Click the picture above to hear the video case brief Grubb v. DRE by Attorney Steve
If you are facing a DRE accusation, most people know that the burden of proof to prove the wrongful conduct of the licensee is on the California Department of Real Estate (“DRE”). The burden of proof is higher than it is in a typical civil case (which is “preponderance of the evidence) and in such cases involving your real estate license “due process” requires that the DRE prove your wrongful conduct by “clear and convincing evidence.”
We recently posted a video about the Grubb v. DRE case which discussed how the mere fact that an underlying civil or small claims lawsuit has a finding of misrepresentation, fraud or deceit against a real estate licensee in regard to an act requiring a real estate license, this in and of itself is not sufficient enough to amount to “clear and convincing proof” of a wrongful act and the DRE must still prove the wrongful act by clear and convincing evidence. In the Grubb case, the DRE argued that proving the fact of the underlying judgment against the licensee in the civil case was enough to discipline the real estate license under California Business and Professions Code section 10177.5 which states:
When a final judgment is obtained in a civil action against any real estate licensee upon grounds of fraud, misrepresentation, or deceit with reference to any transaction for which a license is required under this division, the commissioner may, after hearing in accordance with the provisions of this part relating to hearings, suspend or revoke the license of such real estate licensee.
The California Court of Appeal disagreed with the position taken by the DRE, and awarded substantial attorney fees, (believed to be in excess of $500,000) against the DRE on appeal. Inn short, proving a prior conviction by clear and convincing evidence is not enough to suspend or revoke a real estate license. The fraud, misrepresentation or deceit must be established BY THE DRE with the high standard of clear and convincing evidence. The normal civil standard is preponderance of the evidence, which is a lower standard of proof.
So, if you are facing a DRE accusation based on something that happened in another civil lawsuit, have your case reviewed by a California Real Estate lawyer. If there was no finding of fraud, by clear and convincing evidence, you do not automatically lose your real estate license and defenses can be raised.
Attorney Steve Vondran is a California lawyer and real estate broker. He has represented many real estate brokers and real estate salespersons in DRE hearings, audits, investigation and in civil arbitration and litigation.
Contact us to discuss your case at (877) 276-5084. Here is a a more in-depth overview of the Grubb v. DRE case by Attorney Steve.