Appeals Hearing Board Meeting

MINUTES APPEALS HEARING BOARD MEETING Tuesday, March 29, 2016 11:30 AM MONTEREY, CALIFORNIA Board members Present: Hawkins, Stocker, Villalpando Absent: None. Board Staff City Attorney Christine Davi; Assistant City Attorney Karin Salameh; Chief of Present: Police David Hober; Administrative Analysis Karen Faurot; Recording Secretary Jenny Leinen CALL TO ORDER Chair Stocker called the meeting to order at 11:38 pm. CONSENT ITEMS No consent items at this time. PUBLIC COMMENTS None. PUBLIC HEARING 2. Reconsideration of the Decision by the Appeals Hearing Board Regarding Appeal of Police Chief's Denial of Massage Establishment Permit - Appellant James Hendershott DBA Cypress Studios, 580 Casanova Ave. Monterey Chair David Stocker said the public hearing was prompted by a letter he sent to the City Attorney’s Office. He said it was a very unusual hearing for the Board in that the issue of hearsay evidence was brought up. Chair Stocker said he thought about the decision and wanted to be sure to give the City Attorney, Assistant City Attorney, the Police Department and the appellant an opportunity to discuss the issue and for the other Board members to decide if the previous decision should be reconsidered. Chair Stocker clarified the hearing is only to decide if the previous decision that was made was right or wrong. He said this is not a reflection on anyone, but he wanted to be sure as this case moves forward through the system the decision would be able to hold up. Ms. Davi said the City Code §22-31.10(e) allows for testimony, to be represented by counsel and to cross-examine. She said the formal rules of evidence do not apply, hearsay evidence and any relevant evidence can be admitted. Ms. Davi the issue is the police report is the document that would identify the officers present during the undercover operation and the business owner was not provided a copy the police report. She said the appellant’s attorney did not have an opportunity to identify, cross-examine, or call any of those witnesses nor were they offered in the City’s case in chief. Ms. Davi said hearsay evidence is admissible in a proceeding such as this one, but the question for the attorneys to address is whether the Board’s decision can be based entirely on hearsay. Chair Stocker asked the other Board members if they wanted to reconsider the previous Appeals Hearing Board Minutes Tuesday, March 29, 2016 decision of the Appeals Hearing Board regarding the appeal of the denial of the massage establishment permit. Chair Stocker called for the vote. On a motion made by Board member Villalpando, seconded by Board member Hawkins, and carried by the following vote, the Appeals Hearing Board decides to reconsider the decision of the appeal of the decision of Chief Hober to deny massage establishment permit to James Hendershott dba Cypress Studio at 580 Casanova Avenue. AYES: 3 COMMISSIONERS: Stocker, Hawkins, Villalpando NOES: 0 COMMISSIONERS: None ABSENT: 0 COMMISSIONERS: None ABSTAIN: 0 COMMISSIONERS: None RECUSED: 0 COMMISSIONERS: None Chair Stocker allowed the Police Department to give their argument first followed by the appellant. Ms. Salameh said the evidence submitted by the police department was sufficient to sustain the Board’s denial of the appeal of Cypress Studio. She said the evidence was not solely hearsay because photographs were included showing there were condoms and alcohol present on site and it was being used for residential sleeping purposes. She also said the photographs were provided to the appellant prior to the hearing and were authenticated by the Police Department as part of the evidence collected at Cypress Studio. Ms. Salameh said these reasons alone are substantial violations and enough reason to deny the establishment permit. Ms. Salameh said photographs and the live testimony of Police Chief Hober and Administrative Analysis Karen Faurot were presented. She said the attorney for the appellant had the opportunity to cross examine Chief Hober. Ms. Salameh said it is the testimony of Chief Hober that is most vital because his decision was not based on his involvement in the undercover operation and the fact he was well within his right to deny the massage establishment permit according to the City Code. She said there is a parallel case here; it’s the criminal case which has not concluded. Ms. Salameh said in this kind of situation, the District Attorney’s Office would not allow release of the police report by the Police Department to the appellant without a Filing Status Letter which has not been received by the Police Department at this time. She went on to say the decision reached by the Board was not based on hearsay evidence because in this hearing the rules of evidence do not apply. Ms. Salameh said the Board still had sufficient, adequate evidence with the live testimony and the photographs to make the determination. She said this was enough evidence that a reasonable person could rely upon to find that the City Code had been violated by Cypress Studio and that the Police Chief was well within his right to deny the permit application. Ms. Salameh said the decision should continue to be upheld. Chair Stocker asked Ms. Salameh if the Board was to only look at Chief Hober’s decision as to whether the massage establishment permit should be denied and not at the whole case. He said the Board should determine if the Police Chief had sufficient evidence to make his determination on the outcome of the permit. Ms. Salameh said based on the photographs alone it was shown there were condoms, alcohol, and people sleeping on site. Chair Stocker asked Ms. Salameh if the photos were hearsay evidence. She said the photos were not hearsay evidence because they were authenticated. 2 Appeals Hearing Board Minutes Tuesday, March 29, 2016 They were also provided to the appellant’s attorney prior to the hearing. Jennifer Rosenthal, the attorney for James Hendershott and Cypress Studio, said going forward with the hearing based solely on hearsay evidence is a violation of her client’s rights and would be an unfair hearing. Ms. Rosenthal said, regarding the City Attorney’s statement, the City Code states the regular rules of evidence to not apply in this setting but the Code does not state hearsay evidence is admissible. Ms. Rosenthal also said the City Attorney’s case is based solely on hearsay evidence. She said hearsay evidence is traditionally untrustworthy and unreliable. Ms. Rosenthal said she asked the City Attorney to bring the arresting officers to the hearing. She then referenced an email that was included as part of her Public Records Act request. Ms. Salameh objected to Ms. Rosenthal having in her possession, and reading from, a privileged email during her argument. She stated the email in question was released inadvertently by staff error and was not released by her or any other attorney. Ms. Salameh said Ms. Rosenthal should have recognized it as privileged and immediately returned it to her. Chair Stocker sustained Ms. Salameh’s objection. He then asked Ms. Rosenthal if the photos were hearsay evidence. Ms. Rosenthal said the photos are hearsay because they were not authenticated by the photographer and because they do not show the location of the condom, or the location of the beer cans, and the fact that this is obviously a residence is speculation. Ms. Rosenthal said Chief Hober’s testimony was hearsay because he himself testified he had no involvement in the undercover operation of the November 2015. Ms. Rosenthal said if the hearing was continued until after the criminal case was over the police report would have been obtainable. She also said the City failed to meet their burden of proof and did not bring forward the person most knowledgeable to authenticate the photographs. Public Comment Marnie Gustafson of Federal Consulting, Inc., the owner of the property at Fremont Street and Casanova Avenue, said everything that happens at this hearing directly affects her and the business owner. She said she was given no notice of this hearing and heard last minute it was being moved to 11:30 am and therefore her own attorney was not able to attend. Ms. Gustafson said loss of the permit would cause a five year moratorium on the property and would not allow Federal Consulting to rent to another spa or massage establishment during that time. Ms. Gustafson said Federal Consulting did not break the law and it is punitive denying their livelihood, their property rights, and their income for five years with the decision to deny the permit. Ms. Gustafson said one rogue employee is not consistent with this business’s track record. Ms. Gustafson also said to deny her business the right, for the next five years, to lease the property to a similar business is forcing them into a corner. She said if that is the case, then Federal Consulting will have to consider their actions in the future. Ms. Gustafson wanted to go on record with her statement about possible litigation against the City if Federal Consulting is denied their property rights. Chair Stocker closed the public hearing. Ms. Davi said there is a threat on the record of litigation by Ms. Gustafson. She said if it is the desire of the Board they could choose to consider this issue at a future date in closed session under the exemption of threatened litigation under the Brown Act or they could choose to do this publically as well. 3 Appeals Hearing Board Minutes Tuesday, March 29, 2016 Chair Stocker asked Ms. Davi whether the photographs were hearsay. Ms. Davi said to establish foundation of admissibility of a photograph, you do not necessarily need to question the photographer, but certain questions need to be asked in order to authenticate, for example if the photographs were a true and accurate representation of the scene on the night in question or did the photographs aid in your testimony. In response to Chair Stocker’s question, Ms. Davi said the Board is not questioning the integrity and credibility of the Police Chief, but the Police Chief did testify that he was not present at the undercover operation. She said she believes he is unable to authenticate the photographs because he was not at the scene. Chair Stocker asked how the photographs could have been authenticated and Ms. Davi said that it would require the photographer, an officer who was at the scene, or a records custodian could have said the police report was part of a business record. Chair Stocker asked if the Police Chief would be able to make a different determination based on the outcome of the court case. Ms. Davi said there has not been a conviction in the prostitution case but in the future if there is a conviction, she said she believes the Chief would have the power to revoke the permit at that time based on the conviction. Ms. Davi said she believes there is a separate section in the City Code that would allow for revocation but would need to research further to be sure. Chair Stocker said it is unusual for the Board to try to balance the rules of evidence. He said he would like to make sure at the next hearing of this type, all the rules are know in advance by all parties involved. Chair Stocker asked Ms. Davi if the photographs are hearsay. Ms. Davi said her feeling is yes. Board member Villalpando asked Ms. Davi if it is true the criminal case takes precedence over the civil case. Ms. Davi said the criminal does take precedence. Chair Stocker asked if the City Code is clear on what the Police Chief needs to revoke this permit and he asked if the Board is bound by the same when making a decision. Ms. Davi there is two issues at play. She said the case can have hearsay evidence and it can be admissible but it has to be authenticated. She disagreed with Ms. Rosenthal saying hearsay evidence is admissible because the rules of evidence do not apply in this setting. She said the issue becomes whether the entire case can be hearsay, and typically the case law says there should be some sort of corroborating evidence to go along with the hearsay evidence. Ms. Davi said the amount of evidence required and the due process afforded to both parties should be equivalent to what is at stake. She went on to say if someone’s business license is being taken away or their ability to do business, there needs to be due process in place. Ms. Davi said it would appear Ms. Rosenthal was not given the names of who was at the undercover operation that night and was not able to call any of those witnesses; they do have that right. Ms. Davi said it is that incident which is the reason for the denial of the permit. Chair Stocker gave each attorney time to state their case again before turning the hearing over to the Board for deliberation. Ms. Salameh said the photos are not hearsay because the code says the regular rules of evidence do not apply in this setting and you can rely on them to make your decision. She said both Administrative Analyst Karen Faurot and Police Chief Hober testified the photographs were part of the evidence collected in the undercover operation. She said for an 4 Appeals Hearing Board Minutes Tuesday, March 29, 2016 informal body such as this, it should be enough foundation to authenticate the photos. Ms. Salameh said the issue is not whether the photos are hearsay, but whether the photographs were authenticated and for this informal body the testimony that was given, and these purposes, there was sufficient evidence to consider the photos. Ms. Rosenthal said she does not agree with Ms. Salameh because authentication should come from someone with personal knowledge or through an accepted and known hearsay exception. Ms. Rosenthal said her client was not afforded equal access to the information the City was; they were denied their constitutional rights; and their rights to due process. Ms. Rosenthal said according the rules of court, the Superior Court would find that her client was not given a fair hearing. Ms. Davi said a part which the Board should consider is whether the photographs are the sort of evidence that a reasonable person is accustomed to rely upon while in the conduct of serious affairs. Chair Stocker asked Ms. Davi if the testimony from the Police Chief was sufficient to authenticate the photograph from the undercover operation. Ms. Davi said she didn’t believe it was sufficient because he was not present at the undercover operation and he did not authenticate the photos as a business record. Chair Stocker asked Ms. Davi, in her opinion, are the photos hearsay to which Ms. Davi said yes. Board Member Discussion Board Member Hawkins said the code says the formal rules of evidence do not apply here and he feels that’s what the Board was operating under. Chair Stocker said the City has the burden of proof and the hearsay evidence is not enough. He said the issue for him is the City Attorney is saying that the photos are hearsay and the Board cannot make a decision solely on hearsay. Ms. Davi said the second issue is the objection raised by Ms. Rosenthal about not being able to call and cross examines witnesses. Chair Stocker said he wants the decisions of the Board to be based on real information that would be able to hold up in court if the case went further. He also said it is frustrating to be given evidence that is not completely clear and to be given rules that are not completely set out. Chair Stocker said there is a learning curve with regards to this type of hearing. He suggested at a future date a meeting should be set regarding how these parts of the hearing should be run. Chair Stocker said he believes the police chief 100%; but it is frustrating to hear not enough was done to avoid issues with the decision. Chair Stocker said he cannot vote if he is being told the hearsay evidence will not hold up in court. He said he does not want to expose the City in that way if they would not prevail in court. Chair Stocker said part of the reason for the various Boards is to clear up issues not compound them. He said he wants the decision to hold up if appealed to Superior Court, so for that reason alone he said he is voting to overturn the police chief’s decision. 5 Appeals Hearing Board Minutes Tuesday, March 29, 2016 Board Member Villalpando said the appropriate thing to do would be to rehear the case. Chair Stocker reminded Board member Villalpando the case cannot be re-heard. Board Member Villalpando clarified that the issue currently before the Board is to reconsider the last decision. Board Member Hawkins said he appreciates what the police are doing and what they tried to do in this case, but if the Board did not hear the hearing properly then that is a fact. Chair Stocker made a motion to grant the appeal and overturn the Police Chief’s denial of the permit. Board Member Villalpando seconded the motion. Board Member Hawkins said this sets the case for the future, but unfortunately the Board missed this one. Board Member Villalpando asked if the case could be brought forward in the future with new information. Ms. Davi said there would have to be new information, a conviction, or a violation. She said it would be a new case going from here; it would not to start over. Chair Stocker called for the vote. On a motion made by Chair Stocker, seconded by Board member Villalpando and carried by the following vote, the Appeals Hearing Board grants the appeal and overturns the decision of Chief Hober to deny massage establishment permit to James Hendershott dba Cypress Studio at 580 Casanova Avenue. AYES: 3 COMMISSIONERS: Stocker, Hawkins, Villalpando NOES: 0 COMMISSIONERS: None ABSENT: 0 COMMISSIONERS: None ABSTAIN: 0 COMMISSIONERS: None RECUSED: 0 COMMISSIONERS: None Chair Stocker asked if the motion is an appealable action. Ms. Davi said it is appealable; it would be the City’s appeal to the Superior Court. ADJOURNMENT Chair Stocker called the meeting adjourned at 12:31 pm. Respectfully Submitted, Approved, Alicia Salas David Stocker Recording Secretary Chair 6