The Petitioner excepts to Finding of Fact #31 of the Recommended Order, specifically the first sentence which states, "The evidence reveals that the Respondent and possibly members of his family also invested in the 21st Century promissory notes." The Petitioner argues that this Finding of Fact was based on unsupported hearsay and was inappropriately used to support several Conclusions of Law. The Petitioner states that the evidence was only that the Respondent told consumers that he had invested in the 21st Century promissory notes, but that there was no documentary evidence in the record to support this Finding of Fact.
Section 90.803(18)(a), Florida Statutes provides an exception to the hearsay rule, even though the declarer is available as a witness, namely, an admission, which is "a statement that is offered against a party and is the party's own statement in either an individual or a representative capacity."
A learned treatise on this exception to the hearsay rule states, "Admissions by a party opponent have historically been admissible as substantive evidence...There is no requirement under section 90.803(18), or in the reported decisions that the admissions be against a party's interest. The common name of the exception - admission - may be misleading since there is no requirement that the adversary admit anything in the statement or that it be against the interest of the party making the statement. A more precise term for the exception is 'statement by a party opponent'." C. Ehrhardt, Florida Evidence§ 803.18 (2004 Edition).
The information about the Respondent's investment in the 21st Century promissory notes was elicited by the Petitioner, on direct examination of the Petitioner's investigator (Tr.-p.183) and incorporated into Petitioner's Exhibit 17 offered and admitted into evidence. Said testimony would fall under the admission of a party exception to the hearsay rule. Accordingly, Petitioner's exception is rejected.
The Petitioner excepts to Conclusion of Law #38 of the Recommended Order and states that the Administrative Law Judge improperly found as a matter of law that the Respondent did not violate Section 626.611(7), Florida Statutes. The Petitioner argues that the Administrative Law Judge should have considered prior administrative decisions of the former
Department of Insurance, particularly the cases styled, In the Matter of Gerald Lee Wilkins, Case
No. 24563-98-AG; In the Matter of Robert Darren Carlson, Case No. 07369-93-A; and In the
Matter of Michael Crudele, Case No. 15372-95-A. The Petitioner appears to suggest in this exception that the sale of unregistered securities, in and of itself, demonstrates a lack of fitness or trustworthiness to engage in the business of insurance based on the holdings of the three cases cited in Petitioner's exception. However, the holdings in those cases do not stand for that proposition. In the Wilkins case, the agent sold guaranteed investment contracts, which the
Administrative Law Judge found to be "not an especially risky investment" (Wilkins R.O. p. 11) if it were a true guaranteed investment contract. Agent Wilkins continued to sell these contracts to his consumers even after he knew that the company issuing them was having significant financial problems. Agent Wilkins did not disclose this information to his consumers and that failure was the basis for the Administrative Law Judge to conclude that Agent Wilkins had
violated Section 626.611(7), Florida Statutes. (Wilkins R.O. p. 11). Given the facts of the
Wilkins case, the sale of the guaranteed investment contracts in combination with the agent's
knowledge of the financial difficulties of the issuing company indicated untrustworthiness. However, in view of the Findings of Fact of the Administrative Law Judge in the present case, the sale of the unregistered securities did not reflect untrustworthiness.
In Crudele, the Administrative Law Judge found that it was the multiple roles played by the agent as insurance agent, corporate director and verifier, and as an owner, investor and salesman for the company issuing the promissory notes that proved a violation of Section
626.611(7), Florida Statutes. (Crudele R.O. p. 19). Additionally, Agent Crudele failed to fully and clearly disclose the true nature of the investment to the consumer, which further
distinguishes Crudele from the present case.
Finally, in Carlson, the Administrative Law Judge found that because Agent Carlson was a trusted financial advisor to the elderly consumer, advising the consumer to place the bulk of her life savings in high risk securities violated that trust and proved a violation of Section 626.611(7), Florida Statutes. (Carlson, R.O. p. 21). Again, the Findings of Fact of the Administrative Law Judge, in the present case, do not support a finding of untrustworthiness for the sale of the unregistered securities in and of itself.
Although Section 626.611(7), Florida Statutes does not require an insurance connection
or being "in the conduct of business under the license," (See, In the Matter of Michael Crudele; Case No. 15372-95-A) in this present case, the facts as found do not establish untrustworthiness. The Administrative Law Judge found that the facts did not establish that the Respondent had any wrongful intent, willfulness or engaged in fraud in order to support a violation of Section 626.611(7), Florida Statutes.
The weighing of the evidence and judging the credibility of witnesses by the Administrative Law Judge are solely the prerogative of the Administrative Law Judge as the
finder of fact. See, Strickland v. Florida A&M University. 799 So.2d 276 (Fla. 1st DCA 2001). Further, an administrative agency may not reject an Administrative Law Judge's findings unless
it is first determined that the findings were not based on competent substantial evidence. See,
Bush v. Brogan, 725 So.2d 1237 (Fla. 2d DCA 1999). Conclusion of Law #38 was based on facts supported by competent substantial evidence in record, and accordingly this exception is rejected.
