STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MARIE M. OSTROWSKI,

Petitioner,

vs.

DEPARTMENT OF FINANCIAL SERVICES,

Respondent.

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) Case No. 03-4396

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RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly-designated Administrative Law Judge, Carolyn S. Holifield, held a formal hearing in the above-styled case on January 27, 2004, by videoconference between Tampa and Tallahassee, Florida.

APPEARANCES

For Petitioner: Marie M. Ostrowski, pro se

8649 Hawbuck Street

Trinity, Florida 34655

For Respondent: Ladasiah Jackson, Esquire

Department of Financial Services 612 Larson Building

200 East Gaines Street Tallahassee, Florida 32399-0333

STATEMENT OF THE ISSUES

Whether Petitioner's application for licensure as a customer representative should be granted.

PRELIMINARY STATEMENT

On or about February 28, 2003, Petitioner, Maria M. Ostrowski, submitted an application for a customer representative license pursuant to the provisions of

Chapter 626, Florida Statutes (2003). In a Notice of Denial (Notice or Notice of Denial) dated October 2, 2003, Respondent, the Department of Financial Services (Department), denied Petitioner's application. The Notice alleged that Petitioner had failed to disclose on her application that in 1992, she had "entered a plea of nolo contendere to the charge of Uttering a Forged Check, a Felony." The Notice indicated that this factual allegation required the Department to deny the application for licensure pursuant to Sections 626.611(1), (2), (7), and (14) and 626.7351, Florida Statutes (2003), and Florida Administrative Code Rule 4-211.042(8). Petitioner disputed the factual allegations and timely requested a hearing.

On or about November 24, 2003, the Department forwarded the case to the Division of Administrative Hearings for the conduct of a formal hearing. By notice issued December 9, 2003, the final hearing was scheduled for January 27, 2004.

On January 23, 2004, the Department filed a Motion for Leave to Amend the Notice of Denial (Motion). The Motion represented that the Amended Notice of Denial (Amended Notice) was to "specifically change the criminal offense, which was the

basis for the denials and to add/delete more specific language to the statutory and rule citations, which was listed in the original Notice of Denial." As support for the Motion, the Department stated that the Amended Notice reflected the correction of the criminal offense listed on the Notice from "Uttering a Forged Check, a Felony," to "Issuing a Worthless Check, which is a Misdemeanor."

The Amended Notice deleted the references to Section 626.611(14), Florida Statutes (2003), which authorizes the Department to deny applications of persons who have been found guilty of or have plead guilty or nolo contendere to a felony. Next, the Amended Notice added more language from Florida Administrative Code Rule 4-211.042(4) and deleted language from Florida Administrative Code Rule 4-211.042(8). The latter rule concerns the required waiting periods for an applicant whose law enforcement record includes a single felony crime. Finally, the Amended Notice added Florida Administrative Code Rule

4-211.042(5) as a basis for denying Petitioner's application for licensure. That rule authorizes denial of licensure for a misdemeanor involving breach of trust or dishonesty; or a misdemeanor in combination with other conduct, if such conduct reflects on the applicant's character, fitness, or trustworthiness to engage in the business of insurance.

Prior to the evidentiary part of the hearing, the Department's Motion was addressed by the parties and considered by the undersigned. Petitioner stated that the factual allegation in the Amended Notice accurately reflected that she had plead guilty to "Issuing a Worthless Check, a Misdemeanor," and thus, she did not object to or oppose the Motion. The Motion was granted and the hearing proceeded on the allegations in the Amended Notice.

At hearing, Petitioner testified on her own behalf and had four exhibits, all letters from co-workers and/or employees, received into evidence. The Department presented no witnesses, but had six exhibits received into evidence. The record was left open until February 3, 2004, for Petitioner to late-file her exhibits. As of the date of this Recommended Order, Petitioner's exhibits have not been filed.

A Transcript of the hearing was filed on February 9, 2004. Petitioner has not filed a proposed recommended order as of the date of this Recommended Order. On February 26, 2004, a letter of support from Linda Hayes was filed on Petitioner's behalf.

However, because the letter was not received into evidence of hearing, it has not been considered in preparation of this Recommended Order. The Department filed its Proposed Recommended Order on February 23, 2004.

FINDINGS OF FACT

Based on the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made:

1. Petitioner, Marie Ostrowski, submitted an application for licensure as a customer representative. The application was completed and executed by Petitioner on or about February 28, 2003.

2. Chapter 626, Florida Statutes (2003), creates jurisdiction for Respondent, Department of Financial Services, to issue the license and regulate Petitioner in its use.

   
   

   was:

3. One of the questions to be answered in the application

   
   

   Have you ever been charged, convicted, found guilty, or pled guilty or nolo contendere (no contest) to a crime under the laws of any municipality, county, state, territory or country, whether or not adjudication was withheld or a judgment of conviction was entered? Yes/No

   
   

   Petitioner typed or entered "N" in the space next to the question indicating "no" as the answer.

4. Above the signature Petitioner placed on the application is language, which states in pertinent part:

   I do solemnly swear that all answers to the foregoing questions and statements are true and correct to the best of my knowledge and belief . . .

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   Whoever knowingly makes a false statement in writing with the intent to mislead a public servant in the performance of his/her official duty shall be guilty of a misdemeanor of the second degree.

   
   

   Under penalties of perjury I declare that I have read the foregoing application for license and that the facts stated in it are true. I understand that the misrepresentation of any fact required to be disclosed through this application is a violation of the Florida Insurance and Administrative Codes and may result in the denial of my application and/or the revocation of my insurance license.

   
   

5. In reviewing and considering Petitioner's application, the Department conducted a background check of Petitioner. Based on its criminal background check, the Department determined that, contrary to the representations in the application in response to the question concerning Petitioner's criminal history, Petitioner had a criminal history.

6. On July 15, 1992, in State of Florida vs. Marie Pallante [Petitioner], Circuit Court of Pinellas County, Florida, Criminal Division, Case No. CRC91-21372CFANO-C, Petitioner entered a plea of nolo contendere to "Issuing a Worthless Check." At the time of the criminal matter referenced herein, Petitioner's name was Marie Pallante.

7. On July 15, 1992, the Court accepted the plea, and withheld adjudication, and ordered Petitioner to pay court costs

   of $100.00 within 60 days and to pay restitution in the amount of $100.00 within 60 days to Michael Pallante, who, at that time, was her estranged or former husband.

8. The Clerk of the Circuit Court issued a Satisfaction of Judgment/Fine giving notice that the costs in the amount of

   $100.00 levied against Petitioner in Case No. CRC91-21372CFANO-C on July 15, 1992, was paid and satisfied in full on

   September 14, 1992.

   
   

9. Petitioner also paid the restitution to her former or estranged husband as required by the Court in Case

   No. CRC91-21372CFANO-C.

   
   

10. The underlying incident which led to the criminal charge being brought against Petitioner and resulted in her entering the nolo contendere plea, occurred on or about November 11, 1991, and involved a check written to a Publix Supermarket. At or near the time of the incident, Petitioner's estranged husband had her name removed from their previously joint checking account without her knowledge. This action was taken by Mr. Pallante soon after Petitioner filed for, and obtained, a restraining order against him.

11. Prior to Petitioner's applying for the application, which is the subject of this proceeding, she mistakenly believed that based on her attorney's representations in the above-

    referenced 1992 criminal matter, the record in the matter was sealed and/or expunged.

12. At all times relevant to this proceeding, Petitioner was employed by Mercury Insurance Company (Mercury). At the time Petitioner was employed by Mercury, she advised the appropriate personnel of the 1991 incident and the 1992 plea of nolo contendere. However, neither the criminal charge nor Petitioner's subsequent plea of nolo contendere was reflected in the background check done or procured by Mercury.

13. Apparently, Petitioner answered the subject question on the application inappropriately based on her mistaken belief that her criminal record had been sealed and/or expunged. Petitioner's belief also seemed to be supported by the fact that no criminal record appeared in a previous criminal background check conducted by her employer, Mercury.

14. The subject question, quoted in paragraph 3 above, was not ambiguous and contemplated that an applicant answer the question regarding any crime with which the applicant had been "charged, convicted, found guilty, or pled nolo contendere (no contest) . . . whether or not adjudication was withheld."

15. In light of the clarity of the question, it is unreasonable to believe that Petitioner did not understand the question and appreciate that the answer to the question in the application was untruthful.

16. By signing the application according to the instructions for the oath and by her signature, Petitioner acknowledged the consequences of her choice to provide the wrong answer about her criminal history as constituting a violation of the Florida Insurance Code.

17. Prior to and subsequent to the 1992 criminal matter discussed above, Petitioner has not been involved in any other criminal activity or incident.

    CONCLUSIONS OF LAW

    
    

18. The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of these proceedings pursuant to Sections 120.569 and 120.57(1), Florida Statutes (2003).

19. The Department has jurisdiction over Petitioner's application for licensure as a customer representative pursuant to Chapter 626, Florida Statutes (2003).

20. As an applicant, Petitioner bears the general burden of proving entitlement to a license. Florida Department of

    Transportation v. J.W.C. Co., Inc., 396 So. 2d 778 (Fla. 1st DCA 1981). Petitioner must show by a preponderance of the evidence that she meets all of the relevant statutory criteria to satisfy this burden. Respondent has particularly broad discretion in determining the fitness of applicants. Department of Banking

    and Finance v. Osborne Stern & Co., 670 So. 2d 932, 934 (Fla. 1996).

21. The Department seeks to deny Petitioner's application for a license as a customer representative.

22. As grounds for that action, the Department refers to Sections 626.611 and 626.7351, Florida Statutes (2003).

23. Section 626.611, Florida Statutes (2003), provides in pertinent part:

    Grounds for compulsory refusal, suspension, or revocation of agent's, title agency's, adjuster's, customer representative's, service representative's, or managing general agent's license or appointment.-- The department or office shall deny an application for, suspend, revoke, or refuse to renew or continue the license or appointment of any applicant, agent, title agency, 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:

    
    

    1. Lack of one or more of the qualifications for the license or appointment as specified in this code.

       
       

    2. 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. . . .

       
       

24. Section 626.7351, Florida Statutes (2003), provides in pertinent part:

    Qualifications for customer representative's license.-- The department shall not grant or issue a license as customer representative to any individual found by it to be untrustworthy or incompetent . . . .

    
    

25. Florida Administrative Code Rule 4-211.042 addresses the effect of law enforcement records on applications for licensure and provides in relevant part:

    1. General Policy Regarding Conduct Prior to Licensure. The Department is concerned with the law enforcement record of applicants for the purpose of ascertaining from those records whether the person would represent a significant threat to the public welfare if licensed under Chapter 626, Florida Statutes. It is no part of the Department’s responsibilities, and the Department does not attempt, to "penalize", "discipline", or "punish" any person concerning any conduct prior to licensure.

       
       

    2. Duty to Disclose Law Enforcement Record. Every applicant shall disclose in writing to the Department the applicant’s entire law enforcement record on every application for licensure, as required therein, whether for initial, additional, or reinstatement of licensure. This duty shall apply even though the material was disclosed to the Department on a previous application submitted by the applicant.

    3. Policy Specifically Concerning Effect of Criminal Records.

       
       

       1. The Department interprets Sections 626.611(14) and 626.621(8), Florida Statutes, which subsections relate to criminal records, as applying to license application proceedings. The Department interprets those statutes as not limiting consideration of criminal records to those crimes of a business-related nature or committed in a business context. More specifically, it is the Department’s interpretation that these statutes include crimes committed in a non-business setting, and that such crimes are not necessarily regarded as less serious in the license application context than are crimes related to business or committed in a business context.

          
          

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    4. Effect of Failure to Fully Disclose Law Enforcement Record on Application.

       
       

       1. The Department finds that all matters that are part of an applicant’s law enforcement record are material elements of the application, and finds that the omission of any part of the law enforcement record required to be disclosed on the application is a material misrepresentation or material misstatement in and of itself. The applicant shall have violated Section 626.611(2) or 626.621(1), Florida Statutes, if the applicant fails to provide the Department with the documentation required by this rule.

          
          

       2. 1. If an applicant fails to fully and properly disclose the existence of law enforcement records, as required by the application, the application will be denied and a waiting period will be imposed before the applicant may reapply for any license.

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          1. The waiting period shall begin on the later of:

             
             

             1. The date that the Department issues a letter or notice of denial of the application, or

                
                

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          2. Waiting periods shall be calculated as follows:

          
          

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          c. Omission of any arrest, pending criminal charges, pre-trial intervention, or other part of the law enforcement record required to be disclosed on the application, add 1 year.

          
          

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          (d) After the waiting period has elapsed, the Department shall consider the application if it is resubmitted in good form with applicable fees, and licensure shall be granted if the licensee then meets all the requirements and criteria for licensure as set out in the then applicable rules and statutes.

          
          

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    5. Misdemeanor Crimes

       
       

       (a) Application for licensure shall not be denied or delayed based solely on the fact that an applicant was found guilty of, or pled guilty or nolo contendere to, a misdemeanor, unless the misdemeanor is an insurance-related misdemeanor or a misdemeanor involving breach of trust or dishonesty; provided further, that repeated misdemeanors, or a misdemeanor in combination with other conduct shall merit

       denial of licensure if they reflect on an applicant’s character, fitness, or trustworthiness to engage in the business of insurance.

       
       

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       (c) The Department shall not impose any waiting period pursuant to this rule where the only crime in an applicant’s law enforcement record is a single misdemeanor crime that results from the applicant’s passing of a worthless check, or obtaining property in return for a worthless check, and the amount of the check or checks involved in the single misdemeanor crime is

       $500 or less. However, this subparagraph shall not apply where a misdemeanor crime resulting from the applicant’s passing of a worthless check, or obtaining property in return for a worthless check is not the only crime in an applicant’s law enforcement record. . . .

       
       

26. Petitioner acknowledged that she did not disclose information concerning her law enforcement record on the application for licensure as a customer representative. In accordance with the provisions of Florida Administrative Code Rule 4-211.042(4)(a), all matters that are a part of an applicant's law enforcement record are material elements of the application and the omission of any part of such record required to be disclosed is a material misrepresentation or misstatement and is a violation of Section 626.611(2) or 626.621(1), Florida Statutes (2003).

27. Here, the Department properly denied Petitioner's application based on Section 626.611(2), Florida Statutes

    (2003), which authorizes such denial if an applicant makes a material misstatement or misrepresentation in attempting to obtain a license or appointment.

28. Based on the evidence adduced at hearing, there was no showing that the provisions cited in Sections 626.611(7) and 626.7351, Florida Statutes (2003), related to lack of fitness or trustworthiness, are a proper basis for denying Petitioner's license.

29. Petitioner's credible testimony was that she did not disclose the information regarding her law enforcement record because she believed that the record had been expunged or sealed. According to Florida Administrative Rule 4-211.042, "an applicant is not required to disclose or acknowledge, and is permitted to affirmatively deny, any arrest or criminal proceeding," if the record has been legally and properly expunged or sealed by order of a court prior to the time of the application. However, in this case, contrary to Petitioner's belief, her law enforcement record had not been expunged or sealed at the time she completed and submitted her application. Thus, she was required to disclose her nolo contendere plea to passing a worthless check, a misdemeanor, regardless of the circumstances that led to the criminal charge and the plea.

30. Petitioner's failure to disclose the law enforcement record is clearly grounds for denial of her application to be

licensed as a customer representative. However, pursuant to Florida Administrative Code Rule 4-211.042(4)(b) and (c), Petitioner is eligible to resubmit another application one year from the date the Department issued the Notice.

RECOMMENDATION

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

RECOMMENDED that the Department of Financial Services enter a final order denying Petitioner's application for a customer representative license.

DONE AND ENTERED this 31st day of March, 2004, in Tallahassee, Leon County, Florida.

S

CAROLYN S. HOLIFIELD

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 31st day of March, 2004.

COPIES FURNISHED:

Ladasiah Jackson, Esquire Department of Financial Services 612 Larson Building

200 East Gaines Street Tallahassee, Florida 32399-0333

Marie M. Ostrowski 8649 Hawbuck Street

Trinity, Florida 34655

Honorable Tom Gallagher Chief Financial Officer

Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300

Mark Casteel, General Counsel Department of Financial Services 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.

Docket for Case No: 03-004396

Orders for Case No: 03-004396