Cal Pacific Collections, Inc. v. Powers (1969) · DecisionDepot
Cal Pacific Collections, Inc. v. Powers
California Supreme Court Jan 20, 1969 No. L. A. 29592Published
Before: Burke
BURKE, J.
In this mandamus proceeding, the trial court decreed that defendants
1
acted in excess of their jurisdiction in initiating and prosecuting disciplinary proceedings against plaintiffs under the Collection Agency Act (Bus. & Prof. Code, §6850 et seq.)
2
and that such proceedings should be dismissed. Defendants appeal. We have concluded that the court ruled correctly with respect to certain of the plaintiffs, but that there is statutory authorization for the proceedings against the other plaintiffs.
[138]
. In July 1958 plaintiff Cal Pacific Collections Inc., a California corporation (Cal Pacific), was first issued a state license to engage in the collection agency business.
3
The three individual plaintiffs were its corporate officers at that time and at all relevant times thereafter.
- 'On October 26, 1960, following a hearing on an earlier accusation, Cal Pacific’s license was revoked for failure to maintain the required balance in its clients’ trust account; however, the revocation was stayed and Cal Pacific was placed on .probation for three years. At the same time the qualification certificate theretofore issued to plaintiff Martin Lawson (secretary of Cal Pacific) as a “qualified person” to be in active charge of a collection agency office (§§ 6859, 6906, 6921) was revoked, with the revocation also stayed for three years.
' -.On February 28, 1963, plaintiff Martin Lawson and plaintiffs Marco and Blfriede Lawson (president and vice president, respectively, of Cal Pacific) terminated their employment'with Cal Pacific.
On March 4, 1963, Cal Pacific voluntarily surrendered its license pursuant to section 6949; surrender of the license was accepted effective March 15, 1963; and on March 18, 1963, the Bureau advised Cal Pacific in writing of such acceptance. ¡ The qualification certificate previously issued to Martin Lawson continued in force until June 30, 1963, at which time the certificate was revoked pursuant to section 6893 as then effective, for nonpayment of the continuation fee.
the Bureau initiated disciplinary. proceedings against the four plaintiffs by filing an accusation against them.
4
Following a hearing, the Director in February Í964 ■ found Cal Pacific guilty of various violations, and ordered that its license together with any right of .reinstatement or renewal be revoked, that Martin Lawson’s qualifica
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tion certificate and any right of reinstatement or renewal he revoked, and that the three individual plaintiffs be disqualified from holding any office or employment in the collection agency business. This mandamus proceeding followed.
The sole issue is whether the defendants had jurisdiction to proceed with and to impose disciplinary action against the several plaintiffs. At no time have plaintiffs challenged the sufficiency of the evidence to support the charges on which the discipline was imposed. The trial court ruled that defendants had acted in excess of their jurisdiction under the Collection Agency Act in force prior to certain amendments which became effective on September 21,1963.
5
Jurisdiction Over Cal Pacific
Defendants predicate their claim of jurisdiction over Cal Pacific on section 6949.1,
6
and in particular the provision that “the voluntary surrender of a license . . . shall not deprive the director of jurisdiction to proceed with any . . . disciplinary proceeding against such license. ...”
Cal Pacific contends that the acceptance by the Bureau of its voluntary surrender of license in March' 1963 constituted an administrative determination that no disciplinary action or proceeding was then pending with which “to proceed” as contemplated by section 6949.1. The contention lacks merit. Such a construction would render the quoted portion of the section redundant and a nullity, thereby violating one of the most elementary principles of statutory construction (See
pursuant to which Cal Pacific voluntarily surrendered its license, at the times here involved specified
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that such a voluntary surrender could be made only “so long as no disciplinary action is then pending against said licensee.
...” Hence, as Cal Pacific concedes, if disciplinary action
was
then pending, the license was not subject to voluntary surrender. The provision which follows, in section 6949.1—that voluntary surrender shall not deprive the director of jurisdiction to proceed with any disciplinary proceeding against such license—would be rendered nugatory if held to apply only to a disciplinary proceeding pending at the time of the license surrender—since section 6949, as just noted, did not authorize voluntary surrender if a disciplinary action was then pending. It follows that the disciplinary action with which the director may proceed subsequent to voluntary surrender of a license was not limited to proceedings already pending at the time of such surrender, and that Cal Pacific’s voluntary license surrender did not operate to oust the director of jurisdiction here.
It bears note that a contrary construction would permit a licensee to evade disciplinary action for the evils which the sections were clearly designed to prevent. If the licensee who had voluntarily surrendered his license (necessarily at a time when no disciplinary action was pending against him) could thereby successfully defeat the jurisdiction of the director to take disciplinary measures for violations thereafter discovered, the licensee could apply for a new license after the surrender and thereby evade section 6906, subdiviosion (d), which provides generally that the director may refuse to issue a license if the applicant or any officer, manager, etc., thereof has had a license revoked for cause. (See also section 6950, providing for reinstatement within the limited time of a license revoked for failure to pay the continuation fee.) Statutes are to be interpreted to give a reasonable result consistent with legislative purpose and not evasive thereof.
(Kusior
v.
Silver
(1960) 54 Cal.2d 603, 620 [7 Cal.Rptr. 129, 354 P.2d 657]; see also
Jurisdiction Over Qualification Certificate of Martin Lawson
As already related, the qualification certificate of Lawson was effective until June 30, 1963, but was then
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revoked pursuant to section 6893 for failure to pay the continuation fee.
8
Defendants' claim of jurisdiction to thereafter institute disciplinary proceedings against Lawson rests upon section 118, which purports to apply to all of the statewide administrative agencies under the supervision of the Department of Professional and Vocational Standards which issue licenses and exercise disciplinary powers, including the Collection Agency Licensing Bureau.
9
(§ 101, subd. (aa).)
Since Lawson’s certificate was automatically revoked by operation of law for failure to pay the continuation fee, section 118 appears clearly applicable. Section 6893 provides for reinstatement upon payment of the fee within one year after revocation of the certificate, and section 118 specifies that within that period there is no lack of authority to institute or continue a disciplinary proceeding against the (former) certtificate holder. The disciplinary proceedings here at issue were instituted and carried out during the described period of time. (Note also the direction of section 6893 that “ [reinstatement of a revoked certificate shall not prohibit the bringing of disciplinary proceedings against the holder” thereof.) Accordingly, the director had jurisdiction to proceed against Lawson’s certificate here.
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Jurisdiction to Generally Disqualify The Three Individual
"
Plaintiffs
The contention of the three officer-employees of Cal Pacific that defendants were without jurisdiction to institute general disciplinary proceedings against them after they had terminated such employment appears to be correct.
Section 6930, as it read when such proceedings were commenced, among other things authorized the director upon a finding of violation by an employee or a licensee, to “(a) Order the revocation of the license . . . , or order any accused
employee
disqualified from further employment in the collection agency business.” (Italics added.) By 1963 amendment, not here applicable, the word “employee” was changed to “person.” Thus it appears that as now cast section 6930 authorizes the initiation of disqualification proceedings against a former collection agency employee even after such employment has terminated. However, no statutory provision has been found which would have authorized such proceedings' at the times involved in this case. Accordingly, the peremptory writ of mandate properly issued in their behalf.
Contrary to defendants’ suggestion, it does not follow from our holding with respect to general disqualification of the three individual plaintiffs that despite past misdeeds they will be at liberty to again occupy similar positions in the collection agency business free from the control of defendants. Such positions plainly fall within the registration requirements of the act, which became applicable in 1959 with respect to persons thereafter entering the employ of a licensee. (§ 6894.2; see also § 6894.) Inasmuch as plaintiffs apparently entered the employ of Cal Pacific in 1958, they perhaps did not register with defendants; the record before us is silent on the point. However, if plaintiffs are registered, such registration may be suspended or revoked under the authority of section 6894.7.
10
If plaintiffs are not registered, then upon again entering the employ of a licensee they must apply for registration (§ 6894.2) which may be refused under the authority of the same section 6894.7. Further, a licensee may lose his license by suspension or revocation if he knowingly
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employs any person who has failed to comply with the .registration requirements or who has had a registration denied, suspended or revoked. (§ 6948.)' It thus appears that under the provisions of the Collection Agency Act defendants will not lack disciplinary control over the three individual plaintiffs if the latter again attempt to enter employment in the collection agency business in positions subject to the registraion requirements. ;
The judgment is affirmed as to plaintiffs Norman Marco and Elfriede Lawson and as to the order of the director generally disqualifying plaintiff Martin Lawson; it is reversed as to plaintiff Cal. Pacific and as to the order of the director revolt ing the qualification certificate issued to plaintiff Martin Lawson. Each party shall bear its own costs on appeal.
Traynor, C. J., McComb, J., Peters, J., Tobriner, J., Mosk J., and Sullivan, J., concurred.
1
Defendants are (1) the Director of the Department of Professional and Vocational Standards (Director), and (2) the Collection Agency Licensing Bureau (Bureau), a statewide administrative agency under the Director’s supervision and control.
2
A11 section references are to the Business and Professions Code unless otherwise stated.
3
In 1958 collection agencies were licensed "by the Secretary of State. In 1959 the Collection Agency Act was amended to transfer the licensing power to‘the Bureau as an administrative agency of the Department of Professional and Vocational Standards. (Bus. & Prof. Code, §§ 6860, 6870; Stats. 1959, eh. 2159, §§ 8, 23; see also Bus. & Prof. Code, § 101.)
4
The accusation charged that between July 1, 1959, and October 19, 1962, plaintiffs had violated Bureau rules and regulations in numerous ways, e.g., by (a) making unauthorized collections of attorneys’ fees from-debtors; (b) failing to render timely statements to their customers of • amounts collected from debtors, with the intent to defraud their customers; (c) making false entries in their books and records with intent to deceive the Bureau; (d) attempting to collect from debtors interest and attorneys’ fees not justly due or legally chargeable to the debtors. (See § 6863.)
5
Neither plaintiffs nor defendants contend that the 1963 amendments applied retroactively to the accusation filed June 20, 1963.
6
Seetion 6949.1: "The lapsing or suspension of a license by operation of law or by order or decision of the director or a court of law, or the voluntary surrender of a license by a licensee shall not deprive the director of jurisdiction to proceed with any investigation of or action or disciplinary proceeding against such license or to render a .decision-suspending or revoking such license. ” " ■ .
7
Section 6949 as it read when the disciplinary proceeding was commenced : "Any licensee may, prior -to-the suspension—er revocation—e-f his- or its license, so long as no disciplinary ■ action is then -pending against said- licensee, voluntarily surrender his or its license by -ma-iling the license to-the director together with-a written statement pf such surrender, setting forth the reasons therefor, and a writen declaration of the satisfactory disposition of all accounts of the licensee
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prior to such voluntary surrender, together with a written statement of notification to the licensee’s surety company of such voluntary surrender, and upon receipt of the request for the cancellation of the bond from the surety company, the license shall forthwith be canceled. ’ ’
8
Section 6893 then read in pertinent part; “On or before . . . June 30 of each year ... a qualified person desiring continuation of his qualification certificate shall . . . pay the continuation fee ... If [he] fails to . . . pay the fee within the time fixed, the certificate shall be
automatically revoked,
but
may be reinstated
if
within one year
after its revocation, the holder of the revoked certificate applies for reinstatement and pays the reinstatement fee ....
( (
“Reinstatement of a revoked certificate shall not prohibit the bringing of disciplinary proceedings
against the holder of the certificate. ’
’
(Italics added.)
9
Section 118 in pertinent part: “(b) The suspension,
expiration, or forfeiture by operation of law of a license
issued by a board in the department, or its suspension, forfeiture, or cancellation by order of the board or by order of a court of law, . . .
shall not, during any period in which it may be renewed, restored, reissued, or reinstated, deprive the board of its authority to institute or continue a disciplinary proceeding against the licensee
upon any ground provided by law or to enter an order suspending or revoking the license or otherwise taking disciplinary action against the licensee on any such ground.
“(c) As used in this section, ‘board’ includes an individual who is authorized by any provision of this code to issue, suspend, or revoke a license, and
‘license’
includes
‘certificate,’ ‘registration,’
and ‘permit.’ ” (Italics added.)
Section 22 also states that “ ‘Board,’ as used in any provision of this code, . . . unless otherwise expressly provided, shall include ‘bureau’.
10
Section 6894.7: “After a hearing the director may refuse to register an employee, or may suspend or revoke a previous registration, if the individual has committed any act which would justify refusal of permission to take the collection agency examination and to issue a qualification certificate under Section 6886.1.”
The acts set forth in section 6886.1 would include the charges on which the present disciplinary proceedings were based.
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Holding. The court held that the Director retained jurisdiction to discipline a collection agency after voluntary license surrender and to discipline a qualified person after certificate revocation for nonpayment of fees, but lacked statutory authority to initiate general disqualification proceedings against former employees under the law as it existed at the time.
Issues
Whether the voluntary surrender of a collection agency license deprives the Director of jurisdiction to proceed with disciplinary action.
Whether the revocation of a qualification certificate for nonpayment of fees deprives the Director of jurisdiction to institute disciplinary proceedings.
Whether the Director had statutory authority to initiate general disqualification proceedings against former employees who had terminated their employment.
Disposition. Affirmed in part, reversed in part.
Quotations verified verbatim against the opinion
“the disciplinary action with which the director may proceed subsequent to voluntary surrender of a license was not limited to proceedings already pending at the time of such surrender”
“the director had jurisdiction to proceed against Lawson’s certificate here.”