AHC Rules Cause to Discipline L&C

The Administrative Hearing Commission (AHC) has issued a ruling on the disciplinary complaint filed by the DIFP against L&C Investment Corporation and its president, Doug Cheatham. The complaint was filed by the DIFP in May 2005. After several continuances the AHC heard the complaint in January 2007 and issued its opinion in late July, ruling that there was cause to discipline L&C and there was no cause to discipline Cheatham.

The DIFP alleged in its complaint that Cheatham and L&C had committed misappropriation, misconduct, gross negligence, fraud, misrepresentation, or incompetence by not returning a $9,999 bond premium when the bond failed to secure the release of a defendant Antonio Flemons. L&C wrote a $100,000 in Lafayette County in March 2004. Flemons was being held by Missouri Department of Corrections. Three months later the court declared a scrivener’s error and determined that the bond was intended to be cash-only. Flemons was never released from custody. Cheatham testified that he attempted to return some and then the entire premium to the defendant’s family, but an agreement was never reached. The AHC said in its ruling, “The Director produces no evidence or law that the filing of the bond, even if it did not result in the defendant’s release from prison, is not consideration for the bond payment. The Director has failed to meet his burden to prove that the continual retention of the bail payment by respondents is unauthorized or in violation of any contract” and ruled there was no cause to discipline Cheatham or L&C.

The Department also alleged that L&C should be disciplined for failing to satisfy a judgment in Buchanan County in violation of 374.755.1(6) RSMO. L&C posted a $100,000 bond for defendant Mark Wilson. Wilson pleaded guilty but failed to show up for commitment to DOC 30 days later. L&C appealed the bond forfeiture decision to the Western District Appellate Court, which denied the appeal. L&C filed a motion for rehearing or transfer to the Missouri Supreme Court. Both were denied. L&C, at the time of the hearing, had filed a notice of intent to file a writ of certiorari to appeal to the United States Supreme Court. Heartland Bonding posted a supersedeas bond on the $100,000 judgment on behalf of L&C. L&C’s attorney argued that the case was not ripe for a decision because L&C had not exhausted all of its appeals. The AHC ruled that disciplinary action can proceed even when an appeal is taken and ruled that there was cause to discipline L&C under 374.755.1(6) because it failed to satisfy the judgment within six months as required by 374.763.1.

The DIFP will convene a hearing on October 10th to determine what disciplinary action to take against L&C.