ALJDEC

99A-H1998-REL · Department of Real Estate · 1999-03-29

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 23, 1999

APPEARANCES: Michael Fledzinskas appeared on his own behalf; the State of Arizona, Department of Real Estate was represented by Assistant Attorney General Moira McCarthy.

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Applicant Michael G. Fledzinskas brings this appealable agency action protesting the Arizona Department of Real Estate’s denial of his application for a real estate salesperson’s license. The Department based the denial on Applicant’s felony conviction. The parties presented evidence and testimony at the hearing. Based on the entire record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order that the Commissioner grant a probationary license. FINDINGS OF FACT 1. Applicant is a 21-year-old man who has passed the written examination for a real estate salesperson’s license. In September 1998, Applicant filed an application for licensure. (Exhibit A.) He disclosed a felony conviction for burglary, which occurred while he was living in Sedona, Arizona. (Exhibit B.) 2. In May 1996, Applicant had just turned eighteen and was living on his own in Sedona. He was under some personal stress at the time he committed the offense, the circumstances of which are not particularly relevant to this licensure proceeding, nor do they excuse Applicant’s conduct. Applicant drove his truck up to a locked, unattended car in an isolated parking area. He looked into the car’s window, saw a wallet on the seat, and decided to break in. Applicant retrieved a towel and a hammer from his car and tried to break the window. After several tries, he could not break it. He then stepped back and threw the hammer at the window. Which broke it. He reached in and grabbed the wallet. What Applicant did not know was that the police were staking-out that parking lot because of a rash of car burglaries in the area. They watched Applicant the entire time. When he broke the window, they moved in and arrested him. (Exhibit C.) 3. In August 1996, Applicant pleaded guilty to a class 4 felony of non-residential burglary and received two years’ probation. (Exhibit E1- E4.) In September 1997, Applicant got an early discharge from probation because he had complied with the terms of probation, completed his community service, paid all fines and fees, had no prior record, and did not present a risk of relapse. (Exhibit E5-E6.) 4. The Department denied Applicant’s application based on the felony conviction. (Exhibit G.) Applicant appealed, stating that “this was a one- time circumstance committed under severe duress and not reflective of applicant’s general demeanor.” (Exhibit H.) 5. At the hearing, Applicant testified about his conduct. He is ashamed and repeatedly characterized his actions as “stupid.” He readily admitted that his conduct was criminal and he showed remorse. He also testified that he has worked for several years in the restaurant and fast- food businesses. He has held positions of trust, including night manager of a fast-food business, in which he has had responsibility for safekeeping cash and other assets of the businesses. Applicant I s a high school graduate with some college education. He plans to continue college, but would like to work at a professional-level job in the meantime. This tribunal finds Applicant’s testimony to be credible, truthful, and honest. 6. Applicant’s father also testified at the hearing. George Fledzinskas is an Arizona-licensed real estate broker, in good standing, who lives and works in California. He would like Applicant to work under him and assist him. They have agreed to have Applicant’s license tied to George Fledzinskas’ broker license for a few years to ameliorate any of the Department’s concerns. (Exhibit H.) CONCLUSIONS OF LAW 1. Applicant must show that he meets the qualifications for licensure. A.R.S. § 32-2125.01. The Commissioner has discretion to deny a license application for any of the reasons listed in A.R.S. § 32-2153(A) and (B). The Department has alleged that grounds for denial of Applicant’s application exist under that statute per subsections (B)(2)--conviction of any “crime of forgery, theft, extortion, conspiracy to defraud, a crime of moral turpitude or any other like offense” and (B)(7)--not being a person of honesty, truthfulness, and good character. 2. There is no question that Applicant has committed a crime that falls within subsection (B)(2) of the statute. But that does not automatically disqualify Applicant. The Arizona Legislature has left licensing decisions to the Commissioner’s discretion. In Applicant’s case, there is a great deal of mitigation. Applicant was young at the time of the offense. He is still young, but has clearly learned from his mistake. He cooperated with the police and pled guilty to the offense. He made an effort to get early termination from probation, and did so. He made full disclosure on the application and has been forthright with the Department and this tribunal. Most telling, however, is that the offense is clearly an isolated event in Applicant’s life. He made a mistake; and it was a big one. In fact, it was a felony. But he has had no other encounters with law enforcement before or since. Because of the amount of mitigating evidence, Applicant should be entrusted with a probationary license. 3. Applicant’s and his father’s offer is well taken. The severity of the conviction and Applicant’s youth may still cause the Department concern for the welfare of the public. The appropriate action is to grant Applicant a probationary license for two years. The terms of probation should be that Applicant obey all statutes and rules, comply with all Department directives, and only work under the designated broker's license of his father. These provisions address any lingering concerns for public welfare. 4. Probationary licenses upon initial application are not expressly provided for in the statutes governing the Arizona Department of Real Estate. However, it is settled law that administrative agencies have both express and implied powers and that not all standards accompanying a grant of powers need be set forth in express terms. Cracchiolo v. State, 146 Ariz. 452, 457, 706 P.2d 1219 (App. 1985); Neal v. City of Kingman, 167 Ariz. 574, 579, 810 P.2d 572 (App. 1990), vacated in part on other grounds, 169 Ariz. 133, 817 P.2d 937 (1991) (affirming the appellate court’s implied- powers ruling). For example, in Janusz v. Ariz. Dept. of Economic Security, DES erroneously paid Janusz unemployment benefits. 157 Ariz. 504, 759 P.2d 650 (App. 1988). Janusz requested a waiver of repayment under a statutory grant of authority giving DES power to waive repayments in certain circumstances. Since DES found that Janusz could not repay immediately, but would likely be able to repay in the future, DES “deferred” payment to a future date. The court found that, even though the statute did not expressly mention deferment as an option, deferment was implicitly authorized under the statutory grant of authority to waive repayments in full. 157 Ariz. at 507. 5. Using that reasoning, the Commissioner has authority to grant initial probationary licenses in appropriate circumstances, such as Applicant’s. Because the Commissioner may either completely grant or completely deny licensure, implicitly the Commissioner may take an action that is “in between” those two options. Like the governmental action in the Janusz case, there is implied authority for it.

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RECOMMENDED ORDER Considering the factual findings and conclusions above, IT IS RECOMMENDED that the Arizona Department of Real Estate grant Michael Fledzinskas a probationary license for two years, as long as he meets the other criteria for licensure. The terms of probation should be that he obey all statutes, rules, and Department directives, and that he only work under the supervision of George Fledzinskas as his designated broker; he may not work under any other broker during the probationary period.

Done this 30th day of March 1999.

OFFICE OF ADMINISTRATIVE HEARINGS

______________________________________ Eric A. Bryant Administrative Law Judge

Original mailed this ___ day of March 1999, to:

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

By ___________________________

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Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826