STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF INSURANCE AND TREASURER, )

)

Petitioner, )

)

vs. ) CASE NO. 92-0490

)

CHARLES JOSEPH MAHER, )

)

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 January 14, 1993, in Ft. Myers, Florida.

APPEARANCES

For Petitioner: Lisa Santucci, Esq.

Division of Legal Services

412 Larson Building Tallahassee, Florida 32399-0300

For Respondent: Charles J. Maher, pro se

Post Office Box 1420

Fort Myers, Florida 33902-1420 STATEMENT OF THE ISSUE

Whether the allegations of the Administrative Complaint are correct and, if so, what penalties should be imposed.

PRELIMINARY STATEMENT

By Administrative Complaint filed December 23, 1991, the Petitioner alleges that the Respondent either failed to submit premium payments to insurers or otherwise misappropriated or converted such payments in two separate insurance transactions. The Respondent filed a request for a formal hearing which was forwarded to the Division of Administrative Hearings for further proceedings.

The matter was scheduled to be heard on May 22, 1992, continued once on the request of counsel for Respondent (who subsequently appeared at the hearing without representation) and again on request of counsel for Petitioner. The matter was heard on January 14, 1993.

At the hearing, Petitioner presented the testimony of Kenneth Medford and Linda Stewart. Petitioner's composite exhibit number 1 was admitted.

Respondent presented the testimony of Genevieve Bird. Upon the consent of the parties, the Respondent's answer to the Administrative Complaint was admitted as a Hearing Officer's exhibit.

No 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. At all times material to this case, and at the time of the hearing, Charles Joseph Maher ("Respondent") was licensed in Florida as a life and health agent and general lines agent, doing business as "Maher Insurance".

   
   

   Medford

   
   

2. On or about December 13, 1989, the Respondent completed an application for insurance and received a check in the amount of $557.00 from Kenneth Medford of North Fort Myers, Florida for automobile insurance to be issued by Atlanta Casualty Company. The check was made payable to the insurer.

   
   

3. Although Mr. Medford testified that the Respondent told him the coverage would be bound, the insurance application clearly provides that the coverage was not bound at the time the application was completed.

   
   

4. The Respondent mailed the application and check to Atlanta Casualty Company. Neither the application nor the check were received by Atlanta Casualty Company.

   
   

5. There is no evidence that the Respondent mishandled the application and check or converted said funds to his own use. The check tendered by Mr. Medford has never been deposited and has never cleared the Medford checking account.

   
   

   Grandpa's Cycle Center

   
   

6. On or about October 24, 1990, the Respondent received a check in the amount of $482.50 from Grandpa's Cycle Center of Fort Myers, Florida, constituting the estimated down payment on liability insurance to be issued by Bankers Insurance Company through the Florida Joint Underwriters Association.

   
   

7. The actual down payment on the liability insurance was $250.00 which was remitted in the due course of business by the Respondent to Bankers Insurance Company. The policy was subsequently issued.

   
   

8. A representative of the Respondent thereafter contacted Grandpa's Cycle Center and informed the insured that a refund of the excess down payment was due to the insured. The insured directed the Respondent's representative to retain the excess pending further direction.

   
   

9. In part due to other matters not addressed by the Administrative Complaint filed in this case, the business relationship between the Respondent and the insured became somewhat strained and the insured terminated the relationship.

   
   

10. On or about January 3, 1991, the Respondent tendered a check for

    $355.00 to the insured. The Respondent identified the total amount tendered to include a refund of $232.50 excess down payment and the remainder as "return premium" for a policy which had apparently been cancelled in August, 1990.

    CONCLUSIONS OF LAW

    
    

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

    
    

12. All premiums, return premiums, or other funds belonging to insurers or others received by an agent, solicitor, or adjuster in transactions under his license shall be trust funds so received by the licensee in a fiduciary capacity and the licensee in the applicable regular course of business shall account for and pay the same to the insurer, insured, or other person entitled thereto. 626.561(1), Florida Statutes.

    
    

13. 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:

    * * *

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

    * * *

    1. Demonstrated lack of fitness or trustworthiness to engage in the business of insurance.

       * * *

    2. Demonstrated lack of reasonably adequate knowledge and technical competence to engage in the transactions authorized by the license or permit.

    3. Fraudulent or dishonest practices in the conduct of business under the license or permit.

    4. 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.

14. Section 626.621, Florida Statutes, in relevant part provides: The department may, in its discretion,

    ...suspend, revoke, or refuse to renew or

    continue the license of any agent,...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...licensee...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:

    (2) Violation of any provision of this code or of any other law applicable to the business of insurance in the course of dealing under the license or permit.

    (6) In the conduct of business under the license or permit, engaging in unfair methods of competition or in unfair or deceptive acts or practices, as prohibited under part X of this chapter, or having otherwise shown himself to be a source of injury or loss to the public or detrimental to the public interest.

    
    

15. Section 626.9541(1)(o)1., Florida Statutes, in relevant part provides:

    
    

    1. Unfair methods of competition and unfair or deceptive acts. The following are defined as unfair methods of competition and unfair or deceptive acts or practices:

       * * *

       (o) Illegal dealings in premiums; excess or reduced charges for insurance.--

       1. Knowingly collecting any sum as a premium or charge for insurance, which is not then provided, subject to acceptance of the risk by the insurer, by an insurance policy issued by an insurer as permitted by this code.

       
       

16. The Petitioner has the burden of proving, by clear and convincing evidence, the allegations of the Administrative Complaint. Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987). The burden has not been met. The evidence in this case fails to establish that the Respondent violated the statutes referenced in the Administrative Complaint filed in this case and cited above.

    
    

17. As to the allegations related to the Medford transaction, the greater weight of the evidence establishes that the Respondent accepted the application and payment and forwarded same to the company. The application clearly states that the coverage was not bound. The application and check did not arrive. Mr. Medford, who was involved in an auto accident during the period of time he was shopping for insurance testified that the Respondent told him the coverage was bound. The application clearly states to the contrary. There is no convincing evidence that the Respondent did not mail the check and application during the regular course of business.

    
    

18. As to the allegations related to insurance for Grandpa's Cycle Center, the Administrative Complaint alleges only that the Respondent received the check for the down payment on insurance, that less that the full amount of the check was remitted to the insurer, and that the Respondent misappropriated the remaining funds. The evidence is insufficient to establish that the Respondent misappropriated the funds. The greater weight of the evidence establishes that,

as directed by the insured, the Respondent retained the excess funds until such time as the business relationship was terminated, a few months later.

RECOMMENDATION

Based on the foregoing, it is hereby

RECOMMENDED that the Department of Insurance enter a Final Order dismissing the complaint filed against Charles Joseph Maher.

DONE and RECOMMENDED this 9th day of February, 1993, in Tallahassee, Florida.

WILLIAM F. QUATTLEBAUM

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 9th day of February, 1993.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-0490

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:

3-4, 7. Rejected, not supported by the greater weight of the evidence. Respondent

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

3(a)-(k), 5(a)-(m). Rejected as cumulative or unnecessary except as otherwise adopted in this 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

Lisa Santucci, Esq. Division of Legal Services

412 Larson Building Tallahassee, FL 32399-0300

Charles J. Maher Post Office Box 1420

Fort Myers, Florida 33902-1420

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. 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.

Docket for Case No: 92-000490

Orders for Case No: 92-000490