15-1005-17053-2
STATE OF
OFFICE OF ADMINISTRATIVE HEARINGS
FOR THE DEPARTMENT OF COMMERCE
|
In the Matter of the Real
Estate Salesperson License Application of Marjorie Elizabeth Savik |
FINDINGS
OF FACT, CONCLUSIONS
AND RECOMMENDATION |
The above-entitled matter came on for
hearing before Administrative Law Judge Beverly Jones Heydinger (“ALJ”) on May
9, 2006, at the Office of Administrative Hearings,
Christopher M. Kaisershot, Assistant
Attorney General, 1200
NOTICE
This Report is a recommendation, not
a final decision. The Commissioner of Commerce will make the final decision
after reviewing the record and may adopt, reject or modify these Findings of
Fact, Conclusions, and Recommendations. Under Minn. Stat. § 14.61, the
Commissioner’s decision shall not be made until this Report has been available
to the parties to the proceeding for at least ten (10) 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
Kevin Murphy, Deputy Commissioner,
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.[1]
The record closes upon the filing of exceptions to this 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
1. Did the
Respondent engage in fraudulent, deceptive, and dishonest practices in
violation of Minn. Stat. § 82.35, subd. 1(b)?
2. Did the
Respondent engage in acts that demonstrate she is untrustworthy, financially
irresponsible, or otherwise incompetent or unqualified to act under the license
granted by the Commissioner in violation of Minn. Stat. § 45.027, subd.
7(a)(4)?
3. Does
the Criminal Rehabilitation Act preclude Respondent’s disqualification from
licensure as a real estate salesperson?
FINDINGS OF FACT
1. The
Respondent applied for a Real Estate License on October 24, 2005.[2] As
part of the application, an applicant is required to provide background
information including whether the applicant has “ever been charged with, or
convicted of, or been indicted for, or entered a plea to, any criminal offense,
. . . other than traffic violations, in any State or Federal Court?” The
Respondent answered “yes.”[3]
2. Prior
to her application for a Real Estate License, Respondent was a paddlewheel
operator for Eastside Neighborhood Services (“ESNS”) at Gabby’s Bar.[4]
3. A
paddlewheel game is similar to roulette.
The player buys chips from an operator.
The chips are used to purchase slips, and the slips are placed on
certain numbers or blocks of numbers. A
paddlewheel is designed to bring in a profit for the operator. The odds of winning are smaller than the
payouts for winning tickets.[5]
4. The
operator is required to keep careful records of the amount wagered and the
amount paid out on each spin of the paddlewheel. For each spin of the wheel, losing tickets
are removed, and winning tickets are paid.
Over time, the payouts approximate the odds that are built into the
game. By not clearing the losing tickets
before the next spin, the operator gives the ticket holder a second chance to
win. This is called “double spinning,”
and the charity running the paddlewheel
operation loses the benefit of the losing tickets. “Double-spinning” is felony
cheating in
5. ESNS
contacted the Alcohol and Gambling Enforcement Division of the Department of
Public Safety when its profit from the paddlewheel at Gabby’s Bar dropped below
the expected level.[7] Profits for the periods that the Respondent
operated the paddlewheel dropped from an initial level of 14% in 2002 to a
cumulative low of 6.9%.[8]
6. In
response to the contact from ESNS, Cliff Emmert from the Alcohol and Gambling
Enforcement Division conducted an investigation. A camera installed at Gabby’s routinely
recorded the operation of the paddlewheel.
Emmert reviewed 30 days of videotapes at Gabby’s, and compared the
videotapes with the gambling records of money collected and paid out. Exhibit 1 is two discs that include eight
portions of the videotape, each one showing the Respondent
double-spinning. In one of the eight
instances she received a tip from a game player when she spun the wheel without
picking up the losing tickets. Other
portions of the videotapes identified three other employees who were
double-spinning.[9]
7. Mr.
Emmert contacted the Minneapolis Police Department and arranged to have certain
employees interviewed, including the Respondent. During the interview the Respondent
demonstrated her understanding of the paddle-wheel operation, including the
required record-keeping. She
acknowledged that double-spinning was not permitted, but that sometimes
customers complained that the wheel had not gone around four times as required,
or had not been spun in the direction opposite from the prior spin, as was her
customary practice. When customers
complained, she would occasionally re-spin so that the customers would have fun
and continue to play. She understood
that an employee could get in trouble for double-spinning, but admitted that
she did occasionally double-spin. She
was not aware that double-spinning was a crime.[10]
8. Respondent
was charged with one count of Felony Cheating in violation of Minn. Stat. §
609.76, subd. 3(i)(4) (2003), and one count of Felony Theft Over $500 in
violation of Minn. Stat. § 609.52, subd. 2(1) and 3(3)(a) (2003).[11]
9. Respondent
pled guilty to Minn. Stat. § 609.76, subd. 3(ii)(4), a gross misdemeanor, for
manipulating a gambling device to affect the outcome of the game. Respondent was sentenced to 365 days in jail, 335
of which were stayed, subject to performing 160 hours of community service
within 180 days, paying restitution in the amount of $604.00, and committing no
new offenses for two years.[12]
10. Respondent
has performed the required community service, and paid the required
restitution. All terms of the sentence will be met if Respondent commits no new
offenses prior to August 3, 2006.[13]
11. On
November 16, 2005, the Department notified the Respondent that it would
recommend denial of Respondent’s Real Estate License Application, based on her
criminal offense. It denied the license
because Respondent had a criminal conviction related to her trustworthiness to
handle others’ money, and her honesty. The
letter also informed Respondent that she could request a contested case
hearing.[14]
12. Respondent
formally requested a hearing on December 6, 2005.[15]
13. During
the fall of 2005, the Respondent worked as a hostess at the Parade of Homes, in
a home valued at over three million dollars.
Its owner, Adam Johnson, a licensed real estate salesperson and licensed
residential contractor, worked along with the Respondent at the home, guiding
visitors and responding to questions about the home and its furnishings. At no time during her employment did Mr.
Johnson doubt the Respondent’s honesty or trustworthiness. Mr. Johnson was always in the home when the
Respondent was. Mr. Johnson has worked
with many real estate salespeople and is confident that the Respondent is
capable of doing the job well and honestly.[16]
14. A
real estate salesperson has access to homes when the owners are not
present. A real estate salesperson may
occasionally handle cash transactions, but ordinarily checks are written to and
delivered to the broker.
15. In
order to protect the public, the Department does not grant a license to persons
that it believes are dishonest. It
believed that Respondent’s criminal conviction related directly to her ability
to perform the job of a real estate salesperson, because of the access to
people’s homes and financial information. The Department concluded that sufficient time
had not passed to assure that the Respondent has sufficiently rehabilitated and
shown her fitness to perform the duties of a real estate salesperson.[17]
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 Respondent’s application for a real estate sales license pursuant
to Minn. Stat. §§ 45.027, 82.35, subd. 6, and 14.50 (2004).
2.
Respondent
received due, proper and timely notice of issues in this proceeding and the
time and place of hearing. This matter
is, therefore, properly before the Commissioner and the Administrative Law
Judge.
3.
The Department
has complied with all relevant procedural requirements.
4.
The Respondent
has the burden of showing by a preponderance of the evidence that she meets the
requirements applicable to real estate sales persons.
5.
The Respondent
has engaged in an act that is a fraudulent, deceptive and dishonest practice in
violation of Minn. Stat. § 82.35, subd. 1(b).
6.
The Respondent has
engaged in an act that is untrustworthy, financially irresponsible, or otherwise
incompetent and renders her unqualified to act as a real estate salesperson, in
violation of Minn. Stat. § 45.027, subd. 7(a)(4).
7.
The Respondent’s
conviction for theft related to gambling constitutes a basis to censure,
suspend or revoke her license as a real estate salesperson. Because the conviction relates to theft of
money, it directly relates to the licensed occupation of real estate
salesperson. The Respondent has failed
to show evidence of sufficient rehabilitation and present fitness to perform
the duties of a real estate salesperson, as required by Minn. Stat. § 364.03,
subds. 1-3.
8.
The Department
has demonstrated that it had an adequate basis to deny Respondent’s license.
RECOMMENDATION
IT IS HEREBY RECOMMENDED: that the Commissioner of the Department of
Commerce DENY the Respondent’s application for a license as a real estate
salesperson.
Dated
this __25th____ day of May, 2006
__s/Beverly
Jones Heydinger_______
BEVERLY
JONES HEYDINGER
Administrative
Law Judge
Tape-recorded
(one tape)
NOTICE
Under
MEMORANDUM
The Commissioner of Commerce has the
authority to license real estate salespersons.
Statutes and rules governing the profession outline with specificity the
conduct expected of such persons. A
conviction for theft is sufficient evidence of the Respondent’s dishonesty and
financial irresponsibility to warrant denying her license. The Respondent contends that in her case, the
conviction is not evidence that she is dishonest or financially irresponsible
because she did not know that double-spinning was illegal. However, this is not a compelling argument. The record shows that when the Respondent
began her employment, the charity’s draw was at the expected level, but after
the Respondent gained experience, the returns dropped. This pattern reinforces the Department’s
conclusion that double-spinning was not the result of poor training or
inadvertent error. Instead, as
Respondent admitted, she allowed double-spinning so that the game players would
have a good time and stay at the wheel.
It should have been obvious from the requirements for detailed
bookkeeping that failure to remove losing bids from the table before spinning
again would result in losses for the charity, her employer.
The Respondent has not presented
sufficient evidence of rehabilitation and present fitness to perform the duties
of a real estate salesperson. The statute
addressing rehabilitation states that an individual shall not be disqualified
“if the person can show competent evidence of sufficient rehabilitation and
present fitness to perform . . . the occupation for which the license
is sought.”[18]
It further states that sufficient
evidence may be established by copy of a release order and evidence that at
least a year has passed since release without a subsequent conviction, and an
order of discharge from probation or parole.[19] The Respondent has yet to complete two years
without offense, one of the terms of her sentence.
The licensing agency is also directed
to consider the nature and seriousness of the crime, circumstances surrounding
it, the person’s age when the crime was committed, the time elapsed, and any
other competent evidence including letters of support.[20]
The Respondent was an adult when she
committed her offense. Although she did
not know double-spinning was a crime, she knew it was wrong and that another
employee had been disciplined for it. This reinforces the Department’s conclusion
that the Respondent has poor judgment. Although
the Respondent presented a letter and the testimony of Adam Johnson, a former
employer, praising the Respondent’s job performance, Mr. Johnson acknowledged during his testimony
that he was present in the home where the Respondent was working. This is not strong evidence of her
trustworthiness or good judgment.
Given that the Respondent’s crime
involved misuse of money and dishonesty, and that she has not completed her
sentence, it is reasonable for the Department to refuse to grant her a real
estate salesperson license at this time.
B.J.H.
[1] Unless otherwise indicated, all statutory references
are to Minnesota Statutes 2004.
[2] Ex. 7.
[3] Ex. 7 at 2.
[4] Ex. 8. Though ESNS owned the paddlewheel, it was
operated at Gabby’s Bar.
[5] Test. of Cliff Emmert; Ex. 3 at 2; Ex. 12.
[6] Ex. 3 at 3; Ex. 4 at 3; Test. of Cliff Emmert.
[7] Ex. 3 at 2.
[8] Test. of Cliff Emmert.
[9] Test. of Cliff Emmert.
[10] Exs. 2, 8.
[11] Ex. 4 at 3-4.
[12] Exs. 5, 6.
[13] Ex. 6; Ex. 8 at 3.
[14] Ex. 9.
[15] Ex. 10.
[16] Ex. 11; Test. of Adam Johnson.
[17] Test. of J. Christopher Lubin, Department investigator.
[18]
[19]
[20]