The opinion
TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-22-00757-CV
Richard Walton, Appellant
v.
Texas Real Estate Commission, Appellee
FROM THE 459TH DISTRICT COURT OF TRAVIS COUNTY
NO. D-1-GN-22-001328, THE HONORABLE MADELEINE CONNOR, JUDGE PRESIDING
ME MO RAN DU M O PI N I O N
Richard Walton appeals the district court’s judgment affirming the Texas Real
Estate Commission’s order revoking his real-estate sales-agent license. Walton contends that
the Commission lacked a legal basis on which to change the administrative law judge’s
recommendation not to revoke his license or the findings and conclusions underlying it and that
the Commission’s changes are not reasonably supported by substantial evidence or are arbitrary,
capricious, or exceed its permissible discretion. We will affirm the trial court’s judgment.
BACKGROUND
Walton obtained a real-estate sales-agent license on November 29, 2018. He was
arrested in January 2019 in Collin County for distributing marijuana-based products. He was also
charged with previous offenses of distributing marijuana-based products in Denton County in
October 2018—offenses that predated his receipt of his license. He explained to Commission staff
(Staff) that in Denton County he delivered “10 THC cartridges on three occasions and 5 THC
edibles” to a friend who was working as a police informant.
Walton eventually pleaded guilty to six felony offenses. In Collin County on
August 18, 2020, he pleaded guilty to two counts of manufacture/delivery of a Penalty Group 2 or
2-A controlled substance in the amount of over 400 grams. In Denton County on August 27, 2020,
he pleaded guilty to four counts of possession of a controlled substance with intent to deliver. On
all counts in both counties, adjudication was deferred and Walton was placed on six years of
community supervision. Walton did not inform the Commission of these guilty pleas within thirty
days of their entry.
In November 2020, Walton submitted an application for renewal after his first two
years of being licensed. He submitted a “Background History Form” to Staff in which he disclosed
his deferred-adjudication orders and included a written statement about the nature of his offenses.
The Commission opened a complaint file on December 10, 2020, requesting
information about these offenses. Walton provided some, but not all, of the requested information
on December 23, 2020. He emailed Staff on January 10, 2021, explaining that he had requested
that his community-supervision officer provide additional documents for the Collin County
offenses. By January 21, 2021, Walton had provided all but two requested documents and provided
photographs of the conditions of supervision in Collin County. On March 17, 2021, Staff informed
Walton of its petition to revoke his license and seek an administrative penalty totaling $3,500.
Staff said the financial penalty was calculated as the minimum penalty of $500 for failing to report
the guilty plea on each felony and a $500 penalty for failing to timely provide requested
information.
2
A hearing was held before an administrative law judge (ALJ) from the State Office
of Administrative Hearings (SOAH). A second ALJ later listened to a recording of the hearing and
filed a proposal for decision (PFD) including proposed findings of fact, conclusions of law, and
penalties. The ALJ found that the felony offenses are serious, that Walton had not completed his
community supervision, and that Walton was 31 years old when he committed the offense so it
was not a “youthful indiscretion.” The ALJ also found that Walton had steady employment since
2012, that approximately two years and eight months had passed since the offenses, that he had
complied with the terms of his supervision, and that he demonstrated rehabilitation or rehabilitative
effort through completing community-service hours, submission to drug testing, completion of a
drug-education course, and payment of all outstanding court costs and fees. The ALJ further found
that Walton did not use his license to commit the offenses and would not have the opportunity
to engage in similar criminal activity if granted a license. The ALJ found that Walton’s failure
to report the deferred-adjudication orders was based on Walton’s misunderstanding of the
Commission’s rules and that he tried to correct that failure once aware. The ALJ found that he
fully disclosed his offenses on the background history form he submitted to the Commission in
November 2020 and that he attempted to provide the Commission with additional information in
a reasonable time despite the Commission requesting numerous governmental documents by
Christmas Eve 2020.
The ALJ found that Walton sufficiently established his honesty, trustworthiness,
and integrity to be licensed. The ALJ concluded that, though Walton’s offenses are by rule directly
related to the occupation of a real-estate sales agent, he did not pose a threat to public safety; that
his employment as an agent would not create a situation in which he had the opportunity to repeat
the prohibited conduct; and that the Commission should not treat his deferred adjudication as a
3
conviction. The ALJ also concluded that Walton did not fail to provide the Commission additional
information within 14 days or a reasonable time of the Commission’s request. The ALJ concluded
that the Commission should not revoke Walton’s license, but should impose an administrative
penalty of $3,000 for failing to notify the Commission of the offenses within 30 days of his pleas
of guilty.
The Commission amended the findings, conclusions, and penalties proposed in the
PFD after determining that the ALJ did not properly apply or interpret applicable law. The
Commission noted that Walton was still attempting to provide information six weeks after the
Commission’s initial request. The Commission also determined that the ALJ failed to properly
apply and weigh statutory and rule-based factors in finding that Walton did not pose a continued
threat to public safety and in finding that Walton had the requisite honesty, trustworthiness,
and integrity to be licensed. Similarly, the Commission revised the ALJ’s proposed conclusions
to provide that Walton poses a continued threat to public safety, that the Commission can treat
his deferred-adjudication orders as convictions, that Walton failed to provide the Commission
additional information in a reasonable time, that Walton failed to establish his fitness to hold
a license, and that Walton’s license should be revoked. The Commission increased the
recommended administrative penalty to $3,500.
On appeal, Walton challenges only a finding and conclusions relevant to the
revocation of his license.
STANDARD OF REVIEW
When reviewing a final agency order, we use the substantial-evidence rule which
requires that we reverse or remand a case if the administrative findings, inferences, conclusions,
4
or decisions are: (A) in violation of a constitutional or statutory provision; (B) in excess of the
agency’s statutory authority; (C) made through unlawful procedure; (D) affected by other error of
law; (E) not reasonably supported by substantial evidence; or (F) arbitrary or capricious or
characterized by abuse of discretion. Tex. Gov’t Code § 2001.174. Whether the Commission’s
order satisfies the substantial-evidence standard is a question of law. Firemen’s & Policemen’s
Civil Serv. Comm’n v. Brinkmeyer, 662 S.W.2d 953, 956 (Tex. 1984). On appeal from the trial
court’s judgment, the focus of the appellate court’s review is the Commission’s decision.
See Montgomery Indep. Sch. Dist. v. Davis, 34 S.W.3d 559, 562 (Tex. 2000). Thus, the trial
court’s judgment is not entitled to deference on appeal. Texas Dep’t of Pub. Safety v. Alford,
209 S.W.3d 101, 103 (Tex. 2006) (per curiam).
A substantial-evidence analysis comprises two inquiries: (1) whether the agency
made findings of underlying facts that logically support the ultimate facts and legal conclusions
that are the ultimate basis for the order, and (2) whether the findings of underlying facts
are reasonably supported by evidence. See Vista Med. Ctr. Hosp. v. Texas Mut. Ins. Co.,
416 S.W.3d 11, 26–27 (Tex. App.—Austin 2013, no pet.). The first inquiry, concerning the extent
to which the underlying facts found by the Commission logically support its ultimate decision
or action, may entail questions of law that we review de novo. See Railroad Comm’n v. Texas
Citizens for a Safe Future & Clean Water, 336 S.W.3d 619, 624 (Tex. 2011). The second inquiry
is highly deferential to the Commission’s determination. Slay v. Texas Comm’n on Env’t Quality,
351 S.W.3d 532, 549 (Tex. App.—Austin 2011, pet. denied). “‘Substantial evidence’ does not
mean a large or considerable amount of evidence”—in fact, the evidence may even preponderate
against the agency’s finding—but requires only “such relevant evidence as a reasonable mind
might accept as adequate to support a conclusion of fact.” Id.
5
DISCUSSION
Walton contends that the Commission’s order is improper because the
Commission’s amendments to the ALJ’s PFD are not permitted by Texas Government Code
Section 2001.058(e) and are not reasonably supported by substantial evidence.
I. The Commission sufficiently articulated a legal basis for its amendments.
The finding and conclusions that the Commission changed concern whether Walton
proved himself qualified for a license.
A. Crimes can affect licensing decisions.
To receive a real-estate license, an applicant must satisfy the Commission of
the applicant’s honesty, trustworthiness, and integrity. Tex. Occ. Code § 1101.354(2). The
Commission may suspend or revoke a real-estate license if the license holder enters a plea of guilty
to a felony and the time for appeal has lapsed without regard to whether an order granting
community supervision suspended the imposition of the sentence. Id. § 1101.652(a)(1). An
agency may deny an application for a license if the applicant has committed any crime that
“directly relates to the duties and responsibilities of the licensed occupation.” Id. § 53.021(a)(1).
An agency can treat a person who has not yet completed a term of community supervision for an
offense as having been convicted of the offense, if, after considering various statutory factors under
Occupations Code sections 53.022 and 53.023, the Commission concludes that the person may
pose a continued threat to public safety. Id. § 53.021(d)(1)(B)(i), (2).1 Crimes deemed relevant
1
The statutory factors in determining whether a conviction relates to the duties and
responsibilities of the occupation include the nature and seriousness of the crime; the relationship
of the crime to the purposes for requiring a license to engage in the occupation; the extent to which
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to show a continued threat include felonies involving the manufacture, delivery, or intent to
deliver controlled substances and repeated violations of one criminal statute or multiple violations
of different criminal statutes. 22 Tex. Admin. Code § 541.1(a)(11), (14) (2022) (Tex. Real Estate
Comm’n, Criminal Offense Guidelines). In determining whether a person with a criminal
conviction that directly relates to an occupation is fit to hold a license, the Commission must
consider the factors listed in Occupations Code Section 53.023(a). These factors include the
extent and nature of past criminal activity, age at the time of the crime, time elapsed since the last
criminal activity, conduct and work activity before and after the criminal activity, evidence of
rehabilitation or rehabilitative effort, compliance with community supervision, and other evidence
of fitness including letters of recommendation. Tex. Occ. Code § 53.023(a); see also 22 Tex.
Admin. Code § 541.1(d).
B. The Commission’s power to change an ALJ’s findings or conclusions is limited.
Section 2001.058(e) permits a state agency to change an ALJ’s finding of fact or
conclusion of law only if the agency determines: (1) the ALJ did not properly apply or interpret
applicable law, agency rules, or prior administrative decisions; (2) a prior administrative decision
on which the ALJ relied is incorrect or should be changed; or (3) a technical error in a finding of
fact should be changed. Tex. Gov’t Code § 2001.058(e). The agency must state in writing the
specific reason and legal basis for any change. Id.; Granek v. Texas State Bd. of Med. Exam’rs,
172 S.W.3d 761, 780–81 (Tex. App.—Austin 2005, no pet.); see Garcia v. Texas Real Est. Comm’n,
a license might offer an opportunity to engage in further criminal activity of the same type as that
in which the person previously had been involved; the relationship of the crime to the ability or
capacity required to perform the duties and discharge the responsibilities of the licensed
occupation; and any correlation between the elements of the crime and the duties and
responsibilities of the licensed occupation. Tex. Occ. Code § 53.022.
7
No. 03-14-00349-CV, 2016 WL 3068408, at *3 (Tex. App.—Austin May 27, 2016, no pet.) (mem.
op.). The Commission must “articulate a rational connection between an underlying agency policy
and the altered finding of fact or conclusion of law.” Levy v. Texas State Bd. of Med. Exam’rs, 966
S.W.2d 813, 815 (Tex. App.—Austin 1998, no pet.).
An ALJ is a “disinterested hearing officer” to whom the legislature has delegated
the duty of basic fact-finding. See Flores v. Employees Ret. Sys., 74 S.W.3d 532, 539-40
(Tex. App.—Austin 2002, pet. denied). The ALJ is the sole judge of witness credibility. Granek,
172 S.W.3d at 778. An agency cannot frustrate the delegation of the fact-finding role by ignoring
an ALJ’s “findings with which it disagrees and substitut[ing] its own additional findings.” Davis,
34 S.W.3d at 564. However, “[j]ust because the Commission modifies or rejects an ALJ’s finding
or conclusion does not mean the ALJ was not an independent trier-of-fact.” Pierce v. Texas Racing
Comm’n, 212 S.W.3d 745, 755 (Tex. App.—Austin 2006, pet. denied).
ALJs consider adjudicative and ultimate findings of fact, the latter of which are
sometimes mixed with questions of law. Adjudicative facts are often the subject of conflicting
evidence, which are more appropriately resolved by the ALJ, who is better suited than an agency
or board in determining how much weight to give each side’s evidence and better suited to make
credibility determinations. See Hyundai Motor Am. v. New World Car Nissan, Inc., 581 S.W.3d
831, 838 (Tex. App.—Austin 2019, no pet.). Legislative or ultimate facts “do not usually concern
the immediate parties but are the general facts that help the tribunal decide questions of law and
policy and discretion.” Hyundai, 581 S.W.3d at 838. “A finding of ultimate fact is reached by
inference from basic facts.” West Tex. Utils. Co. v. Office of Pub. Util. Counsel, 896 S.W.2d 261,
270 (Tex. App.—Austin 1995, no writ). A finding of ultimate fact “usually involves ‘a conclusion
of law or at least a determination of a mixed question of law and fact.’” Hunter Indus. Facilities,
8
Inc. v. Texas Nat. Res. Conservation Comm’n, 910 S.W.2d 96, 104 (Tex. App.—Austin 1995, writ
denied) (quoting Helvering v. Tex-Penn Oil Co., 300 U.S. 481, 491 (1937)). Therefore, an ultimate
finding pertaining to compliance with a statutory standard, when that determination is statutorily
within the discretion of an agency, has the same legal effect as a conclusion of law. Hyundai,
581 S.W.3d at 838 (citing Hunter, 910 S.W.2d at 104-05). When reviewing an agency’s findings
of ultimate fact, a reviewing court is “limited to the inquiry of whether the agency’s findings of
basic fact reasonably support its findings of ultimate fact.” Professional Mobile Home Transp. v.
Railroad Comm’n of Tex., 733 S.W.2d 892, 899 (Tex. App.—Austin 1987, writ ref’d n.r.e.).
An agency has broad discretion in determining which sanction available to it best
serves the statutory policies the agency is mandated to oversee. Melmat, Inc. v. Texas Alcoholic
Beverage Comm’n, 362 S.W.3d 211, 219 (Tex. App.—Dallas 2012, no pet.). An agency’s
determination of an appropriate penalty should not be reversed unless there was a clear abuse of
discretion in the imposition of such penalty. Fay-Ray Corp. v. Texas Alcoholic Beverage Comm’n,
959 S.W.2d 362, 369 (Tex. App.—Austin 1998, no pet.). Any recommendation of a penalty by the
ALJ is purely a recommendation and is not binding on the Commission. See 22 Tex. Admin. Code
§ 533.7(a) (2022) (Tex. Real Estate Comm’n, Final Decisions and Orders). However, when the
Commission adds a suspension in an exercise of its discretion to adjust the sanction, it must comply
with section 2001.058(e) by providing a “specific reason and legal basis” for rejection of an ALJ’s
proposal. Garcia, 2016 WL 3068408, at *8 (citing Froemming v. Texas State Bd. of Dental
Exam’rs, 380 S.W.3d 787, 792 (Tex. App.—Austin 2012, no pet.); Pierce, 212 S.W.3d at 755; and
Granek, 172 S.W.3d at 781).
9
C. The Commission’s explanations of its changes are sufficient.
To argue the inadequacy of the Commission’s justifications for its amendment of
the ALJ’s proposal, Walton commendably concedes that the Commission adequately explained the
basis for changing findings of fact underlying the original Conclusion of Law 11 2 [“Mr. Walton
did not fail to provide the Commission additional information within 14 days or a reasonable time
of the Commission’s request.”]. The Commission explained:
For purposes of these sections, Rule § 535.142(e)(3) defines “a reasonable time” to
mean 14 days from receipt of a request made by Commission staff. The evidence
is clear that as late as six weeks after the Commission’s request, Respondent had
still not provided all of the requested information. An attempt to provide
information is not the equivalent of actually providing the information and the plain
language of the Commission rule does not contemplate it. As a result, the
Commission strikes Findings of Fact 7 and 8 as listed in the Proposal for Decision,
replaces them as follows, and renumbers accordingly:
7. On January 10, 2021, Mr. Walton emailed Staff explaining that he
had requested that his community supervision officer provide
additional documents for his Collin County offenses.
8. As late as January 21, 2021, Mr. Walton had not fully complied with
the Commission’s request for information.
These unchallenged amended findings are supported by the record and support the Commission’s
amendment to the original Conclusion of Law 11 to provide, “Respondent failed to provide the
Commission additional information requested by the Commission in a reasonable time. Tex. Occ.
Code § 1101.652(a)(4).” The Commission asserts that this explanation—particularly its reliance
on the rule’s definition of 14 days as “reasonable” and the statement that an attempt to provide
information is not the required provision of information—meets the Commission’s statutory
2
We note that the Commission’s “renumbering” as described in its order lists two
Conclusions of Law 11.
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burden to explain its modification and provide a rational connection between an underlying
agency policy and the altered finding or conclusion. See Tex. Gov’t Code § 2001.058(e); Sanchez
v. Texas State Bd. of Med. Exam’rs, 229 S.W.3d 498, 515 (Tex. App.—Austin 2007, no pet.).
Walton contends, however, that the Commission did not adequately explain its
changes to Finding of Fact 27 and Conclusions of Law 7, 9, 10, and 11. In amending the ALJ’s
Finding of Fact 27 (“Mr. Walton has sufficiently established his honesty, trustworthiness, and
integrity to be licensed at this time”), the Commission stated:
Section 1101.354(2), Occupations Code, requires that a person must satisfy the
Commission as to their honesty, trustworthiness, and integrity to be eligible for
licensure. To determine Respondent’s fitness to hold a license, Texas Occupations
Code §§ 53.021, 53.022, 53.023, and 22 T.A.C. § 541.1 must be considered.
The ALJ failed to properly apply or interpret the law as set forth in Tex. Occ. Code
§§ 53.021, 53.022, 53.023, and 22 T.A.C. § 541.1 based on the evidence presented.
In analyzing the factors listed in § 53.023(a), Occupations Code, and 22 T.A.C.
§ 541.1(d), the ALJ found that Respondent’s criminal offenses were serious: he
pleaded guilty to six felony offenses. The ALJ also found that Respondent’s
criminal offenses were recent and not attributable to youthful indiscretion: he
committed these offenses when he was 31, just three years ago. In analyzing the
remaining factors, the ALJ determined that these factors outweighed the
seriousness and recency of Respondent’s criminal offenses and that Respondent
was fit to hold a license. However, the evidence shows that the remaining factors
do not support such a finding and that the ALJ gave disproportionate weight to
Respondent’s conduct and self-employment, compliance with terms of his
community supervision (which remains ongoing until August 26, 2026), and his
three letters of recommendation (only one of which-written by a friend references
his criminal history).
These findings and evidence clearly demonstrate that the ALJ failed to properly
apply the law and that Respondent lacks the requisite honesty, trustworthiness,
and integrity required for a license. As a result, the Commission strikes Finding of
Fact 27 as listed in the Proposal for Decision, replaces it as follows and renumbers
accordingly:
27. Mr. Walton has not overcome the evidence that he lacks the requisite
honesty, trustworthiness, and integrity to hold a real estate license at this
time.
11
In amending the challenged conclusions, the Commission wrote:
The ALJ misapplied the law in Conclusion of Law 7 [“Mr. Walton does not pose
a threat to public safety”] as stated above. Respondent’s criminal offenses are
serious in nature. He pleaded guilty to six felony offenses. He committed these
offenses when he was 31, just under three years ago. While Respondent appears
to be generally complying with the terms of his community supervision, the
seriousness and recency of these offenses mean that he poses a continued threat to
public safety. As a result, the Commission strikes Conclusion of Law 7 as listed in
the Proposal for Decision, replaces it as follows, and renumbers accordingly:
7. Mr. Walton poses a continued threat to public safety.
Based on amended Conclusion of Law 7, the conclusion [“9. For purposes of
determining his eligibility and fitness to hold a license, the Commission should not
treat Mr. Walton’s deferred adjudication as a conviction. Code §§ 53.021(d),
53.022, and 53.023(a)”] that Respondent’s deferred adjudications for six recent
felony offenses should not be treated as convictions is a misapplication of the law.
As a result, the Commission strikes Conclusion of Law 9, replaces it as follows,
and renumbers accordingly:
9. For purposes of determining his eligibility and fitness to hold a license,
the Commission may treat Mr. Walton’s six orders of deferred adjudication
as six convictions. Tex. Occ. Code §§ 53.021 (d); 53.022, and 53.023(a).
Based on the properly amended findings of fact and conclusions of law, Respondent
has failed to establish that he is fit to hold a real estate sales agent license. As a
result, the Commission strikes Conclusion of Law 10 [“The Commission should
not revoke Mr. Walton’s license pursuant to Code § 110l.652(a)(l).”], replaces it
with the following conclusions of law, and renumbers accordingly:
10. Respondent has failed to establish that he is fit to hold a real estate
sales agent license. Tex. Occ. Code §§ 53.022-.023; 22 Tex. Admin. Code
§ 541.1 (a)-(d).
11 . Mr. Walton’s license should be revoked pursuant to Tex. Occ. Code
§§ 1101.354(2) and 1101.652(a)(1); Tex. Occ. Code §§ 53.021 (d); 53.022,
and 53.023(a); and 22 T.A.C. §541.1(a)(11) and (14).
Walton contends that, unlike the explanation for amending Findings of Fact 7 and 8, these
explanations are conclusory, do not articulate specific reasons or legal bases for rejecting the ALJ’s
12
proposal, do not identify relevant agency policy, and does not articulate a rational connection
between underlying policy and the amendments.
We conclude that, on the record presented, the Commission’s explanations are
minimally adequate to justify the amendments. Finding of Fact 27 is not like the objective
findings, such as that regarding the existence of the convictions, but instead is an assessment of
the accumulated found facts like the nature of the convictions and rehabilitation efforts against a
statutory framework to conclude whether Walton has met his burden to show the Commission
that he has sufficient “honesty, trustworthiness, and integrity” to merit a license. See Tex. Occ.
Code § 1101.354(2). In assessing Finding 27 and Conclusion 7, the Commission relies on the
ALJ’s factual findings regarding the seriousness and recency of Walton’s convictions, his maturity
when committing them, and his steps toward rehabilitation. The Commission’s rejection of the
ALJ’s relative weight assigned to those factors expresses the Commission’s policy to deem the
commission of multiple recent felonies as more contrary to the required honesty, trustworthiness,
and integrity and threatening to public safety than the pending terms of rehabilitative supervision,
employment, and recommendation of friends could redeem. While the Commission could have
expanded its explanation of why it assigned more weight to Walton’s commission of the felonies
than his redemption, the Commission’s emphasis on the seriousness and recency of the felonies
provided an adequately rational connection between an underlying agency policy and the altered
finding or conclusion. See Tex. Gov’t Code § 2001.058(e); Sanchez, 229 S.W.3d at 515.
This case is distinct from cases in which courts have found the agency’s
explanations insufficient. See Levy, 966 S.W.2d at 816; Texas Real Est. Comm’n v. Riekers,
No. 14-18-00287-CV, 2020 WL 1026478 (Tex. App.—Houston [14th Dist.] Mar. 3, 2020, no pet.)
(mem. op.); Garcia, 2016 WL 3068408.
13
In Levy, this Court rejected an agency board’s general statement of law as too
generic to support amendment of several findings, conclusions and orders. Levy, 966 S.W.2d
at 816. The board wrote:
The Texas Board of Medical Examiners finds that the findings of fact and
conclusions of law, and the proposed Order by the Administrative Law Judge are
against the weight of the evidence, based on unsound medical principles, and are
not sufficient to protect public interest and upon such findings it is the policy of the
Board to change findings of fact, and conclusions of law or to vacate or modify the
proposed order of an administrative law judge.
Id. This Court held that the agency failed to give reasons why each finding was against the
weight of the evidence, etc., and did not explain specific reasons for each individual change. Id.
In this case, the Commission gave more explanation—particularly as to Finding of Fact 27 and
Conclusion of Law 7 as set out above. While the explanations for changes to Conclusions of Law
9, 10, and 11, refer to and rely on the amendment of Conclusion of Law 7, the logical connection
of the reasoning for changing Conclusion of Law 7 to the changing of the other conclusions is
readily apparent. The Commission explained that the amendment of Conclusion of Law 7 to
conclude that Walton may pose a continued threat to public safety (rather than that he does not)
affects the weight of the factors in assessing whether to treat the deferred-adjudication orders as
convictions in Conclusion of Law 9. It further explains that these amendments similarly
undermine Conclusion of Law 10 that Walton had established his fitness to hold a license,
necessitating amendment to conclude the opposite and that Walton’s license should be revoked in
Conclusion of Law 10 and new Conclusion of Law 11. We hold that the Commission’s explanation
that it weighs the seriousness and recency of the offenses more heavily than the rehabilitation
efforts and character references, while barebones, is sufficiently specific to support the amended
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Finding of Fact 27 and Conclusion of Law 7 as well as the amendments that necessarily follow in
Conclusions of Law 9, 10, and 11.
In Riekers, the Fourteenth Court of Appeals rejected the Commission’s amendment
of findings and conclusions as inadequate. The court held that the Commission added findings of
fact that were not supported by the record, then reached conclusions based on those unfounded
amended findings. See 2020 WL 1026478 at *6, *11. The court held that the Commission simply
recited aspects of the record, then found that “the ALJ did not properly apply or interpret the
Commission’s authority to discipline a license holder and probate a revocation.” Id. at *6. The
court concluded that the Commission based its modification of the penalty proposed almost
entirely on the fact that it has the power to impose sanctions and made no reference to the factors
weighed under 22 Texas Administrative Code Section 541.1(b)-(c). See id. at *11-12. The
Fourteenth Court held that the Commission must explain the basis for the change in penalty from
the ALJ’s recommendation. Id. at *11. Concluding that the Commission relied on facts not
supported by the evidence and provided no or insufficient factual or legal basis for its
modifications, the court reversed the Commission’s order. Id. In Walton’s case, however, the
Commission did not make unfounded new fact-findings and did refer to the factors to be weighed
under section 541, which refers to the Occupations Code chapter 53. The Commission’s factual
basis for and explanation of its amendments are more substantial than those rejected in Riekers.
This Court’s reversal of the Commission’s modification of a sanction in Garcia is
similarly distinct. Garcia, 2016 WL 3068408, at *3. In its order in Garcia, the Commission added
a license suspension to the ALJ’s recommended financial penalty. Id. at *1. Critically, however,
the Commission did not change an underlying finding of fact that the financial penalty “would
reflect the seriousness of the violation and deter future violations.” Id. at *3. This Court also
15
concluded that the Commission offered no discussion of Garcia’s conduct and its serious nature,
no explanation of why or how the recommended sanction did not address the seriousness of the
violations, and no explanation of statutory authority or articulation of policy as the legal basis for
modifying the sanction assessed. Id. at *3-4. By contrast, the Commission’s order in this case
does not conflict with an unchallenged, unamended finding of fact, discusses the seriousness of
Walton’s actions, and explains that the Commission considers the seriousness of the offenses as
more compelling than the partial completion of the community supervision and continued gainful
employment. Further, this Court noted in Garcia that the Commission “offered no discussion of
Garcia’s conduct and its serious nature,” id. at *3, whereas here the Commission agreed with the
ALJ’s finding of the conduct’s seriousness and emphasized that by concluding that it outweighed
Walton’s work history, supervision compliance, rehabilitation, and recommendations. Whereas
the Commission in Garcia “failed to explain its statutory authority or articulate any policy,
statutory provision, or Commission rule as the legal basis for modifying the sanction assessed,”
id. at *4, the Commission in this case cited the factors in Occupations Code Sections 53.021, .022,
and .023 along with 22 Texas Administrative Code Section 541.1 as guiding its assessment of
Walton’s satisfaction of his burden under Occupations Code Section 1101.354(2) to prove that he
has the honesty, trustworthiness, and integrity to be eligible for licensure.
The Commission provided in writing a sufficiently specific reason and legal basis
explaining how the ALJ did not properly apply or interpret applicable law and giving the reason
for changing the finding and conclusions amended. See Tex. Gov’t Code § 2001.058(e). It did not
change them simply because it disagreed with them. The Commission did not violate the statute
and acted within its mandate. See id. § 2001.174(A), (B). Its ruling was not made through
16
unlawful procedure and is not affected by other error of law. See id. § 2001.174(C), (D). We
overrule point of error one.
II. The Commission’s changes are supported by substantial evidence and are not
arbitrary, capricious, or abusive of its discretion.
Walton recites a series of unchallenged findings of fact made by the ALJ and argues
that the ALJ, as the sole judge of witness credibility, was in a superior position to make those
assessments.3 See Granek, 172 S.W.3d at 778. He contends that the Commission did not identify
any Occupations Code Chapter 53 factor that the ALJ improperly considered and that the
Commission therefore had no legitimate basis to change any of the ALJ’s findings or conclusions.
He notes particularly the ALJ’s assessment of Walton’s assertions that
he was not hiding from his past criminal actions and that he understands he will be
held accountable for those past actions. He admitted to wrongdoing and stated that
he hopes to prove that he is an honest person worthy of holding a real estate license.
The ALJ found that Mr. Walton’s testimony concerning his acceptance of his
past mistakes and willingness to learn was authentic and weighed in favor of his
rehabilitation.
3
Walton cites these findings:
• Mr. Walton’s criminal offenses relate to his possession and intent to deliver marijuana-
based products in October 2018 and January 2019. He has no other criminal history.
• Mr. Walton did not use his real estate sales agent license to commit the drug related
offenses and would not have the opportunity to engage in similar criminal activity if
granted a license.
• The evidence shows that Mr. Walton has complied with the terms of his community
supervision, which will expire in 2026.
• Mr. Walton demonstrated his rehabilitation or rehabilitative effort through completion
of his community service hours, submission to drug testing, completion of a drug
education course, and payment of all outstanding court costs and fees.
• The letters of support provided by Mr. Walton reflect his present fitness to perform the
duties of a real estate sales agent.
• Mr. Walton has sufficiently established his honesty, trustworthiness, and integrity to be
licensed at this time.
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Walton argues that the Commission was not in a reasonable position to judge his credibility
because the Commission was not present at the hearing and did not indicate that it directly
reviewed the recorded testimony and admitted exhibits. He contends that the Commission’s order
accordingly is not supported by substantial evidence or is arbitrary, capricious, or characterized
by abuse of discretion or a clearly unwarranted exercise of discretion. See Tex. Gov’t Code
§ 2001.174(2)(E), (F).
But the Commission’s amendments did not rest on a reassessment of the credibility
of Walton or any witness or evidence. The Commission referred to findings made by the ALJ on
the extent and nature of Walton’s criminal activity, his age when they were committed, the time
elapsed since that criminal activity, his work activity, his rehabilitation or rehabilitative efforts,
his compliance with community-supervision conditions, and his recommendation letters—all
of which are factors under Texas Occupations Code Section 53.022-.023 and 22 Tex. Admin.
Code Section 541.1. Based on those findings, the Commission concluded that—contrary to
the ALJ’s assessment—the seriousness and recency of the offenses outweighed Walton’s
subsequent conduct, employment, compliance with community-supervision conditions, and
recommendations and showed that Walton poses a continued threat to public safety. The
Commission did not reassess the ALJ’s factual findings but changed the ALJ’s proposal based on
the weight the Commission accorded to those findings to achieve its policy aim of protecting the
public from threats.
The amendments here pertain not to what facts Walton showed or whether he
should be sanctioned, but how severe the sanction should be. An agency has broad discretion in
determining which sanction available to it best serves the statutory policies the agency is mandated
to oversee. Melmat, 362 S.W.3d at 219. We review agency decisions not for whether they are right
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but whether they are reasonable. City of El Paso v. Public Util. Comm’n of Tex., 883 S.W.2d 179,
185 (Tex. 1994). “The true test is not whether the agency reached the correct conclusion, but
whether some reasonable basis exists in the record for the action taken by the agency.” Id.
We conclude that the unchallenged underlying findings of fact provide a reasonable basis for
the Commission’s action in amending the finding and conclusions challenged here. The
Commission’s order is supported by substantial evidence and is not arbitrary, capricious, or
characterized by abuse of discretion or clearly unwarranted exercise of discretion. See Tex. Gov’t
Code § 2001.174(2)(E), (F).
We overrule point of error two.
CONCLUSION
Having overruled the points of error presented, we affirm the trial court’s judgment
affirming the Commission.
__________________________________________
Darlene Byrne, Chief Justice
Before Chief Justice Byrne, Justices Triana and Theofanis
Affirmed
Filed: November 26, 2024
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