ALJDEC

99A-228-INS · Department of Insurance · 1999-12-15

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

On December 15, 1999, a hearing was held on the Petitioner’s appeal of the Department’s denial of the Petitioner’s application for an insurance broker’s license. Assistant Attorney General Shelby L. Cuevas represented the Arizona Department of Insurance (the “Department”). James Ross Woodruff (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 November 14, 1985, the Petitioner entered into a plea agreement in which he pled guilty to Count 1, Grand Theft and Count 14, Forgery of Documents in State of California v. James Ross Woodruff, Los Angeles Couty Superior Court, Case No. A591498. See Department’s Exhibit 3. The Court accepted the Petitioner’s plea of guilty for Grand Theft and Forgery of Documents.

2. On or about January 13, 1986, the Court sentenced the Petitioner to serve a period of 180 days in the county jail, to serve a period of 5 years probation and to pay restitution in an amount to be determined by the Petitioner’s probation officer. See Department’s Exhibit 4. The probation officer’s report showed that the Petitioner owed restitution in the amount of $136,656.00. See Department’s Exhibit 6.

3. The probation officer’s report, dated December 27, 1993, shows that the Petitioner paid $23,200.00 as of October 12, 1993. See Department’s Exhibit 6. The probation officer reported the following: Since the granting of probation, the Defendant’s adjustment to probation has been favorable. He has demonstrated determination and perseverance about fulfilling the conditions of probation. The Defendant maintained a good reporting and payment record. He still remitted his monthly restitution payment commensurate with his ability to pay. Although the Defendant has not fulfilled his financial obligation in its entirety, his conduct points to the fact that he has

conscientiously and substantially complied with the terms and conditions of probation. Id.

4. On or about February 16, 1994, the Court found that the Petitioner’s probation had expired and rendered a civil judgment against the Petitioner for the balance of the restitution in the amount of $70,387.00. See Department’s Exhibit 8.

5. On August 9, 1999, the Petitioner filed an application (the “Application”) for an insurance broker’s license with the Department. See Department’s Exhibit 1. In the Application, the Petitioner disclosed that he had a record of felony convictions for theft involving the sale of automobiles and forgery of ownership certificates. Id.

6. On October 7, 1999, the Department denied the Petitioner’s Application. See Department’s Exhibit 9. On October 18, 1999, the Department received the Petitioner’s request for a hearing on the denial of his Application. See Department’s Exhibit 10.

7. At the hearing in this matter, the Petitioner admitted that he forged duplicate certificates of title (“pink slips”) to keep his automobile dealership afloat in 1985. The Petitioner testified that his dealership was undercapitalized so he forged the pink slips to receive capital. The Petitioner testified that his purpose in forging the pink slips was to keep his automobile business from collapsing. The Petitioner was arrested and charged with six counts of grand theft, seven counts of receiving stolen property and three counts of forgery. The Petitioner testified that he pled guilty to one count of grand theft and one count of forgery.

8. The Petitioner testified that he was convicted and served four or five months at a jail in a sheriff’s substation. The Petitioner testified that he was also ordered to pay restitution to the victims in his criminal case. The Petitioner testified that the victims were other car dealerships. The Petitioner testified that he paid $300.00 per month to his probation officer during his probationary term. The Petitioner testified that he continued to pay the $300.00 per month restitution amount even after the expiration of his probationary term.

9. The Petitioner testified that his probation officer ultimately told him to stop paying the $300.00 per month restitution payment. The Petitioner testified that he had the impression that his victims had already been paid in full by their insurance companies. The Petitioner testified that the $70,387.00 civil judgment entered on February 16, 1994 does not appear on his credit report. The Petitioner further testified that the victims have never filed a civil lawsuit against him for the balance of the restitution.

10. The Petitioner testified that he had a serious drinking problem prior to his arrest in 1985. The Petitioner testified that his drinking problem probably contributed to his poor judgment leading up to his arrest in 1985. The Petitioner testified that he has been a member of Alcoholics Anonymous (“AA”) since his arrest. The Petitioner testified that he has sponsored 12 other recovering alcoholics over the years. The Petitioner further testified that for a few years after his release from jail, he visited prisons to lecture convicts about the negative consequences of abusing alcohol.

11. The Petitioner worked for a film studio in California after his release from jail. The Petitioner worked at the film studio as a driver and dispatcher for approximately 10 years. The Petitioner moved to Arizona in 1996. He worked at Auto Rental Resource Center for approximately three years. Auto Rental Resource Center creates and supplies software for new rental car companies.

12. The Petitioner testified that he now has the opportunity to work for Rental Industry Services. This company is in the business of assisting rental car companies in obtaining insurance.

13. The Petitioner testified that he is a Vietnam veteran who has never broken the law except for the 1985 conviction. The Petitioner testified that he made a stupid mistake that he will never repeat again. The Petitioner testified that he believes that he meets the requirements and qualifications to hold an insurance broker’s license in Arizona.

14. No character witnesses testified on behalf of the Petitioner. Furthermore, the Petitioner presented no character reference letters on his own behalf. The Petitioner further testified that he has not had the time to perform community service.

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 the Petitioner’s 1985 felony conviction for grand theft and forgery represents 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 further concludes that the Petitioner’s 1985 felony conviction is a “record of conviction by final judgment of a felony involving moral turpitude” within the meaning of A.R.S. §20-290(B)(6).

4. The undersigned Administrative Law Judge concludes that the Petitioner has led a productive life since his 1985 felony conviction for grand theft and forgery. However, the undersigned Administrative Law Judge cannot ignore the seriousness of the Petitioner’s felonious conduct and behavior. This is not the type of case involving a youthful indiscretion. Nor is it the type of case involving behavior unrelated to the financial dealings of a business. Rather, this case involves an individual who knowingly forged documents to keep his business from financial ruin. The undersigned Administrative Law Judge concludes that grounds do exist to deny the Petitioner’s 1999 Application pursuant to A.R.S. §20-290(B)(2) and (B)(6).

5. The undersigned Administrative Law Judge is mindful of the fact that the Petitioner’s felony conviction occurred over 13 years ago. However, the Petitioner has the burden of showing that he currently meets the requirements and qualifications necessary to hold an insurance broker’s license in accordance with Title 20 of the Arizona Revised Statutes. This includes a showing that the Petitioner has achieved “good moral character” since his 1985 conviction. See A.R.S. §20-294(D). Unfortunately, the Petitioner failed to call a single character witness (e.g., an employer, a colleague, or another insurance broker) who could testify on his behalf at the hearing in this matter. Except for the Petitioner, not one witness testified that the Petitioner has the required honesty, trustworthiness and good character necessary to hold an insurance broker’s license in Arizona. Furthermore, the Petitioner failed to submit a single character reference letter to the undersigned Administrative Law Judge during the hearing in this matter. To meet his burden, the Petitioner must submit sufficient character reference evidence to allow the undersigned Administrative Law Judge to reach the conclusion that he meets all of the requirements and qualifications necessary to hold an insurance broker’s license in Arizona.

RECOMMENDED DECISION

Based upon the foregoing, the undersigned Administrative Law Judge recommends that the Petitioner’s appeal be denied. The Department’s denial of the Petitioner’s 1999 Application should be upheld. Done this day, December 27, 1999.

____________________ Casey J. Newcomb Administrative Law Judge

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

Mr. Charles R. Cohen, Director 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