STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL SERVICES,

Petitioner,

vs.

DAVID BRIGHT,

Respondent.

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) Case No. 05-1736PL

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RECOMMENDED ORDER

Notice was provided and on August 11, 2005, a formal hearing was held in this case. Authority for conducting the hearing is set forth in Sections 120.569 and 120.57(1), Florida Statutes (2005). The hearing was conducted by video- teleconference between sites in Jacksonville, Florida, and Tallahassee, Florida. The hearing commenced at 9:00 a.m. The hearing was held before Charles C. Adams, Administrative Law Judge.

APPEARANCES

For Petitioner: Michael T. Ruff, Esquire

Department of Financial Services

200 East Gaines Street, Room 612 Tallahassee, Florida 32399-0333

For Respondent: David Bright, pro se

Post Office Box 441963 Jacksonville, Florida 32222

STATEMENT OF THE ISSUE

Should discipline be imposed by Petitioner against Respondent's licenses as a life agent (2-16), life and health agent (2-18), and health agent (2-40), held pursuant to Chapter 626, Florida Statutes (2004)?

PRELIMINARY STATEMENT

By an Administrative Complaint in Case No. 64776-03-AG, dated April 26, 2005, Petitioner accused Respondent in a single count of violations of Subsections 626.611(7),(9), and (13) and 626.621(2) and (3), Florida Statutes (2004). If the violations are proven Petitioner intends to impose discipline against Respondent's licenses under authority set forth in Sections 626.611, 626.621, 626.681, 626.691 and 626.9521, Florida

Statutes (2004).

The substance of the Administrative Complaint accuses Respondent of violating the terms of a Consent Order entered October 20, 2004, upon a stipulation between Petitioner and Respondent. In particular, Petitioner accuses Respondent of not timely paying an administrative fine, failing to submit proof that he settled unpaid insurance claims and not completing a continuing educational course involving unauthorized entities, all as required by the Consent Order.

Respondent was provided a form to be executed electing his rights concerning the Administrative Complaint. He chose the option to dispute the factual allegations underlying the Administrative Complaint, leading to a formal hearing pursuant to Section 120.57(1), Florida Statutes (2005). The election of rights was signed and dated May 1, 2005.

On May 13, 2005, the case was received by the Division of Administrative Hearings (DOAH) to conduct a formal hearing under Sections 120.569 and 120.57, Florida Statutes (2005). It was assigned DOAH Case No. 05-1736PL and noticed to be heard on the aforementioned date.

At hearing, Petitioner presented Kerry Edgill, Pamela White, and Leslie Kitterman as its witnesses. Petitioner's Exhibits numbered one through four were admitted as evidence. Respondent testified in his own behalf. Respondent's Exhibits numbers three, four, and seven through nineteen were admitted as evidence, at hearing or posthearing.1/

On September 9, 2005, the hearing transcript was filed. Petitioner filed a proposed recommended order which has been considered in preparing the Recommended Order. Respondent made no filing.

FINDINGS OF FACT

1. Respondent in accordance with Chapter 626, Florida Statutes (2005), currently holds licenses as a life agent (2- 16), life and health agent (2-18), and a health agent (2-40).

2. On June 24, 2003, in an Administrative Complaint brought by Petitioner against Respondent, also under Case No. 64776-03-AG, accusations were made concerning violations of Chapter 626, Florida Statutes (2003). On October 4, 2004, the parties resolved the earlier case through a settlement stipulation for Consent Order.

3. On October 20, 2004, the Consent Order was entered. In pertinent part the Consent Order stated:

   1. The Settlement Stipulation for Consent Order dated October 11, 2004, is hereby approved and fully incorporated herein by reference;

      
      

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      (c) Respondent agrees that he has a continuing obligation for claims, which may not have arisen or otherwise be known to the parties at the time of the execution of the Settlement Stipulation for Consent Order and this Consent Order

      
      

      Respondent shall be responsible for satisfying claims that were covered under the Plans sold by Respondent, up to the amount covered by such Plan, less any applicable deductibles or co-payments.

      Respondent may attempt to negotiate with the providers for compromised amounts, but any such compromise must result in the release of the consumer from any responsibility for

      the amounts that would have been covered under the terms of such Plan, less any applicable deductibles or co-payments;

      
      

      * * *

      
      

      (f) Within ninety (90) days following the issuance of this Consent Order, the Respondent shall complete the Section 626.2815(3)(a), Florida Statutes, continuing education requirement relative to unauthorized entities;

      
      

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      1. Within thirty (30) days of the issuance of this Consent Order, Respondent agrees to pay to the Department, a fine, in the amount of ONE THOUSAND AND 00/100 ($1,000.00) DOLLARS.

         
         

      2. Within ninety (90) days following the issuance of this Consent Order, Respondent shall satisfy any unpaid claims for persons insured under the Local 16 Plans he sold, including claims which may not have arisen or otherwise be known to the parties at the time of the execution of the Settlement Stipulation for Consent Order and this Consent Order. Respondent shall only be responsible, however, for satisfying claims that were covered under the Plans sold by Respondent, up to the amount covered by such Plan, less any applicable deductibles or co- payments. Respondent may attempt to negotiate with the providers for compromised amounts, but any such compromise must result in the release of the consumer from any responsibility for the amounts that would have been covered under the terms of such Plan, less any applicable deductibles or co- payments;

         
         

      3. Within one hundred (100) days following issuance of this Consent Order, the Respondent shall provide proof to the Department that the full amount of claims or

         losses under all contracts or health plans solicited or sold by Respondent on behalf of Local 16 have been paid or satisfied.

         Failure of the Respondent to comply with this paragraph shall constitute a material breach of this Consent Order, unless otherwise advised in writing by the Department;

         
         

      4. Respondent in the future shall comply with all the terms and conditions of this Consent Order; and, shall strictly adhere to all provisions of the Florida Insurance Code, Rules of the Department, and all other laws of the State of Florida. The Respondent shall give the Department full and immediate access to all books and records relating to the Respondent's insurance business, upon request;

         
         

      5. If, in the future, the Department has good cause to believe that the Respondent has violated any of the terms and conditions of this Consent Order, the Department may initiate an action to suspend or revoke the Respondent's license(s) or appointments, or it may seek to enforce the Consent Order in Circuit Court, or take any other action permitted by law;

      
      

4. Respondent paid the $1,000.00 administrative fine required by the Consent Order, but the payment was 20 days late.

5. Respondent completed the continuing education on unauthorized entities. He completed the course on June 3, 2005, beyond the deadline called for in the Consent Order by a number of months. Respondent took the course at Florida Community College in Jacksonville, Florida, an institution that he was familiar with. He took the course to be completed on June 3, 2005, because it was the earliest course available at that

   school. Respondent was unfamiliar with other schools who may have offered the course at a time that would meet the due date set forth in the Consent Order.

6. Consistent with the expectations in the Consent Order, Petitioner's employees have reviewed their files to determine whether Respondent has satisfied unpaid insurance claims in relation to the insurance plan for Local 16. Those employees involved in that review are Kerry Edgill, a legal assistant in the Legal Division in charge of complaint settlements and Pamela White who works with the Division of Consumer Services as a senior management analyst. Neither employee found any evidence that Respondent had satisfied the unpaid insurance claims as called for in the Consent Order.

7. In correspondence from Respondent to Petitioner's counsel in this case, dated December 6, 2004, there is no indication that the unpaid insurance claims have been satisfied.

8. Respondent in his testimony explained the extent to which he had attempted to determine who had outstanding unpaid insurance claims. Respondent went to the location where Local

   16 union members were employed. His contact with union members had to be outside the building proper. He spoke to several members at that time. This contact took place on June 1, 2005. Respondent identified the persons contacted as James, Luther, Gregory, and Michael. Michael's last name may have been

   Williams, as Respondent recalls. Of the persons Respondent spoke with on June 1, 2005, none of them had an unpaid insurance claim which needed to be satisfied.

9. Respondent provided correspondence to a person or persons whose name(s) was or were not disclosed in the testimony. The June 6, 2005, correspondence was addressed to the Amalgamated Transit Union, in reference to insurance claims for Local 16. Respondent's Exhibit Numbered 17 is a copy of that correspondence. In the body of the correspondence it stated:

   June 6, 2005

   
   

   Amalgamated Transit Union Local 1197

   P.O. Box 43285 Jacksonville, FL 32203

   
   

   Re: Claims for Local 16

   
   

   To union members and trustees,

   
   

   This letter is to follow up me meeting members at the station on June 1, 2005 to discuss any issues or concerns that you may be or have had relating to the unpaid claims with Local 16 National Health Fund.

   Although, I feel I am not responsible for the issue I would gladly help assist with resolving any problems or concerns that you may have. Should any members have any correspondents that need immediate attention please forward them to me at: David Bright,

   P.O. Box 441963, Jacksonville, FL 32222.

   
   

   Should you need to speak to me I can be reached at 904-207-0141.

   Thanks for your cooperation in this long due matter!

   
   

10. In relation to what Respondent refers to as accounts for Local 16 which he was servicing, that refers to insurance coverage, it involved a couple of hundred insureds. Respondent in his testimony acknowledged that union members had insurance claims that were unpaid.

    CONCLUSIONS OF LAW

    
    

11. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of this proceeding in accordance with Sections 120.569 and 120.57(1), Florida Statutes (2005).

12. This is a disciplinary case. Therefore, Petitioner has the burden proving the allegations in the Administrative Complaint by clear and convincing evidence. See § 120.571(j), Fla. Stat. (2005); See also Department of Banking and Finance, Division of Securities and Investor Protection v. Osborne Stern and Co., 670 So. 2d 932 (Fla. 1996); Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987); and Pou v. Department of Insurance and

    Treasurer, 707 So. 2d 941 (Fla. 3rd DCA 1998).

    
    

13. In pertinent part, the Administrative Complaint alleges:

    Count I

    
    

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    1. On October 11, 2004, you, DAVID BRIGHT, entered into a Settlement Stipulation for Consent Order with the Department. This Settlement Stipulation for Consent Order was meant to settle the Department's case against you, Case No.: 64776-03-AG, wherein it had been alleged that you aided and abetted an unauthorized entity, Local 16, in its sale of unauthorized health insurance products. This Settlement Stipulation for Consent Order was made effective by the Issuance of a Consent Order on October 20, 2004.

       
       

    2. The Settlement Stipulation for Consent Order and the Consent Order provided that you, DAVID BRIGHT, were to pay to the Department an administrative penalty in the amount of ONE THOUSAND AND NO/100 ($1,000.00) DOLLARS, no lather than thirty

       (30) days following the filing of the Consent Order.

       
       

    3. The Settlement Stipulation for Consent Order and the Consent Order provided that you, DAVID BRIGHT, recognized that you had the responsibility and obligation for unpaid claims resulting from the activities of unauthorized entity, Local 16. Pursuant to the terms of the Settlement Stipulation for Consent Order and the Consent Order, you were also required to, within one-hundred

       (100) days of the filing of the Consent Order, satisfy all outstanding unpaid claims that were known to you at the time of the filing of the Consent Order, and provide proof of such to the Department.

       
       

    4. The Settlement Stipulation for Consent Order and the Consent Order provided that you, DAVID BRIGHT, were to complete the Section 626.2815(3)(a), Florida Statutes,

       continuing education requirement relative to unauthorized entities, within ninety (90) days of the filing of the Consent Order.

       
       

    5. You, DAVID BRIGHT, paid the ONE THOUSAND AND NO/100 ($1,000.00) DOLLARS administrative penalty, required pursuant to the Settlement Stipulation for Consent Order and the Consent Order, but Department records indicate it was not received until December 9, 2004. The penalty was due on November 20, 2004.

       
       

    6. As of April 18, 2005, Department records indicate that you, DAVID BRIGHT, have not provided the Department with proof that you settled unpaid claims involving Local 16, as required by the Settlement Stipulation for Consent Order and the Consent Order, that were known to you at the time of the filing of the Consent Order.

       
       

    7. As of April 18, 2005, Department records indicated that you, DAVID BRIGHT, have not completed the unauthorized entity continuing education course as required by the Settlement Stipulation for Consent Order and the Consent Order.

    
    

14. The alleged violations associated with Count I are in relation to Section 626.611, Florida Statutes (2004), which states in pertinent part:

    The Department shall . . . suspend, revoke, the license . . . of any . . . 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 . . . licensee . . . any one or more of the following applicable grounds exist:

    
    

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    (7) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance.

    
    

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    (9) Fraudulent or dishonest practices in the conduct of business under the license or appointment.

    
    

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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.

    
    

15. In addition, reference is made in Count I to Section 626.621, Florida Statutes (2004), which states in pertinent

    part:

    
    

    The department may, in its discretion . . . suspend, revoke . . . the license . . . of any . . . 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 . . . licensee . . . any one or more of the following applicable grounds exist under circumstances for which such

    . . . suspension, revocation . . . is not mandatory under s. 626.611:

    
    

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    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, commission, or office.

16. Reference is made within Count I of the Administrative Complaint to Section 626.681, Florida Statutes (2004), which allows the imposition of an administrative fine in lieu of or in addition to suspension or revocation.

17. Reference is made within Count I of the Administrative Complaint to Section 626.691, Florida Statutes (2004), which allows Petitioner to place Respondent on probation for violations proven.

18. Within Count I of the Administrative Complaint, reference is made to the provision at Section 626.9521, Florida Statutes (2004), which deals with unfair insurance trade practices. In particular the provision states:

    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.

19. Clear and convincing evidence was presented showing that Respondent did not timely complete the continuing education requirement pertaining to unauthorized entities nor pay the

    $1,000.00 fine required by the Consent Order. Clear and convincing evidence was presented to prove that Respondent has failed to provide proof to Petitioner that he has satisfied unpaid insurance claims pertaining to members of Local 16 as required by the Consent Order. In fact, Respondent has done little to address the unpaid claims consistent with the Consent Order. Respondent by this conduct has violated Subsections 626.611(7) and (13), Florida Statutes (2004), as well as

    Subsections 626.621 (2) and (3), Florida Statutes (2004). The proof was not sufficient to establish a violation of Subsection 626.611(9), Florida Statutes (2004), through noncompliance with the Consent Order. For violations proven, Respondent is subject to the discipline set forth in Sections 626.611 and 626.621, Florida Statutes (2004).

20. Given that the violation of the Consent Order constitutes a second offense imposition of an administrative fine in accordance with Section 626.681, Florida Statutes (2004), or assignment of probation under Section 626.691, Florida Statutes (2004), are not available punishments.

21. By his failure to comply with the Consent Order, that misconduct does not represent unfair trade practices as contemplated in Section 626.9521, Florida Statutes (2004), and no violation of that provision has been proven.

22. Punishment for the violations is considered in accordance with Florida Administrative Code Rules 69B-231.040, 231.080, 231.090 and 231.160.

RECOMMENDATION

Upon consideration of the facts found and the conclusions of law reached, it is

RECOMMENDED:

That a final order be entered finding Respondent in violation of Sections 626.611(7) and (13), and 626.621(2) and (3), Florida Statutes (2004), finding no violation of Section 626.611(9), Florida Statutes (2004), or 626.9521, Florida Statutes (2004), and suspending Respondent's respective licenses as a life agent (2-16), life and health agent (2-18), and health agent (2-40), for a period of six (6) months.

DONE AND ENTERED this 7th day of October, 2005, in Tallahassee, Leon County, Florida.

S

CHARLES C. ADAMS

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 7th day of October, 2005.

ENDNOTE

1/ Sometime around August 8th or 9th, 2005, Respondent made a Chapter 7 Bankruptcy filing in the United States Bankruptcy Court, Middle District of Florida, Jacksonville Division, Case No. 3:05-BK-08415-GLP. Respondent's Exhibit numbered 19. The information presented at hearing did not reveal any orders from the bankruptcy court which would effect the present case. This note is made to remind Petitioner that future decisions made by the bankruptcy court may influence matters associated with the present case.

COPIES FURNISHED:

Michael T. Ruff, Esquire Department of Financial Services

200 East Gaines Street, Room 612 Tallahassee, Florida 32399-0333

David Bright

Post Office Box 441963 Jacksonville, Florida 32222

Honorable Tom Gallagher Chief Financial Officer

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

Carlos G. Muniz, General Counsel Department of Financial Services The Capitol, Plaza Level ll 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: 05-001736PL

Orders for Case No: 05-001736PL