Opinion
NOT TO BE PUBLISHED
City and County of San Francisco Super. Ct. No. CPF-09-509174
LAMBDEN, J.
David Steven Ayerdi applied for a real estate salesperson license after being convicted in 2001 for bribing a public official, attempting to commit visa fraud, and theft of public property. Following an administrative hearing on his application, the administrative law judge (ALJ) for the Department of Real Estate issued a proposed decision recommending that Ayerdi receive a restricted license. A commissioner at the Department of Real Estate (the commissioner) rejected the proposed decision and denied Ayerdi’s application for a license. The commissioner concluded that Ayerdi presented insufficient evidence of rehabilitation based on Ayerdi’s inability to provide any reason for his illegal behavior and his failure to appreciate that not mentioning to a prospective employer in 2000 that there were pending criminal charges against him was a form of deceit.
Ayerdi filed a petition for writ of administrative mandate in the superior court, and the lower court denied his petition. He appeals and argues that the court and the commissioner abused their discretion in denying his application for a license. We affirm the judgment denying Ayerdi’s petition for writ of administrative mandate.
BACKGROUND
Ayerdi’s Crimes While Working as an Immigration Inspector
Ayerdi graduated from a university with a bachelor’s degree in Spanish in 1994, and went to work for the federal agency formerly known as the Immigration and Naturalization Services (INS). The INS hired him as an immigration inspector. During his training, he learned about fraudulent visas and the types of classifications and codes to admit certain types of non-immigrants into the United States. He also learned about the consequences of misusing passport stamps. After training, Ayerdi was assigned to the San Francisco International Airport, where he screened non-immigrants into the United States for tourism and business.
In 2000, while vacationing in the Philippines, Ayerdi met Ramon Arenas at a party. Arenas offered him $100,000 in exchange for two passport stamps and two bottles of ink. These items were wanted to falsify visas of Philippine nationals to misrepresent that they had previously entered or had permission to enter the United States. Ayerdi agreed to provide Arenas with the stamps and ink in return for receiving $100,000.
Subsequently, Arenas reported Ayerdi to government officials. During the undercover investigation, Ayerdi demanded partial payment of $7,500. After receiving this sum, Ayerdi delivered an admission stamp, two bottles of special security stamp ink, and agency codes used to identify admission locations. Following his delivery of those items, Ayerdi was arrested.
In 2000, Ayerdi was charged with bribing a public official, attempting to commit visa fraud, and theft of public property. In 2001, Ayerdi pleaded guilty to all three charges and accepted full responsibility for his criminal conduct. He received a sentence of one year and one day, which he served in a halfway house in San Francisco. Ayerdi received two months off his sentence for good behavior, and was allowed to serve two months under house arrest. When he returned home from the halfway house, Ayerdi became the primary caregiver for his partner, who suffered from AIDS. Ayerdi’s probation was terminated early in June 2004 based on his good behavior.
Ayerdi’s partner died in May 2004.
Ayerdi’s Employment with a Real Estate Office
In 2000, while his criminal charges were pending, Ayerdi applied for a job with McGuire Real Estate (McGuire), and was hired as a comparative market analyst. He was not asked about any criminal convictions or charges and he did not volunteer information about the pending charges against him. Nancy McKain, a vice-president of McGuire, was Ayerdi’s first supervisor. After he was convicted of the three federal charges, Ayerdi told McKain about the convictions and that he was going to be serving his time in a halfway house in San Francisco. McGuire agreed not to terminate Ayerdi’s employment.
McGuire’s top salesperson, Barbara J. Callan (Barbara), knew about Ayerdi’s convictions, but still hired him as her assistant in February 2002. As Barbara’s assistant, Ayerdi prepared marketing mailings, handled escrow files through closing, coordinated the preparation of homes for sale, prepared comparative market analyses, coordinated the efforts of title companies, contractors and inspectors, prepared disclosure packages, and maintained the website he had created for Barbara.
Ayerdi’s Prior Applications for a License
Ayerdi filed his first application for a real estate salesperson license in December 2001, and withdrew the application in early 2002 when advised that his criminal probation would result in the department’s denial of his application.
Ayerdi filed another application for a real estate salesperson license on October 1, 2004. In his application, he disclosed that he had a criminal conviction and stated that he had probation for two years. He, however, gave the wrong conviction date and omitted any reference to his convictions for fraud and theft. He omitted any reference to his prison term. The department denied the application; Ayerdi appealed.
Ayerdi had an administrative hearing. At the hearing, he testified that 2000 was a very difficult time for him because his partner’s condition was deteriorating and he was working full-time while being his partner’s caregiver. When asked why he committed the crimes, he responded: “It was a mistake. There was a lot going on in my life. I’d been going to the Philippines for years and never done anything wrong.”
After the administrative hearing, the ALJ issued his proposed decision to deny Ayerdi’s application for a license. The ALJ provided the following explanation for denying Ayerdi’s license: “[Ayerdi] asserts that he has rehabilitated himself..., and there is evidence that tends to support his claim. [Ayerdi] pled guilty to the crimes without the benefit of a plea bargain. It has been over four years since his convictions.... He is close to his family and provides significant financial support to his mother. Since 2000, he has been gainfully employed by real estate salespersons who speak highly of his work and his character. [Ayerdi] believes that his crimes represent an ‘aberrant’ episode in his life ‘that occurred while his life partner was dying of AIDS.’ He seems to sincerely regret the ‘mistake’ he made.
“Evidence of rehabilitation, however, must be measured against the severity of the crime. The more serious the crime, the stronger an applicant’s showing of rehabilitation must be. In the case of an applicant for a real estate salesperson license, it is difficult to imagine crimes more serious than bribery of a public official, fraud, and theft of public property. These crimes imply a fundamental lack of honesty and integrity, and bear closely and directly on the fiduciary responsibilities of a real estate salesperson. A strong showing of rehabilitation is required.
“[Ayerdi’s] evidence falls short. Little weight can be given to [Ayerdi’s] exemplary behavior since his arrest in 2000, or his conviction in 2001. Three of those years were spent under the constraints of confinement or supervised release, and [Ayerdi’s] application to the department has been pending for over a year. Good behavior is expected under those circumstances. In addition, [Ayerdi’s] behavior was exemplary before he committed the crimes, further diminishing the confidence that can be placed in his post-conviction conduct.
“And questions persist about [Ayerdi’s] honesty. [Ayerdi’s] explanation of why he committed the crimes––stress and depression caused by [his partner’s] deteriorating condition––is not probable; [Ayerdi’s] crimes were not committed impulsively, and no evidence suggests that [his partner’s] illness posed a financial crisis for him or for [Ayerdi]. [Ayerdi’s] testimony in this hearing that he did not stamp the passports of two Philippine nationals, as he had promised Arenas he would, is inconsistent with his admission to federal agents in 2000. And [Ayerdi’s] incomplete disclosure of his convictions on his application is troubling. Just months before he submitted his application, [Ayerdi] told the federal court that a career in real estate would allow him to ‘continue his efforts at rehabilitation.’ It is reasonable to expect that a person in [Ayerdi’s] position would have been scrupulous in disclosing all the facts concerning his convictions and punishment. [Ayerdi’s] failure to do so reflects poorly on his claim that he is rehabilitated.
“It is undoubtedly true that [Ayerdi] feels remorse, and that he sincerely regrets his actions. Given the severity of his crimes, however, and the nature of the license he seeks, a substantial period of good conduct is required to demonstrate rehabilitation. It would be contrary to the public interest to issue [Ayerdi] a real estate salesperson license at this time, even on a restricted basis.” (Fns. Omitted.)
The commissioner denied Ayerdi’s application on February 28, 2006.
Ayerdi’s Current Application and Evidence at the Hearing
In September 2007, Ayerdi again applied for a real estate salesperson license. The commissioner filed a statement of issues, asking that the application be denied upon proof of Ayerdi’s criminal convictions.
On June 26, 2008, an ALJ held an administrative hearing on the statement of issues. At the hearing, Ayerdi was repeatedly asked about his insight into what caused him to commit the crimes. When first asked about what he thought about his criminal action, he responded: “I’m very remorseful. I did what I did––especially anyone that I hurt from this. You know, it’s not about me. It was hurting my family, hurting my friends, hurting loved ones. It was devastating. This is something that I have learned a great deal from. This is something I will always keep with me for the rest of my life. I will never forget it. It’s pretty much made me who I am today.”
Later, when asked why he did such an act as giving out bottles of ink, Ayerdi answered: “You know, it’s something that I did and I take full responsibility for it. To this day I can’t believe I did what I did. I think it was misjudgment on my part. And I––you know, I admitted to everything I did. It was wrong. It was wrong what I did, but I can’t––I don’t know why I did that. I just did what I did and I––I pled guilty and admitted to it.”
When asked why he did something that was against the law, Ayerdi replied: “It was just a bad move on my part. I’m sorry. It was a bad move.” He was then asked what was to prevent him from making another bad move in the future, and he explained as follows: “Well, I––since that happened to me I have kept with me this crime. You know, I’m a criminal this; I’m a felon this. And that I have learned from it tremendously. It’s always going to be a part of my life. And, um, I learned from it and it’s never go[ing] to happen again.” Counsel questioned what he learned, and Ayerdi stated: “I learned from the conviction that doing what I did was wrong and hurt other people, and that’s not right. And it was, you know service––a disservice to my job and I fully admit it was bad what I did. [¶] And, um, like I said, this is something I will never forget. It will always be a part of me and I’m very remorseful I did what I did. I can’t, like, pinpoint and say I did this for this reason, I did it for that. I did it and I pled guilty and it’s on––I have a felony record. And you look from other people [sic]I am a good person and I deserve an opportunity. I deserve a second chance.”
During the recross examination, counsel asked Ayerdi if he ever had counseling at the halfway house. Ayerdi said that he had counseling sessions for about two months. In the beginning the sessions were weekly and later they were biweekly. He said that he learned from the counseling that what he did was wrong and the counseling “just made” him “a better person as well.” When asked how it made him a better person, he replied: “Well, just not wanting to harm other people including myself and, um, just being able to have another second chance. In deciding––I’m also a hard-working citizen.”
Ayerdi’s witnesses at the hearing included Barbara, her husband, Robert R. Callan, Sr. (Robert, Sr.), and their son, Robert R. Callan Jr. (Robert, Jr.), who is also a licensed real estate agent at McGuire. Other witnesses were McKain and Ayerdi’s sister, Ingrid Ayerdi (Ingrid).
At the hearing, Barbara explained the work Ayerdi did for her and mentioned that she had received communications praising Ayerdi’s work, integrity, and honesty from some of her clients. She said that she had put Ayerdi in a position of trust over the years, which he never violated. She confirmed that she knew about Ayerdi’s conviction prior to hiring him, but believed he was a “good, honest person” with high integrity and “absolutely brilliant.” If Ayerdi became an agent, she would be his immediate supervisor.
Barbara was asked if Ayerdi disclosed to her his feelings about his convictions, and she said that he had. She stated: “He felt very bad about breaking the law. He is a very law-abiding person, and I have had the opportunity to see that in him in the years I have worked with him. I think that’s probably the one thing that bothers him the most, that he broke the law. [¶] I mean, he doesn’t even like––he gets upset if he gets a ticket. I think that’s the one thing that probably bothers him more, that he broke the law. And he mentioned on the stand that he did something wrong.”
Robert, Sr. stated that he had come to know Ayerdi and believed that he was a person of integrity. He explained that Ayerdi had six “very solid years of tremendous performance.” Robert, Jr., similarly, opined that Ayerdi is a person with high integrity. He stated that he trusted Ayerdi more after finding out about his convictions and elaborated: “I know personally what he went through from the way he spoke to me about it in great detail. He did on many occasions [say] to me it’s horrible; what he did was wrong. I have heard that on numerous occasions and tears would break out in his eyes. I respect someone who can come from that and to such a high point in life in a relatively short amount of time. I do believe there is a great remorse there. He’s had this on his shoulders and been very humble about it.” He stated that Ayerdi did not discuss with him any of his reasons for committing the crimes.
McKain reported that McGuire would hire Ayerdi as an agent if he obtained his real estate license. She kept Ayerdi as an employee after learning about his convictions in May 2001, because of his work ethic and dedication. She attributed Ayerdi’s crimes to a momentary lapse in judgment.
Ingrid testified that her brother provides financial assistance to their mother on a monthly basis. When asked if her brother confided in her about how he felt about his crimes, she claimed that he had. She concluded from his comments the following: “He regrets it. Everyday of his life he regrets it. I mean, he didn’t even know why he did what he did. He acted so quickly he didn’t think about it. Probably even when he did it, he was feeling guilty. He still did it....”
The ALJ’s Proposed Decision
On July 18, 2008, the ALJ submitted his proposed decision. The ALJ denied Ayerdi’s application for a real estate salesperson license but recommended that a restricted real estate salesperson license be issued to him pursuant to section 10156.5 of the Business and Professions Code. The restricted license was to be subject to the requirements of Business and Professions Code section 10153.4 and to all of the provisions of Business and Professions Code section 10156.7. The ALJ further specified that Ayerdi could not apply for an unrestricted real estate license or for the removal of any conditions until two years had lapsed from the date of issuance of the restricted license to him.
The ALJ made various factual findings, which included a finding that the convictions of bribery of a public official or employee, fraud and misuse of visas, permits and other documents, and theft of public property were crimes that substantially related to the qualifications, functions, and duties of a real estate licensee and involved moral turpitude. The ALJ stated that Ayerdi “candidly and forthrightly acknowledged his criminal conduct” at the hearing.
In terms of matters that negatively impacted upon Ayerdi’s progress towards rehabilitation, the ALJ pointed out that Ayerdi “was unable or unwilling to articulate the reason for his criminal conduct that led to the May 2001 convictions in federal court. He was not persuasive with his current reticence to candidly acknowledge the temptation that a bribe of $100,000 was the lure for him to breach his oath of fidelity and pledge of honor as a federal government law enforcement officer. His proclamation during cross-examination at the hearing of this matter that his criminal act was only a ‘bad move on his part’ does not support a determination that [Ayerdi] has been fully rehabilitated.”
The ALJ also noted that Ayerdi accepted employment with McGuire “without disclosing the fact that he had been arrested for felony offenses and that federal court criminal charges were pending against him.... It may be reasonably inferred that his nondisclosure of the pending criminal charges [to McGuire] amounted to a form of hiding his criminal conduct because of his realization that such disclosure would have precluded his employment. [Ayerdi] did not disclose to a corporate vice president for the broker the criminal matter until after the date of the conviction in May 2001, which was more [than] six months after he began work for McGuire.”
The ALJ wrote as the ninth factual finding the following: “[Ayerdi] secured employment with McGuire Real Estate in November 2000 without disclosing the fact that he had been arrested for felony offenses and that federal court criminal charges were pending against him. At the outset of his direct testimony at the hearing of this matter, [Ayerdi] noted that at the time of his arrest in March 2000 he was terrified with his criminal acts so that he fully cooperated with the federal investigation and he readily entered a plea of guilty to all counts brought against him. Yet, when he sought employment in late 2000 with one of the most prestigious real estate sales brokers in San Francisco he neglected to disclose the conviction. It may be reasonably inferred that his nondisclosure of the pending criminal charges [to McGuire] amounted to a form of hiding his criminal conduct because of his realization that such disclosure would have precluded his employment. [Ayerdi] did not disclose to a corporate vice president for the broker the criminal matter until after the date of the conviction in May 2001, which was more [than] six months after he began work for McGuire.” (Italics added.) The italicized portion of the factual finding is incorrect and inconsistent with the sentences before and after that indicate Ayerdi had been arrested, but not convicted, at the time McGuire hired him.
Finally, the ALJ noted that Ayerdi exhibited “disingenuousness through his current inability or unwillingness to acknowledge that his past failure to disclose pending felony charges to a prospective employer was a form of deceit or dishonesty. His excuse that McGuire Real Estate’s hiring representative never asked about a pending criminal prosecution was vacuous and imponderable.”
With regard to matters in mitigation and matters in rehabilitation, the ALJ pointed out that Ayerdi had been an honor student when in high school and graduated in 1994 from the University of California at Berkeley with a bachelor’s degree in Spanish literature. The ALJ stated that “[d]espite the reservation set out [in the factual findings, Ayerdi] is generally remorseful for his criminal conduct. His expressions of contrition are sincere and poignantly expounded. He vividly notes that his convictions are life-long psychic scars that he will never forget. [Ayerdi] voices his sense of shame for his grievous criminal acts. [Ayerdi] conveys that his criminal acts grievously impacted his family who were hurt through the seemingly wasted educational and career objectives that he had so admirably attained.” The ALJ acknowledged that Ayerdi had complied with all the terms of his sentence and had followed the directions of the parole officer during his supervised release.
The ALJ observed that sufficient time had lapsed between the dates of Ayerdi’s arrest in 2000 and conviction in 2001, and the date he filed his most recent application for licensure in September 2007, to evaluate Ayerdi’s progress toward attaining rehabilitation from his past misconduct. Ayerdi had submitted six letters from real estate professionals who expressed respect and admiration for Ayerdi’s good traits for integrity, honesty, resourcefulness, creativity, and attention to detail.
The letters were from Barbara, Robert Sr., Robert Jr., McKain, and Thomas K. Oxman, Senior Vice President and General Counsel at McGuire.
The ALJ pointed out that Ayerdi had been working at McGuire as Barbara’s assistant and had contributed to her success. Barbara had been the top producing sales agent for McGuire and “[f]or two years immediately preceding the date of the hearing in this matter, Ms. Callan ha[d] been the top ‘realtor’ in San Francisco according to the San Francisco Association of Realtors ranking Report and the Wall Street Journal ‘Real Estate Trends’ article.” At the hearing, Barbara highlighted a “testimonial written by her client, Gavin Newsom, Mayor of San Francisco, regarding the sale of the home he owned with his former wife and [Ayerdi’s] provision of services, which was viewed as being ‘the best [because] his professionalism, diligence and integrity are highly regarded!’ ”
The ALJ found that Ayerdi had offered competent evidence that he had participated in community programs. He had been involved “with a fundraiser for breast cancer research and education[, ]” volunteered with the “Greening of the Marina House[, ]” and “worked for the Child Abuse Prevention Center.” Additionally, he had “contributed to the AIDS Emergency Fund over a three-year period beginning in 2005. During 2008, [Ayerdi] completed a project for the San Francisco Parks Trust, which focuses upon beautification work by high school youth.”
The ALJ concluded the following: Ayerdi “acknowledged the seriousness of his criminal conduct that occurred eight years ago. He suffered felony convictions about seven years ago, spent nearly one year in confinement in a halfway house and fulfilled the terms of supervised probation. The term of probation ended about four years ago. [Ayerdi] has an extensive record of involvement in charitable works for various organizations. [Ayerdi] has strong ties with his family that provides him with great stability. And, he has had a long and solid working history as an assistant in a real estate broker’s office. Only [Ayerdi’s] inability to candidly acknowledge the rationale for his past criminal acts reflects poorly on his rehabilitation.
“Over the eight years since the convictions for acts, which arose out of personal greed and self-interest, [Ayerdi] has altered his disposition so that now he frequently puts first the interests of others. His emotional growth and commitment to good works in both a professional realm and charitable endeavors show [Ayerdi] to have nearly attained full rehabilitation.
“[Ayerdi] provided sufficient competent evidence to establish that he has overcome the liability of having criminal convictions for the various felonies mentioned above. He substantially meets the Criteria of Rehabilitation as set out in the Commissioner’s Regulations as prescribed in California Code of Regulations, title 10, section 2911. And enough time has passed for the [d]epartment to ascertain [Ayerdi’s] progression towards full rehabilitation for criminal acts that involved dishonesty, deceit and fraud against the federal government.”
The Commissioner’s Decision
The commissioner notified Ayerdi that it would not be adopting the ALJ’s proposed decision and that the commissioner would decide the matter upon the transcript of the administrative hearing and any written argument submitted by the parties. On December 17, 2008, the commissioner filed his decision, declining to adopt the ALJ’s proposed decision and denying Ayerdi’s application for a real estate salesperson license. The commissioner omitted the ALJ’s findings that Ayerdi had sufficiently established substantial rehabilitation, but adopted almost word for word the remainder of the ALJ’s proposed decision. The commissioner found that Ayerdi was disingenuous based on his “current inability or unwillingness to acknowledge that his past failure to disclose pending felony charges to a prospective employer was a form of deceit or dishonesty.” In denying Ayerdi’s application for a license, the commissioner found that Ayerdi “provided insufficient competent evidence to establish that he has overcome the liability of having criminal convictions for the various [federal] felonies....” The reason provided was Ayerdi’s “inability to candidly acknowledge the rationale for his past criminal acts, coupled with his disingenuous testimony at hearing, reflect[] poorly on his rehabilitation.”
Petition for Writ of Administrative Mandate
Ayerdi filed a petition for writ of administrative mandate in the superior court to review the commissioner’s decision after rejection. The court held a hearing on the petition on September 24, 2009. On November 13, 2009, the court filed its order denying Ayerdi’s petition for writ of administrative mandate. The court explained that it was Ayerdi’s burden to prove the commissioner’s decision was invalid. The court noted that the ALJ “identified scant evidence of the witnesses’ observed demeanor, manner, or attitude” and the few observations made by the ALJ were omitted in the findings section of the commissioner’s decision. This omission was of particular significance, according to the court, because the commissioner adopted “almost verbatim” the remainder of the ALJ’s proposed decision. The court concluded that the commissioner “duly considered the findings and rejected them.” The court determined that substantial evidence supported the commissioner’s decision based on the findings that Ayerdi was unable or unwilling to articulate the reason for his criminal conduct and exhibited “disingenuousness through his current inability or unwillingness to acknowledge that his past failure to disclose pending felony charges to a prospective employer was a form of deceit or dishonesty.”
The court stressed that the record contains no evidence “of why [Ayerdi] committed his crimes.” The court explained that counsel for Ayerdi “has speculated” that the offenses were motivated by greed, but the court pointed out that Ayerdi had never stated that, “even though it should be a simple concept to articulate. Instead, the administrative record reflects not a simple crime of opportunity, such as a shoplifting or passing a bad check, but rather significant felonies evidencing planning, sophistication, and a serious breach of national security.”
The court concluded as follows: “As reflected in the commissioner’s findings, [Ayerdi] is generally remorseful for his criminal conduct and is ashamed of its adverse impact on himself and his family. The commissioner further credited [Ayerdi] with the many factors in mitigation that point to rehabilitation. However, the commissioner is well within his authority to review the record and reach his own conclusion that petitioner’s inability to candidly acknowledge the rationale for his past criminal acts, coupled with his disingenuous testimony at the hearing, reflects poorly on his rehabilitation, and that [Ayerdi] provided insufficient competent evidence to establish that he has overcome the liability of having criminal convictions for the various felonies. [¶] Substantial evidence supports the commissioner’s decision and no abuse of discretion is demonstrated.”
Judgment was filed on April 5, 2010, and Ayerdi filed a timely notice of appeal.
DISCUSSION
I. The Standard of Review
An administrative agency’s decision denying an application to practice a business or profession may be reviewed by petition for writ of mandate in the superior court. (Code Civ. Proc., § 1094.5; Gov. Code, § 11523.) This statute governs the superior court’s review of administrative decisions, and reads in relevant part: “(b) The inquiry... shall extend 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. 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. [¶] (c) Where it is claimed that the findings are not supported by the evidence, in cases in which the court is authorized by law to exercise its independent judgment on the evidence, abuse of discretion is established if the court determines that the findings are not supported by the weight of the evidence. In all other cases, 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.” (Code Civ. Proc., § 1094.5.)
When a decision does not involve a fundamental vested right, it is reviewed under the deferential substantial evidence test whether it is reviewed by the trial court or by the appellate court. (Berg v. Davi (2005) 130 Cal.App.4th 223, 228.) The decision to deny a license to engage in a business or profession does not involve a fundamental right. (Ibid.) Moreover, when the case involves an application for a license, “ ‘the courts have largely deferred to the administrative expertise of the agency. [Citations.] Courts are relatively ill-equipped to determine whether an individual would be qualified, for example, to practice a particular profession or trade. [Citation.] In a case involving the agency’s initial determination whether an individual qualifies to enter a profession or trade the courts uphold the agency decision unless it lacks substantial evidentiary support or infringes upon the applicant’s statutory or constitutional rights.’ ” (Frink v. Prod (1982) 31 Cal.3d 166, 175.)
Under this standard, the trial court must review all relevant evidence from the administrative record but must not weigh the conflicting evidence. (Manning v. Fox (1984) 151 Cal.App.3d 531, 538-539.) Rather, the trial court begins with presumption that the record contains evidence to support the department’s findings and resolves all conflicts in favor of the department’s decision. (Berg v. Davi, supra, 130 Cal.App.4th at p. 228.) “Our scope of review on appeal from such a judgment is identical to that of the trial court.” (Bixby v. Peirno (1971) 4 Cal.3d 130, 149.)
II. The Licensing Regulations
Business and Professions Code section 10177, subdivision (b) states that the commissioner “may deny the issuance of a license to an applicant, who has... [¶] (b) [e]ntered a plea of guilty or nolo contendere to, or been found guilty of, or been convicted of, a felony, or a crime substantially related to the qualifications, functions, or duties of a real estate licensee....”
Business and Professions Code section 480 provides in part: “(a) A board may deny a license regulated by this code on the grounds that the applicant has one of the following: [¶] (1) Been convicted of a crime. A conviction within the meaning of this section means a plea or verdict of guilty or a conviction following a plea of nolo contendere.... [¶] (2) Done any act involving dishonesty, fraud, or deceit with the intent to substantially benefit himself or herself or another, or substantially injure another. [¶] (3)(A) Done any act that if done by a licentiate of the business or profession in question, would be grounds for suspension or revocation of license. [¶] (B) The board may deny a license pursuant to this subdivision only if the crime or act is substantially related to the qualifications, functions or duties of the business or profession for which application is made. [¶] (b) Notwithstanding any other provision of this code, no person shall be denied a license solely on the basis that he or she has been convicted of a felony if he or she has obtained a certificate of rehabilitation... or that he or she has been convicted of a misdemeanor if he or she has met all applicable requirements of the criteria of rehabilitation developed by the board to evaluate the rehabilitation of a person when considering the denial of a license under subdivision (a) of Section 482. [¶] (c) A board may deny a license regulated by this code on the ground that the applicant knowingly made a false statement of fact required to be revealed in the application for the license.”
California Code of Regulations, title 10, section 2911 (Regulation 2911) provides in relevant part: “The following criteria have been developed by the department... for the purpose of evaluating the rehabilitation of an applicant [who has been convicted of] a crime....: [¶] (a) The passage of not less than two years since the most recent criminal conviction... that is a basis to deny the [application].... [¶] (b) Restitution to any person who has suffered monetary losses through ‘substantially related’ acts or omissions of the applicant. [¶] (c) Expungement of criminal convictions resulting from immoral or antisocial acts. [¶] Expungement or discontinuance of a requirement of registration pursuant to the provisions of Section 290 of the Penal Code. [¶] (e) Successful completion or early discharge from probation or parole. [¶] (f) Abstinence from the use of controlled substances of alcohol for not less than two years if the conduct which is the basis to deny the departmental action sought is attributable in part to the use of controlled substances or alcohol. [¶] (g) Payment of the fine or other monetary penalty imposed in connection with a criminal conviction or quasi-criminal judgment. [¶] (h) Stability of family life and fulfillment of parental and familial responsibilities subsequent to the conviction or conduct that is the basis for denial of the agency action sought. [¶] (i) Completion of, or sustained enrollment in, formal education or vocational training courses for economic self-improvement. [¶]... [¶] (l) Significant or conscientious involvement in community, church or privately-sponsored programs designed to provide social benefits or to ameliorate social problems. [¶] (m) New and different social and business relationships from those which existed at the time of the conduct that is the basis for denial of the departmental action sought. [¶] (n) Change in attitude from that which existed at the time of the conduct in question as evidenced by any or all of the following: [¶] (1) Testimony of applicant. [¶] (2) Evidence from family members, friends or other persons familiar with applicant’s previous conduct and with his subsequent attitudes and behavioral patterns. [¶]... [¶] (5) Absence of subsequent felony or misdemeanor convictions that are reflective of an inability to conform to societal rules when considered in light of the conduct in question....”
III. The Sufficiency of the Evidence
In the present case there is no dispute that Ayerdi suffered three federal convictions and that these convictions involve moral turpitude and therefore substantially relate to his qualifications for a real estate license. (Bus. and Prof. Code, §§ 480, subd. (a) & 10177, subd. (b).) Thus, the commissioner properly denied his license if the record supports a finding that Ayerdi had not met “all applicable requirements of the criteria of rehabilitation” (Bus. & Prof. Code, § 480, subd. (b)).
Regulation 2911 sets forth the criteria used for the purposes of evaluating the rehabilitation of an applicant for a license who has committed a crime. The commissioner’s decision, by accepting most of the factual findings of the ALJ, recognized that Ayerdi’s evidence established he had satisfied most of the criteria. However, the commissioner concluded that Ayerdi had been unable “to candidly acknowledge the rationale for his past criminal acts” and had presented “disingenuous testimony at the hearing, ” which reflected poorly on his rehabilitation. These findings relate to the following factor for evaluating rehabilitation: “Change in attitude from that which existed at the time of the conduct in question[.]” (Regulation 2911, subd. (n).) As we discuss below, the record supports a finding that Ayerdi has not met “all” the criteria necessary for rehabilitation under Business and Professions Code section 480, subdivision (b).
The evidence in the record indisputably showed that Ayerdi was unable to acknowledge the rationale for his past criminal acts. At the prior administrative hearing regarding Ayerdi’s application in October 2004 for a license, Ayerdi blamed his criminal conduct as being caused by the stress and depression he was experiencing related to his partner’s illness. However, that ALJ pointed out the lack of any evidence showing Ayerdi had any serious economic pressures. Furthermore, his crimes required sustained activity and planning and were not simply the consequence of impulsive behavior.
At the current administrative hearing, an explanation for the reasons for his crimes was particularly important since Ayerdi’s crimes involved dishonesty and were related to his job. Moreover, the findings of the ALJ after Ayerdi’s 2004 application indicated that Ayerdi had a problem with being completely forthcoming. At his first administrative hearing, the ALJ pointed out that Ayerdi’s testimony “that he did not stamp the passports of two Philippine nationals, as he had promised Arenas he would, [was] inconsistent with his admission to federal agents in 2000.” Additionally, Ayerdi’s disclosures in his 2004 application regarding his federal convictions were incomplete.
In light of Ayerdi’s pattern of failing to be completely forthcoming as well as his convictions involving dishonesty related to his occupation, it was incumbent upon Ayerdi to establish a change in this behavior. Yet, when repeatedly asked to explain his dishonesty, Ayerdi provided no reason and displayed no insight. He repeatedly testified that he was remorseful, that he took full responsibility for his action, that his convictions had hurt him and the people close to him, and that the crime was always going to be a part of his life. Although he acknowledged committing the crimes, he never explained the reasons for his dishonesty.
When asked why he engaged in such deliberate acts such as giving out bottles of ink, Ayerdi responded that it was a “misjudgment” and “a bad move” on his part. Even when asked what he learned from his counseling while at the halfway house, Ayerdi displayed no insight into what motivated him to commit the crimes. He said that counseling made him a better person because he did not want to harm others or himself. The record establishes that Ayerdi had counseling for only two months, and those sessions were first weekly and then biweekly. The counseling was for a very short time and did not seem to help him gain any insight into the reasons for his behavior.
Other witnesses’ testimony did not indicate that Ayerdi had any insight as to the reasons he committed the crimes. Barbara testified that Ayerdi was upset about breaking the law, but she did not report that he divulged what provoked him to break the law. Ayerdi’s sister also stated that Ayerdi told her that he regretted his crime. Ingrid explained: “He regrets it. Everyday of his life he regrets it. I mean, he didn’t even know why he did what he did. He acted so quickly he didn’t think about it. Probably even when he did it, he was feeling guilty. He still did it.” Thus, she confirmed that he had no explanation for his dishonesty. She explained his behavior as being an impulsive act but, as discussed earlier, his crime required planning and was not a simple act of impulse.
Ayerdi’s comments indicate that he was sorry for what he did, especially as it impacted his family and others’ treatment of him, but his comments evince no insight for the reasons for his action. Ayerdi asserts that he “deserve[s] an opportunity” and he “deserve[s] a second chance[.]” However, he does not “deserve” a real estate license and must establish rehabilitation (see Bus. & Prof. Code, § 480) to show that he has earned the right to a license. This is especially true in the present case where he was convicted of bribery, visa fraud, and theft in the context of his prior job and now wants a license for a job that requires honesty and integrity.
Further reflecting on Ayerdi’s candor and honesty was his failure to tell McGuire about his arrest and pending criminal charges when applying for a job with McGuire. Ayerdi admitted that he did not provide this information when applying for a job with McGuire, and explained that he was never asked about crimes or charges. His testimony indicated that he did not appreciate that failing to offer this information showed a lack of candor and honesty.
“ ‘One’s character trait for honesty and integrity is an important qualification to be a real estate salesperson inasmuch as clients rely on the licensee’s integrity in representing them, disclosing important facts about the properties he is privy to and holding monies in a fiduciary capacity.’ The public exposing itself to a real estate licensee has reason to believe the licensee must have demonstrated a degree of honesty and integrity in order to have obtained a license.” (Harrington v. Department of Real Estate (1989) 214 Cal.App.3d 394, 406.)
We conclude substantial evidence supports a finding that Ayerdi has not met all the criteria for rehabilitation and, therefore, the commissioner did not abuse his discretion in denying Ayerdi’s application for a license.
IV. Ayerdi’s Claim of Error
A. The ALJ’s Credibility Determinations and the Commissioner’s Decision
Ayerdi contends that both the commissioner and the superior court committed error because they both disregarded the credibility determinations of the ALJ. He maintains that the ALJ found that the evidence supported a finding of rehabilitation based on his sincere expressions of remorse for his misconduct and therefore the commissioner should have deferred to the ALJ’s recommendation concerning a restricted license.
Ayerdi stresses that the ALJ expressly stated the following: “Despite the reservation set out [in the factual findings, Ayerdi] is generally remorseful for his criminal conduct. His expressions of contrition are sincere and poignantly expounded. He vividly notes that his convictions are life-long psychic scars that he will never forget. [Ayerdi] voices his sense of shame for his grievous criminal acts. [Ayerdi] conveys that his criminal acts grievously impacted his family who were hurt through the seemingly wasted educational and career objectives that he had so admirably attained.”
Ayerdi claims that the abovementioned finding necessarily required a determination that he was credible and the ALJ, unlike the commissioner and the superior court, had the opportunity to observe his demeanor while he testified. The commissioner omitted this finding by the ALJ in his decision and Ayerdi claims that the superior court incorrectly found the commissioner implicitly rejected this finding. He claims that the omission of factual findings that were integral to the ALJ’s proposed decision, without any explanation, did not indicate that the commissioner duly considered this evidence and rejected it. Ayerdi claims that this omission should result in a reversal of the commissioner’s decision because the failure to state reasons for his departure from the ALJ’s credibility determination was inadequate to show that the commissioner’s decision was not arbitrary and capricious. Ayerdi contends that evidence supporting an administrative department’s finding that is based on credibility is considered less substantial when the finding contradicts the credibility determination made by an ALJ who actually observed the witnesses. (Universal Camera Corp. v. Labor Bd. (1951) 340 U.S. 474, 492-497 [held appeals court erred in believing it was barred from taking into account hearing examiner’s report on factual questions insofar as the report was rejected by the NLRB because findings of trial examiner who observed witnesses should be given reasonable weight, even though those findings were rejected by the administrative board].)
The commissioner’s decision to omit a factual finding made by the ALJ does not mean that his opinion was arbitrary. As the superior court found, the fact that the commissioner set forth almost all of the ALJ’s findings, but omitted the ALJ’s findings on rehabilitation, supports the conclusion that the commissioner rejected this finding. We draw all inferences in support of the commissioner’s decision. (See, e.g., JKH Enterprises, Inc. v. Department of Industrial Relations (2006) 142 Cal.App.4th 1046, 1058.) Here, the commissioner set forth the reasons for finding Ayerdi had not established sufficient rehabilitation and, as discussed above, the record amply supported this finding.
Contrary to Ayerdi’s argument, the commissioner was not required to follow the ALJ’s recommendations. (Gov. Code, § 11517, subd. (c)(2)(E).) An ALJ’s factual findings are not binding on an administrative agency. (California Youth Authority v. State Personnel Bd. (2002) 104 Cal.App.4th 575, 588.) A commissioner is free to return different findings including making different credibility determinations. (Gov. Code, § 11517, subd. (c)(2)(E); Mixon v. Fair Employment & Housing Com. (1987) 192 Cal.App.3d 1306, 1310, fn. 2.)
Ayerdi complains that the commissioner should not have rejected the ALJ’s credibility findings based on the reading of a “cold record” of the administrative proceeding. Ayerdi claims that the commissioner’s conclusions that his “inability to candidly acknowledge the rationale for his past criminal acts, ” and his “disingenuous testimony at hearing” warranted denial of his application contradicted the ALJ’s assessment of the same evidence. He cites various administrative and non-administrative cases that emphasize that a transcript is less reliable than observing the actual testimony when making credibility determinations. (People v. Lenix (2008) 44 Cal.4th 602, 622; Meiner v. Ford Motor Co. (1971) 17 Cal.App.3d 127, 140; Edison Co. v. Labor Board (1938) 305 U.S. 197, 229.)
Even if we were to agree that a commissioner should generally defer to the ALJ’s credibility determinations, in the present case the commissioner’s conclusion about rehabilitation was not based on a credibility determination. The commissioner could accept the finding that Ayerdi was genuinely remorseful for his crimes and sorry about the negative impact his criminal behavior has had on his life and on his family. The commissioner did not make factual findings contrary to the ALJ based on Ayerdi’s observed demeanor. Indeed, as the superior court emphasized, the ALJ’s findings did not appear to be based on demeanor as there was minimal reference to Ayerdi’s observed demeanor, manner, or attitude.
In any event, no credibility determination had to be made to conclude that Ayerdi displayed no insight for the reasons for his crime. As discussed above, the record is clear: Ayerdi could not explain his criminal conduct other than to assert that it was a mistake in judgment and no other witness provided any testimony about the reasons why Ayerdi committed the crime other than to state that it was a mistake. Thus, the commissioner and the ALJ came to different conclusions regarding the showing of rehabilitation based on the same set of facts.
B. Ayerdi’s Failure to Disclose the Pending Charges Against Him to McGuire
As already noted, the commissioner based his decision partially on a finding that Ayerdi was disingenuous based on his “current inability or unwillingness to acknowledge that his past failure to disclose pending felony charges to a prospective employer was a form of deceit or dishonesty.” Ayerdi claims that the commissioner “erred in making findings that are unsupported by, and even contrary to, the evidence, and in reaching conclusions that are unsupported by the findings and, indeed, against the law.”
With regard to making a finding contrary to the record, Ayerdi cites the finding in the commissioner’s decision that was identical to the findings in the ALJ’s proposed decision that incorrectly stated in one sentence that Ayerdi neglected to divulge his criminal conviction during the hiring process at McGuire. The facts at the hearing made it clear that Ayerdi failed to disclose the pending charges against him, as he had not yet been convicted when he applied for the job. The findings in both the ALJ’s proposed decision and the commissioner’s decision include this single incorrect reference to a conviction. Elsewhere, both the proposed decision and the commissioner’s decision correctly state that Ayerdi failed to disclose “pending criminal charges” in an attempt to hide his criminal conduct for fear of employment rejection. Most significantly, the commissioner based his later factual finding of Ayerdi’s disingenuousness on his “current inability or unwillingness to acknowledge that his past failure to disclose pending felony charges to a prospective employer was a form of deceit or dishonesty.” (Italics added.) Thus, it is very plain that the commissioner’s conclusion was based on the correct fact.
Ayerdi also objects to this finding because he claims the record did not show that any person at McGuire ever asked him about pending criminal charges or convictions and that, absent an existing duty to volunteer information, mere failure to disclose information does not constitute deceit. (See Civil Code, § 1710, subd. (3).) He claims that mere silence is not deceitful concealment unless there is a preexisting duty to disclose and therefore the commissioner’s conclusion that he was deceitful was error.
As discussed above, the commissioner made it clear in his findings that he found Ayerdi engaged in a “form of deceit or dishonesty” based on his failure to disclose to a prospective employer that there were pending criminal charges against him. When making this finding, the commissioner was not suggesting that Ayerdi’s failure to disclose this information indicated that he had been engaged in deceit under Civil Code section 1719, subdivision (3), or that he had some legal duty to disclose this information. Instead, it was an assessment of Ayerdi’s general honesty and integrity. “Honesty and truthfulness are two qualities deemed by the Legislature to bear on one’s fitness and qualification to be a real estate licensee.” (Golde v. Fox (1979) 98 Cal.App.3d 167, 176.) “Honesty and integrity are deeply and daily involved in various aspects of the [real estate] practice.” (Ibid.) A real estate licensee must possess “the qualifications of honesty and integrity.” (Id. at p. 177.)
Furthermore, the commissioner’s concern was not simply that Ayerdi did not provide McGuire with information about the pending charges against him. The commissioner was troubled with Ayerdi’s inability or unwillingness to appreciate that neglecting to offer this information simply because McGuire did not specifically ask him if criminal charges were pending against him raised concerns about his candor and honesty.
C. No Error
The present case does not involve the removal of a vested right, such as taking away a license. Rather, the commissioner only needed to find that, given Ayerdi’s crimes of accepting a bribe in his capacity as an immigration inspector, he had not established full rehabilitation. The commissioner concluded from the facts in the record that Ayerdi’s inability to acknowledge the rationale for his past criminal acts in combination with his inability or unwillingness to acknowledge that his past failure to disclose pending felony charges to McGuire established that he had not overcome the liability of having criminal convictions and showed an incomplete rehabilitation. As discussed above, the record supported this conclusion. The commissioner properly considered this evidence as it relates to an evaluation of rehabilitation under Regulation 2911, subdivision (n). Accordingly, we conclude the commissioner committed no error and did not abuse his discretion in rejecting Ayerdi’s application for a license.
V. Refusal to Issue a Restricted License
Ayerdi claims that the trial court and commissioner abused their discretion in refusing to adopt the ALJ’s proposed order for a restricted license. He claims that a restricted license would protect the public interest and would be a more appropriate and reasonable disciplinary sanction.
When arguing that the restricted license was sufficient to protect the public, Ayerdi is essentially asserting that the denial of his application was an excessive penalty. To support this argument he cites Magit v. Board of Medical Examiners (1961) 57 Cal.2d 74 (Magit). In Magit, the Board of Medical Examiners revoked Dr. Magit’s license to practice medicine after he had permitted three men who were highly trained anesthesiologists, but unlicensed in California, to administer anesthetics under his supervision, direction, and control. (Id. at p. 79.) The Supreme Court held that in so acting, Dr. Magit violated the law and was guilty of unprofessional conduct. (Id. at p. 87.) The court upheld the Medical Board’s findings, but concluded that the imposition of the maximum penalty prevented the doctor from being gainfully occupied in his profession and was excessive in light of a record establishing that the law on permitting unlicensed doctors to administer anesthetics was uncertain and that Dr. Magit acted in “utmost good faith” and immediately halted the use of the unlicensed men when the Medical Board indicated that it was not proper. (Id. at p. 88.)
Ayerdi’s reliance on Magit is completely misplaced. Magit involved the revocation of a license, not the denial of a license. Thus, contrary to the present case, the revocation of Dr. Magit’s license involved the removal of a vested right. (See, e.g., Golde v. Fox, supra, 98 Cal.App.3d at p. 173 [right to practice profession is a fundamental vested right].) As already discussed, the present case does not involve a vested right and there is a deferential standard of review. Moreover, Ayerdi did not act in good faith when he committed his crimes and did not break a law that was uncertain or unsettled.
The question before us is not whether we agree that a restricted license was sufficient to protect the public, but whether substantial evidence supported the commissioner’s decision that Ayerdi’s application for a license should be denied because he had not demonstrated sufficient rehabilitation. As already explained, the record supports the commissioner’s findings and conclusions and therefore there was no abuse of discretion. The commissioner reached a different conclusion than the ALJ based on the evidence of rehabilitation and acted well within his discretion in refusing to issue any license to Ayerdi. Accordingly, the superior court also did not abuse its discretion in denying Ayerdi’s petition for a writ of mandate.
DISPOSITION
The judgment is affirmed. Ayerdi is to pay the costs of appeal.
We concur: Kline, P.J., Richman, J.