ALJDEC

00A-217-INS · Department of Insurance · 2001-01-23

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 23, 2001 APPEARANCES: Karen L. Karr, Esq. (of Quarles & Brady Streich Lang LLP) represented Petitioner Mark Colby. Assistant Attorney General Shelby Cuevas represented the Arizona Department of Insurance. ADMINISTRATIVE LAW JUDGE: Daniel G. Martin _____________________________________________________________________

Mark Colby appealed the Arizona Department of Insurance’s November 6, 2000 denial of his application for a property and casualty insurance agent’s license. Based on the evidence of record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law and Recommended Order: FINDINGS OF FACT On August 11, 2000, Mark Colby submitted an application to the Arizona Department of Insurance (the “Department”) for an individual property and casualty insurance agent’s license. By letter dated November 6, 2000, the Department notified Mr. Colby that his application had been denied pursuant to A.R.S. § 20-290(B)(6) (the correct reference is in fact A.R.S. § 20-290(C)(6) ( the statutory provision cited by the Department in its December 20, 2000 Notice of Hearing).

A.R.S. § 20-290(C)(6) provides: “The Director [of the Department] may refuse to accept any application or issue any license under this article if the Director finds . . . [a] record of conviction by final judgment of a felony involving moral turpitude.” There is no dispute that Mr. Colby has an extensive criminal record (dating back to 1974) that includes convictions for felonies involving moral turpitude. Mr. Colby’s criminal record is fully documented in a Recommended Decision issued by Administrative Law Judge Casey J. Newcomb on October 6, 1999 in connection with a previous denial by the Department of an application by Mr. Colby for an insurance agent’s license (Docket No. 99A-165-INS). The Director of the Department adopted Judge Newcomb’s Recommended Decision by Order dated October 14, 1999 and, rather than reproduce Mr. Colby’s criminal history here, the Administrative Law Judge incorporates by reference herein Judge Newcomb’s Findings of Fact Nos. 2-8 as they pertain to Mr. Colby’s criminal record. [1] The Administrative Law Judge also incorporates by reference herein Judge Newcomb’s Findings of Fact Nos. 10-14, in which Judge Newcomb found that since his release from prison in July 1997, Mr. Colby had taken substantial steps towards putting his criminal past behind him, including obtaining several college degrees, obtaining and maintaining regular employment at an Allstate insurance agency in Tucson, Arizona, and undergoing counseling. In his Recommended Decision, Judge Newcomb concluded that Mr. Colby had made a “remarkable turnaround” from his previous lifestyle. [Recommended Decision, Conclusion of Law No. 3] However, Judge Newcomb declined to recommend that the Department reverse its decision to deny Mr. Colby’s application on the grounds that Mr. Colby “is only a few years removed from a lifetime of criminal behavior and illegal drug use that has emotionally and financially damaged numerous members of the public.” [Id.] Judge Newcomb also cited as grounds for his recommendation the fact that Mr. Colby had suffered a drug relapse in March 1998. [Id.] Mr. Colby submitted his second application (the application at issue here) less than ten months after the Director of the Department issued his Order affirming Judge Newcomb’s Recommended Decision and upholding the denial of Mr. Colby’s first application. At the hearing in this matter, Mr. Colby presented evidence building on the pattern of good behavior that Judge Newcomb had previously documented. That evidence consists of the following: h. Mr. Colby continues to be employed as an office manager at the Allstate insurance agency in Tucson, Arizona at which he was working in 1999. i. Michael Brown, Mr. Colby’s employer and a licensed insurance agent, testified to the strength of his confidence in Mr. Colby’s abilities and potential, and to his belief that Mr. Colby is beyond his past substance use. j. Mr. Brown described Mr. Colby as having a “high degree of honesty and integrity,” and opined that Mr. Colby is “totally capable” of working as an insurance agent. k. Mr. Colby has increased his knowledge of the business of insurance through on-the-job training and by taking courses provided by Allstate. l. Mr. Colby, by his own testimony (which the Administrative Law Judge had no reason to question), has remained drug and alcohol-free. m. On June 2, 2000, Mr. Colby’s civil rights were fully restored. [See State’s Exhibit 8 (Order of the Honorable Howard Fell, Pima County Superior Court)] n. Caroline Isaacs, who currently serves as youth and criminal justice coordinator for the American Friends Service Committee (a national organization that, among other things, monitors prison issues), described Mr. Colby as “an absolute model of what we say we want from the criminal justice system.” Ms. Isaacs, who met Mr. Colby in late 1997 and came to know him through his participation in a support group for ex-convicts known as “Outmates,” testified to her favorable impression of Mr. Colby, and of his desire to turn his life around. o. Ms. Isaacs also opined that the longer a person is off drugs/out of prison, the more likely it is that the person will stay off drugs/out of prison. Ms. Isaacs testified to a two year “hump” (a period of time that Mr. Colby has met) after which the likelihood of relapse/recidivism begins to become increasingly smaller. However, Ms. Isaacs could not support this claim with any empirical data, and there was not sufficient foundation laid with respect to Ms. Isaacs’ credentials to enable the Administrative Law Judge to give this opinion more than minimal weight. In addition to the testimony of Mr. Brown and Ms. Isaacs, Mr. Colby offered two written commendations of his character. The first, admitted into evidence as Exhibit A, is a January 22, 2001 letter addressed “To Whom It May Concern” from Anne Adcock, coordinator for business and office programs at Pima Community College’s Center for Training and Development (“CTD”). The second, admitted into evidence as Exhibit B, is a January 18, 2001 affidavit executed by Michael McLaughlin, a case manager with the Vocational Rehabilitation Services division (“VRS”) of the Arizona Department of Economic Security. Mr. McLaughlin was Mr. Colby’s case manager during Mr. Colby’s participation in the VRS program between September 1997 and February 2000 (i.e., following Mr. Colby’s release from prison). Mr. McLaughlin assisted Mr. Colby in applying to CTD to obtain an Office Specialist Certificate. Mr. McLaughlin also assisted Mr. Colby in obtaining employment with Mr. Brown’s insurance agency. Mr. McLaughlin stated in his affidavit, “I have no reservations in my assessment of Mr. Colby’s future potential, his honesty, and his trustworthiness.” [Exhibit 2, ( 15(e)] Mr. McLaughlin further opined, “Mr. Colby is capable of responsibly holding a license issued by the [Department] for property and casualty insurance.” [Id., ( 15(d)] Mr. McLaughlin concurred in Ms. Isaacs’ opinion that a period of two years with no drug or alcohol use (coupled with a record of achievement) is a strong indicator that a person will not return to drug and/or alcohol use. [Exhibit 2, ( 14(c)] However, as was the case with Ms. Isaacs, insufficient foundation was laid with respect to the basis for this opinion to allow the Administrative Law Judge to give it more than minimal weight. Ms. Adcock met Mr. Colby while Mr. Colby was attending CTD as part of his vocational rehabilitation. Ms. Adcock attested to Mr. Colby’s completion at CTD of the objectives for the Office Specialist Certificate. Ms. Adcock stated, “I found [Mr. Colby] to be a very serious, trustworthy, motivated student, dedicated to making major life changes. . . . I feel very proud of [Mr. Colby’s] accomplishments and feel that he has great potential.” [Exhibit A, page 2] The Administrative Law Judge, having viewed Mr. Colby’s demeanor at the hearing and having listened to his testimony, found Mr. Colby to be a man sincerely and legitimately committed to making the most of himself and of his life, and to putting his past behind him. Although the evidence demonstrated that Mr. Colby continues to make good progress in rehabilitating himself, the Administrative Law Judge notes the following factors that weigh, to some extent, in counterbalance of that evidence: w. Despite his long history of drug use, and his relapse in March 1998, Mr. Colby has eschewed continuing participation in twelve-step or similar substance abuse support programs. Mr. Colby testified that he has instead been attending “couple counseling” sessions with his significant other. x. While Mr. Brown spoke highly of Mr. Colby’s character and potential, Mr. Brown’s testimony must be viewed in light of the fact that he has a financial interest in Mr. Colby receiving a license. Mr. Brown candidly admitted that he hired Mr. Colby with the view towards making Mr. Colby a “sales producer” capable of supporting his own salary, and that Mr. Colby cannot attain that position without first receiving a license. y. While Ms. Isaacs spoke highly of Mr. Colby, her exposure to Mr. Colby has been limited to her interactions with him in Outmates meetings ( meetings that Ms. Isaacs acknowledged Mr. Colby no longer attends. z. Although both Ms. Adcock and Mr. McLaughlin spoke highly of Mr. Colby, neither appeared personally for the hearing. Counsel for the Department was unable to cross-examine either witness, and the Administrative Law Judge was unable to directly assess their credibility. For these reasons, the Administrative Law Judge ascribed only modest evidentiary weight to their opinions. aa. The amount of time that Mr. Colby has spent rehabilitating himself following his release from prison (3½ years) remains disproportionate to the length of his criminal history (over 20 years). CONCLUSIONS OF LAW In this proceeding, Mr. Colby bears the burden to prove, by a preponderance of the evidence, that the Department improperly denied his license application. See A.R.S. § 41-1092.07(G) and Arizona Administrative Code (“A.A.C.”) R2-19-119. A preponderance of the evidence is “such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960). The Administrative Law Judge concludes, on the evidence of record, that Mr. Colby did not sustain his burden of proof. A.R.S. § 20-290(C)(6), the authority under which the Department denied Mr. Colby’s license, grants discretion to the Director of the Department to deny a license to a person who has been convicted of a felony involving moral turpitude. Mr. Colby’s record includes four such convictions. The determination as to whether the Department’s denial should be reversed requires balancing the length and nature of Mr. Colby’s criminal history, on the one hand, against the length and nature of Mr. Colby’s efforts to rehabilitate himself, on the other hand. The evidence demonstrated that Mr. Colby’s efforts to rehabilitate himself have been substantial. However, the Administrative Law Judge concludes that on balance, an insufficient amount of time has elapsed since Mr. Colby’s release from prison to tip the balance in Mr. Colby’s favor. Thus, at this point in time, sufficient grounds still exist for the Department to deny Mr. Colby’s application, and the Department’s denial should be affirmed. RECOMMENDED ORDER Based on the foregoing, the Administrative Law Judge recommends that the Department’s decision to deny Mr. Colby’s August 11, 2000 application for a property and casualty insurance agent’s license be affirmed.

Done this day, February 13, 2001.

______________________________________ Daniel G. Martin Administrative Law Judge

. . .

Original transmitted by mail this ____ day of ____________, 2001, to:

Charles R. Cohen, Director Arizona Department of Insurance ATTN: Curvey Burton 2910 North 44th Street, Ste. 210 Phoenix, AZ 85018

By ___________________________ ----------------------- [1] Judge Newcomb’s October 6, 1999 Recommended Decision, and the Director’s October 14, 1999 Order adopting that Recommended Decision, were admitted into evidence in the instant case as State’s Exhibit 5.

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Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826