STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

OFFICE OF THE TREASURER, ) DEPARTMENT OF INSURANCE, )

)

Petitioner, )

)

vs. ) CASE NO. 93-3885

)

EARLE ANTHONY BENNET, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, William J. Kendrick, held a formal hearing in the above-styled case on October 7, 1993, in Miami, Florida.

APPEARANCES

For Petitioner: William C. Childers, Esquire

Department of Insurance 612 Larson Building

Tallahassee, Florida 32399-0333

For Respondent: Earle Anthony Bennett, pro se

12100 N.W. 11th Avenue Miami, Florida 33168

STATEMENT OF THE ISSUES

At issue in this proceeding is whether respondent committed the offenses alleged in the administrative complaint and, if so, what disciplinary action should be taken.

PRELIMINARY STATEMENT

By administrative complaint dated January 21, 1993, petitioner charged that respondent, a licensed insurance agent, violated various provisions of Chapter 626, Florida Statutes, and sought to impose disciplinary sanctions against respondent's licenses and eligibility for licensure. The gravamen of petitioner's charge is the claim that respondent misappropriated or unlawfully withheld insurance premiums owing to his employer, The Independent Life and Accident Insurance Company. Respondent requested a formal hearing to contest the charges leveled against him, and the matter was referred to the Division of Administrative Hearings for the assignment of a Hearing Officer to conduct a formal hearing pursuant to Section 120.57(1), Florida Statutes.

At hearing, petitioner called Sarah F. McRae as a witness, and its exhibits 1, 2, 4, 5, 8, 10 and 11 were received into evidence, subject to the limitations noted on the record. Respondent testified on his own behalf, but offered no exhibits.

The transcript of hearing was not ordered so the parties were granted ten days from the date of hearing within which to file proposed findings of fact. Petitioner elected to file such proposals and they are addressed in the appendix to this recommended order.

FINDINGS OF FACT

1. Respondent, Earle Anthony Bennett, is now and was at all times material hereto licensed by petitioner as an insurance agent in the State of Florida.

   
   

2. Pursuant to Chapter 626, Florida Statutes, petitioner has jurisdiction over the insurance licenses and appointments of respondent.

   
   

3. On October 17, 1990, respondent entered into a home service agent's contract with The Independent Life and Accident Insurance Company (Independent Life). Pertinent to this case, such contract provided:

   
   

   Article 1. Description of General Duties

   
   

   The Agent agrees to canvass for insurance, to collect premiums as due on the policies assigned to the agency, to aid in the proper

   settlement of claims, to keep true records of the business on the books, to forward to the Company on Company forms a true account of each week of the agency, and to give full time to the business of the Company.

   
   

   Article 2. Collections

   
   

   The Agent agrees to pay over all monies collected to the District Sales Manager or to such other person as the Company may direct. No money shall be retained by the Agent out of collections for any purpose. The agent agrees that should legal proceedings be necessary to collect monies due from the Agent to the Company the Agent shall pay legal costs and a reasonable attorney's fee.

   
   

   * * *

   Article 37. Indebtedness Due Company The Company may use any commissions,

   vacation pay, or other compensation due the Agent to reimburse itself for any indebtedness due the Company by the Agent.

   
   

4. In November 1991, respondent terminated his employment with Independent Life, and Independent Life notified petitioner of the cancellation of respondent's appointment as one of its insurance agents.

5. Thereafter, on November 7, 1991, Independent Life conducted an audit of respondent's account which revealed a deficiency of $1,613.70 in insurance premiums collected by respondent and not remitted to the company. Subsequent audits in November reflected an additional deficiency of $213.62, in December an additional deficiency of $178.84, and in February 1992, an additional deficiency of $43.48.

   
   

6. By letters of November 18, 1991, November 21, 1991, December 2, 1991, December 13, 1991, and March 18, 1992, Independent Life made demand upon respondent to satisfy the deficiencies disclosed by the audits. Such letters reflected, however, varying amounts the company claimed to be due as a consequence of newly discovered deficiencies in ongoing audits, discussed supra, as well as varying credits accorded respondent. Such correspondence lends credence to respondent's testimony that he was unsure as to the exact sum owing Independent Life, and that he had, subsequent to his termination of employment, remitted funds to the company. Respondent did concede, however, that when he terminated his employment with Independent Life, his account had a deficiency of approximately $1,400.

   
   

7. Regarding any deficiency that may have been owing Independent Life, the proof demonstrates that respondent did, over time, satisfy all outstanding obligations.

   
   

   CONCLUSIONS OF LAW

   
   

8. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings. Sections 120.57(1) and 120.60(7), Florida Statutes.

   
   

9. In a case of this nature, the petitioner bears the burden of proving the charges set forth in the administrative complaint by clear and convincing evidence. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987). The nature of clear and convincing evidence has been described in Slomowitz v. Walker, 429 So.2d 797, 800 (Fla. 4th DCA 1983), as follows:

   
   

   We therefore hold that clear and convincing evidence requires that the evidence must be found to be credible; the facts to which the witnesses testify must be precise and explicit and the witness must be lacking in confusion as to the facts in issue. 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.

   
   

   See also, Smith v. Department of Health and Rehabilitative Services, 522 So.2d 956 (Fla. 1st DCA 1988).

   
   

10. In determining whether the provisions of law set forth in the administrative complaint have been violated in the manner alleged, one must bear in mind that such statutory and rule provisions are penal in nature. "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). Finally, the grounds proven must be those specifically alleged in the amended administrative complaint. See, Kinney v. Department of State, 501 So.2d 129 (Fla. 5th DCA 1987), and Hunter v. Department of Professional Regulation, 458 So.2d 842 (Fla. 2d DCA 1984).

    
    

11. Pertinent to this case, Section 626.611, Florida Statutes, sets forth the grounds for compulsory suspension or revocation of an agent's license or appointment, as follows:

    
    

    The department shall deny, suspend, revoke, or refuse to renew or continue the license or appointment of any agent, solicitor, adjuster, service representative, managing general agent, or claims investigator, and it shall suspend or revoke the eligibility to hold a license or appointment of any such person, if it finds that as to the applicant, licensee, or appointee any one or more of the following applicable grounds exist:

    * * *

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

    * * *

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

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

    3. 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 or appointment.

    * * *

    (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.

    
    

12. Also pertinent to this case, Section 626.621, Florida Statutes, sets forth the grounds for discretionary suspension or revocation of an agent's license, as follows:

    
    

    The department may, in its discretion, deny, suspend, revoke, or refuse to renew or continue the license or appointment of any agent, solicitor, adjuster, service representative, managing general agent, or claims investigator, and it may suspend or revoke the eligibility to hold a license or appointment of any such person, if it finds

    that as to the applicant, licensee, or appointee 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 appointment.

    * * *

    (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 or appointment, 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.

    
    

13. Finally, Section 626.561(1), Florida Statutes, provides:

    
    

    All premiums . . . belonging to insurers or others received by an agent . . . shall be trust funds so received by the licensee in a fiduciary capacity . . . The licensee in the applicable regular course of business shall account for and pay the same to the insurer

    . . . .

    
    

14. Here, the proof supports the conclusion that respondent's conduct violated the provisions of Sections 626.611(10) and (13), and 626.621(2) and (4), Florida Statutes. The proof fails, however, to clearly and convincingly demonstrate that respondent's conduct violated the provisions of Sections 626.611(4), (7), (8), and (9) and 626.621(6), Florida Statutes.

    
    

15. In arriving at an appropriate penalty for the foregoing violations, due consideration has been given to the penalty guidelines established by Chapter 4-231, Florida Administrative Code. Considering such guidelines and the facts of this case, an appropriate penalty in this case is a suspension of nine months.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered finding respondent guilty of the

violations set forth in the conclusions of law, and suspending his licenses and

eligibility for licensure for a period of nine months.

DONE AND ENTERED in Tallahassee, Leon County, Florida, this 22nd day of October 1993.

WILLIAM J. KENDRICK

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 22nd day of October 1993.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-3885

Petitioner's proposed findings of fact are addressed as follows:

1 & 2. To the extent supported by the proof, addressed in paragraph 1.

3. Addressed in paragraph 2.

4 & 5. Addressed in paragraph 3.

6. Addressed in paragraph 4.

7 & 8. Addressed in paragraph 5.

9 & 10. Addressed in paragraphs 6 & 7, otherwise rejected as not supported by competent proof.

11. Rejected as a conclusion of law.

COPIES FURNISHED:

William C. Childers, Esquire Department of Insurance

612 Larson Building

Tallahassee, Florida 32399-0333

Earle Anthony Bennett

12100 North West 11th Avenue Miami, Florida 33168

Tom Gallagher

State Treasurer and Insurance Commissioner

The Capitol, Plaza Level Tallahassee, Florida 32399-0300

Bill O'Neil 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: 93-003885

Orders for Case No: 93-003885