STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF INSURANCE AND ) TREASURER, )

)

Petitioner, )

)

vs. ) CASE NO. 95-5540

)

HUGO OLIVA, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was conducted in this case at Miami, Florida, on January 9, 1996, before Michael M. Parrish, a duly designated Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Ross S. Burnaman, Esquire

Department of Insurance and Treasurer Division of Legal Services

200 East Gaines Street Tallahassee, Florida 32399-0333

For Respondent: Mr. Hugo Oliva, pro se

14383 Southwest 38th Street Miami, Florida 33175

STATEMENT OF THE ISSUES

This is a license discipline proceeding in which the Petitioner seeks to take disciplinary action against the Respondent on the basis of alleged statutory violations set forth in the Administrative Complaint.

PRELIMINARY STATEMENT

At the formal hearing on January 9, 1996, the Petitioner offered eight exhibits, all of which were received in evidence. The Petitioner also presented the testimony of one witness, a Receivership Operations Manager employed by the Department. Official recognition was taken of several documents at the request of the Petitioner.

The Respondent offered one exhibit, which was received in evidence. The Respondent testified on his own behalf, but did not call any other witnesses.

At the conclusion of the hearing the parties were advised that they would be allowed ten days from the filing of the transcript of the hearing within which to submit their proposed recommended orders. The transcript was filed

with the Hearing Officer on January 26, 1996, and the parties were advised in writing that the deadline for their respective proposed recommended orders would be February 5, 1996.

On February 2, 1996, the Petitioner filed a timely proposed recommended order containing proposed findings of fact and conclusions of law. The proposed findings of fact submitted by the Petitioner are specifically addressed in the appendix to this Recommended Order. As of the date of this Recommended Order there has been no post-hearing document submitted by or on behalf of the Respondent.

FINDINGS OF FACT

1. Respondent is currently licensed in this state as a life insurance agent, a health insurance agent, and a life and health insurance agent.

   
   

2. At all times relevant to the dates and occurrences set forth in the Administrative Complaint, Respondent was licensed in this state as a life insurance agent, a health insurance agent, and a life and health insurance agent.

   
   

3. On December 9, 1991, the court entered its Order of Liquidation, Injunction and Notice of Automatic Stay in State ex.rel. Department of Insurance

   v. Great Oaks Casualty Insurance Company, et al., Case No. 91-4746, 2nd Judicial Circuit in and for Leon County, Florida.

   
   

4. On October 12, 1994, the Receiver filed its Petition for Summary Order Directing Immediate Delivery of Funds in Case No. 91-4746 (referenced in paragraph 3, above), against Respondent, Hugo Oliva, and Inter-American Insurance Agency, Inc., which sought recovery of unearned commissions.

   
   

5. On January 6, 1995, a final judgment was entered against Respondent and Inter-American Insurance Agency, Inc., jointly and severally, to pay the principle sum of $4,352.32, accrued interest through December 23, 1994, in the amount of $1,592.59, plus $300.00 in attorney's fees pursuant to Section 631.154, Florida Statutes, for a total sum of $6,244.91.

   
   

6. Respondent did not pay the judgment referred to in paragraph five, within thirty days of the date of entry of the judgment.

   
   

7. Inter-American Insurance Agency, Inc., did not pay the judgment referred to in paragraph 5, within thirty days of the date of entry of the judgment.

   
   

8. As of the date of the hearing, no payment had been made toward the satisfaction of the judgment.

   
   

9. Inter-American Insurance Agency, Inc., was a Florida corporation which was incorporated by Jose Bello and Jose Calderon on January 28, 1991.

10 The initial board of directors of Inter-American Insurance Agency, Inc., consisted of: Jose Bello, president; Jose Calderon, vice-president; and Hugo Oliva, 2nd vice-president.

1. Neither Jose Bello nor Jose Calderon was ever licensed in the State of Florida as an insurance agent.

2. Respondent was the only person licensed by the Department to transact insurance at Inter-American Insurance Agency, Inc.

   
   

3. Inter-American Insurance Agency, Inc., and Flagship Insurance Underwriters, Inc. ("Flagship"), entered in a brokering agent's agreement dated March 8, 1991.

   
   

4. Respondent acknowledged the existence of agreements between himself and Great Oaks Casualty Insurance Company and Flagship Insurance Underwriters, Inc.

   
   

5. In conjunction with the brokering agent's agreement, someone completed Flagship's "agency questionnaire" form regarding the Inter-American Insurance Agency, Inc.

   
   

6. The Flagship agency questionnaire for Inter-American Insurance Agency, Inc., is accurate in the names of the "principals, partners or corporate officers," and in the particulars regarding Respondent.

   
   

7. Flagship Underwriters, Inc., was the managing general agent for Great Oaks Casualty Insurance Company. The Department's Receivers took control of Great Oaks Insurance Casualty Company's records, including insurance policy files that had been submitted by Inter-American Insurance Agency, Inc.

   
   

8. In order for Inter-American Insurance Agency, Inc., to bind insurance coverage with Great Oaks Casualty Insurance Company through Flagship Insurance Underwriters, Inc., the agent would call the company and obtain a "telephone binder number" which was to be written on the application form in the space provided.

   
   

9. When binding insurance coverage, a "brokering agent's register number" was assigned by Great Oaks Casualty Insurance Company.

   
   

10. The "brokering agent's register number" was placed on the application for insurance as well as in the binder book (brokering agent's register) that was maintained at Inter-American Insurance Agency, Inc. The "brokering agent's register" entries were required to be entered sequentially. Respondent never saw any entries in the "brokering agent's register" that were entered by persons other than himself.

    
    

11. Despite over thirty days actual notice of the entry of the Final Judgment in Case No. 91-4746, in the 2nd Judicial Circuit in and for Leon County, Florida, Respondent did not seek to have the Final Judgment set aside or nullified in any way, nor did Respondent make any payment toward satisfaction of the Final Judgment.

    
    

12. Respondent admitted that his actual signature appears on at least ten applications submitted to Great Oaks Casualty Insurance Company.

    
    

13. Respondent signed at least ten applications submitted to Great Oaks Casualty Insurance Company where coverage was bound on dates ranging from March 23, 1991, through October 25, 1991, and with broker's register numbers ranging from 91-0031 to 91-0522.

    
    

14. Since broker's register numbers were entered sequentially, even if other persons at Inter-American Insurance Agency, Inc., did not make register

    entries, Respondent would have made entries (bound coverage) for 491 policies during the period March 23, 1991, through October 25, 1991.

    
    

15. Of the applications that Respondent denied signing, the coverage was bound during the period of April 1, 1991, through October 25, 1991, and with broker's register numbers ranging from 91-0047 through 91-0590 (543 entries apart).

    
    

    CONCLUSIONS OF LAW

    
    

16. 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.

    
    

17. In a license discipline proceeding of this nature the Petitioner bears the burden of proving its charges by clear and convincing evidence. See Ferris

    v. Turlington, 510 So.2d 292 (Fla. 1987). The nature of clear and convincing evidence has been described as follows in Slomowitz v. Walker, 429 So.2d 797, 800 (Fla. 4th DCA 1983):

    
    

    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 distinctly remembered; the testimony must be precise and explicit and the witnesses 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), which, at page 958, quotes with approval the above- quoted language from Slomowitz. The Smith cases also includes the following at page 958:

    
    

    "Clear and convincing evidence" is an intermediate standard of proof, more than the "preponderance of the evidence" standard used in most civil cases, and less than the "beyond a reasonable doubt" standard used in criminal cases. See State v. Graham, 240 So.2d 486 (Fla. 2d DCA 1970).

    
    

18. Section 626.592(2), Florida Statutes, establishes a duty of "primary agent" status as to Respondent, as the only licensee at the agency, such that he was responsible for the supervision of all individuals in the agency who dealt with the accounting of moneys.

    
    

19. As a general lines agent who was also an officer of Inter-American Insurance Agency, Inc., Respondent was, and is, personally and fully liable for any wrongful acts, misconduct, or violations of any provisions of the Insurance Code by any person under his direct supervision and control because Respondent knew, or should have known, of the acts and of the facts constituting the violations. Section 626.734, Florida Statutes.

20. Inter-American Insurance Agency, Inc., was an "insurance agency" within the meaning of Section 626.094, Florida Statutes.

    
    

21. The Department has proved by clear and convincing evidence all of the facts alleged in paragraphs 1 through 8 of the Administrative Complaint. The facts alleged and proved constitute violations of several provisions of the Florida Insurance Code. The only violation which requires discussion is the violation of Section 631.155, Florida Statutes, which reads as follows:

    
    

    631.155 Agents' balances; premiums and unearned commissions.--Premiums and unearned commissions which have been collected on behalf of an insurer by an agent, solicitor, agency, or other entity or person constitute an asset of the insurer for which the agency, solicitor, agency, or other entity or person has a duty to account to the receiver and to pay over amounts as may be due.

    The duty to account to the receiver shall encompass all persons or entities involved in the handling and transmittal of premium funds. An accounting shall be provided to the receiver within 20 days

    after receipt of a written demand for an accounting. If there is a dispute regarding the accounting,

    the court shall hear and decide the matter upon petition of the receiver. [Compliance with this section and payment of sums determined to be owed by the court within 30 days of judgment, or within other payment terms approved by the court, shall constitute requirements for continued licensure

    of a person holding a license under the Florida Insurance Code], and failure to comply with this section shall be sufficient grounds for the license revocation. [Emphasis added.]

    
    

22. It is clear from the statutory language quoted above that compliance with Section 631.155, Florida Statutes, is a requirement "for continued licensure." The Respondent has clearly failed to comply with Section 631.155. Accordingly, the Respondent is no longer eligible to hold a "license under the Florida Insurance Code," and his licenses should be revoked.

RECOMMENDATION

Based on all of the foregoing, it is RECOMMENDED that a Final Order be issued in this case finding that the Respondent committed the acts alleged in paragraphs 1 through 8 of the Administrative Complaint and, on the basis of those findings, revoking the Respondent's licenses.

DONE AND ENTERED this 28th day of February 1996 in Tallahassee, Leon County, Florida.

MICHAEL M. PARRISH, 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 28th day of February 1996.

APPENDIX

The following are the specific rulings on all proposed findings of fact submitted by all parties.

Proposed findings submitted by Petitioner Paragraphs 1 through 16: Accepted.

Paragraph 17: Rejected as subordinate and unnecessary details. Paragraphs 18 and 19: Accepted.

Paragraph 20: Rejected as subordinate and unnecessary details and as unnecessary commentary regarding evidentiary details.

Paragraph 21: Accepted

Paragraph 22: Rejected as summaries of testimony rather than proposed findings of fact; also rejected as subordinate and unnecessary details.

Paragraphs 23 through 26: Accepted.

Paragraph 27: Rejected as subordinate and unnecessary details.

Paragraphs 28 and 29: Accepted in substance, but with some modifications in the interest of clarity.

Paragraphs 30 and 33: Accepted.

Paragraphs 34 through 36: Rejected as subordinate and unnecessary details.

Paragraph 37: Rejected as irrelevant, because the Respondent cannot be found guilty of or be subjected to penalties as a result of conduct which was not charged in the Administrative Complaint. See, Wray v. Department of Professional Regulation, Board of Medical Examiners, 435 So.2d 312 (Fla. 1st DCA 1983); Sternberg v. Department of Professional Regulation, Board of Medical Examiners, 465 So.2d 1324 (Fla. 1st DCA 1985).

Proposed findings submitted by Respondent (None were submitted.)

COPIES FURNISHED:

Ross S. Burnaman, Esquire

Department of Insurance and Treasurer Division of Legal Services

200 East Gaines Street Tallahassee, Florida 32399-0333

Mr. Hugo Oliva

14383 Southwest 38th Street Miami, Florida 33175

Bill Nelson, Commissioner

Department of Insurance and Treasurer The Capitol, Plaza Level

Tallahassee, Florida 32399-0300

Dan Sumner, General Counsel Department of Insurance

The Capitol, Plaza Level 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 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: 95-005540

Orders for Case No: 95-005540