ALJDEC decisions subject to certification as final

15A-194-INS · Department of Insurance · 2016-03-07

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 16, 2016 APPEARANCES: Petitioner Arely Betzabe Lopez Maldonado was represented by Gordon Bueler. The Arizona Department of Insurance was represented by Assistant Attorney General Liane Kido. ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer _____________________________________________________________________ FINDINGS OF FACT 1. On or about November 27, 2015, Arely Betzabe Lopez Maldonado submitted an Application for an Insurance License for and Individual (Application) with the Arizona Department of Insurance (Department). 2. Ms. Lopez Maldonado answered “Yes” to Question C, Subpart 1 in Section V, Additional Information on the Application. Question C asked: “Have you EVER been found guilty of, have you had a judgment made against you for, or have you admitted to, any of the following.” Ms. Lopez Maldonado answered yes to subpart 1, “A felony (of any kind).” 3. In a letter dated November 30, 2015, the Department informed Ms. Lopez Maldonado that her application had been denied. 4. Ms. Lopez Maldonado requested a hearing, which led to this matter being conducted. 5. The Notice of Hearing shows that the Department denied Ms. Lopez Maldonado’s application based on A.R.S. § 20-295(A)(6) and A.R.S. § (A)(8). 6. On or about June 21, 2010, Ms. Lopez Maldonado pled guilty to, and was convicted of, Criminal Impersonation, a class 6 designated felony in violation of A.R.S. § 13-2001 and A.R.S. § 13-2006. Ms. Lopez Maldonado was sentenced to one year of unsupervised probation. 7. Ms. Lopez Maldonado testified that in 1999, when she was 18 years old, she was applying to work at McDonald’s. At that time, her father gave her a social security number to use for employment purposes because the one she had indicated it was not valid for work. Ms. Lopez Maldonado was hired and worked at McDonald’s until 2010, and during that time, she worked her way up to manager. Ms. Lopez Maldonado testified that, as the manager, she was responsible for hiring people, including obtaining employees’ social security numbers, handled deposits, and managed the schedules. In 2010, it came to light that she had used a false social security number when she applied in 1999, and Ms. Lopez Maldonado was convicted of Criminal impersonation as detailed above. Ms. Lopez Maldonado acknowledged that was she did was wrong and she was guilty, but she wants to grow and be someone. Ms. Lopez Maldonado stated she passed the examination to become an insurance producer knowing that her conviction might prevent her from receiving a license. Ms. Lopez Maldonado testified that after leaving McDonald’s, she and her husband started a cleaning company and has never had any issues with clients. Ms. Lopez Maldonado indicated that she assists with financial matters at her church including handling offerings, deposits, and signing checks for the pastor’s salary and bills. Ms. Lopez Maldonado testified that she feels she is honest and trustworthy and would be able to make a contribution to the industry. 8. Ms. Lopez Maldonado presented the testimony of several character witnesses including her current and previous employers and members of her church. a. Alonso Cornejo and Alesha Cornejo, Ms. Lopez Maldonado’s current employers, testified to her honesty and trustworthiness. Both stated that Ms. Lopez Maldonado was entrusted to watch their young child. Further, Ms. Lopez Maldonado knows their passwords passcodes, and alarm codes, and had never done anything to cause concern. Mr. Cornejo also stated that Ms. Lopez Maldonado passed the examination on the first attempt, which he failed to do, which demonstrated her dedication. b. Ms. Lopez Maldonado’s former employer, Richard Coulston, a retired McDonald’s operator, testified that Ms. Lopez Maldonado started on the ground floor at the store and worked her way up to the General Manager where she was in charge of the store from the top to the bottom. Mr. Coulston stated that Ms. Lopez Maldonado had access to thousands of dollars a day and to employee’s information and never demonstrated a cause of concern. Mr. Coulston testified Ms. Lopez Maldonado was honest and trustworthy. c. Ms. Lopez Maldonado’s former employer Geoff Coulston, a McDonald’s franchisee, testified that he hired Ms. Lopez Maldonado for an entry-level position and she eventually worked her way up to the Store Manager for a couple of stores. Mr. Coulston had no concerns with her ability to handle her assigned tasks. Mr. Coulston stated that Ms. Lopez Maldonado was the top performing manager in their six stores at the time. Mr. Coulston testified that Ms. Lopez Maldonado housesits for him and she is a family friend. Mr. Coulston stated he believed Ms. Lopez Maldonado was honest and trustworthy. d. Nelson Perez, Good Shepard Church, testified that Ms. Lopez Maldonado has been a member of the church since 2003. Ms. Lopez Maldonado was a Sunday school teacher, and eventually oversaw all the teachers, but had recently moved to working with the women’s group. In her current role, Ms. Lopez Maldonado has access to everything at the church and handles many of the financial matters including writing checks and paying bills. e. Cecilia Bonilla, the wife of the pastor at Good Shepard Church, testified that she had known Ms. Lopez Maldonado for 11 years and believed her to be honest and trustworthy. Ms. Bonilla stated that Ms. Lopez Maldonado was the “right hand of the church.” Ms. Bonilla indicated that Ms. Lopez Maldonado handles a lot of the finances including paying the bills. f. Nancy Ramirez, the daughter of the pastor at Good Shepard Church, testified that she had known Ms. Lopez Maldonado for 11 years and believed her to be trustworthy and honest. Ms. Ramirez stated that the most important thing in the church is the children and the members would give their children to Ms. Lopez Maldonado to care for them. 9. Steven Fromholtz, Producer Licensing Administrator for the Department, testified that part of the role of the Department is to protect the public. Because Ms. Lopez Maldonado’s 2010 conviction related to misuse of a social security number and an insurance agent would have access to people’s social security numbers, the possibility exists that she would misuse those social security numbers in the future. Mr. Fromholtz specifically testified that the recentness of the conviction was an area of concern and that the Department viewed the conviction as evidence of Ms. Lopez Maldonado’s lack of honesty and trustworthiness. CONCLUSIONS OF LAW 1. Ms. Lopez Maldonado bears the burden of persuasion. A.R.S. § 41- 1092.07(G)(1). 2. The standard of proof on all issues is that of a preponderance of the evidence. A.A.C. R2-19-119(A). 3. A preponderance of the evidence is “[e]vidence 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). 4. A.R.S. § 20-295(A)(6) provides that the Department’s Director may deny an applicant’s request for a license when the applicant has “been convicted of a felony.” The uncontroverted evidence established that Ms. Lopez Maldonado was convicted of Criminal Impersonation, a class 6 felony, in 2010. Thus, the Department’s Director has the authority to deny her request for a license. 5. A.R.S. § 20-295(A)(8) provides that the Department’s Director may deny an applicant’s request for a license when the applicant has “[used] fraudulent, coercive or dishonest practices, or demonstrat[ed] incompetence, untrustworthiness or financial irresponsibility in the conduct of business in this state or elsewhere.” Ms. Lopez Maldonado’s use of a false social security number when applying for employment in 1999 falls within the definition of fraudulent or dishonest practices. Thus, the Department’s Director has the authority to deny her request for a license. 6. Notably, Ms. Lopez Maldonado’s act of using a false social security number to secure employment occurred in 1999 even though her conviction did not occur until 2010. While the Department cited the recentness of Ms. Lopez Maldonado’s conviction as a cause of concern, her illegal conduct occurred years before that conviction. During the intervening 11 years, Ms. Lopez Maldonado rose through the ranks at McDonald’s to become a general manager and in that position she had access to thousands of dollars and countless employees’ personal information, including social security numbers. Ms. Lopez Maldonado has also had access to the deposits and checks for her church for many years. As an owner of a cleaning company, Ms. Lopez Maldonado had access to people’s homes. In her current employment, Ms. Lopez Maldonado was given passwords, passcodes, and alarm codes for her employers. Despite this access to personal information and financial accounts in each of these positions, Ms. Lopez Maldonado had no reported incidences of improper conduct. Further, numerous character witnesses testified that Ms. Lopez Maldonado was honest and trustworthy. 7. The plain language of the statute in question provides that the Director of the Department may deny Ms. Lopez Maldonado’s application based on the felony conviction and prior dishonest conduct but does not require a denial. Such a decision to deny is within the discretion of the Director. 8. While the Department’s Director has grounds to deny Ms. Lopez Maldonado’s application, Ms. Lopez Maldonado has met the burden to show that her application should be granted. ORDER IT IS ORDERED that Arely Betzabe Lopez Maldonado’s appeal be granted. 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 days after the date of that certification. Done this day, March 7, 2016.

/s/ Tammy L. Eigenheer Administrative Law Judge

Transmitted electronically to:

Leslie R. Hess, Financial Affairs Legal Analyst Arizona Department of Insurance -----------------------

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