ALJDEC

97A-H1902-REL · Department of Real Estate · 1997-10-03

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 3, 1997. APPEARANCES: Jeffrey M. McDonald, Respondent, appeared representing himself. Michael T. Denious, Assistant Attorney General, appeared representing the Department of Real Estate.

ADMINISTRATIVE LAW JUDGE: Kip M. Micuda _____________________________________________________________________ The hearing in this matter was held for the purpose of determining both whether Respondent has violated state law as alleged by the Arizona Department of Real Estate (“Department”) and whether grounds exist allowing the Department to take disciplinary action against Respondent. Evidence and testimony were presented and, based upon the entire record, the following Findings of Fact, Conclusions of Law, and Recommended Decision are made:

FINDINGS OF FACT 1. On October 7, 1994, the Department issued Respondent, Jeffrey M. McDonald, a real estate salesperson’s license. Respondent applied for renewal of his license in October 1996. 2. The instant matter arises out of the Department’s investigation discovering that Respondent has several criminal arrests and convictions between 1993 and 1996. The Department charges, in part, that Respondent failed to disclose these events in either his application for a real estate salesperson’s license or his application for renewal of the real estate salesperson’s license. The Department’s Complaint alleges grounds for the revocation of Respondent’s license. 3. Question 1 on the Licensing Affidavit attached to the license application asks:

Have you ever been charged with or convicted of any felony, misdemeanor or other crime OR do you have any formal charges pending?

Respondent answered “No” to this question. (Department’s Exhibit A). 4. Question 1 on the License Renewal Questionnaire attached to the Renewal Application asks:

Since the issuance of your original license or last renewed license:

1. Have you been convicted of any felony, misdemeanor or other crime OR do you have any formal charges pending?

Respondent answered “No” to this question. (Department’s Exhibit B). 5. The Department approved Respondent’s Renewal application on or about October 31, 1996. 6. The evidence demonstrates, however, that on or about April 14, 1993, Respondent was arrested by the Scottsdale Police Department for one count of Sale of Prescription Drugs Only, a class 6 felony, and one count of Possession of Prescription Drugs, a class 1 misdemeanor. The evidence also demonstrates that, on January 26, 1995, the Superior Court of Maricopa County convicted Respondent of one count of Sale of Prescription Drugs Only in State of Arizona v. McDonald, No. CR94-93603. (Department’s Exhibit G). The court suspended the imposition of sentence and placed Respondent on supervised probation for a period of three years commencing January 20, 1995. Respondent is currently still on probation concerning this conviction. 7. The evidence further demonstrates that, on July 4, 1994, the Phoenix Police Department arrested and charged Respondent with one count of felony trespass. The charge was subsequently dismissed on July 19, 1994. 8. The evidence also shows that, on May 30, 1995, the Scottsdale Police Department issued Respondent a citation for driving under a suspended driver’s license, a class one misdemeanor. On October 31, 1995, the Scottsdale City Court convicted Respondent of the offense. 9. Finally, the evidence shows that, on May 10, 1996, the Scottsdale Police Department issued Respondent a citation for driving under a suspended driver’s license, a class one misdemeanor. The Scottsdale City Court convicted Respondent of the offense on November 11, 1996. 10. The preponderance of the evidence shows that Respondent failed to disclose each of the arrests and convictions, noted above, as required by state law.

APPLICABLE LAW Arizona Revised Statutes §32-2153(A) provides, in part:

The commissioner may suspend or revoke a license, deny the issuance of a license or deny the renewal or the right of renewal of a license issued under the provisions of this chapter if it appears that the holder or applicant, while a licensee under this chapter, within five years immediately preceding, in the performance of or attempt to perform any acts authorized by such license or by this chapter, has:

*** 3. Disregarded or violated any of the provisions of this chapter or any rules adopted by the commissioner.

Section 32-2153(B) adds, in part:

The commissioner may suspend or revoke a license, deny the issuance of a license or deny the renewal or the right of renewal of a license issued under the provisions of this chapter when it appears that the holder or applicant therefor has:

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

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.

3. Made any substantial misrepresentation.

*** 5. Been guilty of any conduct, whether of the same or a different character than specified in this section, which constitutes fraud or dishonest dealings.

*** 7. Not shown that he is a person of honesty, truthfulness and good character.

Section 32-2130(E) also adds, in pertinent part:

The department shall not renew the license of a person who has been convicted of a felony offense and who is currently . . . on probation as a result of the offense. This subsection does not limit the commissioner’s authority and discretion to deny the renewal for any other reason pursuant to this chapter.

Finally, A.A.C. R4-28-301(C)(1) requires that every licensee shall, within ten days of each occurrence, notify the Commissioner of “[a]ny misdemeanor and felony conviction.” For any violation of the above provisions, the Commissioner may assess a civil penalty against a licensee “in an amount not to exceed one thousand dollars for each infraction.” §32-2160.01(A).

CONCLUSIONS OF LAW 1. The Department has jurisdiction over Respondent and the subject matter of this case pursuant to §32-2108, et seq. 2. As a result of Respondent’s failure to disclose his arrests and convictions, as described above, Respondent has failed to comply with state law. Accordingly, the Department sustains its burden of demonstrating violations of §§32-2153(A)(3), (B)(1), (B)(2), (B)(3), (B)(5), and (B)(7), as well as A.A.C. R4-28-301(C)(1).

RECOMMENDED DECISION In view of the foregoing, this Judge has little choice, given Respondent’s pervasive disregard of his obligations under state law, but to recommend that the Department revoke Respondent’s real estate salesperson’s license. While facts certainly exist justifying civil penalties in addition to revocation, this Judge recommends that the Department refrain from imposing any civil penalty. Done this day, October 20, 1997.

______________________________________ Kip M. Micuda Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 1997, to:

Mr. Jerry Holt, Commissioner Department of Real Estate 2910 North 44th Street, Ste. 100 ATTN: Bonnie Hollon Phoenix, AZ 85018

By ___________________________ -----------------------

Office of Administrative Hearings 1700 West Washington, Suite 602 Phoenix, Arizona 85007 (602) 542-9826