Colorado Motor Vehicle Salesperson License Denials and Appeals

My Colorado Motor Vehicle Salesperson License Was Denied. What Can I Do?

Receiving a notice that your Colorado motor vehicle salesperson license application has been denied can put your ability to work in the automobile industry at risk. Criminal convictions are a common reason for licensing problems, but a criminal record does not necessarily mean that you cannot obtain a salesperson license. Colorado law distinguishes between convictions that require denial for a specified period and other criminal convictions that the Motor Vehicle Dealer Board may consider in deciding whether an applicant is qualified for a license.

A license may also be denied for reasons unrelated to a criminal conviction, including problems with the application itself, prior licensing conduct, financial character, fraudulent or deceptive business practices, and other violations of Colorado motor vehicle industry laws and regulations.

If your application has been denied, you may have the right to challenge the denial through an administrative hearing. There are strict deadlines, however, and the hearing is not simply an informal opportunity to explain your situation. The applicant bears the burden of demonstrating why the specific reasons stated in the Notice of Denial should not prevent issuance of the license.

This guide explains the principal reasons a Colorado motor vehicle salesperson license may be denied, how criminal convictions are evaluated, the difference between mandatory and discretionary grounds for denial, and what happens if you request a hearing to challenge the denial.

Can I Get a Colorado Motor Vehicle Salesperson License With a Criminal Record?

Having a criminal record does not automatically prevent a person from obtaining a Colorado motor vehicle salesperson license. The effect of a conviction depends on several factors, including the offense, whether it was a felony or misdemeanor, when the conviction occurred, and whether the conviction falls within one of the specific grounds for denial established by Colorado law.

Colorado law also makes an important distinction between discretionary grounds for denial and certain convictions that require the denial of a license for a specified period.

Felony Convictions

Under C.R.S. § 44-20-121(6)(h), the Motor Vehicle Dealer Board may deny, suspend, or revoke a salesperson license based upon a conviction or plea of no contest to any felony. The same provision applies to crimes under Articles 3, 4, or 5 of Title 18 of the Colorado Revised Statutes, as well as comparable federal or out-of-state offenses.

The word “may” is important. This provision gives the Board authority to deny a license based on the conviction, but it does not make every felony conviction an automatic or permanent disqualification.

For example, a felony drug conviction may fall within this provision because it is a felony, even though drug offenses are generally found in Article 18 of Title 18 rather than Articles 3, 4, or 5. Whether the conviction requires an automatic denial under the separate three-year provision is a different question.

Mandatory Three-Year Disqualification for Certain Convictions

C.R.S. § 44-20-121(8) is different. For certain convictions occurring within the statutory period, the law provides that a salesperson license shall be denied or revoked.

The mandatory provision applies to specified felony convictions under Articles 3, 4, or 5 of Title 18 and certain offenses involving matters such as odometer fraud, salvage fraud, title fraud, or defrauding a retail consumer in connection with a motor vehicle transaction.

The current statutory period is three years, generally measured from the date of conviction or release from incarceration, whichever is later.

This distinction can make a significant difference. A conviction may provide the Board with a discretionary basis to deny a license without necessarily falling within the category that requires denial during the three-year period.

What Happens After the Three-Year Period?

Colorado law also addresses what happens once the three-year period has passed. Generally, the application or license is to be considered in the same manner as one involving a person without a prior criminal record. There is an important exception, however, for a conviction related to the automobile industry, which may continue to be considered.

What About Misdemeanor Convictions?

A misdemeanor conviction can also affect a Colorado motor vehicle salesperson license. C.R.S. § 44-20-121(6)(h) is not limited to felonies. In addition to any felony, the statute permits the Board to deny, suspend, or revoke a license based on a conviction or no-contest plea to a crime under Article 3, 4, or 5 of Title 18, or a comparable federal or out-of-state offense.

Those articles generally include offenses involving persons, property, and fraud or other offenses involving government operations. As a result, the particular offense matters. Simply knowing that a conviction is a misdemeanor does not answer the licensing question.

A misdemeanor that does not fall within § 44-20-121(6)(h) may still be relevant to the licensing process. Colorado law separately permits the Board to deny a license when an applicant’s criminal character or record demonstrates that the applicant is unfit to hold a license. The Board’s regulations direct it to consider factors including the nature and date of convictions, the applicant’s status on probation or parole, satisfactory compliance with supervision, restitution, and whether the applicant has a pattern of criminal convictions.

This is one reason it can be a mistake to assume that a plea in a criminal case is automatically “safe” for licensing purposes simply because the final offense is a misdemeanor.

What About a Deferred Judgment?

A deferred judgment presents a somewhat different issue. Whether a particular disposition itself constitutes a statutory ground for denial must be distinguished from a separate question: what must be disclosed on the salesperson license application.

The application materials require disclosure of criminal-history information that extends beyond traditional convictions. Depending on the circumstances and timing, applicants may be required to disclose criminal charges, no-contest pleas, and deferred judgments and provide certified court records concerning the case.

An applicant should therefore not assume that a deferred judgment can simply be omitted because the case may ultimately be dismissed after successful completion of the deferred judgment.

Do I Have to Disclose My Criminal History?

One of the worst approaches to a potential criminal-history problem is to create a second licensing problem by failing to disclose information requested on the application.

The Auto Industry Division advises applicants to answer the criminal-history questions completely and honestly. Its application materials specifically caution against assumptions such as believing an old case is no longer on the record, that an offense does not matter because it was unrelated to the automobile industry, or that a deferred judgment does not need to be disclosed.

A failure to disclose required information may itself result in a licensing problem based upon a material misstatement in the application, separate from whatever effect the underlying criminal case might have had.

A criminal record may create a licensing problem. Failing to disclose it can create a second one.

The better approach is to address the criminal history directly and provide the information necessary for the Board to evaluate the application.

What Does the Motor Vehicle Dealer Board Consider When Evaluating a Criminal Record?

When a criminal conviction gives the Motor Vehicle Dealer Board discretion to deny a license, the existence of the conviction is not necessarily the end of the analysis. Colorado’s regulations identify several factors the Board considers in determining whether an applicant’s criminal character or record demonstrates that the applicant is unfit to hold a license.

Those factors include:

• the nature and date of the conviction or convictions;
• whether the applicant is currently on probation or parole;
• whether the applicant has maintained satisfactory compliance with probation or parole;
• restitution; and
• whether the applicant has a pattern of criminal convictions.

Importantly, the regulations provide that a pattern of convictions may demonstrate unfitness even when the individual convictions, considered separately, might not be sufficient grounds for denial. 

Evidence of Rehabilitation

The Auto Industry Division specifically places responsibility on the applicant to provide rehabilitation information concerning criminal convictions. It also invites an applicant to provide information that the Board should take into account when evaluating criminal-character issues. 

There is no single rehabilitation document or piece of evidence that will be appropriate in every case. Depending on the circumstances, relevant information may include successful completion of probation or parole, payment of restitution, the amount of time that has passed without additional criminal conduct, employment history, circumstances surrounding the offense, and other evidence demonstrating the applicant’s conduct since the conviction.

The important point is that an applicant with a discretionary criminal-history issue should not treat the application as simply a matter of disclosing the conviction and hoping for approval. If there is favorable information that helps place the conviction in context or demonstrates rehabilitation, that information should be identified and presented thoughtfully.

Disclosure tells the Board what happened. Rehabilitation evidence helps show what has happened since.

Other Reasons a Colorado Motor Vehicle Salesperson License Can Be Denied, Suspended, or Revoked

Criminal history is only one potential basis for licensing action. C.R.S. § 44-20-121(6) identifies a number of other grounds upon which the Motor Vehicle Dealer Board may deny, suspend, or revoke a motor vehicle salesperson license. These provisions generally concern honesty in the licensing process, compliance with motor vehicle laws and regulations, and conduct toward dealers and customers. 

Problems With the License Application or Licensing Requirements

A salesperson license may be denied, suspended, or revoked for making a material misstatement in a license application. Under the Board’s regulations, a material misstatement can include a false or misleading statement, a misleading response to an application question, or an omission for which the applicant is responsible that is significant enough to affect the Board’s review of the application. 

Licensing action may also be based on failure to comply with Colorado’s motor vehicle dealer laws or applicable Board rules, conducting licensed business without the required bond in effect, or engaging in certain salesperson activities for a dealer for whom the salesperson is not properly licensed.

A salesperson may also face licensing action for representing that he or she is a salesperson for a particular motor vehicle dealer or used motor vehicle dealer when the salesperson is not employed and licensed by that dealer. 

Fraud, Misrepresentation, and Conduct Toward Customers

The statute provides several separate grounds involving dishonest or deceptive conduct. These include:

• intentionally publishing or circulating materially misleading or inaccurate advertising;
• engaging in a fraudulent business practice;
• defrauding a retail buyer to the buyer’s damage;
• knowingly representing or selling a used or demonstrator vehicle as new; and
• improperly withholding, misappropriating, or converting money belonging to a customer or another person that was received in the course of employment as a salesperson. 

These provisions illustrate why the Board’s inquiry is broader than simply whether a salesperson has a criminal conviction. Conduct arising directly from the sale of motor vehicles can itself provide a basis for licensing action.

Vehicle and Motor Vehicle Industry Violations

Other statutory grounds relate more specifically to vehicles and regulation of the automobile industry. A license may be subject to action for knowingly buying, selling, acquiring, or disposing of a stolen motor vehicle; violating state or federal odometer laws or regulations; or selling a vehicle to a retail customer when it does not meet required equipment or condition standards, unless it is properly sold as a tow-away vehicle not to be driven. 

The statute also reaches certain willful violations of state or federal laws or regulations concerning commerce or motor vehicles when the violation directly and necessarily involves commerce or motor vehicles. 

Employing an Unlicensed Salesperson

C.R.S. § 44-20-121(6) also lists employing an unlicensed motor vehicle salesperson as a ground for licensing action. 

Although some of these statutory grounds arise much less frequently than criminal-history issues, they are important because a Notice of Denial or disciplinary proceeding should be evaluated based upon the specific statutory ground or grounds alleged by the Board. The facts and evidence that matter in a criminal-history case may be very different from those involved in an alleged application misstatement, fraudulent business practice, odometer violation, or misuse of customer funds.

The reason for the denial matters. The case should be prepared to address the specific grounds identified by the Board.

My Colorado Motor Vehicle Salesperson License Application Was Denied. What Happens Next?

A Notice of Denial should be reviewed carefully and promptly. It identifies the grounds upon which the Motor Vehicle Dealer Board denied the application and provides information concerning the applicant’s right to challenge that decision.

For many first-time applicants, the denial also has an immediate employment consequence. If the applicant had been working under a temporary salesperson license while the background investigation was pending, that temporary license becomes null and void when the application is denied. The applicant is no longer authorized to engage in activities requiring a salesperson license. 

The next step is not necessarily the same in every case. Depending on the reason for the denial, an applicant may need to decide whether to correct the problem and reapply or challenge the denial by requesting a hearing.

Should I Reapply or Request a Hearing?

The Auto Industry Division specifically recognizes that some denials may be capable of being cured through a new application. One example given by the Division is an applicant who failed to properly disclose a criminal conviction on the original application. In that situation, the applicant may choose to submit a new application with the appropriate disclosure and supporting information. A new application, bond, and original application fee are required. 

That option should be distinguished from requesting a hearing to contest the denial. Importantly, the Division states that once an applicant requests a hearing, the Board will table any new salesperson applications until the appeal process is resolved. As a practical matter, an applicant may therefore need to make a strategic choice between attempting to cure the problem through reapplication and exercising the right to challenge the denial through a hearing. 

Which approach makes sense depends on why the application was denied. A correctable disclosure problem may present a very different situation from a denial based upon a criminal conviction that was fully disclosed but that the Board nevertheless determined warranted denial.

There Is a 60-Day Deadline to Challenge the Denial

An applicant who wants to challenge the denial may request a formal hearing. The written hearing request must be received within 60 calendar days after the date shown on the Certificate of Service attached to the Notice of Denial. 

The hearing request must be received by the Auto Industry Division no later than 5:00 p.m. Mountain Time on the 60th day. If the 60th day falls on a weekend or Colorado state holiday, the deadline extends to the next business day. A late hearing request will be denied as a matter of law.

If no timely challenge is made, the denial becomes final after the 60-day period and the applicant loses the right to appeal the denial.

The 60-day period is not simply a deadline to mail the hearing request. The request must be received within the required time.

How Do I Request a Hearing?

The applicant may use the hearing-request form provided with the denial materials or submit a written letter containing the required information. If a letter is used, it must specifically request a hearing on the denial, include the applicant’s full legal name and date, and be signed by the applicant. 

Once a timely hearing request is filed, the matter proceeds to the Colorado Department of Revenue Hearings Division, where it will be assigned to a Hearing Officer. The applicant will subsequently receive a Notice of Hearing identifying the date of the evidentiary hearing.

Preparing for a Colorado Motor Vehicle Salesperson License Denial Hearing

Requesting a hearing preserves the applicant’s right to challenge the denial, but it is only the beginning of the process. A salesperson license denial hearing is an evidentiary proceeding, and the applicant should be prepared to present testimony, documents, and other evidence addressing the specific reasons the license was denied.

Who Has the Burden of Proof?

One of the most important aspects of a salesperson license denial hearing is the burden of proof. Under the Motor Vehicle Dealer Board’s regulations, a license applicant bears the burden of demonstrating that the applicant meets the qualifications for licensure.

Once an application has been denied, the applicant bears the burden of demonstrating that the specific reasons identified in the Notice of Denial should not preclude issuance of a license. 

In practical terms, the applicant should not approach the hearing as though the Board simply has to prove that its initial decision was correct. The applicant needs to be prepared to affirmatively address the grounds for denial and present evidence supporting issuance of the license.

A license denial hearing is not simply an opportunity to tell your side of the story. The applicant has the burden of proving why the stated grounds for denial should not prevent licensure.

Support From the Employing Dealer

The employing dealership can also play an important role. The Board’s regulations require a salesperson applicant to provide written proof that the employing dealer is aware of the grounds that resulted in the initial denial. The written proof must also establish that the dealer will be responsible for the salesperson’s actions in the course of employment if the Board approves a restricted license. 

This is an important requirement to address before the hearing rather than discovering it for the first time on the hearing date.

Witnesses, Exhibits, and the Nine-Day Disclosure Requirement

Prehearing discovery before a single Hearing Officer is generally limited. Each side is required to disclose the name, address, and telephone number of expected witnesses, a brief summary of their anticipated testimony, and the documents the party intends to introduce at the hearing.

Those disclosures must be received by the opposing party no later than nine calendar days before the hearing. Failure to comply may result in the Hearing Officer excluding an undisclosed witness or document. 

That deadline matters. An applicant who waits until the hearing to produce rehabilitation records, character evidence, employment documentation, or other exhibits may risk having evidence excluded if the required prehearing disclosure was not made.

What Evidence Should Be Presented?

The appropriate evidence depends upon the reason for the denial. In a criminal-history case, for example, the presentation may focus on the nature and age of the conviction, compliance with probation or parole, restitution, subsequent conduct, rehabilitation, employment, and other facts relevant to whether the conviction should prevent licensure.

A case involving an alleged material misstatement on the application requires a different analysis. The evidence may instead focus on what information was provided, what was omitted or misstated, the circumstances surrounding the application, and whether the alleged misstatement supports denial under the applicable statute and regulations.

The goal is not simply to accumulate favorable documents. The evidence should be organized around the particular grounds stated in the Notice of Denial and the issues the Hearing Officer will actually be deciding.

What Happens at a Colorado Motor Vehicle Salesperson License Hearing?

A hearing challenging the denial of a salesperson license is not an informal meeting with the Motor Vehicle Dealer Board. The case is heard by a Hearing Officer with the Colorado Department of Revenue Hearings Division. The Hearing Officer functions much like a judge and serves as an independent fact-finder.

The applicant will receive a Notice of Hearing setting the hearing date. The hearing is an electronically recorded evidentiary proceeding in which the applicant and the Board are opposing parties. 

Opening Statements

At the beginning of the hearing, each side generally has an opportunity to make an opening statement. An opening statement provides an overview of the case and the evidence the party expects to present. The applicant is not required to make an opening statement. 

Testimony and Evidence

Both sides have an opportunity to present evidence through witnesses and exhibits. Typically, the Board’s case is presented first so that the reasons for the license denial frame the issues to be decided at the hearing. 

Witnesses testify under oath. The applicant may testify, call other witnesses, and introduce relevant exhibits. The applicant may also be called as a witness by the opposing party.

This is one reason preparation matters. The hearing is not simply a conversation in which the applicant explains why he or she would like a license. Facts must be established through admissible evidence, and the evidence should address the grounds identified in the Notice of Denial.

Cross-Examination and Evidentiary Objections

The applicant has the right to hear and challenge the evidence presented against the application, including the right to cross-examine opposing witnesses. Both sides may also object to testimony or exhibits, and the Hearing Officer rules on evidentiary objections during the proceeding. 

The Hearing Officer may also question witnesses during the hearing.

Do I Have the Right to an Attorney?

Yes. An applicant may represent himself or herself or be represented by a Colorado-licensed attorney. An applicant who proceeds without counsel is nevertheless expected to comply with the applicable rules of procedure and evidence. 

Applicants also have the right to present relevant evidence, call witnesses, cross-examine opposing witnesses, make arguments, and request subpoenas for witnesses or evidence. 

What If I Do Not Appear for the Hearing?

Requesting a hearing and then failing to appear can have significant consequences. If the applicant does not appear and has not obtained a continuance, the Hearing Officer may proceed without the applicant and issue an Initial Decision based on the evidence presented. The Board may then ultimately make a final decision concerning the license without further input from the applicant.

What Happens After the Salesperson License Hearing?

The Hearing Officer generally does not announce a decision at the conclusion of the hearing. Instead, the Hearing Officer reviews the testimony and exhibits, makes credibility determinations where necessary, applies the governing law and regulations, and later issues a written Initial Decision. 

The Hearing Officer’s Initial Decision

The Initial Decision contains three principal components:

• Findings of Fact — the facts the Hearing Officer determines were established through the evidence presented at the hearing;
• Conclusions of Law — the Hearing Officer applies the governing statutes and regulations to the facts and determines whether the applicable burden of proof has been satisfied; and
• Recommended Ruling — the Hearing Officer’s recommendation concerning what should happen to the salesperson license application. 

The Hearing Officer applies the preponderance of the evidence standard. A typical recommended ruling may be that the license be granted, granted subject to specific conditions, or denied. 

Importantly, however, the Hearing Officer does not have final authority to issue the salesperson license. The Hearing Officer makes a recommendation to the Motor Vehicle Dealer Board based upon the Findings of Fact and Conclusions of Law.

What If the Hearing Officer Recommends That My License Be Granted?

A favorable Initial Decision is obviously an important result, but it does not necessarily end the case. The Hearing Officer’s ruling is a recommendation to the Motor Vehicle Dealer Board, not the Board’s Final Order.

After the Initial Decision is issued, it is returned to the Board and provided to the parties. The case then proceeds through an Exceptions Process, which gives the parties an opportunity to ask the Board to modify the Hearing Officer’s Initial Decision. 

Even if neither party files exceptions, the Board may review the Initial Decision on its own motion.

A favorable ruling from the Hearing Officer is an important victory, but the Motor Vehicle Dealer Board makes the final administrative decision.

The Motor Vehicle Dealer Board’s Final Order

After reviewing the Initial Decision and completing the applicable review process, the Motor Vehicle Dealer Board issues a Final Order.

The Board may adopt, modify, or reverse the Hearing Officer’s Initial Decision. The resulting Final Order may therefore be either more favorable or less favorable to the applicant than the Hearing Officer’s recommendation. 

This distinction is important. The evidentiary hearing before the Hearing Officer creates the factual record and results in an Initial Decision, but the Motor Vehicle Dealer Board retains ultimate authority over the administrative licensing decision.

Can I Appeal the Motor Vehicle Dealer Board’s Final Order?

Yes. A Final Order of the Colorado Motor Vehicle Dealer Board may be subject to judicial review.

Unlike some Colorado administrative proceedings in which judicial review begins in the district court, C.R.S. § 44-20-122(5) provides that the Colorado Court of Appeals has initial jurisdiction to review final actions and orders of the Motor Vehicle Dealer Board that are subject to judicial review. The proceedings are conducted in accordance with Colorado’s Administrative Procedure Act.  

Judicial review is different from the evidentiary hearing before the Department of Revenue Hearing Officer. The Court of Appeals does not simply conduct another licensing hearing or give the applicant a second opportunity to present the case from the beginning. The focus is instead on review of the agency’s final action under the standards governing judicial review of administrative decisions.

For that reason, the record developed during the administrative proceedings can become particularly important if a case ultimately proceeds to judicial review.

I Have a Pending Criminal Case — Could a Plea Affect My Colorado Motor Vehicle Salesperson License?

Potentially, yes. If you currently hold a Colorado motor vehicle salesperson license, or expect to apply for one, the possible licensing consequences of a criminal case should be considered before entering a plea.

As discussed above, C.R.S. § 44-20-121 treats different criminal offenses differently. Any felony conviction may provide the Motor Vehicle Dealer Board with a discretionary basis for licensing action. Certain misdemeanor convictions may also fall within the statute, particularly offenses under Articles 3, 4, or 5 of Title 18. Separate provisions require denial for a specified period following certain convictions.

The particular offense therefore matters. Reducing a felony charge to a misdemeanor can be significant, but simply obtaining a misdemeanor disposition does not necessarily answer the licensing question.

Why the Exact Plea Matters

When evaluating a proposed disposition, it can be important to determine not only whether the offense is a felony or misdemeanor, but also where the offense falls within Colorado’s criminal statutes and how it interacts with the motor vehicle licensing laws.

For example, a felony drug offense under Article 18 of Title 18 may fall within the Board’s discretionary authority because it is a felony. A misdemeanor drug offense, however, does not fall within that same provision merely because it is a criminal conviction. Other statutory provisions concerning an applicant’s criminal character or record may still be relevant.

Similarly, offenses involving persons, property, fraud, or conduct connected to the automobile industry may raise different licensing concerns.

Do Not Assume a Misdemeanor Plea Is Automatically “Safe”

A plea agreement that appears favorable from a criminal sentencing standpoint may still have professional licensing consequences. Conversely, different plea dispositions can have materially different consequences under the salesperson licensing statutes.

This does not mean that every criminal case involving a salesperson requires a particular plea or that there is always a disposition that eliminates licensing concerns. It means that when a person’s livelihood depends upon a state-issued license, the licensing consequences should be part of the analysis before the criminal case is resolved.

The time to evaluate the licensing consequences of a plea is before the plea is entered, not after a Notice of Denial arrives.

Frequently Asked Questions About Colorado Motor Vehicle Salesperson License Denials

Colorado Attorney for Motor Vehicle Salesperson License Denials and Hearings

A denial of a Colorado motor vehicle salesperson license can directly affect your ability to work and earn a living. Whether the issue involves a criminal conviction, an application disclosure, or another licensing concern, the first step is identifying the specific basis for the denial and determining the appropriate response.

I represent motor vehicle salespersons in Colorado license denial matters, including administrative hearings before the Department of Revenue Hearings Division and proceedings involving the Motor Vehicle Dealer Board. I also represent individuals in criminal cases where the potential effect of a plea or conviction on a salesperson license needs to be considered.

If your salesperson license application has been denied, or you have a pending criminal case that may affect your license, you may contact my office to discuss your situation.

Need Help With a Colorado Motor Vehicle Salesperson License Denial?

If your Colorado motor vehicle salesperson license application has been denied, the reason for the denial and the applicable deadlines matter. I represent applicants in salesperson license denial hearings before the Colorado Department of Revenue Hearings Division and matters involving the Motor Vehicle Dealer Board.

I also represent individuals in Colorado criminal cases where a pending charge, plea agreement, or conviction may affect a motor vehicle salesperson license.

If you would like to discuss your license denial, upcoming hearing, or the potential licensing consequences of a criminal case, contact my office to schedule a consultation.