Simas & Associates, Ltd. recently petitioned for and was awarded the granting of a Petition to Set Aside the Default Revocation of a California Department of Insurance licensed agent.
“The grounds for the petition was a lack of notice of the Accusation,” explained Justin Hein, Managing Attorney of Simas & Associates, Ltd. “Our client was in the midst of a dispute with her employer. As a result of that dispute, the client was placed on administrative leave. While on administrative leave, our client was served with the Accusation at her place of employment. Her employer never forwarded a copy of the Accusation to our client.”
The failure to respond to the Accusation by filing a Notice of Defense waives the Licensee-Respondent’s right to a hearing. (Gov. Code §§ 11505(a), 11506(c). The agency then may proceed on the sought-after discipline in the matter. (Gov. Code § 11520.) More often than not, this means requesting a default order of discipline against the Respondent-Licensee.
“Here, our client never got the Accusation,” continued Hein. “And so, she never filed a Notice of Defense. Ultimately, the Department [of Insurance] requested and entered a default revocation of her license.”
This was, again, served on her at her employer’s office. Fortunately, this time, it was forwarded to her.
“We were lucky – we still had time to act,” explained Hein. “The default revocation effective date was not for another 3 weeks. And because we received the Notice of Default Decision and Revocation so early, we still had time to file a Petition to Set Aside Default in addition to a Request for Stay.”
In event of default, the licensee has seven (7) days after the service of the decision to seek to set it aside. (Gov. Code § 11520(c).) In seeking to set it aside, you still have to possess a good argument and supporting evidence. So, the petition should be accompanied by a Declaration from the Licensee-Respondent stating the facts resulting in the failure to file a Notice of Defense that establishes “Good Cause” for relief.
“Good Cause includes failure to receive notice and/or having the Accusation served under Government Code section 11505,” stated Hein. In addition, mistake, inadvertence, surprise, or excusable neglect are all potential arguments as to why the petition to set aside should be granted. Ultimately, the agency, has discretion to deny the relief from default. (See Evans v. DMV (1994) 21 Cal.App.4th 958, 973.)
“We also requested a 30-day stay of the effective date,” continued Hein. “In the event the petition to set aside was denied, we would have then had an opportunity to put on evidence that was not considered in reaching the decision to revoke. That would have been through filing a petition for reconsideration. Such a petition does not result in a hearing, with evidence and witnesses testifying. Rather, it would have been done through putting our client’s defense together through briefing. And in a very short time window. So, not ideal by any stretch of the imagination.”
Ultimately, the Department of Insurance never reached the request for stay, instead granting the petition to set aside.
“All that work just now gives our client the right to defend herself through an adversarial administrative hearing,” concluded Hein. “So, now the real work begins.”
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