STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF INSURANCE, )
)
Petitioner, )
)
vs. ) CASE NO. 89-5729
)
ELNOR DARLENE JOHNSON, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice, a formal hearing was conducted in this case at West Palm Beach, Florida, on April 19, 1990, before Michael M. Parrish, a duly designated Hearing Officer of the Division of Administrative Hearings.
Appearances for the parties at the hearing were as follows:
APPEARANCES
For Petitioner: David D. Hershel, Esquire
Department of Insurance Division of Legal Services Room 412, Larson Building
Tallahassee, Florida 32399-0300
For Respondent: Thomas W. Stahl, Esquire
Newell & Stahl, P.A.
817 North Gadsden Street Tallahassee, Florida 32303
and
Wayne O. Smith, Esquire 5420 Central Avenue
St. Petersburg, Florida 33707 STATEMENT OF THE ISSUES
This is a license discipline case in which the Department of Insurance, in a multi-count Second Amended Administrative Complaint, has charged the Respondent with several statutory violations. The issues in the case concern whether the Respondent committed the violations and, if so, what disciplinary penalty should be imposed.
PRELIMINARY HEARING
At the hearing on April 19, 1990, the Petitioner presented the testimony of the following witnesses: Mike Panico, Anna Hajek, Frank Hajek, Mary Henline, Rosa T. Lee, Paul Kline, Betsie Lydell, Larry Hutchison, Rosa Mae Ferrell, Minnie Holden, and Charles Retty, the testimony of the last two being
offered in the form of deposition transcripts. The Petitioner also offered 21 exhibits into evidence, 19 of which were received and 2 of which were rejected. The Respondent testified on her own behalf, but did not call any other witnesses. The Respondent offered one exhibit, which was received in evidence.
Following the hearing, a transcript of the proceedings was filed with the Hearing Officer on May 7, 1990. The parties requested and were granted several extensions of time for the filing of their proposed recommended orders, the last such extension expiring on August 10, 1990. On August 10, 1990, all parties filed proposed recommended orders containing proposed findings of fact and conclusions of law. The parties' proposals have been carefully considered during the preparation of this recommended order. Specific rulings on all findings of fact proposed by the parties are contained in the appendix hereto.
FINDINGS OF FACT
Findings regarding general matters
The Respondent, Elnor Darlene Johnson, is currently licensed in the State of Florida as a life insurance agent and as a health insurance agent. At all times pertinent to the issues in this case, the Respondent was licensed in the State of Florida as a health insurance agent and was employed by National States Insurance Company and Transport Life.
In order to become a licensed Florida Insurance agent, the Respondent was required to become familiar with the provisions of the Florida Insurance Code and pass an examination given by the Department of Insurance. Respondent is familiar with the provisions of the Florida Insurance Code applicable to health and life insurance agents.
Findings regarding Count I (Anna Hajek)
The Respondent visited Anna Hajek for the first time on December 6, 1988. Mrs. Hajek had sent in an advertising card to the Respondent's insurance agency requesting information on several health insurance programs. When the Respondent arrived at Mrs. Hajek's home, she asked Mrs. Hajek what other insurance coverage she had in addition to her Medicare coverage. Mrs. Hajek told the Respondent that she did not have any other existing health insurance coverage at that time. During the visit on December 6, 1988, Mrs. Hajek appeared to understand what she and the Respondent were talking about. They discussed the meals Mrs. Hajek was having, Mrs. Hajek's son, and some of Mrs. Hajek's activities. The Respondent was under the impression that Mrs. Hajek was handling her own affairs and that Mrs. Hajek's son was not involved in the management of her affairs. The Respondent and Mrs. Hajek discussed Mrs. Hajek's son and the fact that she wanted to protect her assets (money invested in certificates of deposit) for her son and that she did not want to spend it all on a nursing home. Mrs. Hajek invited the Respondent to return for another visit to have lunch.
During the course of the December 6, 1988, visit, the Respondent sold Mrs. Hajek a Medicare Supplement insurance policy. Respondent explained the various benefits and coverages under the policy. Mrs. Hajek appeared to understand the policy. The Respondent did not fill out any "replacement forms" because Mrs. Hajek had told her that she did not have any existing Medicare Supplement insurance. Mrs. Hajek appeared to understand the Respondent's questions regarding whether Mrs. Hajek had any existing coverage. When she
left Mrs. Hajek's house, the Respondent left identification, including her telephone number.
The insurance policy sold too Mrs. Hajek on December 6, 1988, was a Medicare Supplement insurance policy to be issued by National States Insurance Company, with an intensive care benefit rider, a dental, vision, and hearing care expense rider, an extended care facility confinement rider, and a rider to increase benefits to Supplement Medicare Part B. The initial annual premium was $1,264.00. Mrs. Hajek paid the initial annual premium by delivering a check to the Respondent. National States Insurance Company issued the policy on December 28, 1988.
On December 8, 1988, the Respondent made a second visit to Mrs. Hajek's home. At that time Mrs. Hajek told the Respondent she thought she needed nursing home coverage because she did not believe she could rely on her son to help her. The Respondent sold Mrs. Hajek three insurance policies during the course of the December 8, 1988, visit. The first of these policies was an Extended Care Confinement policy with an initial premium in the amount of
$121.00 The second was a Limited Medical-Surgical Expense policy with an initial premium in the amount of $668.00. The third was a Nursing Home Policy with a home nurse benefit rider with an initial premium in the amount of
$1,496.00. On December 8, 1988, Mrs. Hajek paid the initial premiums on all three policies by delivering a check to the Respondent. National States Insurance Company issued the three policies on December 28, 1988. The Respondent explained all of the coverages and benefits provided under the various policies prior to selling them to Mrs. Hajek, and Mrs. Hajek appeared to understand the policies she was purchasing. During the December 8, 1988, visit with Mrs. Hajek, the Respondent also discussed policies that would provide long-term custodial-type care, which is a different type of coverage than skilled nursing coverage.
On December 20, 1988, the Respondent made a third visit to Mrs. Hajek's home. During the course of that visit, the Respondent sold Mrs. Hajek a Long- Term Care policy with an inflation rider to be issued by Transport Life Insurance Company. The initial premium for that policy was $2,380.88.
On December 20, 1988, Mrs. Hajek delivered a check in the amount of $2,404.80 in payment of the initial premium and the application fee for the Long-Term Care policy. Transport Life Insurance Company issued a Long-Term Care policy to Mrs. Hajek with an effective date of December 20, 1988.
Mrs. Hajek was enrolled in and covered under Humana Gold Plus HMO from at least June 1, 1987, until December 31, 1988. On December 16, 1988, a disenrollment form dated December 6, 1988, and apparently signed by Mrs. Hajek, was received at the offices of the Humana Gold Plus HMO. The disenrollment form was processed and Mrs. Hajek was disenrolled from the HMO effective December 31, 1988, or January 1, 1989.
The annual premiums of all of the policies sold to Mrs. Hajek by the Respondent during December of 1988 total $5,869.88. At that time Anna Hajek had an annual income of approximately $7,500.00. 1/
During the time period when the Respondent sold the several insurance policies to Mrs. Hajek, Mrs. Hajek appeared to be mentally competent and in charge of her own affairs. At that time, Mrs. Hajek had her own checking account, was handling her own financial affairs, and was living on her own in a condominium. As of that time, Mrs. Hajek had never been
diagnosed as suffering from dementia or any other type of mental disorder that would prevent her from handling her own affairs. 2/
When Mrs. Hajek's son, Frank Hajek, discovered that his mother had purchased several insurance policies, he attempted to contact the Respondent, but she did not return his calls. Ultimately, Frank Hajek wrote to the issuing insurance companies requesting that the policies be cancel led and that the premiums be refunded to his mother. In due course all the policies were cancelled and all of the premiums were refunded.
The coverage provided by the policies the Respondent sold to Mrs. Hajek overlaps in several respects. However, all of the coverage appears to be cumulative in the sense that where a specific circumstance is covered by two policies, both policies will pay. 3/
Findings regarding Count II (Sadie & Joseph Grossman)
No evidence was received regarding the allegations contained in Count II of the Second Amended Administrative Complaint. 4/
Findings regarding Count III (Paul and Mary Kline)
The Respondent visited Paul and Mary Kline at their home in response to a "lead card" the Klines had sent requesting information on long-term nursing home insurance. The Respondent reviewed the Klines' existing coverage and left them information outlining the various benefits and coverages that were available from the companies the Respondent represented. The Klines indicated they were interested in long-term nursing coverage, but did not buy any insurance during the first visit.
Mr. Kline later telephoned the Respondent and told her that he and his wife were interested in purchasing the nursing home insurance they had discussed during the first visit. In the meantime, National States had introduced a new policy, the LTC, and the Respondent returned to the Klines' home on January 26, 1989, and showed them the coverages provided by the new policy. The LTC policy provided for skilled, intermediate, and custodial care, and also provided money back to the policyholder if the coverage was not used.
During the visit on January 26, 1989, the Respondent solicited, and Paul and Mary Kline signed, applications for long-term nursing care policies to be issued by National States Insurance Company. The premium due on the two policies totaled $2,596.00. On January 26, 1989, Mrs. Kline wrote a premium payment check in the amount of $2,357.60 payable to the order of National States Insurance Company and gave the check to the Respondent. At the time of receiving the check, the Respondent did not notice that the amount on the check was less than the total amount of the premium due on the two policies. On January 26, 1989, the Respondent left receipts and outlines of coverage with the Klines. The receipts were for the full amount of the premium, an amount $238.40 greater than the check received by the Respondent on January 26, 1989. The discrepancy between the receipts and the check were noticed when the Respondent submitted the applications to her agency. Thereupon, the Respondent called Mr. Kline and explained what had happened. The Respondent told Mr. Kline that the company would process the applications, but that the
$238.40 shortage would be charged against her account and she hoped he would pay the shortage. Mr. Kline told the Respondent he would pay the difference. The Respondent then wrote a personal check to the insurance company and submitted the Klines' insurance applications for processing. Shortly thereafter Mrs.
Kline signed a check payable to the Respondent in the amount of $238.40 and delivered it to the Respondent.
At some time subsequent to the purchase of the policies, but before the policies were actually issued, the Klines saw a television show that caused them to believe they had purchased the wrong type of insurance. The Klines tried unsuccessfully to contact the Respondent by telephone. Towards the end of February, the Klines wrote a letter to National States Insurance Company requesting that the policies be cancel led and that their premiums be refunded. Mr. Kline also contacted the Department of Insurance service office about his inability to contact the Respondent. Shortly after that contact, the Respondent called Mr. Kline. The policies were canceled and the Klines received a full refund of the $2,596.00 they had paid in premiums.
At the time of the purchase of the policies, the Respondent fully explained the policies to the Klines and the Klines voluntarily purchased same. Mr. Kline was satisfied with the policies on the day he purchased them. Mr. Kline's main complaint was that the Respondent failed to return his telephone calls. Mr. Kline did not believe that the Respondent had lied to him or misrepresented any of the coverages provided by the policies.
Findings regarding Count IV (Charles Retty)
In November of 1988, Charles Retty contacted the St. Petersburg offices of National States Insurance Company and Diversified Health Services with questions regarding the effect of changes in the Medicare program, and how those changes might affect the need for insurance coverage. At that time, Mr. Retty and his wife were insured under two nursing home policies he had purchased from National States Insurance Company. The Respondent had not sold him either of those policies. As a result of that contact, someone in the management of the insurance company asked the Respondent to call on Mr. Retty. Shortly thereafter, the Respondent visited Mr. Retty, discussed his concerns with him, told him she did not know the answers to all of his questions, and told him she would get back in touch with him with further information. Following the initial meeting between Mr. Retty and the Respondent, Mr. Retty made several unsuccessful efforts to get in touch with the Respondent. Mr. Retty then complained to the Department of Insurance service office regarding his concerns and the failure of the Respondent to get back in touch with him. Shortly after his complaint to the Department of Insurance, the Respondent again visited Mr. Retty, at which time they did not get along very well. Each thought the other somewhat rude and antagonistic.
The Respondent was never Mr. Retty's insurance agent. She had never sold him any insurance prior to the visit in November of 1988 and she did not attempt to sell him any insurance during any of her communications with him. The Respondent did not attempt to have Mr. Retty cancel any of his existing insurance or allow any such insurance to lapse. Mr. Retty never gave the Respondent any money.
Findings regarding Count V (Minnie Holden)
The Respondent has been Minnie Holden's insurance agent since about 1976 or 1977, when the Respondent enrolled Mrs. Holden and her husband in a Medicare Supplement program. When Mr. Holden passed away, the Respondent continued to service Mrs. Holden's policies. In 1986, the Respondent sold Mrs. Holden a Medicare Supplement policy issued by United American. In February of 1987, the Respondent converted that policy to an updated United American
Medicare Supplement policy. Mrs. Holden also had a long-term nursing home policy issued by Transport Life.
On February 18, 1988, United American Insurance Company received a
$990.00 renewal premium for the renewal of Mrs. Holden's Medicare Supplement insurance policy. United American Insurance Company renewed the policy for another year, and it remained in force, paid in full, until its lapse date of February 26, 1989. The Respondent was listed as the agent of record for the renewal of that policy. United American Insurance Company credited the Respondent's debit balance account with a commission in the amount of $138.60 for the February 1988 renewal of Mrs. Holden's Medicare Supplement insurance policy. United American Insurance Company also sent the Respondent a statement of account covering the month of February 1988. The statement of account included the information that Mrs. Holden had renewed her Medicare Supplement insurance policy and that the Respondent's account had been credited with a commission for that renewal. The statement of account also contained information about many other policy holders and contained information about many things other than commissions. 5/
The Respondent visited Mrs. Holden on August 25, 1988, at which time Mrs. Holden told the Respondent that she (Holden) had cancelled her Medicare Supplement policy because she could no longer afford it. Mrs. Holden told the Respondent that she (Holden) had kept her long-term nursing home policy in effect because her daughter was thinking of placing Mrs. Holden in a nursing home. 6/
Respondent advised Mrs. Holden that she really should have Medicare Supplement coverage, and during the August 25, 1988, visit the
Respondent solicited and obtained from Mrs. Holden an application for a Medicare Supplement insurance policy to be issued by National States Insurance Company.
In filling out the application for the policy, the Respondent answered "No" to Question 4, which inquired, "Is the insurance being applied for intended to replace any accident or sickness insurance, health service or health maintenance contract? " She also answered "No" to Question 5, indicating that no other existing policies were in force. The Respondent believed that her answers to Questions 4 and 5 on the application form were correct on the basis of what Mrs. Holden had said about the cancellation of the prior policy.
On August 25, 1988, Mrs. Holden paid for only six months of coverage because she said that was all she could afford. The Respondent told Mrs. Holden that the National State policy was less expensive than the prior United American policy because it provided slightly less coverage. The Respondent did not fill out a "replacement form" when she filled out the application on August 25, 1988, because she thought the United American policy had expired and was no longer in effect.
On September 8, 1988, National States Insurance Company issued a Medicare Supplement policy to Mrs. Holden. Mrs. Holden had two Medicare Supplement insurance policies in effect from September 8, 1988, until February 26, 1989.
Findings regarding Count VI (Louella Riley)
The Petitioner did not offer any evidence regarding the allegations contained in Count VI of the Second Amended Administrative Complaint.
Findings regarding Count VII (Violation of probation)
In 1986, the Florida Department of Insurance conducted an investigation Into the activities of the Respondent as an insurance agent in this state. As a result of that investigation, the Department filed Investigation Report No. 86- 158-IA-TP, alleging violation of the replacement laws relating to the solicitation and sale of Medicare Supplement insurance.
On August 28, 1987, the Respondent entered into a Settlement Stipulation For Consent Order with the Department, Case No. 87-L-321DF, whereby she was placed on departmental probation for a period of one year, effective upon the date of signing of the Consent Order in that case. A condition of that probation was that the Respondent strictly adhere to all provisions of the Florida Insurance Code and of the rules of the Department of Insurance. The settlement stipulation also provided that the Department of Insurance would initiate proceedings to revoke all licensure and eligibility for licensure of the Respondent if she violated provisions of the Florida Insurance Code or rules of the Department of Insurance during her probationary period.
On September 9, 1987, a Consent Order was issued by the Department of Insurance in Case No. 87-L-321DF, which incorporated all terms and
conditions of the Settlement Stipulation For Consent Order. Accordingly, the Respondent was on departmental probation from September 9, 1987, through September 8, 1988.
CONCLUSIONS OF LAW
Conclusions regarding all counts
The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this proceeding. Sec. 120.57(1), Fla. Stat.
In a case of this nature, the Petitioner has the burden of proving its case by clear and convincing evidence. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987); Evans Packing Company v. Department of Agriculture and Consumer Services,
550 So.2d 112 (Fla. 1st DCA 1989). The nature of clear and convincing evidence is described as follows in Solomowitz v. Walker, 429 So.2d 797, (Fla. 4th DCA 1983), at 800: 7/
We therefore hold that clear and convincing evidence requires that the evidence must be found to be credible; the facts to which the witnesses testify must be distinctly remembered; the testimony must be precise and explicit and the witnesses must be lacking in confusion as to the facts in issue. The evidence must be of such weight that it produces in the mind of the trier of fact a firm belief or conviction, without hesitancy, as to the truth of the allegations sought to be established.
The Respondent is alleged to have violated subsections (4), (5), (7), (8), and (9) of Section 626.611, Florida Statutes. Those statutory provisions read as follows, in pertinent part:
626.611 Grounds for compulsory refusal, suspension, or revocation of agent's solicitor's or adjuster's license or . permit.--The department shall deny, suspend, revoke, or refuse to renew or continue the license of any agent, solicitor, or adjuster
and it shall 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 of the following applicable grounds exists:
If the license or permit is willfully used, or to be used, to circumvent any of the requirements or prohibitions of this code.
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.
Demonstrated lack of fitness or trustworthiness to engage in the business of insurance.
Demonstrated lack of reasonably adequate knowledge and technical competence to engage in the transactions authorized by the license or permit.
Fraudulent or dishonest practices in the conduct or business under the license or permit.
The Respondent is also alleged to have violated subsections (3) and
of Section 626.621, Florida Statutes. Those statutory provisions read as follows, in pertinent part:
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 . . . 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, suspension, revocation, or refusal is not mandatory under s. 626.611:
(3) Violation of any lawful order or rule of the department.
(6) In the conduct of business under the license or permit, engaging in unfair methods of competition or in unfair arid 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.
Conclusions regarding Count I (Anna Hajek)
Count I of the Second Amended Administrative Complaint charges the Respondent with violation of "one or more" of the following statutory provisions: Subsections (4), (5), (7), (8), and (9) of Section 626.611, Florida Statutes, and subsection (6) of Section 626.621, Florida
Statutes. The evidence regarding the Respondent's interaction with Mrs. Hajek is insufficient to prove a violation of any of the cited statutory provisions. In this regard it is specifically noted that the evidence is insufficient to show that at the time of the sales to Mrs. Hajek there was any reason for the Respondent to believe that Mrs. Hajek was not in full command of her mental faculties. It is also important to note that while it is arguable that the Respondent sold Mrs. Hajek more insurance than Mrs. Hajek needed, there is no evidence that any of such insurance was without value to Mrs.
Hajek. All of the covered risks were risks to which Mrs. Hajek was potentially exposed. Another failure in the proof regarding Count I is the absence of any persuasive evidence that the Respondent knew about Mrs. Hajek's enrollment in an HMO or that the Respondent had any role in the preparation and sending of the disenrollment form.8* Because of insufficient proof, the charges in Count I of the Second Amended Administrative Complaint should be dismissed.
Conclusions regarding Count II (Sadie & Joseph Grossman)
This count should be dismissed because no evidence was received regarding the allegations contained in Count II of the Second Amended Administrative Complaint.
Conclusions regarding Count III (Paul & Mary Kline)
Count III of the Second Amended Administrative Complaint charges the Respondent with violation of "one or more" of the following statutory provisions: Subsections (4), (5), (7), (8), and (9) of Section 626.611(9), Florida Statutes, and subsection (6) of Section 626.621, Florida Statutes.
The evidence regarding the Respondent's interaction with the Klines is insufficient to prove a violation of any of the cited statutory provisions.
Accordingly, the charges in Count III of the Second Amended Administrative Complaint should be dismissed.
Conclusions regarding Count IV (Charles Retty)
Count IV of the Second Amended Administrative Complaint charges the Respondent with violations of subsections (7) and (8) of Section 626.611, Florida Statutes, which subsections authorize disciplinary action upon proof of "[d]emonstrated lack of fitness of trustworthiness to engage in the business of insurance," or "[d]emonstrated lack of reasonably adequate knowledge and technical competence to engage in the transactions
authorized by the license or permit." The evidence regarding the Respondent's interaction with Mr. Retty is insufficient to prove a violation of either subsection. In this regard it must first be noted that Mr. Retty was not a client or customer of the Respondent. The Respondent never sold him anything and never engaged in a business transaction with him. Nothing in the interaction between Mr. Retty and the Respondent bears on the latter's fitness or trustworthiness. The most that can be said in this regard is that the Respondent did not get along well with Mr. Retty and was rude to Mr. Retty.
But the record also supports a finding that Mr. Retty was rude and antagonistic to the Respondent.
With regard to the matter of "adequate knowledge and technical competence to engage in the transactions authorized by the license," nothing in the interaction between Mr. Retty and the Respondent reflects adversely on the Respondent's knowledge and competence. There is no proof in the record that a reasonably knowledgeable and competent insurance agent would have known the answers to Mr. Retty's questions. Absent such proof, it cannot be concluded that the Respondent's knowledge and competence is deficient solely on the basis of her failure to know the answers to all of Mr. Retty's questions. For the foregoing reasons, the charges in Count IV of the Second Amended Administrative Complaint should be dismissed.
Conclusions regarding Count V (Minnie Holden)
Count V of the Second Amended Administrative Complaint charges the Respondent with violation of "one or more" of the following statutory provisions: Subsections (4), (5), (7), (8), and (9) of Section 626.611, Florida Statutes, and subsection (6) of Section 626.621, Florida Statutes. The evidence regarding the Respondent's interaction with Minnie Holden is insufficient to prove a violation of any of the cited statutory provisions. The factual predicate for all of the violations asserted in this count is the allegation that the Respondent had actual knowledge of the February 1988 renewal of
Mrs. Holden's Medicare Supplement insurance policy. That allegation was not proved by clear and convincing evidence. To the contrary, the greater weight of the evidence Supports a finding that on August 25, 1988, Mrs. Holden told the Respondent that her Medicare Supplement policy was cancelled or expired.
Therefore, there is insufficient proof to establish an essential allegation of Count V, and Count V of the Second Amended Administrative Complaint should be dismissed.
Conclusions regarding Count VI (Louella Riley)
This count should be dismissed because the Petitioner did not offer any evidence regarding the allegations contained in Count VI of the Second Amended Administrative Complaint.
Conclusions regarding Count VII (Violation of Probation)
Count VII of the Second Amended Administrative Complaint charges the Respondent with a violation of Section 626.621(3), Florida Statutes, which authorizes disciplinary action for "[v]iolation of any lawful order or rule of the department. The essence of the factual allegations in this count is that the Respondent, while still on probation, violated the terms of the Consent Order that placed her on probation by engaging in the conduct alleged in Counts II and V of the Second Amended Administrative Complaint. Thus, a necessary factual predicate to proof of the violation alleged in Count VII is proof of the violations alleged in Counts II and V. For the reasons discussed above, the
violations alleged in Counts II and V have not been proved. Therefore, the proof is insufficient to establish the violation alleged in Count VII, and Count VII should be dismissed.
For all of the foregoing reasons, it is recommended that the Department of Insurance issue a Final Order in this case dismissing all charges against the Respondent in this case.
DONE AND ENTERED in Tallahassee, Leon County, Florida, this 5th day of November 1990.
MICHAEL M. PARRISH
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 5th day of November 1990.
ENDNOTES
1/ While the Respondent surely knew the amount of all of the premiums of the policies sold to Mrs. Hajek, there is no record evidence as to whether the Respondent knew the amount of Mrs. Hajek's income or assets.
2/ About 6 or 8 weeks before the hearing Mrs. Hajek was diagnosed as suffering from dementia. It was stipulated by counsel for the parties that on the day of the hearing in this case Mrs. Hajek was incompetent to testify as a witness. (See pages 29 and 30 of the transcript.) Accordingly, Mrs. Hajek was unable to give her version of what took place when she purchased insurance policies from the Respondent.
3/ Given the low amounts of some of the benefits payable under the policies, it could be to an insured's advantage to have overlapping coverage for some circumstances.
4/ The evidence offered by the Petitioner in support of the allegations in Count II was objected to and the objections were sustained.
5/ Although it is clear that the statement of account was sent to the Respondent, there is no competent substantial evidence that Respondent actually read the statement of account or that she otherwise had actual knowledge of the February 1988 renewal of Mrs. Holden's Medicare Supplement policy.
6/ The Petitioner's evidence of what transpired between the Respondent and Mrs. Holden on August 25, 1988, consists largely of the deposition testimony of Mrs. Holden. That testimony is to a large extent vague, uncertain, and confused; substantially the opposite of what is required for clear and convincing
evidence. Because of its vague, uncertain, and confused nature, very little weight has been given to the deposition testimony of Mrs. Holden. To the extent of conflicts between Mrs. Holden's version of events and the Respondent's version of events, i have for the most part, if not completely, credited the Respondent's version.
7/ This description of the nature of clear and convincing evidence is also quoted with approval in Evans Packing Company, supra, and in Smith v. Department of Health and Rehabilitative Services, 522 So.2d 956 (Fla. 1st DCA 1988).
8/ Some of the evidence raises a strong suspicion that there may have been some improprieties in the Respondent's handling of the Hajek matter, as well as in the handling of the Kline matter, but suspicions are an insufficient basis for the imposition of discipline in a case where the burden of proof is by clear and convincing evidence.
APPENDIX TO RECOMMENDED ORDER IN CASE NO. 89-5729
The following are my specific rulings on all proposed findings of fact submitted by all parties.
Findings submitted by Petitioner:
Paragraphs 1 through 10: Accepted in substance, with some editorial revisions in the interests of clarity and brevity and with a number of unnecessary details omitted.
Paragraph 11: Accepted in substance, but without the implications attributed to it by Petitioner; the subject information was sent to the Respondent, but the proof is insufficient to establish that the Respondent was aware of the information.
Paragraph 12: Rejected as not supported by persuasive competent substantial evidence and as contrary to the greater weight of the evidence.
Paragraphs 13 and 14: Accepted in substance.
Paragraph 15: Rejected as not supported by persuasive competent substantial evidence and as contrary to the greater weight of the evidence.
Paragraph 16: Accepted in substance.
Paragraph 17: Rejected as constituting a proposed conclusion of law, rather than a proposed finding of fact. Further, to the extent this paragraph contains factual allegations, they are rejected as contrary to the greater weight of the evidence.
Paragraph 18: Accepted in substance, with the exception of the last clause of the last sentence. The amount due for the premiums was
$2,596.00.
Paragraphs 19 through 22: Accepted in substance, with some editorial revisions in the interests of clarity and brevity and with a number of unnecessary details omitted.
Paragraph 23: Accepted in substance, with the exception of the last clause of the last sentence. The evidence in this case is insufficient to characterize the Respondent's demeanor toward Mr. Retty as "unprofessional."
Paragraphs 24 through 28: Accepted in substance, with some additional revisions in the interests of clarity and brevity and with a number of unnecessary details omitted.
Paragraph 29: Accepted.
Paragraph 30 Accepted, with exception of date disenrollment form was completed. Date form was completed is not fully supported by persuasive competent substantial evidence.
Paragraphs 31 and 32: Rejected as not supported by persuasive competent substantial evidence, and as contrary to the greater weight of the evidence.
Paragraph 33: Accepted in substance.
Paragraphs 34 and 35: Rejected as not supported by persuasive competent substantial evidence.
Paragraphs 36 and 37: Accepted in substance.
Paragraph 38: Rejected as irrelevant to disposition of this case. Paragraph 39: Accepted in substance.
Paragraphs 40 and 41: Rejected as not supported by persuasive competent substantial evidence.
Findings submitted by Respondent:
Paragraphs 1 through 24: All of the findings of fact proposed by the Respondent are accepted in substance, with some editorial revisions in the interests of clarity and brevity and with a number of unnecessary details omitted.
COPIES FURNISHED:
David D. Hershel, Esquire Tom Gallagher Department of Insurance State Treasurer and Division of Legal Services Insurance Commissioner
Room 412, Larson Building The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Tallahassee,, Florida 32399-0300
Thomas W. Stahl, Esquire Don Dowdell
Newell & Stahl, P.A. General Counsel
817 North Gadsden Street Department of Insurance and Tallahassee, Florida 32303 Treasurer
The Capitol, Plaza Level
Wayne O. Smith, Esquire Tallahassee, Florida 32399-0300 5420 Central Avenue
St. Petersburg, Florida 33707
NOTICE OF RIGHT TO SUBMIT EXCEPTIONS
All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.
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AGENCY FINAL ORDER
=================================================================
OFFICE OF THE TREASURER DEPARTMENT OF INSURANCE
IN THE MATTER OF: CASE NO.: 89-L-723DH
89-5729 (DOAH)
ELNOR DARLENE JOHNSON
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FINAL ORDER
THIS CAUSE came on before the undersigned Treasurer the State of Florida, acting in his capacity as Insurance Commissioner, for consideration and final agency action. On September 21, 1989, the Department filed an Administrative Complaint against Respondent's licenses and eligibility for licensure. At hearing on April 19, 1990, the Department filed a Second Amended Administrative Complaint. Respondent had timely filed a request for a formal proceeding pursuant to Section 120.57(1), Florida Statutes, on October 12, 1989. Pursuant to notice, the matter was heard before Michael M. Parrish, Hearing Officer, Division of Administrative Hearings, on April 19, 1990.
After consideration of the evidence, argument and testimony presented at hearing, and subsequent written submissions by the parties, the Hearing Officer issued his Recommended Order, attached as Exhibit A, on November 5, 1990. The Hearing Officer recommended that all charges against Respondent be dismissed Petitioner filed exceptions to the Recommended Order on November 15, 1990.
RULINGS ON PETITIONER'S EXCEPTIONS TO FINDINGS OF FACT
Petitioner's Exceptions 1, 2, 3, and 4 are rejected because the credibility of the witnesses is entirely within the discretion of the hearing officer as finder of fact.
Petitioner's Exception 5 is rejected.
Petitioner's Exception 6 is rejected for the same reason as Petitioner's first four exceptions.
Petitioner's Exception 7 is rejected.
Petitioner's Exception 8 is rejected.
RULINGS ON PETITIONER'S EXCEPTIONS TO CONCLUSIONS OF LAW
Petitioner's Exception 1 is rejected regarding Mrs. Hajek's mental competence for the reason stated in paragraph 1 of the Rulings on Findings of Fact and is rejected regarding the handwriting for failure of proof.
Petitioner's Exception 2 is rejected except as to the Hearing Officer's conclusion that there were no statutory violations because Respondent had no actual knowledge of the renewal of Mrs. Holden's United American policy. That matter is addressed in the section on Additional Conclusions of Law.
Petitioner's Exception 3 is accepted, based on the second Additional Conclusion of Law. Count VII of the Second Amended Administrative Complaint recites the circumstances of an earlier investigation of Respondent's activities under her license and the fact that the Settlement Stipulation she entered into on that occasion placed her on probation from September 9, 1987 through September 9, 1988. The terms of the probation required Respondent to adhere strictly to the requirements of the Florida Insurance Code. Having concluded that Respondent violated several provisions of the Insurance Code in the matter of Mrs. Holden and since the application form on which these violations are based was completed on August 25, 1988, Respondent was on probation at the time of the violations. Therefore, Respondent has violated the terms of her probation as alleged in the Second Amended Administrative Complaint and is in violation of Section 626.621(3), Florida Statutes.
ADDITIONAL CONCLUSIONS OF LAW
Petitioner's Exception 1 to the Hearing Officer's Conclusions of Law did not address in detail the matter of the policies sold by Respondent to Mrs. Hajek (Count I). The Hearing Officer simply references the policies and noted in paragraph 5 of his Conclusions of Law stated that "there is no evidence that any of such insurance was without value to Mrs. Hajek." A review of the policies indicates that three of the policies duplicate existing coverage and are therefore worthless. The National States Medicare Supplement Policy (Form UMS- 1)(Pet. Exh. 4) sold to Mrs. Hajek for an annual premium of $1,254.00 on December 6, 1988, includes an Extended Care Facility Confinement Rider (Form REC7-9(R)) which picks up the daily deductible of $67.50 for skilled nursing facility confinement which Medicare does not pay. Respondent indicated on the application form for this policy that Mrs. Hajek was covered by Medicare which pays all the costs of a skilled facility nursing home from the 21st through the 100th day except for the daily deductible. Therefore, between them, Medicare and Petitioner's Exhibit 4 cover Mrs. Hajek for 100 days of care in a skilled nursing facility. Between that one policy with the rider and Medicare, Mrs. Haiek's expenses are completely covered. Therefore, the three other policies, Petitioner's Exhibits 5, 7, and 8, duplicate, for additional annual premiums totalling $3,997.88, what Medicare and the one other policy would pay for a skilled nursing facility. The total annual premiums for all four policies is
$5,251.88. These duplicative, useless policies were sold to a woman whose annual income was $7,500.00. The Department finds that, as a matter of law, this unconscionable duplication of coverage constitutes a violation of subsections (5), (7), (8), and (9) of Section 626.611, Florida Statutes, and is also a violation of Section 626.9541(1)(k)1.,Florida Statutes.
In regard to Count V, although the Hearing Officer is correct that there was no evidence that Respondent actually read the notice from United American showing Mrs. Holden's renewal of her coverage, the Department is not required to prove actual knowledge of the renewal. In Simons v. State Department of Banking and Finance, 490 So.2d 1322 (Fla. 1st DCA 1986), the First District Court of Appeal held that "[I]mplied actual notice is inferred from the fact that a person had the means of knowledge and the duty to use them but did not. . . . it will not suffice the law to remain willfully ignorant of a thing readily ascertainable when the means of knowledge is at hand." Id. at 1324.
The Hearing Officer does not dispute that Respondent actually received the
renewal notification. (See paragraph 22 of the Recommended Order.) The record indicates that the Respondent has been in the insurance business since 1971 and has been licensed as a health agent in Florida since 1975. (T 218) Mrs. Holden stated that she had been purchasing insurance from Respondent for about 10 years. (Pet. Exh. 14, at 3) The record indicates that the majority of the insurance sold by Respondent is health insurance of one form or another to elderly citizens. Mrs. Holden's deposition indicates that she relied heavily, if not completely, on the insurance agent for her insurance coverage. (Pet.
Exh. 14) Under those circumstances, Respondent was not excused from further inquiry as to whether or not Mrs. Holden had in fact cancel led her United American policy, even accepting the Hearing Officer's determination that Mrs. Holden had specifically stated to Respondent that that particular coverage had been cancel led (see paragraph 23 of the Recommended Order). Therefore, Respondent has violated Section 626.611(5), Florida Statutes, in that she willfully misrepresented on the National States policy application that the National States policy was not intended to be a replacement for other coverage. (Exh. 5 attached to Pet. Exh. 14) Respondent has violated Section 626.611(4), Florida Statutes, by using her license to circumvent the prohibitions of the Insurance Code. Respondent has violated Section 626.611(7), Florida Statutes, because that same act demonstrates a lack of fitness or trustworthiness to engage in the business of insurance. Respondent has violated Section 626.611(8), Florida Statutes, because that same act demonstrates a lack of reasonably adequate knowledge and technical competence to engage in the business of insurance. Finally, Respondent has violated Section 626.611(9), Florida Statutes, in that checking "no" on the application form to question 4 (Exh. 5 attached to Pet. Exh. 14) is a dishonest practice in the conduct of business under the license.
RULING ON EXCEPTION TO RECOMMENDATION
1. Petitioner takes exception to the Hearing Officer's recommendation of dismissal of all charges against Respondent. For the reasons indicated in the Rulings on Petitioner's previous exceptions, and in the section on Additional Conclusions of Law, this exception is accepted.
IT IS THEREFORE ORDERED:
The Findings of Fact of the Hearing Officer are adopted as the Department's Findings of Fact.
The Conclusions of Law of the Hearing Officer are adopted as the Department's Conclusions of Law with the exceptions and additions noted above.
That the Hearing Officer's recommendation that all charges against Respondent be dismissed is rejected.
ACCORDINGLY, all licenses and eligibility for licensure held by Respondent, ELNOR DARLENE JOHNSON, are hereby REVOKED, pursuant to the provisions of Section 626.641(2) and 626.651(1),Florida Statutes, for a period of two years from the date of this Final Order or from the date of final court order or decree affirming the revocation. During the period of revocation, Respondent shall not engage in or attempt or profess to engage in any transaction or business for which a license or permit is required under the Florida Insurance Code or be employed in any manner by an insurance agent or agency. Any party to these proceedings adversely affected by this Order is entitled to seek review of this Order pursuant to Section 120.68, Florida Statutes, and Rule 9.110, Florida Rules of Appellate Procedure. Review proceedings must be instituted by filing a
Notice of Appeal with the General Counsel, acting as the agency clerk, at 412 Larson Building, Tallahassee, Florida 32399-0300, and a copy of the same and the filing fee with the appropriate District Court of Appeal within thirty (30) days of the rendition of this Order.
DONE and ORDERED this day of 22nd day of February, 1991.
COPIES FURNISHED TO:
Michael M. Parrish, Esq. Hearing Officer
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-1550
Elnor Darlene Johnson
1605 South U.S. 1, V-3 101
Jupiter, Florida 33477
Elnor Darlene Johnson 5051 66th Street, North
St. Petersburg, Florida 33709
Thomas W. Stahl, Esq. Newell & Stahl, P.A.
817 North Gadsden Street Tallahassee, Florida 32303
Wayne O. Smith, Esq. 5420 Central Avenue
St. Petersburg, Florida 33707
David D. Herschel, Esq. Department of Insurance Division of Legal Services
412 Larson Building Tallahassee, Florida 32399-0300
TOM GALLAGHER
Treasurer and Insurance Commissioner
| Issue Date | Proceedings |
|---|---|
| Nov. 05, 1990 | Recommended Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Feb. 22, 1991 | Agency Final Order | |
| Nov. 05, 1990 | Recommended Order | Evidence insufficient to prove numerous allegations of violations by insurance agent. |
DEPARTMENT OF INSURANCE vs LAWRENCE HUGH SUSSMAN, 89-005729 (1989)
DEPARTMENT OF INSURANCE AND TREASURER vs JOHN MATT EARLY, 89-005729 (1989)
DEPARTMENT OF INSURANCE AND TREASURER vs MICHAEL JOSEPH CALDERONE, 89-005729 (1989)
DEPARTMENT OF INSURANCE AND TREASURER vs MICHAEL HALLORAN, 89-005729 (1989)
IRENE PARKER ZAMMIELLO vs. DEPARTMENT OF ADMINISTRATION, 89-005729 (1989)
