STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF INSURANCE, )

)

Petitioner, )

)

vs. ) Case No. 97-3553

)

PETER JOSEPH DEBELLO, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a Section 120.57(1) hearing was conducted in this case on December 2, 1998, by video teleconference at sites in Fort Lauderdale and Tallahassee, Florida, before Stuart M. Lerner, a duly designated Administrative Law Judge of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Beverly D. Brewster, Esquire

Department of Insurance Division of Legal Services

200 East Gaines Street 612 Larson Building

Tallahassee, Florida 32399-0333

For Respondent: Peter DeBello, pro se

Post Office Box 11438

Fort Lauderdale, Florida 33339-1438 STATEMENT OF THE ISSUES

1. Whether Respondent committed the violations alleged in the First Amended Administrative Complaint; and

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

   
   

   him.

   PRELIMINARY STATEMENT

   
   

   On June 23, 1997, Petitioner issued a six-count Administrative Complaint alleging that Respondent, a Florida licensed life and health insurance agent, had engaged in conduct that warranted the taking of disciplinary action against him.

   Respondent filed a Response to the Administrative Complaint and requested a Section 120.57(1) hearing on the allegations against him. The matter was referred to the Division of Administrative Hearings on August 5, 1997. The final hearing was initially scheduled to commence on October 17, 1997, but was continued several times.

   On July 22, 1998, Petitioner filed an Motion for Leave to Amend Administrative Complaint. Appended to the Motion was Petitioner's First Amended Administrative Complaint containing eight counts. Following a telephone conference call hearing, the undersigned, on August 11, 1998, issued an Order granting the motion.

   As noted above, the Section 120.57(1) hearing in this case was held on December 2, 1998. Three witnesses testified at the hearing: Gary Faske, Esquire; Leo Joy; and Respondent. In addition to the testimony of these three witnesses, a total of 11 exhibits (Petitioner's Exhibits 1 through 6, 10, 11, and 13 through 15) were offered and received into evidence. Among these exhibits were the transcripts of depositions of Gayle Schuler of Ulico Casualty Company and Tracy Fatland of Fidelity Express.

   These depositions were received into evidence in lieu of Ms. Shuler's and Ms. Fatland's live testimony.

   At the conclusion of the evidentiary portion of the hearing, the undersigned, on the record, advised the parties of their right to file proposed recommended orders and established a deadline (25 days from the undersigned's receipt of the transcript of the hearing) for the filing of proposed recommended orders. The hearing transcript was filed on December 29, 1998.

   Petitioner timely filed its Proposed Recommended Order on Monday, January 25, 1999. On January 26, 1999, Respondent, through his newly retained counsel, Neale J. Poller, Esquire, filed a motion requesting a 20-day extension of the deadline for filing his Proposed Recommended Order. On January 27, 1999, Petitioner filed a response in opposition to the motion. A hearing on the motion was held by telephone conference call on January 28, 1999. Following the hearing, on that same day (January 28, 1999), the undersigned issued an Order, which provided as follows:

   Upon consideration, it is hereby ORDERED:

   
   

   1. To the extent that Respondent's Motion to Extend Time requests that the deadline for filing his proposed recommended order be extended beyond the close of business on February 1, 1999, the motion is denied.

      
      

   2. The undersigned will consider a proposed recommended order prepared and filed by

      Mr. Poller on behalf of Respondent, provided that it is filed no later than the close of business on February 1, 1999, and further provided that it contains a written certification signed by Mr. Poller that, prior to his submission of said proposed

      recommended order, he did not review or otherwise learn of the contents of Petitioner's Proposed Recommended Order (which was timely filed in this case on Monday, January 25, 1999).1

   3. Petitioner, if it desires, may file a supplemental proposed recommended order no later than the close of business on February 1, 1999.

      
      

   4. The undersigned will issue his recommended order no later than 30 days from January 25, 1999 (the date Petitioner's Proposed Recommended Order was filed).

Mr. Poller, on behalf of Respondent, filed a Proposed Recommended Order containing the required certification on February 1, 1999. To date, Petitioner has not filed a supplemental proposed recommended order. Petitioner's Proposed Recommended Order and Respondent's Proposed Recommended Order have been carefully considered by the undersigned.2

FINDINGS OF FACT

Based upon the evidence adduced at hearing, and the record as a whole, the following findings of fact are made: Respondent's Licensure Status

1. Respondent is now, and has been at all times material to the instant case, a Florida-licensed life and health insurance agent.

   Counts I through VI

   
   

2. At all times material to the instant case, Peter DeBello, Inc., d/b/a Emery Richardson Insurance (Corporation), a Florida corporation owned by Respondent's father, operated a

   general lines insurance agency (Emery Richardson Insurance) located in the state of Florida. The Corporation was formed to manage the assets of Emery Richardson, Inc., which assets Respondent's father had obtained through litigation.

3. Respondent's father delegated to Respondent the authority to manage the affairs of the Corporation.

4. The same day (in 1992) that the Corporation took possession of Emery Richardson, Inc.'s assets, it so notified the Department of Insurance (Department) by telephone. Shortly thereafter, Leo Joy, a Florida-licensed property and casualty insurance agent since 1961, was designated on a Department- provided form as the primary agent for Emery Richardson Insurance at its 240 Commercial Boulevard location in Lauderdale By The Sea, Florida, and the completed form was provided to the Department.3

5. At no time prior to the commencement of the instant administrative proceeding did Respondent himself personally notify the Department of the identity of Emery Richardson Insurance's primary agent.

6. It was Mr. Joy who (in 1992) filled out the primary agent designation form and submitted it to the Department. Mr. Joy, however, did so on behalf of Respondent, who had verbally designated Mr. Joy as Emery Richardson Insurance's primary agent.

7. Neither Respondent, Mr. Joy, nor any one else, has subsequently used the Department's primary agent designation form to advise the Department of Mr. Joy's continuing status as Emery Richardson Insurance's primary agent.

8. In his capacity as president of the Corporation, Respondent, on behalf of the Corporation, in April of 1994, entered into an agreement (Agreement) with Ulico Casualty Company of Washington, D.C. (Ulico), which provided as follows:

   WHEREAS, the Applicant (Corporation), a licensed insurance agent and/or insurance broker, has heretofore obtained from the COMPANY (Ulico) or is desirous of obtaining from the COMPANY the placement of insurance for the Applicant's customers or principals, and

   
   

   WHEREAS, the COMPANY, using its facilities, has placed insurance for the Applicant or with whom Applicant has requested the placement of such insurance,

   
   

   NOW, THEREFORE, in consideration of the mutual promises herein contained, and for other good and valuable consideration, the receipt whereof is hereby acknowledged. It is mutually AGREED as follows:

   
   

   1. With reference to the placement of new insurance, Applicant shall submit to the COMPANY a separate application containing the name of each prospective insured, describing the risk to be considered for underwriting and binding.

      
      

   2. Applicant specifically understands and agrees that Applicant shall have no authority to authorize or write any insurance or bind any risk on behalf of the COMPANY without the prior written approval by a duly authorized representative of the COMPANY.

   3. With respect to any insurance heretofore placed with the COMPANY by the Applicant, and with respect to any insurance hereinafter placed by the Applicant, all premiums shall be payable to the COMPANY and such Applicant assumes and agrees to pay the COMPANY premiums on all the policies of insurance heretofore or hereinafter placed by Applicant with the COMPANY in accordance with the current statements rendered to the Applicant by the COMPANY, such payment to be made no later than 30 days after the month of issue of the insurance policy, or due date of any installment if issued on an installment basis, less any credits due to the Applicant for return premium, provided an appropriate credit memorandum therefor has previously been issued by the COMPANY to Applicant. In the absence of such credit memorandum, Applicant shall have no right of counterclaim or setoff with respect to any claimed credits due, but shall be required to establish entitlement to the same in a separate action.

   4. Applicant shall have the right, so long as Applicant is not indebted to the COMPANY, to deduct agreed upon commissions on each policy of insurance prior to remitting the remaining premium to the COMPANY.

      
      

   5. In the event that premiums on behalf of any insured party shall have been financed and refund of financed premiums are required from the COMPANY to the financing institution, Applicant shall forthwith refund and pay to the COMPANY all unearned commissions heretofore received with respect to such financed premiums.

      
      

   6. In the event that Applicant shall fail to make any payment to the COMPANY which is required to be made pursuant to this Agreement, within the time specified, the COMPANY shall have the right, at any time subsequent to the due date of payment, to cancel any policy on which the premium payments have not been remitted to the COMPANY, without prior notice to the Applicant, by sending notice of cancellation directly to the insured, except that

      Applicant shall continue to remain liable to the COMPANY for the payment of all premiums earned as of the date of cancellation which are collected by Applicant.

      
      

   7. Applicant represents that they are duly licensed as an insurance broker or agent for Casualty and Property Insurance as indicated in the States set forth below, and agrees that in the event that any license shall cease, terminate or be cancelled, that the Applicant will promptly notify the COMPANY accordingly.

      
      

   8. Applicant agrees, where required, to file at Applicant's expense, all necessary affidavits and collect all State or local premium taxes and to pay the same promptly to the respective taxing authorities on all insurance placed with the COMPANY, in accordance with the laws applicable in the State of licensing.

      
      

   9. No changes or modification of this Agreement shall be valid unless such change or modification is subscribed, in writing, by the COMPANY and Applicant.

      
      

9. Ulico is one of approximately 47 insurance companies that Emery Richardson Insurance represents. In the past five years, Emery Richardson Insurance has received from clients in excess of seven or eight million dollars in premium payments, which it has deposited in its various checking accounts and then paid over to these insurance companies. Ulico is the only one of these 47 insurance companies to have experienced "problems" in receiving from Emery Richardson Insurance monies due. These "problems" are detailed below.

10. On June 13, 1994, the Corporation opened a checking account (account no. 458-902279-9, hereinafter referred to as the

    "Account") with Savings of America at the bank's Hollywood, Florida, branch.

11. The Peter Debello described on the signature card for the Account was Respondent's father.

12. Respondent's father, however, through execution of a power of attorney, had authorized Respondent to act on his behalf in connection with the Account.

13. On August 20, 1996, Respondent drafted and signed four checks drawn on the Account, which were made payable to Ulico: check no. 804, in the amount of $1,729.15, for "Teamsters #769, Policy #BOU 907"; check no. 805, in the amount of $1,071.65, for "Sheet Metal Appr. #32, Policy #CLU 668"; check no. 806, in the amount of $700.00, for "Sheet Metal #32, Policy #CLU 682"; and check no. 807, in the amount of $96.05, for "Painters L.U. 160, Policy #CLU 451." (These policies will hereinafter be referred to as the "Subject Policies.")

14. On January 24, 1997, Respondent drafted and signed a check (check no. 882) drawn on the Account, in the amount of

    $7,500.00, which was also made payable to Ulico.

    
    

15. Check nos. 804, 805, 806, 807,4 and 882 were sent to Ulico as payment for monies the Corporation owed Ulico (pursuant to the Agreement) for insurance coverage obtained from Ulico by the Corporation for its clients (as reflected in invoices Ulico sent the Corporation, which hereinafter will be referred to as the "Subject Invoices").5

16. At the time that he drafted and signed these checks and submitted them to Ulico, Respondent assumed that there were sufficient funds in the Account to cover the amounts of the checks.

17. In drafting and signing these checks and submitting them to Ulico, Respondent did not make any statements or representations that he knew to be false or misleading.

18. All five checks were returned by Savings of America unpaid, with the explanation, "insufficient funds," stamped on each check.6 (These checks will hereinafter be referred to as the "Dishonored Checks.")

19. Ulico's premium collection manager, Gayle Shuler, spoke with Respondent, as well as with Mr. Joy, "many times" concerning the monies the Corporation owed Ulico. At no time did either Respondent or Mr. Joy indicate that they disputed the Subject Invoices7 (although Respondent and Mr. Joy did contest other invoices that they received from Ulico).

20. Although aware that the Dishonored Checks had been returned due to insufficient funds8 and knowing that Ulico desired payment, Respondent failed to act promptly to remedy the situation.

21. It was not until early 1998, after the commencement of the instant administrative proceeding, that Respondent, on behalf of the Corporation, took steps to address the matter. At that time, using Fidelity Express money orders purchased between

    February 26, 1998, and March 1, 1998, (which Respondent dated August 26, 1996), Respondent paid Ulico a portion ($1,867.70) of the total amount of the Dishonored Checks. The money orders were sent to Ulico by certified mail, along with a cover letter from Respondent. Respondent "backdated" the money orders to reflect "when [the monies owed Ulico] should have been" paid. He did so without any intent to mislead or deceive.

22. There is no clear and convincing evidence that anyone other than Ulico was injured by Respondent's failure to timely pay over to Ulico the monies Emery Richardson Insurance had received from its clients for the Subject Policies (which monies belonged to Ulico).

23. Respondent's failure to timely make such payments, it appears, was the product of isolated instances of carelessness, neglect and inattention on Respondent's part,9 which, when considered in light of the totality of circumstances, including his problem-free dealings with the other insurance companies Emery Richardson Insurance represents, were not so serious as to demonstrate a lack of fitness, trustworthiness or competency to engage in transactions authorized by his license.

    Count VII

    
    

24. In August of 1986, Respondent visited Gary Faske, Esquire, at Mr. Faske's office in Dade County, Florida. The purpose of the visit was to have Mr. Faske complete the paperwork

    necessary to add Mr. Faske to his new employer's group major medical insurance policy with Union Bankers Insurance Company.

25. After the paperwork was completed, Respondent left Mr. Faske's office with the completed paperwork, as well as a check from Mr. Faske's employer to cover the cost of adding Mr. Faske to the group policy.10

26. It is unclear what Respondent did with the paperwork and check after he left Mr. Faske's office.

27. In October of that same year (1986), Mr. Faske took ill and had to be hospitalized on an emergency basis. He assumed that he was covered by his employer's group major medical insurance policy, but he subsequently learned that he was wrong and had to pay between $50,000.00 to $60,000.00 in medical bills.

28. The evidence does not clearly and convincingly establish that Respondent (as opposed to Union Bankers Insurance Company or some other party) was responsible for Mr. Faske not having such coverage.

29. Mr. Faske thereafter filed suit against Respondent and Union Bankers Insurance Company in Dade County Circuit Court. He settled his claim against the insurance company, but was unable to reach an agreement with Respondent. Respondent's case therefore went to trial, following which, on August 12, 1997, a Final Judgment11 was entered against Respondent in the amount of

    $40,271.00.12

    Count VIII

30. By filing an Address Correction Request, dated

    
    

    January 29, 1992, Respondent notified the Department that his new mailing address was 40 Hendricks Isle, Fort Lauderdale, Florida.

31. The Department subsequently sent a letter, dated

    
    

    April 14, 1995, to Respondent at this 40 Hendricks Isle address.

    
    

32. Respondent, however, "had just moved from that address," and the letter was returned to the Department stamped, "forward expired."

33. In May of 1995, Respondent advised the Department in writing of his new mailing address.

34. It is unclear whether such written notification was given more than, or within, 30 days from the date Respondent had moved to his new address.

    CONCLUSIONS OF LAW

    
    

35. As noted above, the First Amended Administrative Complaint contains eight counts.

36. The first five counts concern Respondent's drafting, signing and submitting to Ulico check nos. 804 (Count I), 805 (Count II), 806 (Count III), 807 (Count IV) and 882 (Count V). Each of these counts allege that: the "check [in question] was subsequently returned for insufficient funds"; "[a]t the time that [he] submitted this check to Ulico [Respondent] knew or should have known that [he] w[as] in fact not authorized to do so"; "[t]he representations made by [Respondent] in drafting and signing the check were false and a material misstatement of

    fact"; and Respondent "did fail to pay, or refuse to pay money belonging to Ulico, upon demand from Ulico." According to the allegations made in this count of the First Amended Administrative Complaint, in engaging in such conduct, Respondent violated Sections 626.611(7), 626.611(8), 626.611(9),

    626.611(13), 626.621(2), 626.621(4), 626.621(6), 626.9521(1),

    
    

    626.9521(2), and 626.9541(1)(e)1, Florida Statutes.13

37. Count VI of the First Amended Administrative Complaint alleges that Respondent violated Sections 626.592(1) 626.592(7), 626.611(7), 626.611(8), 626.611(9), 626.611(13), 626.621(2), 626.621(6), 626.9521(1), and 626.9521(2), Florida Statutes, "while operating the Emery [Richardson] Insurance Agency, [by] fail[ing] to designate a primary agent, file the name of the person so designated, and the address of the insurance agency location of the primary agent, with the Department."

38. Count VII of the First Amended Administrative Complaint makes reference to the Final Judgment entered against Respondent and in favor of Mr. Faske and alleges that "[s]aid judgment was the result of complaints filed against [Respondent] alleging misappropriations of funds and misrepresentations in the conduct of the business of insurance." According to this count of the First Amended Administrative Complaint, Respondent's conduct violated the provisions of Sections 626.561(1), 626.611(4), 626.611(7), 626.611(9), 626.611(10), 626.611(13), 626.621(2), 626.621(3), 626.621(4), and 626.621(6), Florida Statutes.

39. Count VIII of the First Amended Administrative Complaint alleges that Respondent "ha[s] failed to keep the Department informed of [his] address within 30 days of any change, resulting in no current address of record," in violation of Sections 626.551, 626.611(13), and 626.621(2), Florida Statutes.

40. The above-referenced provisions of Chapter 626, Florida Statutes, which Respondent is alleged to have violated, provide as follows:

    626.551 Notice of change of address, name.–

    
    

    Every licensee shall notify the department in writing within 30 days after a change of name, residence address, principal business street address, or mailing address. Any licensed agent who has moved his or her residence from this state shall have his or her license and all appointments immediately terminated by the department.

    626.561 Reporting and accounting for funds.–

    
    

    (1) All premiums, return premiums, or other funds belonging to insurers or others received by an agent, solicitor, or adjuster in transactions under his or her license shall be trust funds so received by the licensee in a fiduciary capacity. An agent shall keep the funds belonging to each insurer for which he or she is not appointed, other than a surplus lines insurer, in a separate account so as to allow the department to properly audit such funds. 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.14

    626.592 Primary agents.--

    (1) Each person operating an insurance agency and each location of a multiple location agency shall designate a primary agent for each insurance agency location and shall file the name of the person so designated, and the address of the insurance agency location where he or she is primary agent, with the Department of Insurance, on a form approved by the department. The designation of the primary agent may be changed at the option of the agency, and any change shall be effective upon notification to the department. Notice of change must be sent to the department within 30 days after such change.

    
    

    * * *

    
    

    (7) An insurance agency location may not conduct the business of insurance unless a primary agent is designated at all times. Failure to designate a primary agent, on a form prescribed by the department, within 30 days after agency inception or change of primary agent designation, constitutes grounds for requiring that the agency obtain a license in accordance with ss. 626.112 and 626.172.

    
    

    626.611 Grounds for compulsory refusal, suspension, or revocation of agent's, title agency's, solicitor's, adjuster's, customer representative's, service representative's, or managing general agent's license or appointment.--The department shall deny an application for, suspend, revoke, or refuse to renew or continue the license or appointment of any applicant, agent, title agency, solicitor, adjuster, customer representative, service representative, or managing general agent, 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 fitness or trustworthiness to engage in the business of insurance.15

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

       
       

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

       
       

    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 or appointment. 16

    (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.

    
    

    626.621 Grounds for discretionary refusal, suspension, or revocation of agent's, solicitor's, adjuster's, customer representative's, service representative's, or managing general agent's license or appointment.--The department may, in its discretion, deny an application for, suspend, revoke, or refuse to renew or continue the license or appointment of any applicant, agent, solicitor, adjuster, customer representative, service representative, or managing general agent, 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: . . .

    1. 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.

       
       

    2. Violation of any lawful order or rule of the department.

    3. Failure or refusal, upon demand, to pay over to any insurer he or she represents or has represented any money coming into his or her hands belonging to the insurer. 17

    (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 or herself to be a source of injury or loss to the public or detrimental to the public interest.

    
    

    626.9521 Unfair methods of competition and unfair or deceptive acts or practices prohibited; penalties.--

    
    

    1. No person shall engage in this state in any trade practice which is defined in this part as, or determined pursuant to s. 626.951 or s. 626.9561 to be, an unfair method of competition or an unfair or deceptive act or practice involving the business of insurance.

       
       

    2. Any person who violates any provision of this part shall be subject to a fine in an amount not greater than $2,500 for each nonwillful violation and not greater than

    $20,000 for each willful violation. Fines under this subsection may not exceed an aggregate amount of $10,000 for all nonwillful violations arising out of the same action or an aggregate amount of $100,000 for all willful violations arising out of the same action. The fines authorized by this subsection may be imposed in addition to any other applicable penalty.

    
    

    626.9541 Unfair methods of competition and unfair or deceptive acts or practices defined.–

    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: . . .

       
       

       (e) False statements and entries.–

       
       

       1. Knowingly:

          
          

          1. Filing with any supervisory or other public official,

             
             

          2. Making, publishing, disseminating, circulating,

             
             

          3. Delivering to any person,

             
             

          4. Placing before the public,

             
             

          5. Causing, directly or indirectly, to be made, published, disseminated, circulated, delivered to any person, or placed before the public,

          
          

          any false material statement.

          
          

       2. Knowingly making any false entry of a material fact in any book, report, or statement of any person, or knowingly omitting to make a true entry of any material fact pertaining to the business of such person in any book, report, or statement of such person.18

41. Prior to October 1, 1998, and at all times material to the instant case, Section 626.592(1), Florida Statutes, required "each person operating an insurance agency" to annually redesignate a primary agent for the agency and notify the Department of such redesignation by completing and submitting a Department-approved form. Chapter 98-199, Laws of Florida, deleted this annual redesignation and notification requirement.

42. If an agent is found guilty of violating any of the provisions of Section 626.611, Florida Statutes, cited above, revocation or suspension is "mandatory as a matter of law." Dyer v. Department of Insurance and Treasurer, 585 So. 2d 1009, 1015 (Fla. 1st DCA 1991). Pursuant to Section 626.641(1), Florida Statutes, if a suspension is imposed, the period of the suspension "shall not exceed 2 years."

43, Where there has been a violation of Section 626.621, Florida Statutes, the Department may ,in the exercise of its discretion, (but is not required to) revoke or suspend the agent's license. Sections 626.68119 and 626.691,20 Florida Statutes, authorize the Department, in lieu of such discretionary suspension or revocation of the agent's license, to instead impose an administrative fine (Section 626.681) and/or place the agent on probation (Section 626.691).

1. If "one has violated [both] [S]ection 626.611 and 626.621, [Florida Statutes,] [S]ection 626.611 governs the penalty to be imposed." Dyer v. Department of Insurance and Treasurer, 585 So. 2d 1009, 1014 (Fla. 1st DCA 1991). The penalty, however, should be "based upon the number and severity of all offenses of which the licensee has been found guilty." Id.

2. 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); see also Whitaker v. Department of Insurance and Treasurer, 680 So. 2d 528, 531 (Fla. 1st DCA 1996)("Because the statute [Section 626.9541, Florida Statutes] is penal in nature, it must be strictly construed with any doubt resolved in favor of the licensee.").

3. 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 Department of Banking and Finance, Division of Securities and Investor Protection v. Osborne Stern and Company,

   670	So. 2d 932, 935 (Fla. 1996); Ferris v. Turlington, 510 So. 2d
   292	(Fla. 1987); Werner v. Department of Insurance and Treasurer,
   689	So. 2d 1211, 1212 (Fla. 1st DCA 1997); Russell v. Department

   
   

   of Insurance, 668 So. 2d 276, 278 (Fla. 1st DCA 1996); Pascale v. Department of Insurance, 525 So. 2d 922 (Fla. 3d DCA 1988); Section 120.57(1)(h), Florida Statutes ("Findings of fact shall be based on a preponderance of the evidence, except in penal or licensure disciplinary proceedings or except as otherwise provided by statute.").

4. "'[C]lear 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.'" In re: Davey, 645 So. 2d 398, 404 (Fla. 1994), quoting, with approval, from Slomowitz v.

   Walker, 429 So. 2d 797, 800 (Fla. 4th DCA 1983).

   
   

5. Furthermore, the disciplinary action taken against the licensee may be based only upon those offenses specifically alleged in the administrative complaint. See Cottrill v. Department of Insurance, 685 So. 2d 1371 (Fla. 1st DCA 1996); 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).

6. Counts I through V of the First Amended Administrative Complaint allege that Respondent engaged in conduct violative of Sections 626.611(7), 626.611(8), 626.611(9), 626.611(13), 626.621(2), 626.621(4), 626.621(6), 626.9521(1), 626.9521(2), and 626.9541(1)(e)1, Florida Statutes, in connection with his drafting and signing the Dishonored Checks and submitting them to Ulico as payment for monies the Corporation owed Ulico. These counts of the Administrative Complaint are supported by clear and convincing record evidence, but only to the extent that they

   allege Respondent violated Sections 626.621(2) ("violation of any provision of th[e Insurance C]ode") and 626.621(4)

   ("[f]ailure . . ., upon demand, to pay over to any insurer he . . . represents any money coming into his . . . hands belonging to the insurer"). There is insufficient record

   evidence to clearly and convincingly establish that, in drafting and signing the Dishonored Checks and submitting them to Ulico, Respondent "[d]emonstrated lack of fitness or trustworthiness to engage in the business of insurance," in violation of Section 626.611(7); "[d]emonstrated lack of reasonably adequate knowledge and technical competence to engage in the transactions authorized by [his] license," in violation of Section 626.611(8); engaged in "[f]raudulent or dishonest practices," in violation of Section 626.611(9); "[w]illful[ly] fail[ed] to comply with, or willful[ly] violat[ed], any proper order or rule of the department or willful[ly] violat[ed] any provision of th[e Insurance C]ode," in violation of Section 626.611(13); or "engaged in unfair methods of competition or in unfair deceptive acts or practices," as defined in Section 626.9541(1)(e)1, in violation of Section 626.621(6) and Section 626.9521.

   Accordingly, these latter allegations should be dismissed.

   
   

7. Count VI of the First Amended Administrative Complaint alleges that Respondent violated Sections 626.592(1), 626.592(7), 626.611(7), 626.611(8), 626.611(9), 626.611(13), 626.621(2), 626.621(6), 626.9521(1), and 626.9521(2), Florida Statutes,

   "while operating the Emery [Richardson] Insurance Agency,21 [by] fail[ing] to designate a primary agent, file the name of the person so designated, and the address of the insurance agency location of the primary agent, with the Department." The record evidence clearly and convincingly establishes that, after the Department was timely notified in writing that Mr. Joy had been designated as Emery Richardson Insurance's primary agent in 1992, Respondent failed to provide the Department, on an annual basis, with written notification of Mr. Joy's continuing status as Emery Richardson Insurance's primary agent. In failing to provide such subsequent written notification, Respondent violated Section 626.592(1), as it existed prior to October 1, 1998, and therefore also Section 626.621(2).22 The record evidence, however, does not clearly and convincingly establish that that he acted in violation of any of the other statutory provisions cited in Count

   VI. Moreover, because the annual redesignation and notification requirement of the pre-October 1, 1998, version of Section 626.592(1), has been eliminated without the Legislature having enacted a savings clause, the Department may not now discipline Respondent for his failure to comply with this requirement. See Robertson v. Circuit Court for Highlands County, 164 So. 525 (Fla. 1935). Accordingly, Count VI should be dismissed in its entirety.

8. Count VII of the First Amended Administrative Complaint alleges that, in a civil action in Dade County Circuit Court

   initiated by Mr. Faske, Respondent had a Final Judgment entered against him which "was the result of complaints filed against [him by Mr. Faske] alleging misappropriations of funds and misrepresentations in the conduct of the business of insurance," in violation of Sections 626.561(1), 626.611(4), 626.611(7),

   626.611(9), 626.611(10), 626.611(13), 626.621(2), 626.621(3),

   
   

   626.621(4), and 626.621(6), Florida Statutes. It is undisputed that such a final judgment was entered against Respondent. The record evidence, however, does not clearly and convincingly establish that Respondent misappropriated any funds or made any misrepresentations in his dealings with Mr. Faske. Accordingly, this count of the First Amended Administrative Complaint should be dismissed.

9. Count VIII of the First Amended Administrative Complaint, which alleges that Respondent "failed to keep the Department informed of [his] address within 30 days of any change," in violation of Sections 626.551, 626.611(13), and 626.621(2), Florida Statutes, is also not supported by clear and convincing evidence. Accordingly, this count of the First Amended Administrative Complaint should also be dismissed.

10. In determining the particular penalty the Department should impose upon Respondent for committing the violations of Sections 626.621(2), and 626.621(4), Florida Statutes, alleged in Counts I through V of the First Administrative Complaint, which, as noted above, were proven by clear and convincing evidence, it

    is necessary to consult Chapter 4-231, Florida Administrative Code, which contains the Department's "penalty guidelines." Cf. Williams v. Department of Transportation, 531 So. 2d 994, 996 (Fla. 1st DCA 1988)(agency is required to comply with its disciplinary guidelines in taking disciplinary action against its employees).

11. Rule 4-231.040, Florida Administrative Code, describes how the "final penalty" should be "calculated." It provides as follows:

    4-231.040 Calculating Penalty.

    
    

    1. Penalty Per Count.

       
       

       1. The Department is authorized to find that multiple grounds exist under sections 626.611 and 626.621, Florida Statutes, for disciplinary action against the licensee based upon a single count in an administrative complaint based upon a single act of misconduct by a licensee. However, for the purpose of this rule chapter, only the violation specifying the highest stated penalty will be considered for that count. The highest stated penalty thus established for each count is referred to as the "penalty per count".

          
          

       2. The requirement for a single highest stated penalty for each count in an administrative complaint shall be applicable regardless of the number or nature of the violations established in a single count of an administrative complaint.

       
       

    2. Total Penalty. Each penalty per count shall be added together, and the sum shall be referred to as the "total penalty".

       
       

    3. Final Penalty. The final penalty which will be imposed against a licensee under these rules shall be the total penalty, as

       adjusted to take into consideration any aggravating or mitigating factors; provided, however, the Department shall convert the total penalty to an administrative fine and probation in the absence of a violation of section 626.611, Florida Statutes, if warranted upon the Department's consideration of the factors set forth in rule subsection

       4-231.160(1).

       
       

12. The "stated penalties" for violations of Section 626.621, Florida Statutes, are set forth in Rule 4-231.090, Florida Administrative Code. They include, in pertinent part, the following:

    
    

    1. s. 626.621(2), F.S.- suspension 3 months (4) s. 626.621(4), F.S..- suspension 9 months

    
    

13. Rule 4-231.160, Florida Administrative Code, addresses the subject of aggravating and mitigating circumstances. It provides, in pertinent part, as follows:

    4-231.160 Aggravating/Mitigating Factors.

    
    

    The Department shall consider the following aggravating and mitigating factors and apply them to the total penalty in reaching the final penalty assessed against a licensee under this rule chapter. After consideration and application of these factors, the Department shall, if warranted by the Department's consideration of the factors, either decrease or increase the penalty to any penalty authorized by law.

    
    

    1. For penalties other than those assessed under rule 4-231.150:23

1. willfulness of licensee's conduct;

   
   

2. degree of actual injury to victim;

   
   

3. degree of potential injury to victim;

4. age or capacity of victim;

   
   

5. timely restitution;

   
   

6. motivation of agent;

   
   

7. financial gain or loss to agent;

   
   

8. cooperation with the Department;

   
   

9. vicarious or personal responsibility;

   
   

10. related criminal charge; disposition;

    
    

11. existence of secondary violations in counts;

    
    

12. previous disciplinary orders or prior warning by the Department; and

    
    

13. other relevant factors.

1. In the instant case, Respondent has been found guilty, at least in part, of Counts I through V of the First Amended Administrative Complaint. The "penalty per count" for Counts I through V is a 9-month suspension for each count. The "total penalty" therefore is a 45-month suspension, which is the equivalent of revocation inasmuch as a suspension, pursuant to Section 626.641(1), Florida Statutes, may "not exceed 2 years."

2. The undersigned has carefully considered the facts of the instant case in light of the factors listed in Rule 4- 231.160, Florida Administrative Code. Having done so, the undersigned finds that the "mitigating circumstances" present in the instant,24 when compared to the "aggravating circumstances,"25 are sufficient to warrant a reduction in the "total penalty" to an 18-month suspension.

3. Accordingly, the penalty that the Department should impose upon Respondent in the instant case, i.e., the "final penalty," is an 18-month suspension.

RECOMMENDATION

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

RECOMMENDED that the Department issue a final order:

(1) finding Respondent guilty of the violations noted in the Conclusions of Law of this Recommended Order; (2) penalizing Respondent for having committed these violations by suspending his license for 18 months; and (3) dismissing the remaining allegations of misconduct advanced in the First Amended Administrative Complaint.

DONE AND ENTERED this 12th day of February, 1999, in Tallahassee, Leon County, Florida.

STUART M. LERNER

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 12th day of February, 1999.

ENDNOTES

1/ During the hearing on the Motion to Extend Time, Mr. Poller asserted that Respondent had neither given him a copy, nor told him about, the contents of Petitioner's Proposed Recommended Order.

2/ Appended to Respondent's Proposed Recommended Order was an excerpt from the transcript of a deposition of Respondent which was not received into evidence at the final hearing. Inasmuch as the excerpted material is not a part of the evidentiary record in this case, it has not been considered by the undersigned.

3/ This finding is based upon the testimony Mr. Joy and Respondent.

4/ Check nos. 804, 805, 806, and 807 were accompanied by a cover letter from Mr. Joy, explaining that the checks were for the amounts owed Ulico for the Subject Policies.

5/ That these checks were sent is compelling evidence that, contrary to the assertion made by Respondent in this proceeding, there was no dispute concerning the amounts owed Ulico for the Subject Policies.

6/ Cf. Section 832.05(7), Florida Statutes ("(7) REASON FOR DISHONOR, DUTY OF DRAWEE.–It is the duty of the drawee of any check, draft, or other written order, before refusing to pay the same to the holder thereof upon presentation, to cause to be written, printed, or stamped in plain language thereon or attached thereto the reason for the drawee's dishonor or refusal to pay it. In any prosecution under this section, the introduction in evidence of any unpaid and dishonored check, draft, or other written order having the drawee's refusal to pay stamped or written thereon or attached thereto, with the reason therefor as aforesaid, is prima facie evidence of the making or uttering of such check, draft, or other written order, of the due presentation to the drawee for payment and the dishonor thereof, and that the same was properly dishonored for the reasons written, stamped, or attached by the drawee on such dishonored check, draft, or other written order. ").

7/ The absence of such a dispute distinguishes the instant case from Russell v. Department of Insurance, 668 So. 2d 276 (Fla. 2d DCA 1996), a case cited by Respondent in his Proposed Recommended Order.

8/ At hearing, Respondent, in his testimony, suggested that there were insufficient funds in the Account to cover the Dishonored Checks because checks that been deposited in the Account (prior to his drafting and signing the Dishonored Checks) had not cleared at the time the Dishonored Checks were presented to Savings of America for payment from the Account. The Department presented no evidence (in the form of bank statements

or otherwise) demonstrating that this was not the cause of the insufficiency.

9/ It does not appear that Respondent engaged in any intentionally deceitful or fraudulent conduct in his dealings with Ulico.

10/ This finding is based exclusively upon the testimony of Mr. Faske, which the undersigned finds more credible than the testimony of Respondent to the contrary.

11/ This Final Judgment was offered and received into evidence as Petitioner's Exhibit 6 without objection by Respondent.

12/ The Department, which was not a party in the circuit court proceeding involving Mr. Faske and Respondent, cannot use the Final Judgment entered in that proceeding to prevent Respondent from relitigating, in this administrative proceeding, the issues resolved in the circuit court proceeding. See The Florida Bar v. Clement, 662 So. 2d 690, 697 (Fla. 1995)("Collateral estoppel is a judicial doctrine that prevents identical parties from relitigating issues that have previously been decided between them. . . . Although federal courts and some other jurisdictions no longer require mutuality of parties as a prerequisite to asserting the doctrine of collateral estoppel, Florida courts have held that collateral estoppel can be asserted only when the identical issue has been litigated between the same parties.").

Indeed, the Final Judgment cannot even be used as proof of the

facts determined by the judgment. Cf. 24 Fla. Jur. 2d, Evidence and Witnesses, Section 435 ("It is a well settled rule that judgments and decrees rendered in civil cases are inadmissible in evidence [over objection] in criminal prosecutions as proof of any facts determined by such judgment or decree. The reasons behind this rule are that the parties are different, and that the degree of proof in a civil case is less than that required in criminal case."). (The degree of proof in a civil case is also less than that required in a license suspension or revocation proceeding.)

13/ Although Section 626.621(4), Florida Statutes, is specifically referenced in only the first three of these counts, it appears that Respondent was on notice, in advance of the final hearing, that, in Counts IV and V (as in Counts I, II, and III) he was being charged with having engaged in conduct that violated, among other provisions, Section 626.621(4), Florida Statutes.

14/ "[U]nder section[] 626.561(1) . . ., the Department must establish that the agent acted willfully." Russell v. Department of Insurance, 668 So. 2d 276, 278 (Fla. 2d DCA 1996).

15/ "Lack of fitness or trustworthiness," within the meaning of Section 626.611(7), Florida Statutes, may be demonstrated by a single act of misconduct, if it is sufficiently serious. See Werner v. Department of Insurance and Treasurer, 689 So. 2d 1211, 1214 (Fla. 1st DCA 1997); Natelson v. Department of Insurance, 454 SO. 2d 31 (Fla. 1st DCA 1984).

16/ "[U]nder section[] . . . 626.611(10), the Department must establish that the agent acted willfully." Russell v. Department of Insurance, 668 So. 2d 276, 278 (Fla. 2d DCA 1996); see also Bowling v. Department of Insurance, 394 So. 2d 165, 170 (Fla. 1st DCA 1981)("Willfulness is a necessary element of a Section 626.611(10) violation.").

17/ "[S]ection 626.621(4) does not carry a requirement of willfulness." Russell v. Department of Insurance, 668 So. 2d 276, 278 (Fla. 2d DCA 1996).

18/ "These provisions [of Section 626.9541, Florida Statutes] are merely definitional and do not themselves authorize any disciplinary action." Werner v. Department of Insurance and Treasurer, 689 So. 2d 1211, 1214 (Fla. 1st DCA 1997).

19/ Section 626.681, Florida Statutes, provides, in pertinent part, as follows:

626.681 Administrative fine in lieu of or in addition to suspension, revocation, or refusal of license, appointment, or disapproval.--

(1) Except as to insurance agencies, if the department finds that one or more grounds exist for the suspension, revocation, or refusal to issue, renew, or continue any license or appointment issued under this chapter, or disapproval of a continuing education course provider, instructor, school official, or monitor groups, the department may, in its discretion, in lieu of or in addition to such suspension or revocation, or in lieu of such refusal, or disapproval, and except on a second offense or when such suspension, revocation, or refusal is mandatory, impose upon the licensee, appointee, course provider, instructor, school official, or monitor group an administrative penalty in an amount up to

$500 or, if the department has found willful

misconduct or willful violation on the part of the licensee, appointee, course provider,

instructor, school official, or monitor group up to $3,500. 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 or appointee in connection with any transaction as to which the grounds for suspension, revocation, or refusal related. . . . .

(3) The department may allow the licensee, appointee, or continuing education course provider, instructor, school official, or monitor group 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, appointee, course provider, instructor, school official, or monitor group fails to pay the penalty in its entirety to the department within the period so allowed, the license, appointments, approval, or status of that person shall stand suspended or revoked or issuance, renewal, or continuation shall be refused, as the case may be, upon expiration of such period.

20/ Section 626.691, Florida Statutes, provides, in pertinent part, as follows:

626.691 Probation.--

1. If the department finds that one or more grounds exist for the suspension, revocation, or refusal to renew or continue any license or appointment issued under this part, the department may, in its discretion, except when an administrative fine is not permissible under s. 626.681 or when such suspension, revocation, or refusal is mandatory, in lieu of or in addition to such suspension or revocation, or in lieu of such refusal, or in connection with any administrative monetary penalty imposed under

   s. 626.681, place the offending licensee or appointee 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 probation period. If during the probation period the department has good cause to believe that the probationer has violated a term or condition, it shall suspend, revoke, or refuse to issue, renew, or continue the license or appointment of the probationer, as upon the original grounds referred to in subsection (1).

21/ This count of the First Amended Administrative Complaint alleges misconduct on Respondent's part in connection with his "operat[ion of] the Emery [Richardson] Insurance Agency," and it makes no reference to any other insurance agency Respondent may have operated. Accordingly, whether Respondent breached any responsibilities he may had concerning the designation of a primary agent for the Magliore Insurance Agency (the insurance agency which is the subject of Petitioner's Exhibit 15) is an issue that is beyond the scope of the charges against Respondent.

22/ Respondent is guilty, not of failing to designate a primary agent for Emery Richardson, but of failing to properly notify the Department on an annual basis of his designation in accordance with Section 626.592(1), as it existed prior to October 1, 1998.

23/ Rule 4-231.150, Florida Administrative Code, applies where "it is found that a licensee has violated either [S]ection 626.611(14) or 626.621(8)," Florida Statutes.

24/ Most notable of these "mitigating circumstances" are that four of the five Dishonored Checks were written on the same day; Respondent did not know there were insufficient funds in the Account at the time he wrote the Dishonored Checks; Respondent eventually took steps to pay Ulico (albeit not the total amount of the Dishonored Checks); and Respondent was not involved in any similar incidents in his dealings with the 46 other insurance companies Emery Richardson Insurance represents.

25/ The most significant "aggravating circumstance" is that, upon learning that the Dishonored Checks had been returned unpaid, Respondent failed to fully remedy the situation in a timely manner.

COPIES FURNISHED:

Beverly D. Brewster, Esquire Department of Insurance Division of Legal Services

200 East Gaines Street

612 Larson Building

Tallahassee, Florida 32399-0333

Peter DeBello

Post Office Box 11438

Fort Lauderdale, Florida 33339-1438

Neale J. Poller, Esquire

550 Biltmore Way, Suite 700 Coral Gables, Florida 33134

Honorable Bill Nelson

State Treasurer and Insurance Commissioner Department of Insurance

The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300

Daniel Y. 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 within 15 days from the date of this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the Final Order in this case.

1 During the hearing on the Motion to Extend Time, Mr. Poller asserted that Respondent had neither given him a copy, nor told him about, the contents of Petitioner's Proposed Recommended Order.

2 Appended to Respondent's Proposed Recommended Order was an excerpt from the transcript of a deposition of Respondent which was not received into evidence at the final hearing. Inasmuch as the excerpted material is not a part of the evidentiary record in this case, it has not been considered by the undersigned.

3 This finding is based upon the testimony Mr. Joy and Respondent.

4 Check nos. 804, 805, 806, and 807 were accompanied by a cover letter from Mr. Joy explaining that the checks were for the amounts owed Ulico for the Subject Policies.

5 That these checks were sent is compelling evidence that, contrary to the assertion made by Respondent in this proceeding, there was no dispute concerning the amounts owed Ulico for the Subject Policies.

6 Cf. Section 832.05(7), Florida Statutes ("(7) REASON FOR DISHONOR, DUTY OF DRAWEE.–It is the duty of the drawee of any check, draft, or other written order, before refusing to pay the same to the holder thereof upon presentation, to cause to be written, printed, or stamped in plain language thereon or attached thereto the reason for the drawee's dishonor or refusal to pay it. In any prosecution under this section, the introduction in evidence of any unpaid and dishonored check,

draft, or other written order having the drawee's refusal to pay stamped or written thereon or attached thereto, with the reason therefor as aforesaid, is prima facie evidence of the making or uttering of such check, draft, or other written order, of the due presentation to the drawee for payment and the dishonor thereof, and that the same was properly dishonored for the reasons written, stamped, or attached by the drawee on such dishonored check, draft, or other written order. ").

7 The absence of such a dispute distinguishes the instant case from Russell v. Department of Insurance, 668 So. 2d 276 (Fla. 2d DCA 1996), a case cited by Respondent in his Proposed Recommended Order.

8 At hearing, Respondent, in his testimony, suggested that there were insufficient funds in the Account to cover the Dishonored Checks because checks that been deposited in the Account (prior to his drafting and signing the Dishonored Checks) had not cleared at the time the Dishonored Checks were presented to Savings of America for payment from the Account. The Department presented no evidence (in the form of bank statements or otherwise) demonstrating that this was not the cause of the insufficiency.

9 It does not appear that Respondent engaged in any intentionally deceitful or fraudulent conduct in his dealings with Ulico.

10 This finding is based exclusively upon the testimony of Mr. Faske, which the undersigned finds more credible than the testimony of Respondent to the contrary.

11 This Final Judgment was offered and received into evidence as Petitioner's Exhibit 6 without objection by Respondent.

12 The Department, which was not a party in the circuit court proceeding involving Mr. Faske and Respondent, cannot use the Final Judgment entered in that proceeding to prevent Respondent from relitigating, in this administrative proceeding, the issues resolved in the circuit court proceeding. See The Florida Bar v. Clement, 662 So. 2d 690, 697 (Fla. 1995)("Collateral estoppel is a judicial doctrine that prevents identical parties from relitigating issues that have previously been decided between them. . . . Although federal courts and some other jurisdictions no longer require mutuality of parties as a prerequisite to asserting the doctrine of collateral estoppel, Florida courts have held that collateral estoppel can be asserted only when the identical issue has been litigated between the same parties."). Indeed, the Final Judgment cannot even be used as proof of the facts determined by the judgment. Cf. 24 Fla. Jur. 2d, Evidence

and Witnesses, Section 435 ("It is a well settled rule that judgments and decrees rendered in civil cases are inadmissible in evidence [over objection] in criminal prosecutions as proof of any facts determined by such judgment or decree. The reasons behind this rule are that the parties are different, and that the degree of proof in a civil case is less than that required in criminal case."). (The degree of proof in a civil case is also less than that required in a license suspension or revocation proceeding.)

13 Although Section 626.621(4), Florida Statutes, is specifically referenced in only the first three of these counts, it appears that Respondent was on notice, in advance of the final hearing, that, in Counts IV and V (as in Counts I, II, and III) he was being charged with having engaged in conduct that violated, among other provisions, Section 626.621(4), Florida Statutes.

14 "[U]nder section[] 626.561(1) . . ., the Department must establish that the agent acted willfully." Russell v. Department of Insurance, 668 So. 2d 276, 278 (Fla. 2d DCA 1996).

15 "Lack of fitness or trustworthiness," within the meaning of Section 626.611(7), Florida Statutes, may be demonstrated by a single act of misconduct, if it is sufficiently serious. See Werner v. Department of Insurance and Treasurer, 689 So. 2d 1211, 1214 (Fla. 1st DCA 1997); Natelson v. Department of Insurance, 454 SO. 2d 31 (Fla. 1st DCA 1984).

16 "[U]nder section[] . . . 626.611(10), the Department must establish that the agent acted willfully." Russell v. Department of Insurance, 668 So. 2d 276, 278 (Fla. 2d DCA 1996); see also Bowling v. Department of Insurance, 394 So. 2d 165, 170 (Fla. 1st DCA 1981)("Willfulness is a necessary element of a Section 626.611(10) violation.").

17 "[S]ection 626.621(4) does not carry a requirement of willfulness." Russell v. Department of Insurance, 668 So. 2d 276, 278 (Fla. 2d DCA 1996).

18 "These provisions [of Section 626.9541, Florida Statutes] are merely definitional and do not themselves authorize any disciplinary action." Werner v. Department of Insurance and Treasurer, 689 So. 2d 1211, 1214 (Fla. 1st DCA 1997).

19 Section 626.681, Florida Statutes, provides, in pertinent part, as follows:

626.681 Administrative fine in lieu of or in addition to suspension, revocation, or

refusal of license, appointment, or disapproval.--

(1) Except as to insurance agencies, if the department finds that one or more grounds exist for the suspension, revocation, or refusal to issue, renew, or continue any license or appointment issued under this chapter, or disapproval of a continuing education course provider, instructor, school official, or monitor groups, the department may, in its discretion, in lieu of or in addition to such suspension or revocation, or in lieu of such refusal, or disapproval, and except on a second offense or when such suspension, revocation, or refusal is mandatory, impose upon the licensee, appointee, course provider, instructor, school official, or monitor group an administrative penalty in an amount up to

$500 or, if the department has found willful

misconduct or willful violation on the part of the licensee, appointee, course provider, instructor, school official, or monitor group up to $3,500. 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 or appointee in connection with any transaction as to which the grounds for suspension, revocation, or refusal related. . . . .

(3) The department may allow the licensee, appointee, or continuing education course provider, instructor, school official, or monitor group 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, appointee, course provider, instructor, school official, or monitor group fails to pay the penalty in its entirety to the department within the period so allowed, the license, appointments, approval, or status of that person shall stand suspended or revoked or issuance, renewal, or continuation shall be refused, as the case may be, upon expiration of such period.

20 Section 626.691, Florida Statutes, provides, in pertinent part, as follows:

626.691 Probation.--

1. If the department finds that one or more grounds exist for the suspension, revocation, or refusal to renew or continue any license or appointment issued under this part, the department may, in its discretion, except when an administrative fine is not permissible under s. 626.681 or when such suspension, revocation, or refusal is mandatory, in lieu of or in addition to such suspension or revocation, or in lieu of such refusal, or in connection with any administrative monetary penalty imposed under

   s. 626.681, place the offending licensee or appointee 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 probation period. If during the probation period the department has good cause to believe that the probationer has violated a term or condition, it shall suspend, revoke, or refuse to issue, renew, or continue the license or appointment of the probationer, as upon the original grounds referred to in subsection (1).

21 This count of the First Amended Administrative Complaint alleges misconduct on Respondent's part in connection with his "operat[ion of] the Emery [Richardson] Insurance Agency," and it makes no reference to any other insurance agency Respondent may have operated. Accordingly, whether Respondent breached any responsibilities he may had concerning the designation of a primary agent for the Magliore Insurance Agency (the insurance agency which is the subject of Petitioner's Exhibit 15) is an issue that is beyond the scope of the charges against Respondent.

22 Respondent is guilty, not of failing to designate a primary agent for Emery Richardson, but of failing to properly notify the Department on an annual basis of his designation in accordance with Section 626.592(1), as it existed prior to October 1, 1998.

23 Rule 4-231.150, Florida Administrative Code, applies where "it is found that a licensee has violated either [S]ection 626.611(14) or 626.621(8)," Florida Statutes.

24 Most notable of these "mitigating circumstances" are that four of the five Dishonored Checks were written on the same day; Respondent did not know there were insufficient funds in the Account at the time he wrote the Dishonored Checks; Respondent eventually took steps to pay Ulico (albeit not the total amount of the Dishonored Checks); and Respondent was not involved in any similar incidents in his dealings with the 46 other insurance companies Emery Richardson Insurance represents.

25 The most significant "aggravating circumstance" is that, upon learning that the Dishonored Checks had been returned unpaid, Respondent failed to fully remedy the situation in a timely manner.

Docket for Case No: 97-003553

Orders for Case No: 97-003553