Judge: Timothy B. Taylor, Case: 37-2022-00044221-CU-WM-CTL, Date: 2023-09-21 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - September 19, 2023

09/21/2023  01:30:00 PM  C-72 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Timothy Taylor

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Civil - Unlimited  Writ of Mandate Hearing on Petition 37-2022-00044221-CU-WM-CTL HENRY VS CALIFORNIA DEPARTMENT OF REAL ESTATE STATE [IMAGED] CAUSAL DOCUMENT/DATE FILED: Petition for Writ of Mandate, 11/02/2022

Tentative Ruling on Merits Henry v. Dept. of Real Estate, Case No. 2022-44221 Sept. 21, 2023, 1:30 p.m., Dept. 72 1. Overview and Procedural Posture.

In this case, the petitioner, a mortgage loan originator, seeks a writ of mandate pursuant to CCP section 1094.5 directing respondent, the California Department of Real Estate (DRE), to set aside a disciplinary order against him. He alleges that his real estate broker's license should not be revoked, but instead should be suspended, in light of his 'unwitting' involvement in a phony continuing education course.

The DRE decision was handed down in October, 2022, and the present petition was filed in November, 2022. DRE answered. ROA 13.

Petitioner sought a stay of the DRE's discipline, but the court denied the request and set the case for hearing in April, 2023. ROA 7-12, 18. The parties later approached the court for a continuance, which the court allowed. ROA 19-22.

On May 10, 2023, the parties appeared on petitioner's ex parte application to augment the administrative record, and to continue the merits hearing. ROA 24-27. The AG verbally opposed the augmentation request, so the court vacated the merits hearing, set the augmentation motion as a noticed motion, and set a CMC so the case could be re-set for a merits hearing after the augmentation motion was heard and determined. ROA 29, 32-34. The ex parte papers were deemed the moving papers, and opposition and reply briefing (ROA 36-39) was subsequently filed. Following a review of this briefing and a hearing on June 2, 2023, the court exercised its discretion and allowed the augmentation in a detailed ruling.

ROA 43.

The court has reviewed the augmented record* and the merits briefs. ROA 44-49. No further briefing is allowed at this stage.

2. Applicable Standards.

A. Petitioner has expressly invoked Code of Civil Procedure section 1094.5, which 'provides the basic Calendar No.: Event ID:  TENTATIVE RULINGS

2981966 CASE NUMBER: CASE TITLE:  HENRY VS CALIFORNIA DEPARTMENT OF REAL ESTATE  37-2022-00044221-CU-WM-CTL framework by which an aggrieved party to an administrative proceeding may seek judicial review of any final order or decision rendered by a state or local agency.' Bixby v. Pierno (1971) 4 Cal.3d 130, 137. In ruling on a petition for writ of administrative mandate, the court reviews the administrative record to determine whether: (1) the administrative agency exceeded its jurisdiction; (2) there was a fair trial; and (3) there was any prejudicial abuse of discretion. Code Civ. Proc. § 1094.5(b). 'Abuse of discretion is established if the respondent has not proceeded in the manner required by law, the order or decision is not supported by the findings, or the findings are not supported by the evidence.' Id. B. Where it is claimed that the findings are not supported by the evidence and the case does not involve a fundamental vested right, 'abuse of discretion is established if the court determines that the findings are not supported by substantial evidence in the light of the whole record.' (Id., § 1094.5, subd. (c); American National Ins. Co. v. Fair Employment & Housing Com. (1982) 32 Cal.3d 603, 607.) According to petitioner, this court must apply the holding in Li v. Superior Court, 69 Cal. App. 5th 836 (2021), and review the evidence as a whole under the clear and convincing evidence standard. Respondent appears to concede this is the proper standard. ROA 46 at 8:18.

3. Discussion and Ruling.

The petition is granted to the following extent: the case is hereby remanded to the tribunal below, with the ALJ to reconsider only the discipline imposed on Mr. Henry in light of the testimony of Danny Yen that was not available to ALJ in the original proceedings. While this court expresses no opinion on what that discipline should be, the court notes that the Yen testimony and the other evidence of conduct by REES would, at the very least, be admissible in mitigation of the significant shortcomings in Mr. Henry's conduct identified in the decision below.

In a case involving a licensee with no prior DRE discipline, the Yen testimony should in fairness be taken into account in determining whether license revocation is necessary for the protection of the public. This is particularly true in a setting in which there is at least some evidence now that Henry himself was misled by Yen/REES (e.g. ROA 48, Yen Depo. at pp. 25-26, 63:12-18, 74:1-18). This observation is rendered more acute in light of the ALJ's election to 'base his decision that petitioner engaged in dishonesty and other conduct warranting revocation of his license and MLO endorsement in large part upon a credibility determination.' (Opp. Br. at 9: 6-8, citing CR 867-868, ¶ 29.) The Yen testimony may bear on that credibility determination to the extent it in turn bore on the ALJ's implied conclusion that lesser discipline would not protect the public. Said another way: whether the evidence is 'clear and convincing' that only license revocation will protect the public may only be determined by the ALJ, because he alone had the chance to observe the four witnesses' demeanor (and now must have the opportunity to consider same in light of the Yen testimony that was unavailable to him).

___________________________ *The only augmentation was the sworn deposition testimony of Danny Yen, discussed more fully in the text.

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