ALJDEC - Licensing

24A-032-FIN · Department of Insurance and Financial Institutions - Financial · 2024-10-17

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

In the Matter of:

Donald Francis Smith, Petitioner

No. 24A-032-FIN

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: September 27, 2024

APPEARANCES: Donald Francis Smith represented himself. Assistant Attorney Zachary Smith represented the Arizona Department of Insurance and Financial Institutions.

ADMINISTRATIVE LAW JUDGE: Kay A. Abramsohn

EXHIBITS ADMITTED INTO EVIDENCE: Department Exhibits 1 through 8; Petitioner’s Exhibits 1 and 2.

_____________________________________________________________________

FINDINGS OF FACT

The Arizona Department of Insurance and Financial Institutions (Department) has jurisdiction over licensure and regulation of real estate appraisers in Arizona by issuing licenses, investigating complaints, and disciplining licensees pursuant to Ariz. Rev. Stat. §§ 6-121 and 32-3601et seq.

Under Ariz. Rev. Stat. § 32-3620(A), the Department may deny initial licensure or renewal of a license of a license or certificate as a registered trainee appraiser, a supervisory appraiser or a state-licensed or state-certified appraiser to any applicant who has been convicted of a felony, or on any of the grounds prescribed in Title 32, Chapter 36.

The matter was properly brought before the Office of Administrative Hearings pursuant to Ariz. Rev. Stat. §§ 6-138, 32-3632 and 41-1092 et seq.

On June 4, 2024, Donald Francis Smith (Petitioner) filed an application (Application) with the Department for a Trainee Appraiser License.

Petitioner disclosed in the Application that he had prior convictions in the State of Arizona: (1) Upon pleading guilty, on April 18, 2003, he had been convicted of Theft, a Class 3 Felony, in Case #CR2002-019588 in Maricopa County Superior Court; and (2) Upon pleading guilty, on April 18, 2003, he had been convicted on two counts of Attempted Fraudulent Use of a Credit Card, a Class 6 Felony, in Case #CR2003-007390-002 in Maricopa County Superior Court. Petitioner also provided a letter of explanation.

Petitioner subsequently provided additional specific documentation regarding the convictions.

On July 25, 2024, the Department notified Petitioner that, based on the information he had supplied regarding the convictions, the Application was denied pursuant to Ariz. Rev. Stat. § 32-3620(A). The Department also informed Petitioner that he had the right to an appeal of the determination.

The matter was referred to the Arizona Office of Administrative Hearings, an independent state agency, for an evidentiary hearing.

On August 21, 2024, the Department issued a Notice of Hearing (Notice) setting the matter for hearing and provided that the issue set for determination was the denial of the Application. The Notice provided, in relevant part, as follows:

The purpose of the Hearing is to determine whether grounds exist to affirm the denial of Petitioner’s application for an Arizona Trainee Appraiser license.

At hearing, Petitioner testified on his own behalf and submitted two Maricopa County Superior Court records, from February of 2012, each setting aside one of the two convictions.

The Department presented the testimony of Jessica Sapio, Appraisal Licensing Coordinator and submitted Exhibits 1 through 8.

Ms. Sapio testified that the Department reviewed the court documents and determined that the nature of the felonies had bearing with regard to concerns the Department would have with regard to a trainee likely dealing with a client’s financial information.

At hearing, Petitioner acknowledged responsibility and was remorseful about his past actions and the convictions, testifying credibly that these isolated incidents were far in the past. Petitioner testified credibly regarding his life changes and his work experience over the last 20 years, during which time he has had no offenses of any kind.

Petitioner obtained an Associate Degree in technology and worked in that field for 12 years as an IT person. Petitioner worked for the Scottsdale Unified School District for 2 years. Petitioner has worked for a mortgage company for nearly 9 years, at a help desk, as a data analyst and then, most recently, with the appraisers. Petitioner indicated he has been through multiple background checks and had not needed to be bonded or insured in those jobs, despite his background.

In June 2024, Petitioner completed the requisite 150 hours of training. Petitioner noted that he knows multiple appraisers with whom he could work to have their supervision for the work to obtain a license. Petitioner requested that he be given the opportunity to become a trainee appraiser.

The Department argued that the Department was justified in making the denial determination pursuant to Arizona statute and requested that the Tribunal affirm the denial determination.

Arizona law does not provide any time frame parameters for purposes of not considering prior convictions.

CONCLUSIONS OF LAW

Petitioner has the burden of proof to establish by a preponderance of the evidence that he should be granted a trainee appraiser license; Petitioner bears the burden of proof to establish, essentially, that he is rehabilitated and qualified to receive a trainee appraiser license. The standard of proof on all issues in this matter is that of a preponderance of the evidence.

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).

Ariz. Rev. Stat. § 32-3611provides, in pertinent part as follows:

C. At the time of filing an application for registration, licensure or certification, each applicant shall sign a pledge to comply with the standards set forth in this chapter and shall state that the applicant understands the types of misconduct for which disciplinary proceedings may be initiated against a registered trainee appraiser or a state-licensed or state-certified appraiser, as set forth in this chapter.

D. Except as otherwise provided in this chapter, the deputy director shall require such other proof and request such documents, through the application or otherwise, as the deputy director deems necessary for the interests of the public and to verify the honesty, truthfulness, reputation and competency of the applicant and shall require that the applicant for registration, licensure or certification: ..........

4. State whether or not the applicant has ever been convicted in a court of competent jurisdiction in this or any other state of a felony or of forgery, theft, extortion or conspiracy to defraud or any other crime involving dishonesty or moral turpitude.

It is undisputed that Petitioner had previously been convicted of Theft and Attempted Fraudulent Use of a Credit Card. Petitioner disclosed his past convictions on his Application. The Department’s concern is that of protection of the public and any possible future issues with Petitioner dealing with a client’s financial information.

In this case, through his work experience and having technology expertise, Petitioner has had access to family and consumers’ financial and/or confidential information at a school district and at a mortgage company. Petitioner has credibly testified that, in his 20+ years of work history, he has had no offenses of any kind; he had been background checked and never been required by his employers to be bonded or insured against possible issues. By law, an Applicant for this license is required to disclose any convictions involving dishonesty and, on his Application, Petitioner did disclose such. By law, an applicant is required to sign a pledge to comply with the standards set forth in this chapter and shall state that the applicant understands the types of misconduct for which disciplinary proceedings may be initiated against a registered trainee appraiser. Petitioner did so.

The Department has discretion in these licensure matters.

Based on the hearing record, the Administrative Law Judge concludes that Petitioner met the burden of proving by a preponderance of the evidence that he should be granted a trainee appraiser license and that the Department’s denial of the Application should be reversed.

RECOMMENDED ORDER

IT IS RECOMMENDED that the Department’s July 25, 2024, denial of Petitioner’s Application be reversed.

Pursuant to A.R.S. § 41-1092.08(I), the licensee may accept the Administrative Law Judge Decision by advising the Office of Administrative Hearings in writing not more than ten (10) days after receiving the decision. If the licensee accepts the Administrative Law Judge Decision, the decision shall be certified as the final decision by the Office of Administrative Hearings.

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 forty (40) days from the date of that certification.

Done this day, October 17, 2024.

/s/ Kay A. Abramsohn

Administrative Law Judge

Transmitted electronically to:

Barbara D. Richardson,

Department of Insurance and Financial Institutions - Financial

Donald Francis Smith

[email redacted]

Zachary Howard

Assistant Attorney General

[email redacted]

By: OAH Staff