ALJDEC decisions subject to certification as final

12A-119-INS · Department of Insurance · 2012-12-12

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 5, 2012 APPEARANCES: Petitioner Lakisha Alsaadi appeared on her own behalf. Assistant Attorney General Alyse Meislik represented the Arizona Department of Insurance. ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella _____________________________________________________________________ FINDINGS OF FACT 1. On October 8, 2008, the Arizona Department of Insurance (“Department”) issued to Petitioner Lakisha Alsaadi a resident Life Insurance Producer’s License No. 929465. This license expired on July 31, 2012. See Exhibit 1. 2. On July 31, 2012, Ms. Alsaadi submitted to the Department an Insurance License Renewal Application. See Exhibit 2. 3. By letter dated August 16, 2012, the Department advised Ms. Alsaadi that it refused to renew her insurance license based on information provided by Ms. Alsaadi and information made available to the Department. See Exhibit 3. 4. On September 10, 2012, Ms. Alsaadi appealed the Department’s determination to refuse to renew her insurance license. See Exhibit 4. The Department’s Investigation 5. On April 2, 2009, in the case of the United States of America v. LaKisha L. Al-saadi, in the U.S. District Court for the District of Arizona, Case No. CR08-00254-PHX-FJM, Ms. Alsaadi entered a plea of guilty to Misprision of a Felony, a class E felony.[1] See Exhibit 6. Ms. Alsaadi was placed on probation for a term of three years. 6. On November 9, 2011, the Arizona Department of Real Estate (“ADRE”) issued an Order of Summary Suspension suspending Ms. Alsaadi’s real estate license. See Exhibit 8. 7. On March 22, 2012, ADRE issued the Commissioner’s Final Order affirming the Order of Summary Suspension and revoking Ms. Alsaadi’s real estate salesperson’s license. See Exhibit 9. The Commissioner’s Final Order found that Ms. Alsaadi had been convicted of a felony and violated federal law involving dishonest dealings. Id. 8. Steven Fromholtz, the Department’s licensing Administrator, testified that when Ms. Alsaadi initially applied for her insurance license, she disclosed that there was a pending criminal charge. Mr. Fromholtz testified that the Department issued the license at that time because there was no conviction. Mr. Fromholtz explained that when Ms. Alsaadi submitted her renewal application it was tagged for review, due to the prior reporting of the pending criminal charge. 9. Ms. Alsaadi testified that her court records relating to her conviction were supposed to be sealed, and that she “was not supposed to lose her insurance license”. Ms. Alsaadi contended that the Department is refusing to renew her license based upon ADRE’s revocation notwithstanding that they are two separate agencies. Ms. Alsaadi testified that she has completed her probation. 10. One of the terms of Ms. Alsaadi’s probation in the U.S. District Court case was to disclose her conviction to the Department. The Department submitted into evidence a copy of an Order in the U.S. District Court case that states the following in pertinent part in regard to Ms. Alsaadi’s argument that her records were supposed to be sealed: IT IS ORDERED DENYING all Motions to Seal. . . . There was never justification to seal the judgment, and it never has been sealed.

Exhibit 7. (Emphasis in original.)

CONCLUSIONS OF LAW 1. This matter lies within the jurisdiction of the Department.[2] 2. The Department bears the burden to establish by a preponderance of the evidence that it properly refused to renew Ms. Alsaadi’s life insurance producer’s license.[3] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[4] A preponderance of the evidence is “[t]he greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”[5] 3. The Department based its refusal to renew Ms. Alsaadi’s life insurance producer’s license on Ms. Alsaadi’s alleged violations of A.R.S. § 20-295(A). A.R.S. § 20-295(A) provides the following in pertinent part: The director may deny, suspend for not more than twelve months, revoke or refuse to renew an insurance producer’s license . . . for any one or more of the following causes:

6. Having been convicted of a felony; . . .

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

9. Having an insurance producer license, or its equivalent, denied, suspended or revoked in any state, province, district or territory.

4. Ms. Alsaadi was convicted of Misprision of a Felony, a Class E Felony. Ms. Alsaadi’s real estate salesperson’s license was revoked in part because it was demonstrated that Ms. Alsaadi’s actions underlying her conviction constituted dishonest dealings. Therefore, Ms. Alsaadi provided cause under A.R.S. § 20-295(A)(6) and (8) for the Director of the Department to refuse to renew her life insurance producer’s license. 5. The Department also based its refusal to renew Ms. Alsaadi’s license on a finding that the revocation of her real estate salesperson’s license constitutes a violation of A.R.S. § 20- 295(A)(9), which provides that “[h]aving an insurance producer license, or its equivalent, denied, suspended or revoked” provides a basis for the Director to refuse to renew a license. (Emphasis added.) The Administrative Law Judge concludes that there is insufficient evidence to show that a real estate salesperson’s license is equivalent to an insurance producer’s license within the meaning of the statute. Consequently, A.R.S. § 20-295(A)(9) does not provide an independent basis on which to refuse to renew Ms. Alsaadi’s license. 6. The Department proved by a preponderance of the evidence that pursuant to A.R.S. § 20-295(A)(6) and (8), grounds exist for the Director of the Department to refuse to renew Ms. Alsaadi’s life insurance producer’s license. RECOMMENDED ORDER Based on the foregoing, it is ordered affirming the Department’s determination to refuse to renew Ms. Alsaadi’s life insurance producer’s license number 929465. In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be five (5) days from the date of that certification. Done this day, December 12, 2012. /s/ Sondra J. Vanella Administrative Law Judge

Transmitted electronically to:

Germaine L. Marks, Acting Director Department of Insurance ----------------------- [1] The documents submitted by the Department contain slightly differing variations of the spelling of Ms. Alsaadi’s name and the U.S. District Court case number also varies slightly, some containing a different number of zeros. However, there was no dispute at hearing that Ms. Alsaadi was convicted of Misprision of a Felony in U.S. District Court in 2009. [2] See A.R.S. §§ 20-281 to -302. [3] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119; see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [4] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [5] Black’s Law Dictionary at 1220 (8th ed. 1999).

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