STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

STATE OF FLORIDA, DEPARTMENT )

OF INSURANCE AND TREASURER, )

)

Petitioner, )

)

v. ) CASE NO. 91-8089

)

DENNIS HAMEL, )

)

Respondent. )

)

RECOMMENDED ORDER

Notice was provided and on March 10, 1992 a formal hearing was held in this case. The authority for conducting the hearing is set forth in Section 120.57(1), Florida Statutes. The hearing location was Daytona Beach, Florida.

Charles C. Adams was the Hearing Officer.

APPEARANCES

For Petitioner: Andrew Kenneth Levine, Esquire

Room 412, Larson Building Tallahassee, Florida 32399-0300

For Respondent: Dennis Hamel

Post Office Box 29-1221 Port Orange, FL 32129-1221

STATEMENT OF ISSUES

The issues in this case are those promoted by the administrative complaint, DOI Case No. 91-11-353AKL, in which Petitioner alleges certain violations by Respondent according to Chapter 626, Florida Statutes.

PRELIMINARY STATEMENT

When served with the administrative complaint, Respondent requested a formal hearing to contest the allegations in that complaint. Petitioner requested the assignment of a Hearing Officer by the Division of Administrative Hearings to consider the dispute. That assignment was made and the hearing held on the aforementioned date.

At hearing Petitioner presented the testimony of Jean Peevy together with three exhibits which were admitted into evidence. Petitioner, with Respondent's concurrence, submitted late-filed depositions of Susan Shaw and Robert Lamar Linton as part of its case. Those depositions included exhibits. Respondent testified in his own defense and offered one exhibit which was admitted.

A transcript of the hearing was prepared and filed with the Division of Administrative Hearings on March 23, 1992. A timely proposed recommended order

was submitted by Petitioner. The fact proposals in that document are addressed in the appendix to the recommended order. Respondent has filed a document entitled "Proposed Recommended Order (Response to Administrative Complaint)".

This document is constituted of specific admissions or denials in response to paragraphs found in the administrative complaint together with argument. This submission as well as the submission by Petitioner has been considered in preparing the recommended order.

FINDINGS OF FACT

1. At times relevant to this inquiry Respondent has held licenses issued by the Petitioner which allow him to do insurance business in Florida as a life agent; a life and health agent; a life, health and variable annuity contracts agent and a general lines agent. As the licensing body Petitioner has regulatory authority concerning the Respondent's activities in these insurance fields. That authority is found in Chapter 626, Florida Statutes. In furtherance of its duties as regulator Petitioner brought the previously described administrative complaint calling into question conduct by the Respondent as a general lines agent.

   
   

2. Respondent is an officer of M/A Insurance, Inc. (M/A). He has bank account signature privileges for the corporation associated with account no. 13360004759 at the First Union National Bank of Florida, Port Orange Office, Port Orange, Florida. Pertinent to this case Respondent conducted business as a general lines agent through M/A.

   
   

3. On January 1, 1988, M/A entered into an Agency Agreement with Georgia Casualty & Surety Company of Atlanta, Georgia (Georgia Casualty). Respondent executed this agreement for M/A as vice-president for that corporation.

   
   

4. Among the coverages which M/A agreed to carry for Georgia Casualty were workers' compensation and general liability.

   
   

5. The Agency Agreement set out responsibilities concerning premium payments by customers for policies written by M/A. The requirements were announced in Article III where it states:

   
   

   The Agent shall pay to the Company all premiums with respect to policies written by him under this Agreement, whether or not collected by

   the Agent, from the insured. All premiums received by the Agent are the property of the Company and shall be held by the Agent, as trustee, in trust for the Company until delivered to the Company, and it is expressly understood and so agreed that the privilege, if granted, of taking or deducting commissions

   from such premiums before remitting such premiums to the Company shall not be construed as changing or affecting the status of the Agent as a trustee.

   
   

   The Company's maintenance of an account for the Agent on the Company's books, such as a creditor and debtor account, or a declaration of account, or otherwise, is hereby declared a memorandum of business transacted, and the maintenance of such account shall not be con-

   strued as changing or affecting the status of the Agent as a trustee.

   
   

   The Agent shall keep a complete record of account of all transactions pertaining to all of the business transacted by the Agent with

   the Company, which record of account, regardless of the nature thereof, shall be accessible to

   any duly authorized representative of the Company at any reasonable time while this Agreement is

   in force or within one (1) year after the termination hereof.

   
   

6. The commissions due to M/A were based upon a commission schedule which was part of the agreement and is discussed in Article V to the agreement.

   
   

7. The arrangement between M/A, Georgia Casualty and customers who bought workers' compensation and general liability policies was that the customer would pay premiums to M/A. M/A would then deposit the customer's check to the M/A bank account alluded to in the fact finding. The amount set out in the check would be based upon a report prepared by the customer pertaining to activities on the policies, referred to as production. Respondent was obligated to forward those reports to Georgia Casualty. Georgia Casualty would then determine the proper premium amount by an audit process, deduct appropriate commissions for the benefit of M/A and bill M/A for the net premium amount after deducting the commission. This statement of account between Georgia Casualty and M/A is described in Article VI to the agreement where it states:

   
   

   The Company shall furnish the Agent with a statement of account covering transactions for the preceding month and the Agent shall remit to the Company the net amount shown on such statement to be due to the Company, so that such remittance will be received by the Company by the 15th of the second month after the end of the month for which such statement of account is rendered. (Example: Payment for balance shown due for the month of July must be received by the Company no later than September 15).

   
   

   An account for which payment is not received by the 15th of the month, as specified, shall

   be considered to be delinquent; provided, however, that an account shall not be considered delin- quent solely as a result of the withholding of payment for a specific item over which there is

   a bona fide difference of opinion.

   
   

8. As described in Petitioner's Exhibit No. 2, the Agency Agreement, the statement of account was generated for each customer which M/A had written insurance on through Georgia Casualty. The form statement of account had a column in which Respondent could mark the customer accounts which his agency M/A wished to designate for disbursement made from the proceeds of a monthly check written from M/A to Georgia Casualty to satisfy the account obligation between M/A and Georgia Casualty. Petitioner's Exhibit No. 3 gives examples of that selection by M/A to have Georgia Casualty credit the account between Georgia

   Casualty and M/A associated with policy activities between M/A and its customers. Having considered the evidence, it is determined that the marks for crediting the account were made by M/A and not by Georgia Casualty. Georgia Casualty honored the selection by M/A concerning credits against the various customer accounts as part of the overall account between Georgia Casualty and M/A.

   
   

9. Article XII to the Agency Agreement sets out the basis for termination. In the event that termination was for other than cause the outstanding and unexpired policies of insurance written by M/A as agent for Georgia Casualty continued in force subject to Georgia Casualty's normal underwriting standards as one of the alternative arrangements between the parties upon termination other than for cause. In that event, M/A concurrently with the termination of the agreement would enter into a Limited Agency Agreement with Georgia Casualty to permit orderly servicing of the policies until expiration or termination. With the selection of that alternative Article XIIA.3. calls upon M/A to continue to service the policies and receive the prevailing rate of commission on policies renewed by Georgia Casualty under the Limited Agency Agreement or under state laws or regulations pertinent to the transactions. Commissions and return commissions are allowed and paid on all transactions consummated following the effective date of the termination in accordance with the Limited Agency Agreement.

   
   

10. Under Article XIIC., in the event the termination was for cause M/A would still be obligated to complete collection of and account to Georgia Casualty for premium transactions unaccounted for at the time of termination.

    
    

11. As contemplated by Article XII, on April 3, 1990, M/A entered into a Limited Agency Agreement with Georgia Casualty. Respondent executed that agreement as then President for M/A. Respondent's Exhibit No. 1 sets forth the Limited Agency Agreement and its terms wherein it is stated:

    
    

    WHEREAS, the Company and the Agent are parties to a certain Agency Agreement effective as of January 1, 1988 (the "Agency Agreement"); and WHEREAS, the notice of termination of the Agency Agreement has been duly given pursuant to Article XII of the Agency Agreement; and WHEREAS, the parties hereto desire to enter into this Limited Agency Agreement pursuant

    to which the Agent shall continue to serve as an agent of the Company for certain purposes upon the terms and subject to the conditions hereinafter set forth;

    NOW, THEREFORE, in consideration of the premises and the mutual promises and covenants hereinafter set forth, the parties hereto agree as follows:

    1. The Agent's authority to solicit appli- cations for insurance and to request issuance of or issue and countersign binders and policies of insurance as well as customary endorsements effecting policy changes, shall be continued in effect for policies with an effective date prior to April 3, 1990.

    2. The Company agrees to provide renewal policies and to accept renewal policies

       produced by the Agent with effective dates prior to June 30, 1990.

    3. After June 30, 1990, the Agent shall have authority to issue appropriate endorsements or certificates of coverage on policies of insurance in force, provided that any such endorsement

       or certificate shall not increase any coverage limit, add any coverage or extend the term of any policy or contract of insurance without the prior written consent of the Company.

       * * *

       
       

12. Contrary to Respondent's contentions at hearing, while the Limited Agency Agreement restricted the scope of his activities in terms of their duration and the breadth of business activity associated with policies of insurance written by Georgia Casualty through M/A as agent, the Limited Agency Agreement did not relieve M/A in its responsibilities to continue to service the policy in the manner set forth in the January 1, 1988 Agency Agreement for accounts that could be maintained. This included the obligations described for collecting premium payments from insureds to be deposited to the account of M/A and the obligation to receive reports from the insureds to be forwarded to Georgia Casualty to aid Georgia Casualty in preparing a statement of accounts for the preceding month's business by M/A, leading to the deduction of appropriate commissions followed by net billing on the account after deducting the appropriate commission. Again this speaks to the individual accounts of insureds as a part of the overall statement of agency account provided by Georgia Casualty to M/A.

    
    

13. With the advent of the Limited Agency Agreement Georgia Casualty continued to provide the overall statement of agency account with the discreet account references for the insureds for whom M/A had written policies issued by Georgia Casualty. By contrast M/A did not always forward reports generated when an insured would pay M/A for production on policies. The consequence would be that M/A had money paid by the insured as premium payments, but Georgia Casualty would not know about those payments because it had not received the reports due from the insured to M/A and from M/A to Georgia Casualty. Therefore Georgia Casualty did not receive premium payments that it was entitled to in that not having the information from the reports it did not bill M/A for the net premium amounts after deducting commissions due to M/A.

    
    

14. In his testimony at hearing Respondent alluded to the impression which he held concerning the Limited Agency Agreement entered into on April 30, 1990, which he executed as President for M/A, as being an arrangement in which the insured would send the reports directly to Georgia Casualty for production together with the insured's premium payment. This as contrasted with the prior arrangement under the original agreement of January 1, 1988 wherein the report would be made to M/A and a check written to M/A with the report being forwarded to Georgia Casualty to assist in the preparation of the statement of account from Georgia Casualty to M/A. As referred to earlier, this impression is contrary to the terms of the Agency Agreement as modified by the Limited Agency Agreement. Moreover, the activities concerning the arrangement between the insured, M/A, and Georgia Casualty belie such an impression by the Respondent and discredit the purported reading which he gave to the Limited Agency Agreement when contrasted with the original agency agreement. In view of those facts to be detailed next, the Respondent's assertion that he read the Limited Agency Agreement to modify the responsibilities by M/A to accept premium payments at its agency and render a report to an arrangement where reports and

    premium payments were transmitted directly from the insured to Georgia Casualty is rejected.

    
    

15. On four separate occasions after April 3, 1990, the effective date of the Limited Agency Agreement, M/A accepted monthly premium payments and reports from Lamar Linton Logging for workers' compensation and general liability coverage. The monies were deposited by Respondent to M/A's account with First Union National Bank of Florida described before. Again, Respondent had signature authority concerning withdrawal of the monies from that account. The monthly checks from Lamar Linton Logging were written on June 14, 1990 in the amount of $3,529.92; on July 16, 1990, in the amount of $4,006.37; on August 16, 1990 in the amount of $2,648.27; and on September 14, 1990 in the amount of

    $4,109.11. The reports routinely issued by Lamar Linton Logging to M/A to be forwarded to Georgia Casualty were not forwarded to Georgia Casualty as required. Thus M/A was not billed. Around the fall of 1990, Georgia Casualty through contact with Lamar Linton discovered that Linton had paid M/A for the premiums and rendered the appropriate reports. Georgia Casualty then contacted M/A about the missing reports and in October 1990 Respondent faxed the four missing reports to Georgia Casualty. Georgia Casualty in turn sent a statement of the account to M/A for the four months of production associated with Lamar Linton. M/A did not honor its obligation to pay the net premium owed on the four months of transactions. These circumstances make it obvious that Respondent continued to receive premium payments through his company M/A from his customer Lamar Linton, together with reports, in the same manner as had been customary before the Limited Agency Agreement was executed on April 3, 1990, thus discounting his testimony that he was no longer obligated to receive the money and reports. Beyond the receipt of the money and reports, Respondent when confronted with his failure to honor the obligations to transmit the reports to assist in preparing a statement of account from Georgia Casualty to M/A, belatedly sent the reports but his company has failed to honor the account statement on the net premiums owed. Moreover, M/A did not return the premium payments written in the months of July through September, 1990 to Lamar Linton.

    
    

16. Respondent was responsible to see that the reports were rendered on the Lamar Linton account in the periods June through September, 1990, in aid of having Georgia Casualty prepare the statement on account. He bore that responsibility as the officer who executed the original Agency Agreement on January 1, 1988, and the subsequent Limited Agency Agreement of April 3, 1990. Respondent stands to profit from not paying the money owed to Georgia Casualty given his ability to access the M/A bank account at the First Union National Bank of Florida. Respondent is held accountable for the failure by M/A to pay the net premium due to Georgia Casualty for the four months of production by Lamar Linton having gained a knowledge of the report on production in the four months in question and having belatedly forwarded the four months reporting to Georgia Casualty and having been billed the net premium due.

    
    

17. It is alleged in paragraph 22 to the administrative complaint that on September 21, 1989, Respondent drafted an application for commercial vehicle insurance for a 1982 G.M.C. tractor, serial number IGDT94J9CV582562 owned by Lamar Linton. Having considered the facts presented in the deposition of Robert Lamar Linton of Lamar Linton Logging together with Respondent's admission that he drafted the application, it is found that Respondent entered or caused to be entered in the schedule of automobiles referring to that 1982 G.M.C. tractor a valuation of $43,000 for purposes of establishing the amount of insurance premium to be charged. In that same schedule, prepared or caused to be prepared by Respondent, a 1984 G.M.C. tractor of similar nature was valued at $45,000. The latter truck had an initial value of $53,900. On January 16, 1988, the

    purchase price of the 1982 G.M.C. truck was $16,250. Subsequently, by way of a commercial auto general change endorsement to the Edison Insurance policy pertaining to Lamar Linton Logging, processed by Respondent, a virtually identical 1984 G.M.C. truck was added to the policy, making it two 1984 G.M.C. tractors. In that instance the valuation for insurance purposes for the 1984 truck that was added was $17,625 as opposed to the $45,000 for the original 1984

    G.M.C. tractor and the $43,000 for the 1982 tractor. Respondent or his secretary were told when the second 1984 G.M.C. tractor was added that the purchase price of that truck had been $17,625. Another tractor which was added to the policy by the general change endorsement was a 1986 G.M.C. which had a value of $21,625. The 1982 G.M.C. tractor and the first 1984 G.M.C. tractor were put on the Edison Insurance policy effective September 21, 1989. The general change endorsement for the second 1984 G.M.C. tractor and the 1986

    G.M.C. tractor occurred on March 15, 1990. The September 21, 1989 policy was policy no. EC013621. The general change endorsement of March 15, 1990 was under policy no. EC013896. The exact reason for the discrepancy in the stated amount insured on the various trucks which lead to a greater premium being paid than was necessary for the inordinately higher valued trucks in the September 21, 1989 schedule when contrasted with the schedule in the auto general change endorsement of March 15, 1990 is not clear from this record but the circumstances point to Respondent as the individual who is responsible.

    
    

18. Lamar Linton was unaware that the 1982 G.M.C. tractor had been valued by Respondent or someone in his employee at $43,000 for purposes of the insurance policy of September 21, 1989. On the other hand he made M/A aware of the value of the 1984 tractor in the March 15, 1990 policy. That value was basically in keeping with the true value of the tractor. Again the September 21, 1989 valuation for the tractors to include the 1982 tractor was inappropriate and caused a premium charge to Lamar Linton for the 1982 tractor in excess of what was appropriate. This unduly profited Respondent and his agency and under the facts, when contrasted with the valuation in the March 15, 1990 policy for the two additional trucks, points out that the Respondent knew or should have known that the valuation on the 1982 G.M.C. tractor was inappropriate when taking into account that Respondent processed the policies of September 19, 1989 and March 15, 1990.

    
    

19. It is alleged that Respondent without the consent, authorization, permission or present knowledge of Lamar Linton or any representative to Linton affixed the name or signature of Lamar Linton to various insurance agreements, including but not limited to an application for commercial automobile policy, later policy no. EC013621 issued by Edison Insurance and a premium finance agreement on that policy. The testimony by Lamar Linton concerning a policy about which Respondent allegedly failed to gain permission from Lamar Linton or a proper representative to Linton for affixing the Linton signature was associated with policy no. EC013896 by Edison Insurance. This is the March 15, 1990 policy. The information on policy no. EC013896 on the election of non- stacked coverage showing the signature of Lamar Linton was not signed by Linton next to the signature of the Respondent as witness. Likewise, Lamar Linton was certain that he did not sign the form which shows his signature in that policy associated with rejection/selection of uninsured motorist coverage or the form in that policy which shows his signature on the document entitled notice- deductible election. Nor did Linton authorize anyone else to sign his name on those forms. Linton did not offer any testimony as to the Linton signatures that appear in Petitioner's Exhibit No. 4 to his deposition, which is the policy no. EC013621, September 21, 1989.

20. Having considered the testimony it is found that the Respondent witnessed a signature of Lamar Linton on the election of non-stacked coverage form to policy no. EC013896 which Linton did not sign. It has not been established who affixed the Lamar Linton signature to the forms in that policy or policy no. EC013621.

    
    

21. Concerning the customer Florida Mulch, Inc., the administrative complaint, Count I, speaks in terms of $20,498.42 in monies which Florida Mulch paid to M/A for premium payments on workers' compensation and general liability coverage written by Georgia Casualty and placed in the M/A bank account already described.

    
    

22. The witness Susan Shaw who testified as a representative from Florida Mulch brought four checks to the posthearing deposition session. In the deposition testimony she says that she is not sure that two of these cancelled checks written for insurance provided by Georgia Casualty correspond to the checks in the two months which Georgia Casualty complained about as being months upon which Georgia Casualty did not receive payments for activities by Florida Mulch on its policies with the insurer. Moreover, the policy number set out in the administrative complaint, which is CL701406, corresponds to another company, Speciality Insurance and not Georgia Casualty. The Georgia Casualty policy numbers for Florida Mulch were 914266 and 914261. The remarks by Jean Peevy who testified at the hearing for Georgia Casualty only indicated that there were two months for which Georgia Casualty was not paid, that Georgia Casualty got unspecified information from the customer and in turn billed the Respondent in the person of his company M/A which was not paid. Looking at the exhibit on account billings from Georgia Casualty to M/A, Petitioner's Exhibit No. 3, and the checks which the Florida Mulch witness brought to the deposition session, it is not clear where the prosecution got the information set out in the administrative complaint, that $9,983.38 in billings were owed to Georgia Casualty by M/A or that $20,490.42 was paid by Florida Mulch to M/A. The amounts in the administrative complaint, the cancelled checks provided at deposition and the account entries in Petitioner's Exhibit No. 3 are all different amounts. Consequently, it cannot be determined that $9,983.38 was owed and has not been paid as alleged.

    
    

    CONCLUSIONS OF LAW

    
    

23. The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this action pursuant to Section 120.57(1), Florida Statutes.

    
    

24. Petitioner has the burden of proving the allegations in the Administrative Complaint. See Ferris v. Turlington, 510 So.2d 292 (Fla. 1987).

    
    

25. Reference Count I, Petitioner has failed to prove that the Respondent collected premium monies from Florida Mulch, Inc. during or about 1990 in the amount of $20,490.42, constituting monthly premium payments for workers' compensation and general liability policy no. CL701406 issued by Georgia Casualty. Further the proof failed to show that this amount of money was deposited in the bank account of M/A Insurance, numbered 13360004759 at the First Union National Bank of Florida in Port Orange, Florida. Petitioner has failed to prove that Respondent never accounted for or forwarded $9,983.38 of those funds collected from Florida Mulch to Georgia Casualty nor did Petitioner prove that the funds in the amount $9,983.38 were not returned to Florida Mulch, Inc. in the regular course of business. Therefore, Petitioner has failed to prove that Respondent misappropriated, converted or unlawfully withheld

    $9,983.38 from funds belonging to Georgia Casualty or Florida Mulch while conducting the business of insurance under his license in violation of the underlying statutory references nor violated the statutory references discussed in connection with Count II.

    
    

26. Concerning Count II, Petitioner has proven that Respondent in person or as the individual responsible for the activities of M/A collected premium monies from Lamar Linton Logging in the amounts set forth in the fact finding on policies for workers' compensation and general liability issued by Georgia Casualty. It has been proven that those monies were deposited in the bank account of M/A at the First Union National Bank of Florida in Port Orange, Florida, an account upon which Respondent had signature authority, and that Respondent as a responsible person for M/A did not report the collection of money from Lamar Linton Logging to Georgia Casualty as was required by the agreement between M/A and Georgia Casualty nor return the monies to Lamar Linton. Although Respondent did eventually report these collections, he failed to cause payment to me made to Georgia Casualty in the amount of the net premiums owed following deduction of commissions which he was entitled to for the four months collections from Lamar Linton Logging. In this regard Respondent has unlawfully withheld funds belonging to Georgia Casualty by failing to remit the net premium amounts following a statement of account on these four months as had been provided from Georgia Casualty to the Respondent and in the absence of any reimbursement of the monthly premium payments from M/A to Lamar Linton Logging.

    
    

27. Also, related to Count II, Respondent was involved in the application and obtaining of insurance for the 1982 G.M.C. tractor described in the facts. In the course of the schedule of values for vehicles Respondent was responsible for reporting the value of that vehicle as $43,000. In fact it was worth

    $16,250 at time of purchase by Lamar Linton. The representation in the schedule set out in the application that the value was $43,000 was without the knowledge or authorization of Lamar Linton.

    
    

28. In comparing the stated value of the 1982 G.M.C. tractor and a 1984

    G.M.C. tractor in that same policy no. EC0136212 and the stated value in the general change endorsement for policy number no. EC013896 which added another 1984 G.M.C. tractor and a 1986 G.M.C., vastly lower amounts are set out in the latter schedule. Realizing that the Respondent had also established the latter policy, the more appropriate values for the trucks in question is found in the approach found in policy no. EC013896 for the second 1984 G.M.C. tractor and the 1986 G.M.C. tractor. The contrast between the schedules in the two policies for the four trucks points out that the Respondent knew and should have known that the valuation on the 1982 G.M.C. tractor was vastly in excess of its insurable value. This resulted in an excess premium being charged to Lamar Linton to the benefit of Respondent. This representation of the insured value on the 1982

    G.M.C. tractor to the benefit of the Respondent is an item which he is accountable for in the disciplinary process.

    
    

29. Finally, in association with Count II, Respondent witnessed an unauthorized signature of Lamar Linton on the election of non-stacked coverage form in furtherance of the policy no. EC013896, a policy not addressed in the administrative complaint nor has it been shown that he affixed the unauthorized signature of Linton on that form. While Linton did not authorize the signature, it was not proven who did sign his name.

    
    

30. It has not been proven that the Respondent in any other manner without consent, authorization or permission or present knowledge of Lamar Linton or any

    representative to Linton affixed the name or signature of Lamar Linton on various insurance agreements pertaining to Edison Insurance and in particular policy no. EC013621 as alleged or policy no. EC013816 not part of the allegations.

    
    

31. In accordance with the allegations set forth in Count II, Respondent is said to have violated Sections 626.561(1), 626.611(4), 626.611(7), 626.611(8), 626.611(9), 626.611(10), 626.611(13), 626.621(2), 626.621(3), 626.621(4) and 626.734, Florida Statutes. Consistent with the facts found and discussion of law all sections have been violated as alleged in Count II with the exception of Sections 626.611(8) and 626.621(3), Florida Statutes. Those latter two provisions were not violated by the Respondent in any manner. Respondent has also violated Section 626.611(5) and 626.621(7), Florida Statutes, pertaining to Count II.

    
    

32. The violations are such that they speak to Respondent's overall fitness to operate his business under any licenses he holds in Florida, as opposed to violations of a character only associated with his business as a general lines agent. Consequently, all licenses held by Respondent are subject to discipline.

RECOMMENDATION

Based upon the facts found and the conclusions of law reached, it is, recommended that a Final Order be entered suspending all Florida insurance licenses held by Respondent for 90 days.

RECOMMENDED this 14th day of April, 1992, in Tallahassee, Florida.

CHARLES C. ADAMS, 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 14th day of April, 1992.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 91-8089

The following discussion is given concerning the proposed facts offered by the Petitioner:

Paragraphs 1-4 are subordinate to facts found.

Paragraph 5 is not necessary to the resolution of the dispute. Paragraphs 6 through 13 are subordinate to facts found.

Paragraph 14 is not necessary to the resolution of the dispute. Paragraph 15 is subordinate to facts found.

Paragraph 16 is not necessary to the resolution of the dispute.

Paragraphs 17 through the initial sentence in Paragraph 37 are subordinate to facts found with the exception that the money amount set out in Paragraph 37 is

incorrect. The remaining sentence in Paragraph 37 is not necessary to the resolution of the dispute.

Paragraph 38 is subordinate to facts found with the exception of the money amount set forth.

Paragraph 39 and those sentences within Paragraph 40, excepting the last sentence are subordinate to facts found. The last sentence is not necessary to the resolution of the dispute.

Paragraphs 41 and 42 are subordinate to facts found. Paragraph 43 is rejected.

Paragraphs 44 through 47 are subordinate to facts found.

Paragraphs 48 through 60 as they pertain to the count concerning Florida Mulch, Inc. are rejected in the suggestion that proof of a violation has been established.

Paragraph 61 is not necessary to the resolution of the dispute.

Paragraph 62 is accepted as it establishes a demand for money for net premiums related to Lamar Linton Logging but not as it is associated with Florida Mulch concerning a claim of violation for that latter customer for the business dealings with that latter customer.

Paragraph 63 is not necessary to the resolution of the dispute.

Paragraph 64 is subordinate to facts found with the exception of the sentence that says "the Respondent took no action to correct any perception on the part of the insureds" which is not understood in the context of Paragraph 64.

Paragraph 65 is subordinate to facts found.

COPIES FURNISHED:

Andrew Kenneth Levine, Esquire Department of Insurance

Room 412, Larson Building Tallahassee, FL 32399-0300

Dennis Hamel

Post Office Box 29-1221 Port Orange, FL 32129-1221

Tom Gallagher, Commissioner Department of Insurance

and Treasurer The Capitol

Tallahassee, FL 32399-0300

Don Dowdell, General Counsel Department of Insurance

and Treasurer

412 Larson Building Tallahassee, FL 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 10 days in which to submit written exceptions. Some agencies allow a larger period within which top 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-353AKL

DENNIS HAMEL DOAH CASE NO. 91-8089

/

AMENDED 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 November 22, 1991, a two-count Administrative Complaint was filed charging Respondent with violation of various provisions of Chapter 626, Florida Statutes. Respondent timely requested a formal hearing pursuant to Section 120.57(1), Florida Statutes. Pursuant to notice, the matter was heard on March 10, 1992, in Daytona Beach, Florida, before Charles C. Adams, Hearing Officer for the Division of Administrative Hearings.

After consideration of the evidence, argument and testimony presented at hearing, the hearing officer issued his Recommended Order (attached as Exhibit A). The hearing officer recommended that a Final Order be entered suspending for 90 days all insurance licenses of the Respondent, Dennis Hamel, in the State of Florida. The Petitioner filed timely exceptions to the Recommended Order. A Final Order was issued on July 15, 1992. On July 29, 1992, Respondent filed a Motion to Alter or Amend Final Order, requesting the Department to take his exceptions into consideration. After consideration of the argument presented, the motion is granted. All exceptions submitted are considered in the following section of this Order.

RULING ON PETITIONER'S EXCEPTIONS

1. Petitioner in its first exception takes exception to the hearing officer's conclusion of law wherein the hearing officer states that:

   
   

   Reference Count I, Petitioner has failed to prove that the Respondent collected premium monies from Florida Mulch, Inc. during or about 1990 in the amount of

   $20,490.42, constituting monthly premium payments for workers' compensation and general liability policy no. CL 701406 issued by Georgia Casualty. Further the proof failed to show that this amount of money was deposited in the bank account of M/A Insurance numbered 13360004759 at the First Union National Bank of Florida in Port Orange, Florida. Petitioner has failed to prove that Respondent

   never accounted for or forwarded $9,983.38 of those funds collected from Florida Mulch to Georgia Casualty nor did Petitioner prove that the funds in the amount $9,983.38 were not returned to Florida Mulch, Inc. in the regular course of business. Therefore, Petitioner has failed to prove that Respondent misappropriated, converted or unlawfully withheld $9,983.38 from funds belonging to Georgia Casualty or Florida Mulch while conducting the business of insurance under his license in violation of the underlying statutory references nor violated the statutory references discussed in connection with Count II.

   
   

   Petitioner argues that there is substantial competent evidence within the record to show that the Respondent violated numerous provisions of the Insurance Code. The evidence does indicate that 1) the two checks introduced were written by Florida Mulch and were given to the Respondent in the regular course of business, see Florida Mulch Depo. pp. 9, 12-13, Florida Mulch Depo. Comp. ex. 1;

   2) these checks constituted premium payments on a workers' compensation policy under which Georgia Casualty insured Florida Mulch, see Florida Mulch Depo. pp. 13-14, Florida Mulch Depo. Comp. ex. 1; and 3) that competent testimony from Georgia Casualty showed that there were two months of production for which the insurer did not receive premium payments from the Respondent's insurance agency, see Recommended Order, Finding of Fact para. 22; T. 36, 39; Florida Mulch Depo. pp. 14-15. However, it is not plainly evident from the testimony of the Georgia Casualty representative, the testimony of the Florida Mulch representative, nor from the documents admitted into evidence that these checks corresponded to the months for which production was not reported to the insurer. The Petitioner attempts to argue that

   
   

   The precise amounts which Florida Mulch gave to the Respondent and the Respondent failed to forward to the insurer bears no consequence to the implication of the relevant statutes to the Respondent's conduct.

   
   

   This argument is flawed in that precise amounts are clearly relevant and significant. The hearing officer's findings are supportable from the competent substantial evidence in the record and the conclusions related to this count are reasonably based upon these findings. Accordingly, Petitioner's exception number 1 is rejected.

   
   

2. Petitioner in its second exception excepts to the hearing officer's Conclusion of Law which states,

It has not been proven that the Respondent in any other manner without consent, authorization or permission or present knowledge of Lamar Linton or any representative to Linton affixed the name or signature of Lamar Linton on various insurance agreements pertaining to Edison Insurance and in particular policy no. EC 013621 as alleged or policy no. EC 013816 not part of the allegations.

It is true that the hearing officer found factually that "the Respondent witnessed a signature of Lamar Linton ... which Linton did not sign." From a review of the evidence it appears that forms similar to those that Mr. Linton testified about are to be found attached to the Edison Insurance Commercial

Automobile policy, no. EC 013621. These forms contain signatures, purportedly of Mr. Linton, which look remarkably similar to the signature on the forms testified to, and do not look similar to the signature found on the letter admitted into evidence which Mr. Linton wrote to a Dolly Davis, see Pet. Comp. ex. 2 and 4 found in the Linton deposition, and revealed his true signature.

However, testimony was not presented in the record and no finding was made as to the signatures on the documents found in the policy no. EC 013621; therefore, evidence is lacking to reverse the hearing officer's conclusion regarding this issue.

The Petitioner argues that the policy number alleged in the Administrative Complaint is of little or no consequence in ascertaining whether or not a violation occurred. Again, the pleading with specificity is of significance.

The hearing officer clearly based his findings on competent substantial evidence and the conclusions drawn from these findings are reasonable.

Therefore, Petitioner's second exception is rejected.

RULING ON RESPONDENT'S EXCEPTIONS

1. The Respondent takes exception to finding of fact paragraph 8, wherein the hearing officer states

   
   

   having considered the evidence, it is determined that the marks for crediting the account were made by M/A and not by Georgia Casualty.

   Respondent argues that without specific additional findings it is conceivable that the funds drawn on Respondents

   Account and delivered to Georgia Casualty were misapplied by Georgia Casualty.

   
   

   He continues that

   
   

   [i]t is just as plausible that Georgia Casualty co- mingled the funds earmarked for the Linton account by applying Respondent's funds generically to a portfolio of accounts, some for which Respondent has not yet collected a premium.

   
   

   Respondent further cites to a criminal law case that states

   
   

   [i]t is a fundamental tenet of criminal law that circumstantial evidence will not sustain a conviction unless it is inconsistent with any reasonable hypothesis of innocence.

   
   

   However, this is an administrative forum and although the action is penal in nature it is not a criminal proceeding. The standard for burden of proof is not "beyond a reasonable doubt" but rather "by clear and convincing evidence." Ferris v. Turlington, 510 So.2d 292 (Fla. 1987).

   
   

   Further, the finding of fact to which Respondent is taking exception is one that is based on the credibility of the witnesses testifying at hearing. It is the hearing officer's function to consider all the evidence presented, resolve conflicts, judge credibility of witnesses, draw permissible inferences from the

   evidence, and reach ultimate findings of fact based on competent, substantial evidence. State Beverage Department v. Ernal, Inc., 115 So.2d 566 (Fla. 3d DCA 1959). If as is often the case, the evidence presented supports two inconsistent findings, it is the hearing officer's role to decide the issue one way or the other. The agency may not reject the hearing officer's finding unless there is no competent, substantial evidence from which the finding could reasonably be inferred. The agency is not authorized to weigh the evidence presented, judge credibility of witnesses, or otherwise interpret the evidence to fit its desired ultimate conclusion. Heifetz v. Dept. of Business Regulation, 475 So.2d 1277, 1281 (Fla. 1st DCA 1985)

   
   

   In this case, the hearing officer weighed the evidence presented and the testimony received and made his finding. This finding is based on competent substantial evidence and cannot be reversed. Therefore, this exception is rejected.

   
   

2. Exception number two is an objection to findings made in paragraphs 17 and 18 of the Recommended Order. However, these findings are based on the testimony and evidence received. As stated earlier, the hearing officer is permitted to "draw permissible inferences from the evidence, and reach ultimate findings of fact based on competent, substantial evidence." Therefore, exception number two is rejected for the reasons stated herein and in response to exception number 1 above.

   
   

3. The "conclusions" excepted to are based on the determination that the findings of fact of the hearing officer are reversed. This not being the case the exceptions to the conclusions of law are rejected.

RULING ON PETITIONER'S EXCEPTION TO RECOMMENDATION

The Petitioner excepts to the penalty recommended by the hearing officer in his Recommended Order. The Petitioner cites to the recent decision of the Florida Supreme Court of Criminal Justice Standards & Training Commission v.

Bradley, 17 FLW 5193 (Fla. Mar. 26, 1992), which states: "it is a primary function of professional disciplinary boards to determine the appropriate punishment for the misconduct of the professionals it regulates." This is also true for state agencies such as this one. The Court in Bradley, citing to Department of Professional Regulation v. Bernal, 531 So.2d 967 (Fla. 1988), reiterated the requirements an agency must comply with in determining the appropriate punishment for the misconduct of the professionals it regulates.

The Court requires 1) the statute under which a professional agency operates provides guidelines for imposing penalties; see 55. 626.611, 626.621, 626.681, and 626.691, Florida Statutes; 2) that the agency comply with section 120.57(1)(b)10., which requires a review of the complete record and statement with particularity of its reasons for increasing or decreasing a recommended penalty; and 3) that the increased penalty must fall within the guidelines established by its statute.

The hearing officer found that the Respondent, Dennis Hamel, violated Sections 626.561(1), 626.611(4), 626.611(7), 626.611(8), 626.611(9),

626.611(10), 626.611(13), 626.621(2), 626.621(3), 626.621(4) and 626.734,

Florida Statutes. Violations of section 626.611, Florida Statutes, require suspension or revocation. This agent has been found to have wilfully used his license to circumvent any of the requirements or prohibitions of the Insurance Code; to have conducted fraudulent or dishonest practices in the conduct of business under his license; to have misappropriated, converted or unlawfully withheld money belonging to insurers or insureds which money was received in the

conduct of business under his license; to have willfully failed to comply with provisions of the Insurance Code; to lack one or more of the qualifications for the license as specified in the code; to have demonstrated a lack of fitness or trustworthiness to engage in the business of insurance. Each of these grounds is individually sufficient to suspend or revoke the license.

Insurance is a business greatly affected by the

public trust, and the holder of an agent's license stands in a fiduciary relationship to both the client and the insurance company.

Natelson v. Department of Insurance, 454 So.2d 31,32 (Fla. 1st DCA 1984). The record clearly established that the Respondent failed to fulfill the duties and responsibilities he owed Georgia Casualty and the insured, Lamar Linton.

Clearly, the insured in this matter placed his trust in Respondent when he paid the required premiums directly to his agency as he was directed to do. The Respondent violated this trust by failing to forward to the appropriate insurer necessary reports generated by the insured and the payment made by the insured. He did this on four separate occasions. The premiums involved were in excess of

$14,000. Accordingly, the Petitioner's exception to the recommendation of the penalty is accepted.

Therefore, upon careful consideration of the record, the submissions of the parties, and being otherwise advised in the premises, it is ORDERED:

1. The Findings of Fact of the hearing examiner are adopted in full as the Department's Findings of Fact,

   
   

2. The Conclusions of Law of the hearing examiner are adopted in full as the Department's Conclusions of Law.

   
   

3. The hearing officer's recommendation that a Final Order be entered suspending for 90 days all insurance licenses of the Respondent, Dennis Hamel, in the State of Florida is rejected. The suspension of all insurance licenses of DENNIS HAMEL for a period of one year is an appropriate disposition of this case.

ACCORDINGLY, all licenses as an insurance agent in this state held by Respondent, DENNIS HAMEL, are hereby SUSPENDED for a period of one (1) year beginning ten calendar days from the date of the filing of this Final Order. Pursuant to Section 626.641(4), Florida Statutes, the 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 Insurance Code or be employed in any manner by an insurance agent or agency during his period of suspension.

Pursuant to Section 626.641(1), Florida Statutes, Respondent's licensure shall not be reinstated except upon request for such reinstatement, and the Respondent shall not engage in the transaction of insurance until his licensure is reinstated. The Department shall not grant reinstatement if it finds that the circumstance or circumstances for which Respondent's licenses were suspended still exist or are likely to recur.

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 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 the rendition of this Order.

DONE and ORDERED this 2nd day of September, 1992.

TOM GALLAGHER

Treasurer and Insurance Commissioner

COPIES FURNISHED:

CHARLES C. ADAMS

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

DENNIS HAMEL

Post Office Box 29-1221

Port Orange, Florida 32129-1211

ANDREW KENNETH LEVINE, ESQUIRE

Division of Legal Services

448 Fletcher Building

200 East Gaines Street Tallahassee, Florida 32399-0300

Docket for Case No: 91-008089

Orders for Case No: 91-008089