vs. ) Case No. 98-1597
Respondent. )
On August 5, 1998, a formal administrative hearing was held in this case by videoconference between Tampa and Tallahassee, Florida, before Carolyn S. Holifield, Administrative Law Judge, Division of Administrative Hearings.
For Respondent: Paul B. Johnson, Esquire
The issues for determination are: (1) whether Respondent violated the provisions of the Insurance Code as alleged in the Administrative Complaint by pleading guilty to a felony and failing to report such plea to the Petitioner; (2) whether the offense to which Respondent pleaded guilty is a crime involving
penalty should be imposed on Respondent's license as a non- resident life and health insurance agent.
On February 17, 1998, Petitioner, the Department of Insurance and Treasurer (Department), filed a two-count Administrative Complaint against Respondent, Perry Murray Wilson (Respondent), alleging various violations of the Insurance Code. Count I of the Administrative Complaint alleges that Respondent entered a plea of guilty to an offense that constituted a felony involving moral turpitude. Count II of the Administrative Complaint alleges that Respondent failed to report the guilty plea to the Department in violation of Section 626.621 (11), Florida Statutes. Based on the aforementioned allegations, the Department charges Respondent with violating Section 626.611(1),(7), (13), and (14), Florida Statutes, and Section 626.621(2) and (8), Florida Statutes. Respondent timely filed an Election of Rights form and requested a formal hearing. On
April 3, 1998, the matter was forwarded to the Division of Administrative Hearings for assignment of an administrative law judge to conduct the formal hearing.
At the formal hearing, the Department called no witnesses and had one exhibit received into evidence. Respondent testified on his own behalf and offered the deposition testimony (which was received as Respondent's Exhibit 1) of Marcia N. Davis, Certified Clinical Social Worker.
A transcript of the proceeding was filed on August 21, 1998.
Both parties timely filed proposed recommended orders.
At all times pertinent to this proceeding, Respondent was licensed in the State of Florida as a non-resident life and health insurance agent. Respondent has been a licensed insurance agent for twenty-four years, having first been licensed in Florida in 1994. In addition to holding a Florida insurance license, Respondent is also licensed as an insurance agent in North Carolina.
On or about January 13, 1997, an information was filed in the Sixth Judicial Circuit, in and for Pasco County, Florida, Case No. 97-00245CFAWS, charging Respondent with one count of scheme to defraud. This offense constitutes a felony.
On September 4, 1997, Respondent pled guilty to the charge of scheme to defraud. The judge withheld adjudication of guilt, placed Respondent on probation for three years, and indicated that he would consider early termination of probation after Respondent served 50 percent of his sentence.
On September 12, 1997, the court entered a written Order Withholding Adjudication of Guilt and Placing Defendant on Probation that stated in part the following:
It appearing to the satisfaction of the court that you are not likely again to engage in a criminal course of conduct, and that the ends of justice and the welfare of society do not
require that you should presently be adjudged guilty and suffer the penalty authorized by law.
Now, therefore, it is ordered [and] adjudged that the adjudication of guilt [and] imposition of sentence are hereby withheld, [and] that you are hereby placed on probation for a period of three years under the supervision of the Department of Corrections subject to the Florida law. . . .
Respondent did not inform the Department that he pled guilty to a felony and was on probation as required by Section 626.621 (11), Florida Statutes. The reason that Respondent failed to report the guilty plea and probation was that he believed that it was unnecessary because he was not adjudicated guilty.
The aforementioned criminal charge against Respondent and his ultimate guilty plea to the felony of scheme to defraud stemmed from an incident that occurred in 1996. At that time, Respondent was unable to obtain automobile loans due to his bad credit resulting from his divorce. In order to obtain a loan from First Union Bank to purchase automobiles for himself, his wife, and his daughter, Respondent used the name and social security number of his brother, Mark Wilson. As a result of using his brother's name and social security number, Respondent was able to obtain a loan for $43,000.00 to purchase three vehicles, a 1993 Grand Prix, a 1990 Eagle Talon, and a 1995 Lincoln.
Several months after Respondent obtained the loan, his
brother, Mark Wilson, discovered the loans were on his credit record. Thereafter, Mark Wilson's credit record was corrected and Respondent entered into a stipulated settlement with First Union, whereby he agreed to pay the loans and First Union's attorney's fees incurred in connection with the case.
Respondent's brother did not file charges against him.
Respondent was current on the loan payments when Mark Wilson, Respondent's brother, learned that loans had been taken out in his name. At the time of the hearing, on August 5, 1998, the loans had been paid down to approximately $7,800.00, and Respondent was current in paying the balance. No person or entity lost any money as result of Respondent's actions.
At the time Respondent used the aforementioned deception to obtain the automobile loans, he was very depressed and was undergoing psychological therapy by Marcia N. Davis, a licensed therapist in Asheville, North Carolina.
Respondent has continued to undergo psychological treatment by Marcia N. Davis. Her current prognosis is that Respondent has made definite improvement and that she would not expect that he would break the law again.
The criminal charge against Respondent was not related to any action taken by Respondent in his role as a licensed insurance agent.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has
jurisdiction of the subject matter and the parties pursuant to Section 120.57(1), Florida Statutes.
Pursuant to Section 626.611, Florida Statutes, the Department is empowered to revoke, suspend, or otherwise discipline the licenses of insurance agents guilty of conduct enumerated in that provision.
Because the Department has sought penalties which may include of revocation of Respondent's licenses, it has the burden of proving by clear and convincing evidence that he committed the violations alleged in the Amended Administrative Complaint. Department of Banking and Finance, Division of Securities and Investor Protection vs. Osborne Stern and Co., 670 So. 2d 292 (Fla. 1996); Ferris vs. Turlington, 510 So. 2d 292 (Fla. 1987).
Clear and convincing evidence requires that the evidence must be found to be credible, facts to which witnesses testify must be distinctly remembered, testimony must be precise and explicit, and witnesses must be lacking in confusion as to facts in issue; evidence must be lacking in confusion as to facts in issue; evidence must be of such weight that it produces in the mind of the trier of fact a firm belief or conviction without hesitancy, as to the truth of the allegations sought to be established. Slomowitz vs. Walker 429 So. 2d (Fla. 4th DCA 1983).
The Administrative Complaint in this case contains two counts. In order to prevail in this proceeding, the Department
must prove the factual allegations contained therein by clear and convincing evidence.
Count I of the Administrative Complaint alleges that Respondent was charged with and entered a plea of guilty to one count of obtaining property by scheme to defraud, a felony as defined in Section 817.034(4)(a), Florida Statutes. Count II of the Administrative Complaint alleges that Respondent failed to inform the Department of the aforementioned guilty plea. The Department charges that the alleged action of Respondent contained in Count I constitutes the basis for disciplinary action pursuant to Section 626.621(2) and (8), Florida Statutes. Furthermore, the Department charges that the allegation in Count II is the basis for disciplinary action under Section 626.621(2) and (11), Florida Statutes.
If it is determined that an agent has committed one or more of the offenses enumerated in Section 626.621, Florida Statutes, the Department has the discretion to revoke, suspend, or otherwise discipline the license or appointment of that agent. Pertinent to this case is Section 626.621, Florida Statutes, which provides in relevant part the following:
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, 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 626.621.
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(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.
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(8) Having been found guilty of or having pleaded guilty or nolo contendre to a felony punishable by imprisonment of
1 year or more under the law of the United States or of any state thereof or under the law of any other country, without regard to whether a judgment of conviction has been entered by the court having jurisdiction of such cases.
(11) Failure to inform the Department in writing within 30 days after pleading guilty or nolo contendre to, or being convicted or found guilty of, any felony or a crime punishable by imprisonment of
1 year or more under the law of the United States or any state thereof, or under the law of any country without regard to whether a judgment of conviction has been entered by the court having jurisdiction of the case.
With regard to Count I of the Administrative Complaint, there is no dispute that Respondent pled guilty to a crime which constitutes a felony in the State of Florida. In fact, Respondent admitted and has never denied that he entered the guilty plea. Because it has been established that Respondent pled guilty to the charged felony, he is subject to disciplinary
action pursuant to Section 626.621(8), Florida Statutes.
As to Count II of the Administrative Complaint, it is alleged that Respondent failed to notify the Department that he pled guilty to a felony charge. Respondent acknowledged that he failed to inform the Department of his plea. However, Respondent indicated that his failure to provide notice was not intentional, but was based on his belief that notice was not required because the court withheld adjudication. Notwithstanding his subjective understanding to the contrary, Respondent was required to report his guilty plea to the Department "without regard to whether a judgment of conviction has been entered by the court having jurisdiction of the case." Having failed to notify the Department of the plea, Respondent committed an offense for which
the Department may discipline his insurance license pursuant to Section 626.621(11), Florida Statutes.
Clearly, the offenses committed by Respondent are offenses for which the Department is authorized to take disciplinary action as authorized in Section 626.621(8) and (11), Florida Statutes. However, the subject offenses do not appear to fall within the purview of Section 626.621(2), Florida Statutes. While Subsections (8) and (11) of Section 626.621, Florida Statutes, enumerate specific offenses which may be the basis for disciplinary action, Section 626.621(2), Florida Statutes, is more general. The latter provision authorizes the Department to impose disciplinary action "for 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." In the instant case, the Department has cited no specific provision of the Insurance Code that was violated by Respondent's conduct. Likewise, the Department has failed to establish that the offenses committed by Respondent violated any law applicable to the insurance business that occurred in the course of dealing under Respondent's license or appointment.
Based on the foregoing reasons, it is concluded that the acts committed by Respondent are offenses for which the Department may discipline Respondent's license under Section 626.621(8) and (11), Florida Statutes. The offenses committed by Respondent, however, do not fall within the purview of Section
626.621(2), Florida Statues.
In both Counts I an II of the Administrative Complaint, the Department also charged that because Respondent pled guilty to a felony and failed to report such plea to the Department, he is subject to disciplinary action pursuant to Section 626.611(1), (7), (13), and (14), Florida Statutes.
Section 626.611, Florida Statutes, mandates suspension or revocation of an agent's license if the Department finds that such agent engaged in conduct within the scope of that provision. That section provides in pertinent part the following:
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, 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.
Lack of one or more of the qualifications for the license or permit as specified in this code.
(7) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance.
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.
Having been found guilty of or having pleaded guilty or nolo contendre to a felony or a crime punishable by imprisonment of 1 year or more under the law of the United States or of any state
thereof or under the law of any other country which involves moral turpitude, without regard to whether a judgment of
conviction has been entered by the court having jurisdiction of such cases.
Based on the aforementioned provisions, the Department charged that as a result of Respondent's engaging in the subject conduct, he (1)lacks one or more of the qualifications for an insurance license or permit; (2) lacks the fitness or trustworthiness to engage in the insurance business; (3) willfully failed to comply with an order or rule of the Department or willfully violated a provision of the Insurance Code; and (4) pled guilty to a felony which involves moral turpitude. See Section 626.611 (1), (7), (13), and (14), Florida Statutes.
The Department failed to establish by clear and convincing evidence that because Respondent committed the acts which are the subject of this proceeding, he (1)lacks one or more of the qualifications required for an insurance license and (2) has demonstrated lack of fitness or trustworthiness to engage in the business of insurance.
While the underlying conduct of Respondent was criminal, neither of the acts involved the insurance business nor were such actions characteristic of Respondent. No evidence was presented by the Department that prior to this incident, Respondent had been subject to disciplinary action by the Department. Similarly, the Department did not dispute either the finding of the Court that Respondent is not "likely to engage in a criminal course of conduct," or the same conclusion and opinion
of Respondent's therapist.
In regard to Count I of the Administrative Complaint, the Department charged that by Respondent's pleading guilty to a felony, he willfully failed to comply with or willfully violated a rule or order of the Department or a provision of the Insurance Code and, accordingly, is subject to disciplinary action under Section 626.611(13), Florida Statutes. The Department has failed to prove this charge.
As to Count II, the Department failed to prove that Respondent's failure to notify the Department of his guilty plea was willful. Consequently, there is no basis for the Department to discipline Respondent's license under Section 626.611(13), Florida Statutes. In order to establish a violation under this provision, the evidence must demonstrate that in failing to notify the Department of his guilty plea, Respondent acted in a "willful" manner. Bowling vs. Department of Insurance, 394 So. 2d 165 (Fla. 1st DCA 1981). For purposes of administrative proceedings, "willfulness is satisfied by a conscious intentional act." See State Department of Highway Safety and Motor Vehicles vs. Taylor, 456 So. 2d 550, 552 (Fla. 3rd DCA 1984). Here, the Department presented no evidence that Respondent's action of failing to report his guilty plea was a willful violation of the Insurance Code.
Finally, the Administrative Complaint alleges that the felony offense to which Respondent entered a guilty plea is one
that involves moral turpitude. According to Section 626.611(14), Florida Statutes, the entry of a guilty plea to a felony offense which involves moral turpitude is grounds for compulsory revocation or suspension of an agent's license without regard to whether a judgment of conviction has been entered by the court.
Having established that Respondent pled guilty to a felony offense, it must next be determined that the offense involved moral turpitude.
The Supreme Court of Florida has defined moral turpitude as follows:
Moral turpitude involves the idea of inherent baseness or depravity in the private or social relations or duties owed by man to man or by man to society. (citations omitted). It has also been defined as anything done contrary to justice, honesty, principle, or good morals, though it often involves the question of intent as when unintentionally committed through error of judgment when wrong was not contemplated.
Pearl vs. Florida Board of Real Estate, 394 So. 2d 189, 190 (Fla. 3rd DCA 1981) citing State ex rel. Tullidge vs. Hollingsworth, 108 Fla. 607, 146 So. 660, 661 (1933).
Here, Respondent pled guilty to engaging in a scheme to defraud, a second degree felony. Section 817.034(4),Florida Statutes. The term "scheme to defraud" is defined as "a systematic, on-going course of conduct with the intent to defraud one or more persons, or with the intent to obtain property from one or more persons by false or fraudulent pretenses,
representations, or promises. . . ." Section 817.034(3), Florida Statutes.
Based on a review and careful consideration of applicable law, it is determined that the offense to which Respondent pled guilty is a felony that involves moral turpitude. Consequently, Respondent is subject to the compulsory disciplinary measures authorized by the Section 626.611(14), Florida Statutes.
The disciplinary guidelines of the Department of Insurance found in Rules 4-231.080, 4-231.090, and 4-231.150, Florida Administrative Code, establish penalties that are to be imposed when a licensee is found guilty of the offenses enumerated in Sections 626.611 and 626.621, Florida Statutes. The penalty for engaging in the conduct described in Section 626.621(11), Florida Statutes, is a suspension of three months. Rule 4-231.090, Florida Administrative Code. The penalty for committing the offenses described in Sections 626.611(14) and 626.621(8), Florida Statutes, ranges from a two-month suspension to revocation. In this case, where the licensee has not been adjudicated guilty, but has pled guilty to a felony offense involving moral turpitude, and the conduct is not related to the
insurance license, "the penalty shall be a six-month suspension." Rule 4-231.150(2)(c), Florida Administrative Code.
The offense giving rise to the charges in this in Counts I and II are identical. Therefore, notwithstanding the
determinations that Respondent is guilty of engaging in conduct alleged in Counts I and II, the imposition of penalties is not enhanced. The penalty imposed pursuant to conduct described in Sections 626.611(14), 626.621(8), and 626.611(11), Florida Statutes, shall run concurrently.
Rule 4-231.160, Florida Administrative Code, requires the Department of Insurance to take into consideration the following aggravating or mitigating factors in reaching the appropriate penalty in each case. That rule states:
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.
For penalties other than those assessed under rule 4-231.150:
willfulness of licensee's conduct;
degree of actual injury to victim;
degree of potential injury to victim;
age or capacity of victim;
timely restitution;
motivation of agent;
financial gain or loss to agent;
cooperation with the Department;
vicarious or personal responsibility;
related criminal charge; disposition;
existence of secondary violations in counts;
previous disciplinary orders or prior warning by the Department; and
other relevant factors.
For penalties assessed under rule 4-
231.150 for violations of sections 626.611(14) and 626.621(8), F.S.:
Number of years that have passed
since criminal proceeding;
Age of licensee at time the crime was committed;
Whether licensee served time in jail;
Whether or not licensee violated criminal probation;
Whether or not licensee is still on criminal probation;
Whether or not licensee's actions or behavior resulted in substantial injury to victim;
Whether or not restitution was, or is being, timely paid;
Whether or not licensee's civil rights have been restored; and
other relevant factors.
In arriving at an appropriate penalty in the instant case, consideration has been given to the disciplinary guidelines set forth in Rule 4-231.160(1) and (2), Florida Administrative Code. Based on a balancing of these guidelines, an appropriate penalty in this case is the suspension of Respondent's license for a period of two months.
Based on the foregoing Findings of Fact and Conclusions of Law, it is Recommended that a Final Order be entered suspending the license of Respondent, Perry Murray Wilson, for two months.
DONE AND ENTERED this 30th day of September, 1998, in Tallahassee, Leon County, Florida.
CAROLYN S. HOLIFIELD
Filed with the Clerk of the Division of Administrative Hearings this 30th day of September, 1998.
Paul B. Johnson, Esquire Post Office Box 3416 Tampa, Florida 33601
Daniel Y. Sumner, General Counsel Department of Insurance and Treasurer The Capitol, Lower Level 26 Tallahassee, Florida 32399-0300
Department of Insurance and Treasurer The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
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.
