ALJDEC decisions subject to certification as final

25F-T036-LAN · State Land Department · 2025-12-02

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

In the Matter of:

IN THEMATTER OF APPEAL OF COMMISSIONER ORDER 032-2025/2026 CANCELLATION OF LEASE FOR FAILURE TO CURE DEFAULT FOR COMMERCIAL LEASE NO.03-117441-00,

LESSEE: CUTTER GRIND BROADCASTING LLC,

Appellant.

No. 25F-T036-LAN

ADMINISTRATIVE LAW

JUDGE DECISION

HEARING: August 1, 2024.

APPEARANCES: Charles Helstein appeared for Respondent. Assistant Attorney General Sarah Hicks appeared for the Arizona State Land Department.

ADMINISTRATIVE LAW JUDGE: Samuel Fox

EXHIBITS ADMITTED INTO EVIDENCE: Department Exhibits A through G.

_____________________________________________________________________

FINDINGS OF FACT

Lease Number 03-117441-00 (Lease) was issued by the Arizona State Land Department (the Department) to Tabback Broadcasting Co. on or about June 14, 2024. Article 11 of that lease set forth specific insurance and indemnification requirements, relevantly the policy must specify the lease number, the location description, have been endorsed with a statement adding insureds to the policy, and include a waiver of subrogation against the State of Arizona. Article 17 sets forth, “Breach of any one of these conditions by Lessee or any sublessee shall be sufficient grounds for cancellation.”

On July 26, 2024, Lease was assigned to Cutter Grind Broadcasting, LLC (Appellant). Shortly thereafter, the Department communicated with Appellant about the insurance requirements under the Lease.

On March 19, 2025, the Department formally notified Appellant that Lease was in default because “[Appellant] has failed to provide [the Department] with a current Commercial General Liability Certificate of Insurance including endorsement forms pursuant to the Lease’s requirements outlined in . . . [Lease] Paragraph 11.2.A(1) . . . and Paragraph 11.2.A(2).” It also notified Appellant about its right to cure the default pursuant to A.R.S. § 37-289, which provided Appellant forty-five days.

Between March 2025 and September 2025, Appellant and the Department were in regular communication. The Department also attempted to help Appellant with its insurance company.

On September 5, 2025, nearly six months after the notice of default, the Department issued an Order for Lease Cancellation for Failure to Cure Default.

Appellant appealed the cancellation on September 29, 2025.

The Department’s witness testified in support of the cancellation. She testified that Appellant was not in compliance with the insurance policy requirements, and Appellant was required to comply.

Appellant’s witness testified that the insurance company did not offer what the Department required, and he testified that he had spent a significant amount of time working with the insurance company and the Department to come into compliance. He testified about the radio station’s role in society, specifically benefit underserved communities.

CONCLUSIONS OF LAW

The Director has jurisdiction over this matter, and the matter was properly brought before the Office of Administrative Hearings.

The burden of persuasion is by a preponderance of the evidence. A.C.C. R2-19-119(A). “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”

The issue for hearing was a matter of lease cancellation under the contract and pursuant to A.R.S. § 37-289. Appellant’s lease required it maintain sufficient insurance, and it was undisputed that it did not. The Department complied with the cancellation requirements.

Appellant argued that its insurance company would not allow the changes that the Department required, making the Department’s requirements an impossibility and excusing Appellant’s inability to cure the default. That argument was not compelling. If an insurance company cannot meet the Department’s requirements, it may not be the right insurance company for the lessee’s policy. The lessee’s obligations under a lease are not excused under those circumstances.

Appellant was provided the required opportunity to cure the default, and it did not do so. Therefore, Appellant did not demonstrate by a preponderance of the evidence that the cancellation was inappropriate.

RECOMMENDED ORDER

IT IS RECOMMENDED that Appellant’s appeal be denied and Lease Number 30-117441-00 be cancelled.

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, December 2, 2025.

/s/ Samuel Fox

Administrative Law Judge

Transmitted by either mail, e-mail, or facsimile to:

Robyn Sahid, State Land Commissioner

State Land Department

CHARLES HELSTEIN

CUTTER GRIND BROADCASTING LLC

[email redacted]

Sarah K. Hicks

[email redacted]

David Jacobs

Land & Natural Resources Section

[email redacted]

By: OAH Staff