vs.
Respondent.
) Case No. 01-4266PL
Notice was provided, and a formal hearing was held on February 25, 2002, in Tallahassee, Florida, and conducted by Harry L. Hooper, Administrative Law Judge with the Division of Administrative Hearings.
For Petitioner: Richard J. Santurri, Esquire
Whether Respondent's insurance license should be suspended or revoked or otherwise disciplined because Respondent violated the Florida Insurance Code.
The Department of Insurance (Department) filed an Administrative Complaint alleging three counts of wrongdoing with regard to Respondent on September 19, 2001. Respondent subsequently filed a Response to Administrative Complaint and submitted an Election of Rights which was dated October 18, 2001. The matter was forwarded to the Division of Administrative Hearings and filed on October 31, 2001.
The matter was set for hearing on January 14, 2002. On January 9, 2002, the Department moved to amend the Administrative Complaint. The motion was opposed by Respondent; nevertheless, the motion was granted after oral argument. The First Amended Administrative Complaint, which alleged but two counts of wrongdoing, was filed on January 9, 2002. On January 11, 2002, Respondent moved to continue the case. The motion was granted and the case was re-scheduled for February 25, 2002, and heard as scheduled.
The Department presented the testimony of one witness and offered four exhibits which were admitted. Respondent presented the testimony of one witness and testified in his own behalf.
Respondent offered one exhibit which was not admitted into evidence.
A Transcript was filed on March 18, 2002. Both parties filed Proposed Recommended Orders which were considered in the
preparation of the Recommended Order. References to statutes are to Florida Statutes (1999).
The Department is the agency with jurisdiction over licensing insurance agents pursuant to Chapter 626, Florida Statutes.
Respondent applied for a license with the Department as a non-resident life, health, and variable annuity agent by submitting an application which he signed on July 4, 1999. He was awarded nonresident insurance License No. D008927 on July 12, 1999.
Question seven on the July 4, 1999, application for licensure, inquired, "Has anyone ever obtained a judgement, or is there currently pending, any type of civil action against you individually or against any entity in which you are or were an officer, director, partner, or owner based upon allegations of fraud, misrepresentation or conversion or which in any way involved the subject of insurance?" Respondent checked a box which indicated a negative answer.
Because the application submitted by Respondent appeared to be correct, Respondent was issued the aforementioned license.
On July 4, 1999, when Respondent answered question seven, a judgment by default had been entered against Respondent by the Circuit Court of Maryland for Montgomery County, in a case
styled Paley, Rothman, Goldstein, Rosenberg & Cooper, Chartered, v. Daniel D. Manoff. The judgment was in the amount of $7,590.36 and was filed with the Clerk on July 6, 1994. The complaint which resulted in the judgment alleged that Respondent had failed to pay for legal services received. This complaint involved the breach of a contract. Therefore, Respondent's answer to question seven was correct, insofar as the unrevealed judgment is concerned, because the judgment did not involve a matter "based upon allegations of fraud, misrepresentation or conversion or which in any way involved the subject of insurance."
A complaint was filed against Petitioner on May 18, 1998, in the Circuit Court of Maryland for Montgomery County, styled First Financial Group, et al., v. Daniel Manoff, et al., v. The Guardian Life Insurance Company of America, et al. Respondent was a defendant in that case. The suit which was the subject of the complaint was unresolved on July 4, 1999, when Respondent answered question seven. The complaint in the First Financial Group case alleged that Respondent committed fraud. Because of this, Respondent incorrectly answered question seven.
When Respondent signed the application for an insurance license on July 4, 1999, he was aware, or was provided ample opportunity to be aware, that a truthful application was expected by the Department. This is because immediately above the signature line are the words, "Final Statement," and below those
words are explicit warnings as to the hazards of signing the application when the person providing the imprimatur has not provided correct information. The warnings include one which informs that signing a false statement is a second degree misdemeanor and another that states that the signature is made under penalties of perjury.
In addition to the foregoing, the "Final Statement" contains an oath which avers that, ". . . I have not withheld any information on myself that would in any way affect my qualifications."
The information sought by question seven is material to the decision as to whether the Department considered Respondent to be qualified to hold an insurance license. Had the information requested been timely supplied, Respondent would not have been awarded a license absent further inquiry into his experiences with the legal system in Montgomery County, Maryland.
Respondent worked for Agency 10 of the Berkshire Life Insurance Company in Rockville, Maryland, at the time he submitted the application for licensure which is the subject of this proceeding. The person charged with carrying out administrative duties at that agency was Kathy Cody. Among other duties, she was responsible for obtaining licenses and appointments for agents and managers in the Rockville field office.
When processing applications, Ms. Cody, and sometimes another administrator in the office, typically would solicit information from the agent, broker or manager requiring a license and would prepare an application. She did this for many people for many states. Respondent was licensed in a number of states and Ms. Cody assisted Respondent in obtaining some of those licenses. She does not specifically remember the application at issue. It was Ms. Cody's practice to submit completed application forms to the home office in Pittsfield, Massachusetts. If the paperwork was in order, the home office would send the applications to the appropriate state licensing agency.
Ms. Cody, or in any event, someone in the office other than Respondent, sent his Florida application to the home office. Respondent did not complete the entire application. He did, however, sign the application which meant that he swore to the accuracy of its contents.
Sue Carter processes license applications for the Department. She has engaged in this work since 1984. According to Ms. Carter, if an application is received which reveals an unsatisfied judgment, then further inquiry is made. According to Ms. Carter, it is the policy of the Department to refuse to license someone with a pending complaint alleging fraud. Therefore, she stated, if Respondent's application had revealed
the existence of the First Financial Group complaint, the Department would not have issued a license to Respondent.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of this proceeding pursuant to Sections 120.569 and 120.57(1), Florida Statutes.
The burden of proof is on the party asserting the affirmative of an issue before an administrative tribunal, Florida Department of Transportation v. J.W.C. Company, Inc., 396 So. 2d 778 (Fla. 1st DCA 1981). Therefore, the Department has the burden of proof. The standard to be met by the Department in this case is proof by clear and convincing evidence. Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987).
Section 626.611, Florida Statutes, provides as follows:
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:
Lack of one or more of the qualifications for the license or appointment as specified in this code.
Material misstatement, misrepresentation, or fraud in obtaining the license or appointment or in attempting to obtain the license or appointment.
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(7) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance.
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(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. . . .
Section 626.621, provides as follows:
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) Any cause for which issuance of the license or appointment could have been refused had it then existed and been known to the department. . . .
Respondent did not violate the provisions of Section 626.611(2), Florida Statutes, as alleged in Count I of the First Amended Administrative Complaint, because he answered the question correctly. No evidence was adduced indicating that having a judgment for not paying one's attorneys would disqualify an insurance license applicant or demonstrate a lack of fitness or trustworthiness to engage in the business of insurance. It also does not indicate a violation, especially not a willful violation, of the Florida Insurance Code.
Section 626.731(1), Florida Statutes, provides that, "The department shall not grant or issue a license as general lines agent to any individual found by it to be untrustworthy. . . ." Section 626.785(1), Florida Statutes,
provides that, "The department shall not grant or issue a license as life agent to any individual found by it to be untrustworthy.
. . ." Section 626.831(1), Florida Statutes, provides that, "The department shall not grant or issue a license as health agent to any individual found by it to be untrustworthy. "
Respondent violated the provisions of Section 626.611(1), Florida Statutes, as alleged in Count II of the First Amended Administrative Complaint, because he was untruthful when
he denied having pending against him a civil suit alleging fraud at the time of application. Section 626.611(7), Florida Statutes, as noted above, recites that the Department must deny a license to a person who has demonstrated a lack of trustworthiness. Sections 626.731(1), 626.785(1), and 626.831(1), Florida Statutes, all indicate that an insurance license should only be issued to persons who are trustworthy.
It is apparently the policy of the Department to refuse to license someone with a pending lawsuit alleging fraud. This is reasonable because a person with a pending lawsuit alleging fraud may eventually be determined by the court having jurisdiction over the suit to have committed fraud. One may reasonably conclude that a person who commits fraud is untrustworthy and the Department is entitled to have that knowledge when making the decision as to the fitness of an applicant to hold an insurance agent license.
In this case, the allegations in First Financial Group complaint alone, however, do not indicate that Respondent is untrustworthy. It is Respondent's submission of an application containing incorrect statements, in the face of warnings not to do so, which results in the conclusion that the Respondent is untrustworthy. Therefore, he lacked one of the qualifications for the license he received at the time of application, as contemplated by Section 626.611(1), Florida Statutes. Respondent
also demonstrated a lack of trustworthiness to engage in the business of insurance as contemplated by Section 626.611(7), Florida Statutes.
Respondent further made a material misstatement or misrepresentation in obtaining the license as contemplated by Section 626.611(2), Florida Statutes.
Rule 4-231.40, Florida Administrative Code, provides penalties for persons found guilty of violating Section 626.611, Florida Statutes, as follows:
4-231.080 Penalties for Violation of Section 626.611.
If it is found that the licensee has violated any of the following subsections of section 626.611, Florida Statutes, for which compulsory suspension or revocation is required, the following stated penalty shall apply:
(7) s. 626.611(7), F.S. -- suspension 6 months
That a final order be entered which finds that Respondent violated on one occasion, Section 626.611(1), (2) and (7), and Section 626.211(1), Florida Statutes, and which requires Respondent to surrender his non-resident life, health, and variable annuity insurance agent license.
DONE AND ENTERED this 8th day of April, 2002, in Tallahassee, Leon County, Florida.
HARRY L. HOOPER
Filed with the Clerk of the Division of Administrative Hearings this 8th day of April, 2002.
Richard J. Santurri, Esquire Department of Insurance Division of Legal Services
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.
