ALJDEC decisions subject to certification as final

14F-2012.058B-ACY · State Board of Accountancy · 2014-02-24

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 5, 2014 APPEARANCES: Michael Raine, Assistant Attorney General representing the Board of Accountancy; Ryan Edmonson, Board of Accountancy staff member; Marvin Doxey, Respondent and representative of Respondent ADMINISTRATIVE LAW JUDGE: Dorinda M. Lang _____________________________________________________________________

FINDINGS OF FACT Background and Procedure 1. The Arizona State Board of Accountancy (“the Board”) is the State agency authorized pursuant to A.R.S. §§ 32-701 et seq., to regulate the profession of Certified Public Accountants (“CPAs”) in the State of Arizona. 2. The Board issued Certified Public Accountant Certificate No. 2985-E to Marvin L. Doxey (“Respondent or Mr. Doxey”). It issued Certified Public Accounting Firm Registration No. 4087-S to Marvin L Doxey, CPA (“Firm”), of which Respondent is the sole CPA owner. 3. On December 16, 2013, the Board issued a Complaint and Notice of Public Hearing, referring this matter to the Office of Administrative Hearings, an independent hearing agency. The Complaint and Notice of Public Hearing charged Respondent and Firm with failing to comply with A.R.S. § 32-741(A)(9) and (A)(15) as well as A.A.C. R4-1-455.03(F), thereby furnishing the Board with grounds for revocation or suspension of Respondent’s CPA Certification and Firm Registration. 4. On February 5, 2014, a hearing was held at the Office of Administrative Hearings. The Board presented the testimony of Ryan Edmonson, its Compliance Manager, and submitted seven exhibits. Respondent and Firm presented the testimony of Mr. Doxey, who is also Firm’s sole CPA owner. Hearing Evidence 5. Mr. Edmonson testified that the Board’s February 14, 2012 Decision and Order (By Consent) required Mr. Doxey to renew his independent certificate and his firm registration during the pendency of the order and to respond within 30 days to requests from the Board regarding compliance affidavits.[1] 6. Mr. Edmonson testified that on July 19, 2013, the Board requested a response in a letter to Mr. Doxey regarding a compliance affidavit. He stated that the Board did not receive a response within 30 days. 7. Mr. Edmonson testified that a meeting was set up for September 16, 2013, to discuss Mr. Doxey’s failure to respond to the letter. According to the minutes of that meeting, a vote passed to offer Mr. Doxey Decision and Orders (By Consent) to include a $500.00 civil penalty for failure to respond. The penalty was to be paid within 30 days of the signed Orders.[2] Mr. Doxey was informed of the meeting by letter dated September 6, 2013.[3] The letter required Mr. Doxey to response within 30 days. According to Mr. Edmonson, Mr. Doxey had not responded by the time of the hearing. 8. Mr. Edmonson testified that on September 20, 2013, the Board received a letter from Mr. Doxey with the requested compliance affidavit attached.[4] 9. Mr. Edmonson testified that as of the date of the hearing, Mr. Doxey had not complied with the February 14, 2012 Decision and Order (By Consent) because Mr. Doxey had not renewed his individual certificate and firm registration and he had not responded to the request for a compliance affidavit or the offer of a new Decision and Orders (By Consent) within the 30 days required by the February 14, 2012 Decision and Order (By Consent). 10. Mr. Doxey appeared at the hearing and testified that he underwent an operation on May 15, 2012 and the complications put him in pain until July 20, 2013. He also said the he had trouble completing his Continuing Professional Education (“CPE”) which was needed to renew his certificate because he had planned to do it during his recovery period. Mr. Doxey stated that he did not send in his certification and registration because he had not completed the CPE yet. He said he completed it in or around October 2013. He said he knew that he could turn in his certification and registration renewal with a late completion of the CPE, but the letter from the Board confused him. He said he planned to go to a meeting the month after the September 16, 2013 meeting, but circumstances conspired to prevent it. CONCLUSIONS OF LAW The Board has been created and authorized to regulate and control the profession of Certified Public Accountancy in Arizona.[5] This matter lies within its jurisdiction. The Board bears the burden of proof to establish cause to discipline Respondent‘s CPS Certificate and Firm’s CPA Firm Registration by a preponderance of the evidence.[6] Respondent and Firm bear the burden to establish affirmative defenses or factors in mitigation of any penalty by the same evidentiary standard.[7] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[8] Mr. Doxey did not dispute that he did not comply with the terms of the February 14, 2012 Decision and Order (By Consent). Therefore, under A.R.S. § 32-741(A)(9)[9] and (15)[10] the Board is authorized to discipline Respondent‘s CPS Certificate and Firm’s CPA Firm Registration. As factors in mitigation of the penalty, Mr. Doxey testified that he was confused and he had been experiencing a long recovery from surgery in which he experienced a painful complication. However, Mr. Doxey also testified that as of July 20, 2013, he was recovered sufficiently to do some tasks. The affidavit Mr. Doxey was to fill out and send back did not require a great deal of work to do, and as of July 20, 2013, he still had 29 days in which to do it. It is not unreasonable to expect Mr. Doxey to respond to the request for response in the 30 day time period by that time. It is not unreasonable to expect Mr. Doxey to complete his renewal information during that time either. Finally, Mr. Doxey did not establish good cause for failing to respond to the October 10, 2013 offer of new Decision and Orders (By Consent) within 30 days. A.R.S. § 32-742(B) allows the Board some discretion as to whether to unconditionally discipline or to impose a lesser penalty.[11] However, Mr. Doxey has not established that a lesser penalty would be appropriate. At this time, Mr. Doxey is either unable or unwilling to be regulated. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the final Order in this matter, the Board revoke Respondent‘s CPS Certificate and Firm’s CPA Firm Registration It is further recommended that the Board require Mr. Doxey to reimburse the Board’s costs of investigating and proceeding to hearing in this matter under A.R.S. § 32- 701(6)(f).

In the event of certification of the Administrative Law Judge Decision, the effective date of the Order will be five days from certification.

Done this day, February 24, 2014.

/s/ Dorinda M. Lang Administrative Law Judge

Transmitted electronically to:

Monica L. Petersen, Executive Director Arizona State Board of Accountancy ----------------------- [1] See Exhibit 1. [2] Exhibit 4, p. 13. [3] Exhibit 7. [4] Exhibit 5. [5] See A.R.S. § 32-701 et seq. [6] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and (B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [7] See A.A.C. R2-19-119(B)(2). [8] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [9] A.R.S. § 32-741(A)(9) provides that after notice and an opportunity for hearing, the Board may suspend, revoke, or otherwise discipline the holder of any certificate for “[k]nowing violation of any decision, order or rule issued or adopted by the board.” [10] A.R.S. § 32-741(A)(15) provides that after notice and an opportunity for hearing, the Board may suspend, revoke, or otherwise discipline the holder of any certificate for “[f]ailing to respond or furnish information in a timely manner to the board or its designated agent, if the information is legally requested by the board and is in the registrant’s possession or control.” [11] A.R.S. § 32-742(B) provides in relevant part: After notice and an opportunity for a hearing, the board may revoke or suspend a firm's registration to practice public accounting and may additionally take disciplinary action concerning the registrant for any of the causes enumerated in section 32-741, subsection A . . . .

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