Regan v. State Dept. of Licensing
| Citation | 130 Wn. App. 39,121 P.3d 731 |
| Decision Date | 23 August 2005 |
| Docket Number | No. 31848-2-II.,31848-2-II. |
| Court | United States State Supreme Court of Washington |
| Parties | David H. REGAN, d/b/a Metro Bail Bonds, Inc., Appellant, v. STATE of Washington DEPARTMENT OF LICENSING, Respondent. |
Donald Gene Grant, Grant & Elcock PLLC, Vancouver, WA, for Appellant.
Susan Sackett Danpullo, Office of the Attorney General, Martha Patricia Lantz, Offc. of Atty. Gen. Lic & Admin. Law Div., Olympia, WA, for Respondent.
¶ 1 David Regan and Metro Bail Bonds (Regan) appeal an order of the Director of the Department of Licensing (DOL) finding that Regan aided and abetted unlicensed bail bond activity and revoking Regan's bail bond individual agent and agency licenses for five years. Regan argues that (1) the definition of "bail bond agent" in former RCW 18.185.010(6) (2000)1 is unconstitutionally vague; (2) the Director erroneously interpreted former RCWs 18.185.010(6) and 18.185.110(10) (2000); (3) the record lacks substantial evidence to support the Director's order; and (4) the Director's order and disciplinary sanctions were arbitrary and capricious. We affirm.
¶ 2 David Regan was a licensed bail bond agent and the president and sole shareholder of Metro Bail Bonds, Inc. Metro's principal office is in Vancouver, Washington; it has branch offices in Tacoma, Seattle, Yakima, and Spokane.
¶ 3 Carmetrus Patterson worked for Metro as a bail bond negotiator2 at three different times. From April through September 1999, she held a bail bond agent's license. From March 2000 through April 2001, she worked without a license, but she applied for a bail bond agent's license. When DOL requested additional information about her criminal history, she did not respond. DOL issued a Statement of Intent to Deny Patterson's application. Patterson failed to request a hearing and the Director entered a default order, denying her application and prohibiting her from applying for a bail bond agent's license for 20 months from May 24, 2000. Starting in late October 2001, she again worked as a negotiator.
¶ 4 Patterson applied to renew her bail bond agent's license, which application DOL received on November 1, 2001. Mary Haglund, the bail bonds program manager, called Metro's principal office and spoke with Elizabeth Regan.3 Haglund informed Elizabeth Regan that Patterson was not eligible to apply for a bail bond agent's license until January 24, 2002, and that Metro could not have Patterson working in the Metro office.
¶ 5 That same day, Patterson called Haglund; Haglund repeated to Patterson that she could not perform the duties of a bail bond agent4 and that she was ineligible to reapply for her license until January 24, 2002. Also that day, Elizabeth Regan told David Regan about her conversation with Haglund; she informed him that Patterson could not be licensed until January 24, 2002, and that Patterson could not write bail bonds without a license.
¶ 6 Shortly after her conversations with Elizabeth Regan and Patterson, Haglund received an anonymous phone call informing her that Metro was allowing unlicensed bail bond activity. Haglund called David Regan at Metro's principal office and told him that Patterson could not sell or issue bail bonds.
¶ 7 On November 27, 2001, Haglund sent David Regan a letter to follow up on her telephone calls. Regan received the certified letter on December 3, 2001. The letter repeated Haglund's admonition that Patterson could not perform the duties of a bail bond agent; the letter did not otherwise specify or elaborate on particular duties Patterson must avoid. No one from Metro contacted Haglund for clarification about what duties Patterson could or could not perform.
¶ 8 A few days after Haglund's conversation with David Regan, an individual5 came to the DOL reception desk to complain about unlicensed bail bond activity at Metro. The individual gave Haglund documents from Metro's office, including negotiator schedules for November and December and daily production reports for November 16, 26, 27, and 28, 2001. The documents showed that (1) Patterson worked as the day agent, (2) she was the sole listed negotiator on six signature bonds and six deed-of-trust bonds, and (3) she had worked with another employee in negotiating three other bail bond transactions.
¶ 9 On December 21, 2001, Karen Roney, a DOL investigator, went undercover to Metro's Tacoma office to post a bond for a fictitious criminal defendant. Patterson confirmed the booking and gave Roney paperwork to complete to purchase a signature bond.6 According to Roney, Patterson did not exercise discretion in selecting the forms, which were bundled together. At Metro's office, Roney observed Patterson serving other clients by (1) taking money, (2) issuing receipts, (3) instructing clients to go to the jail to bail out defendants, and (4) talking with a client about the return of collateral.
¶ 10 Patterson testified that, in deciding to issue a signature bond, she considered the amount of bail, Roney's employment, the defendant's charges and prior history, and whether the defendant had ever failed to appear. After Roney completed the paperwork, Patterson reviewed the documents with her. Roney paid $75 to Patterson. Patterson issued Roney a receipt and told her to ensure that the defendant appeared in court and checked in with Metro within 24 hours. Patterson then gave the paper work to Trisha Uehara, a licensed bail bond agent, to execute the bond form and to post it at the jail.
¶ 11 On January 14, 2002, DOL served Regan and Metro with a Statement of Charges and Notice and Order of Summary Suspension alleging aiding or abetting unlicensed activity.7 Regan and Metro requested a hearing.
¶ 12 Patterson, Roney, and David Regan, among others, testified at the hearing before an Administrative Law Judge (ALJ). Regan testified that an agent's typical steps in selling or issuing a bail bond are (1) making contact with the client, (2) collecting the premium, (3) determining the size of the bond and assessing whether the transaction needs to be referred to a manager, (4) giving the client a pre-printed set of forms, (5) retrieving the forms from the client, and (6) issuing a receipt. He also testified that licensed bail bond agents perform various duties, including collecting premium payments, assisting customers with paperwork, and obtaining information from the jail, all of which duties Patterson performed during her transaction with Roney.
¶ 13 Regan further testified that after DOL contacted Metro about Patterson's license status, (1) he told her to stay in the back room to avoid public contact, and to act as a receptionist screening calls for licensed agents, and (2) he knew Patterson was still selling bonds in December 2001.
¶ 14 Patterson testified that (1) Regan never told her to stop selling or negotiating bail bonds, (2) he discussed her sales with her in January 2002, and (3) he reviewed production reports daily when they were faxed to Metro's Vancouver office.
¶ 15 Following the hearing, the ALJ issued an initial decision dismissing the charges and lifting the summary suspension of Metro's license. The ALJ specifically found (1) credible Regan's testimony that he had told Patterson to stay in the back room and not to be out in the front of the Metro office; and (2) not credible Patterson's denial that Regan or anyone else from Metro had told her not to sell or to negotiate bail bonds.
¶ 16 DOL petitioned for review by the Director, alleging factual and legal errors in the ALJ's decision. The Director issued an order reversing the ALJ and revoking both Regan's bail bond agent and Metro's agency licenses for five years. The Director made numerous modifications to the ALJ's findings of fact and conclusions of law.
¶ 17 Primary among these modifications was the Director's finding Regan's testimony, that he had instructed Patterson not to sell or to issue bonds, lacked credibility because it was inconsistent and contradictory. Specifically, Regan had testified that his understanding of the law was that Patterson was prohibited only from posting bail at the jail or signing bonds, but that she could perform all other duties. The Director noted:
If that was his understanding, his testimony that (following notice from the Department) he told Ms. Patterson to stay in the back room and not have any contact with customers does not make any sense. If Ms. Patterson was permitted to perform all the duties involved in negotiating a bond, but for signing and posting, why would she need to remain in the back room?
Administrative Record (AR) at 690.
¶ 18 The Director also relied on evidence in the record that Regan and other Metro employees met with Patterson to suggest she testify at her deposition that her job was called "service representative," rather than "bond negotiator," to take advantage of a perceived statutory loophole. The Director found such coaching indicated that Regan and Metro employees had a "motive or bias to present the facts in this proceeding in a prescribed manner." AR at 691. In contrast Patterson's testimony did not contain inconsistencies. And in light of DOL's charges against her, her testimony was also self-incriminating, thus indicating a lack of motive to misrepresent facts. These factors suggested that, where their testimonies conflicted, Patterson was more credible than Regan.
¶ 19 Regan petitioned for judicial review. The superior court affirmed most of the Director's decision, but it remanded to the Director to reconsider the length of the license suspension. On remand, the Director reinstated the original five-year suspension.
¶ 20 Regan then requested judicial review of the Order...
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