ALJDEC decisions subject to certification as final

21A-043-INS · Department of Insurance and Financial Institutions - Insurance · 2021-08-13

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

In the Matter of:

LUCINDA ELLIOTT

No. 21A-043-INS

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: July 30, 2021

APPEARANCES: Petitioner Lucinda Elliott appeared on behalf of herself. Assistant Attorney General James Rolstead appeared on behalf of the Arizona Department of Insurance and Financial Institutions.

ADMINISTRATIVE LAW JUDGE: Velva Moses-Thompson

_____________________________________________________________________

Petitioner Lucinda Elliott (Ms. Elliott) appealed the denial of her Insurance License Application with the Arizona Department of Insurance and Financial Institutions (the Department). Based on the evidence of record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law and Order:

FINDINGS OF FACT

In April of 2012, in the Circuit Court of the Tenth Judicial Circuit of Illinois, Ms. Elliott pleaded guilty to and was convicted of Theft, a Class 2 felony. See Exhibit 6. The court imposed a sentence of 180 days in jail and 36 months of probation. See id.

Ms. Elliott’s probation terminated in April of 2015. See Exhibit 7.

3. On or about April 30, 2021, Ms. Elliott filed an application for a Temporary Insurance Producer’s License (the Application) with the Department with lines of authority in property and casualty insurance. See Exhibit 1.

4. Ms. Elliott responded “Yes” to the following questions on the Application:

1A. 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:

1. A felony (of an kind)?

4. Withholding, misappropriating, converting or stealing money or property?

6. Using fraudulent, coercive or dishonest business practices including forgery with intent to defraud?

7. Conducting business in an incompetent, untrustworthy o financially irresponsible manner? convicted of a misdemeanor, had a judgment withheld or deferred, or are you currently charged with committing a misdemeanor?

5. Ms. Elliott further disclosed in the Application that on multiple occasions, she failed to deposit money from clients in a client trust account while working for a law firm. See Exhibits 1 and 2.

6. On May 12, 2021, the Department notified Ms. Elliott that the Application was denied pursuant to Arizona Revised Statutes (A.R.S.) sections 20-295(A)(6) and (A)(8).

7. Ms. Elliott requested a hearing regarding the denial.

8. On June 22, 2021, the Department issued a Notice of Hearing setting the matter for hearing on July 30, 2021 at 1:00 p.m. The Notice of Hearing provided that the purpose of the hearing was to determine “whether grounds exist to affirm the Department’s intent to deny Petitioner’s application for an Arizona Insurance license.”

9. A hearing was held on July 30, 2021. The Department presented the testimony of its Licensing Supervisor, Aqueelah Curry and submitted exhibits 1 through 9. Ms. Elliott testified on behalf of herself and submitted exhibit A.

10. At hearing, Ms. Elliott contended that the Application should be approved because she knows that her actions were irresponsible. Ms. Elliott stated that her past mistakes were well outside of her character.

11. Ms. Elliott asserted that she has taken responsibility for her past mistakes. Ms. Elliott explained that she served 90 days in jail and 3 years on probation without any violation or incident. Ms. Elliot stated that she worked several jobs to pay off the $11,000 restitution plus penalties as required. Ms. Elliott explained that she has been upfront with potential employers regarding her felony.

12. Ms. Elliot stated that she lost her home, her car, and temporary custody of her children for a short period of time due to her past mistake. Ms. Elliott stated that she assisted in the prosecution of her case.

13. On cross-examination, Ms. Elliott admitted that she benefitted financially from her crimes.

13. Ms. Elliott explained that she has been responsible for inventory at a dealership and for customers’ payments without any problems. Ms. Elliott explained that Edmund Marquez, the Agency Principal for Edmund Allstate Agencies in Tucson, AZ has agreed to regulate, train, and manage Ms. Elliott’s work as an insurance agent. In support of her case, Ms. Marquez submitted a letter from Mr. Marquez. See Exhibit A. Mr. Marquez stated that he believes that Ms. Elliott has learned from her past mistakes and would not be a threat to the public. See id.

14. Ms. Elliott contended that the Director’s authority to deny the Application under A.R.S. § 20-295(A) is not mandatory. Ms. Elliott stated that the felony occurred 12 years ago and does not reflect on her character nor her ability to perform as an insurance license producer.

15. The Department argued that the denial was appropriate because

Ms. Elliott committed acts of theft in connection with her employment. The Department asserted that Ms. Elliott is a risk to the public even if she is rehabilitated. The Department asserted that Ms. Elliott cannot work as a licensed agent under

Mr. Marquez’s monitoring because the Department does not issue provisional licenses.

CONCLUSIONS OF LAW

1. This matter lies within the Department’s jurisdiction.

2. The Notice of Hearing that the Department mailed to Respondent at her

address of record was reasonable, and Respondent is deemed to have received notice of the hearing.

3. This matter is a disciplinary proceeding wherein the Department must prove by a preponderance of the evidence that Respondent violated the State’s Insurance Laws.

4. Once good character is shown to be absent, it is not automatically regained by the mere passage of time. The legislature established the Department to protect consumers. It is undisputed that Petitioner stole clients’ funds for her own benefit while in a position of trust. Based on the evidence presented at hearing, the Administrative Law Judge concludes that the Department’s denial was appropriate due to the nature and severity of the crime.

5. Grounds exist for the Director of the Department deny the Application License pursuant to A.R.S. § 20-295(A)(6) and (A)(8).

ORDER

Based upon the above, the Department’s denial of Petitioner Lucinda Elliott’s application for a Temporary Insurance License is affirmed.

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, July 30, 2021.

/s/ Velva Moses-Thompson

Administrative Law Judge

Transmitted electronically to:

Evan G. Daniels,

Department of Insurance and Financial Institutions - Insurance