STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

IVAN YESNES, )

)

Petitioner, )

)

vs. ) CASE NO. 81-225

)

DEPARTMENT OF INSURANCE )

AND TREASURER, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice the Division of Administrative Hearings by its designated Hearing Officer, Michael Pearce Dodson, held the final hearing in this case on April 9, 1981, in Pensacola, Florida. The following appearances were entered:

APPEARANCES

For Petitioner: Michael T. Webster, Esquire

SELBY, CHESSER, WINGARD & BARR

838 North Eglin Parkway, Suite 601 Fort Walton Beach, Florida 32548

For Respondent: Steven R. Scott, Esquire

Department of Insurance Room 428-A Larson Building Tallahassee, Florida 32301

PROCEDURAL BACKGROUND

These proceedings began on December 27, 1980 when Petitioner, Ivan Yesnes, requested an administrative hearing on the proposed denial by Respondent, Department of Insurance, of Mr. Yesnes' application for qualification as an ordinary life insurance agent in the State of Florida. On January 27, 1981 the case was forwarded to the Division of Administrative Hearings for the assignment of a Hearing Officer and the scheduling of a final hearing.

That hearing was scheduled for and held on April 9, 1981. At the hearing Petitioner presented as his witnesses: Alice F. Hunter, Gary Toth, Anthony Secchiari, Conon J. Meehan, Dorothy Dale Godwin and himself. He offered Exhibit A which was received into evidence. Both parties offered Joint Exhibit 1 which was also received into evidence. Respondent offered as its witnesses: Michael Howard, Dorothy Dale Godwin, Sara Dawson, Charles H. Dyer, Eugene Petree, III and the Petitioner, Ivan Yesnes. The Department offered no exhibits. At the conclusion of the hearing the parties were informed of their right to submit proposed findings of fact and proposed orders. Section 120.57(1)(b)4. Florida Statutes. The parties were allowed twenty (20) days from the date the hearing transcript was filed to simultaneously submit their proposed recommended orders

or findings. They waived the 30-day time for the filing of a recommended order. Section 28-5.402, Florida Administrative Code. The hearing transcript was filed in the Division of Administrative Hearings on May 1, 1981. On May 21, 1981 the Department of Insurance filed a Memorandum In Support Of License Denial. While not containing proposed findings of fact, this Memorandum did argue the legal issues in the case from the Department's point of view. Subsequently on June 12, 1981 the Petitioner filed a Memorandum In Opposition To License Denial. 1/ Subsequently the Department filed a Motion To Strike Petitioner's Memorandum In Opposition To License Denial. The Motion is founded on the failure of Petitioner to submit his Memorandum within the time set at the conclusion of the final hearing. Subsequently on June 25, 1981, by an agreement of counsel, the Motion To Strike was withdrawn and Respondent filed a Reply to Petitioner's untimely Memorandum.

FINDINGS OF FACT

1. During 1977, while licensed as an insurance agent, Mr. Yesnes engaged in a scheme to fraudulently obtain sales commissions from various insurance companies. He submitted applications for insurance coverage without the prior consent of the purported applicants. He obtained the data to fill in their application forms from information contained in previous policy records. This scheme was admitted by Mr. Yesnes when he appeared before a Department of Insurance investigator, Eugene Petree, III, to explain consumer complaints against him related to the bogus applications.

   
   

2. On February 24, 1977 Mr. Yesnes, while registered with the Department as a non-resident agent, sold a $50,000 decreasing term life insurance policy to a 65 year old widow, Mrs. Inez Cameron. This sale was made in Pensacola, Florida, where both Mr. Yesnes and Mrs. Cameron were living at the time. The beneficiary of the policy was designated as "the estate of Inez Cameron." When that designation was made, Mr. Yesnes was the legatee of Mrs. Cameron's will. Mr. Yesnes later requested the company issuing the policy, United Presidential Life Insurance Company, to change the beneficiary of the policy to himself by name, but the company refused to make the change.

   
   

3. Under the foregoing circumstances it is contrary to the standards of the insurance industry for an agent to sell a policy in which he is made the beneficiary.

   
   

4. Mrs. Cameron was a widow and had no known living close relatives. She had established a personal "mother-son" relationship with Mr. Yesnes and for a period of time they lived together.

   
   

5. For the last year and a half Mr. Yesnes has been a pizza wholesaler in the Pensacola area. He contracts for a supplier to manufacture the pizzas which Mr. Yesnes then sells to bars and small restaurants who cannot economically produce their own pizzas. According to his present supplier Mr. Yesnes sells a product of a much higher quality than the purchasers should expect to get for their cost. His present supplier, Mr. Meehan, has known Mr. Yesnes for eight to nine months. In his opinion Mr. Yesnes is trustworthy and reliable. He pays his bills on time and keeps his obligations.

   
   

6. Mr. Secchiari, the owner of Genos Pizza in Pensacola, is Mr. Yesnes' former supplier. He too believes him to be trustworthy and reliable. In his opinion as an insurance consumer he believes that if licensed, Mr. Yesnes would be better than some life insurance agents and not as good as others. Mr. Yesnes has always been prompt in paying his bills with Mr. Secchiari.

7. Mr. Yesnes was initially licensed as an insurance agent in Florida in February 1965. Three years later he moved to Atlanta, Georgia. He later moved to Pensacola in 1976 where he was employed by the Franklin Life Insurance Company. During that employment he was supervised by Michael Howard, an area manager. Mr. Howard had contact with Mr. Yesnes for a period of eighteen months. On the basis of that experience Mr. Howard is of the opinion that Petitioner is ethically unfit to be in the insurance business.

   
   

8. Respondent offered testimony from Ms. Dorothy Dale Godwin and Ms. Sarah Dawson in the form of their opinion of Petitioner's character. This testimony is not accepted as credible. It lacks an adequate foundation because the witnesses contact with Mr. Yesnes was fleeting. Due to their relationship with Mrs. Cameron they are also found to be biased against Mr. Yesnes.

   
   

9. On his pending application for licensure Mr. Yesnes gave 804 Royce Street, Pensacola, Florida 32503 as his address for the past five years. In fact, during that time he lived in Atlanta, Georgia; Mobile, Alabama; and at different addresses in Pensacola. He gave the 804 Royce Street address because that is where his father lives. At times Petitioner has lived there and he considers it his permanent address.

   
   

10. At no time during these proceedings has Petitioner expressed regret for any past unprofessional actions. He has also not expressed any commitment not to engage in unprofessional behavior in the future, if licensed to sell insurance in the State of Florida.

    
    

    CONCLUSIONS OF LAW

    
    

11. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of this case. Section 120.57(1) and Section 120.60, Florida Statutes (1979)

    
    

12. Petitioner has filed an application with Respondent to be licensed as a life insurance agent. As the applicant for a license he has the burden of proving by a preponderance of the evidence that he meets the criteria established for licensure. Department of Transportation v. J.W.C., Inc., So.2d , 6 FLW 694, 3 FALR 398-J (Fla. 1st D.C.A. March 27, 1981). The standards for receiving a life insurance agent license are given in Section 626.785, Florida Statutes (1979) which requires in part:

    
    

    1. The department shall not grant or issue a license as life agent as to any individual found by it to be un

       trustworthy or incompetent, or who does not meet the following qualifications:...

       
       

       The Florida Insurance Code further provides that:

       
       

       The department may, in its discretion, deny, suspend, revoke, or refuse to renew or continue the license of any agent, solicitor, or adjuster, or the permit of any service representative, supervising or managing general agent, or claims investigator, and it may suspend or revoke the eligibility to

       hold a license or permit of any such persons if it finds that as to the applicant, licensee, or permittee any one or more of the following applicable grounds exist under circumstances for which such denial, suspension, revoca tion, or refusal is not mandatory

       under s626.611:

       1. For any cause for which issuance of the license or permit could have been refused had it then existed and been known to the department.

       2. 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.

       3. Violation of any lawful order

          or rule or regulation of the department.

       4. Failure or refusal upon demand, to pay over to any insurer he repre sents or has represented any money coming into his hands belonging to the insurer.

       5. Violation of the provision against "twisting," as defined in s626.955.

       6. If in the conduct of business under the license or permit he has engaged in unfair methods of competition or in un fair or deceptive acts or practices, as prohibited under part VII of this chapter, or has otherwise shown himself to be a source of injury or loss to the public or detrimental to the public interest.

       7. Willful overinsurance of any pro perty insurance risk.

       8. If such person has been found guilty of, or has pleaded guilty or nolo contendere to, a felony in this state or

          any other state, without regard to whether a judgment of conviction has been entered by the court having jurisdiction of such cases

       9. If a life agent, he has violated the code of ethics. (Emphasis added) Section 626.621, Florida Statutes (1979).

          
          

13. Throughout these proceedings the Department has asserted that Petitioner is untrustworthy or incompetent to engage in the sale of insurance for the following reasons:

    
    

    1. While holding only a nonresident license when he was living in Florida Petitioner

       sold an insurance policy to Mrs. Inez Cameron.

    2. The policy he sold to Mrs. Inez Cameron designated her estate as the beneficiary

       of the policy when at the same time, Mr. Yesnes was the legatee under her will.

    3. Mr. Yesnes forwarded insurance applica tions to insurance companies without the consent of the purported applicants in

       order to fraudulently collect a commission.

    4. Petitioner failed to disclose all of the addresses at which he lived during

    the past five years as requested by the Department's application form.

    
    

    Failure To List All Addresses

    
    

14. One of the purposes for requiring an applicant to supply certain information when applying for an insurance license is to determine the character of the applicant. Section 626.786 (2)(g), Florida Statutes (1979). By knowing where an applicant has lived the Department can more easily make an investigation into the character of license applicants. In this case Mr. Yesnes disclosed only his residence at 804 Royce Street, Pensacola, Florida. In fact, during the last five years he has lived in Atlanta, Georgia; Mobile, Alabama; and several addresses in Pensacola. The failure to disclose these additional addresses is contrary to Section 626.786(2)(a), Florida Statutes (1979).

    
    

    Forwarding Bogus Applications

    
    

15. According to the evidence presented and accepted as credible at the final hearing, Petitioner engaged in a scheme to obtain commissions from insurance companies by submitting phony applications. Such acts are contrary to Section 626.9541(11), Florida Statutes (1979). In his application for licensure Mr. Yesnes was less than candid about this incident. He attempted to shift blame for the fraudulent applications onto a girlfriend. At this point it must be noted that Mr. Yesnes' subsequent arrest and judgment on a criminal charge arising out of that incident is given no consideration here because his criminal record has been expunged. Section 943.058, Florida Statutes (Supp. 1980) and Section 901.33, Florida Statutes (1979). The facts concerning Petitioner's acts in submitting the false applications were not established through his criminal record, but were established independently through Petitioner's application and his own admissions to the witness Eugene Petree, III, when Petree was an insurance investigator.

    
    

    Policy Sale To Mrs. Cameron

    
    

16. The business of life insurance is a public trust in which the interest of the insured comes first. Section 4-9.01, Florida Administrative Code. When Mr. Yesnes sold a life insurance policy in which he was the beneficiary by virtue of being legatee of Mrs. Cameron's will, he compromised his duty as a trustee. The conflict of interest between being a responsible agent and a policy beneficiary should have been apparent to Mr. Yesnes and he should have requested that Mrs. Cameron consult another agent. His dual status as both an agent and beneficiary of an insurance policy indicate a lack of trustworthiness as a life agent.

    
    

    Selling Insurance In Florida With A Nonresident License

17. When he sold the policy to Mrs. Cameron in 1977 Mr. Yesnes was living in Pensacola, Florida. At that time he held only a nonresident license to sell insurance in this state. Section 626.792, Florida Statutes (1979) provides in part:

    
    

    1. The department may issue a license as a life agent to a person not resident of this state, upon compliance with the applicable provisions of this code, if the state or province of Canada of such person's residence will accord the same privilege to a resident of this state...

       (3) No such applicant or licensee shall have a place of business in this state, nor be an officer, director, stockholder, or partner in any corporation or partner ship doing business in this state as a life insurance agency.

       
       

       According to Mr. Yesnes' application both his residence and place of business since 1976 have been in Pensacola, Florida. His sale of insurance in 1977 under the authority of a nonresident license was therefore contrary to Section 626.792, Florida Statutes (1979).

       
       

       CONCLUSIONS OF LAW

       
       

18. Much of the evidence presented in this proceeding which demonstrate a lack of trustworthy character in Mr. Yesnes relate to events several years ago. It is recognized that a lapse of time can have a cleansing effect in the rehabilitation of a person's character. Cf. Section 475.17, Florida Statutes (Supp. 1980). Unfortunately, here Petitioner has not adequately demonstrated rehabilitation. At no time in this proceeding has he admitted that the sale of a policy to Mrs. Cameron while he was the beneficiary of that policy and while he was not licensed as a resident agent in Florida, was an unethical act which he would not perform again. Furthermore on his pending application he tried to dodge responsibility for the false applications submitted in a fraudulent attempt to secure unearned commissions.

    
    

19. While Mr. Yesnes is presently earning a good reputation as a competent small business man who promptly meets his financial obligations, he has not yet demonstrated the candor and sensitivity to the ethics of the insurance business which are required by Section 626.785, Florida Statutes (1979).

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED:

That the Respondent, Department of Insurance and Treasurer, enter a final order denying the application of Ivan Yesnes for a license as a life agent in the State of Florida.

DONE and RECOMMENDED this 14th day of July, 1981, in Tallahassee, Florida

MICHAEL PEARCE DODSON

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 14th day of July, 1981.

ENDNOTE

1/ It was this filing which precipitated an ex parte communication by Department's counsel to the Hearing Officer. See Memorandum of Ex parte Communication dated June 12, 1981.

COPIES FURNISHED:

Michael T. Webster, Esquire SELBY, CHESSER, WINGARD & BARR

838 N. Elgin Parkway Suite 601

Fort Walton Beach, Florida 32548

Steven R. Scott, Esquire Department of Insurance Room 428-A Larson Building Tallahassee, Florida 32301

Docket for Case No: 81-000225

Orders for Case No: 81-000225