JOHN R. BECK, )
vs. ) CASE NO. 83-918
Respondent. )
Pursuant to notice, a hearing was held before Charles C. Adams, a Hearing Officer with the Division of Administrative Hearings. This hearing was conducted on June 13, 1983, in Room 409, Richard P. Daniel Building, 111 East Coastline Drive, Jacksonville, Florida. This Recommended Order is being entered following the receipt and review of the transcript of proceedings which was filed on July 15, 1983, in the Office of the Division of Administrative Hearings. The proposed Recommended Order of Respondent's counsel has also been reviewed. That item was filed with the Division of Administrative Hearings on July 27, 1983. In correspondence of August 3, 1983, which is forwarded with this Recommended Order, counsel for Petitioner indicated that he had not received the transcript of proceedings and wished to secure the transcript to facilitate the preparation of his proposed Recommended Order. That correspondence was directed to counsel for Respondent and was answered on August 9, 1983, by a letter from Respondent's counsel indicating the name of the court reporter who appeared at the hearing. A copy of the August 9, 1983, correspondence is forwarded with this Recommended Order. Notwithstanding the expressed desire to file a proposed Recommended Order, that proposal has not been offered.
Respondent's proposed Recommended Order has been used to the extent that it is consistent with the Recommended Order herein. To the extent that the proposed Recommended Order is inconsistent, its proposals and conclusions are rejected for reasons of being irrelevant, incompetent, immaterial or not supported by the evidence.
For Petitioner: William G. Noe, Jr., Esquire
For Respondent: Ruth L. Gokel, Esquire
The issues presented concern the question of whether the Petitioner should be entitled to stand examination and be granted a license from the State of Florida, Department of Insurance and Treasurer, for the position of general lines agent. Particular consideration is given to the letter of denial of Petitioner's application which sets forth the grounds for denying the request for licensure. The date of that Statement of Denial is March 3, 1983.
Petitioner, John R. Beck, was formerly licensed as a general lines agent by the State of Florida, Department of Insurance and Treasurer. Effective April 21, 1980, Petitioner had his license privilege revoked for a period of two years. Indeed, the revocation term ensued and ended on April 21, 1982. Petitioner now seeks relicensure. That request has been denied through correspondence submitted from Respondent to Petitioner, dated March 3, 1983.
The statutory basis for denial is discussed in the Conclusions of Law portion of this Order. Petitioner did not accept the proposed agency action of denial and following request for a formal hearing, a hearing was conducted by the Division of Administrative Hearings on June 13, 1983.
When Petitioner held his license as a general lines 220 agent, he operated as John Beck Insurance Agency. Subsequent to that time his title with that company has been one of clerk. For the most part, Petitioner has written applications for insurance, answered the phone and done filing in his clerical capacity in the insurance office. In that position, he has been supervised by general lines agents in the Beck office, namely John B. Hancock and Monica Gail Beck, his wife. During Mrs. Beck's period of supervision, she has signed all applications. That time commenced in February 1983, and corresponds to the place and time when Monica Beck became the agent-owner of Beck Insurance. Monica Beck was the agent-owner of Beck Insurance at the time of the final hearing in this cause. At times when Beck was supervised by Hancock he would sign Hancock's name on the application in that place where the agent was supposed to sign. The signatures were made with the permission of Hancock. On occasion the signatures would be placed by Beck before the application was reviewed by Hancock as general lines agent. Nonetheless, all applications on which Beck placed Hancock's name were reviewed by Hancock.
Even though most of Beck's duties were performed in the insurance office proper, during the time he served as clerk, subsequent to the revocation of his general lines agent's license, there were occasions when he took applications outside the confines of the office. Those trips outside the office were made with the permission of Hancock, when Hancock was serving as supervisor to Beck. One of these occasions concerned a transaction with Judy Suddeth. On November 30, 1981, Suddeth was attempting to purchase insurance as a prerequisite to obtaining an automobile tag for her car. She was recommended to the Petitioner for this purpose by an acquaintance of her daughter's who worked at River City Chrysler-Plymouth. That acquaintance contacted the Petitioner and Suddeth met Beck at River City Chrysler-Plymouth where he took her application for insurance. Beck was not accompanied by any supervising agent from his office at the time the application was taken. As part of the process Beck presented Suddeth with a business card, which is found as Respondent's Exhibit No. 1 entered into evidence. That card identifies Beck as the agent-owner of the insurance company known as John Beck Insurance Agency. The card states in its advertisement "All Lines Insurance at Your Door." Suddeth paid $72 down payment with the balance of the premium price to be financed by Castle Premium,
after an application form was filled out by Petitioner and signed by Suddeth. The policy was to be effective from November 30, 1981, through November 30, 1982.
Suddeth had a further transaction with Beck in January 1982. This occurred as a result of her purchase of another automobile. She was told by the proprietor of Warren Motors, who sold her the car, that she needed to have insurance for the car and was asked what company she might have in mind. The same acquaintance mentioned before and her daughter were with her on this occasion and that acquaintance suggested that Suddeth contact the Petitioner to purchase the insurance. Tbe acquaintance called Beck's office and the Petitioner came to Warren Motors to deal with the policy question on the purchase of the automobile, unattended by a -supervisor from his office. A copy of the application form that was executed by Petitioner may be found as Respondent's Exhibit No. 2 admitted into evidence. As was the initial case of the purchase by Suddeth in November 1981, this was an application to purchase insurance from Kenilworth Insurance Company. Suddeth signed the request as applicant and Beck signed the document with John Hancock's name on the signature line for the brokering agent. As a part of the application process, Suddeth signed on the part of the form related to the acceptance of uninsured motorist's coverage and on that signature line related to personal injury protection with a deductible of $8,000. Suddeth had indicated to Beck that she was desirous of sufficient insurance to "drive that car off the lot," and that was all. Beck did not ask her whether she wanted a deductible for personal injury protection or explain to her what the significance of that coverage might be or what the term "deductible" meant. At the hearing, Suddeth expressed an understanding of what a deductible policy meant. Suddeth did not make a close review of the application.
At the time of the 1982 transaction, Suddeth also signed or made application to be a member of the Nation Motor Club, Inc. A copy of that application may be found as Respondent's Exhibit No. 3 admitted into evidence. She did not tell Beck that she wanted to be a member of the motor club when he asked. In fact she responded in the negative. Nor did she indicate that she would be interested in towing coverage when Beck inquired about towing coverage. She again told him no. Nonetheless, she signed that item because Petitioner told her to sign it. She paid $25 for membership in the motor club, along with
$106 as a down payment on the insurance policy with a balance to be financed through a premium finance arrangement. It was not until several weeks later that she discovered that she had purchased a membership in the motor club.
Kenilworth Insurance Company went bankrupt and Suddeth lost coverage from that company. She did not receive any reimbursement following that bankruptcy. Neither did she receive money back from the purchase of the motor club benefits, nor receive any of the materials describing the benefits. In this connection, she has not asked Beck for a refund for the motor club purchase.
Steven Ray Christian purchased an automobile from Coggin Pontiac on February 24, 1982. While at the dealership, the salesman introduced Christian to the Petitioner. Petitioner then processed Christian's application for insurance. No supervisory representative from Beck's office was with him on this occasion. Petitioner was not summoned to the dealership specifically to process the application. His presence was a happenstance. The application was for insurance from Kenilworth Insurance Company for the period February 23, 1982 through February 23, 1983. Christian wanted coverage sufficient to get a tag for the automobile being purchased. The application was signed by Christian, to
include his signature indicating the desire to have uninsured motorist's coverage. In addition, Christian signed that entry related to personal injury protection options and the election for a deductible of $8,000. A discussion was entered into between the Petitioner and Christian on the subject of personal injury protection in which Petitioner explained the concept. It is unclear whether that discussion included a decision to elect the $8,000 deductible.
Christian was provided a copy of a business card which had the same appearance as that card provided to Suddeth, as described before. That card is admitted into evidence as Respondent's Exhibit No. 4. Christian did not request the right to join a motor club when discussing his insurance needs. He did indicate his desire to have towing service. Christian had already purchased a membership in a motor club from the Coggin Pontiac Agency. Christian paid $35 through Petitioner to provide towing service. Christian did not review the application for insurance before he signed it.
One other matter of customer involvement while Petitioner was employed as a clerk at the Beck Insurance Agency concerned an insurance purchase by Pamela Beals. In particular, she bought policies for her benefit and for the benefit of her father. She had been recommended to speak to the John Beck Insurance Agency by an individual at Southside Ford. Beals went to the office of John Beck Insurance Company on Atlantic Boulevard in May of 1982. When she entered, Petitioner was at a desk. Beals was given the impression that Beck owned the insurance agency in that John Beck Insurance Agency was written on the door of the office and in view of a card which she was given which indicated that John Beck was the owner of the company. Petitioner filled out an application from Beals for a car she was purchasing and for two cars for her father. Beals explained what coverage she wanted and indicated she was in a hurry. She then signed the applications and paid for the coverage by Beck.
When she received her policy from the Utah Fire Insurance Company, she discovered that the policy indicated a $150 deductible as opposed to a $100 deductible which she had requested and the fact that the personal injury protection indicated an $8,000 deductible when in fact she desired no deductible in that category. The origins of these errors were not established in the hearing. She also received a letter from the insurance company indicating that her premium amount would be greater because she did not have her license for three years nor had she been previously insured. She was told by the insurance company that the reason for this adjustment was in view of the fact that they had discovered that she did not have prior insurance from Allstate as had been indicated on the application and her lack of driving experience. The information about Allstate Insurance was not on the application Beck processed on the day her insurance was purchased. Beck had written down on the application form filled out at the time of the visit to the office that Beals had her license for three years. Beals did not tell the Petitioner that information, which was false. In fact, Beals had never owned a car and never had purchased insurance before dealing with Beck.
Subsequently, Beals decided to cancel the policy with Utah Home Insurance and was informed that this should be done to the John Beck Insurance Agency. She spoke to Monica Beck who explained that this matter would be attended. She finally received a refund from the purchase of insurance from the Beck agency in the amount of $36 out of the $300 plus paid for the policy period. She also received $35 back as a refund for purchase of motor club rights through Petitioner. In that regard, Beals had told Beck that she wanted towing services; however, she did not mention a request to join a motor club. Petitioner indicated that the Utah Home Insurance Company did not provide towing coverage and that another policy would be necessary to obtain the coverage.
In dealing with the customers who are referred to in this Recommended Order, Petitioner failed to indicate to them that he was a clerk as opposed to a licensed agent, or to offer any other comment which would tend to demonstrate that he was not an insurance agent for John Beck Insurance Agency. By way of explanation related to the business cards which showed him to be the insurance agent for the company, Petitioner stated it was simply a matter of having "leftover" cards from the time when he was licensed and not using up those cards. He acknowledged that persons might be misled by the statement on the cards to the effect that he was the agent-owner of John Beck Insurance Agency.
All events reported above occurred in Duval County, Florida.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this action, per Subsectionl20.57(1), Florida Statutes.
Respondent through counsel had moved to oppose the filing and consideration of any findings of facts and conclusions of law submitted by Petitioner. No such proposals have been made by the Petitioner, therefore the motion is moot and stands denied.
As envisioned by Subsection 626.641(2), Florida Statutes, it was necessary for Petitioner to make an original application for licensure as a general lines 220 agent, having had his license revoked for two years commencing April 21, 1980. That request for relicensure and opportunity for examination was denied based upon the interpretation that Petitioner transacted insurance without a currently effective license, within the meaning of Subsection 626.112(2), Florida Statutes. That subsection provides:
No agent or solicitor shall solicit or otherwise transact as agent or
solicitor, or represent or hold himself out to be an agent or solicitor as to,
any kind or kinds of insurance as to which he is not then licensed as such agent or solicitor under a currently effective license issued to such person by the department pursuant to this code.
This section in law prohibits the solicitation or transaction of business in other related matters by persons who are agents or solicitors. At the time Petitioner transacted business with the individuals referred to in the findings of fact, he was not an agent or solicitor. Therefore this provision has no application to Petitioner and may not bar his licensure.
The second reason stated for denying the license pertains to the offense by Petitioner related to Subsection 626.9541(11)(a), Florida Statutes, which states:
Knowingly making false or fraudulent statements or representations on, or relative to, an application for an insurance policy for the purpose of obtaining a fee, commission, money, or
other benefit from any insurer, agent, broker, or individual.
This subsection in law is under Part VII of the Insurance Code related to unfair insurance trade practices. Petitioner in indicating the three year driving experience of the customer Beals violated that provision, when with knowledge that Beals did not have that driving experience and did not make such an indication to Petitioner, the applicant nonetheless made the false statement through the application process and did so for purposes identified in this provision. In turn, this was a willful violation of a code provision, within the meaning of Subsection 626.611(13), Florida Statutes and is sufficient reason for denying his license request. His conduct reference the Beals' application also constitutes fraud or dishonest practice in the conduct of business by this applicant within the meaning of Subsection 626.611(11), Florida Statutes and is sufficient reason for the rejection of Petitioner's application. Moreover, Petitioner's utilization of the business cards which indicated that he was the agent-owner of the Beck Insurance Agency constituted a violation of Subsection 626.611(9), Florida Statutes and is sufficient reason to deny his licensure.
The overall pattern and conduct on the part of the Petitioner in dealing with the several customers by holding himself out to be an insurance agent within the meaning of Florida law, by his failure to better explain the nature of the policies being purchased, by offering services not sought by the customer and by placing misinformation in the application form in the instance of the Beals' circumstance, demonstrates that Petitioner is lacking in fitness and trustworthiness which are necessary to engage in the business of insurance, within the meaning of Subsection 626.611(7), Florida Statutes. This is sufficient reason to deny his application for licensure. These same failings on the part of the Petitioner cause his license denial based upon the fact that he has been demonstrated -to be lacking in reasonably adequate knowledge and technical competence to engage in the transactions which would be authorized by a license or permit, as described in Subsection 626.611(8), Florida Statutes. Finally, upon the discretion of the licensing agency, a discretion that should be used in this instance, Petitioner is denied his request for licensure based upon conduct in transactions with the several customers, which is contrary to Subsection 626.621(6), Florida Statutes. That provision states:
If in the conduct of business under the license or permit he has engaged in
unfair methods of competition or in unfair
or deceptive acts or practices, as prohibited under Part VII of this chapter, or has other- wise shown himself to be a source of injury or loss to the public or detrimental to the public interest.
Based upon a full consideration of the facts in this case and the conclusions of law reached, it is recommended: That a final order be entered which denies the application by Petitioner to stand examination and be granted a license as a general lines 220 agent.
DONE and ORDERED this 20th day of September, 1983, in Tallahassee, Florida.
CHARLES C. ADAMS
Filed with the Clerk of the Division of Administrative Hearings this 20th day of September, 1983.
William G. Noe, Jr., Esquire
Ms. Ruth L. Gokel Department of Insurance and
