KY. LICENSING BOARD FOR SPECIALISTS IN HEARING INSTRUMENTS VS. AZAR (ARTHUR L.)Annotate this Case
RENDERED: OCTOBER 24, 2008; 2:00 P.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
COMMONWEALTH OF KENTUCKY,
KENTUCKY LICENSING BOARD FOR
SPECIALISTS IN HEARING INSTRUMENTS
APPEAL FROM MCCRACKEN CIRCUIT COURT
HONORABLE R. JEFFREY HINES, JUDGE
ACTION NO. 07-CI-00069
ARTHUR L. AZAR
** ** ** ** **
BEFORE: FORMTEXT COMBS, CHIEF JUDGE; TAYLOR AND LAMBERT,
JUDGES. TAYLOR, JUDGE: Commonwealth of Kentucky, Kentucky Licensing
Board for Specialists in Hearing Instruments (Board) brings this appeal from a
November 14, 2007, order of the McCracken Circuit Court reversing the Board’s
Final Order of discipline against Arthur L. Azar. We affirm.
Azar operates Paducah Hearing Aids, Inc., d/b/a Beltone, and was a
licensed hearing instrument specialist in Kentucky. The relevant facts of this case
were succinctly set forth by the Hearing Panel of the Board as follows:1
This case involves a former patient of the
Princeton Health Care Manor, Charlene Faughn. At the
time, her daughter, Shirley Pidcock, acted as her
attorney-in-fact pursuant to a Power of Attorney she
received from her mother in 1994.
While at the nursing home, on May 3, 2004,
Ms. Pidcock ordered two Beltone hearing aids for her
mother. Ms. Pidcock signed for the hearing aid order
writing, “Shirley Pidcock P.O.A.” Ted Bauer was the
Paducah Hearing Aid Center salesman who took the
order and ultimately fitted Ms. Faughn with two Beltone
While in the nursing home, Ms. Faughn
received Social Security payments, which were deposited
in an account from which Ms. Pidcock could write
checks on her mother’s behalf. Ms. Faughn’s Social
Security payments were her only source of income. Ms.
Pidcock intended to use her mother’s Social Security
payments to pay for the hearing aids.
On October 22, 2004, salesman Bauer fitted
Ms. Faughn at the nursing home with the two hearing
aids. Ms. Pidcock acknowledged receipt of the hearing
aids signing “Charlene Faughn By: Shirley Pidcock
In early 2005, Charlene Faughn was
released from the nursing home, and she went to live
with her daughter, Shirley Pidcock. Because she was no
longer eligible for the Social Security payments she had
received while in the nursing home, Ms. Faughn no
The Hearing Panel of the Kentucky Licensing Board for Specialists in Hearing Instruments
(Board) rendered Findings of Fact, Conclusions of Law and Recommended Order, which was
subsequently adopted by the Board, subject to minor modifications for clerical errors. The
Hearing Panel’s findings of fact are set forth on pp. 1-6 thereof.
longer had sufficient income to pay the installment
payments due for the two hearing aids. As a result, Ms.
Pidcock contacted the Paducah Hearing Aid Center
offices to inquire about reducing the payments her
mother owed for the hearing aids.
Because of back surgery in early 2005, Ted
Bauer was not working for the Paducah Hearing Aid
Center when Ms. Pidcock called the office. Arthur Azar,
owner of the Paducah Hearing Aid Center, returned Ms.
Pidcock’s call. He told Ms. Pidcock that the hearing aids
could not be returned, but he would inquire about
whether a loan could be obtained that would reduce the
payments due on the hearing aids.
On April 2, 2005, on behalf of Ms. Pidcock,
Mr. Azar submitted a loan application to a local bank.
The bank arranged a loan for Ms. Pidcock through CIT
Bank for the outstanding balance on the hearing aids,
which was $2,720.00.
On April 4, 2005, Mr. Azar traveled to Ms.
Pidcock’s home to have her sign the loan agreement.
Ms. Pidcock’s name, not her mother’s, appeared on the
loan agreement, and what purports to be Ms. Pidcock’s
signature also appears at the bottom of the document with
the date 4-4-05.
Mr. Azar says Ms. Pidcock didn’t ask
questions about the loan documents, which were written
in her name alone, not in her mother’s name. Mr. Azar
says it was not unusual for children to pay for their
parent’s hearing aids, and thus, he did not think the
transaction was unusual. Mr. Azar testified that Ms.
Pidcock signed the loan documents in her own name
without inquiring whether she could sign for her mother
10. Ms. Pidcock says when Ms. Azar came to
her home on April 4, 2005, she was surprised to find the
loan documents were written in her name, not her
mother’s. Ms. Pidcock testified she asked Mr. Azar
whether she could return the hearing aids and that he said
the hearing aids could not be returned. She also says she
asked Mr. Azar whether she could sign the loan
documents on her mother’s behalf with her power of
attorney. She says Mr. Azar told her she had to sign for
the loan in her own name. Ms. Pidcock claims Mr. Azar
intimidated her into signing the loan agreement.
11. Eight days later, on April 12, Ms. Faughn
12. Almost immediately, Ms. Pidcock
complained to the Paducah Hearing Aid Center and to the
Board that Mr. Azar obtained her signature on the loan
agreement by intimidating her and misinforming her
about her obligation under the original agreement to
obtain the hearing aids for her mother. (Citations
Eventually, Pidcock initiated a complaint against Azar with the Board.
After an investigation, the Board filed charges against Azar and specifically
Based upon the allegations set forth above,
to be supplemented by evidence to be introduced before
the Board, the Board has reason to believe that [Azar] has
A) KRS 334.120(4)(e) by committing an unfair,
false, misleading, or deceptive act or practice, and;
B) KRS 334.120(4)(g) by violating 201 KAR
7:090 §1(2) by obtaining a fee or making a sale by fraud
These violations involved [Azar’s]
misrepresentation to [Pidcock] in order to induce
[Pidcock] to pay for the hearing instruments of [Faughn]
when [Pidcock] was not otherwise obligated to pay.
Wherefore, based upon the allegations above, the
Board has sufficient reason to take discliplinary action
under KRS 334.120(4) against [Azar].
A hearing was conducted before a Hearing Panel of the Board.
Kentucky Revised Statutes (KRS) 13B.080. Thereafter, the panel rendered its
Findings of Fact, Conclusions of Law and Recommended Order (recommended
order). KRS 13B.090 & 13B.110. The panel found that Azar violated KRS
334.120(4)(e) and KRS 334.120(4)(g). Azar filed exceptions to the recommended
order. Except for correcting apparent clerical errors in the recommended order, the
Board adopted the order and rendered its Final Order disciplining Azar. The Board
reprimanded Azar, fined him a total of $1000, and placed his license on probation
for one year.
Thereafter, Azar appealed the Board’s Final Order to the McCracken
Circuit Court. KRS 13B.140. The circuit court concluded that the Board’s
disciplinary action against Azar was “arbitrary, capricious, or characterized by
abuse of discretion and without support of substantial evidence on the whole
record.” The circuit court reversed the Board’s Final Order and remanded to the
Board for entry of an order of dismissal. Our review follows. KRS 13B.160.
The Board contends that the circuit court erroneously reversed its
Final Order disciplining Azar. Specifically, the Board asserts that the circuit court
erred by concluding that the Board’s findings of fact were not supported by
substantial evidence of a probative value and that the circuit court erred by
concluding that Azar “was not sufficiently personally involved in the misconduct
of question to be held accountable.” For the reasons hereinafter stated, we hold the
circuit court properly reversed the Board’s Final Order of discipline.
As an appellate court, we review an administrative agency’s decision
for arbitrariness. Am. Beauty Homes Corp. v. Louisville and Jefferson Co.
Planning and Zoning Comm’n, 379 S.W.2d 450 (Ky. 1964). Arbitrariness has
many aspects; relevant to this appeal is whether the Board’s Final Order was
supported by substantial evidence of a probative value. See id.
The Board charged Azar with violating KRS 334.120(4)(e) “by
committing unfair, false, misleading, or deceptive act or practice” and with
violating KRS 334.120(4)(g) “by obtaining a fee or making a sale by fraud or
misrepresentation” in contravention of 201 Kentucky Administrative Regulations
(KAR) 7:090 § 1(2). Particularly, in its Final Order, the Board found that Azar
violated KRS 334.120(4)(e) “when he failed to explain to Ms. Pidcock that she was
not obligated to sign the loan agreement in her own name to pay for her mother’s
hearing instruments.” And, the Board found that Azar violated KRS 334.120(4)(g)
“when he intimidated Ms. Pidcock into signing the loan agreement that she was not
obligated to sign.”
Azar’s apparent failure to inform Pidcock that she was not required to
sign the loan agreement simply does not constitute an unfair, false, misleading, or
deceptive act. KRS 334.120(4)(e). Indeed, Pidcock testified that she knew there
was no legal obligation upon her to sign the loan agreement. Pidcock also testified
that she understood it was her mother’s debt. Additionally, the record reveals that
Pidcock voluntarily gave Azar her personal information to secure the loan, and the
Board particularly found that Azar “initially assumed Ms. Pidcock was going to
obtain the loan herself for her mother’s indebtedness on the hearing aids, and that
he applied for the loan in her name thinking that is what she wanted.” Thus, the
loan documents presented to Pidcock were in her name alone and not in her
mother’s. The facts were undisputed that Pidcock read the loan agreement,
understood its terms, and signed the loan agreement in her name alone. What is
most puzzling to this Court is that the record before the Board reflected no
evidence whatsoever as concerns CIT Bank and its role in refinancing the
repayment of Faughn’s hearing aids. If CIT Bank would not extend a loan to
Faughn, which is plausible under the facts of this case, it is hard to conceive how
Azar could have committed some type of fraud, in his capacity as an agent for the
bank, in procuring Pidcock’s signature on the loan documents. The Board’s Order
assumes that the bank would give credit to Faughn, which is simply
unsubstantiated by the record in this case. Thus, we conclude that there does not
exist substantial evidence of a probative value to support the Board’s finding that
Azar committed an unfair, false, misleading or deceptive act under KRS
As to the Board’s finding that Azar engaged in fraud or
misrepresentation by intimidating Pidcock into signing the loan agreement, we
believe this finding was also not supported by substantial evidence of a probative
value. During the hearing, Pidcock testified that she signed the loan agreement out
of concern for her mother. In particular, when specifically asked “[w]hy did you
sign those loan documents,” she answered:
I was concerned for my mother. I was worried
about getting out and doing the things I needed to do in
order to bring her home, and I wanted him out of my
house so I could do what I needed to do.
Pidcock’s own testimony demonstrated that she signed the loan document for her
own reasons and not because of intimidation by Azar.
In sum, we hold that the Board’s Final Order was arbitrary as lacking
substantive evidence of a probative value. See Am. Beauty Homes, 379 S.W.2d
450. We, thus, determine that the circuit court properly reversed the Board’s Final
Order and remanded to the Board for entry of an order of dismissal.
For the foregoing reasons, the order of the McCracken Circuit Court is
BRIEFS FOR APPELLANT:
BRIEF FOR APPELLEE:
Attorney General of Kentucky
Glenn D. Denton
Assistant Attorney General
ORAL ARGUMENT FOR
ORAL ARGUMENT FOR
Glenn D. Denton
Assistant Attorney General