Derasmo v. Smith

• Decision Date: 24 February 1971
• Citation: 93 Cal.Rptr. 289,15 Cal.App.3d 601
• Court: California Court of Appeals Court of Appeals
• Parties: Paul DeRASMO, Petitioner and Appellant, v. Burton E. SMITH, Real Estate Commissioner, and Department of Investment, Division of Real Estate, a Department of the State of California, Defendant and Respondent. Civ. 35115.

Page 289

93 Cal.Rptr. 289

15 Cal.App.3d 601

Paul DeRASMO, Petitioner and Appellant, v. Burton E. SMITH, Real Estate Commissioner, and Department of Investment, Division of Real Estate, a Department of the State of California, Defendant and Respondent.

Civ. 35115.

Court of Appeal, Second District, Division 5, California.

Feb. 24, 1971.

Hearing Denied April 22, 1971.

Richard Goldstein, Beverly Hills, for petitioner ahd appellant.

Thomas C. Lynch, Atty. Gen., and Anthony C. Joseph, Deputy Atty. Gen., for defendant and respondent.

REPPY, Associate Justice.

This is an appeal from the superior court's affirmance of a decision of the real estate commissioner (hereinafter, the commissioner) revoking petitioner-appellant Paul DeRasmo's real estate salesman's license under section 10177, subdivision a, of the Business and Professions Code. ¹

After a hearing on an accusation, a proposed decision was issued by the hearing officer containing findings of fact, the substance of which is as follows:

1. In his October 1967 application for a real estate salesman's license, DeRasmo answered in the negative inquiries as to prior arrests or convictions, ² and the commissioner issued DeRasmo a salesman's license in reliance on said answers.

2. In November 1953, in the City of New York, DeRasmo pleaded guilty to a charge of possession of heroin; upon suspension of proceedings he was placed on probation, the terms of which he successfully completed.

3. At the time DeRasmo executed the application, he was under the impression that the 1953 record had been expunged and that there was no need to set forth the conviction. He did not intend to deceive or mislead the commissioner, but acted in good faith in answering the questions in the negative, and said answers were true as DeRasmo then understood the questions.

The hearing officer nonetheless determined that there was proper cause for disciplinary action under section 10177, subdivision a. He recommended a revocation of DeRasmo's license and the issuance of a restricted license upon application by DeRasmo accompanied by a statement from an employing broker that he had read the decision issued by the commissioner and would agree to review all of DeRasmo's transactions.

The commissioner adopted the proposed decision of the hearing officer.

DeRasmo sought review by filing a petition for a writ of mandamus in the superior court. The court denied the petition after receiving evidence and hearing arguments. The substance of the pertinent findings of fact made by the trial court are as follows: (1) all of the commissioner's findings are supported by the weight of the evidence; (2) DeRasmo did not show that he had any rational basis for his belief that the prior conviction had been expunged; and (3) the falseness of DeRasmo's answers deprived the commission of an opportunity to investigate DeRasmo's background to ascertain his honesty and good reputation--in part the statutory prerequisites for issuance of a salesman's license. The trial court drew the following conclusions of law: (1) the 1953 conviction was void because petitioner was denied his right to counsel; (2) one of the purposes of questions in license applications asking for an applicant's prior criminal arrests or convictions is to provide the licensing agency with an opportunity to investigate the background and qualifications of the applicant; (3) the negative answers to the inquiries as to arrests and convictions were material misstatements within the meaning of section 10177, subdivision a; (4) the effect of each misstatement was to deprive respondent of complete information and of the opportunity to fully investigate the application before petitioner was issued a license; and (5) whether the commissioner would have refused the issuance of petitioner's license if the arrest or conviction had been disclosed is not relevant in determining whether section 10177, subdivision a has been violated.

Section 10177, subdivision a, provides that 'The commissioner may suspend or revoke the license of any * * * licensee * * * who has done any of the following:

'(a) Procured, or attempted to procure, a * * * license, * * * by * * * deceit, or by making any material misstatement of fact in an application for a * * * license.'

Both parties agree that, in view of the administrative finding that petitioner was not intentionally deceitful, the license was revoked on the ground that he had made a 'material misstatement.'

On appeal, petitioner contends that because his New York conviction was void, it could not have been the basis for refusal of the license, and that therefore he did not procure the license by a material misstatement. He asserts that his license could not be properly revoked without a showing that it would have been denied if the misstatement had not been made, i.e., if the true facts had been known. He relies on both the phrase 'procured * * * by' and the word 'material' in support of his interpretation of the statute.

We hold that petitioner has stated the proper interpretation and base our ruling on the statutory language 'procured * * * by.' Similar terminology was construed in Jones v. Maloney, 106 Cal.App.2d 80, 234 P.2d 666. In that case the petitioner had wilfully denied convictions as to two misdemeanors in his application for an insurance agent's license. His license was revoked under subdivision b of Insurance Code, section 1731, ³ as it provided for revocation if the license holder (1) has '* * * Wilfully made a misstatement in an application to the commissioner for a license,' (p. 87, 234 P.2d p. 670--italics supplied) or (2) has 'obtained his license by concealment or knowing misrepresentation.' (P. 89, 234 P.2d p. 672--italics supplied.)

The court held that, as to charges under the first provision, there was nothing in that provision 'which limits the misstatement to one concerning a matter which, if known, would cause a denial of the license,' and adding, in effect, that it is the Fact or wilful misstatement that is important, rather than the matter misstated. (Id. at p. 87, 234 P.2d at p. 670.) However, it was held that 'on the charge of having obtained his license by concealment or misrepresentation, the materiality of the matter concealed or misrepresented becomes important. * * * Under this portion of the section * * * a showing that this concealment or misrepresentation was of such a nature that it was the cause of the obtaining of a license which otherwise would have been denied (is required).' (Id. at p. 89, 234 P.2d at p. 671.)

Nelson Valley Bldg. Co. v. Morrisey, 135 Cal.App.2d 738, 288 P.2d 135, cited by respondents, is distinguishable in that the statute under which the petitioner's license was revoked in that case provided: 'Misrepresentation of a material fact by an applicant In obtaining a license constitutes a cause for disciplinary action.' (Italics supplied. Bus. & Prof.Code, § 7112.) Language referring to misrepresentation of a fact 'in obtaining' a license does not cannote the same necessity for a causal requirement between that misrepresentation and the granting of the license as does language referring to procuring or obtaining a license by misrepresentation or misstatement. The 'in obtaining' language is comparable to that of the first provision of section 1731, subdivision b, interpreted in Jones v. Maloney, Supra, 106 Cal.App.2d 80, 87, 234 P.2d 666. ⁴

Would the license have been denied if the arrest and conviction questions had been answered affirmatively' The superior court held that the 1953 conviction was void because of lack of counsel. Such a judgment is of no validity or effect (De La Vigne v. Dept. of Motor Vehicles, 272 Cal.App.2d 820, 825, 77 Cal.Rptr. 675), and could not have served in and of itself as a proper ground for denial of the license. ⁵ Respondent does not contend otherwise. However, a question as to the propriety of the superior court's holding of voidness arises because of the recent case of Thomas v. Dept. of Motor Vehicles, 3 Cal.3d 335, 90 Cal.Rptr. 586, 475 P.2d 858.

A judgment of prior conviction, even though valid on its face, may be attacked at any time on constitutional grounds in a proceeding in which by reason of such prior conviction increased sanctions may be imposed against the person suffering it. ⁶ (Thomas v. Dept. of Motor Vehicles, Supra, 3 Cal.3d 335, 338, 90 Cal.Rptr. 586, 475 P.2d 858; Hasson v. Cozens, 1 Cal.3d 576, 579, 83 Cal.Rptr. 161, 463 P.2d 385; People v. Coffey, 67 Cal.2d 204, 214--215, 60 Cal.Rptr. 457, 430 P.2d 15.) Collateral attack on constitutional grounds of a first drunk driving conviction has been allowed in proceedings leading to a second drunk driving conviction where the two convictions would lead to a suspension of driving privilege (under Vehicle Code, section 13352) on the theory that the suspension of driving privilege constituted the imposition of a greater sanction based on the first conviction. (Hasson v. Cozens, Supra, 1 Cal.3d 576, 579, 83 Cal.Rptr. 161, 463 P.2d 385; De La Vigne v. Dept. of Motor Vehicles, Supra, 272 Cal.App.2d 820, 822--825, 77 Cal.Rptr. 675; Mitchell v. Orr, 268 Cal.App.2d 813, 815--817, 74 Cal.Rptr. 407.) Similarly, we feel that collateral attack of a conviction on constitutional grounds should be permitted in a proceeding in which a real estate salesman's license is revoked because of that conviction. If revocation of a driver's license constitutes 'sanction' so should revocation of a salesman's license. It should not matter that the proceeding is one in which sanctions are to be imposed for the one and only conviction, as opposed to greater sanctions on the occurrence of a second conviction because of a first. Nor should it be determinative that the revocation proceeding was not for the imposition of sanctions because of the conviction itself but rather because of procurement of the license by material misstatement as to the conviction, because whether there was...