ALJDEC decisions subject to certification as final

19A-092-INS · Department of Insurance · 2019-09-04

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 15, 2019 APPEARANCES: Petitioner Rhett Michael Underwood appeared on his own behalf. Assistant Attorney General Lynette Evans, Esq., appeared on behalf of the Arizona Department of Insurance (Department). ADMINISTRATIVE LAW JUDGE: Kay A. Abramsohn _____________________________________________________________________ FINDINGS OF FACT 1. On June 6, 2019, Petitioner submitted an online application (Application) for an Individual Producer License with a line of authority in life insurance.[1] 2. Petitioner answered “Yes” to Question #1A in the Background Questions section of the application, which reads as follows:

1a) Have you ever been convicted of a misdemeanor, had a judgement withheld or deferred, or are you currently charged with committing a misdemeanor?

3. On July 06, 2016, the Superior Court of Arizona (Court) in Yavapai County convicted Petitioner of Attempted Misconduct Involving Simulated Explosive Device, a Class 6 Undesignated Felony, and Obstructing Governmental Operations, a Class 2 Misdemeanor.[2] Petitioner pled guilty to the charges at that time.[3] Petitioner was placed on supervised probation for three years.[4] 4. On March 18, 2019, the Court terminated Petitioner’s probation and ordered that the Class 6 Undesignated Felony for Attempted Misconduct Involving Simulated Explosive Device be re-designated as a Class 1 misdemeanor.[5] 5. By letter dated July 27, 2019, the Department notified Petitioner that his Application for licensure had been denied.[6] 6. After the Department received an appeal from Petitioner regarding the denial,[7] the Department referred the matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing to determine whether grounds exist to deny Petitioner an Insurance Producer’s License. 7. At the hearing, Ms. Currie testified regarding her review of the Application and related documents. Petitioner did not dispute any of the available records or evidence.[8] 8. Petitioner argued that, now that his sentence is over, and noting that he was released from probation early, he wants to begin to work with his wife in her insurance business. Petitioner has worked for 2 years for a security company that installs home automation and security systems.[9] Petitioner argued that he had never harmed anyone out of anger or frustration and that, due to his faith and upbringing, he had always preached honor and integrity. Petitioner argued that the Department was likely looking at this with preconceived notions about the conviction and about him. 9. Petitioner reconnected, as friends, with his current wife, Sarah Cox, about three years ago. Ms. Cox echoed her husband’s statements regarding Petitioner not harming others, honor, and respect; she indicated that she had never heard him raise his voice to anyone. Ms. Cox indicated that Petitioner had been forthcoming with her about this past conviction. 10. The Department remains concerned regarding Petitioner’s honesty and truthfulness, given the evidence in the criminal case. The Department’s sense is that Petitioner is demonstrating that he is headed in a better direction with his life at this time, but that it is too soon after the criminal conviction to allow licensure. CONCLUSIONS OF LAW 1. This matter lies with the Department’s jurisdiction and was properly brought before OAH for adjudication.[10] 2. Petitioner bears the burden of proof to establish that he is rehabilitated and qualified to receive an insurance license.[11] The standard of proof on all issues in this matter is that of a preponderance of the evidence.[12] 3. A preponderance of the evidence is: The 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.

Black’s Law Dictionary 1373 (10th ed. 2014). 4. Ariz. Rev. Stat. § 20-285(B)(2) provides that “[b]efore the director approves the application of the individual, the director shall find that the individual has not committed any act that is a ground for denial, suspension or revocation prescribed in section 20-295.” 5. Ariz. Rev. Stat. § 20-285(E)(1) provides that “[b]efore the director grants a license, the director may require the applicant to provide any document that is reasonably necessary to verify the information that is contained in an application and other information including prior criminal records.” 6. Ariz. Rev. Stat. § 20-295(A)(6) provides, in pertinent part, that the director may deny to issue an insurance producer's license is an applicant has been convicted of a felony. 7. The hearing record demonstrates that Petitioner has a felony conviction on his record that was subsequently re-designated as a misdemeanor. It remains problematic that Petitioner did not take responsibility for the actions that resulted in his felony conviction, because the evidence available for review demonstrated his connection to the actions. 8. Based on the hearing record, the Administrative Law Judge concludes that the Department’s denial of licensure should be upheld because Petitioner has not demonstrated that the denial was inappropriate or that he should be granted licensure at this time given his criminal conviction and under the existing statutory parameters. RECOMMENDED ORDER IT IS ORDERED that the Department’s denial of Appellant’s Application be upheld and Petitioner’s appeal be denied. 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, September 4, 2019.

/s/ Kay A. Abramsohn Administrative Law Judge

Transmitted electronically to:

Keith A. Schraad, Director Arizona Department of Insurance ----------------------- [1] See Department Exhibit 1. Petitioner’s July 2018 application was denied, adopted by the Department, appealed, and rehearing denied. [2] See Department Exhibits 3 - 10. In that criminal case, the evidence documented that Petitioner’s DNA was found on the device or elements of the device. See Exhibit 9. [3] At hearing, Petitioner explained that he had pled because he had no money for a defense attorney and needing to get out of jail due to his health and jail conditions at the time; however, the record does not demonstrate whether Petitioner has ever taken personal ownership of the actions to which he pled guilty. [4] See Department Exhibit 4. [5] See Department Exhibit 11. [6] See Department Exhibit 16. [7] See Department’s Exhibit 17. [8] Petitioner had obtained a copy of his Criminal History Record and offered it into the hearing record; however, it was determined that such record would not add anything to documents already in the hearing record and his Criminal History Record was not admitted. In Closing, Petitioner opined that perhaps he should have brought forward more current scientific information regarding DNA; however, the purpose of this particular administrative hearing is as to licensure and does not provide an opportunity to attack the past conviction. [9] His employer, Gary Hounslow provided a character reference letter. See Petitioner’s Exhibit B. [10] See Ariz. Rev. Stat. §§ 20-282 and 41-1092 et seq. [11] See Ariz. Rev. Stat. § 41-1092.07(G)(1). [12] See Ariz. Admin. Code R2-19-119; see also Vazanno v. Superior Court, Ariz. 369, 372, 249 P.2d 837 (1952).

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Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826