Pautsch v. Maryland Real Estate Comm'n

• Decision Date: 28 October 2011
• Docket Number: No. 9,2011.,Sept. Term,9
• Citation: 423 Md. 229,31 A.3d 489
• Parties: Joel PAUTSCH v. MARYLAND REAL ESTATE COMMISSION.
• Court: Maryland Court of Appeals

31 A.3d 489

423 Md. 229

Joel PAUTSCH

v.MARYLAND REAL ESTATE COMMISSION.

No. 9

Sept. Term

2011.

Court of Appeals of Maryland.

Oct. 28, 2011.

Nancy S. Forster (Law Office of Nancy S. Forster, Towson, MD), on brief, for petitioner.

Jessica B. Kaufman, Asst. Atty. Gen. (Douglas F. Gansler, Atty. Gen. of Maryland, Baltimore, MD), on brief, for respondent.

Argued before BELL, C.J. HARRELL, BATTAGLIA, GREENE, ^* MURPHY, ADKINS, BARBERA, JJ.BATTAGLIA, J.

In this case, we are asked to review the decision of the Maryland Real Estate Commission, Respondent, to revoke the real estate licenses ¹ of Joel T. Pautsch, Petitioner, pursuant to Sections 17–322(b)(24)(i) of the Business Occupations and Professions Article, Maryland Code (2000, 2004 Repl.Vol.),² based upon his convictions for child abuse. Mr. Pautsch sought judicial review of the Commission's decision in the Circuit Court for Baltimore City,³ which affirmed in a Memorandum Opinion penned by Judge Barry G. Williams, in which he reasoned that there was “ competent, material and substantial evidence to support” the Commission's decision, and “there [was] no evidence to support the allegation that the decision of the Maryland Real Estate Commission was either arbitrary or capricious.” The Court of Special Appeals affirmed in an unreported opinion,⁴ concluding that the Commission's “estimation of [Mr. Pautsch's] trustworthiness was neither arbitrary nor capricious,” and that Mr. Pautsch “ failed to demonstrate any factual or legal error in the Commission's decision.” We granted certiorari, Pautsch v. Maryland Real Estate Commission, 418 Md. 587, 16 A.3d 977 (2011), to consider the following questions:

1. Did the Court of Special Appeals err in holding that a four year old conviction for sexual child abuse warrants revocation of Petitioner's real estate broker's license “[b]ecause licensure would place members of the public in [Petitioner's] trust” especially when such a conclusion could apply to any crime and particularly since Petitioner's convictions had absolutely no nexus to his work as a real estate broker? ⁵

2. In adopting the ALJ's finding of fact that “[Petitioner] has and continues to be a respected real estate broker in Anne Arundel County and carries a reputation of professionalism, diligence and respect [and] [h]is real estate practices have never been affected by felonies that he committed or the therapy that he receives,” was it arbitrary and capricious for the Commission to nevertheless conclude that revocation of Petitioner's real estate license was appropriate because his crimes “undermine his trustworthiness in dealing with the public during the course of providing real estate brokerage services, and negatively impact his character and reputation”?We shall hold that the Commission's determination that there was a nexus between Mr. Pautsch's real estate licenses and his conviction for child sexual abuse was supported by substantial evidence and that the Commission's prescribed sanction, revocation, was neither arbitrary nor capricious.

In July of 2007, the Commission issued a “Statement of Charges and Order for Hearing,” which stated:

STATEMENT OF CHARGES AND ORDER FOR HEARING

On February 5, 2007, the Maryland Real Estate Commission filed a complaint against the Respondent, Joel Pautsch, a real estate broker with Providence Realty, LLC. Based on the complaint, and an investigation, the Commission has determined that charges against the Respondent are warranted. Accordingly, in this Order, the Commission will set forth the charges against the Respondent.

The Statement of Charges alleged that Mr. Pautsch violated Section 17–322(b)(24)(i) of the Business Occupations and Professions Article, because he had been convicted of sex abuse with a minor and child abuse by a parent, and as such, that his real estate license was subject to suspension or revocation:

Charges Against the Respondent

The Maryland Real Estate Commission hereby charges the Respondent with violating the Real Estate law, Maryland Annotated Code, Business Occupations and Professions Article, §§ 17–101 et seq. The specific violations of the law are set forth below. The Respondent is advised that these charges, if established following a hearing may result in a suspension or revocation of any real estate license the Respondent currently holds. In addition, in appropriate cases, the Commission may impose a monetary fine of up to $5000.00 per violation, pursuant to Business Occupations and Professions Article, §§ 17–322(c).

It is alleged that the Respondent has been convicted in the Circuit Court for Anne Arundel County in State of Maryland v. Joel T. Pautsch, Case No. 02–K–06–001728 IF of Sex Abuse with a Minor, a felony. It is additionally alleged that the Respondent has been convicted in the Circuit Court for Anne Arundel County in State of Maryland v. Joel T. Pautsch, Case No. 02–K–07–000140IN of Child Abuse by Parent, a felony.

Based on the above, it is alleged that the Respondent has violated, and is subject to, Business Occupations and Professions Article, §§ 17–322(b)(24) and (25) and 17–322(c), which provide:

§ 17–322 Denials, reprimands, suspensions, revocations, and penalties-Grounds.

(b) Grounds:—Subject to the hearing provisions of § 17–324 of this subtitle, the Commission may deny a license to any applicant, reprimand any licensee or suspend or revoke a license if the applicant or licensee:

* * *

(24) under the laws of the United States or any state, is convicted of:

(i) a felony;

* * *

(25) engages in conduct that demonstrates bad faith, incompetency, untrustworthiness or that constitutes dishonest, fraudulent or improper dealings

* * *

(c) Penalty.-(1) Instead of or in addition to suspending or revoking a license, the commission may impose a penalty not exceeding $5000.00 for each violation.

The Statement of Charges also reflected that the Commission delegated the task of conducting Mr. Pautsch's hearing to an administrative law judge at the Office of Administrative Hearings (“OAH”).⁶

The ALJ held a hearing during which she heard from an investigator for the Commission who authenticated various exhibits, including reports documenting the Anne Arundel County Police Department's investigation of Mr. Pautsch, charging documents, docket sheets from Mr. Pautsch's criminal cases in the Circuit Court for Anne Arundel County, an application to the District Court of Maryland (sitting in Anne Arundel County) for charges against Mr. Pautsch, and a document relating to Mr. Pautsch's registration as a sex offender. The ALJ heard from nine other witnesses, including Mr. Pautsch himself, and those who were associated with him, such as colleagues and friends, his pastor, and a former client, and also received several exhibits including a record of Mr. Pautsch's psychotherapy treatment, letters written on his behalf, and a resume of Mr. Pautsch's professional history and accomplishments.

In her proposed decision ⁷ to the Commission, the ALJ made the following findings of fact:

1. On January 29, 2007, the Respondent pled guilty to the felony charges of Sex Abuse with a Minor and Child Abuse by Parent in the Anne Arundel County Circuit Court. The victims of the Respondent's crimes were his daughter and his niece.

2. On March 23, 2007, as a result of the Respondent's guilty pleas, the Honorable Joseph P. Manck sentenced him to four years in jail with three years suspended. Four months of the year to be served were in the Anne Arundel County Detention Center, with the remaining eight months on house arrest, at which time the Respondent was allowed to work. Judge Manck required the Respondent to register as a child sex offender, to have no unsupervised encounters with minors, and to continue counseling. Judge Manck also ordered that the Respondent be on probation for five years.

The ALJ also made findings regarding Mr. Pautsch's rehabilitation efforts and other mitigation:

3. The Respondent is currently involved in a church recovery program called “Celebrate Recovery” which is a biblically based twelve step recovery program that addresses many types of addiction issues; it is not limited to alcohol and drug addictions. At least three times per week, he is involved in a Celebrate Recovery activity.

4. The Respondent currently attends therapy and counseling with Jim Gach, Clinical Social Worker. From June 2006 through November 2007, he received psychotherapeutic treatment from James R. David, Ph.D., a private practice psychotherapist and Board certified sex therapist.

5. The Respondent has never previously been the subject of a complaint to the Commission. He has and continues to be a respected real estate broker in Anne Arundel County and carries a reputation of professionalism, diligence and respect. His real estate practices have never been affected by the felonies that he committed or the therapy that he receives.

The ALJ also captioned a recommendation for sanction as “Conclusions of Law”: ⁸

Based upon the foregoing Findings of Fact and Discussion, I conclude, as a matter of law, that the Respondent's real estate broker's license should be not be [sic] revoked, but should be suspended for six months to allow additional treatment and therapy prior to the resumption of real estate activities. Md.Code Ann., § 17–322(d) (Supp.2007). Additionally, I conclude, that a civil penalty of $10,000 is not appropriate in this case. Md.Code Ann. § 17–322(c) (Supp.2007).

Thereafter, the Commission adopted, in a proposed order,⁹ the ALJ's findings of fact, but rejected the ALJ's recommended sanction of a six-month suspension in favor of revocation. The Commission stated that it disagreed with the ALJ's recommendation for sanction for a number of reasons, to include that Mr. Pautsch had violated Section 17–322(b)(24)(i) of the Business Occupations and Professions Article under circumstances similar to those in Attorney Grievance v. Thompson, 367 Md. 315, 786 A.2d 763 (2001), which...