Following suspension of its license to sell beer and wine, petitioner business sought review of an order of respondent California Alcoholic Beverage Control Appeals Board affirming the decision of real party in interest California Department of Alcoholic Beverage Control under Bus. & Prof. Code, § 23090. You can refer  minimum wage San Diego  on this web site.

The business argued that its rights under California's Administrative Procedure Act (APA), Gov. Code, § 11340 et seq., were violated. The court held that the business made a prima facie case of an APA violation, i.e., that it was standard Department procedure for the Department's prosecuting attorney to furnish a report of hearing ex parte to the Department's decision maker. The court based its decision on a recent California Supreme Court case that held the APA was violated by the Department's practice of having the Department's prosecuting attorney send a “report of hearing” to the Department's decision maker before a final decision was made. Although the Department's decision maker rejected the administrative law judge's (ALJ's) proposed decision in the supreme court case, the court concluded that the APA was also violated even where, as in the case at bar, the Department's decision maker decided to adopt the ALJ's proposed decision. Although the Department asserted that it did not use the condemned practice, the Department failed to adduce evidence substantiating its assertion before the Appeals Board. It could not do so for the first time in the court.

The court reversed the Department's order of suspension of the license and remanded the cause to the Appeals Board for further proceedings.

Cross-appeals were taken from a judgment of the Superior Court of Santa Clara County (California), which found defendant lender liable to plaintiff borrowers for usury and fraud; declined to award treble damages under Stats. 1919, § 1, p. lxxxiii; 9C West's Ann. Civ. Code (2010 ed.) foll. § 1916.12, designated as § 1916-3, subd. a; and ruled that defendant investors were not liable for usury as they were holders in due course of loan instruments.

Promissory notes for mortgage loans were made payable to the lender and its assignees. The lender's president was a licensed real estate broker, but the lender itself was not licensed under Bus. & Prof. Code, § 10211. The lender assigned fractional interests in the notes to the investors. The court held that because the lender was unlicensed, the loans were not exempt under Cal. Const., art. XV, § 1, from the usury laws. A misrepresentation that the lender was licensed caused no loss. The investors were not holders in due course under U. Com. Code, §§ 1201, subd. (b)(21)(A), 3302, subd. (a)(2), and thus did not take their interests free of the usury defense pursuant to U. Com. Code, § 3305, subd. (b). Assignees were not identifiable payees under U. Com. Code, § 3110, subd. (c). Negotiation did not occur absent indorsement and where less than the entire instrument was transferred, as stated in U. Com. Code, § 3203, subds. (b)-(d). The investors had only the rights of partial assignees under Civ. Code, § 1459. A finding of intentional misconduct in a broker disciplinary proceeding, which was not necessary to the judgment, had no collateral estoppel effect as to treble damages.

The court reversed and remanded with directions to the trial court to enter judgment in favor of the lender as to fraud and negligent misrepresentation; to find the liability of the investors on the usury claims and enter judgment accordingly; to enter the remainder of the judgment in accordance with prior determinations unaffected by the appeal; and to entertain renewed motions for attorney fees.