Opinion
As Modified on Denial of Rehearing June 27, 1968.
For Opinion on Hearing see, 74 Cal.Rptr. 289, 449 P.2d 225.
Thomas C. Lynch, Atty. Gen., and David Gould, Deputy Atty. Gen., for defendants and appellants.
Carter & Campbell and Roger C. Campbell, Culver City, for petitioners and respondents.
Judge of the Superior Court sitting under assignment by Chairman of the Judicial Council.
This appeal is from a judgment granting a peremptory writ of mandate. The appellants are Harold J. Powers, Director of the Department of Professional and Vocational Standards (hereafter Director) and Collection Agency Licensing Bureau (hereafter Bureau) a statewide administrative agency under Director's supervision and control.
Respondents are Cal Pacific Collections Inc., a California corporation (hereafter Cal Pacific) and its officers: Norman Marco, president; Elfriede Lawson, vice president; and Martin W. Lawson, secretary and "qualified person."
The facts are not disputed. the issue is one of law relating to jurisdiction and the right of appellants to discipline the several respondents, pursuant to the provisions of the Collection Agency Act. (Ch. 8, div. 3, § 6850 et seq., of the Business and Professions Code, hereafter called the Act.)
Chronologically stated these are the pertinent facts:
On or about July 13, 1958, Cal Pacific was first issued a state license to engaged in the collection agency business; the three individual respondents were its corporate officers at that time and at all relevant times thereafter. In 1962, due to the fact that Cal Pacific had moved to a new location, a duplicate license was issued as provided in section 6912 of the Act.
In 1958 collection agencies were licensed by the Secretary of State. In 1961 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.
On or about October 26, 1960, following a hearing on an earlier accusation, Cal Pacific's license was revoked for failure to maintain the required balance in its clients' trust account; however, the revocation was stayed and Cal Pacific was placed on probation for a period of three years. At the same time the qualification certificate theretofore issued to Martin Lawson as "a qualified person" was revoked, but said revocation was also stayed for a period of three years.
On February 28, 1963, Norman Marco and Elfriede Lawson terminated their employment with Cal Pacific.
On March 4, 1963, Cal Pacific voluntarily surrendered its license pursuant to section The qualification certificate previously issued to Martin Lawson continued in force until June 30, 1963, at which time the certificate was revoked for nonpayment of the continuation fee required by section 6893 of the Act as then effective.
On June 20, 1963, the Bureau initiated disciplinary proceedings against the four respondents by filing an accusation against them pursuant to sections 6949 and 6949.1 of the Act then in effect.
At that time section 6949 provided as follows:
"Any licensee may, prior to the suspension or revocation of his or its license, so long as no disciplinary action is then pending against said licensee, voluntarily surrender his or its license by mailing the license to the director together with a written statement of such surrender, setting forth the reasons therefor, and a written declaration of the satisfactory disposition of all accounts of the licensee 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."
In 1963 the Legislature amended section 6949 of the Act, effective September 21, 1963, (Stat.1963, ch. 1814, pp. 3735-3736, § 68) by deleting the words "so long as no disciplinary action is then pending against said licensee," and making other changes which are of no significance here.
At that time, also, section 6949.1 provided as follows:
"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."
The accusation of June 20, 1963, following the appropriate statutory notice and statement to respondents pursuant to the Administrative Procedure Act (Gov.Code, § 11505), was called for hearing on February 3, 1964, at which time respondents severally entered special appearances through their attorney who, at that time, made a motion that the hearing officer determine the jurisdiction of the Director and the Bureau over each respondent and the subject matter of the accusation, and in that manner respondents severally challenged the power, authority and jurisdiction asserted over them. The hearing officer, after extended argument, ruled that the Director and Bureau had jurisdiction. Thereupon respondents' attorney withdrew and the hearing proceeded as a default. On February 7, 1964, the hearing officer submitted his proposed decision which recommended that Cal Pacific's license together with any right of renewal or reinstatement be revoked, that the individual officers (employees) be disqualified from holding any office or employment in the collection agency business, and that Martin Lawson's qualification certificate be revoked. On February 20, 1964, the Director adopted the proposed decision as his own, to become effective on March 19, 1964.
The petition for writ of mandate was filed in the superior court on April 20, 1964. At no time have respondents contested the sufficiency of the evidence to support the Director's findings, nor the sufficiency of the findings to support the decision rendered or the disciplines and penalties imposed, except, of course, on the basis of the asserted lack of jurisdiction. The trial court prepared a very lengthy and detailed minute order, so-called, the substance of which, after revision, correction
Appellants predicate their claim of jurisdiction over Cal Pacific on section 6949.1 of the Act, emphasizing the clause "* * * the voluntary surrender of a license * * * shall not deprive the director of jurisdiction to proceed with any * * * disciplinary proceeding against such license * * * "
The trial court rejected this claim. It found that when the Bureau chief accepted Cal Pacific's surrender of license by letter date March 18, 1963, he made an administrative determination that at that time no disciplinary action or proceeding was then pending with which "to proceed" as contemplated by section 6949.1.
Appellants seek to negate the consequences which flow form such acceptance by arguing that section 6949.1 must be read with section 6949, that since the latter accords a licensee the "right" to surrender a license so long as no disciplinary action is "then" pending, the Bureau's notification of acceptance of the surrender was a legal nullity because the statutory right to surrender was not made contingent upon acceptance and the Bureau was not thereby estopped "to proceed."
Appellants argue that the trial court's interpretation and application of the law (sections 6949 and 6949.1) ignores and operates to defeat the "residual jurisdiction" which the Legislature meant to invest in the Bureau; and, further, that it enables a disreputable licensee to anticipate and forestall any future application of section 6906, subsection (d), which authorizes the Bureau chief to refuse a license to anyone who previously has had a license revoked for cause.
The interpretation of the statute in this instance is made difficult because of the legislative use of ambiguous terminology, namely, "to proceed."
Appellants cite a New York Court of Appeal decision, which adopts a definition from Webster's Century Dictionary, that "proceed," in the context of judicial proceedings means "to conduct, to begin and carry on an action or proceeding." It must be acknowledged that "proceed" as a verb has many meanings, dependent upon the context of usage and the objectives contemplated. Fenby Handy Dictionary of English Synonyms (5th ed.--David McKay Co., Phila.) lists synonyms for the verb "to proceed," as follows: "move, advance, arise, issue, emanate, spring."
In People v. McCarthy (1901) 168 N.Y. 549, 61 N.E. 899, 900, the construction placed on the words "to proceed" depended on the interpretation given to preceding language in a city charter which defined jurisdiction of the Courts of Special Sessions in the City of New York and provided that they should "be devested of jurisdiction to proceed with the hearing and determination" of misdemeanor charges in specified classes of cases. But see People v. Kassover (1959) 20 Misc.2d 782, 191 N.Y.S.2d 54 (City Magistrates Traffic Court) which also borrows a definition from Webster to the effect that "proceed" means "to move, pass or go forward or onward; to advance especially after interruption or from a given point or stage; to continue or to renew motion or progress as to proceed on a journey; * * * " (191 N.Y.S.2d at 56.) While these definitions are interesting and informative, they are not controlling.
In resorting to dictionaries and other wordbooks, for guidance, we are not unmindful of Judge Learned Hand's caveat to "the dictionary school" of statutory interpretation that " * * * it is not enough for the judge just to use a dictionary. If he should do no more, he might come out with a result which every sensible man would recognize to be quite the opposite of what was really intended; * * * " (Hand, The Spirit of Liberty, edited by Irving Dilliard (3rd ed. Enlarged, 1960, p. 106).)
Quite apposite in this setting is Sir Francis Bacon's epigram: "Certainty is so essential to law that law cannot even be just without it. 'For if the trumpet give an uncertain sound, who shall prepare himself to the battle?' * * * [The law] ought therefore to warn before it strikes." (The Advancement of Learning (1623).)
No doubt it is fascinating diversion for scholars in the field of semantics to probe words to their etymological depths, trace their historic transmutations and produce definitions universal, constant and lucid in all applications, but in the area of statutory interpretation it is too often an exercise in augury for the judiciary to proclaim what the composite mind of the Legislature intended when it employed terms of chameleonic hues.
Had the Legislature intended to use the word "proceed" in the all-embracing sense which appellants contend for, it would have been very simple to say "to initiate and to conduct" or "to file and to pursue to final determination" or some alternative meaningful and unambiguous language.
As an example, see Stats.1941, chapter 1163, section 2, which provided that repeal of former chapter 14 of the Business and Professions Code, relating to Structural Pest Control Operators and the enactment of a new chapter 14 did not constitute a bar " * * * to the institution of any disciplinary proceeding nor to the disciplining of any person for any act committed against that repealed chapter." (Emphasis supplied.)
However desirable it might be to invest the Director of the Department of We are impelled to the conclusion in the present instance that Cal Pacific's surrender of its license prior to the initiation of the accusatory proceedings on June 20, 1963, effectively bars the Director and the Bureau from taking action under sections 6949 and 6949.1. We reserve for separate discussion hereinafter the applicability of section 118, subsection (b), of the Business and Professions Code. We do not speculate on the extent to which the 1963 amendment of the Collection Agency Act has changed jurisdictional limitations. We only say in agreement with the trial court that the amendments have no retroactive application to respondents. (See People v. Allied Architects Assn., 201 Cal. 428, 436-437, 257 P. 511.) Moreover, " * * where a board is granted the power to revoke a license for certain reasons set forth in the statute, it may not be revoked for any other or different causes not clearly within the provisions of law or by implication included therein * * *." (Barron v. Board of Dental Examiners, 109 Cal.App. 382, 385, 293 P. 144.) Furthermore, it is well established in California that a statute shall be prospective but not retrospective in its operation unless relevant statutory language so directs. (Wilke & Holzheiser, Inc. v. Dept. of Alcoholic Bev. Control, 65 Cal.2d 349, 371, 55 Cal.Rptr. 23, 420 P.2d 735; DiGenova v. State Board of Education, 57 Cal.2d 167, 172-175, 18 Cal.Rptr. 369, 367 P.2d 865; also see Whitmire v. H.K. Ferguson Co., 261 Cal.App.2d 594, ---, 68 Cal.Rptr. 78.)
O'Neil v. Dept. of Professional & Vocational Standards (1935) 7 Cal.App.2d 395, 46 P.2d 234 is a case which has relevancy to this matter. There a complaint had been filed with the Registrar of Contractors by a person who had a contract with O'Neil to construct a dwelling. A hearing before a "district supervisor" resulted in his recommendation that O'Neil be "found guilty and his name flagged in Sacramento, and that no renewal of license or new license be issued * * *." Despite some irregularity in the procedure, a decision in conformity with the recommendation was made. At all times O'Neil objected to any proceedings on the ground that there was no jurisdiction therefor, one ground being that at the time of the proceedings he was not a licensed contractor, a fact which was not challenged. O'Neil applied to the court for a writ of review. The trial court upheld the Department's claim of jurisdiction and the order finding O'Neil guilty of the charges. The appellate court reversed, stating (p. 398, 46 P.2d p. 235):
"We think it is clear that neither the department of professional standards nor the bureau nor the officers provided for by the act herein under consideration, nor any other official acquired any jurisdiction of petitioner to consider or make any order and that the order made is null and void. This, of course, because petitioner herein was not a licensed contractor at the time of the proceeding, which is a precedent necessity before any action is authorized."
It may be noted that the Attorney General has cited the decision in the O'Neil case, supra, approvingly in two matters. (See 10 Ops.Cal.Atty.Gen. 63 at p. 64 (1935); 32 Ops.Cal.Atty.Gen. 60 at p. 63 (1958).)
In the foregoing pages we have dealt only with sections 6949 and 6949.1 of the ACt. There remains to be considered the applicability of Business and Professions
Subsection (b) of section 118, provides as follows:
"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, or its surrender without the written consent of the board, 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."
While we need not speculate as to the reasons underlying the enactment of section 118, it is entirely possible that the Legislature was endeavoring to achieve some semblance of uniformity for the guidance of all administrative agencies. Whatever was the motivation, the fact is that section 118, on its face, reserves to the agency a rather broad time period within which it may institute and maintain disciplinary proceedings,--much broader and more explicit than the language of sections 6949 and 6949.1. The express grant of authority "to institute or continue a disciplinary proceeding" avoids the objectionability for ambiguity observed in the "to proceed" language n section 6949.1. However, there is one clause of subsection (b) of section 118 which must be specially considered in its application to the facts of the instant case. It provides that "surrender without the written consent of the board" is no bar to a disciplinary proceeding. We shall assume that this clause implies as a corollary that surrender with written consent of the board does operate as a bar. Then the query is: Was the letter sent by the Bureau chief to Cal Pacific on March 18, 1963, a "written consent" of the character contemplated, or was it, as appellants claim, a nonstatutory communication having no legal significance?
The trial court's findings and conclusions of law treated the Bureau chief's letter as "the written consent of the board."
It is true, as pointed out by appellants, that nowhere in the Act is provision made for the Bureau to formally accept a surrender of license. But it is sophistry to insist that the silence of the statute negates the worth or legal effectiveness of the Bureau chief's letter. Actually, had not the chief sent his letter of advice to Cal Pacific, he might well claim at a later date that Cal Pacific had not met one or more or the stipulated conditions of surrender set out in section 6949 and that consequently there had not been a valid surrender; but since he did formally accept the surrender, we treat his action as meaningful and hold that the result was a surrender with his consent within the corollary of section 118, subsection (b). This compels the determination that on June 20, 1963, when the Accusation and Petition was filed, the appellants had We turn now to a consideration of the " * * * Separate, Second and Distinct Further Charge and Cause of Disciplinary Action * * * " against Cal Pacific, filed June 20, 1963.
The Bureau chief's letter might also serve to implement Bureau's rules and regulations (Rule 617; Register 61, No. 4) and provide a basis for criminal prosecution under section 6871 of the Act in case the former licensee continued to carry on business after its license had expired.
In that charge the Bureau sought revocation of Cal Pacific's license on the ground that it had violated the term of probation under which the earlier revocation order of October 20, 1960, was stayed. that order (effective November 7, 1960) stayed the revocation for a period of three years on condition that Cal Pacific observe specified terms of probation.
Under ordinary circumstances we assume that appellants would have retained jurisdiction over Cal Pacific for the period of probation or, alternatively, until its earlier termination. However, in this case, the intervening surrender and acceptance of the license effective March 15, 1963, made the matter functus officio n that date with the result that there remained no license to revoke when the new accusation was filed on June 20, 1963.
For all of the following reasons the peremptory writ of mandate properly issued in behalf of Cal Pacific.
We shall now separately consider the matter of appellants' jurisdiction over the two officer-employees of Cal Pacific, namely, Norman Marco and Elfriede Lawson. We approve the trial court's finding, based on its interpretation of the Collection Agency Act, that these two individuals were never "licensees" within the definitions or intendment of the Act. Assuming that they were registered employees under article 5.5 of the Act, their only amenability to discipline is found in section 6930, which provides that for violation of the Act or the Bureau's rules and regulations, the Bureau may order "any accused person disqualified from further employment in the collection agency business" (subsection (a)), or it may impose upon such employee "compliance with such just and reasonable conditions as may be specified (subsection (c)).
The decision of the Director, so far as it concerned these two employees, was based on subsection (a) only; it disqualified them from further employment in the collection agency business.
The issue of jurisdiction over an "employee" as distinguished from a licensed or qualified person under the Act presents new questions which must be separately resolved because an "employee" is not dealt with in sections 6949 and 6949.1 or section 118 of the Code. As already noted, he is subject to discipline under section 6930, subsections (a) and (c). Article 5.5 of the Act (comprising sections 6894 through 6894.14) provides for the registration of employees, but section 6894.7 alone therein prescribes any form of discipline, namely, the suspension or revocation of a previous registration for committing "any act which would justify refusal of permission to take the collection agency examination and to issue a qualification certificate * * *."
Nowhere in the Collection Agency Act, nor in the Administrative Procedure Act (Gov.Code, Title 2, Chap. 5, Div. 3, Pt. 1; section 11500 et seq.), is there any statutory time-period fixed for instituting or conducting administrative proceedings to discipline a mere employee, as distinguished from a licensee or qualified person. Query: Must such a proceeding be instituted while the person accused is still employed by the licensee in whose employment the challenged conduct occurred, or may it ensue after such employment terminates, and, if so, within what time-period,--six months, one year, two years,--or ad infinitum?
To pose these queries is not to answer them, but it does point up a deficiency in the legislation which the judiciary has no authority to cure, absent some legislative guide. At most, we can only invoke what we believe to be a rule of justice and common sense, namely, that such disciplinary proceedings must be instituted during the For these reasons, the peremptory writ of mandate properly issued in their behalf.
Finally, we consider the position of Martin Lawson. Appellants argue that his status as a "qualified person" under section 6921 is controlled n turn by section 6893, and that since his certificate was not revoked by operation of that section until June 30, 1963,--some ten days after the new accusation was filed, he is still amenable to discipline. Appellants assert that section 6893 conferred a "residual right" to reinstatement in case the certificate holder should apply for same within one year, and on that basis contend that their right to discipline continues during such period.
The trial court characterized the reinstatement prospect as "only a privilege."
Section 6893 alone applies to Lawson qua "qualified person." This section was added to the Act in 1961. It was amended in 1963, but as already noted the 1963 amendments to the Act did not become effective until September 21, 1963, and can be accorded no retroactive application. Therefore, we must treat the section as effective on June 20 and June 30, 1963.
In accordance with its provisions, Lawson's certificate was "revoked" on June 30, 1963, because he failed to apply for continuation and pay the continuation fee by that date. While section 6893 was self-operative, the trial court record contains a registered letter from the Bureau Chief to Lawson dated July 12, 1963, informing him that since he had not applied for a continuation certificate by June 30, 1963, "Your Qualification Certificate was therefore revoked on that date."
The 1963 amendment of section 6893 replaced the language of finality "shall automatically be revoked" with the mollifying words "shall automatically lapse." (See State v. Otterholt, 234 Iowa 1286, 15 N.W.2d 529, to the effect that revoke and lapse are not synonymous.) We do not speculate as to what would be the status of Lawson under the amended statute. Suffice it to say that his certificate was effectively revoked on June 30, 1963, and after that date it lacked viability for any purpose. Consequently, the administrative hearing on February 3, 1964, and the Director's decision on February 20, 1964, were idle acts without legal force or effect as to Lawson. Accordingly, the peremptory writ of mandate which issued in his behalf was proper.
The judgment is affirmed as to all respondents.
JEFFERSON, Acting P.J., and KINGSLEY, J., concur.
The accusation charged that between July 1, 1959, and October 19, 1962, respondents had violated rules and regulations of the Bureau in numerous ways, e.g., by (a) making unauthorized collection of attorneys' fees from debtors; (b) by failing and neglecting to render timely statements to their customers of amounts collected from debtors with the intent to defraud their customers; (c) by making false entries in their books and records with intent to deceive the Bureau; (d) by attempting to collect from debtors interest and attorneys' fees not justly due or legally chargeable to the debtor.
A.P. Herbert, a popular writer of English legal literature, has commented on the changing usage of the verb "proceed" thus: " 'Proceed' was a fine word once--a dignified word to be kept for dignified occasions. 'Then shall the Bishop proceed to the Communion.' It was well enough for our dignified policemen 'to proceed to the scene of the crime', for our dignified troops 'to proceed to France'. But now the whole world 'proceeds'--and even 'proceeds to go'; and those who merely 'go' or 'pass' have become the dignified exceptions." (A.P. Herbert, M.P., What A Word, Methuen & Co., London, 1935, 5th ed., p. 112.)
Our review of State legislative acts creating agencies for the regulation of businesses and professions indicates that in most instances the disciplinary powers of the agencies have been couched in clear, definitive terms. For example, the statute which covers the powers of the California State Board of Landscape Architects (Bus. & Prof.Code, § 5615 et seq.) specifies that "[a]ll accusations against a licensee shall be filed within two years after the act or omission alleged * * * " and states that if such accusation is not filed within the time specified "no action * * * shall be commenced under the provisions" of the statute (§ 5661). (Emphasis supplied.)
The Real Estate Law (Bus. & Prof. Code, § 10101) provides that an accusation "shall be filed not later than three years from the occurrence of the grounds for revocation or suspension * * * " (Emphasis supplied.)
Only in the Structural Pest Control Operators Act (Bus. & Prof.Code, § 8500 et seq.) do we find language similar to that in the Collection AGency Act. It provides that the lapse, suspension or surrender of a license "shall not deprive the board of jurisdiction to proceed with any investigation of or action or disciplinary proceeding * * * or to render a decision * * *." (Section 8625.) (Emphasis supplied.)
a. Advance Report Citation: 261 A.C.A. 676, 684.