vs. ) CASE NO. 82-2815
Respondent. )
Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, James E. Bradwell, held a formal hearing in this case on March 23, 1983 in Miami, Florida. The parties filed a joint request for and were afforded leave through June 3, 1983 to submit proposed recommended orders. In so doing, the parties waived the 30-day time requirement that the undersigned issue a recommended order herein following the close of the hearing. 1/
For Petitioner: Clark R. Jennings, Esquire
For Respondent: Thomas F. Woods, Esquire
The issue posed for decision herein is whether or not the Respondent's license and eligibility for licensure as an Ordinary Life, Disability and a General Lines agent should be revoked, suspended, or otherwise disciplined for reasons set forth hereinafter by the Administrative Complaint filed by the Petitioner on September 24, 1982.
An Insurance Binder dated October 7, 1980, issued to Colon Aveiga by Center Insurance Agency, Inc., and signed by Jon Scott Robbins evidencing payment of $554 for an auto insurance policy issued by Dixie Insurance Company (Petitioner's Exhibit 53).
An application for a Fireman's Fund auto insurance policy, dated October 10, 1980, signed by Colon Aveiga and Jon Scott Robbins evidencing payment of $514 (Petitioner's Exhibit 44).
An Insurance Binder dated April 20, 1981, issued to Colon Aveiga and signed by Jon Scott Robbins evidencing payment of $767 credit for premiums paid and $299 for premiums due (Petitioner's Exhibit 56).
A copy of a cancelled personal check (numbered 128) written by Colon Aveiga, dated April 20, 1981, made payable to Metro Insurance Agency in the amount of $299 for payment of premiums due (Petitioner's Exhibit 57).
A Notice of Cancellation of a Fireman's Fund auto insurance policy dated March 25, 1981, and issued to Colon Aveiga for nonpayment of premiums due (Petitioner's Exhibit 52).
An Amended Fireman's Fund Auto Insurance Policy dated February 6, 1981, issued to Colon Aveiga and showing a premium adjustment of $271 due (Petitioner's Exhibit 49).
A Fireman's Fund Interoffice Memo dated March 23, 1981, written by Albert Sons, FJUA Underwriting Manager for Fireman's Fund Insurance Companies, discussing Colon Aveiga's insurance policy application (Petitioner's Exhibit 42).
A Fireman's Fund FJUA Underwriters Request for Information from Metro Insurance Agency regarding Colon Aveiga, dated December 1, 1980 (Petitioner's Exhibit 46)
A Fireman's Fund Underwriting memo dated January 14, 1981, requesting information about Colon Aveiga from Metro Insurance Agency and containing a new address for Colon Aveiga (Petitioner's Exhibit 47).
A Florida Department of Highway Safety and Motor Vehicles' transcript of Gaston Aveiga's certified driving record, dated September 16, 1981 (Petitioner's Exhibit 43).
An Insurance Binder dated October 2, 1980, issued to Marc Gavidia by Metro Insurance Agency and signed by Jon Scott Robbins, evidencing a payment of
$140 for an auto insurance policy issued by Fireman's Fund (Petitioner's Exhibit 97).
An Insurance Premium Finance Agreement dated October 23, 1980, issued to Marc Gavidia by the Metro Insurance Agency and signed by Jon Scott Robbins (Petitioner's Exhibit 98).
A Florida Department of Highway Safety and Motor Vehicles' transcript of Marc Gavidia's certified driving record, dated September 16, 1981 (Petitioner's Exhibit 99).
An application for a Fireman's Fund auto insurance policy, dated October 9, 1980, signed by Marc Gavidia and Jon Scott Robbins (Petitioner's Exhibit 101).
A Policy Change Request for a Fireman's Fund auto insurance policy, dated February 10, 1981, issued by Metro Insurance Agency, signed by Jon Scott
Robbins, concerning Marc Gavidia's policy and listing his address as 5361 S.E. 11th Street, Tallahassee, Florida (Petitioner's Exhibit 111).
A Notice of Cancellation of Marc Gavidia's auto insurance policy, dated February 27, 1981, issued by Fireman's Fund and citing material misrepresentation as the grounds for the cancellation (Petitioner's Exhibit 112).
A copy of a cancelled personal check (No. 1726) written by Juana Perez, dated March 12, 1981, made payable to Metro Insurance Agency in the amount of $299 for payment of premiums due (Petitioner's Exhibit 62).
An Insurance Binder dated March 12, 1981, issued to Rogelio Perez by Metro Insurance Agency and signed by Jon Scott Robbins, evidencing auto insurance coverage by Utah Home Insurance Company (Petitioner's Exhibit 63).
An Insurance Premium Finance Agreement dated March 12, 1981, issued to Rogelio Perez by Metro Insurance Agency, and signed by Jon Scott Robbins (Petitioner's Exhibit 78).
An application for a Fireman's Fund auto insurance policy, dated March 12, 1981, signed by Rogelio Perez and Jon Scott Robbins (Petitioner's Exhibit 65).
A Declarations Form for auto insurance coverage by Rogelio Perez by Fireman's Fund showing a premium due of $978 (Petitioner's Exhibit 75).
A Declarations Form for auto insurance coverage by Rogelio Perez by Fireman's Fund showing a premium due of $881 (Petitioner's Exhibit 66).
A receipt from Luby's Chevrolet of Miami, Florida, showing $1,084 received from Luis G. Capon (Petitioner's Exhibit 80).
An Insurance Binder dated January 26, 1981, issued to Luis Capon by Metro Insurance Agency, signed by Jon Scott Robbins and evidencing auto insurance coverage provided by Utah Home Insurance Company (Petitioner's Exhibit 81).
An application for a Fireman's Fund auto insurance policy dated January 28, 1981, signed by Jon Scott Robbins (Petitioner's Exhibit 84).
A Policy Change Request for a Fireman's Fund auto insurance policy stating that Luis Capon's address had been changed to 2560 S.W. 34th Street, Gainesville, Florida, and signed by Jon Scott Robbins (Petitioner's Exhibit 86).
A Florida Department of Highway Safety and Motor Vehicles' transcript of Luis Capon's certified driving record, dated September 12, 1981 (Petitioner's Exhibit 79).
A cancelled policy advisal dated July 8, 1981, regarding Luis Capon's Fireman's Fund auto insurance policy (Petitioner's Exhibit 90).
A letter from Albert M. Sons, dated September 22, 1981, in his capacity as FJUA Manager stating that an inspection by Fireman's Fund established that Luis Capon had not moved to Gainesville, Florida, and that in fact he lived in Miami and was therefore in a higher rating zone (Petitioner's Exhibit 89).
An Interoffice Memo from the file of Fireman's Fund dated March 23, 1981, in reference to Luis Capon questioning certain inconsistencies in that individual's application for insurance (Petitioner's Exhibit 83).
An application for a Fireman's Fund auto insurance policy, dated September 10, 1980, issued to Javier Alvarez, showing a signature of "Javier Alvarez" and signed by Jon Scott Robbins (Petitioner's Exhibits 3 and 4).
A Declarations Form for auto insurance coverage of Javier Alvarez by Fireman's Fund showing a premium due of $737 (Petitioner's Exhibit 5).
A Return to Sender letter from Fireman's Fund to Javier Alvarez bearing the address of 4902 S.W. 84th Street, Plantation, Florida (Petitioner's Exhibit 6).
A Fireman's Fund FJUA Underwriters request for Javier Alvarez' correct address, issued to Metro Insurance Agency, dated November 14, 1980 (Petitioner's Exhibit 7).
An Insurance Premium Finance Agreement allegedly signed by Javier Alvarez, issued by Metro Insurance Agency, and signed by Jon Scott Robbins (Petitioner's Exhibit 19).
A letter from the National Insurance Finance Company to Javier Alvarez, 251 Crandon Boulevard, Miami, Florida, informing Alvarez of dates and terms of due payments (Petitioner's Exhibit 20).
Deposition of A. M. Beverly, taken February 22, 1983 (Petitioner's Exhibit 1).
FJUA Rating Manual (Petitioner's Exhibit 2).
Fireman's Fund FJUA Rating Examination (Petitioner's Exhibit 3).
The following witnesses testified on behalf of the Petitioner: Gaston Aveiga, Albert M. Sons, Peter Gavidia, Marc Gavidia, Juana Perez, Luis Capon, and Javier Alvarez. The Respondent testified on his own behalf.
Based upon my observation of the witnesses and their demeanor while testifying, post-hearing memoranda, documentary evidence received, pre-hearing stipulations and the entire record compiled herein, I hereby make the following relevant:
The Respondent, Jon Scott Robbins, was, during times material herein, licensed as an Ordinary Life, Disability and General Lines agent. By its Administrative Complaint filed herein dated September 24, 1982, Petitioner, Department of Insurance, charged that the Respondent engaged in the following acts and/or conduct (in summary fashion) which amounts to conduct violative of Chapter 626, Florida Statutes, to wit:
Respondent failed to account for or pay to the insurer, insured, or other persons entitled to premiums or other funds received belonging to insurers or others in transactions under his license in a fiduciary capacity, in violation of Section 626.561(1), Florida Statutes.
Respondent diverted or appropriated such funds or portions thereof for his own use, in violation of Section 626.561(2), Florida Statutes.
Respondent collected a sum as premium or charge for insurance in excess of or less than the premium or charge applicable to such insurance, in violation of Section 626.9541(15)(b), Florida Statutes.
Respondent misappropriated, converted, or unlawfully withheld monies belonging to insurers, insureds, beneficiaries, or others received in the conduct of business under his license, in violation of Section 626.611(10), Florida Statutes.
Respondent knowingly filed with a supervisor or other public official, or made, published, disseminated, circulated, delivered to any person, or placed before the public, or caused directly or indirectly to be filed with a supervisor, or other public official, or made, published, disseminated, circulated, delivered to any person, or placed before the public, any false material statement, in violation of Section 626.9541(d), Florida Statutes.
Respondent knowingly made a false material statement, in violation of Section 626.9541(5)(a)2, Florida Statutes.
Respondent knowingly made a false entry of material fact in a book, report, or statement of any person, or knowingly omitted to make a true entry of a material fact pertaining to the business of such person in a book, report, or statement of such person, in violation of Section 626.9541(5)(b), Florida Statutes.
Respondent made false or fraudulent statements or representation on, or relative to, an application for an insurance policy for the purpose of obtaining a fee, commission, money, or other benefit from an insurer, agent, broker or individual, in violation of Section 626.9541(11)(a), Florida Statutes.
Respondent knowingly made a false or fraudulent statement or representation in or with reference to an application or negotiation for insurance, in violation of Section 626.9541(11)(b), Florida Statutes.
Respondent willfully violated a provision or provisions of the Insurance Code, in violation of Section 626.611(13), Florida Statutes.
Respondent demonstrated a lack of fitness or trustworthiness to engage in the business of insurance, in violation of Section 626.611(7), Florida Statutes.
Respondent engaged in fraudulent or dishonest practices, in violation of Section 626.611(9), Florida Statutes.
Respondent engaged in unfair methods of competition or in unfair or deceptive acts as prohibited under Part VII of Chapter 626, Florida Statutes, in violation of Section 626.621(6), Florida Statutes.
Respondent violated a provision of the Insurance Code, in violation of Section 626.611(10), Florida Statutes.
Respondent has shown himself to be a source of injury or loss to the public, or detrimental to the public interest, in violation of Section 626.621(6), Florida Statutes.
During times material herein, Respondent served as a General Lines agent and represented Fireman's Fund Insurance (Fireman's Fund).
The complaint allegations, in summary fashion, may be grouped in two classifications; (1) that Respondent knowingly filed false statements of material facts concerning insureds in an attempt to attract more insureds by offering lower rates and (2) Respondent received premiums from insureds in excess of the actual premiums he submitted to Fireman's Fund and thereby unlawfully appropriated the excess monies to his own use.
Albert Sons is the underwriting manager for the Florida Joint Underwriters Association (FJUA) in his capacity for Fireman's Fund and is a direct contact for Fireman's Fund with the Respondent.
All FJUA premium rates are identical given the same variables such as age, type of vehicle, use and territory. Any variation of these factors changes the rate in a uniform manner and that change is uniform throughout the industry. As an example, Miami is a substantially higher rated territory than Gainesville (TR 31-32).
An insured who cancels his insurance coverage is charged the amount of premium based on the amount of time that the coverage remained in effect plus a service charge exacted by the company for processing the application.
Pursuant to negotiations for the purchase of auto insurance, Gaston Aveiga, speaking on behalf of his father Colon Aveiga, informed Respondent of his Florida driver's license number and date of birth. The same information was provided to the Respondent on behalf of Colon Aveiga. Gaston advised the Respondent that he would be the principal driver of the car to be insured.
Colon Aveiga purchased an auto insurance policy from the Respondent on October 7, 1980 and was quoted a premium of $544. Colon received an insurance binder from Respondent reflecting his correct address: 1215 NE 110th Street, Miami, Florida (Petitioner's Exhibit No. 53). Approximately three days later, an application was made to Fireman's Fund on October 10, 1980, reflecting that Colon Aveiga's address is 1534 SW 34th Street, Gainesville, Florida. The Aveigas have never lived in Gainesville nor have they indicated any intention of moving to Gainesville (TR 15). The insurance application further provides that Colon Aveiga is the only driver of the car and that he had an international drivers license whereas the Aveigas only have Florida driver's licenses; they specifically informed the Respondent of the same and that Gaston would be the principal driver of the insured car. The application submitted to Fireman's Fund on behalf of the Aveigas reflects a total premium of $514 which is, of course, $30 less than the premium quoted and collected from Colon Aveiga.
On October 2, 1980, Marc Gavidia, and his father, Peter, purchased an auto insurance policy from the Respondent, doing business as Metro Insurance Agency. 2/ Respondent provided the Gavidias an insurance binder containing their correct address: 10441 SW 50th Street, Miami, Florida and evidencing a payment of $140 towards the balance due (Petitioner's Exhibit No. 97). The insurance was purchased to insure Marc Gavidia's Dodge van of which he was the principal driver. Marc Gavidia purchased the auto insurance from Respondent because of the cheaper rate (TR pp. 41-45).
On October 4, 1980, an auto insurance application was tendered to Fireman's Fund on behalf of Marc Gavidia reflecting that he was self-employed (Petitioner's Exhibit No. 101). Marc Gavidia did not list himself as self- employed on the application (TR 49).
Marc Gavidia gave Respondent his Florida driver's license which reflected a birth date of February 7, 1960 whereas the application submitted by Respondent on behalf of Marc Gavidia reflects a birth date of February 14, 1950 with a different driver's license number (Petitioner's Exhibit No. 101).
On February 14, 1981 Respondent sent a policy change request for Florida auto insurance stating that the insured, Marc Gavidia, transferred schools to Tallahassee and now lives at 5361 SE 11th Street, Tallahassee, Florida (petitioner's Exhibit No. 111). Marc Gavidia has never lived in Tallahassee nor has he communicated to the Respondent any intent of moving to Tallahassee. (TR pp. 49-50).
Juana Perez and her husband, Rogelio Perez purchased auto insurance from the Respondent based on the low rate quoted by Respondent. Ms. Perez wrote a check in the amount of $275 payable to Metro Insurance and received an insurance binder (TR pp. 53-54).
Ms. Perez gave David Einhorn (a salesman of a local automobile dealership who was representing Respondent) Mr. Perez's Florida driver's license and Mr. Einhorn made a copy of the license (TR p. 56).
An application for insurance was submitted to Fireman's Fund on behalf of the Perezes and reflects a total premium of $893. The application states further that the applicant has an international drivers license whereas Mr. Perez has never had an international drivers license (TR p. 59). The application reflects further that Mr. Perez was unemployed whereas he was employed at the time of his application for insurance (TR pp. 59, 63 and 65).
An insurance premium finance agreement dated December 30, 1981, entered into by Mr. Perez shows $978 as a total amount of premiums minus the
$275 downpayment leaving $704.20 as the amount to be financed (Petitioner's Exhibit No. 78). This represents approximately eighty-five ($85.00) dollars more than the premium sent to Fireman's Fund.
On January 28, 1981, Luis Capon, purchased auto insurance from the Respondent and an application was submitted to Fireman's Fund reflecting a total premium of $789. At that time, Luis Capon paid $1,084 in cash to the Metro Insurance Company (TR p. 68). The application submitted by Respondent reflected further that Luis Capon had an international drivers license No. 1581934 and was born on January 15, 1944. At the time Luis Capon made application with the Respondent for auto insurance, he provided his Florida Drivers license which reflected his correct address: 419 NW 15th Avenue, Miami, Florida and his birth date, November 28, 1956 (TR p. 71).
A policy change request for Fireman's Fund issued to Luis Capon states that Capon changed his address to 2560 SW 34th Street, Gainesville, Florida.
The policy change request form was signed by Respondent. Luis Capon has never lived in Gainesville nor has he evidenced to Respondent any intent of living in Gainesville. Further, Luis Capon has never received any refund from Respondent and in fact had to pay additional premiums (TR p. 73). The additional premium
seems to have stemmed from additional violations as reflected by a DMV Driving Report.
Javier Alvarez purchased an auto insurance policy from Respondent and was advised that the total cash premium for the policy was $830. Javier Alvarez paid $250 and financed the remaining $580 (Petitioner's Exhibit No. 19). An application submitted on behalf of Mr. Alvarez reflects a total premium of $730 which was submitted with the application. Mr. Alvarez has not received a refund of the difference in the amount quoted i.e. $830 and the amount $730 actually paid to Fireman's Fund by Respondent.
When negotiating for the purchase of the auto insurance policy from the Respondent, Javier Alvarez gave the Respondent his Florida driver's license which contained his license number, birth date and address. The application submitted on behalf of Mr. Alvarez shows a Plantation, Florida address and reflects that Javier Alvarez has a Massachusetts driver's license and a birth date of August 16, 1940 whereas his correct birth date is February 22, 1961 and his address is 251 Crandon Boulevard, Apartment 342, Key Biscayne, Florida (TR p. 106).
Mr. Alvarez has never had any address other than the Key Biscayne, Florida address and has never possessed a Massachusetts driver's license.
On April 2, 1981, Respondent sent an endorsement request to Fireman's Fund advising that Javier Alvarez had transferred schools and was living in Gainesville, Florida (Petitioner's Exhibit No. 2). Javier Alvarez has never attended any school in Gainesville, Florida nor has he indicated to Respondent any intent to do so (TR p. 110).
THE RESPONDENT'S POSITION
The Respondent testified on his own behalf and has been licensed since 1978. Respondent was first employed as a managing agent and as an underwriter for several years with another agency. During that employment, Respondent did not have the guidance and/or the assistance of a tutor. Respondent acknowledged that there were indeed numerous errors in addresses but he attributes same to the fact that he was a new agent without proper checks and balances in his office at the time, and that he, more than anyone else, was the victim of such mistakes. Respondent points to the fact that he earns commissions based on the amount of premiums and that the lower premiums quoted result in lower commissions to him. Finally, Respondent points to the fact that other agencies such as the chief complaining party in this case, Fireman's Fund, had a greater error ratio than the Respondent in the conduct of its insurance agency and that these errors were the result of sloppy clerical work and language barriers more than any intentional act on Respondent's part. 3/
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this action. Section 120.57(1), Florida Statutes.
The parties were duly noticed pursuant to the notice provisions of Chapter 120, Florida Statutes.
The authority of the Petitioner is derived from Chapter 626, Florida Statutes.
The Respondent, a licensed General Lines Agent including Ordinary Life and Disability Life Insurance, is subject to the disciplinary guides of Chapter 626, Florida Statutes.
During times material herein, the Respondent conducted his insurance business through the entity Metro Insurance Agency and represented Fireman's Fund Insurance Company.
Based on the foregoing Findings of Fact, competent and substantial evidence was offered to establish that the Respondent based on his insurance dealings with Peter and Marc Gavidia, Juana and Rogelio Perez, Luis Capon and Javier Alvarez, made false material statements in insurance applications and forms for the purpose of obtaining commissions in violation of Sections 626.9541(d); 626.9541(5)(a)2; 626.9541(5)(b); 626.9541(11)(a); and 626.9541(11)(b), Florida Statutes. Based thereon, due to the numerous violations, Respondent derivatively violated Sections 626.611(13) and 626.611(10), Florida Statutes.
Based on the foregoing and the Respondent's falsification of applications and other insurance forms combined with the unlawful conversion of excess premium monies clearly demonstrate that Respondent engaged in fraudulent and dishonest practices in violation of Section 626.611(9), Florida Statutes.
The Respondent, by engaging in a practice of falsifying insureds information supplied to the insurer (Fireman's Fund) in order to offer lower premiums and to attract more customers constitutes unfair methods of competition within the meaning of Sections 626.621(6), Florida Statutes.
The foregoing conduct by Respondent, in its entirety, demonstrates that the Respondent, if permitted to remain an agent without restriction, would be unfit and unworthy to engage in the business of insurance in this state, Section 626.611(7), Florida Statutes. 4/
RECOMMENDED that the Respondent's insurance license as referred to herein be suspended for a period of two (2) years. It is further RECOMMENDED that eighteen (18) months of the subject suspension be suspended during which time the Respondent's license shall be placed on probation.
RECOMMENDED this 2nd day of September, 1983 in Tallahassee, Florida.
JAMES E. BRADWELL, Hearing Officer Division of Administrative Hearings The Oakland Building
Filed with the Clerk of the Division of Administrative Hearings this 2nd day of September, 1983
1/ The parties have submitted proposed recommended orders which were considered by the undersigned in preparation of this Recommended Order. To the extent that the proposed findings, etc., are not contained in this Recommended Order, said proposed findings were deemed either irrelevant, immaterial, or otherwise not supported by record evidence.
2/ During times material herein, the Respondent stipulated that he operated through the corporate entity, Metro Insurance Agency.
3/ The Respondent introduced into evidence a deposition of A. M. Beverly, an employee of the Petitioner. The thrust of her testimony was that the Petitioner had an approximate ten percent (10 percent) error margin in listing the correct addresses of insurance agents that had licenses. That deposition was considered, however, it was deemed irrelevant to the issues posed herein.
4/ Consideration was given to the Respondent's testimony to the effect that he has presently installed proper checks and balances to see that the conduct here found to be violative of the insurance code will not recur in the future.
Consideration was further given to the testimony of Albert M. Sons, representative of Fireman's Fund who echoed the conclusion that the Respondent is not presently engaging in the numerous mistakes that has occurred by him, and/or his agents, in the past. However, due to the number of violations found herein, I shall recommend that the Respondent's license as referred to herein be suspended for a period of two (2) years.
Clark R. Jennings, Esquire Department of Insurance Suite 413-B, Larson Building Tallahassee, Florida 32301
Thomas F. Woods, Esquire WOODS, JOHNSTON and CARLSON
