11-1005-16658-2

 

STATE OF MINNESOTA

OFFICE OF ADMINISTRATIVE HEARINGS

FOR THE COMMISSIONER OF COMMERCE

 

 

In the Matter of the Real Estate Salesperson License Application of Stacey Ann Ratai

FINDINGS OF FACT,                            CONCLUSIONS, AND                           RECOMMENDATION

          The above-entitled matter came on for a hearing before Administrative Law Judge Barbara L. Neilson on July 22, 2005, at 9:30 a.m. at the Office of Administrative Hearings in Minneapolis, Minnesota.  Michael J. Tostengard, Assistant Attorney General, 445 Minnesota Street, Suite 1200, St. Paul, Minnesota 55101-2130, appeared on behalf of the Department of Commerce ("the Department").  Stacey Ratai, 9043 East Wakemup Village Road, Cook, MN  55723, appeared on her own behalf, without an attorney.  The OAH record closed at the conclusion of the hearing on July 22, 2005. 

NOTICE

          This Report is a recommendation, not a final decision.  The Commissioner of Commerce will make the final decision after a review of the record.  The Commissioner may adopt, reject or modify the Findings of Fact, Conclusions, and Recommendations.  Under Minn. Stat. § 14.61, the final decision of the Commissioner shall not be made until this Report has been made available to the parties to the proceeding for at least ten days.  An opportunity must be afforded to each party adversely affected by this Report to file exceptions and present argument to the Commissioner.  Parties should contact the office of Kevin Murphy, Deputy Commissioner of Commerce, 85 Seventh Place East, Suite 500, St. Paul, Minnesota 55101-2198, for information about the procedure for filing exceptions or presenting argument.

 

If the Commissioner fails to issue a final decision within 90 days of the close of the record, this report will constitute the final agency decision under Minn. Stat. § 14.62, subd. 2a.  The record closes upon the filing of exceptions to the report and the presentation of argument to the Commissioner, or upon the expiration of the deadline for doing so.  The Commissioner must notify the parties and the Administrative Law Judge of the date on which the record closes.

 

STATEMENT OF ISSUES

During July and August of 2002, the Respondent engaged in sexual conduct on more than one occasion with a juvenile who had previously been in placement at a correctional facility at which the Respondent was employed.  She pleaded guilty to two counts of criminal sexual conduct in the third degree in 2003.  The issue presented in this case is whether the Respondent thereby engaged in conduct that demonstrates that she is unqualified to act as a real estate salesperson under Minn. Stat. § 45.027, subd. 7(4) and whether the Department’s denial of her application for licensure should be affirmed. 

The Administrative Law Judge recommends that the denial of the Respondent’s application be reversed because the conviction does not directly relate to the occupation of real estate salesperson within the meaning of Minn. Stat. § 364.03, subds. 1-2. 

          Based upon all of the proceedings herein, the Administrative Law Judge makes the following:

FINDINGS OF FACT

1.              The Respondent Stacey Ann Ratai, applied to the Department of Commerce for a real estate individual license on or about March 23, 2005.  The Respondent checked “yes” in response to a question on the application asking whether she had ever been charged with, or convicted of, or been indicted for, or entered a plea to, any criminal offense (felony, gross misdemeanor or misdemeanor), other than traffic violations, in any state or federal court.  She provided documents relating to a 2003 conviction to the Department.[1]

2.              The Respondent was previously employed by the Minnesota Department of Corrections.  She worked as a juvenile counselor at the Thistledew Juvenile Correctional Facility in Togo, Minnesota, from June of 1999 to February of 2003.  She became acquainted with a juvenile who was placed at the facility from March 25, 2002, until July 12, 2002.  After the juvenile left the correctional facility but was still under court supervision, the Respondent and the juvenile met at a hotel in the Twin Cities on July 29-30 and August 16-17, 2002, and engaged in sexual intercourse.  The Respondent was 26 and the juvenile was 16 at the time.  The Respondent and the juvenile corresponded with each other between August 2002 and February 2003.[2] 

3.              After personnel from the Hennepin County Home School found approximately seventy “love letters” from the Respondent and a photograph of the Respondent in the juvenile’s belonging, they contacted the Hennepin County Sheriff’s Office to report that the juvenile may have been the victim of criminal sexual conduct by the Respondent.  The Respondent was charged in late July of 2003 with two counts of criminal sexual conduct in the third degree.[3] 

4.              In November of 2003, the Respondent pleaded guilty to two counts of criminal sexual conduct in the third degree, which is a felony.   She was fined in the amount of $3,000, with $2,950 stayed, and was sentenced to 180 days, with imposition of the sentence stayed.  She served 120 days of work release and was placed on five years of probation, which will expire in November 2008.  Once her probationary period is successfully completed, the felony charge will be reduced to a misdemeanor.  She has not been required to register as a sex offender.[4]

5.              The Department of Commerce reviewed the Respondent’s application for a real estate salesperson license and documentation relating to her conviction, and determined that she was unqualified to act as a real estate salesperson under Minn. Stat. § 45.027, subd. 7(4).  The Department noted that real estate salespersons are provided access to the homes and money of clients, and was concerned about the past conviction as showing that the Respondent had abused a position of authority and trust.  The Department’s investigator did not contact the Respondent’s probation officers before making her recommendation to deny the license application.[5]

6.              The Respondent was experiencing difficulties in her marriage and was at a very low point in her life when the sexual conduct with the juvenile occurred.  She has since successfully completed mental health therapy and has gained a better understanding of herself.  She regrets the conduct, feels remorse for her actions, and accepts responsibility for her misconduct.[6]

7.              In letters she wrote to her counselor and the juvenile victim in October of 2004, the Respondent recognized that she took advantage of the trust the juvenile had in her and his inexperience in relationships to get what she needed.  She indicated that she had come to realize that this situation could affect all of the juvenile’s future relationships.  She stated that she was sorry for her lack of judgment and hoped that the juvenile could overcome any difficulties related to the incident.[7] 

8.              By letter dated March 15, 2005, the Respondent’s probation officer from October 2003 to June 2004 indicated that the Respondent had cooperated with him and was in full compliance with all court-ordered conditions during the period he supervised her.  He expressed support for her application to be licensed as a real estate agent.[8] 

9.              By letter dated March 21, 2005, the Respondent’s current probation officer indicated that the Respondent had met all conditions of her probation including completing all treatment requirements, and was functioning well in the community.  He noted that her “involvement with the legal system was atypical for her” and “was a result of overwhelming personal matters” which she has taken the initiative to rectify.[9]

10.          The Respondent submitted several letters from high school teachers, coaches, friends, and co-workers.  Her supervisor during her prior employment at a different juvenile treatment facility praised her work during that employment and indicated that she “was a constant professional in and out of the workplace.”[10]  Her high school teacher and volleyball coach indicated that the Respondent “made very responsible decisions” and was looked up to by all of the players on the team.[11]  Another school employee and friend noted that the Respondent was popular, willing to help others, and compassionate.[12]  A long-time family friend noted that she was a conscientious person who was highly regarded in the community.[13]  Another neighbor and family friend stated that the incident with the juvenile was out of character for the Respondent.[14]

11.          The Respondent has no other criminal history.[15]

 

          Based upon the foregoing Findings of Fact, the Administrative Law Judge makes the following:

CONCLUSIONS

1.          The Administrative Law Judge and the Commissioner of Commerce are authorized to consider the charges against Respondent under Minn. Stat. §§ 45.027, subd. 7, and 14.50.

2.          Respondent received due, proper and timely notice of the charges against her, and of the time and place of the hearing.  This matter is, therefore, properly before the Commissioner and the Administrative Law Judge.

3.          The Department has complied with all relevant procedural legal requirements. 

4.          The burden of proof in this proceeding is on the Respondent to show by a preponderance of the evidence that she should be granted a license in this matter.[16]

5.          The Commissioner of Commerce may deny an application for a real estate salesperson’s license if the Commissioner finds that it is in the public interest to do so and the applicant has “engaged in an act or practice, whether or not the act or practice directly involves the business for which the person is licensed or authorized, which demonstrates that the applicant or licensee is untrustworthy, financially irresponsible, or otherwise incompetent or unqualified to act under the authority or license granted by the commissioner.[17] 

6.          Minn. Stat. § 45.027, subd. 10, specifies that “Chapter 364 [relating to rehabilitation of those convicted of crimes] does not apply to an applicant for a license . . . where the underlying conduct on which the conviction is based would be grounds for denial . . . of the license.”

7.          Respondent’s conduct as evidenced by her conviction of third degree criminal sexual conduct does not demonstrate that she is “untrustworthy, financially irresponsible, or otherwise incompetent or unqualified to act under the authority or license” of real estate salesperson under Minn. Stat. § 45.027, subd. 7(a)(4), or warrant the denial of her license application under Minn. Stat. § 45.027, subd. 10. 

8.          Under Minn. Stat. § 364.03, subd. 1, notwithstanding any other statutory provision to the contrary, “no person shall be . . . disqualified from pursuing, practicing, or engaging in any occupation for which a license is required solely or in part because of a prior conviction of a crime or crimes, unless the crime or crimes for which convicted directly relate to the . . . occupation for which the license is sought.”[18]  In determining whether a conviction directly relates to the occupation for which the license is sought, Minn. Stat. § 264.03, subd. 2, specifies that the licensing authority must consider the following factors:

(a)      the nature and seriousness of the crime or crimes for which the individual was convicted;

(b)      the relationship of the crime or crimes to the purposes of regulating . . . the occupation for which the license is sought;

(c)      the relationship of the crime or crimes to the ability, capacity, and fitness required to perform the duties and discharge the responsibilities of the . . . occupation.

9.          To the extent that Chapter 364 applies here, the Respondent’s conviction is not directly related to the occupation of licensed real estate salesperson within the meaning of Minn. Stat. § 364.03, subd. 1. 

10.          These Conclusions are reached for the reasons discussed in the Memorandum below, which is hereby incorporated in these Conclusions.

 

            Based upon the foregoing Conclusions, the Administrative Law Judge makes the following:

RECOMMENDATION

IT IS HEREBY RECOMMENDED:  that the Department’s denial of the Respondent’s application for a real estate salesperson’s license be REVERSED. 

Dated:  August 22, 2005

 

s/Barbara L. Neilson

BARBARA L. NEILSON

Administrative Law Judge

 

NOTICE

Pursuant to Minn. Stat. § 14.62, subd. 1, the Agency is required to serve its final decision upon each party and the Administrative Law Judge by first-class mail or as otherwise provided by law.

 

Reported:  Tape Recorded (not transcribed); 1 tape.

 

 

MEMORANDUM

 

In the Notice of and Order for Hearing filed in this matter, the Department alleged that Respondent is not entitled to a real estate salesperson’s license because she engaged in sexual conduct with a juvenile who had previously been placed in the correctional facility where she worked and later entered a guilty plea to two counts of criminal sexual conduct in the third degree.  The Department argues that this conduct demonstrates that the Respondent is “untrustworthy, financially irresponsible, or otherwise incompetent or unqualified to act under the authority or license granted by the commissioner” under Minn. Stat. § 45.027, subd. 7(a)(4).  The Respondent made no attempt to deny or excuse her past misconduct, but argued that she has learned a hard lesson and will not repeat such behavior.  She requested that she be afforded an opportunity to move on and work in the area of real estate sales. 

During the criminal investigation, the Respondent readily admitted her involvement with the juvenile.  She also truthfully disclosed the conviction on her application for a real estate license, provided pertinent information to the Department, and made no attempt to deny her involvement or limit her responsibility at the hearing.  She has taken full responsibility for the mistake she made.  She has no prior or subsequent criminal convictions.  There is no evidence of any sort of pattern of similar behavior on her part.  It appears that her involvement with the juvenile was aberrant, isolated behavior on her part that occurred at a time when she was experiencing significant problems in her marriage.  She has successfully completed counseling, has accepted responsibility for her role in the situation, and has acknowledged and apologized for the detrimental impact on the victim.  It is evident that she is very remorseful about this incident.  These facts are not sufficient to support the conclusion that the Respondent engaged in a practice that was fraudulent, deceptive, dishonest, or demonstrated untrustworthiness. 

Under Chapter 364 of the statutes, a person cannot be disqualified from pursuing a licensed occupation due to prior conviction of a crime unless the crime relates directly to the occupation for which the license is sought.  The Department argues that Chapter 364 is inapplicable here because Minn. Stat. § 45.027, subd. 10, was later amended to state that Chapter 364 does not apply to an applicant where the underlying conduct on which the conviction is based would be grounds for denial of the license.  This appears to reflect legislative intent that an applicant in a case such as this cannot provide evidence of rehabilitation to overcome disqualification from licensure.  However, the matter is not free from all doubt since Chapter 364 itself specifies that it applies “[n]otwithstanding any other provision of law to the contrary.”[19]  In any event, the Administrative Law Judge concludes that the facts in the present case are not sufficient to support the conclusion that the Respondent’s underlying conduct directly relates to the occupation of real estate salesperson.  There is no basis for a conclusion that her conduct places real estate clients at risk or makes her more likely to engage in fraudulent, deceptive, dishonest, or untrustworthy activity while engaged in real estate sales.  There simply is no connection between the Respondent’s inappropriate sexual involvement with an adolescent boy and her pursuit of an occupation in real estate sales.

The Administrative Law Judge is not minimizing the nature and seriousness of the Respondent’s criminal conduct.  She was in a position of trust with the adolescent and betrayed that trust by allowing herself to be drawn into a sexual relationship with him after he left the correctional facility.  However, in light of the isolated nature and circumstances of the Respondent’s conduct, its lack of connection to the types of activities involved in real estate sales, and the policy of the State of Minnesota to “encourage and contribute to the rehabilitation of criminal offenders and to assist them in the resumption of the responsibilities of citizenship” including the opportunity to “engage in a meaningful and profitable trade, occupation, vocation, profession or business,”[20] the Administrative Law Judge has recommended that the Department’s denial of the Respondent’s license application be reversed. 

B.L.N.