Porter Law Center, LLC v. Department of Financial Institutions ( 2016 )

r*o ' "1- r * '•
c=>
~~i €Z
en
"Xs»
~ ^-^ ' t __ „
\ 'l^>---:
CO -'-" "C •
";'"> ; :•
"T,n. ..Jp". •
'-• ' i • = [--•
2S-
-'.- rr:^—-
CO B —
Ol •:: —
o
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
PORTER LAW CENTER, LLC d/b/a No. 73424-5-1
PORTER LAW CENTER, and DEAN
DOUGLAS PORTER, DIVISION ONE
Appellants,
v.
UNPUBLISHED OPINION
STATE OF WASHINGTON
DEPARTMENT OF FINANCIAL
INSTITUTIONS, DIVISION OF
CONSUMER SERVICES,
Respondent. FILED: August 8, 2016
Schindler, J. —The Department of Financial Institutions (DFI) filed charges
against Dean Douglas Porter and Porter Law Center LLC (collectively, Porter) alleging
violations of the Mortgage Broker Practices Act (MBPA), chapter 19.146 RCW. Porter
claimed he was exempt from the MBPA because a licensed Washington attorney
provided legal services to clients in Washington. Following a hearing, an administrative
law judge concluded Porter violated the MBPA by providing residential loan modification
services to Washington consumers without a license. DFI issued a final order adopting
the findings of fact and conclusions of law in the initial order. DFI ordered Porter to
cease and desist; pay $28,886.87 in restitution; pay a fine of $24,000.00; and pay
investigative fees. We affirm the DFI order.
No. 73424-5-1/2
FACTS
Dean Douglas Porter is licensed to practice law in Ohio. Porter owns Porter Law
Center LLC (PLC), an Ohio limited liability company located in South Carolina. PLC
provides nationwide foreclosure defense services including bankruptcy, loan
modification, and debt settlement. Porter is not licensed to practice law in Washington.
On October 3, 2012, the Washington State Department of Financial Institutions
(DFI) received an anonymous complaint about a "Payment Reduction Notification"
advertisement. The advertisement urged "eligible property" owners in Olympia to use a
toll-free telephone number to complete the "prequalification process" for "mortgage
relief." The advertisement also listed a website, www.helpmod.com, to obtain "pre
qualification verification" and an address in Utah for "confirmation of eligibility" by mail.
On October 5, a DFI investigator called the number listed on the Payment
Reduction Notification advertisement. The person who answered the call as the "Porter
Law Firm" in South Carolina said the law firm used a Washington attorney to provide
loan modification services to Washington residents. A few days later, another DFI
investigator called the same number. The call was answered by the "modification
department" of "Porter Law Firm representing Jefferson Consumer Law PLLC."
On October 10, DFI sent Porter Law Firm and Jefferson Consumer Law PLLC a
"DIRECTIVE TO PROVIDE DOCUMENTS AND EXPLANATION" for loan modification
services. After neither the Porter Law Firm nor Jefferson Consumer Law PLLC
responded, DFI issued a subpoena to provide information by November 13.
No. 73424-5-1/3
On November 14, 2012, an attorney representing Porter and PLC (collectively,
Porter) responded to the subpoena. The attorney signed the response in Porter's name
with his address and telephone number.
In response to the question, "Are you currently or have you ever provided or
offered to provide loan modification services, including short sale negotiation services,
for properties or consumers located in the state of Washington?," Porter answered,
"Yes." In response to the question, "Please explain the service provided or offered and
the time period provided or offered," Porter states, "Porter Law Center offers legal
services relating to residential mortgages." Porter explained, "[l]t is often our
professional legal opinion that a loan modification is in the best interests of our clients.
In such cases, it would be unethical not to assist clients with these services."
Porter states the "mailer received with the complaint is the only solicitations used
by PLC in WA." Porter identified eight Washington residents PLC assisted with
residential loan modifications and provided a "copy of a solicitation to Washington
consumers." Porter admitted charging each of the eight Washington residents "$3997
[+] a monthly maintenance fee for loan modification services rendered." Porter
identified Christopher Jason Mercado as the Washington attorney who provided the
residential loan modification services to Washington residents.
Porter claimed the attorney exemption to the Mortgage Broker Practices Act
(MBPA), chapter 19.146 RCW, applied and filed a "Claim of Non-Applicability of the
Mortgage Broker Practices Act." Porter asserted PLC was not subject to the MBPA
because "Porter Law Center assists clients with application for loan modification as part
of the licensed practice of law in the State of Washington." DFI investigators attempted
No. 73424-5-1/4
to contact the eight Washington residents Porter identified and "ultimately spoke to two
of them: James Adney and Robert Olacio."
On March 25, 2013, DFI filed a "Statement of Charges" against Porter. DFI
alleged Porter violated RCW 19.146.200(1) of the MBPA by "engaging in the business
of a mortgage broker for Washington residents or property without first obtaining a
license to do so" and RCW 19.146.0201(2) and (3) by "engaging in an unfair or
deceptive practice toward any person or obtaining property by fraud or
misrepresentation."
Porter filed an administrative appeal of the Statement of Charges. Porter argued
PLC was "exempt from the MBPA" under former RCW 19.146.020(1)(c) (2009)1 and
WAC 208-660-008(5) because it performed the loan modification services as part of the
licensed practice of law in Washington and was not "principally engaged in residential
mortgage loan negotiations."
Porter submitted a supplemental response to the subpoena. Porter changed his
answer to several questions. But Porter did not change the response that he "provided
or offered to provide loan modification services, including short sale negotiation
services, for properties or consumers located in the state of Washington." Nor did he
change the previous response that "Porter Law Center offers legal services relating to
residential mortgages," including "modification applications," and that the "mailer
received with the complaint is the only solicitations used by PLC in WA."
DFI financial legal examiners Devon Phelps and Steve Sherman, Washington
resident James Adney, and Porter testified at the administrative hearing. Washington
attorney Mercado did not appear to testify.
1 Laws of 2009, ch. 528, §2.
No. 73424-5-1/5
Adney testified he received an unsolicited call on his cell phone from "Porter
Law." The caller stated Adney was behind on his mortgage payments and PLC could
work with his mortgage company to get "a loan modification." The caller stated PLC
was "operating out of Utah. Adney testified he called back and hired "Porter Law
Center." Adney completed and signed an application, a "Limited Services Retainer
Agreement," and a request for information from PLC. The administrative law judge
(ALJ) admitted the application, the Limited Services Retainer Agreement, and the
request for information into evidence.
The Limited Services Retainer Agreement states PLC will "analyze the case,
prepare documents and negotiate with the lender, servicer and/or investor of the first
mortgage loan" for the "Borrower's residential property." Paragraph 6 of the Limited
Services Retainer Agreement states PLC "may contract or affiliate with co-counsel
attorneys in the course of representation of Borrower. . . . Borrower understands and
agrees that co-counsel may charge fees in addition to the Firm for services not covered
in the scope of this agreement." Paragraph 9 of the Limited Services Retainer
Agreement describes the scope of the PLC work as an attempt "to qualify Borrower's
first mortgage for work-out programs that are available."
9. Limited Scope of Services: The Firm will represent Borrower to the
lender, servicer and/or investor(s) of their first mortgage. The
scope of representation provided for by this Agreement is limited to
attempts to qualify Borrower's first mortgage for work-out programs
that are available. This can include:
a. Initial consultation and file qualification.
b. Preliminary legal review of the file.
c. Ongoing legal consultation.
e. Review and analysis of possible predatory lending issues
and review of forensic audit if applicable.
No. 73424-5-1/6
j. Review by local counsel for eligibility and compliance,
k. Attorney review for alternative legal options.
But Paragraph 9 specifically excludes legal services that "are not included within the
scope of this Agreement."
Borrower acknowledges that the following matters are not included within
the scope of this Agreement and agrees that, as to these matters, the Firm
will not take any action on Borrower's behalf without a written request and
a separate agreement and possibly an additional fee.
(a) Motions to revoke a discharge;
(b) Removal of a pending action in another court;
(c) Obtaining title reports;
(d) The determination of real estate tax liens:
(e) Appeals to the BAP, District Court or Court of Appeals;
(f) Correcting credit reports;
(g) Negotiations with Check Systems regarding Borrower;
(h) Defense of or response to non-mortgage collection activity;
(i) Motions to dismiss Borrower's bankruptcy case filed by the
Trustee, U.S. Trustee, or any creditor;
(j) Any adversary proceeding filed by the Trustee, U.S. Trustee, or
any other party on any basis, including, without limitation,
proceedings to determine dischargeability of debts;
(k) Preparing affirmation agreements, negotiating the terms of
reaffirmation agreements proposed by creditors, motions to redeem
personal property, and negotiating reaffirmation agreements when
Borrower's income is not sufficient to rebut the presumption of
undue hardship and special circumstances do not warrant the
signing of a reaffirmation agreement;
(I) Motion to impose or extend the bankruptcy stay;
(m) Quiet title actions, quit-claim deeds or other conveyance and
title issues;
(n) Other matters not specifically part of the limited scope of this
agreement.
See the list attached to the end of this Agreement for details regarding the
availability of additional legal services not within the scope of this
Agreement.
Adney testified that he communicated with PLC by e-mail and phone. Adney
said he "never even heard of Mercado and never talked to "anyone identifying
themselves as Christopher Mercado." Adney testified PLC never told him it was not
No. 73424-5-1/7
licensed to provide loan modification services in Washington. Adney "obtained a
modification of his residential loan mortgage" and paid PLC $3,476.
The ALJ admitted into evidence copies of the retainer agreements for the other
Washington residents. The description of the scope of the services was the same as
the services set forth in the Limited Services Retainer Agreement signed by Adney.
Porter testified PLC represented eight clients in Washington but he had "no idea"
how the eight Washington clients learned about PLC. Porter "presumed Mr. Mercado
was responsible for soliciting the eight Washington consumers." Contrary to the
responses to the DFI subpoena, Porter testified PLC did not engage in "any marketing
solicitations."
[PORTER] I don't have any marketing solicitations.
Q No marketing solicitations? So it's your testimony it's not your
flier?
A That is correct.
Porter testified the toll-free number listed on the Payment Reduction Notification
advertisement was "not our national number" and was "[n]ot a number that I am familiar
with." Porter said the www.helpmod.com Internet address listed on the advertisement
did not belong to PLC. Porter "presumed that Mr. Mercado provided legal services to
these eight Washington consumers" based on the "Customer Notes" Mercado submitted
to PLC.
The ALJ admitted the Customer Notes from Mercado into evidence as exhibits.
The Customer Note entries "are blank, and the time entry reflects zero (0) minutes
billed." The only billing records "in evidence" show "a charge of $50" in late 2012 for
unspecified "tasks" Mercado performed for PLC clients. Porter testified he was unaware
of whether $50 was a reasonable fee for loan modification services.
No. 73424-5-1/8
The ALJ concluded Porter violated RCW 19.146.200(1) of the MBPA by "offering
and providing eight Washington customers residential loan modification services without
possessing a mortgage broker or loan originator license." The ALJ rejected Porter's
testimony that Mercado provided legal services to the eight Washington clients. The
ALJ found there was "insufficient evidence on the record to establish what work, ifany,
that Mr. Mercado performed or oversaw," and the "weight of the evidence in the record
establishes that PLC staff outside of Washington performed most if not all of the loan
modification work for the eight Washington consumers at issue." The ALJ found that
because the loan modification services PLC provided were not "incidental to, or a small
part of, other legal representation" and instead were "the primary purpose of the
representation," the MBPA attorney exemption did not apply.
The ALJ concluded Porter violated RCW 19.146.0201 of the MBPA by engaging
in "deceptive practices toward eight Washington consumers." The ALJ found PLC
"advertised residential loan modification services to Washington consumers via mailer,
telephone, and the internet" without disclosing it was "not licensed in Washington as
mortgage brokers, loan originators, or attorneys." The ALJ found Porter's testimony that
he did not engage in the solicitation of Washington residents not credible. "Mr. Porter
on two occasions told [DFI] in the Directive that the solicitation belonged to [Porter and
PLC]." The ALJ found there was "no evidence" PLC told consumers that Mercado,
rather than PLC, would represent them or provide loan modification services.
The ALJ entered extensive and detailed findings of fact and conclusions of law
and an initial order. On July 16, 2014, DFI entered a final order adopting the ALJ
findings and conclusions. DFI ordered PLC to "cease and desist from further violation
8
No. 73424-5-1/9
of Chapter 19.146 RCW" and ordered Porter and PLC to pay $28,886.87 in restitution, a
$24,000.00 fine, and investigative fees. Porter appealed. The superior court affirmed
the DFI final order.
ANALYSIS
Porter appeals the superior court order affirming the DFI decision. The
Washington Administrative Procedure Act (WAPA), chapter 34.05 RCW, governs
judicial review of a final administrative decision. Nationscapital Mortg. Corp. v. Dep't of
Fin. Insts.. 133 Wn. App. 723, 737, 137 P.3d 78 (2006). When reviewing agency action,
this court "sits in the same position as the superior court, applying the standards of the
WAPA directly to the record before the agency." Tapper v. Emp't Sec. Dep't. 122
Wn.2d 397, 402, 858 P.2d 494 (1993); Brown v. Dep't of Commerce. 184 Wn.2d 509,
544, 359 P.3d 771 (2015).2
We review the agency's findings of fact for substantial evidence. Raven v. Dep't
of Soc.& Health Servs.. 177 Wn.2d 804, 817, 306 P.3d 920 (2013); Nationscapital. 133
Wn. App. at 737. Substantial evidence is "evidence of a 'sufficient quantity ... to
persuade a fair-minded person of the truth and correctness' of the agency action."
Campbell. 180 Wn.2d at 5713 (quoting Port of Seattle v. Pollution Control Hearings Bd..
151 Wn.2d 568, 588, 90 P.3d 659 (2004)). "We will not weigh the evidence or
substitute our judgment regarding witness credibility for that of the agency."
Nationscapital. 133 Wn. App. at 738; Port of Seattle. 151 Wn.2d at 588. We treat
findings of fact labeled as conclusions of law as findings of fact. Rilev-Hordkv v. Bethel
2Therefore, we review the decision of the agency, not the superior court. Campbell v. Emp't Sec.
Dep't. 180 Wn.2d 566, 571, 326 P.3d 713 (2014).
3 Internal quotation marks omitted.
No. 73424-5-1/10
Sch. Dist.. 187 Wn. App. 748, 759, 350 P.3d 681 (2015); Willener v. Sweeting. 107
Wn.2d 388, 394, 730 P.2d 45 (1986).
Unchallenged findings are verities on appeal. Nationscapital. 133 Wn. App. at
738; Darkenwald v. Emp't Sec. Dep't. 183 Wn.2d 237, 244, 350 P.3d 647 (2015). We
review de novo an agency's "conclusions of law and its application of the law to the
facts." Raven. 177 Wn.2d at 817; Tapper, 122 Wn.2d at 402. Because Porter does not
assign error to any of the findings of fact, we treat the findings of the ALJ that were
adopted by DFI as verities on appeal. RAP 10.3(h); Darkenwald. 183 Wn.2d at 244;
Nationscapital. 133 Wn. App. at 738; cf. Ferry County v. Growth Mgmt. Hearings Bd..
184 Wn. App. 685, 725, 339 P.3d 478 (2014). Although the ALJ labeled some findings
of fact as conclusions of law, we treat those conclusions as findings of fact. Willener,
107Wn.2dat394.
Porter contends the attorney exemption to the MBPA applies and substantial
evidence does not support the conclusion that PLC engaged in unlicensed activity in
violation of RCW 19.146.200(1) or deceptive practices in violation of RCW 19.146.0201.
Under RCW 19.146.200(1), a person "may not engage in the business of a
mortgage broker or loan originator without first obtaining and maintaining a license
under this chapter" unless specifically exempt under RCW 19.146.020. Under the
MBPA, "person" means "a natural person, corporation, company, limited liability
corporation, partnership, or association." Former RCW 19.146.010(17) (2010).4 Former
RCW 19.146.010(11)(c) defines "loan originator" to include:
[A] natural person who for direct or indirect compensation or gain or in the
expectation of direct or indirect compensation or gain performs residential
4 Laws OF 2010, ch. 35 § 13.
10
No. 73424-5-1/11
mortgage loan modification services or holds himself or herself out as
being able to perform residential mortgage loan modification services.[5]
RCW 19.146.010(21) defines "residential mortgage loan modification services."
RCW 19.146.010(21) states:
"Residential mortgage loan modification services" includes negotiating,
attempting to negotiate, arranging, attempting to arrange, or otherwise
offering to perform a residential mortgage loan modification. "Residential
mortgage loan modification services" also includes the collection of data
for submission to any entity performing mortgage loan modification
services.
Porter argues DFI erred in concluding the attorney exemption to RCW
19.146.200(1) did not apply to PLC and improperly placed the burden of proof on
Porter.
Under former RCW 19.146.020(1)(c), an attorney licensed to practice law in
Washington who is "not principally engaged in the business of negotiating residential
mortgage loans" is exempt from the MBPA. Former RCW 19.146.020(1) provides:
The following are exempt from all provisions of this chapter:
(c) An attorney licensed to practice law in this state who is not
principally engaged in the business of negotiating residential mortgage
loans when such attorney renders services in the course of his or her
practice as an attorney.^
5 Emphasis added.
6The legislature amended RCW 19.146.020(1)(c) in 2013. Laws of 2013, ch. 30, § 2. RCW
19.146.020(1) now provides:
The following are exempt from all provisions of this chapter:
(c) An attorney licensed to practice law in this state. However, (i) all mortgage
brokeror loan originator services must be performed by the attorney while engaged in the
practice of law; (ii) all mortgage broker or loan originator services must be performed
under a business that is publicly identified and operated as a law practice; and (iii) all
funds associated with the transaction and received by the attorney must be deposited in,
maintained in, and disbursed from a trust account to the extent required by rules enacted
by the Washington supreme court regulating the conduct of attorneys.
11
No. 73424-5-1/12
WAC 208-660-008(5)(a) provides that "an attorney licensed in Washington" is
exempt from the MBPA under RCW 19.146.020(1 )(c) if the mortgage broker activities
performed by the attorney "are incidental to your professional duties as an attorney."7
There is no dispute Porter is not licensed to practice law in Washington. Porter
asserts that because Washington attorney Mercado provided mortgage loan
modification services for PLC Washington clients, DFI erred in concluding the
exemption did not apply. The record supports the DFI conclusion that the "weight of
evidence establishes that [PLC], not Mr. Mercado, performed these services for the
eight consumers at issue."
Adney testified he communicated only with PLC paralegals and never heard of
Mercado. Porter testified he did not know what work Mercado provided to the
Washington clients and Porter, not Mercado, assigned work on the cases to the PLC
paralegals.
The unchallenged findings establish the loan modification services Porter
provided were not "incidental to, or a small part of, other legal representation" and were
7 WAC 208-660-008(5) states:
As an attorney, must Ihave a mortgage broker or loan originator license to assist a
person in obtaining or applying to obtain a residential mortgage loan in the course
of my practice?
(a) If you are an attorney licensed in Washington and if the mortgage broker
activities are incidental to your professional duties as an attorney, you are exempt from
the Mortgage Broker Practices Act under RCW 19.146.020(1 )(c).
(b) Whether an exemption is available to you depends on the facts and
circumstances ofyour particular situation. For example, if you hold yourself out publicly
as being able to perform the services of a mortgage broker or loan originator, or if your
fee structure for those services is different from the customary fee structure for your
professional legal services, [DFI] will consider you to be principally engaged in the
mortgage broker business and you will need a mortgage broker or loan originator license
before performing those services. A"customary" fee structure for the professional legal
servicedoes not include the receipt of compensation or gain associated with assisting a
borrower in obtaining a residential mortgage loan on the property.
(Boldface in original.)
12
No. 73424-5-1/13
"the primary purpose of the representation." The Limited Services Retainer Agreement
describes the scope of PLC work on behalf of the Washington clients as "attempts to
qualify Borrower's first mortgage for work-out programs that are available," and explicitly
lists legal services that "are not included within the scope of this Agreement." The
unchallenged findings and the administrative record establish the MBPA attorney
exemption under former RCW 19.146.020(1)(c) did not apply.
Porter also argues DFI erred in placing the burden on Porter to prove the
attorney exemption applied. Because the unchallenged findings and the administrative
record establish the attorney exemption does not apply, Porter cannot show prejudice.
RCW 34.05.570(1)(d); Denslev v. Dep't of Ret. Sys.. 162 Wn.2d 210, 217, 173 P.3d 885(2007).
The unchallenged findings support the DFI conclusion that PLC acted as a loan
originator without a license in violation of RCW 19.146.200(1). Porter offered residential
loan modification services and received compensation for those services. While Porter
was "admittedly not licensed as [a] mortgage broker[ ] or loan originator[ ] in the state of
Washington," PLC "held [itself] out publicly to at least eight Washington consumers as
being able to perform the services of a mortgage broker or loan originator." The
findings establish the Washington consumers "paid PLC to negotiate, attempt to
negotiate, arrange, or attempt to arrange a residential loan modification for them."
Porter contends substantial evidence does not support finding PLC held itself out
as being able to provide loan modification services directly to Washington consumers
and the DFI decision is arbitrary and capricious.
13
No. 73424-5-1/14
The unchallenged findings support the conclusion that Porter violated former
RCW 19.146.0201 (2009)8 of the MBPA. Former RCW 19.146.0201 states, "It is a
violation of this chapter for a loan originator or mortgage broker required to be licensed
under this chapter to: . . . (2) Engage in any unfair or deceptive practice toward any
person." The findings establish PLC "advertised residential loan modification services
to Washington consumers via mailer, telephone, and the internet." The Payment
Reduction Notification flyer, Adney's testimony, and the PLC website support this
finding.
The unchallenged findings establish there is "no evidence" that PLC "disclosed to
Washington consumers, during such advertising, that they were not licensed in
Washington as mortgage brokers, loan originators, or attorneys," or that PLC "ever told
Washington consumers that Washington attorney Christopher Mercado would represent
them or provide them loan modification services."
Neither the flyer nor the PLC website mention PLC is not licensed as a mortgage
broker or loan originator in Washington or that Washington attorney Mercado would
provide the loan modification services for PLC's Washington clients.
"The scope of review under an arbitrary and capricious standard is very narrow,
and the party asserting it carries a 'heavy burden.'" Ass'n of Wash. Spirits &Wine
Distribs. v. Liguor Control Bd.. 182 Wn.2d 342, 359, 340 P.3d 849 (2015)9 (quoting King
County Pub. Hosp. Dist. No. 2 v. Dep't of Health. 167 Wn. App. 740, 749, 275 P.3d
8 Laws OF 2009, ch. 528, § 3.
9 Internal quotation marks omitted.
14
No. 73424-5-1/15
1141 (2012)). "An agency's decision is arbitrary and capricious ifthe decision is the
result of willful and unreasoning disregard of the facts and circumstances." Overlake
Hosp. Ass'n v. Dep't of Health. 170 Wn.2d 43, 50, 239 P.3d 1095 (2010). " '[W]here
there is room for two opinions, an action taken after due consideration is not arbitrary
and capricious even though a reviewing court may believe it to be erroneous.'" Wash.
Indep. Tel. Ass'n v. Wash. Utils. & Transp. Comm'n. 148 Wn.2d 887, 905, 64 P.3d 606(2003)10 (quoting Rios v. Dep't of Labor &Indus.. 145 Wn.2d 483, 501, 39 P.3d 961(2002).
The decision that PLC engaged in deceptive practices in violation of former RCW
19.146.0201 is supported by the unchallenged findings and the record, and the decision
is not arbitrary or capricious.
Porter claims the ALJ "erroneously made credibility determinations." We
disagree. An ALJ is entitled to determine the weight given to conflicting evidence. See
Port of Seattle, 151 Wn.2d at 588; Beattv v. Wash. Fish &Wildlife Comm'n, 185 Wn.
App. 426, 449, 341 P.3d 291 (2015); William Dickson Co. v. Puoet Sound Air Pollution
Control Agency. 81 Wn. App. 403, 411, 914 P.2d 750 (1996). Credibility determinations
made by a presiding officer at an administrative hearing "are not subject to appellate
review." Dep't of Health Unlicensed Practice Program v. Yow. 147 Wn. App. 807, 820,
199 P.3d 417 (2008).
Porter also claims the ALJ erred in admitting hearsay evidence. We disagree.
Under the WAPA, the Rules of Evidence are "guidelines for evidentiary rulings." RCW
10 Internal quotation marks omitted.
15
No. 73424-5-1/16
34.05.452(2). The WAPA expressly provides that hearsay evidence is admissible if "in
the judgment of the presiding officer it is the kind of evidence on which reasonably
prudent persons are accustomed to rely in the conduct of their affairs." RCW
34.05.452(1). "Findings may be based on such evidence even if it would be
inadmissible in a civil trial." RCW 34.05.461(4).
Porter contends the ALJ erred in allowing the DFI investigators to testify that
Washington resident Robert Olacio filed a complaint against PLC. But Porter provided
the names of the PLC Washington clients, including Olacio, and identified how much he
charged each client. Porter also asserts the ALJ abused its discretion by admitting
evidence about the Washington clients DFI was not able to contact. Porter argues the
evidence was irrelevant and "highly prejudicial because it suggested a pattern of
conduct on behalf of PLC." The ALJ did not abuse its discretion in admitting the
evidence. Whether Porter provided loan modification services to Washington residents
outweighed any prejudice.
Porter challenges the $24,000 fine imposed by DFI. Porter argues DFI
"arbitrarily fabricated a fine amount" and failed to follow prescribed procedures because
it "deviated from its usual practice of using a fine matrix."
Former RCW 19.146.220(2)(c) (2006)11 authorized DFI to impose fines for "[a]ny
violation of this chapter." WAC 208-660-530(6) gives DFI the discretion to impose a fine
of up to $100 for each violation. "Each day's continuance of the violation is a separate
and distinct offense." WAC 208-660-530(6). Neither RCW 19.146.220 nor WAC 208-
660-530 requires DFI to utilize a "fine matrix."
11 Laws of 2006, ch. 19, § 13.
16
No. 73424-5-1/17
The unchallenged findings support the $24,000 fine. The findings establish PLC
"worked for at least one month on each of their eight Washington clients' residential
loan modifications." DFI calculated the fine at 30 days per customer. The decision to
impose a fine of $3,000 for each of the eight Washington clients was not arbitrary and
capricious or a failure to follow a prescribed procedure.
Porter also challenges the order to pay $28,886.87 in restitution. But the record
shows Porter admitted the eight PLC Washington clients paid a total of $28,886.87.
Porter asserts the MBPA violates the separation of powers by encroaching on
the Supreme Court's authority to regulate the practice of law. We disagree.
The separation of powers doctrine " 'serves mainly to ensure that the
fundamental functions of each branch remain inviolate.'" Brown v. Owen. 165 Wn.2d
706, 718, 206 P.3d 310 (2009) (quoting Carrick v. Locke, 125 Wn.2d 129, 135, 882
P.2d 173 (1994)). In determining whether a particular action violates the separation of
powers doctrine, we look to " 'whether the activity of one branch threatens the
independence or integrity or invades the prerogatives of another.'" Brown, 165 Wn.2d
at 71812 (quoting Carrick, 125 Wn.2d at 135). Although "the regulation of the practice of
law is within the sole province ofthe judiciary," application ofconsumer protection laws
such as the MBPA to attorneys "does not trench upon the constitutional powers ofthe
court to regulate the practice of law." Bennion. Van Camp. Haoen &Ruhl v. Kassler
12 Internal quotations omitted.
17
No. 73424-5-1/18
Escrow. Inc.. 96 Wn.2d 443, 453, 635 P.2d 730 (1981); Short v. Demopolis. 103 Wn.2d
52,65,691 P.2d 163(1984).
We affirm the final decision and order of DFI.
*^WLQ?^,
WE CONCUR:
s\S~1LvA t
^f
18