Souza v. Bureau of Real Estate CA3 ( 2016 )

Filed 2/23/16 Souza v. Bureau of Real Estate CA3
NOT TO BE PUBLISHED
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
THIRD APPELLATE DISTRICT
(Sacramento)
----
DARRELL ANTHONY SOUZA, C077024
Plaintiff and Appellant, (Super. Ct. No.
34201380001443CUWMGDS)
v.
BUREAU OF REAL ESTATE,
Defendant and Respondent.
This appeal from the denial of a petition for a writ of administrative mandate
arises from an order of the Real Estate Commissioner revoking plaintiff Darrell Anthony
Souza’s real estate broker license. On appeal, Souza offers several challenges to the
actions of the administrative agency (defendant Bureau of Real Estate; hereafter, the
1
Bureau)1 and the trial court. Finding no merit in any of Souza’s arguments, we will
affirm.
FACTUAL AND PROCEDURAL BACKGROUND
We take the following facts and background from the trial court’s decision:
“Beginning in 2001, [Souza] and developer Ronald Malik (Malik) entered into
various business transactions together. A significant portion of those transactions
concerned purchases by Malik through companies he owned, Van der Meer, LLC and
MedCal, LLC (the LLC’s), [of] land parcels in Modesto, in an area known as ‘Sky
Hawk.’ [Citation.] In 2005, Malik made [Souza] manager of the LLC’s. [Souza]’s
duties as manager were to assist Malik in purchasing the Sky Hawk properties without
sellers knowing that the LLC’s were owned solely by Malik. . . .
“[¶] . . . [¶]
“The Bureau produced a letter at the administrative hearing dated May 9, 2007,
purportedly signed by Malik, addressing [Souza]’s compensation. . . .
“The May 9, 2007 letter states that it ‘confirm[s] previous compensation
agreements between ourselves.’ . . . The letter also states that [Souza] ‘may record the
appropriate documents’ on Malik’s property to ‘secur[e] our previously agreed upon
share of 5% of all Van der Meer and Medcal properties to yourself.’ [Citations.]
“[Souza], acting as the LLC’s manager, created two Demand Promissory Notes,
dated May 21, 2007, for $4 million each (Notes). The Notes state that Van der Meer,
LLC and Medcal, LLC promise to pay Sperry [Souza’s company] this amount with
interest immediately on demand. The Notes also allow the Note holder to receive 5% of
the gross sales price of any parcel securing the Note, if sold by the LLC. The Notes state
1 At the time of the administrative proceedings, the Bureau was known as the
Department of Real Estate. For the sake of consistency, we will refer to the agency as the
Bureau throughout our opinion.
2
that they are secured by deeds of trust and rely on the authorization in the May 9, 2007
letter. [Citations.]
“In May 2007 and January 2008, deeds of trust with assignment of rents (Deeds of
Trust) were created between Medcal, LLC and Van der Meer, LLC as trustors and Sperry
as beneficiary. [Citations.]
“On October 2, 2008, [Souza] recorded the two Deeds of Trust with Stanislaus
County Recorder. Each deed of trust was attached to various parcels in Modesto and
Stanislaus County. [Citations.]
“On October 22, 2008, [Souza] informed Malik about the Deeds of Trust recorded
on the property. [Souza] sent Malik a letter on October 22, 2[0]08, stating that Malik
owed Sperry $793,226.00, later reduced to [$]476,460.00 after crediting Malik for other
monies. [Citations.] [Souza] . . . informed Malik that if Malik will ‘pay the balance of
400-and-some thousand [monies owed to [Souza]], and I’ll [sic] release the deeds of
trust.’ [Citation.]
“Malik then filed an action against [Souza] and Sperry in Malik v. Souza,
Stanislaus County Superior Court Case No. 634008 (Malik v. Souza). Malik amended the
complaint in July 2009. The First Amended Complaint alleged causes of action against
[Souza] for slander of title, cancellation of instrument clouding title to real property, civil
extortion, intentional interference with contractual relations, intentional interference with
prospective economic advantage, breach of fiduciary duty, declaratory relief, accounting,
fraud, conversion, and breach of contract. [Citation.]
“On August 11, 2009, [Souza], represented by Cort V. Wiegand, entered into a
settlement of Malik v. Souza (Settlement). The Settlement required [Souza] to remove
the deeds of trust, pay Malik $500,000 in installments, and admit the allegations in the
First Amended Complaint in Malik v. Souza. The parties also agreed that if [Souza]
breached the Settlement, a stipulated judgment (Stipulated Judgment) would be filed.
[Citations.]
3
“The Stipulated Judgment states [Souza] fabricated the May 9, 2007 letter and
forged Malik’s signature. The Stipulated Judgment further states that [Souza] forged the
letter to give [Souza] the authority to prepare and record documents against Malik’s
properties to secure an alleged indebtedness to [Souza]--e.g., create the $4 million
promissory notes in favor of himself and record the deeds of trust without Malik’s
consent. [Citations.]
“On August 31, 2011, the Bureau filed an Accusation against [Souza], seeking to
suspend or revoke his real estate license. The Accusation charged [Souza] with fraud,
misrepresentation, and/or dishonest dealing and/or negligence or incompetence in
performing acts for which he is required to hold a license. The Accusation alleged that
[Souza] created the May 9, 2007 letter describing how he was to be compensated by
Malik, that [Souza] in 2007 and 2008 executed deeds of trust naming Souza and
Associates as the beneficiary, and that [o]n October 2, 2008 [Souza] recorded these deeds
of trust with the Stanislaus County Recorder’s Office. [Citation.]
“After conducting administrative hearings, the ALJ [administrative law judge]
issued a proposed decision on November 19, 2012 revoking [Souza’]s real estate license.
The ALJ’s decision found that [Souza] engaged in a pattern of conduct of fraud,
dishonest dealing, negligence and incompetence, and revoked [Souza’s] license pursuant
to Business and Professions Code section 10176, subdivisions (a), (b), (c)[, and (i)] and
section 10177, subdivisions (g) and (j). [Citation.]
“The Real Estate Commissioner adopted the ALJ’s decision on December 28,
2012 (Decision). [Citation.] [Souza] petitioned for reconsideration. [Citation.]
[Souza’s] petition for reconsideration was denied. [Citation.]” (Fns. and bolding
omitted.)
In March 2013, Souza commenced this proceeding by filing a petition for a writ of
mandate in the superior court seeking to set aside the Bureau’s decision. In April 2014,
Souza filed a motion to augment the administrative record with a declaration from the
4
attorney who represented him in Malik’s civil action against Souza. The trial court
denied the motion to augment and in May 2014, denied the writ petition. From the
judgment entered in June 2014, Souza timely appealed.
DISCUSSION
I
Standard Of Review
“A writ of administrative mandate is available ‘for the purpose of inquiring into
the validity of any final administrative order or decision made as the result of a
proceeding in which by law a hearing is required to be given, evidence is required to be
taken, and discretion in the determination of facts is vested in the inferior tribunal . . . .’
(Code Civ. Proc., § 1094.5, subd. (a).) The trial court’s inquiry in such a case ‘extend[s]
to the questions whether the respondent has proceeded without, or in excess of,
jurisdiction; whether there was a fair trial; and whether there was any prejudicial abuse of
discretion.’ (Code Civ. Proc., § 1094.5, subd. (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. (Code
Civ. Proc., § 1094.5, subd. (b).)
“When it is claimed the findings are not supported by the evidence, and the trial
court, as here, is authorized by law to exercise its independent judgment on the evidence,
‘abuse of discretion is established if the [trial] court determines that the [administrative
agency’s] findings are not supported by the weight of the evidence.’ (Code Civ. Proc.,
§ 1094.5, subd. (c).) In such a case our review on appeal is limited. We will sustain the
trial court’s findings if they are supported by substantial evidence. [Citations.] In
reviewing the evidence, we ‘resolve all conflicts in favor of the party prevailing in the
superior court and must give that party the benefit of every reasonable inference in
support of the judgment.’ [Citation.]
“[¶] . . . [¶]
5
“[W]e review independently [any] other claims, that the [administrative agency]
exceeded its jurisdiction or failed to afford a fair trial.” (Kifle-Thompson v. State Bd. of
Chiropractic Examiners (2012) 208 Cal. App. 4th 518, 523-524.) In such instances, “[t]he
trial court’s determination of abuse or nonabuse of discretion by the administrative
agency is of no concern to the appellate court. The appellate court gives no deference to
the trial court’s determination. It makes its own determination, de novo.” (Cummings v.
Civil Service Com. (1995) 40 Cal. App. 4th 1643, 1652.)
With the foregoing principles in mind, we turn to Souza’s arguments on appeal.
II
Statute Of Limitations
Souza first contends the administrative charges against him were barred by the
statute of limitations in Business and Professions Code2 section 10101. The trial court
disagreed. So do we.
Section 10101 provides as follows: “The accusation provided for by Section
11503 of the Government Code shall be filed not later than three years from the
occurrence of the alleged grounds for disciplinary action unless the acts or omissions
with which the licensee is charged involves fraud, misrepresentation or a false promise in
which case the accusation shall be filed within one year after the date of discovery by the
aggrieved party of the fraud, misrepresentation or false promise or within three years
after the occurrence thereof, whichever is later, except that in no case shall an accusation
be filed later than 10 years from the occurrence of the alleged grounds for disciplinary
action.”
The accusation here was filed on August 31, 2011. Thus, the first question here is
whether the alleged grounds for disciplinary action occurred before or after August 31,
2 All further section references are to this code unless noted otherwise.
6
2008 -- three years before the accusation was filed. If they occurred after August 31,
2008, then the accusation was not barred by section 10101.3
The accusation alleged that Souza was the designated manager for two limited
liability companies of which Malik was the sole member, but Souza could not take any
action without Malik’s prior written consent. Despite this limitation, Souza created a
fraudulent letter on or about May 9, 2007, that was purportedly signed by Malik and that
purportedly addressed “all the different ways [Souza] was to be compensated for his
services” and authorized Souza to “ ‘record the appropriate documents securing’ ”
Souza’s five percent interest in all properties belonging to the companies. Thereafter, on
or about May 21, 2007, and on or about January 30, 2008, Souza executed two deeds of
trust on behalf of the companies purporting to secure two $4 million promissory notes to
“Souza and Associates.” On or about October 2, 2008, Souza recorded both of the deeds
of trust. The accusation alleged that “[t]he acts and omissions of [Souza] as described
above constitute the misrepresentation of a material fact, fraud and/or dishonest dealing,
and/or negligence or incompetence in performing an act for which he is required to hold a
license.” The accusation further alleged that “[t]he facts described above constitute cause
to suspend or revoke all licenses and license rights of [Souza] pursuant to the provisions
of Sections 10176(a), 10176(b), 10176(c), 10176(i), 10177(g) and/or 10177(j) of the
Code.”
3 If the alleged grounds for disciplinary actions occurred before August 31, 2008,
then the accusation would be time-barred unless the charges involved fraud,
misrepresentation, or a false promise and the accusation was filed within one year after
the date of discovery by the aggrieved party of the fraud, misrepresentation, or false
promise but not more than 10 years from the occurrence of the alleged grounds for
disciplinary action. Because we conclude the accusation was timely under the three-year
limitations period in any event, we need not consider whether it was timely under the
one-year-from-discovery provision.
7
The first four of the foregoing provisions authorize the Bureau to suspend or
revoke the license of a real estate licensee where the licensee, while a licensee, “in
performing or attempting to perform any of the acts within the scope of this chapter,” is
guilty of any of the following:
1) “Making any substantial misrepresentation” (§ 10176, subd. (a));
2) “Making any false promises of a character likely to influence, persuade, or
induce” (§ 10176, subd. (b));
3) “A continued and flagrant course of misrepresentation or making of false
promises through real estate agents or salespersons” (§ 10176, subd. (c)); or
4) “Any other conduct, whether of the same or a different character than specified
in this section, which constitutes fraud or dishonest dealing” (§ 10176, subd. (i)).
The last two of the foregoing provisions authorize suspension or revocation of a
license when the licensee has done either of the following:
1) “Demonstrated negligence or incompetence in performing an act for which he
or she is required to hold a license” (§ 10177, subd. (g)); or
2) “Engaged in any other conduct, whether of the same or a different character
than specified in this section, that constitutes fraud or dishonest dealing” (§ 10177,
subd. (j)).
For our purposes, it is sufficient that the foregoing provisions authorized the
Bureau to suspend or revoke Souza’s license for conduct that constituted dishonest
dealing. So just what conduct was alleged in the accusation as the grounds for
disciplinary action? As stated in the Bureau’s decision, “[t]he crux of [the Bureau]’s case
[wa]s that [Souza] forged the May 9, 2007 letter and recorded deeds of trust to prevent
Malik from selling property until [Souza] was paid according to the terms of that letter.”
Thus, the wrongful conduct alleged in the accusation that provided the grounds for
disciplinary action was: (1) Souza’s creation of the fraudulent letter in May 2007; (2) his
execution of the deeds of trust in May 2007 and January 2008; and (3) his recording of
8
those deeds of trust in October 2008. It was this course of conduct for which the Bureau
sought to discipline Souza, not any one particular act within that course of conduct.
Thus, the course of conduct that provided the alleged grounds for disciplinary action
against Souza occurred from May 2007 through October 2008. Because the final part of
that course of conduct occurred less than three years before the accusation was filed, the
accusation was timely under section 10101.
In arguing to the contrary, Souza focuses not on the allegations of the accusation
but on the Bureau’s decision. He contends the Bureau “never concluded that the
recording of the deeds was a basis for discipline” (underlining omitted) and “[t]herefore
the date of the recording of the deeds, no matter when it occurred, cannot form the basis
to discipline [his] license.” He further contends that “[s]ection 10101 . . . does not
provide for extending the statu[t]e of limitations based on an alleged pattern of conduct.”
We are not persuaded. To the extent Souza focuses on the Bureau’s decision
rather than the accusation, we are constrained to point out that the three-year period of
limitations in section 10101 is triggered by “the occurrence of the alleged grounds for
disciplinary action” -- that is, the grounds for disciplinary action alleged in the
accusation. Thus, our focus in applying the statute of limitations is on the allegations
contained in the accusation, and under that analysis -- set forth above -- we have
concluded that the accusation was timely filed.
To the extent Souza asserts that “[t]he alleged violations [set forth in the
accusation] relate [only] to alleged conduct in May 2007 and January 2008,” we disagree.
As we have explained, the accusation alleged a course of conduct by which Souza
attempted to wrongfully interfere with Malik’s ability to sell the properties belonging to
his two companies by drafting a fraudulent letter authorizing Souza to be compensated
with a percentage interest in those properties, then executing two deeds of trust to secure
his nonexistent interest in the properties, then recording those deeds of trust to make his
nonexistent interest in the properties a matter of record. Contrary to Souza’s position, the
9
recording of the deeds of trust was an integral part of the course of conduct for which the
Bureau sought to discipline him, because it was the recording of the deeds that put the
cloud on record title to the properties that prevented Malik from freely conveying those
properties to others. In other words, the recording of the deeds of trust was a vital
component of Souza’s scheme to wrongfully wring from Malik compensation to which
Malik had never agreed.
Moreover, we disagree with Souza’s assertion that in its decision the Bureau
“never concluded that the recording of the deeds was a basis for discipline.” (Underling
omitted.) After finding that Souza “forg[ed] a letter and record[ed] deeds o[f] trust to
obtain money from Malik,” the Bureau concluded that Souza “engaged in a pattern of
conduct of fraud[ and] dishonest dealings . . . by,” among other things, “creating false and
misleading documents” and “seeking unreasonable and duplicative payments outside the
ordinary and usual payments in real estate practice.” Souza’s recording of the bogus
deeds of trust was an essential part of the course of conduct by which he sought from
Malik unreasonable and duplicative payments outside the ordinary and usual payments in
real estate practice. Thus, the Bureau did conclude that the recording of the deeds of trust
was part of the basis for imposing discipline on Souza.
As for Souza’s argument that section 10101 does not extend the limitations period
based on an alleged pattern of conduct, that argument misses the point. The issue in a
case like this is not whether the limitations period is extended when a pattern of conduct
is at issue; the issue is when the limitations period is triggered when a pattern of conduct
is at issue. Souza’s position appears to be that the three-year period is triggered by any
discrete action taken by the licensee that is part of a pattern or course of conduct, and the
three-year period runs separately as to each discrete action, meaning that the only action
in this case for which he could have been disciplined under the three-year period was the
recording of the deeds of trust in October 2008 -- which, according to him, the Bureau
did not find as a basis for discipline. We have explained already, however, that where --
10
as here -- a course of conduct provides the alleged grounds for discipline, the three-year
limitations period is not triggered until that course of conduct is complete, because as
long as the course of conduct is ongoing, it is still occurring, and the three-year
limitations period runs “from the occurrence of the alleged grounds for disciplinary
action.” (§ 10101, italics added.)
This conclusion is consistent with the general purpose of statutes of limitation,
which is “to provide repose and to protect persons against the burden of having to defend
against stale claims.” (Wyatt v. Union Mortgage Co. (1979) 24 Cal. 3d 773, 787.) In the
context of a civil conspiracy, our Supreme Court has concluded that “[s]o long as a
person continues to commit wrongful acts in furtherance of a conspiracy to harm another,
he can neither claim unfair prejudice at the filing of a claim against him nor disturbance
of any justifiable repose built upon the passage of time.” (Ibid.) That same reasoning
applies when, as here, the Bureau seeks to discipline a real estate licensee for a course of
conduct that, taken as a whole, constitutes dishonest dealing. Here, Souza continued in
his course of conduct to wrongfully wring from Malik compensation to which Malik had
not agreed through at least October 2008, when Souza wrongfully recorded the deeds of
trust he had wrongfully executed on behalf of Malik’s companies. Souza cannot claim
any unfair prejudice from the Bureau’s filing of its accusation less than three years later,
in August 2011, nor can he claim the disturbance of any justifiable repose built on the
passage of time from his signing of the second deed of trust in May 2007, since he
continued to engage in his wrongful course of conduct through at least August 2008, with
the recording of the deeds of trust.
For all of the foregoing reasons, we find no merit in Souza’s argument that the
administrative charges against him were barred by the statute of limitations in
section 10101.
11
III
Discipline For Conduct Not Requiring A Real Estate License
Under section 10176, the Bureau may suspend or revoke the license of a real
estate licensee “where the licensee, while a real estate licensee, in performing or
attempting to perform any of the acts within the scope of this chapter,” engages in
conduct described in that section. Similarly, under subdivision (g) of section 10177, the
Bureau may suspend or revoke the license of a real estate licensee when the licensee had
“[d]emonstrated negligence or incompetence in performing an act for which he or she is
required to hold a license.” Thus, under the foregoing provisions, the Bureau could
impose discipline on Souza only for conduct that required a real estate license.
Applying the foregoing principle, Souza contends he was not subject to discipline
here because “[a]t the time of [his] alleged misconduct, [he] was acting as manager of
two LLCs” and his actions in that capacity did not require a real estate license. The trial
court disagreed, and again so do we.
Souza’s argument is without merit because in making it he ignores the fact that the
Bureau -- in addition to finding cause to revoke his license under section 10176,
subdivisions (a), (b), (c), and (i), and section 10177, subdivision (g) -- found cause to
revoke his license under section 10177, subdivision (j). That subdivision allows the
Bureau to revoke a real estate license when the licensee has “[e]ngaged in any . . .
conduct . . . that constitutes fraud or dishonest dealing.” (§ 10177, subd. (j), italics
added.) In other words, section 10177, subdivision (j) permits the Bureau to impose
discipline on a licensee for fraud or dishonest dealing, regardless of whether that fraud or
dishonest dealing occurred in the course of conduct that required a real estate license.
“Honesty and truthfulness are two qualities deemed by the Legislature to bear on one’s
fitness and qualification to be a real estate licensee.” (Harrington v. Department of Real
Estate (1989) 214 Cal. App. 3d 394, 402.) Applying that principle, it has been said that if
offenses committed by an applicant for a real estate license “reflect unfavorably on his
12
honesty, it may be said he lacks the necessary qualifications to become a real estate
salesperson.” (Ibid.) The same reasoning applies to actions by a person who already has
a real estate license. If the actions of a licensee reflect unfavorably on his honesty, then it
may be said that he lacks the necessary qualifications to continue as a real estate licensee.
Such was the case here. Among various other findings, the Bureau can be
understood to have found that Souza engaged in conduct that constituted fraud and/or
dishonest dealing when he drafted a fraudulent letter authorizing him to be compensated
with a percentage interest in the properties owned by Malik’s companies, then executed
two deeds of trust to secure his nonexistent interest in those properties, then recorded
those deeds of trust to make his nonexistent interest in the properties a matter of record.
Under subdivision (j) of section 10177, it does not matter whether Souza’s actions in this
regard required a real estate license; he was subject to discipline for fraud and/or
dishonest dealing under that subdivision whether a license was required for his actions.
Accordingly, we find no merit in Souza’s argument that he was not subject to discipline.4
IV
The Bureau’s Consideration Of Souza’s Admissions
In The Settlement Agreement And Stipulated Judgment
Souza contends that any admissions he made in the settlement agreement and
stipulated judgment in Malik’s civil action against him that he (Souza) forged the May
2007 letter were conditional admissions, and because the condition was never satisfied,
4 In reaching this same conclusion -- that Souza was subject to discipline under
subdivision (j) of section 10177 even if he was not acting as a licensee -- the trial court
specifically noted that Souza “d[id] not argue otherwise.” The same is true on appeal:
Souza simply repeats the arguments he made in the trial court and once again completely
ignores the Bureau’s power to discipline him under subdivision (j) section 10177
regardless of whether he was engaging in conduct for which a real estate license was
required. Under these circumstances, Souza’s argument is not simply without merit; it is
frivolous.
13
the Bureau could not rely on those admissions in deciding to revoke his license. 5
Whether we view this as a claim that the findings against him are not supported by the
evidence (in which case we review the trial court’s findings for substantial evidence) or a
claim that the Bureau prejudicially abused its discretion in considering these allegedly
conditional admissions (in which case we review the Bureau’s action independently of
the trial court), we find no merit in Souza’s argument.
We focus on the Bureau’s decision, which lies at the heart of the matter. Souza
contends that the “crux” of the Bureau’s decision was that he “purportedly admitted to
forging the May 9, 2007 letter” in the settlement agreement and the stipulated judgment
in Malik’s civil action. In essence, Souza’s position is that because the evidence of
forgery that was the “crux” of the Bureau’s decision was not a proper basis for that
decision, the decision cannot stand. But Souza is wrong in his assertion that the allegedly
conditional admissions in the settlement agreement and the stipulated judgment were the
“crux” of the Bureau’s decision. What the Bureau said was that “[t]he crux of [its] case
[wa]s that [Souza] forged the May 9, 2007 letter and recorded deeds of trust to prevent
Malik from selling property until [Souza] was paid according to the terms of that letter.”
Thus, the forgery of the letter was (with the recording of the deeds of trust) the crux of
the Bureau’s case. In finding that Souza engaged in that forgery, however, the Bureau
relied on more than the admissions in the settlement agreement and stipulated judgment.
On that point, the Bureau’s decision states as follows:
“When confronted with his admission to [the forgery] in a signed settlement
agreement and stipulated judgment, [Souza] variously stated that he never read the
settlement agreement and judgment, that he signed it only to end the litigation that he
could not afford to pursue, that he thought it would be kept confidential, and that it was
5 Specifically, Souza contends he “never adopted, nor intended to adopt those
[admissions] unless [he] failed to make the agreed settlement,” which he did not do.
14
not signed ‘under penalty of perjury.’ [Souza]’s excuses are not believable. It is not
conceivable that a real estate broker would not read a four-page settlement agreement and
a five-page stipulated judgment wherein he was settling a large case and agreeing to pay
$500,000. In fact, he specifically referred to portions of the agreement in explaining why
he signed it, such as referencing the confidentiality clause and the fact that if he did not
make regular payments, the total amount due would be $1 million. [Souza]’s testimony
that he did not forge Malik’s signature on the May 9, 2007 letter is not credible.
Moreover, [Souza] testified that he did, in fact, cut and paste a signature on another
document in 2003. He claimed that that action was not forgery because he was simply
re-creating an original letter that he had lost. It is certainly not customary business
practice to re-create a letter and cut and paste a signature when an original cannot be
found. [Souza]’s testimony supports a finding that [Souza] forged the May 9, 2007 letter,
just as he had done earlier in 2003.”
What we take from the foregoing is that there was much more than the admissions
themselves on which the Bureau relied in finding that Souza forged the May 2007 letter.
First of all, Malik testified that he did not sign the letter, and in fact he sued Souza on that
basis, claiming the letter was fabricated and its substance was false. Second, the Bureau
found Souza’s testimony denying that he forged the letter “not credible.” Third, the
Bureau relied on the fact that Souza admitted to previously cutting and pasting a
signature on a document, and the Bureau drew the inference that Souza similarly forged
the May 2007 letter.
Even if we were to agree with Souza that: (1) the admissions in the settlement
agreement and the stipulated judgment were conditional admissions; (2) the condition on
those admissions was never satisfied; and (3) therefore the admissions never became
operative, he would not be entitled to any relief because the Bureau had several valid
15
reasons (set forth above) for finding that Souza forged the May 2007 letter that did not
depend on whether the admissions in the settlement agreement and the stipulated
judgment were operative. If we treat Souza’s argument on this point as an assertion that
the findings against him are not supported by the evidence, we disagree because these
additional reasons for finding that he forged the May 2007 letter constitute substantial
evidence supporting the trial court’s decision on this point, which was that the Bureau’s
decision was supported by the weight of the evidence. On the other hand, if we treat
Souza’s argument on this point as an assertion that the Bureau prejudicially abused its
discretion in considering the admissions in the settlement agreement and the stipulated
judgment, we still disagree because any abuse of discretion in considering those
admissions was not prejudicial to Souza because the Bureau would have found that Souza
forged the May 2007 letter in any event based on the additional reasons the Bureau gave
for finding that he forged the letter that were not dependent on the admissions as such.
Accordingly, we reject this argument as well.
V
Augmentation Of The Administrative Record
Under subdivision (e) of Code of Civil Procedure section 1094.5, “[w]here the
court finds that there is relevant evidence that, in the exercise of reasonable diligence,
could not have been produced or that was improperly excluded at the hearing before
respondent, it may enter judgment as provided in subdivision (f) remanding the case to be
reconsidered in the light of that evidence; or, in cases in which the court is authorized by
law to exercise its independent judgment on the evidence, the court may admit the
evidence at the hearing on the writ without remanding the case.”
Here, Souza filed a motion in the trial court seeking to augment the administrative
record with a declaration from Cort Wiegand, the attorney who represented Souza in
16
Malik’s civil action. In that declaration, Wiegand attested that Souza completed his
performance under the settlement agreement in that action in March 2013 and the final
settlement check had been cashed by Malik. Wiegand also detailed some of the
negotiations that led up to the settlement. In seeking admission of Wiegand’s
declaration, Souza argued that “[t]he evidence being offered came into existence after the
administrative hearing in 2012 and the Real Estate Commissioner’s Order Denying
Reconsideration of February 20, 2013.” He further argued that Wiegand’s declaration
was relevant because it “goes to the issue of adoptive admissions.” He also asserted,
without elaboration, that the evidence was relevant “for mitigation of the penalty.”
The trial court denied Souza’s motion. To the extent Wiegand’s declaration
addressed the negotiations that led up to the settlement, the court noted that those events
occurred in 2009 and thus Wiegand’s information “was known and available to [Souza]
at the time of the [administrative] hearings.” To the extent the declaration addressed
Souza’s completion of performance under the settlement agreement, the court concluded
that information was irrelevant.
“Augmentation of the administrative record is permitted only within the strict
limits set forth in the statute. [Citations.] Before the court may properly consider
evidence that was not presented at the administrative hearing, the petitioner must show
the evidence could not have been produced below had reasonable diligence been
exercised. (Code Civ. Proc., § 1094.5, subd. (e).) Determination of the question is
within the discretion of the trial court; we will not disturb the exercise of that discretion
unless it is manifestly abused.” (Armondo v. Department of Motor Vehicles (1993) 15
Cal. App. 4th 1174, 1180.)
On appeal, Souza contends that evidence of the completion of performance under
the settlement agreement could not have been produced in the exercise of reasonable
17
diligence at the administrative hearing. That is true, given that the final settlement
payment was not made and accepted until after the administrative hearing was over, but
Souza’s argument misses the point. The reason the trial court refused to admit
Wiegand’s declaration to show completion of performance under the settlement
agreement was that the court deemed completion of that performance irrelevant. We find
no prejudicial abuse of discretion in that decision. Essentially Souza contends Wiegand’s
declaration shows that the conditional admissions in the settlement agreement and
stipulated judgment “never became adoptive admissions.” But we have explained
already that even if the Bureau had not considered those admissions, it would have made
no difference because the Bureau still would have found that Souza forged the May 2007
letter. Because the Bureau’s consideration of the admissions did not prejudice Souza, it
follows that admission of the Wiegand declaration in the trial court would have made no
difference either.
To the extent Souza complains that the trial court “never addressed mitigation of
penalty or whether or not the penalty was excessive, in light of the fact that [he] paid the
full amount of the settlement,” Souza is mistaken. In denying Souza’s motion to admit
Wiegand’s declaration, the trial court specifically noted that “[Souza] does not dispute
[the Bureau]’s argument that evidence that he made restitution is relevant in re-
application proceedings to obtain his license, rather than to mitigate the penalty of license
revocation.” As appellant, Souza bore the burden of persuading us that the trial court was
incorrect in concluding that his completion of payment under the settlement agreement,
while relevant to any reapplication he might make for his license, was not relevant to
mitigate the penalty of revocation in the first place. Having failed to acknowledge the
trial court’s conclusion on this point, Souza has necessarily failed to carry his burden of
persuading us that the court’s conclusion was wrong.
18
DISPOSITION
The judgment is affirmed. The Bureau shall recover its costs on appeal. (Cal.
Rules of Court, rule 8.278(a)(1).)
/s/
Robie, Acting P. J.
We concur:
/s/
Mauro, J.
/s/
Murray, J.
19