ALJDEC

99A-236-INS · Department of Insurance · 1999-12-21

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

On December 21, 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 L. Cuevas represented the Arizona Department of Insurance (the “Department”). Richard Cantin (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 June 27, 1989, the Maricopa County Superior Court issued an Indictment in State of Arizona v. Richard David Cantin, Case No. CR89- 06514, charging the Petitioner with one count of Theft, a Class 3 felony. See Department’s Exhibit 4.

2. On or about October 11, 1989, the Petitioner entered into a plea agreement in Case No. CR89-06514 in which he pled guilty to one count of Theft, a class 6 open felony. See Department’s Exhibit 5.

3. On or about December 8, 1989, the Petitioner was convicted of Theft, a class 6 undesignated felony. See Department’s Exhibit 6. The Court ordered that the Petitioner’s sentence be suspended and that the Petitioner be placed on probation for a period of 3 years. The Court also ordered the Petitioner to participate in the Work

Order Program for a period of 40 total hours, to pay victim compensation in the amount of $100.00 and to pay the Bad Check Program in the amount of $6,735.15. Id.

4. On April 30, 1991, the Department issued a Notice of Hearing in the case entitled In the Matter of Richard David Cantin, Docket No. 7401. That Notice of Hearing was amended and reissued on May 29, 1991. See Department’s Exhibit 2.

5. On July 22, 1991, the Director of the Department entered an Order revoking the Petitioner’s insurance license. See Department’s Exhibit 3. The Director concluded that the Petitioner had misappropriated or converted funds to his own use belonging to policyholders under his license within the meaning of A.R.S. §20-316(4). Id. at page 5. The Director further concluded that the Petitioner had been convicted of a felony involving moral turpitude which reflected adversely on his honesty, integrity or personal values, within the meaning of A.R.S. §20-316(A)(6). Id. at pages 5-6. The Director also concluded that the Petitioner was a source of injury and loss to the public or any insurer within the meaning of A.R.S. §20-316(A)(7). Id. at page 6.

6. On or about February 18, 1993, the Court in Cause No. CR89-90047 (formerly Case No. CR89-06514) ordered that the Petitioner be discharged from probation and that his undesignated felony conviction be designated as a misdemeanor. See Department’s Exhibit 8.

7. On October 5, 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 that he had been convicted of a felony. Id. The Petitioner further disclosed that his previous insurance license with the Department was revoked in 1991. Id.

8. On October 7, 1999, the Department denied the Petitioner’s Application for a life and disability insurance agent’s license. See Department’s Exhibit 9. On October 22, 1999, the Department received the Petitioner’s request for a hearing on the Department’s denial of his Application. See Department’s Exhibit 10.

9. At the hearing in this matter, the Petitioner testified that he was an insurance agent with American Marketing and the Federal Employee Association from 1984 to 1990. The Petitioner testified that he worked with federal employees in purchasing annuities. The Petitioner testified that he handled approximately $200,000.00 in insurance premiums per year. The Petitioner further testified that he dealt with two to three thousand clients as an insurance agent with American Marketing and Federal Employee Association.

10. The Petitioner testified that he was a general agent who supervised other insurance agents. The Petitioner testified that one of his agents sold a dental policy to Ms. Pamela Meck in 1988. The Petitioner testified that his company accepted a $156.00 premium from Ms. Meck. The Petitioner testified that his company requested a marriage license from Ms. Meck to establish coverage for her husband. The Petitioner testified that Ms. Meck refused to submit the marriage license. The Petitioner testified that Ms. Meck could not receive dental coverage for her husband without the marriage license. Ms. Meck ultimately incurred dental expenses in excess of $500.00 that were not covered because the Petitioner never forwarded her application and $156.00 premium to the dental carrier.

11. Ms. Meck filed a complaint with the Department that ultimately led (in part) to the revocation of the Petitioner’s insurance license. A hearing was held in June of 1991. The Chief Hearing Officer (and ultimately the Director) found the Petitioner’s testimony and credibility to be questionable. See Department’s Exhibit 3, page 3.

12. The Petitioner testified that this matter (i.e., the Meck matter) could have been handled better. However, the Petitioner testified that it is inconceivable that he would have jeopardized an extremely lucrative insurance career just to misappropriate a $156.00 premium.

13. The Petitioner testified that he was convicted of one count of Theft in 1989. The Petitioner testified that he believed that First Interstate Bank had incorrectly withdrawn approximately $3,600.00 from his bank account over a three year period to cover various charges and fees. The Petitioner testified that First InterstateBank refused to return his $3,600.00. The Petitioner testified that he “got even” by writing checks totaling $3,600.00 on a First Interstate Bank account that the Petitioner knew had insufficient funds to cover the checks.

14. The Petitioner testified that his criminal behavior was “incredibly stupid.” The Petitioner testified that he has paid approximately $9,000.00 in restitution and fines because of the bad checks. The Petitioner testified that he has successfully completed his probationary term of three years. The Petitioner further testified that his felony conviction was ultimately designated as a misdemeanor conviction in 1993.

15. The Petitioner testified that the Department received only one complaint (i.e., the Meck complaint) during his career as an insurance agent. The Petitioner testified that he was also a real estate broker for years and never once received a complaint. The Petitioner testified that he has no criminal record except for the aforementioned misdemeanor conviction. The Petitioner testified that he has sold vending machines since his insurance license was revoked. The Petitioner testified that he now possesses the required honesty, trustworthiness and good character to hold an insurance license. The Petitioner testified that he desires to be an insurance agent again because he truly enjoyed helping people obtain insurance.

16. The Petitioner submitted two positive reference letters from his two former superiors at American Marketing and Federal Employee Association. See Petitioner’s Exhibits A & B. Both writers indicate that the Petitioner would be rehired if he was eligible. The undersigned Administrative Law Judge can give very little weight to these letters because (1) these letters are not notarized and (2) these individuals did not appear in person to be cross-examined.

17. Grant Holmes has been the Petitioner’s friend since 1979. Mr. Holmes was a District Manager for General Motors from 1964 to 1989. He is now the president of American National Leasing. American National Leasing provides a vehicle leasing service for state and federally chartered credit unions. Mr. Holmes testified that the Petitioner is an honest, straightforward individual who is always trying to help people. Mr. Holmes testified that the Petitioner is a good person and possesses good character. Mr. Holmes testified that he has personally observed the Petitioner helping dozens of people with problems ranging from automobile maintenance to lending money. Mr. Holmes testified that the Petitioner has also been very supportive of his family during some very distressful and emotional times. Mr. Holmes testified that the world needs more individuals like the Petitioner.

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 1991 Order revoking the Petitioner’s license and (2) the Petitioner’s 1989 conviction for Theft 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 the Director’s 1991 Order revoking the Petitioner’s license is a “record of . . . revocation of an insurance license in any jurisdiction” within the meaning of A.R.S. §20-290(B)(5).

4. 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) 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 ten years since the Petitioner was convicted of Theft; b. The Petitioner’s conviction was ultimately designated as a misdemeanor; c. The Petitioner successfully fulfilled the terms of his probation; d. The Petitioner successfully paid all fines and restitution; e. The Petitioner’s testimony regarding his past misconduct and his rehabilitation was credible; f. The Petitioner has no criminal record except for the Theft conviction; g. It has been over eight years since the Director’s 1991 Order revoking the Petitioner’s insurance license; h. The Petitioner dealt with hundreds of customers and thousands of dollars in premiums but the Department received only one complaint during the Petitioner’s career as an insurance agent; i. The Petitioner received no complaints during his 27 year real estate career; j. Grant Holmes’ testimony regarding the Petitioner’s character was credible and persuasive; and k. The Petitioner has been a successful businessman during the past eight years. 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, December 30, 1999.

______________________________________ Casey J. Newcomb Administrative Law Judge

Original transmitted by mail this ____ day of December, 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