Owen v. Sands, A121809.

• Decision Date: 28 July 2009
• Docket Number: No. A121809.,A121809.
• Citation: 98 Cal. Rptr. 3d 167,176 Cal.App.4th 985
• Court: California Court of Appeals Court of Appeals
• Parties: TIMOTHY J. OWEN, Plaintiff and Appellant, v. STEPHEN P. SANDS, as Registrar of Contractors, etc., Defendant and Respondent.

176 Cal.App.4th 985

98 Cal. Rptr. 3d 167

TIMOTHY J. OWEN, Plaintiff and Appellant, v. STEPHEN P. SANDS, as Registrar of Contractors, etc., Defendant and Respondent.

No. A121809.

Court of Appeals of California, First District, Division Five.

July 28, 2009.

Timothy J. Owen, in pro. per., for Plaintiff and Appellant.

Edmund G. Brown, Jr., Attorney General, and Diann Sokoloff, Deputy Attorney General, for Defendant and Respondent.

OPINION

BRUINIERS, J.^*

A licensed contractor was cited for six violations of state contractor law and ordered to pay civil penalties and compensation to the injured homeowner. He challenged the citation, which was upheld by the Registrar of Contractors after an administrative hearing at which the violations were found true by a preponderance of the evidence. The contractor argues the standard of proof should have been clear and convincing evidence. We conclude the agency applied the correct standard of proof. We also reject the contractor's contention that he was improperly convicted of criminal misdemeanors through an administrative proceeding, and his argument that the administrative hearing was procedurally flawed because no accusatory pleading was filed.

BACKGROUND

The following facts are taken from the administrative law judge's findings, which are not disputed for purposes of this appeal. On June 28, 2005, Timothy J. Owen verbally agreed to replace 18 windows, install a sliding glass door, and replace the front door in a Kensington home for $19,000. He performed the work in July and August 2005, even though his contractor's license was not issued until September 2005. The homeowner asked other contractors to review the quality of Owen's work, and it was found deficient. When the homeowner confronted Owen on the matter, he became angry, demanded more money, and ultimately abandoned the project. The homeowner hired another contractor to correct and complete the work at a cost of $13,265.

The Registrar of Contractors (Registrar) issued a citation to Owen alleging six violations of the Business and Professions Code:¹ (1) engaging in the business of contractor without a license (§ 7028); (2) willfully and materially departing from trade standards of good workmanship (§ 7109); (3) failing to correct or complete a project for the stated contract price, causing the owner to secure the services of another contractor (§ 7113); (4) failing to include required provisions in the contract (§ 7159); (5) willfully or fraudulently acting in a manner that substantially injured another (§ 7116); and (6) falsely claiming a workers' compensation insurance exemption (§ 7125, subd. (b)). The citation imposed civil penalties totaling $1,600 and an order of correction requiring Owen to pay the homeowner $7,880.79.

Owen contested the citation and a hearing was held before an administrative law judge (ALJ) of the Contractors' State License Board. Before the hearing commenced, Owen argued that the standard of proof at the hearing should be clear and convincing evidence, but the ALJ ruled the applicable standard of proof was preponderance of the evidence. Following four days of testimony, the ALJ found each of the alleged violations to be true, and increased the civil penalties to $2,000 after finding Owen's conduct was deceitful, grave and egregious. The Registrar adopted the ALJ's proposed decision in September 2007 and his decision became final in October.

In November 2007, Owen filed a petition for administrative mandamus asking the court to set aside the decision on the ground that the ALJ applied the wrong standard of proof. (Code Civ. Proc., § 1094.5.) After briefing, the trial court ruled that the preponderance of the evidence was the correct standard of proof and denied the petition.

DISCUSSION

Owen argues the ALJ applied the wrong standard of proof, that the ALJ improperly convicted him of misdemeanors without criminal jurisdiction, and that the hearing was procedurally flawed because it was not initiated with a formal accusatory pleading. Because only legal issues are raised on appeal, our standard of review is de novo. (Steinsmith v. Medical Board (2000) 85 Cal.App.4th 458, 465 (Steinsmith).)

I. Standard of Proof at the ALJ Hearing

Owen argues the standard of proof required in all professional or vocational license disciplinary proceedings is clear and convincing proof to a reasonable certainty. We conclude the preponderance standard was appropriate in the citation proceeding because the only potential sanctions were orders of correction and civil penalties.

(1) Owen relies on a line of cases holding that the clear and convincing evidence standard of proof applies in proceedings to restrict, suspend or revoke professional or vocational licenses. In the lead case of Ettinger v. Board of Medical Quality Assurance, the court held that "the proper standard of proof in an administrative hearing to revoke or suspend a doctor's license should be clear and convincing proof to a reasonable certainty and not a mere preponderance of the evidence." (Ettinger v. Board of Medical Quality Assurance (1982) 135 Cal.App.3d 853, 856 (Ettinger).) Ettinger in turn relied on cases holding that this heightened standard of proof applies in proceedings to disbar an attorney or to suspend or revoke a real estate license. (Id. at p. 855, citing Furman v. State Bar (1938) 12 Cal.2d 212, 229 (Furman); Small v. Smith (1971) 16 Cal.App.3d 450, 457 (Small); Realty Projects, Inc. v. Smith (1973) 32 Cal.App.3d 204, 212 (Realty Projects); see also Kapelus v. State Bar (1987) 44 Cal.3d 179, 184, fn. 1 [242 Cal.Rptr. 196, 745 P.2d 917] (Kapelus); cf. San Benito Foods v. Veneman (1996) 50 Cal.App.4th 1889, 1892-1895 [heightened standard of proof not required in proceeding to revoke nonprofessional food processing license]; Mann v. Department of Motor Vehicles (1999) 76 Cal.App.4th 312, 318-320 [same with respect to vehicle salesperson's license].) Although Owen does not cite any case that holds the clear and convincing evidence standard of proof applies in a licensed contractor disciplinary proceeding, the Registrar does not dispute that the higher standard would apply in a proceeding seeking suspension, or revocation of a contractor's license. (See Viking Pools, Inc. v. Maloney (1989) 48 Cal.3d 602, 605 [257 Cal.Rptr. 320, 770 P.2d 732] [noting that ALJ applied clear and convincing evidence standard in licensed contractor disciplinary hearing without addressing whether the higher standard was required].)

(2) The question before us is whether the clear and convincing evidence standard also applies in a citation proceeding where the only proposed sanctions are a civil penalty or an order of correction, and which does not involve restriction, suspension, or revocation of a contractor's license. In the licensed contractor context, the Registrar generally has the power to "cite, temporarily suspend, or permanently revoke any license or registration if the . . . licensee . . . is guilty of or commits any one or more of the acts or omissions constituting causes for disciplinary action." (§ 7090; see also § 7095.) A subset of statutes, however, provides for citation proceedings with more limited remedies. (§§ 7099-7099.11.) "If, upon investigation, the registrar has probable cause to believe that a licensee . . . has committed any acts or omissions which are grounds for denial, revocation, or suspension of license, he or she may, in lieu of proceeding pursuant to this article, issue a citation to the licensee . . . . Each citation . . . may contain an order of correction fixing a reasonable time for correction of the violation or an order . . . for payment of a specified sum to an injured party in lieu of correction, and may contain an assessment of a civil penalty." (§ 7099, italics added.) If the licensee appeals a citation, the Registrar must afford an opportunity for a hearing and "thereafter issue a decision, based on findings of fact, affirming, modifying, or vacating the citation or penalty, or directing other appropriate relief." (§ 7099.5; see § 7099.3.) Suspension or revocation of a license cannot be ordered unless certain procedural prerequisites, such as the filing of an accusation, are satisfied. (See, e.g., Gov. Code, § 11503.)² Those procedures were not invoked here.

Neither party has cited, and we have not found, any case law that directly addresses the appropriate standard of proof in a citation proceeding such as that described in section 7099 et seq. Therefore, we look to the principles underlying the Ettinger line of cases for guidance on the issue.

(3) In Hughes v. Board of Architectural Examiners, the Supreme Court linked the Ettinger cases to procedural due process principles.³ (Hughes v. Board of Architectural Examiners (1998) 17 Cal.4th 763, 788-789 [72 Cal.Rptr.2d 624, 952 P.2d 641].) "[W]e often have recognized that an individual, having obtained the license required to engage in a particular profession or vocation, has a `fundamental vested right' to continue in that activity. [Citations.] [¶] A licensee, having obtained such a fundamental vested right, is entitled to certain procedural protections greater than those accorded an applicant. For example, this court repeatedly has held, with exceptions not pertinent here, that the `independent judgment' standard of review must be applied [in the trial court] to an administrative decision that substantially affects such a fundamental vested right. [Citations.]" (Id. at pp. 788-789.) "Similarly, it has been held that procedural due process of law requires a regulatory board or agency to prove the allegations of an accusation filed against a licensee by clear and convincing evidence rather than merely by a preponderance of the evidence. (See, e.g., Kapelus[,supra, 44 Cal.3d at p.] 184, fn. 1 . . .; Ettinger[,supra, 135 Cal.App.3d at p.] 856 . . .; see also [citation].)" (Id. at p. 789, fn. 9.)

Although courts have not considered the...