STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

STATE OF FLORIDA, DEPARTMENT ) OF INSURANCE, )

)

Petitioner, )

)

vs. ) CASE NO. 79-2322

)

GARY THOMAS JEWELL, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings by its assigned Hearing Officer, Michael Pearce Dodson, held a public hearing in this case on February 27, 1980, in Melbourne, Florida. The following appearances were entered:

APPEARANCES

For Petitioner: L. Terrye Coggin, Esquire

Department of Insurance Larson Building, Room 428-A Tallahassee, Florida 32301

For Respondent: Fred D. Leone, Esquire

3017 Riveredge Boulevard Suite 108, Riveredge Plaza Post Office Box 1536 Cocoa, Florida 32922

These proceedings began on September 13, 1979, when the Department of Insurance (Department) served an administrative complaint on Gary Thomas Jewell. On November 9, 1979, he requested a fact finding hearing on the charges in the administrative complaint, and the case was forwarded to the Division of Administrative Hearings on November 19, 1979 for the assignment of a Hearing Officer and the scheduling of the final hearing. By notice to all parties the final hearing was scheduled for and held on February 27, 1980.

The administrative complaint contained four Counts, but by a stipulation of the parties, Counts II, III, and IV were dismissed. Count I alleged that Mr.

Jewell who was employed by Gulf Life Insurance Company failed to remit premiums he had collected from policyholders to the company. He was therefore alleged to have misappropriated $1,363.77 to his own use. Prior to the hearing, the parties entered into the stipulation which is incorporated by reference into this Order. Through the stipulation, Mr. Jewell admitted the allegations of Count I. The Department agreed that his acts would be subject to possible discipline only under Section 626.621 Florida Statutes (Discretionary Discipline) and not under Section 626.611 Florida Statutes (Mandatory Discipline).

The Department presented Mr. William Earl Adams as its witness but did not offer any exhibits other than the stipulation. The Respondent presented as his witness Mr. Jeffrey Williams, Mr. Patrick Anthony and the Respondent himself, Gary Thomas Jewell. He too offered no exhibits other than the stipulation.

FINDINGS OF FACT

1. Mr. Jewell was employed as a life insurance agent from February, 1977 until June 12, 1978, with Gulf Life Insurance Company.

   
   

2. During his employment as a "debit agent" with Gulf Life, Mr. Jewell misappropriated $1,363.77 of premiums from the company policyholders for his own use. His defalcation was discovered by the company in May of 1978, and as a result his employment was terminated.

   
   

3. Part of his job as a debit agent included collecting premiums from the company's policyholders on a periodic basis. He was then to forward these premiums to Gulf Life. An audit of his books by Gulf Life in May of 1978 revealed that he was in fact misappropriating the funds. When confronted with the facts he was cooperative in establishing the amount of the defalcation. He made however, no attempt at restitution.

   
   

4. On October, 1979 Gulf Life wrote a letter to him stating that he had a deficiency in his accounts and demanded payment therefor. The letter did not state the amount owed. Mr. Jewell still made no attempt to pay the amount due even though as early as June, 1979, he knew from a partial audit that his accounts were at least $700.00 short.

   
   

5. Thereafter Mr. Jewell was sued by Gulf Life in Circuit Court for the misappropriated funds and a default judgement was obtained against him in May, 1979 for more than $1,300.00. There is still approximately $600.00 owing on the judgement.

   
   

6. In the last nine months prior to the hearing Mr. Jewell has been employed by Reserve Life Insurance Company. He was hired as a manager-trainee and then promoted to be the district manager for the company's Merritt Island Office. It is the policy of Reserve Life that its district managers must spend at least 30 percent of their time in direct insurance sales while devoting the balance of their time to managerial duties.

   
   

7. If Mr. Jewell's insurance license is suspended or revoked, he could possibly lose his position with Reserve Life because of the 30 percent sales rule.

   
   

8. Since he has worked for Reserve Life his employer has been well pleased with his performance. His office has produced a remarkable amount of new business. His present supervisor, Mr. Patrick Anthony, thinks very highly of Mr. Jewell's integrity and character. He appeared on Respondent's behalf at the instant final hearing.

   
   

9. While he may have mentioned having had some kind of a problem at Gulf Life, it does not appear that Mr. Jewell was completely candid about the nature or the extent of his defalcation at the time he was hired by Mr. Anthony for Reserve Life.

   CONCLUSIONS OF LAW

   
   

10. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of this case, Section 120.57(1) Florida Statutes.

    
    

11. The conduct of insurance agents in Florida is regulated by the Licensing Procedures Law, Section 626.011-626.711 Florida Statutes of the Florida Insurance Code. By the stipulation of the parties, the penal provisions of Section 626.621 Florida Statutes - discretionary suspension or revocation of a license - control the determination made here. That section provides in part:

    
    

    The department may, in its discretion, deny, suspend, revoke, or refuse to renew or continue the license of any agent, solicitor, or adjuster, or the permit of any service representative, supervising or managing general agent, or claims in vestigator, and it may suspend or revoke the eligibility to hold a license or permit of any such persons if it finds that as to the applicant, licensee, or permittee any one or more of the follow- ing applicable grounds exist under cir- cumstances for which such denial, sus- pension, revocation, or refusal is not mandatory under Section 626.611:

    
    

    (2) Violations 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 permit...

    
    

    (4) Failure or refusal, upon demand,

    to pay over to any insurer he represents or has represented any money coming into his hands belonging to the insurer.

    
    

12. On the basis of the stipulation and the facts adduced at the final hearing it is found that the misappropriation of funds entrusted to Mr. Jewell for remittance to Gulf Life Insurance Company, constitutes a violation of Section 626.621(2) and (4). Such a violation may be penalized by a term of probation, Section 621.691; an administrative fine, Section 626.681; or suspension or revocation of the licensee's permit, Section 626.641.

    
    

13. There are facts here in favor of a mitigated penalty. There are also facts which operate against mitigation. When a shortage in Mr. Jewell's account was first noticed by Gulf Life, he assisted in establishing the amount of the shortage. Since his defalcation at Gulf Life, Mr. Jewell has obeyed all statutes and rules regulating the sale of insurance. His present employer believes he is performing admirably in the insurance business. I am not unaware, however, that his employer has some self-interest at stake here, in view of the remarkably high production rate of Mr. Jewell's office. These facts favor mitigating the penalty.

    
    

14. On the other side of the balance, Mr. Jewell's unwillingness to accept full responsibility for immediate repayment of the damage done by his

    misappropriation lessens their mitigating force. Rather than immediately coming forth to Gulf Life, and saying, "I have made a mistake, how can I repay the money?" he forced the company to sue him for its funds. Even at the hearing, Mr. Jewell attempted to rationalize his failure to make immediate restitution by arguing that the company's demand letter of October, 1979, did not specify the complete amount he owed. This rationalization is untenable because he knew as early as in June, 1979, that he owed at least $700.00 to the company.

    
    

15. When he applied for employment with Reserve Life, it does not appear that Mr. Jewel made full disclosure about his misappropriation of Gulf Life funds. For example, Mr. Anthony, his present supervisor, just learned at the hearing about the $1,300.00 judgement against the Respondent. In light of the foregoing factors, for and against mitigation, an appropriate penalty for the violation of Section 626.621(2) and (4) is to suspend Mr. Jewell's license as an insurance agent in the State of Florida for a period of three (3) months.

RECOMMENDATION

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

That a final order be entered by the State of Florida, Department of Insurance, suspending the license of Gary Thomas Jewell to represent an insurance company as an agent for the period of three (3) months beginning from the date of the final order

DONE and ENTERED this 8th day of July, 1980, in Tallahassee, Florida.

MICHAEL PEARCE DODSON

Hearing Officer

Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301

(904)488-9675

COPIES FURNISHED:

L. Terry Coggin, Esquire Department of Insurance Larson Building

Room 428-A

Tallahassee, Florida 32301

Fred D. Leone, Esquire 3017 Riveredge Boulevard Suite 108, Riveredge Plaza Post Office Box 1536 Cocoa, Florida 32922

Docket for Case No: 79-002322

Orders for Case No: 79-002322