STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF INSURANCE, )
STATE OF FLORIDA, )
)
Petitioner, )
)
vs. ) CASE NO. 83-1094
)
JOSEPH MICHEAL PALESKY, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice, the Division of Administrative Bearings, by its duly designated Hearing Officer, William E. Williams, held a public hearing in this cause on July 21 and 22, 1983, in Orlando, Florida.
APPEARANCES
For Petitioner: Ruth L. Gokel, Esquire and
Rhoda S. Kibler, Esquire Department of Insurance 4l3-B Larson Building Tallahassee, Florida 32301
For Respondent: Melvin R. Borne, Esquire and
William L. Grossenbacher, Esquire 800 Barnett Bank Building Tallahassee, Florida 32302
By Administrative Complaint dated March 28, 1983, Petitioner, Department of Insurance ("Petitioner"), charged Respondent, Joseph Michael Palesky ("Respondent"), with 12 counts of violations of the Florida Insurance Code. On April 14, 1983, Petitioner's First Amended Administrative Complaint added an additional four counts, and, on April 21, 1983, Petitioner's Second Amended Administrative Complaint containing an additional seven counts was filed.
Respondent filed a request for a formal hearing pur- suant to the provisions of Section 120.57(1) , Florida Statutes, on April 8, 1983. Petitioner forwarded that request to the Division of Administrative Bearings on April 13, 1983, and, by Notice of Hearing dated May 12, 1983, a formal administra- tive hearing was scheduled for July 21 and 22, 1983, in Orlando, Florida.
At the final hearing Petitioner called Marjorie Brubaker, Louise S. Donovan, Winifred Bell, Mary Evelyn Stapleton, and Esther Buddleson as its witnesses. In addition, depositions were taken of Koy B. Cook, Lillian B. Smith, J. Capers Smith, Kenneth Fritz, Leila Mueller, and Lucille Shock, which deposi- tions were admitted into evidence. The depositions of Koy B. Cook, Lillian B. Smith, J. Capers Smith, and Kenneth Fritz were videotaped, as well as
transcribed by court reporter. Pursuant to agreeient of counsel, the Hearing Officer viewed these videotaoes in his office in Tallahassee, Florida, on July 26, 1993. Petitioner offered Petitioner's fxhibits 1 through 13, which were received into evidence. Respondent testified in his own behalf and called Barbara Peters as his only other witness. Respondent offered Respondent's Exhibits 1 through 27, which were received into evidence.
At the final hearing in this cause, Petitioner took a voluntary dismissal with regard to Counts III, V, VII, VIII, IX, X, XIII, XIV, XVI, XVIII, Ix, XX,
and XXIII. As a result, the only counts remaining for resolution in this proceeding are Counts I, II, IV, VI, XI, XII, xV, XVII, XXI, and XXII.
Each of the parties have submitted proposed findings of fact for consideration by the Hearing Officer. To the extent that those proposed findings are not included in this Recommended Order, they have been specifically rejected as either being irrelevant to the issues involved in this cause, or as not having been supported by evidence of record.
FINDINGS OF FACT
At all times material hereto, Respondent was an Ordinary Life, including Disability Agent, and a Disability Agent licensed by the State of Florida. During this period, Respondent was licensed to sell life and health insurance policies for National States Insurance Company, American Guaranty Life Insurance Company, and Old Southern Life Insurance Company. Respondent was employed as an agent by Diversified Health Services, an insurance agency whose office is located in St. Petersburg, Florida. At no time material hereto was Respondent employed by any agency of the State of Florida.
As indicated above, there remain viable in the Administrative Complaint ten counts charging Respondent with various violations of provisions of the Florida Insurance Code. For purposes of clarity, the findings of fact with regard to each of those remaining counts will be set forth separately.
COUNT I
On February 12, 1983, Respondent visited Lucille Shock at her home in Bradenton, Florida. Mrs. Shock had earlier purchased a Medicare supplement policy from National States Insurance Company through another agent, but had decided to cancel that policy. Respondent visited Mrs. Shock's home in response to her notice of cancellation in hopes of persuading her to reinstate coverage.
In paragraph three of Count I of the Administrative Complaint, Respondent is charged with having told Mrs. Shock that he was ". . . authorized by the Florida Department of Insurance to investigate the Diversified Health Agency" when, in fact, he was not employed by any state agency. While it is true that Respondent was not at the time of his visit to Mrs. Shock employed by any state agency, the record in this cause is insufficient to establish the foregoing allegation of the Administrative Complaint. Respondent denies having made any c representation to Mrs. Shock that he was employed by the State of Florida. Further, Mrs. Shock's testimony in this regard is inconsistent and conflicting. In a February 21, 1983, letter to a representative of the Florida Department of Insurance, Mrs. Shock stated that at the time of his visit to her home the Respondent represented that he ". . . was an investigator for the Diversified Health Agency. . . . At final hearing, Mrs. Shock testified that Respondent told her that he was an investigator for the "insurance department," but also, on cross-examination, testified that Respondent told her that he was
an investigator for Diversified Health. Despite these inconsistencies, it is clear from the record in this proceeding that before the end of Respondent's visit with Mrs. Shock on February 12, 1983, she knew that Respondent was an insurance agent for National States Insurance Company. Because of the inconsistencies in Mrs. Shock's testimony, it is specifically concluded that her testimony concerning Respondent's representation about his employment is unreliable. Other than Mrs. Shock's testimony, there is no other record basis to establish that Respondent represented himself to be an employee of the Department of Insurance as alleged in Count I.
Respondent is also charged in paragraph five of Count I of the Administrative Complaint with having "falsely represented the financial condition of several insurance companies licensed to do business in Florida as part of your sales presentation to induce Mrs. Shock to buy insurance policies from you." The record in this cause establishes that Respondent and Mrs. Shock discussed several insurance companies, including Vulcan Insurance Company, Tara Life Insurance Company, and Bankers Life during their visit on February 12, 1983. Respondent reviewed with Mrs. Shock data contained in certain A. M. Best Company reports concerning these insurance companies.Respondent advised Mrs. Shock that Vulcan Insurance Company was "a rather shaky company" and that Tara Life Insurance Company had been experiencing "financial problems." There is, however, nothing of record in this proceeding to establish either that these companies are licensed in Florida or that the representations made by Respondent to Mrs. Shock concerning these insurance companies were false. Accordingly, the allegations contained in paragraph five of Count I have not been established.
COUNT II
On or about February 10, 1983, Respondent visited Koy B. Cook at his home in Port Orange, Florida. The purpose of Respondent's visit to Mr. Cook was to dissuade Mr. Cook from cancelling a policy with National States Insurance Company whichir. Cook had previously bought from another agent. After buying the National States policy initially, Mr. Cook had attempted to cancel a preexisting policy with Bankers Life Insurance Company, but had been advised by that company that the policy could not be cancelled. Mr. Cook determined that he could not afford duplicated coverage, so he contacted National States Insurance Company and advised them of his desire to cancel his National States policy. Be was advised, in writing, by National States, that his policy had been cancelled and that his premium had been returned to the insurance agency which had sold him the policy for refund. Sometime prior to January 12, 1983, Respondent contacted Mr. Cook by telephone, identified himself by name, and arranged an appointment to visit with Mr. Cook in his home. Mr. Cook understood from the conversation with Respondent that the purpose of their appointment was to return Mr. Cook's refund check from his cancelled National States policy.
Immediately prior to Respondent's arrival at Mr. Cook's home, Mr. Cook had been asleep. When Respondent arrived at Mr. Cook's door, Mr. Cook was still in a "daze," having just awakened. This fact is of significance, because at various times in his testimony Mr. Cook testified that Respondent identified himself as . . . an adjuster with Bill Gunter out of Tallahassee, or . . . an adjuster for the insurance company out of Tallahassee." Mr. Cook also testified that Respondent showed him some identification which bore a photograph of Insurance Commissioner Bill Gunter. This photograph was apparently attached to a document, the contents of which were unknown to Mr. Cook. Respondent denies having represented that he was an employee of the Department of Insurance.
During the course of their conversation, Mr. Cook advised Respondent that he preferred the coverage offered under the National States policy to that of the Bankers Life policy, but simply could not afford duplicate coverage. Respondent and Mr. Cook discussed the amount of unearned premium outstanding on the Bankers Life policy as compared to the cost of reinstating the National States policy. Mr. Cook had originally paid $630 for the issuance of the National States policy. Respondent returned to Mr. Cook a check in that amount during the course of their visit. Further, by offering to reinstate the National States policy for a $526 annual premium, Respondent demonstrated to Mr. Cook that he would save approximately the amount that remained in unearned premiums on the Bankers Life policy. Mr. Cook agreed to this proposal, Respondent completed an application form, and Mr. Cook gave Respondent a check for approximately $526 to reinstate the National States policy, with the understand- ing that the National States and Bankers Life policies would overlap for some period of time. Upon leaving Mr. Cook's house, Respondent gave Mr. Cook one of his business cards, which identi- fied Respondent as an agent of National States Insurance Company.
In Count II of the Administrative Complaint, Respondent is charged with having told Mr. Cook that he was an "insurance adjuster working out of Tallahassee" and that he "worked for the Florida Department of Insurance. Respondent is further charged with having told Mr. Cook that he "had a refund check for a cancelled Bankers Life policy when in fact the] had no such check." The testimony of Mr. Cook and Respondent on the issues alleged in Count II are diametrically oooosed. Viewing the transaction between Mr. Cook and Respondent in its totality, it is concluded that Respondent's version of the transaction is the more credible. Mr. Cook's testimony concerning Respondent's representations about his employment status contained several contradictions and inconsistencies. In addition, it is clear that Mr. Cook expected to receive a refund check from National States Insurance Comoany, that Mr. Palesky contacted him by telephone prior to his February 10 visit to advise him that he had his refund check, and that Respondent conducted himself during the entire transaction in a manner which clearly identified him as an insurance salesman. Finally, Respondent furnished Mr. Cook with a business card during the course of their meeting which clearly showed Respondent to be an agent of National States Insurance Company. It is also clear that Mr. Cook was aware during this entire transaction that his Bankers Life policy had not been cancelled, and that as a result of his transaction with Respondent he would be carrying policies with National States and Bankers Life which afforded duclicate coverage, and that he was advised of this fact by Respondent. These facts are clearly inconsistent with Mr. Cook's testimony that Respondent advised him that he had a refund for a cancelled Bankers Life policy in his possession.
COUNT IV
On or about March 2, 1982, Respondent visited Marjorie Brubaker in her home in Bradenton, Florida. The purpose of Respondent's visit to Mrs. Brubaker was to dissuade her from
cancelling an insurance policy with National States Insurance Company which she had previously purchased through another agent and had subsequently cancelled.
Mrs. Brubaker testified that, upon arrival at her home, Respondent represented to her that he was an "investigator for the state" or a "state investigator," looking into her cancellation of her policy with National States Insurance Company. Respondent denies having made that representation. The record is clear, however, that shortly after entering Mrs. Brubaker's home, Respondent showed Mrs. Brubaker materials which clearly identified him as an
agent of National States Insurance Company, and that Mrs. Brubaker clearly understood within minutes after his entering her home that he was, in fact, a salesman for National States Insurance Company. Under these circumstances, it is specifically found that Respondent's testimony concerning his employment status is more credible. If, as is clear from the record, Respondent intended to sell insurance to Mrs. Brubaker, there is little logic to his having represented himself as a state employee at the door to her home, and within minutes clearly divulging to her that that was indeed not the case.
Petitioner also alleges in the Administrative Complaint that Respondent displayed a photograph of Insurance Commissioner Bill Gunter to Mrs. Brubaker to establish his position as an investigator for the state. Mrs. Brubaker, however, was unable to identify the person in the photograph displayed to her by Respondent, other than to assert that the person in the photograph was not the Respondent, but instead a clean-shaven person with light hair and fair, reddish complexion. Those facts, standing alone, are insufficient to establish that the person in the photograph was, in fact, Mr. Gunter.
Respondent is alleged in paragraph twenty of Count IV of the Administrative Complaint of having ". . . . falsely represented the status of Medicare coverage in this state in order to induce Mrs. Brubaker to purchase' new insurance policies from you." The only evidence in the record on this issue is Mrs. Brubaker's testimony that Respondent told her that Blue Cross-Blue Shield would soon cease to be the Medicare carrier in Florida, and that there existed a substantial possibility that National States Insurance Company would be designated as the new Medicare carrier in Florida. The record in this cause is absolutely devoid of any evidence that that representation, even if it had been made, was false. Accordingly, Petitioner has failed to establish facts to support the allegations that Respondent has falsely represented the status of Medicare coverage in Florida.
Finally, paragraph twenty-one of Count IV of the Administrative Complaint alleges that Respondent falsely told Mrs. Brubaker that her present insurer, Orange State Life Insurance Company, was cancelling its Medicare Supplement policies. . . . It is undisputed that Mrs. Brubaker, at the time she was visited by Respondent, had insurance coverage through Orange State Life Insurance Company. Mrs. Brubaker, it is clear from the record, was under the impression that her policy with Orange State Life Insurance Company was a Medicare supplement policy. Respondent testified that her policy was not a Medicare supplement policy, and, in fact, bore a statement across the top of the policy to the effect that the policy was not a Medicare supplement policy. Petitioner offered no evidence to rebut Respondent's testimony in this regard, and neither party sought to introduce the policy into evidence. The only evidence offered by Petitioner to support the allegation that Respondent's representation that Orange State Life Insurance Company was cancelling its Medicare supplement policv was the fact that Mrs. Brubaker had continued to pay premiums on her policy after the representation was made by Respondent without receiving notice of any cancellation. However, any inference that might be drawn from continued payment of premiums fails if, in fact, the policy held by Mrs. Brubaker was not a Medicare supplement policy. Neither party having offered competent evidence to establish that Mrs. Brubaker's Orange State Life Insurance Company policy was in fact a Medicare supplement policy, the allegations contained in paragraph twenty-one of Count IV of the Administrative Complaint are deemed to be without factual support.
COUNT VI
In Count VI f the Administrative Complaint, it is alleged that Respondent visited the home of Leila Mueller on October 18, 1979. It is further alleged that at that time Respondent told Mrs. Mueller that he was ". . . from Medicare and that [Respondent] had called at one of [Mrs. Mueller's] neighbor's homes to explain the changes in Medicare coverage." It is further alleged that Respondent ". . . misrepresented [his] actual employment in order to induce Mrs. Mueller to buy insurance policies.
The record in this cause establishes that on or about October 18, 1979, Mrs. Mueller was visited in her home by two insurance salesmen whom she believed to be in some way affiliated with Medicare. Mrs. Mueller did not recall the names of either of the two men, was not asked to physically identify the Respondent, and could not recall which of the two men led her to believe that they were affiliated with "Medicare." Mrs. Mueller inquired about whether there existed any written material that she could review to decide whether to purchase insurance coverage. One of the men furnished her a brochure which had the name "Palesky" on it.
There is no evidence of record in this proceeding to establish that Respondent was ever in the home of Mrs. Mueller or that he in any fashion ever represented to her or to anyone
else that he was a representative of Medicare. The only testi- mony in this record that in any way connects Respondent with Mrs. Mueller was her testimony that she was given a brochure, which was not introduced into evidence, containing Respondent's name. This fact, standing alone, is insufficient to establish the factual allegations contained in Count VI of the Adminis- trative Complaint.
COUNT XI
On or about March 21, 1982, Respondent visited William F. and Winifred
M. Bell in their home in Sarasota, Florida. The purpose of Respondent's visit to the Bells was to sell them a Medicare supplement policy. The Bells had previously purchased a policy from Union Fidelity Insurance Company. During the course of Respondent's visit with the Bells, Respondent advised them that Union Fidelity was "not a good company" and that the policy they had with Union Fidelity was "not a good policy." In addition, Respondent advised the Bells that if anything happened to Mr. Bell that Mrs. Bell would not be insured within two months after Mr. Bell's death.
Paragraph fifty-five of Count XI of the Administrative Complaint alleges that Respondent told the Bells ". . . that their present insurance coverage was no good" and that if Mr. Bell died, Mrs. Bell would not be insured when in fact [Respondent] knew that both of those statements were false."
The record in this cause contains no evidence that the representations set forth above made by Respondent to the Bells were false. The Bells' insurance policy was not received into evidence because Petitioner failed to respond fully to Respondent's Request for Production of Documents, and had further failed to fully exchange exhibits with Respondent, including a copy of the Bells' policy, as required by the Pre-hearing Order entered by the Hearing Officer approximately two months prior to the date set for final hearing in this cause. Accordingly, there are no facts to substantiate the allegations contained in Count XI of the Administrative Complaint.
COUNT XII
On or about February 4, 1983, Respondent visited Louise S. Donovan at her home in Daytona Beach, Florida. Respondent visited Mrs. Donovan in response to her cancellation of a previous policy purchased from National States Insurance Company from another agent on or about November 17, 1982. Soon thereafter, she cancelled that policy but on December 22, 1982, reinstated the policy after having available coverages explained to her by the other agent. Sometime thereafter she again can- called the National States policy. By letter dated January 17, 1983, from the home office of National States Insurance Company, Mrs. Donovan was advised that her refund-check had been returned to her agency for refund to her. On February 4, 1983, Respondent visited Mrs. Donovan in her home. Under direct examination, Mrs. Donovan testified as follows concerning that visit:
Q So, you showed [the January 27, 1983] letter to Mr. Palesky; and, how did he respond to the letter?
A He said sort of -- it's a little vague now after all these months -- that, oh, well, they didn't pay any attention to those things, or some- thing like that, and that the company would not refund any money on the policy.
Q Be made the statement to you that the company was not going to refund?
A The company would not -- now, I believe his interpretation of that, but it
wasn t clear to me, was that there was a certain clause in that policy that I was not satisfied with and that he would not reissue the same policy under the same conditions.
Well, I'm a lay person. I don't know all these fine points. And, I under- stood that he meant that the company would not refund any money to me at all...
During the course of their discussions, Mrs. Donovan advised Respondent that she had cancel led the policy because she did not have nursing home coverage. Respondent explained to her that, under those circumstances she would have to either add nursing home coverage to the policy she had cancelled, which he was not sure that he could do for her because the so-called "RS 100 feature" was in the process of being discontinued, or she could take out a separate nursing home policy. Resnondent advised her that in order to keep the RS 100 feature she would have to reinstate the policy which she had cancelled, and take out a separate nursing home policy at a later date. This is the option which Respondent recommended to Mrs. Donovan, and the option that she ultimately chose. Accordingly, Mrs. Donovan opted to fill out an application reinstating the cancelled policy. She had originally paid $659 for the policy she took out on December 22, 982, but premium rates had increased since that time. The application filled out by Mrs. Donovan on February 4, 1983, reflects the premium rate increased to $691. Mrs. Donovan testified that she did not recall endorsing a refund check in the amount of $659 from National States Insurance Company and allowing Respondent to submit the endorsed check to National States
along with the application dated February 4, 1983. Respondent testified that she did, in fact, endorse that check, which he forwarded to National States Insurance Company with the February 4, 1983, application. According to Respondent's testimony, which is uncontradicted, he submitted the $659 check to National States, notwithstanding the fact that the premium rate had increased to
$691, with the understanding that the company had the option of either reinstating the policy for $659 or insisting upon the increased premium rate. Thereafter, Mrs. Donovan again decided to cancel the coverage she received as a result of the February 4, 1983, application submitted through Respondent.
Mrs. Donovan signed a sworn statement on March 30, 1983, which provided, in part, as follows:
Mr. Palesky has shown me the com- plaint filed against him by the Department of Insurance.
I totally disagree with the accusa- tions in the complaint.
My only problem with Mr. Pale sky was a misunderstanding concerning the fact that the RS 100 rider could
not be refunded and reissued (as it
was being discontinued) [sic] I thought he meant the entire policy could not
be refunded. . . .
Count XII of the Administrative Complaint alleges that Respondent ". .
. refused to return [premium] money to Mrs. Donovan. . ., and that ". . . as a result of your refusal Mrs. Donovan felt pressured into applying for a new policy at a higher premium." Further, Count XII alleges that ". . . the new policy was written for a higher premium, that [Resoondent] signed a receipt acknowledging receipt of the higher premium, and that Mrs. Donovan gave [Respondent] no money during [the] visit [of] February 4, 1983." The evidence in this cause does not establish that Respondent refused to return premium money to Mrs. Donovan, nor does the evidence establish that Mrs. Donovan was pressured into applying for a new policy at a higher premium. Finally, the evidence in this cause establishes that Respondent attempted to have National States Insurance Company reinstate Mrs. Donovan's coverage at the premium originally paid in December of 1982, notwithstanding a premium increase that had occurred in the interim, a procedure which has not been shown by the record in this cause to be in any way improper.
COUNT XV
On or about January 24, 1983, Kenneth E. Fritz bought a National States Insurance Company policy from an agent other than Respondent. On or about February 12, 1983, Mr. Fritz cancelled that policy and asked for a full refund. Mr. Fritz subsequently received a letter dated March 11, 1983, from National States Insurance Company acknowledging his request for cancellation, and advising him that a full refund of his premium was being sent to the agency office which had sold the policy to him, with instructions to deliver the refund to him.
On or about March 24, 1983, Respondent visited Mr. Fritz in his home in Largo, Florida, with Mr. Fritz' refund check.
In paragraph eighty-eight of Count XV of the Administrative Complaint, Respondent is charged with having ". told Mr. Fritz that [Respondent was] an
`investigator with Florida' and that [Respondent] pointed to an emblem on [Respondent's] jacket which gave [Mr. Fritz] the idea [Respondent was] employed by the State of Florida' when in fact [Respondent was] not and are not employed by the Florida Deoartment of Insurance in any capacity." It is further alleged that Resoondent made this representation to influence Mr. Fritz to buy insurance policies, and that Mr. Fritz did not realize that Respondent was not a government employee until reading a newspaper article on or about April 2, 1983, concerning the emergency suspension of Respondent's licensed.
Respondent denies ever having represented to Mr. Fritz that he was an employee of the State of Florida. Indeed,
Mr. Fritz testified on this issue only that:
Mr. Palesky came here, and he
had a thing on his coat, and he says[sic] you bought some policies from the --
and he mentioned the name of the company in St. Louis, and he says[sic] I'm here to check on that, and he rattles this thing and give [sic] me the impression that he was the--was from the State
of Florida checking this. . . .
As mentioned above, Respondent is charged with representing to Mr. Fritz that Respondent was an "investigator with Florida." Nothing contained in the record in this cause establishes that Respondent ever made such a representation to Mr. Fritz. Indeed, Mr. Fritz clearly testified that he could not remember exactly what Respondent said to him to give him the "impression" that he was an employee of the State of Florida. It is, however, clear from the record in this cause that the allegation of the Administrative Complaint that Mr. Fritz did not know that Respondent was not a state employee until reading of Respondent's emergency suspension in a newspaper article on or about April 2, 1983, is false. What is clear is that Respondent made a sales presentation to Mr. Fritz which resulted not only in Mr. Fritz' reinstating the policy he had earlier purchased from another agent and cancelled, but in fact buying another policy from Respondent at the same time. It is also clear that Respondent gave Mr. Fritz a business card during the course of their conversation which clearly identified Respondent as a salesman for National States Insurance Company.
In short, this record does not establish that Respondent ever represented himself as an employee of the State of Florida during the course of his sales presentation to Mr. Fritz, nor did Mr. Fritz reinstate his cancelled policy and purchase a second policy based upon any such representation.
COUNT XVII
On April 15, 1981, Esther Huddleson purchased two Medicare supplement policies issued by National States Insurance Company from agent Michael Frye. On April 16, 1901, she requested a refund on the National States policies. On June 1, 1981, she was visited in her home by Respondent.
Count XVII alleges that Respondent falsely advised Mrs. Huddleson that he was an "insurance investigator" and an "investigator for the State." It is also alleged that Respondent was not an "investigator" for National States
Insurance Company and that his status with the company had always been that of a sales representative. Further, it is alleged that Respondent ". . . falsely told Mrs. Huddleson her statutory `free look' had expired and so persuaded her to sign a conservation notice."
It is clear from the record in this proceeding that Respondent never advised Mrs. Huddleson that he was an "investigator for the State" or in any other manner employed by the State of Florida or the Department of Insurance. A sworn statement signed by Mrs. Huddleson upon which she was closely interrogated by counsel and the Bearing Officer during the course of this proceeding clearly reflects that Respondent identified himself either as "an investigator from National States Insurance Company" or "States Insurance Company." Fur ther, there is no evidence in the record in this cause from which it can be concluded that this representation by Respondent was in any way false. Finally, the only testimony in the record in this cause concerning Mrs. Huddleson's statutory "free look" period occurred on the direct examination of Mrs. Buddleson as follows:
Q Did [Respondent] lead you to believe that your 30-day period had passed?
A yes. At least, that was in my mind.
Mrs. Buddleson's testimony in this regard is, at best, equivocal, and does not persuasively establish that Respondent did, in fact, advise her that her "free look" period had expired as alleged in the Administrative Complaint.
There is, accordingly, insufficient evidence of record in this proceeding to establish the allegations against Respondent contained in Count XVII of the Administrative Complaint. The Bearing Officer feels constrained, further, to note with concern the failure of Petitioner's counsel to deal with both Mrs. Huddleson's sworn statement and direct testimony concerning the fact that Respondent never represented himself to her to be an employee of the State of Florida. In fact, to say that Petitioner's counsel failed to deal with those issues is most charitable. It would perhaps be more accurate to say that the proposed findings submitted by Petitioner's counsel on this particular issue have absolutely no factual basis in this record, despite citations to a portion of the transcript purportedly supporting the allegations of the Administrative Complaint.
COUNT XXI
In December of 1982 Mary Ellen Stapleton purchased a Medicare supplement policy from an agent, other than Respon- dent, representing National States Insurance Company. After reviewing the policy and deciding that she did not want to retain it, Mrs. Stapleton returned the policy on or about February 8, 1983, to National States Insurance Company, and requested a refund of her premium. Through a series of correspondence with National States Insurance Company, Mrs. Stapleton's cancellation request was acknowledged, and she was advised that her premium refund had been returned to the office of the agency selling the policy, with instructions to make immediate delivery to her.
On or about March 8, 1983, Respondent telephoned Mrs. Stapleton at her home and advised her that he was an investigator for National States Insurance Company and that he was investigating a Mr. Buffer, who had sold Mrs. Stapleton her National States policy.
Count XXI, in pertinent part, alleges:
That on or about March 8, 1983, you, JOSEPH MICHAEL PALESKY, telephoned Mrs. Stapleton at her home in Lakeland, Florida, and told her you were "an investigator for National States and [that you were] investi- gating Mr. Buffer" when in fact you were
not and are not an investigator for National States Insurance Company but were and are only a salesman.
That at no time did you tell Mrs. Stapleton that you represented Diversified Health Services of St. Petersburg, Florida.
That you, JOSEPH MICHAEL PALESKY, created the false impression of your employ- ment status in order to induce Mrs. Stapleton to keep the [cancelled] policy. .
Respondent did not tell Mrs. Stapleton that he represented Diversified Health Services of St. Petersburg, Florida. It is undisputed that Respondent was, on March 8, 1983, a salesman for National States Insurance Company. Petitioner has not established by any evidence whatsoever that Respondent was not an investigator for National States Insurance Company with authority to investigate Mr. Buffer. Neither has it been shown in this record that Respondent was under any obligation to identify the insurance agency by whom he was employed after having first clearly identified himself as being affiliated with National States Insurance Company. It is, therefore, specifically concluded that there are no facts of record to establish the violations alleged in Count XXI of the Administrative Complaint.
COUNT XXII
On September 24, 1980, Respondent visited John Capers Smith and Lillian H. Smith in their home in Bradenton, Florida. Respondent went to the Smiths' home in response to the Smiths having sent a card to National States Insurance Company requesting information concerning Medicare supplement policies.
Upon his arrival at the Smiths' home, Respondent was advised by Mrs. Smith initially that she did not wish to speak with him further on that day because her husband had recently undergone surgery and was still recuperating. However, uoon Respondent's insistence, he was admitted to the Smiths' home at approximately 1:00 p.m. Respondent remained in the Smiths' home until approximately 8:00 p.m. on September 24, 1980.
When he first arrived in the Smiths' home, Respondent told the Smiths that he worked for the State of Florida and that Bill Gunter was his boss. In the course of discussing National States Insurance Company policies, Respondent advised the Smiths that this type of policy was something that Mr. Gunter was attempting to do to assist elderly Floridians. During the course of his conversation with the Smiths, Respondent displayed a photograph of Mr. Gunter to the Smiths as proof of his affiliation with the State of Florida, and offered to call Mr. Gunter on the telephone to verify his credentials.
After a long period of discussion, the Smiths purchased an insurance policy from Respondent, and gave him a check for $694. The Smiths' purchase of the policy was due in large part to Respondent's representation that he was an employee of the State of Florida, and that Mr. Gunter approved of the policy.
Respondent denies having made any representation to the Smiths concerning his employment by the State of Florida, but, under the circumstances here present, it is specifically concluded that the Smiths' versions of the transaction occurring on September 24, 1980, are more credible.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter of, and the parties to, this proceeding. Section 120.57(1), Florida Statutes.
In Bowling v. Department of Insurance, 394 So.2d 165, 171-172 (Fla. 1st DCA 1981), the court held that:
In proceeding under a penal statute
for suspension or revocation of a valu- able business or professional license, the term "substantial competent evidence" takes on vigorous implications that are not so clearly present on other occasibns for agency action under Chapter 120.
Although all questions of fact as dis- tinguished from policy are determinable under the Administrative Procedure Act by substantial competent evidence . . .
we differentiate between evidence which "substantially" supports conventional forms of regulatory action and evidence
which is required to support "substantially" a retrospective characterization of con- duct requiring suspension or revocation
of the actor's license. Evidence which is "substantial" for one purpose may be less so on another, graver occasion. .
. . .Now we recognize also that in both form and persuasiveness evidence may "substantially" support some types of agency action, yet be wanting as a record foundation for critical findings in license revocation. . . [W]e glean a requirement for more substantial evi- dence from the very nature of license discipline proceedings; when the standards of conduct to be enforced are not ex- plicitly fixed by statute or by rule . when the conduct to be assessed is past, beyond the actor's power to conform it
to agency standards announced prospectively; and when the proceeding may result in the loss of a valuable business or professional
license, the critical matters in issue must be shown by evidence which is indubi- tably as "substantial" as the consequences
* * * *
In anyone's judgment, a judge's no less than any other, certain factors present
"in the record" of penal proceedings fairly detract from the substantiality of evidence which is weighty enough for less consequential purposes. One such factor is a grave penalty. In determining "the substantlality of evi- dence," which is to say in ascertaining
what we call the facts, a judge takes the penalty into account for the same reason that compels him, in ascertaining the law, to impose a "strict" construction on the penal statute. . . .
. . . .[T]he violation of a penal statute is not to be found on loose interpretations and problematic evidence, but the violation
-must in all its implications be shown by evidence which weighs as "substantially" on a scale suitable for evidence as the penalty does on the scale of penalties.
In other words, in a world ensnarled by false assumptions and hasty judgments, let the prosecutor's proof be as serious-minded as the intended penalty is serious.
Based upon the foregoing Findings of Fact, and the standards of proof set forth in the Bowling decision quoted above, it is specifically concluded that Petitioner has failed -to establish, by a preponderance of the evidence, the allegations contained in Counts I, II, IV, VI, XI, XII, XV, XVII, and XXI.
Section 626.611, Florida Statutes, provides, in pertinent part, that: The department shall suspend
[or] revoke . . . the license of any
agent . . and it shall suspend or
revoke the eligibility to hold a license of any such person, if it finds
that as to the . . . licensee .
anv one or more of the following applicable grounds exist:
* * * *
(5) 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 dissemina- tion of information or advertising.
* * * *
(7) 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.
Section 626.621, Florida Statutes, provides, in pertinent part, tht: The department may, in its discretion,
suspend [or] revoke . . . the
license of any agent . . . and it may suspend or revoke the eligibility to hold a license . . of any such person,
if it finds that as to the . . . licensee any one or more of the following applicable grounds exist under circum- stances for which such denial, suspension, reyocation or refusal is not mandatory under s. 626.611:
* * * *
(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.
* * * *
(6) If in the conduct of business under the license or permit he has engaged in unfair methods of competi- tion or in unfair or deceptive acts or practices, as prohibited under part VII of this chapter, or having other- wise shown himself to be a source of injury or loss to the public or detrimental to the public interest.
Section 626.9541(5)(a), Florida Statutes, defines an unfair or deceptive act or practice as knowingly making, publishing, disseminating, or circulating any false statement in the business of insurance.
The Petitioner has proven, by a preponderance of the evidence, the facts alleged in Count XXII of the Administrative Complaint, as amended. It is specifically concluded, as a matter of law, that those facts, hereinabove detailed, constitute a violation of Sections 626.611(5), (7), and (9), Florida Statutes, as well as Sections 626.621(6) and 626.9541(5)(a), "Florida Statutes.
Respondent has filed Motion for Summary Administrative Order as to Counts IV, XII,and XVII; Motion for Directed Verdict as to Counts I, II, VI, XV, and XXII; a Motion to Strike; and a Motion in Limine. To the extent that those motions are consistent with the findings, conclusions and recommendations contained in this Recommended Order, they are hereby granted. To the extent that those motions are contrary to the provisions of this Recommended Order, they are hereby denied.
Accordingly, based upon the foregoing Findings of Fact and Conclusions of Law, it is
That a Final Order be entered by the State of Florida, Department of Insurance, dismissing Counts I, II, IV, VI, XI, XII, XV, XVII and XXI; finding Respondent guilty of the charges contained in Count XXII, and suspending Respondent's licenses for a period of one (1) year, with the period of suspension to run retroactively from the date of the Emergency Order previously entered by the Department suspending those licenses.
DONE AND ENTERED this 14th day of October, 1983, at Tallahassee, Florida.
WILLIAM E. WILLIAMS
Hearing Officer
Division of Administrative Hearings 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 October, 1983.
COPIES FURNISHED:
Ruth L. Gokel, Esquire and
Rhoda S. Kibler, Esquire Department of Insurance 413-B Larson Building Tallahassee, Florida 32301
Melvin R. Borne, Esquire and
William L. Grossenbacher, Esquire 800 Barnett Bank Building Tallahassee, Florida 32301
Honorable Bill Gunter
Treasurer and Insurance Commissioner The Capitol
Tallahassee, Florida 32301
| Issue Date | Proceedings |
|---|---|
| Oct. 14, 1983 | Recommended Order sent out. CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Oct. 14, 1983 | Recommended Order | Respondent insurance salesman's license suspended for misrepresenting himself as a state employee in an attempt to sell insurance. |
