Court Opinion

ID: 9791225
Source: CourtListenerOpinion
Date Created: 2023-08-31 02:07:48.623761+00
Date Added: 2024-06-11T07:37:34.963440
License: Public Domain

BIRD, C. J.
I respectfully dissent. Since Justice Howard Wiener of the Court of Appeal set forth a thoughtful analysis with which I agree, I herewith publish his opinion in pertinent part:
The right to practice a profession is a fundamental right protected by the due process clause of the state and federal Constitutions. (5 Witkin, Summary of Cal. Law (8th ed. 1974) Constitutional Law, § 273, p. 3563; Brecheen v. Riley (1921) 187 Cal. 121, 124-125 [200 P. 1042].) A person may be barred from practicing a lawful profession only for reasons relating to his fitness or competence to practice that profession. (Newland v. Board of Governors (1977) 19 Cal.3d 705, 711 [139 Cal.Rptr. 620, 566 P.2d 254].) The power of a state to deny or revoke a vocational license cannot be applied arbitrarily. The exercise of the power must bear a direct and rational relationship to the individual’s fitness to engage in the particular vocation involved. (See, e.g., Hallinan v. Committee of Bar Examiners (1966) 65 Cal.2d 447 [55 Cal.Rptr. 228, 421 P.2d 76]; Morrison v. State Board of Education (1969) 1 Cal.3d 214 [82 Cal.Rptr. 175, 461 P.2d 375]; and Perrine v. Municipal Court (1971) 5 Cal.3d 656 [97 Cal.Rptr. 320, 488 P.2d 648].)
Since 1943 when [Business and Professions Code] section 10177, subdivision (b), was first enacted and pursuant to all subsequent amendments, the Real Estate Commissioner has had the power to commence disciplinary proceedings involving any real estate licensee who had been convicted of a felony. (Stats. 1943, ch. 127, § 1, p. 842.) Evidence of a conviction based on a guilty plea is admissible to establish the fact that the licensee had committed the crime to which he had entered his plea pursuant to his implicit admission of every element contained in the of*454fense charged.5 (See Cal. Administrative Mandamus (Cont.Ed.Bar Supp. 1979) § 5.31, pp. 40-41.) It was not until 1953 in response to Caminetti v. Imperial Mut. L. Ins. Co. (1943) 59 Cal.App.2d 476 [39 P.2d 681], that the Legislature amended section 10177, subdivision (b), to include a conviction following a plea of nolo contendere to a felony or to a crime involving moral turpitude as a basis for discipline.
In Caminetti, the officers of an insurance company entered a nolo contendere plea and were convicted in federal court of a charge of defrauding the United States. In proceedings under the Insurance Code, the Commissioner attempted to introduce the federal conviction as conclusive evidence of fraud justifying the seizure of the company’s assets. The court ruled the conviction inadmissible since it was based on the nolo contendere plea.6 The nolo contendere plea was held to be an arrangement between the defendant and the court to expedite the criminal proceedings; thus the conviction obtained on the plea “... by reason of the agreement underlying it, must in all good conscience, fairness and equity be held to be a conviction for the limited and agreed purposes of that proceeding... and for no other purpose.” (Caminetti, supra, at p. 492.) The Caminetti court refused to distinguish between the plea of nolo and the conviction based on the plea. A similar result followed in a State Bar proceeding in In re Hallinan, supra, 43 Cal.2d 243, 247, which prompted the Legislature to make wholesale amendments to the Business and Professions Code involving the legal profession, dentists, pharmacists, accountants, nurses, veterinarians and physical therapists. (See Kirby v. Alcoholic Bev. etc. App. Bd. (1969) 3 Cal.App.3d 209, 220 [83 Cal.Rptr. 89]; Cartwright v. Board of Chiropractic Examiners [1976] 16 Cal.3d 762, 769-774 [129 Cal.Rptr. 462, 548 P.2d 1134].)
*455At first blush it thus appears the Legislature attempted to equate a plea of nolo contendere to a felony under section 10177, subdivision (b), with either a guilty plea or a finding of guilty after trial. To treat them as identical, however, ignores not only the policy underlying the purpose for the enactment of the nolo plea, but also Evidence Code section 1300, which provides that evidence of a final judgment adjudging a person guilty of a felony is admissible when relevant in a civil action unless the judgment was based on a plea of nolo contendere. It is generally recognized that Penal Code section 1016, subdivision 3, was enacted in response to Teitelbaum Furs, Inc. v. Dominion Ins. Co., Ltd., supra, 58 Cal.2d 601. (See, e.g., Comment, Nolo Contendere—Its Use and Effect [1964] 52 Cal.L.Rev. 408, 409; Comment, The Nolo Contendere Plea: Uncertainty Surrounding Its Collateral Effects in California (1975) 3 Western St.U.L.Rev. 92, 93.) There the court held a civil litigant is collaterally estopped from relitigating an issue previously found against him after a criminal trial. Any issue necessarily decided in the criminal prosecution is conclusively determined as to the parties if the issue is involved in a subsequent civil action.
In dictum, the Teitelbaum court also discussed the inapplicability of the doctrine of collateral estoppel where the conviction is based on a guilty plea. It pointed out that although in a subsequent civil trial the plea of guilty is admissible as an admission against interest, it cannot be treated as conclusive of the issues involved for there has not previously been a full presentation of the case. “Considerations of fairness to civil litigants and regard for the expeditious administration of criminal justice [citations] combine to prohibit the application of collateral estoppel against a party who, having pleaded guilty to a criminal charge, seeks for the first time to litigate his cause in a civil action.” ([Teitelbaum Furs, Inc. v. Dominion Ins. Co., Ltd., supra, 58 Cal.2d 601,] 605-606.) Thus before the nolo plea was allowed in state courts a criminal defendant faced with related civil proceedings had an unhappy choice. He could go through the expensive process of a criminal trial and if convicted, the conviction would conclusively and adversely determine the issues involved in the civil matter. Of course, if acquitted, because of the difference in the burdens of proof in a civil and criminal case, the acquittal would be of no evidentiary benefit to him. He could also plead guilty recognizing the impact his admission would have on the trier of fact in the civil case. To avoid this perhaps justifiable Catch-22 facing defendants in criminal cases, the Legislature enacted Penal Code section 1016, subdivision 3, which would avoid the perceived disastrous civil consequences to a defendant consistent with the goals of the penal *456system, concurrently expediting the administration of criminal justice. Basically, the civil consequences of criminal acts would be deferred to the civil forum to allow each party his day in court. The distinction between the nolo and guilty pleas was reinforced two years later when Evidence Code section 1300 was enacted (Stats. 1965, ch. 299, § 2 [, P- 1345].)7
The distinction drawn in Teitelbaum between the collateral effect of a conviction after trial and a conviction following a guilty plea is equally applicable in the administrative context. Similarly, the distinction between a nolo and guilty plea must be recognized to satisfy the legislative intent reflected in section 10177, subdivision (b), Penal Code section 1016, subdivision 3, and Evidence Code section 1300.
The number of possible factual situations facing an administrative law judge in disciplinary proceedings involving real estate licensees or others, although not infinite, borders on the immeasurable. The Legislature, aware of the administrative burden of regulatory agencies to effectively discipline errant licensees and the nexus between a conviction based on a nolo plea and the commission of the underlying act(s), authorized the regulatory agency to impose discipline based on a conviction following a nolo plea. Within this continuum of possible cases, there may be those in which the licensee may fail to appear at the hearing or after appearing will devote his energies to evidence relating to his rehabilitation in mitigation of discipline. Other cases may include the unusual situation such as the one presented here where the licensee vigorously asserts his innocence and attempts to explain away his plea of nolo. Because of the unique characteristics of the nolo plea, we conclude that only by treating section 10177, subdivision (b), as creating a rebut-table presumption designed to implement the public policy of expediting the functions of those charged with regulating vocational or professional licensees can the plea be used in disciplinary proceedings. The competing interests are thus reconciled within constitutional limitations— proper deference is given to the legislatively determined reliability of a nolo plea as an indication of guilt, the legislatively created and judicially recognized distinction between the nolo pleas is preserved, and the licensee is not denied due process of law.
*457In an administrative hearing, a guilty plea is admissible evidence to be weighed along with and against all other evidence presented at the hearing to determine whether the licensee has by his actions shown himself to be unfit to continue practicing in the real estate profession. If the hearing officer finds by a preponderance of the evidence, including evidence of the guilty plea, that suspension or revocation of the license is warranted, he may recommend such action to the Commissioner and the Commissioner may so act, subject to judicial review for abuse of discretion. However, if the proceeding has been triggered by a conviction following a nolo plea, the certified records of the indictment or information, the nolo plea, and the conviction based upon the nolo plea may be introduced as prima facie evidence that the licensee committed the acts described in the documents (Evid. Code, § 602), thereby transferring to the licensee the burden of establishing the nonexistence of the presumed facts (Evid. Code, § 606). This presumption is not evidence (Evid. Code, § 600, subd. (a)), and if the licensee presents evidence at the hearing sufficient to rebut it, the facts of the conviction may no longer be considered in determining the truth or falsity of the allegations.
In further balancing of the interests involved, we conclude the burden placed on the licensee under such circumstances should be proof, by a preponderance of the evidence, of the nonexistence of the presumed facts.
When we test this approach on a practical basis not only in the present case but in hypothetical cases within the continuum described, we conclude the presumption created does not place an undue burden on the agency or the individual involved. It merely assures the licensee and the public that the hearing officer in the first instance and the court thereafter will have sufficiently reliable information to properly exercise discretion in the weighing process necessary to reach a fair decision.

The Hearing Officer’s Failure to Exercise His Discretion in Weighing the Evidence Requires Reversal for Future Administrative Hearing

Plaintiff’s petition for writ of mandate required the trial court to exercise its independent judgment on the evidence. (Code Civ. Proc., *458§ 1094.5, subds. (b), (c).) The court adopted the Commissioner’s findings of fact and conclusions of law.8 These findings were that (1) Arneson was a real estate broker, (2) he was convicted of conspiracy in the federal court on his plea of nolo contendere, and (3) conspiracy was a felony and a crime involving moral turpitude, and the crime was substantially related to the qualifications, duties, and functions of a real estate licensee within the meaning of section 490. The findings also stated by way of “mitigation, aggravation or explanation” Arneson was a “willing instrument of the officers of the corporation [U.S. Financial] who made its policies and directed its affairs.”
The administrative hearing was brief. The Commissioner, subject to examining Arneson, rested his case after he introduced the indictment, Arneson’s nolo plea, and the conviction. Counsel for Arneson made an opening statement to satisfy the dual purpose of furnishing the hearing officer an overview of the facts plus introducing evidence in narrative form of Arneson’s limited involvement in U.S. Financial’s affairs. Arneson’s direct testimony confirmed and buttressed his counsel’s explanation and furnished additional information relating to his proper handling and accounting for millions of dollars of real property and cash.
The confusion as to the evidentiary significance of the conviction based on the nolo plea is apparent from the record. At different times, the hearing officer said: “The conviction points in one direction. It points towards guilty. You have painted a picture here that points in the exact opposite direction,” and “Based on what you tell me, no aiding or abetting took place, at least none of a criminal nature,” and “[Y]ou haven’t said anything that would indicate that the respondent was implicated in any of these transactions, and if he was not, why was a plea of nolo contendere entered?”
When Arneson tried to respond to these inquiries by introducing a written explanation as to why he had pleaded nolo, the evidence was re*459jected as irrelevant. During cross-examination when counsel for the Commissioner was trying to probe into the underlying facts set out in the indictment to deal with Arneson’s theory of defense, the hearing officer declined to recess to permit Arneson to review the indictment, stating: “I think we have spent more time than we should on this case. It’s now ten after three. We’ve been going since 1:30. I don’t know how much further we’re going to go, and I would like to wind it up as soon as possible.” When reminded that the time estimate was two to three hours, the hearing officer said: “Listening to the evidence here at this time, it seems to me it’s a substantial overestimate.” On another occasion when asked to recess so he might look at the indictment, he commented: “No, counsel, I’m not going to do that at this time. We have spent two hours, and I’m not going to sit down and go through the indictment. I’m going to confine your questions to the area that is relevant at this point.”
The comments made by the hearing officer, his rejection of the explanation underlying Arneson’s nolo plea, and his statement that a two-hour hearing was an excessive time estimate to resolve the factual questions presented in the indictment all point to the hearing officer’s determination that nothing further was required as a basis for imposition of discipline other than the nolo plea and the conviction based on the plea. The Attorney General in this appeal makes the same argument. The finding that Arneson was a willing instrument of the officers of U.S. Financial was drawn only by inference from the conviction and was treated as a conclusive presumption, for no other evidence was presented on this question.
We conclude in the exercise of discretion, not only must the hearing officer decide the weight to be given to a conviction (Arenstein v. California State Bd. of Pharmacy, supra, 265 Cal.App.2d 179, 190), but where the conviction is based on a plea of nolo contendere, he must decide whether the underlying acts constituting the. crime were actually committed. In those cases where a licensee asserts his innocence after a prima facie case against him has been made, he is entitled to a full hearing to guarantee him the panoply of legal protection to which he is entitled in protecting his right to practice his profession. (Yakov v. Board of Medical Examiners (1968) 68 Cal.2d 67, 75 [64 Cal.Rptr. 785, 435 P.2d 553].) “Due process” are more than buzz words. To be meaningful they must be energized from the theoretical to the practical through well-prepared lawyers and patient triers of fact. Where, as *460here, the Commissioner failed to exercise his discretion in the manner required by law, Arneson is entitled to a new hearing.
Newman, J., concurred.

The guilty plea is admissible in a subsequent civil proceeding on the independent ground that it is an admission against interest (Evid. Code, § 1220). It does not, however, for the purposes of the later civil action, conclusively prove the commission of the acts alleged in the underlying information or indictment. (Teitelbaum Furs, Inc. v. Dominion Ins. Co., Ltd. (1962) 58 Cal.2d 601, 605 [25 Cal.Rptr. 559, 375 P.2d 439].) The weight and significance given the plea in determining whether or not to suspend or revoke a professional license is for the hearing officer (and, in an independent judgment case under Code Civ. Proc., § 1094.5, the trial court) to decide. (Arenstein v. California State Bd. of Pharmacy (1968) 265 Cal.App.2d 179, 191 [71 Cal.Rptr. 357].) Certainly, in a subsequent civil proceeding, under either the majority or minority view of the use of the conviction following a nolo plea..., the same right to litigate the issues underlying a conviction had without trial should inure to the nolo pleader as it does to one who has pleaded guilty.

A plea of nolo contendere in the state courts was not permitted until the enactment in 1963 of Penal Code section 1016, subdivision 3. (Stats. 1963, ch. 2128, § 1, p. 4418.)

Allhough these policy considerations could arguably be deemed irrelevant to the instant case on the grounds that a disciplinary proceeding is not a civil action, this distinction is too tenuous as the basis for a meaningful rationale.

Although we do not address whether the findings in this case were in violation of California Rules of Court, rule 232(e) precluding findings which merely refer to the truth or falsity of allegations contained in the pleadings (see Martin v. Baker (1974) 43 Cal.App.3d 1049 [118 Cal.Rptr. 238]), our preference would be for the court to make its own findings to assure its independent judgment on the weight of the evidence and to guarantee that our attention will be properly focus.ed. (Cal. Administrative Mandamus (Cont.Ed.Bar Supp. 1979) Procedure and Practice, § 15.26, p. 151.)