ALJDEC

99A-194-INS · Department of Insurance · 1999-11-10

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

On November 10, 1999, a hearing was held on the Petitioner’s appeal of the Department’s denial of the Petitioner’s application for a life and disability insurance agent’s license. Assistant Attorney General Shelby Cuevas appeared on behalf of the Arizona Department of Insurance (the “Department”). Sheldon Neil Gossling (the “Petitioner”) appeared on his own behalf. Evidence and testimony were presented. Based upon a review of the entire record, the following Findings of Fact, Conclusions of Law and Recommended Decision are made.

FINDINGS OF FACT

1. On or about January 24, 1994, the Department’s Director (the “Director”) issued an Order (the “1994 Order”) in the case, In the Matter of Sheldon Neil Gossling, Docket No. 8157. See Department’s Exhibit 5, pages 5-6. In this Order, the Director found the existence of a misrepresentation or fraud by the Petitioner in obtaining or attempting to obtain an insurance license when the Petitioner attempted to conceal that a non-resident license application in the State of Washington had previously been denied. Id. The Director ordered that the Petitioner’s Arizona resident license be suspended for 90 days and that the Petitioner pay a civil penalty of $500.00. Id.

2. On April 6, 1994, the State of Washington Insurance Commissioner (the “Insurance Commissioner”) issued an Order of Revocation (the “Washington Order”) against the

Petitioner. See Department’s Exhibit 3. The Insurance Commissioner found that the Petitioner demonstrated himself to be untrustworthy and a source of injury and loss to the public. See Department’s Exhibit 3. The Insurance Commissioner further found that the Petitioner was not qualified to be licensed as an insurance agent. Id. The Washington Order resulted from two incidents that occurred between 1988 and 1990 involving separate clients (i.e., Robert and Beverly Wagner and Ms. Verna MacQuarrie). Id.

3. On August 9, 1994, the Department issued a Notice of Hearing in the case, In the Matter of Sheldon Neil Gossling, Docket No. 8501. See Department’s Exhibit 4. On February 15, 1995, the Department’s Director issued an Order (the “1995 Order”) revoking the Petitioner’s life and disability insurance agent’s license. See Department’s Exhibit 5. The Director’s 1995 Order was based on the above referenced Washington Order and the Director’s 1994 Order. Id. at page 6.

4. On January 2, 1996, the Maricopa County Superior Court affirmed the Director’s 1995 Order in Sheldon Neil Gossling v. State of Arizona, Case No. CV95-06847. See Department’s Exhibit 6.

5. On July 3, 1997, the Petitioner filed an application for a life and disability insurance agent’s license with the Department. See Department’s Exhibit 7. In this application, the Petitioner disclosed his previous revocations and suspensions regarding his insurance licenses held in Arizona and Washington. Id.

6. On August 6, 1997, the Department denied the Petitioner’s 1997 application. See Department’s Exhibit 8. On August 15, 1997, the Petitioner requested a hearing. See Department’s Exhibit 9. The administrative hearing was held on October 15, 1997. On November 10, 1997, the Director issued an Order (the “1997 Order”) denying the Petitioner’s 1997 application. See Department’s Exhibit 10.

7. On August 18, 1999, the Petitioner filed an application (the “Application”) for a life and disability insurance agent’s license with the Department. See Department’s Exhibit 1. In this Application, the Petitioner disclosed his previous revocations and suspensions regarding his insurance licenses held in Arizona and Washington. Id.

8. On September 1, 1999, the Department denied the Petitioner’s Application. See Department’s Exhibit 11. On September 13, 1999, the Department received the Petitioner’s request for a hearing. See Department’s Exhibit 12.

9. At the hearing in this matter, the Petitioner conceded that he had made mistakes in the past. The Petitioner testified that he now accepts full responsibility for his actions resulting in the Washington Order and the Director’s 1995 Order revoking his insurance licenses. The Petitioner testified that he cannot reverse what has already occurred. However, the Petitioner testified that he has helped one of his former clients (Verna MacQuarrie) who was injured by the Petitioner’s actions in 1988 resulting in the Washington Order. The Petitioner testified that over the years he has personally paid the life insurance premiums (totaling $10,000.00) for Verna MacQuarrie. The Petitioner testified that he has not been able to contact the other injured client (i.e., the Wagners) who was injured by his actions in 1990.

10. The Petitioner worked at Marine Minerals from June 1995 to June 1996. He returned to Marine Minerals from June 1997 to June 1998. Marine Minerals sells herbal and mineral supplements. The Petitioner was involved in promoting and developing this company. In January of 1997, the Petitioner started his own company called Micro Mineral Nutrients Inc. This company is involved in the sale of natural antibiotics to dairy farmers in 21 states. The Petitioner testified that this company has over $100,000.00 in sales per year. The record shows no evidence that the Petitioner has ever had a complaint regarding his handling of this company’s revenues.

11. The Petitioner has also worked for Collector’s Gallery from June 1996 to June 1997. He is still in the business of collecting and selling art. The Petitioner testified that he personally receives and distributes $50,000.00 to $100,000.00 in art proceeds per year. The record shows no evidence that the Petitioner has ever had a complaint regarding his handling of these proceeds.

12. The Petitioner is currently employed as a loan officer with Express One Mortgage. He has worked at Express One Mortgage since June of 1998. The Petitioner handles new home, construction and refinancing loans. In his capacity as a loan officer, the Petitioner has access to extremely sensitive and confidential financial information. The Petitioner testified that he has received no complaints since becoming a loan officer.

13. The Petitioner is the father of five children. Two of his children are in college. The Petitioner was a scoutmaster for five years. He is involved in his children’s music and sporting events. He volunteers for school fundraising and chaperoning. The Petitioner is also active in community service through his church. The Petitioner testified that he helps to take care of the homes for single, abused mothers. The Petitioner is also active with his church’s youth group in cleaning up the environment.

14. The Petitioner testified that he has done everything possible in the past four years to be an upstanding citizen. The Petitioner testified that he has overcome his mistakes that resulted in the Washington Order and the Director’s 1995 Order (that revoked his insurance agent’s licenses). The Petitioner testified that he has no criminal record.

15. The Petitioner submitted approximately 57 reference letters regarding his character and professionalism. See Petitioner’s Exhibit A. However, the vast majority of these reference letters are form letters that were prepared by the Petitioner and submitted to various individuals for their signatures. Accordingly, the undersigned Administrative Law Judge can give very little weight to these letters because (1) these letters are not notarized; (2) these individuals did not appear in person to be cross- examined; and (3) there is no indication in these letters that the signers were aware of the Petitioner’s past behavior in the insurance industry.

CONCLUSIONS OF LAW

1. The Petitioner has the burden of proof, and the standard of proof on all issues is by a preponderance of the evidence. Culpepper v. State, 187 Ariz. 431, 930 P.2d 508 (App. 1996). A "preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not." Morris K. Udall, Arizona Law of Evidence, §5 (1960). It "is evidence which is of greater weight or more convincing than the 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." Black's Law Dictionary, 1182 (6th ed. 1990).

2. The undersigned Administrative Law Judge concludes that (1) the Director’s 1994 Order suspending the Petitioner’s Arizona license, (2) the Insurance Commissioner’s Washington Order revoking the Petitioner’s Washington license, and (3) the Director’s 1995 Order revoking the Petitioner’s Arizona license represent a “record of dishonesty on the part of the [Petitioner] in business or financial matters” within the meaning of A.R.S. §20-290(B)(2).

3. The undersigned Administrative Law Judge concludes that (1) the Insurance Commissioner’s Washington Order revoking the Petitioner’s Washington license, and (2) the Director’s 1995 Order revoking the Petitioner’s Arizona license represent a “record of conduct under an insurance license issued in this state or elsewhere showing the [Petitioner] to be incompetent or a source of injury and loss to, or repeated complaints by, the public or any insurer” within the meaning of A.R.S. §20-290(B)(4).

4. The undersigned Administrative Law Judge concludes that (1) the Director’s 1994 Order suspending the Petitioner’s Arizona license; (2) the Insurance Commissioner’s Washington Order revoking the Petitioner’s Washington license, and (3) the Director’s 1995 Order revoking the Petitioner’s Arizona license represent a “record of suspension or revocation of an insurance license in any jurisdiction” within the meaning of A.R.S. §20-290(B)(5).

5. The undersigned Administrative Law Judge concludes that grounds exist to deny the Petitioner’s 1999 Application pursuant to A.R.S. §20-290(B)(2), (B)(4), and (B)(5). However, for the following reasons, the undersigned Administrative Law Judge further concludes that the Petitioner has met his burden of showing that he is qualified to hold a life and disability insurance agent’s license: a. It has been almost ten years since the two incidents that resulted in the Washington Order and the Director’s 1995 Order revoking the Petitioner’s insurance licenses; b. It has been over five years since the issuance of the Washington Order; c. It has been almost five years since the issuance of the Director’s 1995 Order; d. The Petitioner has been active in community service over the years; e. The Petitioner has been a successful businessman during the past four years and apparently has received no complaints during that time period; f. The Petitioner has been entrusted with large sums of money during the past four years and apparently has received no complaints during that period of time; g. As a loan officer, the Petitioner has had access to confidential financial information and apparently has received no complaints from customers; h. The Petitioner has no criminal history; i. The Petitioner’s testimony acknowledging his past misconduct (and that he has learned from his previous mistakes) seemed credible; and j. The Petitioner has voluntarily attempted (at great expense) to rectify the incident concerning Ms. MacQuarrie.

RECOMMENDED DECISION

This was a difficult case. However, based upon the foregoing, the undersigned Administrative Law Judge recommends that the Department’s denial of the Petitioner’s 1999 Application be reversed. The Petitioner meets the qualifications for holding a life and disability insurance agent’s license.

Done this day, November 17, 1999.

______________________________________ Casey J. Newcomb Administrative Law Judge

Original transmitted by mail this ____ day of November, 1999, to:

Mr. Charles R. Cohen Department of Insurance ATTN: Curvey Burton 2910 North 44th Street, Ste. 210 Phoenix, AZ 85018

By ___________________________

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Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826