STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF INSURANCE, )

)

Petitioner, )

)

vs. ) CASE NO. 82-1273

)

JOHN RICHARD KLEE )

)

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 March 7, 1983 in Fort Lauderdale, Florida. The following appearances were entered:

APPEARANCES

For Petitioner: William M. Tharpe, Jr., Esquire

Department of Insurance 413-B Larson Building

Tallahassee, Florida 32301

For Respondent: Sheldon R. Rosenthal, Esquire

721 City National Bank Building

25 West Flagler Street Miami, Florida 33130

BACKGROUND INFORMATION

These proceedings began on April 6, 1982 when Petitioner Bill Gunter, as Insurance Commissioner and Treasurer, filed an Administrative Complaint against Respondent John Richard Klee. On May 5, 1982 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 initially scheduled for November 3, 1982. On October 8, 1982 Petitioner moved for leave to file an Amended Administrative Complaint. By an order dated October 25, 1982 the motion was granted and the Amended Administrative Complaint was filed. Subsequently, Petitioner moved for a continuance of the final hearing because Petitioner's primary witness, Marie D. Grantley, was physically injured and unable to attend the final hearing. By an order dated November 1, 1982 the motion was granted and the final hearing was rescheduled for January 13, 1983.

On January 5, 1983 Petitioner again moved for a continuance of the final hearing because Mrs. Grantley had not yet recovered from her injuries and continued to be unable to attend the hearing as scheduled. The motion was granted and the final hearing was rescheduled one more time for March 7, 1983.

At the final hearing Petitioner presented the testimony of one witness and offered Exhibit 1 into evidence. Respondent objected to the receipt of the exhibit on the assertion that Petitioner had made no showing that the deponent Marie D. Grantley was unavailable. The Hearing Officer reserved ruling on the objection and now overrules it. Exhibit 1 is therefore received into evidence for this proceeding. Respondent called one witness and offered Respondent's Exhibits A and B which were received into evidence.

After the final hearing both parties submitted proposed recommended orders which contain proposed findings of fact. To the extent that those proposed findings are not reflected in this order, they are rejected as either not supported by the weight of admissible evidence or as being irrelevant to the issues determined here. Sonny's Italian Restaurant v. Department of Business Regulation, 414 So.2d 1156, 1157 (Fla. 3d DCA 1982).

FINDINGS OF FACT

1. Respondent John Richard Klee is licensed by Petitioner as a disability insurance agent in the State of Florida. At all times material to these facts he has been so licensed.

   
   

2. Mr. Klee was employed by the Interstate Insurance Agency for approximately 9 years. During that time Interstate wrote insurance for the Guaranty Trust Life Insurance Company and for the Founders Life Insurance Company.

   
   

3. While an independent agent working through the Interstate Agency, Mr. Klee, on April 10, 1981 sold a hospital indemnity insurance policy through the Guaranty Trust Company to Marie D. Grantley.

   
   

4. Subsequently, Mr. Klee left the Interstate Agency and began employment with the Diversified Health Insurance Company which writes policies for the American Guaranty Life Insurance Company. After he had begun his new employment, Mrs. Grantley called him in October, 1981 to, get assistance in determining what her benefits were under the Guaranty Trust Company policies. 1/

   
   

5. On October 13, 1981 Mr. Klee went to Mrs. Grantley's home to explain her coverage as it applied to her current medical bills. At that meeting Mr. Klee solicited and received her application for a medicare supplemental policy unwritten by American Guaranty Life Insurance Company. The new policy covered certain expenses such as out-patient medical bills which were not covered by the existing Guaranty Trust policies.

   
   

6. During their discussion about the new policy, Mr. Klee explained to Mrs. Grantley that the new policy was to provide her supplemental coverage in addition to that which she already had under the Guaranty Trust policies. He did not tell her that the new policy was a direct replacement of the Guaranty Trust policies. Additionally, he did not tell her that she should cease paying the premium on her Guaranty Trust policies. These findings are the pivotal factual issues in the case. Mrs. Grantley's testimony which was received through a deposition 2/ is to the contrary. Mr. Klee's testimony that he thoroughly explained the coverage of the new policy and how it did not replace the existing Guaranty Trust Life policies is accepted as more credible than Mrs. Grantley's contrary testimony. This determination is based on the demeanor of Mr. Klee at the final hearing and on the apparent weakness of Mrs. Grantley's memory of the transaction as shown in her deposition.

7. When Mr. Klee met with Mrs. Grantley, he gave her all the information she needed to reasonably understand the nature of the new policy she was applying for as it related to her existing policies. He did not represent to her that the American Guaranty Company was in any way related to the Guaranty Trust Company.

   
   

8. When Mr. Klee took Mrs. Grantley's application for the American Guaranty Life Insurance policy, he gave her a receipt for three months' premium of $206.65. The receipt indicated that Mr. Klee is with the Diversified Health Agency and that the policy was to be issued by American Guaranty Life Insurance Company. Mrs. Grantley signed the American Guaranty Life Insurance Company application which indicated that the new coverage being applied for did not replace existing accident and sickness policies then in force. At the time Mrs. Grantley signed the application, Mr. Klee reasonably believed that she understood what she was doing.

   
   

9. The check which Mrs. Grantley drew to pay for the first three months' premium on the new policy was made out to Diversified Health Services.

   
   

10. Subsequent to her application for the American Guaranty Life policy, Mrs. Grantley called Mr. Gerald Schectman who had been Mr. Klee's supervisor at the Interstate Insurance Agency. She told Mr. Schectman that she was confused about her insurance coverage. Several days later, Mr. Schectman went to visit her at her home. She told him that she wanted to retain her original coverage purchased through the Interstate Agency and did not want the new American Guaranty Policy. As she recalled her transaction with Mr. Klee, she believed that he had told her that Guaranty Trust Life Insurance Company was being taken over by the American Guaranty Company or that they were otherwise the same company.

    
    

11. When Mr. Schectman heard her version of Mrs. Grantley's transaction with Mr. Klee, he took her to the Insurance Commissioner's Office to file a complaint against the Respondent.

    
    

    CONCLUSIONS OF LAW

    
    

12. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of this case. Section 120.57(1), Florida Statutes (1981).

    
    

13. Petitioner offered the deposition of Marie D. Grantley taken on February 15, 1983 as its Exhibit 1 at the final hearing. Respondent objected. He argued that Petitioner had not made an adequate showing that Mrs. Grantley was unavailable for the final hearing. Rule 1.330(a)(3), Florida Rules of Civil Procedure, provides that the deposition of a witness may be used at trial if it is determined that the witness is unavailable to attend the trial because of illness.

    
    

14. The deposition of Marie D. Grantley shows that she is 82 years old. On September 6, 1982 she broke her shoulder. Later Mrs. Grantley suffered a compressed fracture of two vertebrae on December 23, 1982. At the time of the deposition she was not able to sit up to read her mail. In order to be

    transported outside of her home she needed an ambulance wheelchair. These facts which appear in her deposition are sufficient to show that Mrs. Grantley was unavailable for the final hearing. Colonnades, Inc. v. Vance Baldwin, Inc., 318

    So.2d 515, 517 (Fla. 4th DCA 1975). The deposition has therefore been considered in this order.

    
    

15. In proceedings of this type where a regulatory agency seeks to discipline a person in a manner substantially affecting the practice of his business or profession, the Petitioner must prove the allegations of an administrative complaint by clear and convincing evidence. Gans v. Department of Professional and Occupational Regulation, 390 So.2d 107 (Fla. 2d DCA 1980); Walker v. Board of Optometry, 322 So.2d 612 (Fla. 3d DCA 1975); Reid v. Florida Real Estate Commission, 188 So.2d 846, 851 (Fla. 2d DCA 1966). The evidence must be as substantial as its consequences. Bowling v. Department of Insurance,

394 So.2d 165, 172 (Fla. 1st DCA 1981). Under any standard of proof, be it clear and convincing or even preponderance of the evidence, 3/ Petitioner has failed to prove the factual allegations of its Amended Administrative Complaint. According to the more credible evidence, no violation of the Insurance Code was committed by Mr. Klee in the sale of the American Guaranty Life Insurance Company policy to Marie D. Grantley on October 13, 1981. He made no misrepresentations and supplied Mrs. Grantley with sufficient information for her to understand the nature of the policy she was buying and how it related to her existing policies. For these reasons, the Amended Administrative Complaint filed against Respondent should be DISMISSED.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Insurance enter a Final Order dismissing

the Amended Administrative Complaint filed against John Richard Klee.

DONE and RECOMMENDED this 1st day of June, 1983, in Tallahassee, Florida.

MICHAEL P. 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 1st day of June, 1983.

ENDNOTES

1/ In 1978 Mrs. Grantley had purchased another Guaranty Trust policy from an agent with the Interstate Agency.

2/ Mrs. Grantley was unable to appear at the final hearing due to her physical condition.

3/ In the Matter of Mary Lou Finn, 4FALR1113A (Fla. Department of Insurance, Final Order, March 31, 1982)

COPIES FURNISHED:

William M. Tharpe, Jr., Esquire Department of Insurance

413-B Larson Building Tallahassee, Florida 32301

Sheldon R. Rosenthal, Esquire 721 City National Hank Building

25 West Flagler Street Miami, Florida 33130

The Honorable Bill Gunter Department of Insurance The Capitol

Tallahassee, Florida 32301

Docket for Case No: 82-001273

Orders for Case No: 82-001273