In a recent case before the Court of Appeals in California, the court affirmed a decision by the Department of Consumer Affairs, Bureau of Security and Investigative Services (the Bureau) that revoked the license of the appellant as an alarm company qualified manager. The appellant was the president of an alarm security company that was licensed under the Alarm Company Act. The appellant was charged by a misdemeanor complaint with assault with a firearm, exhibition of a firearm, carrying a loaded weapon and false imprisonment. The matters were consolidated with another matter in which the appellant was charged with violence against a former spouse, along with an action for disturbing the peace.

The appellant plead no contest to the disturbing the peace charge, whereas the remaining five counts were all dismissed. The Bureau filed an “accusation” initiating disciplinary proceedings to suspend or revoke the appellant and the alarm company’s license pursuant to former §490 of the California Business and Professions Code which, at the time, read “a board may suspend or revoke a license on the ground that the licensee has been convicted of a crime, if the crime is substantially related to the qualifications, functions, or duties of the business or profession for which the license was issued. A conviction within the meaning of this section means a plea or verdict of guilty or a conviction following a plea of no contest.

The appellant claimed he was not convicted, but he entered a plea of no contest. The appellant further alleged that he disturbed the neighborhood yelling for the police, which certainly was not a criminal act. In a letter to the Bureau the appellant stated that the charge was for a “verbal” disturbance and did not affect his business status. A disciplinary committee found, “clear and convincing evidence exists to initiate proceedings to suspend or revoke the alarm company operator license and the appellant’s alarm company qualified manager certificate.”

At a hearing on administrative review, the Administrative Law Judge (ALJ) overruled the appellant’s objections to admission of the arrest report of the arresting officer’s testimony describing the circumstances of the appellant’s arrest. The ALJ also excluded the transcript of the appellant’s plea bargain. The ALJ stayed the order of revocation and placed appellant’s license on probation for three years. The ALJ further concluded that cause was not established to discipline the alarm company because the conviction was against the appellant and no theory of derivative liability was plead or argued.

The appellant petitioned the Superior Court for a Writ of Mandate directing the Bureau to set aside the revocation of his license. Following a hearing, the trial court denied the petition, finding that appellant’s conviction was substantially related to his fitness as an alarm company qualified manager. The court further found that the conduct for which appellant was convicted was directly related to his alarm and security business, and no evidence in the administrative record shows or even purports to show otherwise. The appellant appealed.

The Appellate Court stated that in ruling on an application for a Writ of Mandate following an Order of Suspension or Revocation, a trial court is required to determine, based on its independent judgment, whether the weight of the evidence supported the administrative decision. On appeal, however, the court pointed out that, “We need only review the record to determine whether the trial court’s findings are supported by substantial evidence.”

The court pointed out that §490 is part of the Business & Professions Code, and that there was substantial evidence that the appellant’s conviction was substantially related to the qualifications, functions or duties of a qualified alarm manager. The court entered judgment in favor of the Bureau and against the appellant and dismissed against the alarm company.

Beware of no contest plea. It apparently will not preclude the Bureau from reviewing the facts surrounding the arrest or to other evidence which may affect the status of a license.

Readers Ask

Q: As an alarm installer, my company installs in many communities throughout the state. One of the municipalities where we install just passed a law that indicates that we must have a license to install systems in their city. We are licensed with our state. Is this license and fee really something that the city can require?

A: Without reading the state law, it is difficult to give an exact answer. However, if the state has passed legislation regarding alarm licensing, unless there is an exemption, the state would preempt all of the municipalities within its jurisdiction from passing any legislation regarding alarm licensing. If, of course, the state legislation provides that the local municipality can regulate in certain areas, then the municipality is not prohibited from regulating in that area.