STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF INSURANCE, )

)

Petitioner, )

)

vs. ) CASE NO. 93-0257

)

GLORIA MARIA FERNANDEZ, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was conducted in this case on March 23, 1993, in Miami, Florida, before Stuart M. Lerner, a duly designated Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: James A. Bossart, Esquire

Department of Insurance

412 Larson Building

Tallahassee, Florida 32399-0300

For Respondent: Gloria Maria Fernandez, pro se

Prestige Insurance Consultants

55 West 29th Street Hialeah, Florida 33012

STATEMENT OF THE ISSUES

1. Whether Respondent committed the violations alleged in Administrative Complaint?

   
   

2. If so, what disciplinary action should be taken against her?

   
   

   PRELIMINARY STATEMENT

   
   

   On or about May 6, 1992, the Department of Insurance (hereinafter referred to as the "Department") issued a three-count Administrative Complaint against Respondent, a licensed insurance agent. Counts I (numbered paragraphs six through 13) and III (numbered paragraphs 29 through 34) of the Administrative Complaint alleged that Respondent had engaged in the following conduct:

   
   

   1. On or about September 13, 1990, Mayra Loboquerrero [sic] of Miami, Florida, requested that you, GLORIA MARIA FERNANDEZ, secure son, Andres Loboquerrero [sic], an automobile insurance policy.

   2. On or about September 13, 1990, you, GLORIA MARIA FERNANDEZ, through Prestige Insurance Consultants received from Mayra Loboquerrero [sic], the sum of $1,140.00 as the premium payment in full on the automobile insurance policies.

   3. The above-mentioned premium payments represented trust funds received by you, GLORIA MARIA FERNANDEZ, from Mayra Loboquerrero [sic] in a fiduciary capacity for an insurer.

   4. The insurance policies were to be procured from Protective Casualty Co. and National Insurance Co. You, GLORIA MARIA FERNANDEZ, failed to remit the full premium payment to the insurers. You, GLORIA MARIA FERNANDEZ, only submitted a downpayment, financing the remainder of the premium without the knowledge or consent of the insureds. The policies were subsequently cancelled for non payment of premiums.

   5. You, GLORIA MARIA FERNANDEZ, . . . have failed to account for and pay the above mentioned premium over to the insurers.

   6. You, GLORIA MARIA FERNANDEZ, failed to promptly refund the above-mentioned premium to the insured.

   7. You, GLORIA MARIA FERNANDEZ, misappropriated, converted, or failed to turn over moneys due and owing an insurer.

   8. As a result of your actions, Mayra Loboquerrero [sic] and Andres Loboquerrero [sic] failed to receive the requested insurance and coverage thereunder.

1. On or about April 1, 1990, Rahman Nisbet of Miami, Florida requested that you, GLORIA MARIA FERNANDEZ, secure him an automobile insurance policy. You, GLORIA MARIA FERNANDEZ, quoted Rahman Nisbet a premium of $1,480.00.

2. On or about April 1, 1990, you, GLORIA MARIA FERNANDEZ, received $751.00 from Rahman Nisbet as an initial premium payment on the above mentioned automobile insurance policy. The policy was to be placed with Oak Casualty Insurance Co.

3. On or about May 6, 1991, Rahman Nisbet received information from MCL Inc., a premium finance company that the actual premium was to be in excess of $2,200.00. Rahman Nisbet cancelled the policy and requested you, GLORIA MARIA FERNANDEZ, to refund his unearned premium.

4. The above mentioned premium payment represented trust funds received by you, GLORIA MARIA FERNANDEZ, from Rahman Nisbet in a fiduciary capacity for an insurer.

5. You, GLORIA MARIA FERNANDEZ, . . . failed to account for and pay the above mentioned premiums over to the insurer or refund same to the insured.

6. You, GLORIA MARIA FERNANDEZ, have misappropriated, converted, or unlawfully withheld monies due and owing to an insured. Demand has been made upon you, GLORIA MARIA FERNANDEZ, for return of the premium, but you have refused same.

According to the Administrative Complaint, in engaging in the conduct alleged in these paragraphs, Respondent violated Sections 626.561(1), 626.611(7), 626.611(8), 626.611(9), 626.611(10), 626.621(4), 626.621(6), 626.9521, and

626.9541(1)(o)1, Florida Statutes.

Respondent denied the allegations of wrongdoing advanced in the Administrative Complaint and initially requested an informal hearing. Subsequently, by letter dated January 8, 1993, she requested a formal hearing. On January 21, 1993, the matter was referred to the Division of Administrative Hearings for the assignment of a Hearing Officer to conduct the formal hearing Respondent had requested.

At the outset of the formal hearing, which was held on March 23, 1993, the Department announced that it was "dropping" Count II of the Administrative Complaint. Accordingly, evidence was presented only with respect to the remaining two counts of the Administrative Complaint. A total of six witnesses testified at the hearing. Among these witnesses were Respondent, Mayra Loboguerrero, and Rahman Nisbet. In addition to the testimony of these six witnesses, a total of 22 exhibits (Petitioner's Exhibits 1 through 19 and Respondent's Exhibits 1 through 3) were offered and received into evidence.

At the conclusion of the evidentiary portion of the hearing, the Hearing Officer, on the record, advised the parties of their right to file post-hearing submittals and established a deadline for the filing of such submittals. The Department and Respondent filed their post-hearing submittals on April 19, 1993, and April 23, 1993, respectively.

The Department's post-hearing submittal contains what are labelled as proposed "findings of fact." Respondent's post-hearing submittal does not; it consists exclusively of argument. The parties' post-hearing submittals have been carefully considered by the Hearing Officer. The "findings of fact" proposed by the Department's in its post-hearing submittal are specifically addressed in the Appendix to this Recommended Order.

FINDINGS OF FACT

Based upon the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made:

Background Information

1. Respondent is now, and has been at all times material to the instant case, licensed by the Department as a life and health insurance agent and as a general lines insurance agent.

2. Respondent is now, and has been at all times material to the instant case, an officer and director of Prestige Insurance Consultants, Inc., (Prestige) and its only licensed insurance agent. Throughout the period of time material to the instant case, she had an extremely heavy workload requiring her, generally, to work at least 12 hours a day, seven days a week.

   
   

3. Prestige Insurance Consultants, Inc., is an incorporated insurance agency with offices in Hialeah, Florida. It has been in business approximately five years.

   
   

   Count I

   
   

4. On or about September 13, 1990, Mayra Loboguerrero requested Respondent to assist her in obtaining automobile insurance coverage for her teenage son, Andres Loboguerrero.

   
   

5. During their meeting on this date, Respondent received from Ms. Loboguerrero a check made out to Prestige in the amount of $510.00 as a down payment on the premium that would have to be paid to obtain such coverage.

   
   

6. The check was subsequently deposited in Prestige's bank account.

   
   

7. To obtain the coverage that Ms. Loboguerrero had requested for her son, Respondent remitted an amount representing the difference between the down payment she had received from Ms. Loboguerrero and the commission Respondent and Prestige were due.

   
   

8. The balance of the premium was financed by M.C.L., Inc., (M.C.L.) pursuant to a premium finance agreement executed by Andres Loboguerrero.

   
   

9. The requested coverage was obtained from two separate insurance companies, Protective Casualty Company, which provided collision and comprehensive coverage, and Security National Insurance Company, which provided bodily injury and property damage coverage. The two companies issued their policies on October 17, 1990, and November 15, 1990, respectively.

   
   

10. After Andres had signed the premium finance agreement, Ms. Loboguerrero advised Respondent by telephone that she wanted to prepay the total amount that was due M.C.L. to avoid having to pay the full finance charge and having to make monthly payments. Respondent, in turn, assured Ms. Loboguerrero that prepayment was an available option and that all Ms. Loboguerrero needed to do to exercise this option was to mail Respondent a check in the amount of

    $1,140. According to Respondent, she would "take care of the rest."

    
    

11. Following her telephone conversation with Respondent, Ms. Loboguerrero made out a check to Prestige in the amount of $1,140 and mailed it to Respondent.

    
    

12. Respondent received the check and, on or about October 30, 1990, deposited it in Prestige's bank account.

    
    

13. Respondent, however, did not "take care of the rest," as she had promised. She inadvertently failed to remit the $1,140 to M.C.L.

14. On November 26, 1990, a Notice of Intent to Cancel was mailed to Prestige and the Loboguerreros. The notice provided the following advisement:

    
    

    Installment in the amount of $169.24 due 11/20/90 has been in default for five (5) days. If payment of the amount of $179.24 is not received by 12/16/90 we will be obliged to cancel your policy (ies) as of this date without further notice.

    
    

15. Such payment was not made. Accordingly, the automobile insurance coverage Ms. Loboguerrero had obtained for her son was cancelled effective December 23, 1993, "for non-payment of an installment in accordance with the conditions and terms of the premium finance agreement." A Standard Cancellation Notice advising of the cancellation was sent to Prestige and the Loboguerreros. Upon receiving this notice, Ms. Loboguerrero telephoned Prestige to inquire about the matter. In response to her inquiry, she was told that a "mistake" had been made. Based upon what she had been told, Ms. Loboguerrero assumed that the "mistake" would be corrected and that the coverage would be reinstated. 1/

    
    

16. No such corrective action was taken, however, as Ms. Loboguerrero discovered in March of 1991, when her son was involved in an automobile accident.

    
    

17. Following the cancellation of coverage, the unearned premium, which amounted to $627.30, was returned to M.C.L.

    
    

18. The return of the unearned premium left the Loboguerrero account with an unpaid balance of approximately $110.00, which M.C.L. subsequently recouped from Respondent.

    
    

19. Respondent thereafter offered to reimburse Ms. Loboguerrero $818.00, which represented the unused portion of the funds Ms. Loboguerrero had paid to obtain automobile insurance coverage for her son. Ms. Loboguerrero, however, refused to accept anything less than $1,140, which was more than she was entitled to receive.

    
    

20. Neither party was willing to compromise on the matter. Finally, Ms. Loboguerrero filed suit against Prestige in Dade County Court.

    
    

21. On June 3, 1992, an Amended Final Judgment was entered in the case awarding Ms. Loboguerrero $818.00, plus prejudgment interest in the amount of

    $139.06. That same day, Respondent handed Ms. Loboguerrero a check in the amount of $957.06 to fully satisfy the Amended Final Judgment.

    
    

    Count II

    
    

22. On or about April 13, 1991, Rahman Nisbet requested Respondent to assist him in obtaining automobile insurance coverage.

    
    

23. During their meeting on this date, Respondent received from Nisbet a check made out to Prestige in the amount of $751.00 as a down payment on the premium that would have to be paid to obtain such coverage.

    
    

24. The check was subsequently deposited in Prestige's bank account.

25. To obtain the coverage that Nisbet had requested, Respondent remitted an amount representing the difference between the down payment she had received from Nisbet and the commission Respondent and Prestige were due.

    
    

26. The balance of the premium was financed by M.C.L.

    
    

27. The requested coverage was obtained from two separate insurance companies, Oak Casualty Insurance and Anglo-American Insurance.

    
    

28. Thereafter, Nisbet received information from M.C.L. that the amount of the total premium for such coverage was well in excess of what he thought it was and what he was willing to pay.

    
    

29. Accordingly, Nisbet wrote Prestige a letter indicating that he wished to cancel his coverage.

    
    

30. Prestige received the letter May 16, 1991.

    
    

31. It thereupon transmitted Nisbet's cancellation request to the insurance companies that had issued the policies Nisbet desired to cancel.

    
    

32. The policies were subsequently cancelled.

    
    

33. Following the cancellation of the policies, the insurance companies returned the unearned premiums to M.C.L.

    
    

34. 
    

    The return of the unearned premiums left the Nisbet account with an unpaid balance of approximately $155.00, which M.C.L. subsequently recouped from Respondent.

    
    

35. Respondent offered to reimburse Nisbet $218.17, which represented the unused portion of the funds Nisbet had paid to obtain automobile insurance. Nisbet initially refused the offer because he believed, erroneously, that he was owed more than $218.17. On or about July 13, 1992, he accepted and cashed a check from Prestige in the amount of $218.17, but in so doing he made clear that he considered the $218.17 as merely partial payment of the monies owed him.

    
    

    CONCLUSIONS OF LAW

    
    

36. Counts I and II of the instant Administrative Complaint allege that, in her dealings with Mayra Loboguerrero and Rahman Nisbet, Respondent acted in violation of Sections 626.561(1), 626.611(7), 626.611(8), 626.611(9), 626.611(10), 626.621(4), 626.621(6), 626.9521, and 626.9541(1)(o)1, Florida Statutes.

    
    

37. At all times material to the instant case, Section 626.561(1), Florida Statutes, has provided in pertinent part that "all premiums, return premiums, or other funds belonging to insurers or others received by an agent . . . 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."

38. At all times material to the instant case, Section 626.611, Florida Statutes, has provided in pertinent part as follows:

    
    

    The [D]epartment [of Insurance] shall . . . suspend, revoke . . . the license . . of any . . . agent . . ., and it shall suspend or revoke the eligibility to hold a license

    . . . of any such person, if it finds that as to the . . . licensee . . . any one or more of following applicable grounds exist: . . .

    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

       . . . .

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

    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 . . . .

       
       

39. At all times material to the instant case, Section 626.621, Florida Statutes, has provided in pertinent part as follows:

    
    

    The [D]epartment [of Insurance] may, in its discretion . . . suspend, revoke, the

    license . . of any . . . agent . . . , and it may suspend or revoke the eligibility to hold a license . . . 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 . . . suspension, revocation, 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 . . . .

    (4) Failure or refusal, upon demand, to pay over to any insurer he represents or has represented any money coming into his hands belonging to the insurer. . . .

    (6) In the conduct of business under the license . . . , 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.

40. At all times material to the instant case, Section 626.9521, Florida Statutes, has provided in pertinent part that "[n]o person shall engage in this state in any trade practice which is defined in this part as, or determined pursuant to . . . s.626.9561 to be, an unfair method of competition or an unfair or deceptive act or practice involving the business of insurance."

    
    

41. At all times material to the instant case, Section 626.9541(1)(o)1, Florida Statutes, has provided in pertinent part as follows:

    
    

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

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

    
    

42. The foregoing statutory provisions are "in effect, . . . penal statute[s] . . . This being true the[y] must be strictly construed and no conduct is to be regarded as included within [them] that is not reasonably proscribed by [them]. Furthermore, if there are any ambiguities included such must be construed in favor of the . . . licensee." Lester v. Department of Professional and Occupational Regulations, 348 So.2d 923, 925 (Fla. 1st DCA 1977).

    
    

43. An agent's license may be suspended or revoked based upon the foregoing statutory provisions only if the grounds for suspension or revocation are established by clear and convincing evidence. See Ferris v. Turlington, 510 So.2d 292 (Fla. 1987); Pic N' Save v. Department of Business Regulation, 601 So.2d 245 (Fla. 1st DCA 1992); Munch v. Department of Professional Regulation,

    592 So.2d 1136 (Fla. 1st DCA 1992); Newberry v. Florida Department of Law Enforcement, 585 So.2d 500 (Fla. 3d DCA 1991); Pascale v. Department of Insurance, 525 So.2d 922 (Fla. 3d DCA 1988). "The evidence must be of such weight that it produces in the mind of the trier of fact a firm belief or conviction, without hesitancy, as to the truth of the allegations sought to be established." Slomowitz v. Walker, 429 So.2d 797, 800 (Fla. 4th DCA 1983).

    
    

44. Furthermore, the grounds proven must be those specifically alleged in the administrative complaint. See Kinney v. Department of State, 501 So.2d 129,

    133 (Fla. 5th DCA 1987); Hunter v. Department of Professional Regulation, 458 So.2d 842, 844 (Fla. 2d DCA 1984).

    
    

45. In the instant case, the only alleged wrongdoing that the record in the instant case clearly and convincingly demonstrates that Respondent engaged in was mishandling the $1,040 that she had received from Ms. Loboguerrero and which she was supposed to pay to M.C.L. on Ms. Loboguerrero's behalf. In failing to make such payment, she violated Section 626.561(1), Florida Statutes, but not any of the other statutory provisions cited in the Administrative Complaint inasmuch as Respondent's failure to pay has not been shown to be anything more than an isolated instance of mere inattention on her part.

46. A nonwillful violation of Section 626.561(1), Florida Statutes, such as that committed by Respondent, is a ground upon which the Department may, in its discretion, suspend or revoke the license of the offending agent pursuant to Section 626.621(2), Florida Statutes.

    
    

47. Section 626.681, Florida Statutes, authorizes the Department, in lieu of discretionary suspension or revocation of the agent's license, to instead impose an administrative fine. At all times material to the instant case, it has provided in pertinent part as follows:

    
    

    (1)[I]f the department finds that one or more grounds exist for the suspension, revocation,

    . . . [of] any license . . . issued under this chapter, the department may, in its discretion, in lieu of such suspension, revocation, . . . , and except on a second offense . . . , impose upon the licensee . . . an administrative penalty in an amount up to

    $500 . . . . The administrative penalty may, in the discretion of the department, be augmented by an amount equal to any commissions received by or accruing to the credit of the licensee . . . in connection with any transaction as to which the grounds for suspension, revocation . . . related....

    (3) The department may allow the licensee

    . . . a reasonable period, not to exceed 30 days, within which to pay to the department the amount of the penalty so imposed. If the licensee . . . fails to pay the penalty in its entirety to the department within the period so allowed, the license . . . of the licensee shall stand suspended or revoked, . . . , as the case may be, upon expiration of such period.

    
    

48. Section 626.691, Florida Statutes, authorizes the Department, in addition to imposing an administrative fine, to place the agent on probation in lieu of discretionary suspension or revocation of the agent's license. At all times material to the instant case, it has provided in pertinent part as follows:

    
    

    1. If the department finds that one or more grounds exist for the suspension, revocation

       . . . [of] any license . . . issued under this part, the department may, in its discretion, except when an administrative fine is not permissible under s.626.681 . . . , in lieu of such suspension, revocation, . . . , or in connection with any administrative monetary penalty imposed under s.626.681, place the offending licensee . . . on probation for a period, not to exceed 2 years, as specified by the department in its order.

    2. As a condition to such probation or in connection therewith, the department may specify in its order reasonable terms and

    conditions to be fulfilled by the probationer during the probationary period. If during the probationary period, the department has

    good cause to believe that the probationer has violated such terms and conditions or any of them, it shall suspend, revoke, . . . the license . . of the probationer, as upon the original ground or grounds referred to in subsection (1).

    
    

49. Having carefully considered the facts of the instant case in light of the foregoing statutory provisions, the Hearing Officer is of the opinion that the Department should penalize Respondent for having violated Section 626.561(1), Florida Statutes, as alleged in Count I of the Administrative Complaint, not by suspending or revoking her license, but by requiring her to pay, within 30 days of the issuance of the Department's final order, an administrative fine in the amount $250.00 and by placing her on probation, on such terms and conditions as the Department deems appropriate, for a period of one year.

RECOMMENDATION

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

RECOMMENDED that the Department enter a final order (1) finding Respondent guilty of violating Section 626.561(1), Florida Statutes, as alleged in Count I of the Administrative Complaint; (2) penalizing Respondent for having committed this nonwillful statutory violation, not by suspending or revoking her license, but by requiring Respondent to pay, within 30 days of the issuance of its final order, an administrative fine in the amount $250.00 and by placing her on probation, on such terms and conditions as the Department deems appropriate, for a period of one year; and (3) dismissing the remaining allegations of misconduct advanced in the Administrative Complaint.

DONE AND ENTERED in Tallahassee, Leon County, Florida, this 11th day of May, 1993.

STUART M. LERNER

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 11th day of May, 1993.

ENDNOTE

1/ The record fails to clearly and convincingly establish that this assumption was reasonably based upon something that Respondent had told her.

APPENDIX TO RECOMMENDED ORDER IN CASE NO. 93-0257

The following are the Hearing Officer's specific rulings on the proposed "findings of fact" set forth in the Department's post-hearing submittal:

1-8. Accepted and incorporated in substance, although not necessarily repeated verbatim, in this Recommended Order.

1. First and second sentences: Accepted and incorporated in substance; Third sentence: Rejected because it is not supported by persuasive competent substantial evidence.

2. Accepted and incorporated in substance.

3. First, second and fourth sentences: Accepted and incorporated in substance; Third sentence: Rejected because it is not supported by persuasive competent substantial evidence.

4. First sentence, before comma: Accepted and incorporated in substance; First sentence, after comma: Rejected because it is not supported by persuasive competent substantial evidence; Second sentence: Accepted and incorporated in substance.

5. Accepted and incorporated in substance.

6. First sentence: To the extent that this proposed finding states that the request was made "[o]n or about April 1, 1990," instead of on or about April 13, 1991, it has been rejected because it is not supported by persuasive competent substantial evidence. Otherwise, it has been accepted and incorporated in substance; Second sentence: Rejected because it is not supported by persuasive competent substantial evidence.

7. To the extent that this proposed finding states that the payment was made "[o]n or about April 1, 1990," instead of on or about April 13, 1991, it has been rejected because it is not supported by persuasive competent substantial evidence. Otherwise, it has been accepted and incorporated in substance.

16-18. Accepted and incorporated in substance.

COPIES FURNISHED:

James A. Bossart, Esquire Department of Insurance

412 Larson Building Tallahassee, Florida 32399-0300

Gloria Maria Fernandez Prestige Insurance Consultants

55 West 29th Street Hialeah, Florida 33012

Honorable 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 of time 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: 93-000257

Orders for Case No: 93-000257