FINACT18F-2018.141-ACY.pdf

18F-2018.141-ACY · State Board of Accountancy · 2018-08-02

BEFORE THE ARIZONA STATE BOARD OF ACCOUNTANCY In the Matter of Certified Public OAH Docket No. 18F-2018.141-ACY Accountant Certificate No. 16285-E ASBA File No. 2018.141 Issued to: KARTER P. KLUMPYAN DECISION AND ORDER Respondent.

On July 30, 2018, this matter came before the Arizona State Board of Accountancy (“Board”) for consideration of Administrative Law Judge (“ALJ”) Jenna Clark’s proposed Findings of Fact, Conclusions of Law and Recommended Order (“ALJ’s Decision”). Neither Karter P. Klumpyan (“Respondent”) nor an attorney on his behalf

appeared. Assistant Attorney General Scott Donald appeared on behalf of the State. The Board received independent legal advice from Assistant Attorney General Seth Hargraves. The Board, having considered the ALJ’s Decision and the entire record in this

matter, hereby issues the following Findings of Fact, Conclusions of Law and Order (“Decision and Order”). FINDINGS OF FACT

The Findings of Fact as set forth in the ALJ’s Decision are adopted in their

entirety and incorporated herein. CONCLUSIONS OF LAW The Conclusions of Law as set forth in the ALJ’s Decision are adopted in their

entirety and incorporated herein. // // A true and correct copy of the ALJ’s Decision is attached and certain parts of it are incorporated here as set forth above. ORDER Based on the foregoing, the Board ORDERS that Respondent Certified Public Accountant Certificate No. 16285-E be REVOKED. IT IS FURTHER ORDERED that Respondent shall be required to reimburse the Board $29.36 within thirty (30) days of the effective date of this Decision and Order. This amount reflects the costs and attorney’s fees the Board incurred in prosecuting this matter.2 NOTICE OF APPEAL RIGHTS Respondent is hereby notified that they have the right to move for a rehearing or review by filing a motion with the Board’s Executive Director within thirty (30) days after service of this Decision and Order. A.R.S. § 41-1092.09. The motion must set forth legally sufficient reasons for granting a rehearing. A.A.C. R4-1-114(C). Service of this Decision and Order is effective on the date of personal service or five (5) days after the date of mailing. If a motion for rehearing is not filed, the Board’s Decision and Order becomes effective thirty (30) days after it is mailed to Respondent. Respondent is further notified that the filing of a motion for rehearing is required

to preserve any rights of appeal to the Superior Court. DATED this 31st day of July, 2018. ARIZONA STATE BOARD OF ACCOUNTANCY By: ___________________________________ Julie S. Klewer, CPA, Board President The Board voted to modify the ALJ’s Decision to include a requirement that Respondent pay reimbursement within thirty (30) days. Original of the foregoing Decision and Order (and attachment) st filed this 31 day of July, 2018 with: Monica L. Petersen Executive Director Arizona State Board of Accountancy th 100 N. 15 Avenue, Suite 165 Phoenix, AZ 85007 Copy of the foregoing st Decision and Order (and attachment) e-filed this 31 day of July, 2018 with: Greg Hanchett, Director Arizona Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, AZ 85007 Copy of the foregoing Decision and Order (and attachment) mailed via U.S. First Class Mail and Certified Mail #[account number redacted] 0289 this 31st day of July, 2018, to: Karter Klumpyan 224 Upland Circle Corte Madera, CA 94925 Copy of the foregoing Decision and Order (and attachment) emailed this 31st day of July, 2018 to: Scott Donald Assistant Attorney General 2005 N. Central Avenue Phoenix, Arizona 85004 Seth Hargraves Assistant Attorney General Independent Advisor 2005 N. Central Avenue Phoenix, Arizona 85004 By: ___________________________________ IN THE OFFICE OF ADMINISTRATIVE HEARINGS

In the Matter of Certified Public Accountant No. 18F-2018.141-ACY Certificate No. 16285-E Issued to: KARTER P. KLUMPYAN, ADMINISTRATIVE LAW JUDGE Respondent. DECISION

HEARING: June 04, 2018 at 1:00 PM. APPEARANCES: Assistant Attorney General Scott Donald, Esq. appeared on behalf of the Arizona State Board of Accountancy (“the Board”), with Christopher Rasmussen as a witness. No appearance(s) on behalf of Karter P. Klumpyan (“Respondent”). ADMINISTRATIVE LAW JUDGE: Jenna Clark. _____________________________________________________________________ Having heard the evidence and testimony and having considered the record in this matter, the undersigned Administrative Law Judge hereby makes the following Findings of Fact and Conclusions of Law and issues the following Recommended Order to the Executive Director of the Board. FINDINGS OF FACT PROCEDURE AND BACKGROUND 1. Per the COMPLAINT AND NOTICE OF HEARING, the Board referred this matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing on June 04, 2018, to determine whether the Board has good cause to take disciplinary action against Certificate No. 16285-E issued to Respondent. 2. Respondent did not request an informal Settlement Conference in this matter. 3. On March 26, 2018, the Board voted to proceed to an administrative hearing for revocation of Respondent’s certificate for failure to respond to their January 10, 2018, as required by ARIZ. REV. CODE R4-1-455.03(D). 4. At the hearing, the Board submitted two exhibits and presented the testimony of Mr. Rasmussen, Assistant Director of Regulation and Compliance. 5. Although the start of the duly noticed hearing was briefly delayed allow Respondent additional travel time, he did not appear, personally or through an attorney, and did not contact the Office of Administrative Hearings to request that the start of the Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826 hearing be further delayed. No request to continue was submitted on Respondent’s behalf, nor was a request to appear telephonically. Consequently, Respondent did not present any evidence to defend his Certified Public Accountant Certificate. HEARING EVIDENCE 6. The Board drafted and mailed Respondent a letter via Certified Mail on January 10, 2018, putting him on notice that he had been selected to participate in continuing professional education (“CPE”) audit by the Board’s CPE Advisory Committee.1 7. The letter explicitly puts Respondent on notice that he could face disciplinary action for failing to provide timely proof of CPE requirements.2 8. Although the letter advised Respondent that he was required to respond by February 10, 2018, no response was ever received by the Board.3 9. At the hearing, Mr. Rasmussen testified that registrants, such as Respondent, are required to provide current contact information, including their address of record, to the Board in their registration renewal. Registrants are also permitted to submit a change of address form to the Board. 10. Mr. Donald argued that Respondent’s certificate be revoked, as the evidence established that Respondent willfully refused to be regulated or disciplined by the Board. 11. Mr. Donald also requested that Respondent be required to reimburse the Board for the cost of litigating this matter, including attorney’s fees. CONCLUSIONS OF LAW 1. The COMPLAINT AND NOTICE OF HEARING the Board mailed to Respondent at his addresses of record was reasonable, and Respondent is deemed to have received it.4

See Board Exhibits A and B. 2 See Board Exhibit A. See Board Exhibits A and B. The United States Postal Service marked the January 10, 2018, letter as “unclaimed” and “unable to forward,” and returned it to the Board on February 05, 2018. The Board received it on February 09, 2018. See ARIZ. REV. STAT. § 41-1092.04. 2. The Board has personal and subject matter jurisdiction over Respondent pursuant to ARIZ. REV. STAT § 32-701 et seq. and ARIZ. ADMIN. CODE R4-1-101 et seq. 3. The Board has the authority to discipline Respondent pursuant to ARIZ. REV. STAT. §§ 32-741(A) and 32-701(10). 4. Pursuant to ARIZ. REV. STAT. § 41-1092.07(G)(2), the Board has the burden of proof in this matter. The standard of proof is a preponderance of the evidence.5 5. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”6 A preponderance of the evidence is also, “evidence which is of greater weight or more convincing than 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.”7 6. ARIZ. REV. STAT. § 32-741(A)(5) provides: After notice and an opportunity for a hearing, the board may revoke or suspend any certificate granted under this chapter and may take disciplinary action concerning the holder of any certificate for any of the following causes: * * * * Discipline to the holder of any certificate or other authority to practice or refusal to renew the certificate or other authority to practice as a certified public accountant by any other jurisdiction or foreign country for any cause other than failure to pay license or registration fees. * * * * 7. ARIZ. ADMIN. CODE R4-1-455.03(D) provides: Communications: When requested, a certified public accountant or public accountant shall respond to communications from the Board within 30 days after the communication is mailed by registered or certified mail.

9. Respondent is deemed to have knowledge of the Board’s rules.8 10. The Board established by a preponderance of the evidence that it mailed a disciplinary action notice to Respondent’s correct address of record on January 10, 2018, and Respondent failed to respond within thirty days of mailing, which is a violation of ARIZ. ADMIN. CODE R4-1-455.03(D). See ARIZ. ADMIN. CODE R2-19-119(A). MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960). BLACK’S LAW DICTIONARY at page 1064 (6th ed. 1990). See ARIZ. ADMIN. CODE R4-1-102(A). 11. Because Respondent violated ARIZ. ADMIN. CODE R4-1-455.03(D), the Board has authority to revoke his Certified Public Accountant Certificate under ARIZ. REV. STAT. § 32-741(A)(9). 12. Because Respondent violated ARIZ. ADMIN. CODE R4-1-455.03(D), the Board has authority to require reimbursement of the Board's costs of investigations and proceedings, including attorney fees, under ARIZ. REV. STAT. § 32- 701(10)(g).9 RECOMMENDED ORDER Based on the foregoing facts and conclusions of law, IT IS RECOMMENDED that on the effective date of the Board’s final order, the Board revoke Certified Public Accountant Certificate No. 16285-E issued to Respondent Karter P. Klumpyan. IT IS FURTHER RECOMMENDED that on the effective date of the final order, Respondent shall be required to pay the Board’s costs and attorney’s fees incurred in prosecuting the two violations in this matter pursuant to ARIZ. REV. STAT. § 32-701(10)(g). 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 from the date of that certification. Done this day, June 08, 2018

/s/ Jenna Clark Administrative Law Judge

Transmitted electronically to:

Monica L. Petersen, Executive Director Arizona State Board of Accountancy

ARIZ. REV. STAT. § 32-701(10)(g) defines “disciplinary action” to include “[r]eimbursement of the board's costs of investigations and proceedings initiated under this chapter, including attorney fees.”