Opinion
H049198
10-12-2022
KATHLEEN O'NEILL, Plaintiff and Appellant, v. CALIFORNIA DEPARTMENT OF REAL ESTATE, Defendant and Respondent.
NOT TO BE PUBLISHED
(Santa Cruz County Super. Ct. No. 19CV01033)
Wilson, J.
Plaintiff Kathleen O'Neill appeals from the denial of her petition for writ of administrative mandamus, which sought to set aside the California Department of Real Estate's (DRE) denial of her 2017 application for a real estate salesperson license. On appeal and proceeding in propria persona, O'Neill generally challenges the DRE's decision and conduct in denying this and her previous applications. Finding no error, we affirm.
O'Neill has also filed a motion for sanctions against the Deputy Attorney General (DAG) who filed a respondent's brief in this case. O'Neill accuses the DAG of misrepresenting the record and the law. On the merits, we find the accusations unfounded and we deny the motion.
I. Background
A. Administrative Proceedings
In 2010, O'Neill applied for a real estate salesperson license. The application was denied based on O'Neill's criminal history convictions and her failure to disclose two convictions on the application. The decision denying her application recounted her convictions: (1) July 2001, a no contest plea for maintaining a place for drugs (Health & Saf. Code, § 11366); (2) April 2005, a no contest plea for driving with a blood alcohol level of 0.08 percent or higher (Veh. Code, § 23152, subd. (b)); (3) December 2005, a no contest plea for driving with a blood alcohol level of 0.08 percent or higher (Veh. Code, § 23152, subd. (b)), and driving while privilege was suspended for a prior driving under the influence (DUI) conviction (Veh. Code, § 14601.2, subd. (a)); (4) March 2006, a no contest plea for driving while privilege was suspended for a prior DUI conviction (Veh. Code, § 14601.2); and (5) January 2009, a no contest plea for driving without a valid driver's license (Veh. Code, § 12500, subd. (a)).
O'Neill applied again in 2015. The DRE served O'Neill with a statement of issues, which proposed denying her application based on her criminal convictions and her failure to disclose her prior license denial. After O'Neill failed to return a timely notice of defense or otherwise request a hearing, the DRE denied the application by default decision.
In 2017, O'Neill filed a new application for a real estate salesperson license.
While the application was pending, in October 2017, O'Neill pleaded no contest to misdemeanor violations of disturbing the peace by loud and unreasonable noise (Pen. Code, § 415, subd. (2)), and public intoxication (Pen. Code, § 647, subd. (f)).
In response to the 2017 application, the DRE filed a statement of issues to deny the application based on O'Neill's criminal convictions, including the 2017 conviction.
Following a hearing on December 18, 2018, the matter was submitted for decision. On January 2, 2019, the administrative law judge (ALJ) issued a proposed decision denying the 2017 application. The ALJ recounted O'Neill's criminal convictions and found that they were "substantially related to the qualifications, functions, or duties of a real estate licensee." The ALJ noted that the convictions were substantially related because they consisted of "conduct which demonstrates a pattern of repeated and willful disregard of the law, and [that] they consist[ed] of two or more convictions involving the consumption of alcohol," with "at least one conviction involv[ing] driving and the consumption of alcohol." The ALJ specifically noted, however, that cause for denial was not established based on the 2001 conviction, which had been dismissed under Penal Code section 1203.4.
The ALJ also addressed O'Neill's purported efforts at rehabilitation, noting that O'Neill asserted that she satisfied the rehabilitation criteria established by the DRE. The ALJ indicated that O'Neill "provided some evidence of her community involvement, compliance with probation, and formation of new relationships." However, the ALJ also determined that she had "a history of offenses spanning 2001 to 2009," with her most recent arrest occurring in 2016. The convictions resulting from that arrest had occurred within the last two years. The ALJ reasoned that O'Neill's "most recent convictions and her reluctance to take responsibility for her actions raises concerns about her fitness for licensure." Although the ALJ recognized that O'Neill was seeking dismissal of her convictions, "as of the time of the hearing, only the 2001 conviction had been dismissed." Accordingly, the ALJ concluded that O'Neill failed to demonstrate "sufficient rehabilitation to warrant licensure," that "a longer period [was] required to demonstrate rehabilitation," and that "[i]t would be against the public interest to grant [O'Neill's] application at this time."
On January 24, 2019, the DRE Commissioner adopted the ALJ's proposed decision denying O'Neill's 2017 application.
On February 17, 2019, O'Neill requested reconsideration of the DRE's decision. In support of the request for reconsideration, among other claims, O'Neill asserted that some of the convictions relied upon by the ALJ had been dismissed pursuant to Penal Code section 1203.4, and thus reliance on those convictions was prohibited. O'Neill also asserted that the ALJ failed to acknowledge and properly account for her efforts at rehabilitation. Attached to the reconsideration request was a Penal Code section 1203.4 dismissal of the 2017 conviction obtained on December 27, 2018.
O'Neill also raised claims regarding the DRE's adjudication of her 2015 application, including the assertion that the DRE wrongly denied the claim and that its employees had engaged in "defamation of character." As these claims are not pertinent to this appeal, we do not recount them in detail.
In its response, the DRE recommended denying the reconsideration request. The DRE concluded that the Penal Code section 1203.4 dismissal of the 2017 conviction "did not exist at the time of the hearing and should not be considered by the [DRE]." The DRE also concluded that even with the dismissal, O'Neill's application should be denied because only the 2001 and 2017 convictions had been dismissed, leaving four convictions that had not been dismissed. In addition, the DRE reiterated that O'Neill failed to show sufficient rehabilitation.
On March 5, 2019, the DRE's acting commissioner issued an order denying O'Neill's request for reconsideration of the January 24, 2019 decision.
B. Trial Court Proceedings
On April 4, 2019, O'Neill filed a petition for writ of administrative mandamus (Code Civ. Proc., § 1094.5), seeking to set aside the DRE's denial of the 2017 application.
O'Neill later filed a "Notice Motion: Seeking Relief for Tort Claims and Memorandum in Support," which alleged various tort claims against the DRE and its employees and sought monetary damages. More specifically, the motion alleged claims of defamation, malicious prosecution, and abuse of process by the DRE and certain DRE employees. In a written order, the trial court denied the motion, finding that O'Neill "ha[d] not alleged any tort claims, or any facts which would support tort claims within her petition," and she had failed to comply with the mandatory filing procedures of the Government Claims Act. On appeal, O'Neill does not challenge this decision, and thus we do not address it.
Following a hearing, the trial court issued an oral ruling denying the writ petition. The court later issued a written order, elaborating on its reasoning. The court noted
O'Neill's argument that her 2017 conviction and four convictions between 2005 and 2009 had been dismissed in July 2020, and thus the DRE's reliance on those convictions was improper. The court dismissed this argument because none of the convictions were dismissed until after the administrative hearing. The court also acknowledged O'Neill's argument that under Business and Professions Code section 480, "the DRE improperly considered the convictions that predated her application by more than seven years." The court also dismissed this argument, noting that although the statute had been amended to include the current seven-year restriction in 2020, the statute in effect at the time of the administrative hearing did not preclude consideration of the convictions.
As for the DRE's denial of the application, the trial court found substantial evidence existed to support the decision because two or more of O'Neill's convictions involved the consumption of alcohol and at least one involved driving and the use of alcohol. The court also found substantial evidence to support the finding that O'Neill had not demonstrated sufficient rehabilitation to warrant licensure. The court found that O'Neill's 2017 conviction supported the finding that a longer period of time was necessary to demonstrate rehabilitation. The court further found that except for the 2001 conviction, which was explicitly not considered, the balance of O'Neill's convictions were not dismissed at the time of the administrative hearing, thus supporting the finding that O'Neill had not demonstrated the ability to abide by the law. Finally, the court found O'Neill's rehabilitation evidence failed to demonstrate a change in attitude.
O'Neill timely appealed.
II. Discussion
A. Standard of Review
"Section 1094.5 of the Code of Civil Procedure provides the basic framework by which an aggrieved party to an administrative proceeding may seek judicial review of any final order or decision rendered by a state or local agency." (Bixby v. Pierno (1971) 4 Cal.3d 130, 137, fn. omitted.) Our inquiry is limited to whether the agency "proceeded without, or in excess of, jurisdiction; whether there was a fair trial; and whether there was any prejudicial abuse of discretion." (Code Civ. Proc., § 1094.5, subd. (b).) Abuse of discretion is established if the agency proceeded in a manner contrary to the law, "the order or decision is not supported by the findings, or the findings are not supported by the evidence." (Ibid.) We review the whole administrative record "to determine whether the findings are supported by substantial evidence and whether the agency committed any errors of law." (Donley v. Davi (2009) 180 Cal.App.4th 447, 456 (Donley); Bixby, supra, at p. 144.)
B. Applicable Law
"Business and Professions Code section 480 authorizes the denial of a license by a professional licensing board, including the DRE (Bus. & Prof. Code, § 477, subd. (a)), on the ground that the applicant has been convicted of a crime, 'if the crime . . . is substantially related to the qualifications, functions, or duties of the business or profession for which application is made.' " (Donley, supra, 180 Cal.App.4th at p. 463.) Further, at the time of the hearing, Business and Professions Code section 10177, provided the commissioner the authority to deny the issuance of a license to an applicant who had "[e]ntered a plea of guilty or nolo contendere to, or been found guilty of, or been convicted of, a felony, or a crime substantially related to the qualifications, functions, or duties of a real estate licensee . . . ." (former Bus. & Prof. Code, § 10177, subd. (b)(1), eff. Jan. 1, 2018 to Dec. 31, 2018, as amended by Stats. 2017, ch. 561, § 6.)
We quote from the version of Business and Professions Code section 480 that was applicable at the time of O'Neill's hearing. The statute was amended effective January 1, 2020, and the current version differs in substantial respects from the version applicable to O'Neill. We briefly address some of these changes below.
The DRE has also adopted regulations specifying the criteria for determining if a crime is substantially related to the qualifications, functions, or duties of a real estate licensee. As relevant here, a crime may be deemed to be "substantially related" if it involves "[c]onduct which demonstrates a pattern of repeated and willful disregard of law" (Cal. Code Regs., tit. 10, § 2910, subd. (a)(10)), or "[t]wo or more convictions involving the consumption or use of alcohol or drugs when at least one of the convictions involve driving and the use or consumption of alcohol or drugs." (Cal. Code Regs., tit. 10, § 2910, subd. (a)(11).)
C. Substantial Evidence Supports the License Denial
Preliminarily, we agree with the Attorney General that significant portions of O'Neill's opening brief are devoted to matters outside of the administrative record regarding the denial of the 2017 application. To the extent O'Neill challenges the prior denials of her 2010 and 2015 real estate salesperson license applications, those decisions are final and outside the scope of the present appeal. (Gov. Code, § 11523 [a petition for review of an administrative decision shall be filed within 30 days after the last day on which reconsideration can be ordered].)
As for the substance of the DRE's decision, we find substantial evidence supports the DRE's denial of the 2017 license application. At the time of the hearing, it was uncontroverted that O'Neill's criminal record reflected five convictions, three of which involved alcohol and two of which involved the consumption of alcohol and driving. O'Neill's most recent convictions in 2017 occurred during the pendency of the application. There is also no dispute that the DRE may deny issuance of a real estate license to an applicant who has been convicted of a crime substantially related to the qualifications, functions, or duties of a real estate licensee. Simply put, O'Neill's record of convictions provided a valid basis for denying O'Neill's application. (See Cal. Code Regs., tit. 10, § 2910, subd. (a)(10), (11).) Because substantial evidence supported the DRE's denial of the application, we find that the DRE did not abuse its discretion in declining to issue a license to O'Neill.
Substantial evidence also supports the DRE's finding that O'Neill failed to meet her burden to establish rehabilitation. Under the applicable version of Business and Professions Code section 480, subdivision (b), a real estate license may be denied if the applicant fails to meet all the rehabilitation criteria under section 2911, title 10 of the California Code of Regulations. (Former Bus. & Prof. Code, § 480, subd. (b), eff. Jan. 1, 2015 to Dec. 31, 2018, as amended by Stats. 2014, ch. 737, § 1.) Section 2911 sets forth 14 criteria to be used by the DRE in determining whether the applicant has been sufficiently rehabilitated (Cal. Code Regs., tit. 10, § 2911), and the burden rests with the applicant to demonstrate sufficient rehabilitation. (Donley, supra, 180 Cal.App.4th at p. 466.)
In this case, at the time of the hearing on the 2017 application, it had been less than two years since the date of O'Neill's 2017 conviction. (See Cal. Code Regs., tit. 10, § 2911, subd. (a)(1)(A) [providing that the "passage of less than two years after the most recent criminal conviction" "is inadequate to demonstrate rehabilitation"].) Further, that two-year period may be increased based on "[t]he nature and severity" (Cal. Code Regs., tit. 10, § 2911, subd. (a)(1)(B)(i)) of the applicant's crimes, especially if those crimes are" 'substantially related' to the qualifications, functions, or duties of a real estate licensee." (Cal. Code Regs., tit. 10, § 2911, subd. (a)(1)(B)(ii).) O'Neill's criminal history at the time of the administrative hearing included multiple DUI convictions. Finally, O'Neill's recent conviction also provided substantial evidence of a failure to demonstrate a "[c]hange in attitude from that which existed at the time of the conduct in question." (Cal. Code Regs., tit. 10, § 2911, subd. (a)(14).) Although O'Neill argues that the DRE did not properly credit her rehabilitation evidence, an applicant must demonstrate that she has met all the criteria necessary for a conclusion that she is rehabilitated. (Donley, supra, 180 Cal.App.4th at p. 466.) O'Neill did not. Thus, substantial evidence supports the finding that O'Neill failed to demonstrate complete rehabilitation.
O'Neill's other arguments concerning the DRE's decision are also unavailing. O'Neill argues that the DRE abused its discretion because the dismissal of her 2017 conviction constituted" 'new or different facts, circumstances, or law,'" warranting approval of her application on reconsideration. O'Neill is mistaken. First, as noted by the DRE, this evidence did not exist at the time of the administrative hearing, and thus could not be used to show that the ALJ's decision was erroneous. Second, as the DRE also noted, even with the absence of this conviction O'Neill's application still reflected four convictions, which included two DUIs. These other convictions were a sufficient basis to deny O'Neill's 2017 application, as they were also past crimes "substantially related" to the qualifications, functions, or duties of a real estate licensee. (Cal. Code Regs., tit. 10, § 2910, subd. (a)(11); see Donley, supra, 180 Cal.App.4th at p. 466 [concluding that the petitioner's conviction "was substantially related to the qualifications, functions or duties of a real estate salesperson licensee because it came within the meaning of section 2910, subdivision (a)(8)"].)
O'Neill also argues that it was improper to consider her prior convictions because they were more than seven years old. This argument is unavailing. Effective January 1, 2020, Business and Professions Code section 480, subdivision (a)(1) limits the consideration of convictions to those occurring "within the preceding seven years from the date of application," except for serious felonies under Penal Code section 1192.7 or crimes for which registration is required under Penal Code section 290, subdivision (d)(2) or (3). (Bus. & Prof. Code, § 480, subd. (a)(1)(A).) O'Neill's 2017 application and disposition of that application occurred well before the effective date of amended Business and Professions Code section 480. As we are only tasked with reviewing the DRE's decisional process based on the law as it existed at the time of the decision, there is no basis for applying the amended version of Business and Professions Code section 480.
Based on our review of the record, we find that substantial evidence supports the denial of O'Neill's real estate salesperson license, and that O'Neill has failed to demonstrate any errors of law. (Donley, supra, 180 Cal.App.4th at pp. 455-456.)
III. Disposition
The judgment is affirmed.
WE CONCUR: Bamattre-Manoukian, Acting P.J., Danner, J.