STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF INSURANCE )

AND TREASURER, )

)

Petitioner, )

)

vs. ) CASE No. 89-0883

)

LARRY WAYNE LINDSAY, )

)

Respondent. )

)

RECOMMENDED ORDER

On September 21, 1989, a formal administrative hearing was held in this case in Winter Haven, Florida, before J. Lawrence Johnston, Hearing Officer, Division of Administrative Hearings.

APPEARANCES

For Petitioner: Robert V. Elias, Esquire

Office of Legal Services

412 Larson Building Tallahassee, Florida 32399-0300

For Respondent: Thomas F. Woods, Esquire

Gatlin, Woods, Carlson and Cowdrey 1709-D Mahan Drive

Tallahassee, Florida 32308 STATEMENT OF THE ISSUE

The issue in this case is whether the Petitioner, the Department of Insurance and Treasurer, should discipline the Respondent, Larry Wayne Lindsay, on charges set out in an Administrative Complaint filed against Lindsay on or about January 23, 1989.

PRELIMINARY STATEMENT

On or about January 23, 1989, the Petitioner, the Department of Insurance and Treasurer, filed an eleven count Administrative Complaint against the Respondent, Larry Wayne Lindsay.

The first ten counts of the Administrative Complaint charge essentially that, while Lindsay was the full-time agent in charge of Ridge Insurance Agency, Inc., Haines City, Florida, Lindsay and others under Lindsay's supervision, and with Lindsay's knowledge: (1) took ten applications for insurance coverage by the Florida Joint Underwriting Association (FJUA) when Lindsay knew he was not authorized to accept the applications; (2) delayed submitting eight of the applications to State Farm Mutual Insurance Company for approximately three months, at which time they were submitted through another insurance agency,

Central Florida Insurance Agency of Winter Haven, Inc., over the signature of Robert James Seese, its full-time agent in charge; and (3) did not submit two of the applications at all. 1/

In the two counts addressing the latter two applications, it also is alleged that, after several months of unsatisfactory inquiries of Lindsay and Ridge Insurance Agency, the applicant demanded and received a full refund.

The last count of the Administrative Complaint alleges that, while Lindsay was the majority or sole owner of four insurance agencies, approximately $13,000 in checks drawn on the insurance agencies' accounts and payable to a premium finance company, on behalf of insureds, were returned due to insufficient funds. The count also alleges that on December 10, 1986, Lindsay gave the premium finance company a promissory note for the amounts due, promising to pay the debt at the rate of $500 a month but that as of July 1, 1988, only $2,000 had been paid on the note.

The final hearing in this case was consolidated with the final hearing in the case entitled Department of Insurance and Treasurer v. Robert James Seese, DOAH Case No. 89-0884. However, the parties joined in a request that separate recommended orders be submitted in each case. Later, the Petitioner and Seese joined in a request to suspend the entry of a recommended order in the Seese case in anticipation of an informal disposition of that case under Section 120.57(3), Florida Statutes (1987). On November 9, 1989, a Consent Order was entered in the Seese case. Therefore, a good portion of the evidence and testimony in this case relates to the Seese case, not to this case.

The Petitioner ordered the preparation of a transcript of the final hearing in this case. The transcript was filed on October 12, 1989. The parties later asked for and received an extension of the time for filing proposed recommended orders until October 27, 1989. Explicit rulings on the parties' proposed findings of fact may be found in the attached Appendix to Recommended Order, Case No. 89-0883.

FINDINGS OF FACT

1. Essential Background.

   
   

   1. The Respondent, Larry Wayne Lindsay, is and has been at all times pertinent to this case, eligible for licensure as a general lines agent and as a life and health agent.

      
      

   2. Effective between December 31, 1987, and January 1, 1988 (the written agreement is dated December 24, 1987), Lindsay's Friendly Auto Insurance of Polk County, Inc., formerly Friendly Auto Insurance Agency of Lake Wales, Inc. (Friendly of Lake Wales), and Friendly Auto Insurance of Winter Haven, Inc. (Friendly of Winter Haven), sold their assets, including the leasehold on the Friendly of Winter Haven business location, to Central Florida Insurance Agency of Winter Haven, Inc. (Central), for $500. The Respondent, Larry Wayne Lindsay (Lindsay), signed the agreement on behalf of the sellers. Kimberly Strayer, then Lindsay's fiance, now his wife, is the sole legal owner, officer and director of Central.

      
      

   3. Effective between December 31, 1987, and January 1, 1988 (the written agreement is dated January 27, 1988), Friendly Auto Insurance of Haines City, Inc. (Friendly of Haines City), sold its assets, including the leasehold on its business location, to Ridge Insurance Agency, Inc. (Ridge), for $200. Lindsay

      signed the agreement on behalf of the seller. Kimberly Strayer is the sole legal owner, officer and director of Ridge.

      
      

   4. When it was formed in approximately April of 1984, Lindsay and Ruth Kent were the initial directors of Friendly of Winter Haven. The two of them remained the directors and officers of the corporation through at least January of 1987, according to the corporation's annual reports. At some point before December 31, 1987, Kent transferred all of her interest in the corporation to Lindsay, who became the sole owner, officer and director of the corporation. But the evidence was not clear when Kent transferred her interest to Lindsay or what Lindsay's ownership interest in the corporation was up to the time of the

      transfer. Lindsay was the full-time agent in charge of Friendly of Winter Haven in March of 1983, according to Department of Insurance records, but the evidence was not clear how long he remained full-time agent in charge. At some point, he was replaced by Thomas Shaw.

      
      

   5. The evidence was not at all clear who were the owners, directors or officers of Friendly of Lake Wales at any point in time before Lindsay, acting on its behalf, transferred its assets to Central. Robert Seese was its nominal full-time agent in charge starting approximately in July, 1986, until approximately September, 1988, according to the evidence, but he was not actually in charge of the office, had little to do with the business and spent little time at the business. He essentially allowed Friendly of Lake Wales to use his name, license and facsimile stamp. Lindsay also submitted some applications for insurance from the Lake Wales office in the fall of 1987. The evidence was not at all clear when Seese's nominal role as the full-time agent in charge was terminated or who was the full-time agent in charge when Seese was not.

      
      

   6. When it was formed in approximately September of 1983, Lindsay and Ruth Kent were the initial directors of Friendly of Haines City. The two of them remained the directors and officers of the corporation through at least January of 1987, according to the corporation's annual reports. At some point before December 31, 1987, Kent transferred all of her interest in the corporation to Lindsay, who became the sole owner, officer and director of the corporation.

      But the evidence was not clear when Kent transferred her interest to Lindsay or what Lindsay's ownership interest in the corporation was up to the time of the transfer.

      
      

   7. When it was formed in approximately September of 1984, Lindsay and Ruth Kent were the initial directors of Friendly Auto Insurance Agency of Bartow, Inc., (Friendly of Bartow). The two of them remained the directors and officers of the corporation through at least January of 1987, according to the corporation's annual reports. In May, 1987, Lindsay was the full-time agent in charge of Friendly of Bartow, according to Department of Insurance records in evidence. At some point in time, Lindsay transferred all of his interest in the corporation to Kent. But the evidence was not clear when Lindsay ceased acting as full-time agent in charge of Friendly of Bartow, when Lindsay transferred his interest to Kent or what Lindsay's ownership interest in the corporation was up to the time of the transfer.

      
      

   8. When Central began doing business at the former Friendly of Winter Haven location in January, 1988, Seese transferred his license there and began to pose as its full-time agent in charge. In fact, Seese was not in charge of Central's business, had very little to do with the business and spent practically no time at Central's office. Essentially, all he did was allow Central to use his name, license and facsimile stamp. Lindsay often was at

      Central giving advice to Strayer and, as a practical matter, acting in the role of the full-time agent in charge of Central.

      
      

   9. Ridge began doing business at the former Friendly of Haines City location in January, 1988, without having notified the Department of Insurance of the identity of its full-time agent in charge. Strayer testified that Ridge had no full-time agent in charge but conceded that she knew it was illegal to operate without one. In fact, Lindsay spent much of his time at Ridge and essentially ran the office, acting as if he were the full-time agent in charge.

      
      

   10. Business with the FJUA is produced by agents who are licensed by the FJUA to produce business at a certain location and assigned to a particular insurance company. When they began doing business, neither Ridge nor Central had a relationship with FJUA. Lindsay had been an FJUA producer assigned to State Farm Mutual Insurance Company (State Farm) and licensed to produce business at Friendly of Bartow. Although the evidence is not clear when Lindsay stopped producing FJUA business at Friendly of Bartow, he officially was terminated as a producer at that location on or about April 21, 1988. Seese had been an FJUA producer at Friendly of Lake Wales assigned to State Farm from July, 1987, officially until approximately February 9, 1988. Thomas Shaw, who was the full-time agent in charge of Friendly of Winter Haven, had been an FJUA producer assigned to State Farm at that location--the same location Central later assumed. There is no evidence when or if Shaw officially was terminated as a producer at the Friendly of Winter Haven location.

       
       

   11. Lindsay knew, and should have known, that Ridge had not yet been licensed by the FJUA to produce FJUA business at its location or that it had been assigned to State Farm. When Ridge began doing business, applications for FJUA insurance coverage first were transmitted to Central to be submitted by Central, over Seese's facsimile stamp, to State Farm.

       
       

2. Transactions Alleged Under Counts I Through VIII.

   
   

   1. On or about January 14, 1988, Ridge took from David Doolin of Davenport, Florida, an application and $70 as a down payment for coverage under the FJUA and bound the coverage. (Count I.)

      
      

   2. On or about January 20, 1988, Ridge took from Rachel McKenny of Haines City, Florida, an application and $56 as down payment for six months of personal injury protection (PIP) coverage with United States Underwriters (USU) and bound the coverage. When coverage under USU became unavailable, Ridge advanced McKenny $12 to pay for the down payment on a year of coverage under the FJUA. (Count II.)

      
      

   3. On or about January 12, 1988, Ridge took from Richard Truett of Haines City, an application and $109 as down payment for a year of coverage under the FJUA and bound the coverage. (Count III.)

      
      

   4. On or about January 13, 1988, Ridge took from Bruce Tish, Jr., an application and $150 as down payment for and with Dairyland Insurance Company and bound the coverage. When Dairyland insurance became unavailable, Ridge advanced Tish $16 for the down payment on a year of coverage with the FJUA. (Count IV.)

      
      

   5. On or about January 15, 1988, Ridge took from Germaine Collier of Winter Haven an application and $56 as down payment for six months of PIP coverage with USU and bound the coverage. When USU coverage became unavailable,

      Ridge advanced Collier $2 for the down payment for a year of coverage under the FJUA. (Count V.)

      
      

   6. On or about January 15, 1988, Ridge took from Callie Robinson, Jr., of Haines City an application and $56 as down payment for six months of PIP coverage with USU and bound the coverage. When the USU coverage became unavailable, Ridge advanced Robinson $2 for the down payment for a year of coverage under the FJUA. (Count VI.)

      
      

   7. On or about January 15, 1988, Ridge took from James Belcher, through his wife Peggy, an application and $56 as down payment for six months of PIP coverage with USU and bound the coverage. When the USU coverage became unavailable, Ridge advanced Belcher $12 for the down payment for a year of coverage under the FJUA. (Count VII.)

      
      

   8. On or about January 15, 1988, Ridge took from Gerald Dempsey of Winter Haven an application and $60 as down payment for six months of PIP coverage with USU and bound the coverage. When the USU coverage became unavailable, Ridge submitted the application for a year of coverage under the FJUA (the down payment for which was only $58.) (Count VIII.)

      
      

   9. It was not proven, as alleged, that Ridge did not secure the necessary money order for the down payment for the FJUA coverage referred to in Counts I through VIII until on or after March 24, 1988, or that Ridge did not submit the applications referred to in Counts I through VIII until on or about April 12, 1988. To the contrary, it never was made clear from the Department's evidence whether the FJUA applications referred to in Counts I through VIII (Petitioner's Exhibits 18 through 25, in evidence) were among the applications received by State Farm for the first time on or about April 12 and 19, 1988, or whether they were among the applications previously submitted to State Farm but returned by State Farm for various reasons.

      
      

      Lindsay's evidence, which is more persuasive, suggests that Ridge transmitted the applications to Central for processing, money orders for the down payments were obtained and Central sent the applications to State Farm within approximately a week from when they were taken by Ridge. According to Lindsay's version of the events that transpired, State Farm rejected the applications once because Seese's facsimile stamp had been used on the applications. (The applications themselves would support Lindsay's version in this respect. Seese's name is signed over a part of the application that appears to have been "whited-out.") State Farm returned the applications and the money orders. Central then repurchased money orders, had Seese sign the applications and re-submitted the applications. For a second time, State Farm rejected and returned the money orders, this time because the effective date of the coverage was before Seese became licensed by the FJUA and assigned to State Farm as agent at the Central location. The applications also support Lindsay's version in this respect because the effective date of the coverage is changed to start coverage one month later, after Seese's February 9, 1988, appointment date. Central re-purchased money orders again, dated March 24, 1988, and submitted the applications for at least the third time on or about April 12, 1988. All of these applicants received coverage as of the revised effective date.

      
      

3. Transactions Alleged Under Counts IX And X.

   
   

   1. On or about March 11, 1988, Ridge, through Lindsay, took from Charles and Erna Bluschke an application and Erna's $236 check for the down payment for

      a year of FJUA coverage on their 1984 Thunderbird. (Count IX.) Ridge gave the Bluschkes a Florida Automobile Insurance Identification Card indicating that State Farm was the carrier and that the coverage was bound effective March 11, 1988.

      
      

   2. When the Bluschkes received no paperwork from State Farm or the FJUA within approximately a month, Mr. Bluschke returned to Ridge and talked to Lindsay. Lindsay told him that the paperwork had not come through but should be in "any day." Approximately another month went by without any paperwork, and Bluschke again went to speak to Lindsay. Bluschke was concerned because State Farm had cancelled him previously, and he wanted to know how he could be sure he had coverage. Lindsay responded, "Don't worry, you're covered."

      
      

   3. In fact, as Lindsay knew, the Bluschkes' application had not been submitted to State Farm. By the time the Bluschkes had applied, Ridge and Central were in the midst of dealing with problems they were having getting older applications accepted by State Farm and had put the Bluschkes' application aside until the older problems were resolved. They also were attempting to be assigned to an FJUA carrier other than State Farm. Indeed, on or about April 12, 1988, certainly by the time of Bluschke's second inquiry, and perhaps even by the time of his first inquiry, Lindsay had submitted an application as Ridge's general lines agent to be licensed to produce for the FJUA and to be assigned to Allstate instead of State Farm.

      
      

   4. The representations Lindsay made to Bluschke on the first and second inquiries were knowing misrepresentations made for the purpose of concealing from the Bluschkes the actual status of Ridge's relationship to the FJUA and State Farm.

      
      

   5. After his second inquiry, Bluschke demanded and received a full refund of his $236 down payment.

      
      

   6. On or about February 12, 1988, Paris and Helen Dalton of Hamilton, Florida, went to Ridge to purchase insurance for a 1979 Pontiac and a 1977 Dodge Van. (Count X.) They completed an FJUA application and paid $409 down. They were given a Florida Automobile Insurance Identification Card indicating that State Farm was the carrier and that coverage was bound effective February 12, 1988. For the same reasons that Ridge did not submit the Bluschke application, Ridge never submitted the Dalton application to State Farm.

      
      

   7. In March, 1988, after 30 days had passed, Helen Dalton returned to Ridge because the Daltons had not yet received a payment book from State Farm. "Wanda," who worked at Ridge, assured the Daltons that the policy and payment book would come in the mail and that it sometimes took as much as 90 days.

      
      

   8. Later in March, 1988, the Daltons' bank asked for proof of insurance on their vehicles. Helen Dalton went to Ridge and got from "Wanda" a copy of the binder, signed by Lindsay. "Wanda" told Dalton that Ridge would call the bank.

      
      

   9. Ridge never called the bank, as the bank informed the Daltons in June, 1988. Helen Dalton again returned to Ridge, and this time a different person working at Ridge told her that "it's hard to get through to State Farm." Helen Dalton called State Farm directly and was told that State Farm never had received the application and that Ridge and Lindsay were not authorized to write FJUA insurance through State Farm. Dalton returned to Ridge and confronted Lindsay directly with this information. Lindsay offered to "re-write" the

      policy, but Dalton demanded her money back. Lindsay sent Dalton to Central in Winter Haven to have Strayer refund the money, saying he had no authority to write a refund check, and the Daltons finally got their refund on or about June 27, 1988.

      
      

4. Transactions Alleged In Count XI.

1. At least from on or before July 1, 1985, continuously until after December 31, 1986, Friendly of Winter Haven, Friendly of Bartow, Friendly of Haines City, and Friendly of Lake Wales arranged customers' premium financing through Time Premium, Inc., of Boca Raton, Florida. As part of each premium finance transaction, the agency submitted to Time Premium, Inc., an agency check representing the down payment received from the customer and an executed premium finance contract. The agencies also collected monthly payments from insureds and forwarded agency checks to Time Premium on behalf of these insureds.

   
   

2. From August, 1985, through July, 1986, these corporate agencies wrote approximately $13,000 in checks payable to Time Premium drawn on the agencies' business accounts. Lindsay personally signed in excess of seven thousand dollars worth of these checks. These checks were returned due to insufficient funds.

   
   

3. On December 10, 1986, these four corporate agencies, through Lindsay and Ruth Kent as the directors, executed a promissory note in favor of Time Premium, Inc., in the amount of $13,076.34 to satisfy the outstanding indebtedness on the returned checks. The promissory note required repayment at the rate of $500 per month.

   
   

4. As of July 1, 1988, only $2,000 had been repaid.

   
   

   CONCLUSIONS OF LAW

   
   

5. On the basis of the eleven count Administrative Complaint in this case, the Respondent, Larry Wayne Lindsay, is charged under the following provisions of the Florida Statutes (1987):

626.561 Reporting and account for funds.--

(1) All premiums, return premiums, or

other funds belonging to insurers or others received by an agent, solicitor, or adjuster in transactions under his license shall be trust funds so received by the licensee in a fiduciary capacity; and the licensee in the applicable regular course of business shall account for and pay the same to the insurer, insured, or other person entitled thereto.

* * *

626.611 Grounds for compulsory refusal, sus- pension, or revocation of agent's, solicitor's,

or adjuster's license or service representative's, supervising or managing general agent's, or claims investigator's permit.--The department shall deny, suspend, revoke, or refuse to renew or continue the license of any agent, solicitor, or adjuster or the permit of any service representative, supervising or managing general agent, or claims investigator, and it shall suspend or revoke the

eligibility to hold a license or permit any such person, if it finds that as to the appli- cant, licensee, or permittee any one or more of the following applicable grounds exist:

* * *

1. 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 dissemination of information or advertising.

2. If, as an adjuster or claims investigator or agent permitted to adjust claims under the code, he has materially misrepresented to an insured or other interested party the terms and coverage of an insurance contract with intent and for the pur- pose of effecting settlement of claim for loss or

damage or benefit under such contract on less favor- able terms than those provided in and contemplated by the contract.

* * *

1. Fraudulent or dishonest practices in the con- duct of business under the license or permit.

2. Misappropriation, conversion, or unlawful withholding of moneys belonging to insurers or insureds or beneficiaries or to others and re- ceived in conduct of business under the license.

* * *

(13) Willful failure to comply with, or willful violation of, any proper order or rule of the department or willful violation of any provision of this code.

* * *

626.621 Grounds for discretionary refusal, suspension, or revocation of agent's, solicitor's or adjuster's license or service representative's, supervising or managing general agent's, or claims investigator's permit.--The department may, in its discretion, deny, suspend, revoke or refuse to renew or continue the license of any agent, solicitor, or adjuster or the permit of any service representative, supervising or managing general agent, or claims investigator, and it may

suspend or revoke the eligibility to hold a license or permit of any such person, if it finds that as to the applicant, licensee, or permittee any one

or more of the following applicable grounds exist under circumstances for which such denial, sus- pension, revocation, 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) In the conduct of business under the license or permit, engaging in unfair methods of competi-

tion or in unfair or deceptive acts or practices, as prohibited under part X of this chapter, or having otherwise shown himself to be a source of injury or loss to the public or detrimental to the public interest.

1. Whether or not Lindsay was the record full-time agent in charge of Ridge Insurance Agency, Inc., he should be held responsible for the conduct of Ridge's business as if he were. He was acting in that capacity, he knew it was illegal for Ridge to operate without one, and he knew Ridge had no one else acting in that capacity. Indeed, the transfer of the assets of Friendly of Haines City to Ridge, like the transfer of the assets of Friendly of Polk County and Friendly of Winter Haven to Central, was a subterfuge engaged in for Lindsay's own reasons apparently in an attempt to avoid certain consequences of his involvement as owner of those companies. As a matter of law, those attempts should not be, and are not, sufficient for him to avoid license discipline for his conduct in the role of owner and full-time agent in charge of Ridge.

2. Section 626.734, Florida Statutes (1987), provides: 626.734 Corporations, liability of agent.--

   Any general lines insurance agent who is an officer, director, stockholder, or employee of an incorporated general lines insurance agency shall remain personally and fully liable and accountable for any wrongful acts, misconduct, or violations of any pro- visions of this code committed by such licensee or by any person under his direct supervision and control while acting on behalf of the corporation.

   
   

   As stated above, where license discipline is concerned, Lindsay cannot use the subterfuge of transferring the assets of his insurance agencies to a corporation owned and controlled, on paper, by his then fiancee, now wife, to escape the legal consequences of ownership of those agencies. That includes the consequences of Section 626.734. Therefore, for purposes of license discipline, Lindsay is responsible for violations of the insurance code committed by him or by persons under his direct supervision or control acting on behalf of Ridge.

   See Final Order, Dept. of Ins. v. Lindsay, 10 F.A.L.R. 7191 (Dept. Ins. 1988); Hartnett v. Dept. of Ins., 422 So.2d 155, 157 (Fla. 3rd DCA 1983).

   
   

3. Under Counts I through X of the Administrative Complaint in this case, it was proven that Lindsay violated Sections 626.611(5), (9) and (13) and 626.621(2) and (6), Florida Statutes (1987). When Ridge took the applications referred to in Counts I through X (especially Counts IX and X, the Bluschke and Dalton applications), he knowingly and willfully misrepresented, through implication, that Ridge was licensed to produce FJUA business, was assigned to State Farm, and could bind coverage immediately. In the case of the applicants referred to in Counts I through VIII, Ridge eventually was able to obtain coverage through Central but, as a result of the problems Ridge had trying to obtain coverage, the applications could not be processed for approximately three months and, when they were, coverage was effective one month after the date on which Ridge represented to its customers that it was binding coverage. In the case of the Bluschkes and the Daltons, applications were not submitted at all as a result of the problems and delays Ridge encountered trying to obtain coverage through Central. The Bluschkes had no coverage for approximately two months

   before they got a refund; the Daltons had no coverage for more than five months. In addition, Lindsay and persons working for Ridge under his direct supervision and control knowingly and willfully misrepresented the status of Ridge's relationship with the FJUA and State Farm when they inquired.

   
   

4. The evidence presented under Counts I through VII did not prove violations of Sections 626.561(1) or 626.611(6) or (10), Florida Statutes (1987). Lindsay did not fail to account or pay money "to the insurer, insured, or other person entitled thereto" as contemplated by Section 626.561(1). Nor did he "misappropriate, convert or unlawfully withhold moneys" as contemplated by Section 626.611(10). As for Section 626.611(6), none of Lindsay's misrepresentations were "for the purpose of effecting settlement of a claim . .

   . on less favorable terms than those provided in and contemplated by the [insurance] contract."

   
   

5. The evidence presented under Counts IX and X did prove violations of Sections 626.561(1) and 626.611(10), Florida Statutes (1987). Lindsay did not "in the applicable and regular course of business . . . account for and pay" the Bluschkes' and Daltons' down payments "to the insurer, insured, or other person entitled thereto" as contemplated by Section 626.561(1). (Emphasis added.) Instead, he misappropriated and unlawfully withheld the money within the contemplation of Section 626.611(10). (Again, as for Section 626.611(6), Lindsay's misrepresentations were not "for the purpose of effecting settlement of a claim . . . on less favorable terms than those provided in and contemplated by the [insurance] contract."

   
   

6. Count XI alleges facts which, if true, would be violations of Sections 626.561(l) and 626.611(10), Florida Statutes (1987). The evidence proved that Lindsay was the full-time agent in charge of Friendly of Bartow in May, 1987, but it was not made clear whether he was the full-time agent in charge of that agency before or since. None of the returned checks on the Friendly of Bartow account were in May, 1987. (Both were signed by Ruth Kent.) The evidence also did not prove that Lindsay was the full-time agent in charge of any of the other agencies whose checks were returned. Absent persuasive evidence of the circumstances described in Conclusions of Law 2 and 3, above, Lindsay would be responsible for the violations of others employed in the operation of these agencies only if there were persuasive evidence that, at the time of the violations, he was the record general lines agent in charge of the agency. See Sections 626.172 and 626.747, Florida Statutes (1987).

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Petitioner, the Department of Insurance and Treasurer, enter a final order finding the Respondent, Larry Wayne Lindsay, guilty of some, but not all, of the violations alleged in the Administrative Complaint in this case, as reflected in this Recommended Order, and suspending, for a period of one year, his general lines, health and life insurance agent licenses and his eligibility to hold those licenses.

RECOMMENDED this 22nd of November, 1989, in Tallahassee, Florida.

J. LAWRENCE JOHNSTON Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 22nd day of November, 1989.

ENDNOTES

1/ In four of those counts, it also is alleged that the applicant's signature was a forgery, but no evidence was presented in support of those allegations.

APPENDIX TO RECOMMENDED ORDER, CASE No. 89-0883

To comply with the requirements of Section 120.59(2), Florida Statutes (1987), the following rulings are made on the parties' proposed findings of fact:

Petitioner's Proposed Findings of Fact.

1. Accepted and incorporated.

2. Rejected as not proven by the evidence. The evidence did, however, prove that Lindsay acted as if he were the record general lines agent in charge of Ridge.

3. As for being general lines agent of record for Ridge, see 2., above; otherwise, accepted and incorporated.

4 and 5. Rejected as not proven by the evidence that Lindsay's ownership of the two agencies went from December 31, 1987, back continuously to October, 1984, and February, 1983; otherwise, accepted and incorporated.

6-9. Accepted and incorporated.

10. Rejected as not proven by the evidence.

11-20. Accepted and incorporated. (To the extent that these proposed findings of fact were intended to imply that the applications were submitted to State Farm for the first time on or about April 12, 1988, or that they were accompanied each time they were submitted with a money order dated March 24, 1988, the intended implications are rejected as not proven by the evidence.)

21. Rejected as not proven by the evidence. 22.-57. See 11-20, above.

58. Rejected as not proven by the evidence. 59.-60. Accepted and incorporated.

61. Rejected as not proven by the evidence. 62.-64. Accepted and incorporated.

1. The phrase "which Larry Wayne Lindsay in a fiduciary capacity" is not clear. To the extent that it is intended to imply that Lindsay was the full- time agent in charge of these agencies from August, 1985, through July, 1986, the implication is rejected as not proven by the evidence. (The evidence proved

   that Lindsay was the full-time agent in charge of Friendly of Bartow in May, 1987, but that is all.) To the extent that it is intended to imply that Lindsay was the sole or majority owner of these agencies from August, 1985, through July, 1986, rejected as not proven by the evidence. To the extent that it is intended to imply that Lindsay was a director or officer of Friendly of Lake Wales, rejected as not proven by the evidence; as to the other agencies, accepted and incorporated.

2. Accepted and incorporated. (However, they were signed on behalf of the corporate agency, not in his individual capacity.)

3. Rejected as not proven by the evidence.

4. Accepted and incorporated. (However, he signed the note as a director of the corporate agencies, as did Ruth Kent.)

69.-70. Accepted and incorporated. Respondent's Proposed Findings of Fact.

1. In part, accepted and incorporated. (It was not proven that Lindsay used insureds' money for his own purposes.) In part, rejected as contrary to facts found and contrary to the greater weight of the evidence (Lindsay did not pay any money out of his own pocket although Ridge did advance money, which was not paid back, to some insureds as needed for the down payment for FJUA coverage after USU coverage became unavailable) and as argument (as to the "basic thrust" of the Administrative Complaint.)

2. Rejected as conclusion of law and argument.

COPIES FURNISHED:

Robert V. Elias, Esquire Office of Legal Services Department of Insurance

and Treasurer

412 Larson Building Tallahassee, Florida 32399-0300

Thomas F. Woods, Esquire

Gatlin, Woods, Carlson and Cowdrey 1709-D Mahan Drive

Tallahassee, Florida 32308

Honorable Tom Gallagher State Treasurer and

Insurance Commissioner The Capitol, Plaza Level

Tallahassee, Florida 32399-0300

Don Dowdell, Esquire General Counsel Department of Insurance

and Treasurer

The Capitol, Plaza Level Tallahassee, Florida 32399-0300

Docket for Case No: 89-000883

Orders for Case No: 89-000883