After a buyer entered into a purchase agreement, he discovered the broker had unknowingly misrepresented the square footage of the property and cancelled the transaction. The buyer sued the broker for misrepresenting the home’s square footage, and a judgment was entered against the broker in favor of the buyer based on the broker’s breach of his fiduciary duty owed to the buyer. In response to a complaint based on the judgment, the Department of Real Estate (DRE) suspended the broker’s license. The broker sought to have his license reinstated, claiming the DRE’s decision was not based on clear and convincing evidence that the broker had knowingly misrepresented the residence’s square footage. The DRE claimed its authority to suspend the broker’s license was based on the judgment entered against the broker for license-related misconduct. A California appeals court held the DRE could not act on an adverse judgment against a licensee to suspend a license if the judgment is not based on clear and convincing evidence that the broker knowingly misrepresented a material fact concerning the condition of the property. [The Grubb Company v. Department of Real Estate (2011) 194 CA 4th 1494]