STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

LORENZO ALEJANDRO PORRAS, )

)

Petitioner, )

)

vs. ) Case No. 05-4188

)

DEPARTMENT OF FINANCIAL )

SERVICES, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case on January 9, 2006, by video teleconference, with the parties appearing in Miami, Florida, before Patricia Hart Malono, a duly-designated Administrative Law Judge of the Division of Administrative Hearings, who presided in Tallahassee, Florida.

APPEARANCES

For Petitioner: Lorenzo Alejandro Porras, pro se

14973 Southwest 11th Street Miami, Florida 33194

For Respondent: W. Gautier Kitchen, Esquire

Department of Financial Services

200 East Gaines Street 612 Larson Building

Tallahassee, Florida 32399

STATEMENT OF THE ISSUE

Whether the Petitioner application for licensure as a resident life, variable annuity and health agent should be granted or denied.

PRELIMINARY STATEMENT

In a Notice of Denial dated June 7, 2005, the Department of Financial Services ("Department") notified Lorenzo A. Porras that his application for licensure as a resident life, variable annuity, and health insurance agent had been denied. The Department stated in the notice that Mr. Porras's application for licensure was denied pursuant to Sections 626.611(1), (7), and (13) and 626.621(2) and (3), Florida Statutes(2005),1 because Mr. Porras had allegedly continued to work at The Garpo Group, Inc., insurance agency after he surrendered his insurance agent's license and because Mr. Porras had allegedly violated a Consent Order issued on December 4, 2002, by engaging in the transaction and/or solicitation of insurance. Mr. Porras timely requested a formal administrative hearing, and the Department transmitted the matter to the Division of Administrative Hearings for assignment of an administrative law judge.

Pursuant to notice, the final hearing was held on January 9, 2006.

At the hearing, Mr. Porras testified in his own behalf but did not offer any exhibits into evidence. The Department

presented the testimony of Jose M. Peña-Perez, and Respondent's Exhibits 1 through 6, 8, 9, and 11 were offered and received into evidence.(2005).2

The one-volume transcript of the final hearing was filed with the Division of Administrative Hearings on February 2, 2006, and the parties timely filed proposed findings of fact and conclusions of law, which have been considered in the preparation of this Recommended Order.

FINDINGS OF FACT

Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made:

1. The Department is the state agency responsible for issuing licenses "authorizing a person to be appointed to transact insurance or adjust claims for the kind, line, or class of insurance identified in the document." §§ 626.015(9) and 626.112(1)(a), Fla. Stat.

2. Prior to December 4, 2002, Mr. Porras was licensed in Florida as an insurance agent. He was also part-owner of The Garpo Group, Inc. ("Garpo Group"), an insurance agency.

3. On October 18, 2002, the Department (formerly the Department of Insurance) and Mr. Porras entered into a Settlement Stipulation for Consent Order ("Settlement Stipulation") as a result of an investigation by the Department

   that resulted in allegations of wrongdoing on the part of

   
   

   Mr. Porras. In the Settlement Stipulation, Mr. Porras agreed to surrender his agent's licenses to the Department. Mr. Porras did not admit in the Settlement Stipulation that he committed the acts alleged by the Department.

4. A Consent Order was entered on December 4, 2002. The Consent Order incorporated the terms of the Settlement Stipulation and provided that the surrender of Mr. Porras's licenses "shall have the same force and effect as a revocation pursuant to Section 626.641, Florida Statutes"; that Mr. Porras "shall not engage or attempt or profess to engage in any transaction or business for which a license or appointment is required under the insurance code or directly or indirectly own, control, or be employed in any manner by any insurance agent or agency . . . ."; and that Mr. Porras "shall not have the right to apply to the Department for another license under the Insurance Code within two (2) years of the effective date of revocation."

5. Neither the Settlement Stipulation nor the Consent Order included a deadline by which Mr. Porras was required to divest himself of his ownership interest in the Garpo Group.

6. On April 24, 2003, a Purchase and Sale Agreement ("Agreement") was executed whereby Mr. Porras, Eduardo Garcia, Mayda Garcia, and Luis Garcia, who were identified as the

   principals of the Garpo Group, agreed to sell the Garpo Group to Jose Peña and Peter Rivero. The Agreement included a purchase price of $50,000.00, payable in an initial deposit of

   $20,000.00, with the remaining balance to be paid "in monthly installments of no less than $500.00 (Five Hundred Dollars), and no more than $2,500.00 (Two Thousand Five Hundred Dollars)."

7. A Special Condition of the Agreement provided that Mayda Garcia, "Shareholder/Registered Agent/General Agent/Director," and Luis Garcia, "Shareholder/Director," would "remain in Corporation in their current capacity until final payment for sale of business is paid." Mr. Porras retained an interest in the monthly payments to be made by Mr. Peña and

   Mr. Rivero for the purchase of the business.

   
   

8. In accordance with the terms of the Consent Order, Mr. Porras surrendered his license and did not subsequently engage in the transaction or solicitation of insurance.

   Mr. Porras did not exercise any control over the Garpo Group after entry of the Consent Order.

9. Mr. Porras worked for the Garpo Group as a bookkeeper from May 2004 through October 2004.3 He was paid $175.00 per week, and his duties included reconciling the Garpo Group's bank accounts, entering deposits in the system, and cutting checks on the Garpo Group accounts.4

10. It can be reasonably inferred from the evidence presented by Mr. Porras regarding his understanding of the terms of the Consent Order that Mr. Porras was aware when he accepted employment with the Garpo Group that the terms of the Settlement Stipulation and of the Consent Order prohibited him from any involvement in the business of the Garpo Group, including employment "in any manner."

    CONCLUSIONS OF LAW

    
    

11. The Division of Administrative Hearings has jurisdiction over the subject matter of this proceeding and of the parties thereto pursuant to Sections 120.569 and 120.57(1), Florida Statutes.

12. Mr. Porras, as the applicant for a licensure as an insurance agent, has the burden of proving by a preponderance of the evidence that he is entitled to issuance of the license. See Department of Banking & Finance, Division of Securities & Investor Protection v. Osborne Stern & Company, 670 So. 2d 932, 934 (Fla. 1966); § 120.57(1)(j), Fla. Stat. The Department, however, has the burden of presenting evidence to support its reasons for denying Mr. Porras's application. See Id.

13. The Department based its decision to deny Mr. Porras's application for licensure on the factual allegations that

    Mr. Porras had continued to work at the Garpo Group after he surrendered his license and that he engaged in the "transaction

    and/or solicitation of insurance" in violation of the Consent Order. The Department failed to present any evidence to establish that Mr. Porras was involved in the transaction or solicitation of insurance. The evidence presented by the Department is, however, sufficient to establish that Mr. Porras was employed by the Garpo Group for a five-month period during 2004.

14. Section 626.611, Florida Statutes, provides in pertinent part:

    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, 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.

       
       

       * * *

       
       

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

       
       

       * * *

       
       

       (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. The legislature did not provide a definition of the term "willfully absent" in Section 626.611(13), Florida Statutes. However, in defining the term "willful violation" as that term was used in Section 376.3078(3)(c), Florida Statutes, the court in Metropolitan Dade County v. State Department of Environmental Protection, 714 So. 2d 512, 515-17 (Fla. 3d DCA 1998)(citing Thunderbird Drive-In [Theatre, Inc. v. Reed, 571 So. 2d 1341, 1344 (Fla. 4th DCA 1990), required that "the act be intentional and accompanied by the 'actor's intent and purpose that the prohibited conduct take place.'" Based on the findings of fact herein, the Department has established that, applying this definition, Mr. Porras willfully violated the terms of the Consent Order and of Section 626.641(4), Florida Statutes, which was specifically referenced in the Consent Order, when he accepted employment at the Garpo Group, and that the Department, therefore, is required to deny Mr. Porras's application for licensure, pursuant Section 626.611(13), Florida Statutes.

16. It cannot be inferred from the finding that Mr. Porras was aware when he accepted employment by the Garpo Group that Mr. Porras either lacks "one or more of the qualifications for the license" or that the Department otherwise demonstrated

    Mr. Porras's " lack of fitness or trustworthiness to engage in the business of insurance," Section 626.611(1) and (7), Florida Statutes, and the Department failed to present any persuasive

    evidence to establish that Mr. Porras's application for licensure must be denied on these statutory grounds.

17. In light of the above, it is not necessary to reach the issue of whether the Department has discretion to deny Mr. Porras's application for licensure pursuant to

Section 626.621(2) and (3), Florida Statutes.5

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED the Department of Financial Services enter a final order finding that Lorenzo Alejandro Porras violated the terms of a Consent Order entered by the Department of Financial Services and denying his application for licensure as a resident life, variable annuity, and health agent, pursuant to Section 626.611(13), Florida Statutes.

DONE AND ENTERED this 29th day of March, 2006, in Tallahassee, Leon County, Florida.

S

PATRICIA M. HART

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 29th day of March, 2006.

ENDNOTES

1/ All references herein to the Florida Statutes are to the 2005 edition, unless otherwise indicated.

2/ All references herein to the Florida Statutes are to the 2005 edition, unless otherwise indicated.

3/ It is noted that, in the Denial Letter dated June 7, 2005, the Department stated that Mr. Porras's employment extended from May 2003 through August 2004. This allegation is not supported by the evidence.

4/ Mr. Porras's categorical denial that he was employed at the Garpo Group after entry of the Consent Order has not been overlooked. Mr. Peña's testimony regarding the nature and duration of Mr. Porras's employment was persuasive, even though Respondent's Exhibits 8, 9, and 11, offered into evidence by the Department to support Mr. Peña's testimony, fail to provide such support. Based on a review of the entire record of this case, Mr. Peña's testimony is accepted over that of Mr. Porras.

5/ The Department offered evidence regarding the factual issue of Mr. Porras's retention of an ownership interest in the Garpo Group pursuant to the Agreement. This allegation was not identified in the Letter of Denial issued June 7, 2005, as a basis for denying Mr. Porras's application for licensure and is, therefore, no properly considered in this proceeding.

COPIES FURNISHED:

Lorenzo Alejandro Porras 14973 Southwest 11th Street Miami, Florida 33194

W. Gautier Kitchen, Esquire Department of Financial Services

200 East Gaines Street 612 Larson Building

Tallahassee, Florida 32399

Honorable Tom Gallagher Chief Financial Officer

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

Carlos G. Muñiz, 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: 05-004188

Orders for Case No: 05-004188