STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF INSURANCE )

AND TREASURER, )

)

Petitioner, )

)

vs. ) CASE NO. 92-7400

)

GLENN HAMILTON MARTIN, )

)

Respondent. )

)

RECOMMENDED ORDER RELINQUISHING JURISDICTION AND CLOSING FILE

Pursuant to notice, the above styled matter was heard before the Division of Administrative Hearings by its duly designated Hearing Officer, Daniel M. Kilbride, on January 4, 1994, by telephone conference call in Tallahassee, Florida. The following appearances were entered:

APPEARANCES

For Petitioner: John R. Dunphy, Esquire

Division of Legal Services 612 Larson Building

Tallahassee, Florida 32399-0300

For Respondent: Gary R. Dorst, Esquire

J. Cheney Mason, Esquire Barnett Bank Center, Suite 2100

390 North Orange Avenue Orlando, Florida 32801

STATEMENT OF THE ISSUES

Whether the "voluntary surrender" of the Respondent's license as an insurance agent to the Department, and his statement that he will not seek to renew that license on or before the next expiration period, while an administrative complaint is pending before the Division of Administrative Hearings deprives the Division and the Department of jurisdiction from seeking discipline of that license under the provisions of Chapters 624 and 626, Florida Statutes.

PRELIMINARY STATEMENT

The Department filed a three count Administrative Complaint against respondent on November 10, 1992 alleging violations of the Insurance Unfair Trade Practices Act and facts indicating Respondent's lack of fitness and trustworthiness to engage in the business of insurance. Respondent filed his Response denying the allegations on December 4, 1992. The original complaint

was amended twice and the current charging document is the Second Amended Administrative Complaint which was filed pursuant to the Hearing Officer's Order of August 6, 1993.

Respondent filed a Motion to Abate Proceedings, on September 20, 1993, and argued that "Respondent's constitutional rights of access to the courts, equal protection and due process... has been thwarted." The basis for the position was the assertion that Respondent and "essential witnesses" were targets of a federal criminal investigation. The Department opposed the motion on several grounds including Respondent's failure to make a showing of how the testimony of the "essential witnesses" would aid in Respondent's defense and the speculative nature of Respondent's claims of potential criminal prosecution. By Order dated October 18, 1993 Respondent's motion was denied and the matter was set for Final Hearing to commence on January 13, 1994.

On December 10, 1993, Respondent, through counsel, mailed the Department his insurance license photographic identification card and a letter notifying the Department of the "surrender" of his license and his intention not to renew the license at its scheduled expiration date. The Department responded on December 27, 1993 with a letter acknowledging receipt of the license and notice of surrender and advising of the termination of Respondent's appointments and ability to transact insurance in Florida. The letter further advised Respondent of the Department's intention to proceed to hearing on the charges contained in the Second Amended Administrative Complaint.

Respondent filed a Motion to Terminate Proceedings as Moot, on January 4, 1994. The motion alleged that the issues for consideration at Final Hearing had been mooted by Respondent's license surrender. The Department filed a response opposing the motion and requesting expedited oral argument the same morning.

Oral arguments were made by telephone conference call commencing at 2:30 P.M., Tuesday, January 4, 1994. At the commencement of the motion hearing, the Department withdrew its written response and asserted its opposition orally.

The Department's oral response consisted of a request for leave to amend the Second Amended Administrative Complaint to seek supplemental relief pursuant to the provisions of Section 624.310, Florida Statutes. The Department asserted that pursuant to Section 624.310, Florida Statutes, success on the merits at Final Hearing could result in the entry of an order restricting or prohibiting participation by Respondent in the affairs of any licensee under the Florida Insurance Code. It argued that, even absent amendment of the Administrative Complaint, the issues to be determined at the Final Hearing are not mooted by the "surrender" of Respondent's licenses. Included was the statement that a revocation pursuant to Section 626.641, Florida Statutes carries with it the following restrictions not present by the terms of Respondents "surrender":

1. No right to apply for another license or appointment for two years [Section

   626.641(2), Florida Statutes];

2. On future application for licensure, the burden of proof is on Respondent to establish that the circumstances for which the eligibility or previous license was revoked

   do not still exist and are not likely to recur [Section 626.641(2), Florida Statutes];

3. After second revocation, the Department may not ever again issue a license to the former licensee [Section 626.641(3), Florida Statutes];

4. During the period of revocation, the former licensee shall not directly or indirectly own, control, or be employed in any manner by any insurance agent or agency [Section 626.641(4), Florida Statutes].

Additionally, a licensee may not avoid the imposition of statutorily provided sanctions for violations of the insurance code by merely relinquishing his license to the Department. The legislature has seen fit to impose restrictions on former licensees who have had their licenses revoked which are greater than those imposed on persons who are simply unlicensed. Also, Section 624.404, Florida Statutes prohibits the Department from granting a Certificate of Authority to transact in this state to any insurer

"the management, officers, or directors of which are found by it to be ... untrustworthy...; or which it has good reason to believe are affiliated directly or indirectly through ownership, control, reinsurance transaction, or other insurance business relations, with any person whose business operations are or have been marked, to the detriment of policyholders or stockholders or investors or creditors or of the public, by manipulation of assets, accounts, or reinsurance or by bad faith."

The Department indicated it was prepared to proceed to final hearing and prove the allegations set forth in the Administrative Complaint and that amendment of the Administrative Complaint to seek relief under Section 624.310, Florida Statutes would not affect the substantive allegations of the complaint.

Respondent moved to terminate these proceedings as moot since he has voluntarily surrendered his license to the Department of Insurance and simultaneously therewith acknowledged that he does not intend to renew same. Respondent argued that he and his principle witnesses have asserted and continue to assert their Fifth Amendment privilege to remain silent and failure to abate this matter will deny him of his due process rights. Respondent also alleged that he is without funds and ability to present a defense even without the invocation of the witnesses' privilege against self-incrimination.

The Hearing Officer inquired whether the surrender of Respondent's licenses is tantamount to a withdrawal of Respondent's denial of the charges asserted in the Second Amended Administrative Complaint. The Hearing Officer cited to the provisions of Section 626.661, Florida Statutes which indicated that in the event of a license surrender "such license shall no longer be in force and effect." Counsel for Respondent argued that the surrender does not constitute an admission, only that Respondent is unable to defend himself against the charges contained in the Second Amended Administrative Complaint. The Department asserted that Respondent's "surrender" coupled with the Motion to Terminate Proceedings as Moot indicated Respondent's intent not to contest the charges and, therefore, it would be appropriate for the Hearing Officer to relinquish jurisdiction to the Department for entry of a Final Order.

FINDINGS AND CONCLUSIONS

1. The Division of Administrative Hearings, has jurisdiction over the subject matter of and the parties to this proceeding. Chapters 624, 626, and Section 120.57(1), Florida Statutes.

   
   

2. By the terms of Section 120.57(1), there are only three grounds upon which the Hearing Officer may relinquish jurisdiction:

   
   

   1. Determination that no substantial interest is affected by the proposed agency action;

   2. Determination that the proceeding does not involve a disputed issue of material fact; or

   3. Determination that the affected parties have waived their rights to a proceeding.

      
      

3. In the instant case, it is undisputed that substantial interest of the Respondent will be affected by the proposed agency action.

   
   

4. On December 10, 1993, Respondent voluntarily surrendered to the Department his insurance licenses and eligibility for appointment under the Florida Insurance Code, and simultaneously acknowledged that he does not intend to renew said licenses.

   
   

5. By surrendering his insurance licenses to the Department, Respondent has evinced his intention not to contest the charges contained in the Second Amended Administrative Complaint. As such the factual allegations of the Complaint may be taken as true.

   
   

6. Respondent asserts that he is unable to defend against the allegations of the Second Amended Administrative Complaint due to his assertion that he and his "essential witnesses" are targets of a federal criminal investigation. This argument is misplaced. See: Patchett v. Commission on Ethics, 18 FLW D2407 (Fla. 1st DCA 1993).

   
   

7. Respondent further alleged that he does dispute the factual allegations in the Complaint but is financially unable to defend himself. However, Respondent may not hide from the consequences of his actions behind the surrender of his licenses. Boedy v. Department of Professional Regulation, 433 So.2d 544 at 544 (Fla. 1st DCA 1983). In Boedy, the Court adopted the rationale stated in the Final Order of the Board of Medical Examiners stating "to suggest that physicians should be able to immunize themselves from prosecution by simply going inactive suggests a form of self-regulation of the medical profession which was obviously rejected by the Legislature when it chose to enact Chapter 458, Florida Statutes.: Id. Likewise, it would be contrary to the Legislative mandates of Chapter 626, Florida Statutes and specifically the provisions of Section 626.641, Florida Statutes and specifically the provisions of Section 626.641, Florida Statutes to allow a licensee to avert prosecution for violations of the Florida Insurance Code by simply "surrendering" his license.

   
   

8. This same line of reasoning was repeated by the Court in Couch v. Turlington, 465 So.2d 557 (Fla. 1st DCA 1985). The court in the Couch asserts that inherent in the regulatory agency's power to establish the terms of

   issuance of a certificate "is the implied power to govern the terms and conditions under which a certificate may be altered by the holder thereof." Id. at 559.

   
   

9. Extending this rationale to the instant case, the Department seeks the imposition of a revocation pursuant to Section 626.641, Florida Statutes, and it is not for Respondent to set the conditions of his surrender as a means of avoiding the sanction.

   
   

10. By surrendering his license to the Department Respondent has indicated his intent not to contest the charges contained in the Second Amended Complaint. Therefore, Respondent has waived his right to a formal administrative proceeding. The surrender has the same effect as the withdrawal of Respondent's request for a administrative proceeding and places him in the same position as if he had not responded to the Administrative Complaint within the twenty-one days as required pursuant to Rule 4-121.084, Florida Administrative Code. Rule 4-121.084(4), Florida Administrative Rules, states that failure to timely request a hearing "shall constitute a waiver of the licensee's right to such a hearing, and the Department is authorized to enter a final order imposing a penalty or to take other action without further proceeding."

    
    

11. It is therefore appropriate for the Division to relinquish jurisdiction to the Department of Insurance to conduct informal proceedings, pursuant to Section 120.57(2), Florida Statutes or for entry of a Final Order. Rule 60Q-2.033(1), Florida Administrative Code.

In view of the foregoing, it is ORDERED:

1. Jurisdiction of this cause is relinquished to the Department of Insurance for the entry of a Final Order or other proceedings as deemed appropriate.

   
   

2. The file of the Division of Administrative Hearings in this case is closed.

DONE AND ORDERED this 2nd day of February, 1994, in Tallahassee, Leon County, Florida.

DANIEL M. KILBRIDE

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 2nd day of February, 1994.

COPIES FURNISHED:

Gary R. Dorst, Esquire

J. Cheney Mason, Esquire Barnet Bank Center

390 North Orange Avenue, Suite 2100 Orlando, Florida 32801

John R. Dunphy, Esquire Division of Legal Services 612 Larson Building

Tallahassee, Florida 32399

Tom Gallagher

State Treasurer and Insurance Commissioner

The Capitol, Plaza Level Tallahassee, Florida 32399-0300

Bill O'Neil, Esquire General Counsel Department of Insurance The Capitol, PL-11

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 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.

Docket for Case No: 92-007400

Orders for Case No: 92-007400