ALJDEC

01A-236-INS-res · Department of Insurance · 2002-03-08

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 15, 2002. APPEARANCES: Shelby Cuevas, Assistant Attorney General, appeared on behalf of the Department of Insurance. Respondent Yolanda Borquez failed to appear. ADMINISTRATIVE LAW JUDGE: Gregory L. Hanchett _____________________________________________________________________

In this matter, the Department of Insurance (hereinafter Department) seeks to revoke the insurance producer’s license of Respondent Borquez (hereinafter Respondent) based on her conviction of a crime of moral turpitude involving fraud. Based on the evidence adduced at the hearing, the following findings of fact, conclusions of law, and recommended decision are made. FINDINGS OF FACT 1. At all times material to this case, Respondent has been licensed to transact life, disability, property and casualty as an insurance producer under license number 75416. 2. On March 27, 2001, a criminal complaint was filed against Respondent in West Tempe Justice Court alleging a Class 3 felony of theft, a Class 4 felony of attempted theft, and a Class 6 felony of filing a fraudulent insurance claim. At the hearing in this matter, an investigator for the Department, Arnold Sniegowski, testified that he investigated the criminal charges and learned that the charges resulted from Respondent’s conduct of forging her mother’s name on a State Farm Insurance Auto Policy and then making claims against that policy. The complaint itself indicates that the Class 6 felony arose from Respondent’s conduct of presenting a written document to an insurer that contained untrue statements of fact with respect to a claim for payment. 3. On May 23, 2001, Respondent pled guilty to the charge of insurance fraud. Respondent was placed on probation with the terms that she pay a fine and that she pay restitution to State Farm in the amount of $5,954.00. 4. Mr. Sniegowski further testified at the hearing that he had learned through his investigation that Respondent had failed to make the restitution payments required as a condition of her probation. 5. Sniegowski also testified that the position of insurance producer carries with it the need to fulfill fiduciary duties with honesty and integrity that are beyond reproach. Respondent’s conduct in committing this crime demonstrates that she is unfit to maintain the level of honesty required of the position and that she is not capable of fulfilling the fiduciary duties intrinsic to the position of insurance producer. CONCLUSIONS OF LAW 1. As this matter is a contested agency action, the Department bears the burden of proof, and the standard of proof on all issues is by a preponderance of the evidence. Culpepper v. State, 187 Ariz. 431, 930 P.2d 508 (App. 1996). 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). It "is evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not." Black's Law Dictionary, 1182 (6th ed. 1990). 2. Arizona Revised Statutes § 20-295 (A) states in pertinent part that the

director may deny, suspend for not more than twelve months, revoke or refuse to renew an insurance producer’s license or may impose a civil penalty . . . for any one or more of the following causes:

* * * 2. Violating any provision of this title or any rule , subpoena or order of the director. * * * 7. Having admitted or been found to have committed any insurance unfair trade practice or fraud.

8. Using fraudulent, coercive or dishonest practices, or demonstrating incompetence, untrustworthiness or financial responsibility in the conduct of business in this state or elsewhere.

3. The Department has shown that grounds exist to demonstrate a violation of A.R.S. § 20-295(A)(7). 4. The Department has shown that grounds exist to demonstrate a violation of A.R.S. § 20-295(A)(8). The conduct described in the charging documents, the plea agreement, and the investigator’s testimony is the very type of conduct this statute is designed to guard against. 5. Having found that Respondent violated A.R.S. § 20-295(A)(7) and A.R.S. § 20-295(A)(8), a violation of A.R.S. § 20-295(A)(2) necessarily ensues. 6. The Department seeks revocation in this matter. Considering the description of the conduct that lead to Respondent’s conviction, as well as the duties intrinsic in the position of an insurance producer, revocation is appropriate. RECOMMENDED DECISION Based on the foregoing the undersigned recommends to the Director of the Department of Insurance that Respondent’s license number 75416 be revoked. Done this day, March 8, 2002. ______________________________________ Gregory L. Hanchett Administrative Law Judge . . . Original transmitted by mail this ____ day of ____________, 2002, to:

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

By ___________________________

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