s failure to answer “yes” to questions #5 and #15 on his initial application for licensure were not offenses significant enough to warrant denial, but argued that grounds for denial manifested for the Department upon considerations regarding the denial of Petitioner’s fingerprint clearance card application and Practice Restriction. As such, the Department asked that its denial of Petitioner’s application for licensure be upheld.

In closing, Petitioner argued that the underlying allegations against him that resulted in the Practice Restriction remained unproved, and that he had not been criminally convicted on any related charge(s) as a result. Petitioner vehemently denied he ever violated the standard of care while practicing medicine, and also denied any wrongdoing that resulted in his arrest on domestic violence charges in 2003. Petitioner admitted that he erred in failing to read the Disciplinary Actions Disclosure form clearly, and argued that he atoned for his mistake by providing a supplemental filing to the Department which evinced his honesty and good character. Petitioner opined that the neither age of his conviction, coupled with his complete restitution and completion of probation, nor the slight error he made on his initial application as sufficient for the Department to deny his request for licensure as a real estate salesperson.

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:

(1) Procured or attempted to procure a license under this chapter for the holder or applicant or another by fraud, misrepresentation or deceit, or by filing an original or renewal application which is false or misleading.

* * *

(3) Made any substantial misrepresentation.

* * *

(7) Not shown that the holder or applicant is a person of honesty, truthfulness and good character.

(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 19yr old criminal conviction and 2017 Practice Restriction, 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 undersigned concludes that Petitioner has sustained his burden of proof in this matter.

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). Here, Petitioner established that the underlying facts surrounding his arrest and conviction did not stem from malicious or violent conduct, and that he had satisfactorily completed all requirements for his case to be closed and purged by the City of Scottsdale. Petitioner also credibly established that he mistakenly failed to answer “yes” to questions #5 and #15 on his initial application for licensure, and that he made a good faith attempt to correct his error by providing the Department with a corrected Disciplinary Actions Disclosure form. No violation of Ariz. Rev. Stat. §§ 32-2153(B)(1) or (B)(3) have been established.

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.” Here, although the record clearly supports the Department’s concerns regarding the allegations set forth in the Practice Restriction, Petitioner correctly argues that it is not a final judgment regarding the claims. It must be noted, however, that the Tribunal is concerned with Petitioner’s untrue assertions that he was “forced to sign” the interim order, as well as his abject refusal to acknowledge any of the harm that resulted from his underlying actions, regardless of his intended result(s), that brought about his Practice Restriction. Petitioner’s subjective beliefs about his medical practices are not supported by the actual harm, and potential harm, suffered by some of his patients. Notably, while the Tribunals concerns are not outweighed by the vast amount of community support that Petitioner has received in pursuit of licensure by the Department, it is quelled in large part because of it. Thusly, the undersigned concludes that no violation of Ariz. Rev. Stat. § 32-2153(B)(7) has been established.

Because Petitioner offered sufficient mitigating evidence to overcome the Board’s evidence, as well as evidence of his willingness to be regulated by the Department, he has established a baseline qualification for licensure a real estate salesperson by the Department.

After closely scrutinizing the evidentiary record, the undersigned Administrative Law Judge concludes that Petitioner has sustained his burden of proof in this matter by a preponderance of the evidence. Grounds exist for the Department to grant issuance of a real estate salesperson license to Petitioner. However, because Petitioner did not provide evidence of one or more offers of employment, with or without monitoring, as a real estate salesperson, it would be most appropriate for the Department to issue a provisional license to Petitioner at this time.

RECOMMENDED ORDER

Based upon the foregoing,

IT IS RECOMMENDED that the Department Commissioner to reverse the Department’s January 13, 2022, Intent to Deny Application for Original Salesperson’s License No. SA699489000.

It is FURTHEr recommended that Petitioner Steve Fanto be issued a two-year provisional 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 will be five (5) days from the date of that certification.

Done this day, May 10, 2022.

Office of Administrative Hearings

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Louis Dettorre, Commissioner

Arizona Department of Real Estate

By Miranda Alvarez

Legal Secretary