vs. ) CASE NO. 80-1291
Respondent. )
Pursuant to notice the Division of Administrative Hearings, by its duly designated Hearing Officer, K. N. Ayers, held a public hearing in the above styled case on 19 and 20 November 1980 in Gainesville, Florida and on 5 January 1981 at Tallahassee, Florida.
For Petitioner: Daniel Y. Sumner, Esquire,
Patrick F. Maroney, Esquire 428-A Larson Building Tallahassee, Florida 32301
Robert C. Blunt, Esquire Division of Insurance Fraud 6501 Northwest 36 Street
For Respondent: John A. Barley, Esquire
By Administrative Complaint dated 17 June 1980, as amended, the Florida Insurance Commissioner, Petitioner, seeks to revoke, suspend, or otherwise discipline the license of Harry Joseph Finn, Respondent, as a General Lines Agent. In this 19-count complaint it is alleged that Respondent violated various provisions of Chapter 626, Florida Statutes, by including membership in a motor club with automobile insurance policies sold by his employees to clients which they are unaware they were obtaining, were unaware that an extra charge was imposed for this motor club membership, or were retired to buy motor club membership as a condition of getting automobile insurance. By the acts alleged Respondent is charged with engaging in unfair methods of competition or deceptive practices; knowingly making false or fraudulent representations respecting an application for automobile insurance; knowingly making, disseminating, or delivering to an insured false material statements; knowingly collecting as premium or charge for insurance a sum in excess of the applicable
premium or charge; and engaging in unfair and deceptive acts, all in violation of Sections 626.611, 626.621, 626.9521 and 626.9541, Florida Statutes.
Prior to the hearing the parties submitted a pre-hearing stipulation in which certain facts were stipulated. These are contained in Findings of Fact Nos. 1 through 11 below.
At the hearing in Gainesville 20 witnesses were called by Petitioner, 10 witnesses were called by Respondent and 67 exhibits were offered into evidence. Objections to Exhibit 17, 33 and 34 on grounds of relevancy were sustained.
At the completion of Petitioner's case, Petitioner moved to quash subpoenas served 19 November 1980 on Thomas K. Sturgis and Robert E. McKenna of the Division of Insurance Fraud for their appearance 20 November. At a telephone conference in which the Hearing Officer, Mr. Sumner, Mr. Barley, and Mr. Blunt participated, all parties wore given the opportunity to argue the merits their positions. Thereafter, the motion to quash was denied; however, all parties were advised that the protections provided by Section 626.989(4), Florida Statutes, would be accorded to these witnesses if they raised the privilege.
The parties agreed to depose these witnesses and to submit their testimony by depositions as late-filed exhibits. During the conference call Respondent represented to the Hearing Officer that the testimony he desired from these witnesses was their knowledge, or determinations they made, with respect to the decision to investigate and prosecute this Administrative Complaint (Tr. p. 388, 393).
Due to circumstances beyond the control of the parties these depositions were not taken within the time frame prescribed and, at the request of the parties, the hearing was reopened on 5 January 1981 to take the testimony of Sturgis and McKenna. Mr. Sturgis testified that he was conducting an ongoing insurance fraud investigation of Mr. Finn, and that he first became aware that a basis for criminal charges against Finn may exist when he received a copy of the Administrative Complaint that had been filed in this case. Following Sturgis' testimony that he had no part in the investigation leading to the charges preferred in the Administrative Complaint, objections were sustained to most of Respondent's questions on grounds of relevancy. Respondent then declined to call Mr. McKenna who, with Mr. Blunt, had proceeded from Miami to Tallahassee for the reopened hearing.
Proposed findings and conclusions submitted by Petitioner and not included below were not supported by the evidence or were deemed immaterial to the results reached. Respondent did not submit a proposed recommended order.
At the commencement of the hearing Respondent's motion to limit admissible evidence was denied.
Respondent is licensed by Petitioner to act as a General Lines Agent and, as such, engages in the business of soliciting, procuring and transacting the sale of motor vehicle insurance in Gainesville, Florida, under the name "University Insurance".
Prior to November 13, 1979 Petitioner undertook agency action in the form of inquiry and investigation calculated to determine whether Respondent was transacting the sale of automobile insurance in violation of Chapter 626,
Florida Statutes, and that said agency action was undertaken without prior notice from Petitioner to Respondent and without Respondent's knowledge.
On November 13, 1979 Petitioner filed and served an Administrative Complaint charging Respondent with several violations of the Florida Insurance Code and expressing Petitioner's intent to revoke Respondent's license to act as a General Lines Agent.
On February 25, 1980 the aforesaid Administrative Complaint was dismissed without prejudice for reason that Petitioner had failed to provide Respondent with adequate notice of its belief that sufficient information existed to find probable cause for charging Respondent to the extent expressed in said Administrative Complaint.
Subsequent to November 13, 1979, through October, 1980, without prior notice to Respondent, Petitioner continued to undertake agency action in the form of inquiry and investigation calculated to gather information supportive of Petitioner's previously made determination that Respondent follows a general business practice in transacting the sale of automobile insurance that is in violation of Chapter 626, Florida Statutes.
Pursuant to the above-described agency action, on May 9, 1980, Petitioner served on Respondent a Notice of Intended Administrative Action charging Respondent with violation of Chapter 626, Florida Statutes, and expressing Petitioner's intent to revoke Respondent license to act as a General Lines Agent.
On May 28, 1980, Petitioner supplemented the aforesaid Notice to add additional grounds for the charges made therein.
Respondent, through counsel, replied to the aforesaid Notice and Supplement in writing, stating that the agency action taken by Petitioner in conducting the above-described inquiry and investigation and in making the
above-described determinations is unlawful and wrongfully subjects Respondent to egregious loss and damage.
On June 17, 1980, Petitioner filed and served an Administrative Complaint charging Respondent with violation of Chapter 626, Florida Statutes, and expressing Petitioner's intent to revoke Respondent's license to act as General Lines Agent.
On August 25 and October 17, 1980, respectively, Petitioner amended the July 17, 1980 Administrative Complaint to add additional grounds for the aforesaid charges.
The June 17, 1980 Administrative Complaint, amended as aforesaid, is the subject of administrative proceedings being conducted pursuant to Section 120.57(1), Florida Statutes, and in respect of the allegations set forth in said Administrative Complaint, as amended, the following material facts are admitted:
That Respondent, as the General Lines Agent of Record d/b/a University Insurance Agency, Gainesville, Florida, or one of his agents or employees, transacted the sale of motor vehicle insurance and an automobile club membership to each of the persons identified in Counts I through XVIII on or about the
dates stipulated in each of said Counts, excepting the date stipulated in Count V;
That as an incidence of transacting each and every such sale, Respondent, or one of his agents or employees, charged each of the persons identified in Counts I through XVIII for a membership in an automobile club in addition to the cost charged for motor vehicle insurance;
That as an incidence of transacting each such sale, Respondent, or one of his agents or employees, forwarded the respective applications executed and the premiums paid for motor vehicle insurance and an automobile club membership to the respective companies concerned; and
That Deborah Zeller is one of Respondent's employees who participated in the transaction
of the sale of motor vehicle insurance and an automobile club membership to Billy Joe Haynes;
That Gail Livingston is one of Respondent's employees who participated in the transaction of the sale of motor vehicle insurance and an automobile club membership to Deborah E. Boyles, Delores C. Golden, and David or Sandra Maxey-Dickson;
That Mona Cayce is one of Respondent's employees who participated in the transaction of the sale of motor vehicle insurance and an automobile club membership to Peter H. Gloodt, Jacquelyne C. Williams, and Susan F. Rudder;
That Joan Roberts is one of Respondent's employees who participated in the transaction of the sale of motor vehicle insurance and an automobile club membership to Andrew J. Ciucio;
That Pamela Polcover is one of Respondent's employees who participated in the transaction
of the sale of motor vehicle insurance and an automobile club membership to Debborah [sic] Lee Abramson, Walter W. Griffin, and Emily L. Crep;
That Cheryl McLaughlin is one of Respondent's employees who participated in the transaction of the sale of motor vehicle insurance and an automobile club membership to Robin Sweet and George L. Chamberlin;
That Kim Gary is one of Respondent's employees who participated in the transaction of the sale of motor vehicle insurance and an automobile club membership to James E. Rippy, Jr., and Russell W. Rowe;
That Elizabeth Borne is one of Respondent's employees who participated in the transaction of the sale of motor vehicle insurance and an automobile club membership to Louvenia Gainey and Robert E. Dow; and
That Caren Frost is one of Respondent's employees who participated in the transaction of the sale of motor vehicle insurance and an automobile club membership to Barton K. Hulett.
At all times here relevant Respondent was licensed as noted in Finding No. 1 above and was the General Lines Agent of record for the University Insurance Agency of Gainesville, Florida (University).
University catered to young drivers generally with poor driving records who were uninsurable, or insurable only at high premiums by standard risk insurance companies.
Respondent advertised for this class of clientele and specialized in providing automobile insurance through substandard companies. In addition to forms of automobile insurance sold, Respondent, by and through his employees, sold memberships in several motor clubs.
Many of Respondent's customers wanted the minimum amount of automobile insurance necessary for them to comply with Florida law and expressed that desire when inquiring about the cost of coverage or when actually obtaining a policy.
Respondent, during all times here relevant, employed several sales persons who wrote automobile insurance policies for clients which were accepted on behalf of the underwriter by Respondent as General Lines Agent. These employees were paid a bonus on the amount of insurance sold and an additional and separate bonus on the motor club memberships sold.
Commissions on motor club memberships were as high as 80 percent of the premium and bonuses given by Respondent on motor club memberships were one- third of that commission.
Florida Statutes, Section 627.733 requires owners of motor vehicles required to be registered in this state to maintain security to provide certain benefits without regard to fault. This security may be provided by the registrant taking out an insurance policy providing personal injury protection (PIP) in specified amounts. Accordingly, all clients of Respondent purchased PIP. Since the commission on PIP was 10 to 15 percent of the premium, if no additional coverage was purchased by the insured, the premium received by Respondent's agency was barely sufficient to cover the cost of writing PIP coverage
When a call was received at University for a quote on the price for minimum coverage required by Florida the caller was usually given a total quote which included PIP and motor club membership without being told the quote included a separate charge for motor club membership.
Motor club memberships came in several denominations with the cost varying with the additional services provided. Sometimes customers came in with their policy from another agency to see if University could give them a better price. Looking over the old policy the salesperson could determine how much they could save the customer, and often this savings would determine the class motor club membership sold to the customer. Even without the former policy, Respondent's employees knew generally how much the customer had to pay at another agency and, therefore, how much they could save the customer.
Generally, the greater the difference between the price the customer paid for
insurance at another agency and the price this coverage could be provided by Respondent, the more costly would be the motor club membership provided.
Only if specific inquiry was made by a customer would he learn that he was paying (or being charged) extra for motor club membership in the total amount he was billed. Although Respondent's employees testified that they never intentionally deceived any customer or failed to advise customers regarding the costs of the coverages they were getting, on cross-examination these witnesses acknowledged that they emphasized only the total cost and gave no breakdown to the insured for PIP, uninsured motorist, liability, collision, comprehensive or motor club. When they did run down the coverages provided for the premium charged, they used the phrase "towing and road service" as being included rather than "motor club". Most of the complaining
witnesses were unaware they were road service"
Standard procedure followed at University was that after writing up the coverages, the salespeople had the customer sign several documents, among which was an application for motor club membership. Respondent contends that by having these applications signed, the customer was made aware that he was being charged extra for motor club membership.
At one time during the period here involved, Mrs. Finn, wife of Respondent and a registered 220 Agent who helped Respondent manage the Gainesville office, inquired of the Deputy Insurance Commissioner in Gainesville, a Mr. Quigley if it was permissible to refuse to write PIP coverage only. She was told that was permissible and she instructed all of the employees writing policies that they were not to write PIP alone but to include motor club, liability or other coverages with this coverage. Some three months later, after customers complained about the refusal of University Insurance Agency to sell PIP alone and demanded their right to purchase only PIP if they so desired, Mrs. Finn again called Quigley to report that some customers had insisted they had the right to buy PIP alone and asked if that was correct. A day or two later Quigley advised Mrs. Finn that the Agency did have to offer PIP only if that is what the customer wants. (Tr. p. 581). Thereafter, Mrs. Finn testified, "We immediately changed and started writing PIP only if we really had to". (Tr. p. 582)
The testimony of Respondent's witnesses who sold policies to the complaining witnesses has been considered in the light of this background and their admissions that they do not remember the specific transactions complained of. But for Count IV each count of the Administrative Complaint was supported by the testimony of a complaining witness. Respondent and his employees denied any intent to deceive or refuse to sell insurance without including motor club membership.
With respect to Counts I through XVIII the following findings are made:
Count I.
Billy Joe Haynes purchased automobile insurance from University on September 11, 1978. After calling several agencies to get bids on the minimum coverage he was required to have, University gave him the lowest bid. He told them he wanted the minimum coverage which he understood to be PIP and collision insurance to protect the bank which had
purchase money liens. He signed the papers prepared for him and was unaware that he had also purchased motor club membership until some time later. During his telephone conversation and his acceptance of the policy at the office the question of motor club membership never came up. Had Haynes been aware motor club membership was included in his coverage he would not have accepted the insurance policy.
Count II.
Deborah Boyles on April 16, 1979 purchased automobile insurance from University. She asked only for liability coverage and signed the papers presented to her. Later she learned that she had also been sold a motor club membership which she never asked for and which had never been discussed with her. She did not desire to purchase motor club membership and would have been unaware she had paid for such coverage had she not gone to the office of the Insurance Commissioner in Gainesville for another reason and been asked to check her papers for this membership.
Count III.
Peter Gloodt purchased automobile insurance from University on July 15, 1978. This policy included a motor club membership which Gloodt did not request, did not want, and was unaware that he had purchased. Gloodt went to University to purchase PIP only, told the girl processing his application he wanted minimum coverage he could buy, was quoted one price for the policy, signed the papers presented to and later learned that he had been sold and charged for a motor club membership. The explanation given him that the policy included road towing services was presented in such a manner Gloodt was not aware there was a separate charge for such service. When his policy accompanying papers arrived in the mail Gloodt became aware that he had been charged
$50 for motor club membership. He went back to University to complain, talked to the person who had sold him his policy, was told that he had signed papers applying for such membership and that the agency did not like to write PIP only. When Gloodt got angry and raised his voice the employee gave him cancellation forms to sign and he left the agency. When some two months passed and he had not received a refund, Gloodt went to the office of Insurance Commissioner in Gainesville to complain. Thereafter he was refunded most of the premium paid for the
motor club membership.
Count IV
Petitioner presented no evidence with respect to this count.
Count V.
Deborah Lee Abramson purchased automobile insurance from University on February 12, 1979. (Tr. p. 248). She asked for only the required coverage to permit her to "drive legally".
After signing the papers prepared for her signature Ms. Abramson was told motor club membership was part of the package and that she had to take it. She protested that she had AAA and didn't need another motor club and did not want to pay for something she didn't need. However, she was told by one of Respondent's employees that she couldn't get the insurance without motor club membership.
Count VI.
Susan Rudder purchased automobile insurance from University on August 8, 1978. She, too, was a member of AAA, had no need for another motor club membership, and would not have accepted knowing a separate charge was involved. The person preparing Ms. Rudder's applications for her signature advised her that the price included all coverages desired and towing and road service. No additional price was indicated for the motor club and Ms. Rudder assumed from the manner in which motor club was presented, that there would be no separate charge for this road service. When she contacted the Insurance Commissioner's Gainesville office on another matter she learned she had paid $30 for a motor club membership.
Count VII
Robin Sweet purchased automobile insurance from University on May 8, 1979. Ms. Sweet was also a member of AAA and asked University for the necessary coverage to protect herself
from liability in case she struck someone with her car. At the time she signed the papers prepared for her signature Ms. Sweet admits she didn't read them before signing but relied upon University to provide her with the coverage risked for. A short time later when
contacted by the Deputy Commissioner's office in Gainesville to inquire if she had purchased motor club membership from University, Ms.
Sweet replied no and was asked to check her policy. When she did she learned she had been charged $35 for a motor club membership she
didn't want, didn't ask for, and would have refused if made aware she was being charged extra for this membership.
Count VIII.
Walter W. Griffin purchased automobile insurance from University on July 19, 1979. He, too, requested the minimum coverage to comply with Florida law and was told the premium would be $60-odd which included a separate charge for motor club membership. When he said he didn't want motor club membership and questioned the necessity of buying it, he was told the Insurance Commissioner had approved University's practice not to sell minimum coverage without including motor club membership.
Count IX.
George L. Chamberlin renewed his automobile insurance coverage with University on March 28, 1979. At this time he signed an application for motor club membership. No reference was made to the motor club membership and Chamberlin was unaware he was being sold motor club membership. Had he known, he would not have taken this road service coverage. When visiting the Insurance Commissioner's office in Gainesville to complain about another matter he learned that he had been charged for a motor club membership by University.
Count X.
James Edward Presley a/k/a James Elvis Rippy, Jr., before a recent name change, purchased automobile insurance from University on September 12, 1979. While his application was being prepared for his signature he noticed motor club membership was included which he did not want and did not believe he was required to buy. He even went to Finn to complain that he didn't want the motor
club membership and didn't think he was required to take it. Finn talked to the girl preparing Presley's applications but the end result was that Presley had to take motor club if he wanted only PIP coverage. After
signing the necessary papers, including an application for motor club membership, Presley complained to the Deputy Commissioner in Gainesville.
Count XI.
Emily L. Crep renewed her automobile insurance policy with University on January 27, 1980.
She told the employee preparing her
application that she wanted the same coverage she had the previous year. Ms. Crep was aware this included motor club membership but was not aware that she was being charged a separate fee of $25 for this membership. Had she known there was a separate charge, she would not have purchased it. Ms. Crep submitted a claim for towing service after she learned she had paid for motor club membership and had complained to the Deputy Insurance Commissioner. This claim was paid by the motor club but was not covered by the club membership. Ms. Crep had not refunded the money at the time of the hearing.
Count XII.
Delores Golden purchased automobile insurance on behalf of her husband, McIvor Golden, from University on November 2, 1978. At this time McIvor Golden's automobile insurance had been cancelled and Mrs. Golden told the University employee preparing her application that she wanted everything in the way of coverage needed to comply with the law. Several documents were prepared for her husband's signature and she signed his name on the documents presented for signature. Although Mrs. Golden denies that she or her husband signed Exhibit 15, application for motor club membership, it is concluded that this document was signed by her at the same time she signed the other documents at University. No discussion was made regarding motor club membership and Mrs. Golden didn't know she had applied for and had been charged for auto club membership until she went to the Insurance Commissioner's office in Gainesville to complain about another matter.
COUNT XIII.
Sandra Maxey-Dickson called University to discuss her car insurance following receipt of a renewal notice from University, She and her husband owned three cars and wanted only minimum coverage on the two older cars and more coverage on the newest car. She was
quoted a price for the coverages she asked for. No mention was made of motor club membership and no request for such coverage was made.
On May 5, 1979 David Maxey-Dickson, husband of Sandra, proceeded to University where he executed the papers that had been prepared for his signature. At the time he signed these papers, which included applications for motor club membership for the three cars, no mention was made of motor club membership and David Maxey-Dickson was unaware he was purchasing
and being charged for this coverage. Had he known, he would not have taken motor club membership.
Count XIV.
Louvenia Gainey purchased automobile insurance from University on January 4, 1979, right after she had purchased a new car, and the dealer called University for coverage.
At the time she signed the papers prepared by University she signed an application for motor club membership. She was not advised there was an extra charge for this motor club membership or that she even had this coverage.
Had she been advised at the time, she would
have declined to purchase motor club membership. Subsequently, Ms. Gainey was contacted by the Tallahassee office of Petitioner to inquire if she was aware she had motor club membership.
She was not aware of this until she rechecked her policy and the accompanying documents.
Count XV.
Russell Rowe renewed his automobile insurance from University on December 22, 1978. He wanted property damage and liability and was quoted a price for this coverage. When the papers were presented for his signature, he saw that a motor club membership was included for an additional price which had been included in the quote given him. When he said he didn't want motor club, he was told they included motor club in all policies. To his statement they couldn't force him to buy motor club,
the University employee responded they didn't have to sell him insurance. Since his policy was about to expire, Rowe accepted the motor club membership and shortly thereafter proceeded to the Insurance Commissioner's Gainesville office to ascertain where he stood with regard to motor club membership. He then cancelled his entire policy with University and moved his coverage to another company.
Count XVI.
Jacqueline Williams purchased automobile insurance from University on February 14, 1979. When she went to University she told the girl who served her that she wanted the minimum coverage to legally drive in Florida. She was given a quote of about $100. When the papers were presented for her signature Ms. Williams noted motor club membership was included and asked if this was to cost more. She told motor club was included in the price quoted . When her policy arrived, Ms. Williams saw that she had been charged $35 for motor club membership
and called University to say she didn't want the motor club. The girl at University replied that it was their policy to sell motor club with PIP coverage.
Count XVII.
Barton K. Hewlett purchased automobile insurance from University on March 28, 1979. He desired liability coverage and in addition he received membership in an automobile club. Hewlett knew that he was paying fur a club membership but believed that it was part of a package deal which he had to take to get the liability coverage.
Count XVIII.
Robert F. Dow purchased automobile insurance from University on November 20, 1979. Before going to the office, he telephoned University and got a quote on the liability, comprehensive and collision coverage he desired. He then went to the office, discussed the coverage he was getting, signed the papers presented to him, made a down payment and financed the balance of the premium. The total premium was approximately
$600. Motor club membership was not mentioned to him and he was unaware that his premium included a charge for a motor club membership. At the time, Dow was a member of the Amoco Motor Club and would have declined another motor club membership had he known he was being charged for one. Dow's testimony that he was unaware he was being charged extra for motor club membership is corroborated by comparing a copy of the premium finance agreement he was given at the time he purchased his automobile insurance
(Exhibit 42) with carbon copy of the same premium finance agreement forwarded to Perry and Company, the premium finance company (Exhibit 28). Mr. Dow's copy of the finance agreement contains no notation of a charge for motor club membership, while the finance company copy shown $35 was charged to Dow for this membership.
Respondent called as a witness each girl who prepared and sold the policies to the complaining witnesses in Finding 24 above. These witnesses denied that they ever deceived anyone, failed to explain to anyone the extent of their coverage, or refused to sell PIP insurance without including motor club or some other coverage. Thus this testimony is in direct conflict with the above findings. Several factors, other than their demeanor on the witness stand, led to the conclusion that the testimony of the complaining witnesses was more reliable. These factors include:
Respondent stipulated that during a period of approximately two months the policy of the office, communicated to the girls writing insurance by Respondent, was
that minimum coverage (PIP) would not be sold alone without including a motor club membership. (Tr. p. 313, 314)
Mrs. Finn testified (Tr. p. 580, 581, 600) that after getting Mr. Quigley's concurrence that they could refuse to sell PIP alone, they operated in this manner for several months and she communicated this policy to the employees.
After the second call to Quigley disclosed they could lot refuse to sell PIP only, Mrs. Finn testified, "So we immediately changed and started writing PIP only if we really had to." (Tr. p. 582, 600).
Questions for minimum coverage given to customers all appear to have included motor club membership. A standard "rap" was developed which was given to customers (Tr. p.
550) in which the customer was advised. "'You have this, this, and this and this is how much it cost.' That was standard."
A very high and separate bonus was given the employees on the motor club memberships they sold.
Different classes (and charges) for motor club memberships were used by the employees depending on how much money they believed
they saved the customer and the differences were seldom, if ever, explained. (Tr. p. 474)
Respondent testified that "when Mr. Quigley said. . . that we could decline PIP, we did not decline." (Tr. p. 613) . This conflicts with more credible testimony.
Kim Gary, who has been employed by Respondent since 1976, testified the procedure at University regarding the sale of motor club membership was essentially the same the date of the hearing as it had been during the four-plus years she was employed at University.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of these proceedings.
Respondent is charged with violating Sections 626.611 (4), (5), (7), (9) and (13); 626.621(2), (3) and (6); 626.9521; and 626.9541(5)(a), (11)(b) and (15)(b) , Florida Statutes.
Section 626.611, Florida Statutes, provides grounds upon which the Department of Insurance shall revoke the license of any agent and provides the department shall suspend the eligibility of any such person to hold a license or
permit if it finds as to licensee any one or more of the following grounds exist. These include:
If the license or permit is willfully used, or to be used, to circumvent any of the requirements or prohibitions of this code.
Willful misrepresentation of any insurance policy or annuity contract or willful
deception with regard to any such policy or contract, done either in person or by any form of dissemination of information or advertising.
(7) For demonstrated lack of fitness or trustworthiness to engage in the business of insurance.
(9) Fraudulent or dishonest practices in the conduct of business under the license or permit.
(13) Willful failure to comply with, or willful violation of, any proper order, rule, or regulation of the department or willful violation of any provision of this code.
Section 626.621 provides, inter alia, the following grounds for discretionary revocation of license:
Violation of any provision of this code or of any other law applicable to the business of insurance in the course of dealing under the license or permit.
Violation of any lawful order or rule or regulation of the department.
Section 626.9521, Florida Statutes, provides the department may impose a monetary penalty on any person subject to the department's jurisdiction who has engaged in unfair or deceptive acts or practices enumerated in Section 626.9541 which include:
(5) Knowingly making or causing to be made, any false material statement.
(11)(b) Any agent . . . who knowingly makes any false and fraudulent statement or representation in, or with reference to, any application . . . for insurance . . . shall upon conviction be guilty of a misdemeanor of the second degree.
(15)(b) Knowingly collecting as a premium or charge for insurance any sum in excess of
. . . the premium or charge applicable to such insurance . . .
The essence of the Administrative Complaint is that Respondent, by his policies and procedures leading to the sale of motor club memberships by his employees to customers, often without the customer knowing he has purchased a motor club membership, or, if known, that a separate charge resulted therefrom, or pressuring the customer into purchasing a motor club membership as a condition of obtaining insurance, has violated the above-quoted statutory provisions.
Despite testimony to the contrary, it is evident that numerous customers were sold auto club memberships without realizing that they were paying a separate fee for "towing and road service". It is further clear that the tactics of those selling motor club memberships was to exert considerable effort to include the cost of motor club membership in the total premium without alerting the customer there was a separate charge for this service. Not only was this done to those complaining witnesses who appeared at this hearing, but also this tactic had been inaugurated by Respondent to sell these high- commission motor clubs to all who did not adamantly refuse to purchase. In so doing Respondent, by and through his employees, mislead, misinformed and coerced customers into purchasing auto club membership as alleged. These acts constitute violations of Sections 626.611(5), (7), and (9); 626.621(6); 626.9521; and 626.9541(5)(a), Florida Statutes.
Respondent may not, in these proceedings, be found guilty of Section 626.9541(11)(b) , violation of which is a misdemeanor. Rifkin v. Florida Real Estate commission, 345 So.2d 349 (Fla. 4th DCA 1977).
From the foregoing it is concluded that Harry Joseph Finn was guilty of all counts in the Administrative Complaint except Count IV on which no evidence was submitted, and that he thereby violated the provisions of Sections 626.611(5), (7), (9) and (13); 626.621(2), (3) and (6); 626.9521; and 626.9541(5)(a), Florida Statutes, as alleged and that these violations occurred pursuant to a policy established by Respondent for the conduct of business in his insurance agency. It is therefore
RECOMMENDED that the license of Harry Joseph Finn as a General Lines Agent be revoked.
Entered this 13th day of February, 1981.
K. N. AYERS Hearing Officer
Filed with the Clerk of the Division of Administrative Hearings this 13th day of February, 1981.
Daniel Y. Sumner, Esquire Patrick F. Maroney, Esquire 428-A Larson Building Tallahassee, Florida 32301
Robert C. Blunt, Esquire Division of Insurance Fraud 6501 Northwest 36 Street
John A. Barley, Esquire
