STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

PAUL L. KORNYA )

)

Petitioner, )

)

vs. ) CASE NO. 91-2327

)

DEPARTMENT OF INSURANCE, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, William F. Quattlebaum, held a formal hearing in the above-styled case on September 12, 1991, in Ft. Myers, Florida.

APPEARANCES

For Petitioner: Steven M. Malono, Esq.

660 East Jefferson Street Post Office Box 11127 Tallahassee, Florida 32302

For Respondent: David Hershel, Esq.

412 Larson Building Tallahassee, Florida 32399-0300

STATEMENT OF THE ISSUE

Whether the Petitioner's application of January 11,

1991, for examination as a general lines agent should be granted.

PRELIMINARY STATEMENT

By application dated January 11, 1991, and filed January 16, 1991, Petitioner Paul L. Kornya applied to Respondent Florida Department of Insurance for examination as a general lines insurance agent. By letter of March 1, 1991, Respondent denied the Petitioner's application. Mr. Kornya requested formal administrative hearing on the Department's action. The case was referred to the Division of Administrative Hearings.

By Notice of Hearing dated May 2, 1991, the case was scheduled for hearing on August 9, 1991. On June 21, 1991, Respondent moved to amend the March 1, 1991 letter of denial. On July 3, 1991 the previously assigned hearing officer granted the motion to amend. By Second Notice of Hearing dated July 12, 1991, upon the motion of the Petitioner, the case was rescheduled to be heard on September 12, 1991. On July 23, 1991, the case was transferred to the undersigned Hearing Officer.

At hearing, Petitioner presented the testimony of Samuel Jokich, Jeffery Allen Hooker, Kenneth Snyder and Patricia Lehman, and testified on his own behalf. Petitioner's exhibits numbered 2-20 were admitted. Respondent presented the testimony of Patricia Lehman and had exhibits numbered 1-2 admitted. A written stipulation submitted at hearing was marked and admitted as a Hearing Officer's exhibit.

A transcript of the hearing was filed. Both parties

filed proposed recommended orders. The proposed findings of fact are ruled upon as set forth in the Appendix which is attached and hereby made a part of this Recommended Order.

FINDINGS OF FACT

1. Petitioner Paul L. Kornya was licensed in 1974 as a general lines insurance agent in the State of Florida. Prior to 1984, Respondent Department of Insurance had taken no formal disciplinary action against the Petitioner.

   
   

2. In 1983, while licensed as an insurance agent and employed in the capacity of office manager for the Milton Carpenter Insurance Agency, Petitioner established a demand deposit account in the name of "Atlantic Association Insurance" and listed himself as the sole signatory and beneficiary on the account. Petitioner thereafter wrote four unauthorized checks on the Milton Carpenter Agency Account totaling $47,132.14 made payable to Atlantic Association Insurance and deposited them into his demand deposit account. In order to conceal his activity, the Petitioner altered the payee of the checks. In a prior administrative case (Case No. 84-L-4085F), Petitioner admitted misappropriating and converting the funds.

   
   

3. In 1983, while licensed as an insurance agent and employed in the capacity of office manager for the Milton Carpenter Insurance Agency, Petitioner wrote two unauthorized checks on the Milton Carpenter Agency Account totaling $3,455 made payable to Blinder, Robinson and Co., Inc., Investment Bankers. In order to conceal his activity, the Petitioner listed an agency account code designated for miscellaneous companies on said checks. In a prior administrative case (Case No. 84-L- 4085F), Petitioner admitted misappropriating and converting the funds which were used for Petitioner's personal stock purchases.

   
   

4. In 1984, a judgement in the amount of $52,013.35 was entered against Petitioner in the case styled Milton Carpenter Insurance, Inc., a Florida Corporation, and Cincinnati Insurance Company vs. Paul L. Kornya, Case No. 84-3235 CA(L)A, Fifteenth

   Judicial Circuit Court, Palm Beach County, Florida.

   
   

5. On October 31, 1985, the Department entered a Final Order revoking Petitioner's license qualifications and eligibility for licensure for a period of two years, based upon the misappropriation and conversion of said funds.

   
   

6. By application signed December 16, 1987 and filed December 28, 1987, Petitioner submitted an application for examination as a general lines insurance agent.

   
   

7. By Insurance Commissioner Bill Gunter's letter to the Petitioner of February 29, 1988, the Department requested

   that the Petitioner submit certain certificates of employment to verify his prior experience. The letter stated that, "[t]o qualify for this examination through experience you must have completed within the past 4 years, at least 1 year of substantially full-time responsible duties as the bona fide employee of an agent or insurer. Your duties during this time must have been in all lines of property, casualty, surety, health and marine insurance. ... One certificate should be completed by you and the other by your employer."

   
   

8. The Petitioner claims to have submitted said employment certificates shortly following the Department's request. However, the Department's files do not contain the documents or any other response to the letter, and there is no evidence beyond Petitioner's testimony to support the claim.

   
   

9. By letter of March 17, 1988, Department

   representative Franklin Thompson again requested the experience information cited in the February 29 letter or in the alternative, that Petitioner submit proof that a course of education had been completed. The letter further stated that "we will need a statement from Milton Carpenter Insurance Inc. Agency of Belle Glade, Florida stating that any and all indebtedness you may have had relative to their firm has been satisfied".

   
   

10. Both the February 29 and March 17 letters provided

    that failure to file the information within 30 days from the date of each letter is grounds for denial of the application.

    
    

11. Three months passed following the March 17 letter

    to the Petitioner. According to the records of the Department, no response to either letter was received. On June 17, 1988, the Petitioner's December 1987 application was closed by the Department based upon the failure of Petitioner to submit the previously requested information.

    
    

12. By letter of June 23, 1988, the Petitioner advised the Department that the indebtedness was not to the Milton Carpenter Insurance Agency, but was to Cincinnati Insurance Company, which had insured the Carpenter agency against such

    losses. The letter further stated that approximately $5,000 had been repaid to the Cincinnati Insurance Company.

13. By letter of August 3, 1988, Department representative Thompson wrote, "[t]he information you have furnished has been thoroughly reviewed. It appears that your

    indebtedness with Milton Carpenter Insurance has been assigned to Cincinnati Insurance Company. Please request that Cincinnati Insurance Company furnish us with a statement indicating that all of your indebtedness to their company has been satisfied". The letter stated that failure to respond within 30 days from the date of the letter was grounds for denial of the application.

    
    

14. The evidence does not explain the reason for Mr. Thompson's letter of August 3, 1988. Given the June 17 closure of the pending application based upon the Petitioner's failure to supply additional information, the information furnished apparently consisted of the Petitioner's untimely filed letter of June 23. As of August 3, no pending application existed. In any event, the Petitioner did not respond to the August 3 request.

    
    

15. By second application signed October 31, 1989, and filed November 3, 1989, Petitioner submitted an application for examination as a general lines insurance agent. By undated letter, Department representative Thompson again requested Petitioner to submit either certificates of employment to verify his prior experience or proof of completion of certain educational requirements, and further requested a reply to the letter of August 3, 1988 seeking statement from Cincinnati Insurance Company indicating that "all of your indebtedness to their company has been satisfied". Again the letter provides that failure to furnish the requested information within 30 days would result in the file being closed. 1/ The Petitioner, subsequent to the undated letter and prior to February 2, 1990, submitted said certificates of employment.

    
    

16. Early in 1990, the Petitioner's application file

    was assigned to Department representative, Patricia Lehman. On February 2, 1990, Ms. Lehman informed that Petitioner that his certificates of employment were not acceptable, and that he would be required to complete a 240 hour educational requirement.

    Further, Ms. Lehman's letter provided that, "[i]n addition, you will need to furnish us with a certified letter from Cincinnati Insurance Company that you have made full restitution or a certified copy of the written agreement between you and the party(s) involved that you are making restitution satisfactory to all parties concerned. The information you sent to us is not certified and reflects no signatures".

    
    

17. Beginning February 26, 1990, Mr. Kornya took and completed the 240 hour insurance course as identified in the Department's previous communications. The $595 course met for six weeks, five days each week, from 8:00 a.m. to 5:00 p.m.

    
    

18. On September 17, 1990, the pending application was closed by the Respondent based upon the failure of Petitioner to submit the previously requested information. There is no evidence that Petitioner submitted evidence of completing the educational requirement.

19. On or about January 8, 1991, Petitioner entered

    into an restitution agreement with Cincinnati Insurance Company setting forth a payment schedule which requires that Petitioner make a payment of $300 each month to the Cincinnati Insurance Company in order to eventually satisfy the entire $52,013.35 judgement against him.

    
    

20. By application signed January 11, 1991, and filed January 16, 1991, Petitioner submitted an application for examination as a general lines agent.

    
    

21. By memorandum of February 18, 1991, to her superior, Bob Stewart, Ms. Lehman recommended that the Petitioner's application be denied. Specifically, her memo provides as follows:

    
    

    Mr. Kornya's license qualification and eligibility for licensure were revoked by the Department in 1985 for the mishandling of funds in a fiduciary capacity. It does not appear Mr. Kornya attempted to make restitution until the signed Agreement in 1991. He has demonstrated lack of fitness and trustworthiness to engage in the business of insurance. Therefore pursuant to Sections 626.611(1) (7) , [sic]

    626.641(2) and 626.731(1), I recommend his application be denied.

    
    

22. Although Ms. Lehman's memo states that "[i]t does not appear Mr. Kornya attempted to make restitution until the

    signed Agreement in 1991", prior to the January 8, 1991 execution of the restitution agreement, the Petitioner had paid $12,237.94 to Cincinnati Insurance Company realized from the sale of vehicles and real estate. The executed copy of the restitution agreement reflects that such funds were paid, although the agreement fails to indicate when the payment was made. The payment was applied towards interest which had accumulated on the judgement, not towards the $52,013.35 principle judgement amount.

    
    

23. At the time of the hearing, the restitution

    payments were current (although Petitioner did not make the $300 payment due in April, but paid $600 in May.) As of the date of hearing, approximately $49,913 remained to be paid to Cincinnati Insurance Company to satisfy the judgement. Although at the time of the hearing, a letter allegedly from Cincinnati Insurance Company indicated that they had not received documentation of Petitioner's compliance with paragraph five of the restitution agreement (a requirement that Petitioner purchase a life insurance policy naming the insurer as irrevocable beneficiary), said policy was purchased on January 9, 1991.

    
    

24. By letter of March 1, 1991, the Department denied the application, based on an application of the statutory sections cited in Ms. Lehman's memo. On June 21, 1991, the Department issued an amended letter of denial. 2/

25. In the amended letter of denial, the Department cites the prior misappropriation of funds, the unsatisfied judgement, and the 1985 revocation of licensure and eligibility for licensure, which "circumstances surrounding that revocation still exist". The letter cites Sections 626.611(1), (4), (7), (9), (10) and (13), section 626.641(2), and section 626.731(1) Florida Statutes, as the statutory basis for the denial.

    
    

26. The evidence fails to establish that any representative of the Department of Insurance, at any time, informed or assured the Petitioner that, upon his completion of

    the course of education and upon the execution of the restitution agreement between Cincinnati Insurance Company and the Petitioner, his application for examination for licensure as a general lines insurance agent would be approved.

    
    

27. The Petitioner has been acquainted with his current employer, Samuel Jokich, for approximately six years. Mr. Jokich employs the Petitioner as a "Colorado Prime" freezer beef salesman. According to Mr. Jokich, the Petitioner is "extremely trustworthy" and of good character. The Petitioner had not disclosed to Mr. Jokich, and Mr. Jokich was not otherwise aware, that the Petitioner had taken approximately $52,000 from the Milton Carpenter Insurance Agency.

    
    

28. Mr. Jeffrey Hooker, an independent insurance agent

    in Belle Glade and childhood friend of the Petitioner's, is aware of the Petitioner's misappropriation and conversion of approximately $52,000 from the Milton Carpenter Insurance Agency. However, Mr. Hooker stated that he would trust the Petitioner and "try to help him any way I could". Mr. Hooker desires to become partners with the Petitioner in a proposed insurance agency in Ft. Myers.

    
    

29. Mr. Kenneth Snyder, a field representative for CNA Insurance Company, has known the Petitioner for approximately eight years. He believes the Petitioner to be of "good character" with "solid morals". Although Mr. Snyder was aware that the Petitioner had taken some funds from the Milton Carpenter Insurance Agency, he was unaware of the amount of said funds. Mr. Snyder stated that he would be willing to enter into a business relationship were the Petitioner to become licensed as a general lines agent.

    
    

    CONCLUSIONS OF LAW

    
    

30. The Division of Administrative Hearings has jurisdiction over the parties to and subject matter of this proceeding.

    Section 120.57(1), Florida Statutes.

    
    

31. The Petitioner has the burden of proving by a preponderance of the evidence that he is entitled to sit for the examination for licensure as a general lines insurance agent. Balino v. Department of Health and Rehabilitative Services, 348 So.2d 349 (1st DCA 1977). Florida Department of Transportation

    v. JWC Company, Inc., 396 So.2d 778 (Fla. 1st DCA 1981). In this case, the burden has not been met.

32. The first letter of denial cited Sections 626.611(1) and (7), 626.641(2) and 626.731(1),, Florida Statutes, as the basis for the denial. In the amended letter of denial, the Department, citing Section 626.611(1), (4), (7), (9), (10) and (13), section 626.641(2), and section 626.731(1) Florida Statutes, identifies the reason for the denial as the prior misappropriation of funds, the unsatisfied judgement, and the 1985 revocation of licensure and eligibility for licensure, which "circumstances surrounding that revocation still exist".

    
    

33. Section 626.611, Florida Statutes, in relevant part provides:

    
    

    The department shall deny, suspend, revoke, or refuse to renew or continue the license of any agent,...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 or more of the following applicable grounds exist:

    1. Lack of one or more of the qualifications for the license or permit as specified in this code.

       (4) If the license or permit is willfully used, or to be used, to circumvent any of the requirements or prohibitions of this code.

       (7) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance.

       1. Fraudulent or dishonest practices in the conduct 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 received 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.

       
       

34. Section 626.641(2), Florida Statutes, in relevant part provides:

    
    

    .... The department shall not. grant a new license or permit or reinstate eligibility to hold such license or permit if it finds that the circumstance or circumstances for which the eligibility was revoked or for which the previous license or permit was revoked still exist or are likely to recur....

35. Section 626.731(1) Florida Statutes, in relevant part provides:

    
    

    The department shall not grant or issue a license as general lines agent to any individual found by it to be untrustworthy or incompetent. ...

    
    

36. In 1983, the Petitioner took approximately $52,000 from the Milton Carpenter Insurance Agency for his own personal use. In 1984 a judgement in the amount of $52,013.35 was entered against Petitioner in the case . 3/ In 1991, approximately six years later after the judgement was entered, the Petitioner entered into a restitution agreement with the Cincinnati Insurance Company to pay the judgement and began to make monthly payments at a rate of $300 each month. The sole reason the Petitioner entered into the restitution agreement was apparently because he believed it would result in approval of his application for examination as a general lines agent. There is no credible evidence that the Petitioner would have otherwise made any arrangements to pay the outstanding judgement amount.

    
    

37. At this time, the Petitioner's application should be denied. He has demonstrated a lack of fitness or trustworthiness to engage in the business of insurance. Section 626.611(7), Florida Statutes. His misappropriation and conversion of his employer's funds constitute dishonest practices in the conduct of business under the license or permit. Section 626.611(9), Florida Statutes. The circumstances for which his license was revoked in 1985, the taking of said funds, continue to exist. Section 626.641(2), Florida Statutes. The Department is prohibited from issuing a license as general lies agent to any individual found by it to be untrustworthy. Section 626.731(1), Florida Statutes. Although the Petitioner offered testimonial evidence in support of his trustworthiness and fitness for licensure, the testimony was not persuasive.

    
    

38. The Petitioner asserts that the Department is equitably estopped from denying him the opportunity to sit for the general lines insurance agent licensure examination. As set forth in the Petitioner's proposed recommended order, the elements of equitable estoppel include:

    
    

    1. An agency representation as to a material fact;

    2. reliance on that representation; and

    3. a change in agency position detrimental to the party claiming estoppel.

    
    

39. In this case, the evidence fails to establish that the Department represented that, upon Petitioner's completion of the course of education and upon the execution of the restitution agreement between Cincinnati Insurance Company and the Petitioner, his application to sit for examination for licensure as a general lines agent would be approved. The Petitioner's extensive but uncorroborated testimony regarding alleged

    telephone conversations he had with Department representatives Franklin Thompson and Patricia Lehman, do not establish that any such representations were made.

    
    

40. The Petitioner's exhibits, including Department letters to the Petitioner, indicate that the Department sought additional information prior to a determination being made related to whether the Petitioner's application for examination would be approved. Any reliance by the Petitioner on the Department's request for additional information was misplaced.

    
    

41. The Petitioner cites a number of previous Orders issued by the Department of Insurance related to persons with histories of assorted criminal convictions applying for licensure as insurance agents. The Orders, allegedly "allowing individuals with such histories to become licensed as insurance agents in the State of Florida, often with some conditions attached", resulted from informal proceedings conducted within the agency or reflect settlements of previous legal actions.

    
    

42. None of the criminal convictions reflected in the cited Orders involve the sale of insurance or the misappropriation of insurance agency funds. A close review of the Orders indicates that, in all cases, the Orders deny the application for licensure. At most, the Orders suggest that, upon the completion of some requirement (including restoration of civil rights, completion of criminal probation, or full restitution) the individuals may file new applications. None of the submitted Orders suggest that partial or continuing restitution is sufficient for re-licensure.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby

RECOMMENDED that the Department of Insurance enter a

Final Order denying the application of Paul L. Kornya to sit for examination for licensure as a general lines insurance agent.

DONE and RECOMMENDED this 23rd day of January, 1992, in Tallahassee, Florida.

WILLIAM F. QUATTLEBAUM

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, FL 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 23rd day of January, 1992.

ENDNOTES

1/ Given that the letter was undated, it is not possible to determine when the 30 day period expired.

2/ The amended letter of denial was filed subsequent to the referral of this case to the Division of Administrative Hearings. On June 21, 1991, Respondent moved to amend the March 1, 1991 letter of denial. On July 3, 1991 the previously assigned Hearing Officer entered an order granting the motion to amend the letter of denial. The amended letter of denial included additional statutory references at Section 626.611(4), (9), (10),

and (13).

3/ Milton Carpenter Insurance, Inc., a Florida Corporation, and Cincinnati Insurance Company vs. Paul L. Kornya, Case No. 84-3235 CA(L)A, in the Circuit Court of the Fifteenth Judicial Circuit, Palm Beach County, Florida.

APPENDIX CASE NO. 91-2327

The following constitute rulings on proposed findings of facts submitted by the parties.

Petitioner

The Petitioner's proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows:

8. Rejected, unnecessary. Although Petitioner testified that neither such vehicles nor real estate were purchased with the misappropriated funds, it is likely that the availability of such misappropriated funds permitted the Petitioner to utilize other remaining funds for such items.

15. Rejected, irrelevant. The Department merely requested additional information related to the application. The March 17 letter does not state, directly or indirectly, that submission of the additional information will result in re-licensure. Mr. Kornya's "understanding" of what was required is irrelevant.

16-17. Rejected, uncorroborated hearsay is insufficient upon which to base a Finding of Fact.

19. Rejected, uncorroborated hearsay is insufficient upon which to base a Finding of Fact.

23. Rejected, uncorroborated hearsay is insufficient upon which to base a Finding of Fact.

27. Rejected, irrelevant. The Department merely requested additional information related to the application. The February

3 letter does not state, directly or indirectly, that submission

of the additional information will result in re-licensure. Mr. Kornya's "belief" of what was required is irrelevant.

28-30. Rejected, irrelevant.

1. Rejected, irrelevant. There are no representation in Ms. Lehman's February 3 letter, direct or indirect, that submission of the additional information would result in granting Petitioner's application for examination for re-licensure. The testimony of conversations with Ms. Lehman is uncorroborated hearsay insufficient upon which to base a Finding of Fact.

   
   

2. Rejected as to "Department's representations" as not established by the evidence.

   
   

3. Rejected as to implication that the Department would

   re-license given a restitution agreement between the parties, not supported by evidence. As to the Petitioner's rationale for entering into an agreement to make restitution to Cincinnati Insurance Company, to do so for no apparent reason other than to become re-licensed as a general lines agent, is contrary to Petitioner's assertion that he is sufficiently trustworthy to be re-licensed.

   
   

4. Rejected, immaterial.

1. Rejected as to Department's "representations", not supported by evidence.

   
   

2. Rejected. The Department's "request" that a new application be filed because the Department's forms had allegedly changed is uncorroborated hearsay insufficient upon which to base a Finding of Fact. Further, the application of October 31, 1989 had been closed due to the Petitioner's failure to timely provide the requested information.

   
   

3. Rejected, contrary to the evidence, the application being filed on January 16, 1991.

   
   

4. Rejected as to need to confirm that Cincinnati Insurance Company was "satisfied regarding the contents of the agreement so that there would be no problem with the licensure". There is no evidence that the Department would license the Petitioner as long as an insurer was satisfied.

1. Rejected, immaterial. The is no evidence that any representative of the Department stated, directly or indirectly, that submission of the additional information would result in granting Petitioner's application for examination for re- licensure.

   
   

2. Accepted insofar as relevant and material. However, the assertion that "Mr. Kornya is extremely sorry and remorseful concerning the events resulting in the revocation of his license" is somewhat contrary to the assertion that he signed the restitution agreement so that he could become re-licensed, and that he was aware that "he could merely allow Cincinnati

Insurance Company to execute against Mr. Kornya's real or personal property pursuant [to] its final judgement" as stated in Petitioner's proposed finding #33.

48-52. Rejected, cumulative.

53-54. Rejected, unnecessary, the memorandum sets forth the basis for Ms. Lehman's recommendation.

55. Rejected, irrelevant.

57-58. Rejected, cumulative.

1. Rejected, the greater weight of the witness' testimony fails to establish that the restitution agreement "would have been acceptable to the Department with respect to his licensure".

   
   

2. Rejected, cumulative.

61-62. Rejected, unnecessary.

62. Rejected, unnecessary.

Respondent

The Respondent's proposed findings of fact are accepted as modified and incorporated in the Recommended Order.

COPIES FURNISHED:

Tom Gallagher

State Treasurer and Insurance Commissioner The Capitol, Plaza Level

Tallahassee, Florida 32399-0300

Bill O'Neil General Counsel

Office of State Treasurer The Capitol, Plaza Level

Tallahassee, Florida 32399-0300

Steven M. Malono, Esq. 660 East Jefferson Street Post Office Box 11127

Tallahassee, Florida 32302

David Hershel, Esq.

412 Larson Building Tallahassee, Florida 32399-0300

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 TEN DAYS IN WHICH TO SUBMIT WRITTEN EXCEPTIONS. SOME AGENCIES ALLOW A LARGER PERIOD WITHIN 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.

=================================================================

AGENCY FINAL ORDER

=================================================================

OFFICE OF THE TREASURER DEPARTMENT OF INSURANCE

IN THE MATTER OF:

CASE NO. 91-L-l94DDH

PAUL L. KORNYA 91-2327

/

FINAL ORDER

THIS CAUSE came on before the undersigned Treasurer of the State of Florida, acting in his capacity as Insurance Commissioner, for consideration and final agency action. On March 1, 1991, the State of Florida, Department of Insurance (hereinafter referred to as "Department"), by letter denied PAUL L. KORNYA (hereinafter referred to as "Petitioner") his application for examination and qualification for licensure as a general lines insurance agent.

The Petitioner timely requested a formal administrative hearing pursuant to section 120.57(1), Florida Statutes, on the Department's denial.

Pursuant to notice, the matter was heard before William F. Quattlebaum, Hearing Officer, Division of Administrative Hearings, in Fort Myers, Florida, on September 12, 1991.

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 January 23, 1992. The hearing officer recommended that the Department of Insurance enter a final order denying the Petitioner's application for examination and qualification for licensure as a general lines insurance agent.

The Petitioner timely filed exceptions to the hearing officer's Recommended Order on January 31, 1992.

RULINGS ON THE PETITIONER'S EXCEPTIONS

1. The Petitioner's exception identified in paragraph one (1), is rejected. Case law establishes that it is the Hearing Officer's function to consider all of the evidence presented, resolve conflicts, judge credibility of the witnesses, which are permissible inferences from the evidence, and reach ultimate findings of fact based on competent and substantial evidence. State Beverage Department v. Ernel, Inc., 115 So.2d 566 (Fla. 3d DCA 1959); Cernac v. Florida State Board of Accountancy, 399 So.2d. 1013, 1016 (Fla. 1st DCA 1981); Herfetz v. Department of Professional Regulation, 475 So.2d. 1277 (Fla. 1st DCA 1985). With finding of fact number 18, the Hearing Officer established that the Petitioner submitted to the Department no evidence of his completing the educational requirement. At hearing, the Petitioner presented a certificate of course completion from the Foremost Insurance School that established that he completed the educational requirement. The Petitioner testified that he believed the school was responsible for mailing the certificate to the Department. However, Petitioner did not establish that this certificate was mailed to and received by the Department.

   
   

2. The Petitioner's exception identified in paragraph two (2), is rejected. Exhibit P-11 merely establishes the application information that Mr. Kornya must submit for the Department to consider his application for examination and qualification. The Hearing Officer reached this finding of fact by considering all of the evidence presented. The record identifies competent and substantial evidence upon which the Hearing Office could base this finding of fact.

   
   

3. The Petitioner's exceptions identified in paragraph three (3) are rejected. The Hearing Officer is correct in concluding that the Department must determine an applicant's fitness and trustworthiness to engage in the business of insurance prior to granting any licensure. The Department would not approve licensure to any applicant who is found unfit or otherwise determined untrustworthy. See Section 626.731(1), Florida Statutes.

   
   

   The Hearing Officer is likewise accurate in his statement that because the Petitioner failed to timely satisfy or seek to satisfy the judgement held by the Cincinnati Insurance Company, the conditions that lead to the Petitioner's revocation in 1985, i.e., the taking of said funds, continue to exist. The Hearing Officer bases that finding on the following competent and substantial evidence. Ms. Lehman, on page 3 of exhibit P-16, clearly established that Mr. Kornya's failure to faithfully address payments of his judgement revealed his then present lack of fitness and trustworthiness to engage in the business of insurance. Ms. Lehman made that determination on February 18, 1991.

   
   

4. The Petitioner's exception identified in paragraph four (4) is rejected. At hearing, the Hearing Officer found that the Petitioner did not establish that Ms. Lehman or any other Departmental staff member represented orally or in writing that the Department would grant Mr. Kornya eligibility for licensure should he meet the educational requirements and demonstrate satisfaction of his indebtedness to the Cincinnati Insurance Company. The Department could not act to approve or deny Mr. Kornya his application for examination and licensure until his current fitness and trustworthiness for licensure could be determined or otherwise evaluated. Instead, the Hearing Officer found competent and substantial evidence showing that the Department was unable to fully evaluate Mr. Kornya's fitness and trustworthiness until Mr. Kornya submitted detailed and independently corroborated information that established his efforts to satisfy his

   indebtedness to Cincinnati Insurance Company. Based on information she reviewed, Ms. Lehman concluded that, because no payments on the debt had occurred since 1985 when approximately $ 12,200.00 was paid, it did not appear that Mr. Kornya attempted to make further restitution efforts until more than five years later, when he negotiated and signed the January 8, 1991 Agreement with the Cincinnati Insurance Company.

   
   

5. Rulings on the Petitioner's exceptions to the Hearing Officer's rulings on the Petitioner's proposed findings of fact are as follows:

   
   

   1. The exception in reference to the Hearing Officer's comments on this point is rejected. The Hearing Officer ruled the Petitioner's proposed finding of fact number 8 to be irrelevant and unnecessary to the case at hand. Even the Petitioner's Proposed Recommended Order fails to apply this fact to any stated conclusion of law.

      
      

   2. The exceptions relative to proposed findings of fact numbers 15 and 27 are rejected. Mr. Kornya's "understanding" is irrelevant to the issue at hand. The Hearing Officer ruled with finding of fact number 26 that the Petitioner's evidence failed to establish that any representative of the Department of Insurance, at any time, informed or assured the Petitioner that, upon his completion of the course of education and upon the execution of his restitution agreement with Cincinnati Insurance Company, his application for examination for licensure as a general lines insurance agent would be approved.

      
      

   3. The exceptions relative to proposed findings of fact numbers 16, 17, and 23 are rejected. The remarks would not be relevant were they not offered to prove the truth of the matter asserted, i.e. that Mr. Kornya had communications with Cincinnati Insurance Company over payment of the judgment. Mr. Kornya did not produce at hearing any written communications he prepared or the Cincinnati Insurance Company prepared evidencing these communications.

      
      

   4. The exceptions relative to proposed findings numbers 28-33, 36, 41, 49, and 59 are rejected. Mr. Kornya must demonstrate his fitness and trustworthiness to engage in the business of insurance prior to examination and qualification for licensure.

      
      

      The Petitioner's theory of equitable estoppel will not vitiate the Department's clear statutory responsibility to determine an applicant's fitness and trustworthiness for engaging in the business of insurance prior to licensure. That responsibility is set forth in Sections 626.611(7), 626.641(2) and 626.731, Florida Statutes.

      
      

   5. The exceptions relative to proposed findings 61 and 62 are rejected. Competent and substantial evidence presented by the Department at hearing demonstrated that Ms. Lehman was aware of the restitution efforts made by Mr. Kornya in 1985. The Hearing Officer could reasonably have rejected these two proposed finding of facts as unnecessary to the resolution of the issues at hearing.

Upon careful consideration of the record, the submissions of the parties, and being otherwise advised in the premises, it is

ORDERED:

1. That the Findings of Fact of the hearing officer are adopted in full as the Department's Findings of Fact.

   
   

2. That the Conclusions of Law of the hearing officer are adopted in full as the Department's Conclusions of Law.

   
   

3. That the hearing officer's recommendation that the Petitioner's application for examination and qualification for licensure as a general lines insurance agent be denied is approved and accepted as being the appropriate disposition of this case.

ACCORDINGLY, that application for examination and qualification for licensure as a general lines insurance agent submitted by PAUL L. KORNYA is DENIED.

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 Department's General Counsel, acting as the agency clerk, at 200 East Gaines Street, 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 rendition of this Order.

DONE and ORDERED this 26 day of March , 1992.

TOM GALLAGHER

Treasurer and Insurance Commissioner

COPIES FURNISHED TO:

WILLIAM F. QUATTLEBAUM, HEARING OFFICER

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, FL 32399-1550

STEVEN M. MALONO, ESQUIRE

660 East Jefferson Street Post Office Box 11127 Tallahassee, Florida 32302

DAVID HERSHEL, ESQUIRE

Division of Legal Services

448 Fletcher Building

200 East Gaines Street Tallahassee, Florida 32399-0300

Docket for Case No: 91-002327

Orders for Case No: 91-002327