Real Estate Brokers Win Protection from License Suspension

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$517,929 judgment against The California Department of Real Estate is final chapter in groundbreaking case, says attorney Frank Buda of http://www.Dre-Defense.Com.

Attorney Frank M. Buda co-represented the Grubb Company in the Administrative hearing held to discipline the Grubb Company and advising them on their appeal. Attorney Frank M. Buda first raised the Clear and Convincing evidence standard issue at the administrative hearing level. Though an administrative judge ruled that the Grubb Company's license should not be disciplined, the Real Estate Commissioner chose not to adopt the administrative judge's proposed decision and instead ordered a stayed license suspension. The Grubb Company appealed, ultimately won, overturning the Real Estate Commissioner's Order, and this month The Grubb Company obtained a $517,929 attorney fee award against the Department of Real Estate ("DRE") (Superior Court of California, Alameda County, Rene C. Davidson Alameda County Courthouse, Order No: RG08364823, http://apps.alameda.courts.ca.gov/domainweb/service?ServiceName=DomainWebService&PageName=itree&Action=27094182 )

When the Grubb Company was disciplined by the Real Estate Commissioner, the DRE had used a civil judgment obtained under a standard of preponderance of the evidence and not the standard of Proof in license disciplinary actions of Clear and Convincing evidence. The Court of Appeal in Grubb Co., Inc. v. Dept. of Real Estate (2011), 194 Cal. App. 4th 1494 made clear that no discipline may be imposed under a civil judgment against a real estate licensee where the civil judgment is obtained under a standard of preponderance of the evidence because the standard of Proof in license disciplinary actions must be Clear and Convincing evidence
This month The Grubb Company obtained a $517,929 attorney fee award against the Department of Real Estate ("DRE"). It now remains to be seen if the DRE will appeal.

With his firsthand experience in the Grubb Company case, Attorney Buda points out the Department of Real Estate can no longer use a civil judgment as the basis for license discipline of a brokers and salesperson's license under the lower standard of preponderance of evidence. "The Decision aids in the defense of clients by requiring that a higher standard of proof is met. It limits the DRE from bringing actions where judgments are used that do not meet this standard of proof. It also eliminates the DRE ability to use such judgments from Small Claims Court. I have already used the Grubb Company case Determination in other DRE cases to eliminate charges in a DRE Accusation and to have a DRE case dismissed."

This is an important change in the landscape of defending real estate licensees, an area of the law in which Frank Buda has been at the forefront of while in private practice for over twenty years. Previous to opening his law office, Attorney Buda was at the Department of Real Estate for nine years as a Deputy Commissioner I,II,III, and Real Estate Counsel.

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Dalton Wagner
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