Pieri v. Fox

• Decision Date: 11 September 1979
• Citation: 158 Cal.Rptr. 256,96 Cal.App.3d 802
• Court: California Court of Appeals Court of Appeals
• Parties: Joseph George PIERI III, Plaintiff and Appellant, v. David H. FOX, as Real Estate Commissioner, etc., Defendant and Respondent. Civ. 18498.

Page 256

158 Cal.Rptr. 256

96 Cal.App.3d 802

Joseph George PIERI III, Plaintiff and Appellant, v. David H. FOX, as Real Estate Commissioner, etc., Defendant and Respondent.

Civ. 18498.

Court of Appeal, Fourth District, Division 1, California.

Sept. 11, 1979.

Hearing Denied Nov. 8, 1979.

Joel M. Kriger, San Diego, for plaintiff and appellant.

George Deukmejian, Atty. Gen., Arthur C. de Goede, Asst. Atty. Gen., and Edmond B. Mamer, Deputy Atty. Gen., for defendant and respondent.

STANIFORTH, Associate Justice.

Joseph George Pieri III sought a writ of mandate (Code Civ.Proc., § 1094.5) in the superior court to annul the decision of the administrative law judge made in hearings before the Department of Real Estate, State of California (Commissioner) denying Pieri's application for real estate broker's license. ¹ The trial court issued its alternative writ and upon hearing found "substantial evidence" supported the Commissioner's denial of the broker's license to Pieri. The sole basis was Pieri's plea of guilty (Oct. 1975) to a misdemeanor violation of Unemployment Insurance Code section 2100. He made a false written statement to obtain unemployment benefits. Pieri appeals contending no substantial evidence supports the Commissioner's denial of a broker's license and as a matter of statutory command (Bus. & Prof.Code, § 480, subd. (b)), he cannot be denied a broker's license upon the ground stated.

I

The Commissioner's evidence consisted solely of the municipal court docket reflecting the charge made, Pieri's plea of guilty of making a false statement a misdemeanor. The municipal court imposed no fine or other sanction on Pieri except a requirement of restitution of $229 as condition of summary probation. The record shows that upon his successful completion of the one-year term of summary probation, the conviction was set aside, a plea of not guilty entered and the charge dismissed pursuant to Penal Code section 1203.4. Pieri testified as to the factual basis for his 1975 plea of guilty. In 1974 Pieri was the resident manager of rental property and received a rental allowance plus some money for performing odd jobs. In order to obtain unemployment insurance benefits, he filed false statements consisting of signed bi-weekly statements in which he represented he was not being paid anything.

There was no evidence of misconduct or complaints regarding Pieri's current work as a real estate salesman. In fact, Pieri presented three witnesses who testified to his good reputation and performance as a real estate salesperson. He was a university graduate in sociology. Aside from this single transgression, his record appears without blemish.

Based upon this evidence, the administrative law judge found (finding IV) that Pieri "was convicted of the crime of violating Unemployment Insurance Code Section 2100 (False Statement), a misdemeanor, and a crime involving moral turpitude;" and that crime "bears a substantial relationship to the qualifications, functions, or duties of a real estate licensee" (finding V). The law judge concluded that cause existed for denial of Pieri's application "by reason of his convictions as set forth in findings IV and V above, pursuant to Sections 480 and 10177(b) of the Business and Professions Code."

II

Business and Professions Code section 480 provides in part:

"(a) A board may deny a license regulated by this code on the grounds that the applicant has one of the following:

"(1) Been convicted of a crime; or

". . .

"(3) . . . P The board may deny a license pursuant to this subdivision only if the crime or act is substantially related to the qualifications, functions or duties of the business or profession for which application is made.

"(b) Notwithstanding any other provision of this code, no person shall be denied a license solely on the basis that he has been convicted of a crime if he has obtained a certificate of rehabilitation under Section 4852.01 and following of the Penal Code, and if his probation has been terminated and the information or accusation has been dismissed pursuant to Section 1203.4 of the Penal Code."

Since the Legislature rewrote in chapter 1321, Statutes of 1974, the provisions of law governing denial, suspension revocation of a business or professions license "even a conviction can no longer support a denial or revocation of a license unless the crime is 'substantially related to the qualifications, functions or duties of the business or profession' in question. (Bus. & Prof.Code, §§ 480, subd. (a) and 490.)" (Loder v. Municipal Court, 17 Cal.3d 859, 874, 132 Cal.Rptr. 464, 475, 553 P.2d 624, 635.)

The Legislature in enacting Business and Professions Code sections 480, subdivision (a), and 490 intended this prohibition to prevail over those sections of the Business and Professions Code which prescribe licensing requirements for a particular business and professional license. Section 475, subdivision (a) of the Business and Professions Code states: "Notwithstanding any other provisions of this code, the provisions of this division shall govern the denial of licenses on the grounds of: . . . (2) Conviction of a crime; . . ." (Italics added.) Section 480, subdivision (b), also contains similar broad language. From the language of section 480, subdivision (a)(3), it is clear that an additional requirement must be met before any denial or suspension of a license is authorized.

Before Pieri's application for real estate broker's license could be denied, substantial evidence must be produced to support a finding that the crime be committed came within its ambit; to wit, the crime must have been Substantially related to His qualifications for a real estate broker's license. Here the evidence before the law judge, without question, showed the commission of a 1974 crime involving a false statement made to procure unemployment benefits this was a crime involving moral turpitude. (Carey v. Board of Medical Examiners, 66 Cal.App.3d 538, 541, 136 Cal.Rptr. 91; In re Hallinan, 43 Cal.2d 243, 272 P.2d 768.) The record, however, before the law judge contains no evidence whatsoever to warrant the further finding required by section 480, subdivision (a)(3) that this single isolated act in 1974 "substantially related" in some rational respect to his 1978 application for a broker's license. The evidence before the law judge was without contradiction that since 1975 when Pieri was granted a California real estate salesman's license, he had performed his duties in all respects satisfactorily. The evidence was uncontradicted as to the isolated nature of his offense; he was highly regarded by persons brokers in his profession. In short, there is a total lack of evidence to support the finding that the misdemeanor offense committed in 1974 was Substantially related to the 1978 qualifications of Mr. Pieri as a real estate broker. All evidence points to an opposite conclusion. In Brandt v. Fox, 90 Cal.App.3d 737, 153 Cal.Rptr. 683, the appeal court could not "condone" the conduct of Brandt distribution of cocaine but continued stating:

"Given the isolated nature of the incident, the fact that it occurred over four years ago, the lack of any evidence that plaintiff's subsequent conduct has been other than exemplary, or that such conduct bore a substantial relationship to the qualifications, functions or duties of, or otherwise rendered him unfit to engage in, the activity for which he sought a license, we must conclude that the Commissioner's decision to deny plaintiff's application was not supported by substantial evidence." (Id. at p. 747, 153 Cal.Rptr. at p. 689.)

The concept that conviction of a crime a felony (here a misdemeanor) constitutes "a disqualifying defect in moral character, "which justifies permanent exclusion from an occupation, found favor among courts in times past (Hirsch v. City & County of San Francisco, 143 Cal.App.2d 313, 325, 300 P.2d 177, 185). However, the present requirement is that at least some reasonable relation between an applicant's qualification and his past criminal conviction be shown. (See Morrison v. State Board of Education, 1 Cal.3d 214, 234-235, 82 Cal.Rptr. 175, 461 P.2d 375; Perrine v. Municipal Court, 5 Cal.3d 656, 663, 97 Cal.Rptr. 320, 488 P.2d 648.)

We conclude that the prohibition against denial of a real estate license enacted in 1974 in Business and Professions Code section 480, subdivision (a) (3), adds an additional factual requirement that must be supported by substantial evidence. It is in addition to the requirement authorizing a denial of a license found in Business and Professions Code section 10177, subdivision (b). Proof of commission of a crime involving moral turpitude is not enough; competent evidence must show that the present qualifications of Pieri for a broker's license is in some fashion rationally and substantially related to, effected by the earlier offense. Absence of such evidence here requires reversal.

III

A second and further legal basis compels this conclusion, Pieri points to section 480, subdivision (b), as a plain explicit legislative command that precludes a denial of a real estate license where an applicant such as Pieri had had his conviction set aside, a not guilty plea entered and the charge dismissed under Penal Code section 1203.4. The Attorney General contends that despite the plain explicit language of section 480, subdivision (b), denial was nevertheless...