STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF STATE )

DIVISION OF INSURANCE, )

)

Petitioner, )

)

vs. ) CASE NO. 81-093

)

CARL AUSTIN JORGENSEN, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to Notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, DONALD R. ALEXANDER, held a formal hearing in this case on March 25, 1981, in Miami, Florida.

APPEARANCES

For Petitioner: Deborah A. Getzoff, Esquire

428-A Larson Building Tallahassee, Florida 32301

For Respondent: William A. Meadows, Jr., Esquire

6101 SouthWest 76th Street South Miami, Florida 33143

BACKGROUND

By Administrative Complaint dated December 12, 1980, the Petitioner, Department of Insurance, alleged Respondent's ordinary-combination life including disability insurance license should be suspended or revoked for violation of Chapter 626, Florida Statutes. Specifically, the Department alleges that: (1) Respondent submitted an application for agency appointment to the Florida Joint Underwriters Association listing his wife as the general lines agent in the agency; that said application was made without his wife's knowledge or consent and that she did not participate in its subsequent operation; that Respondent is not licensed to sell property or casualty insurance; that no licensed general lines agent was in active and full time charge of its operation; and that such acts violated Sections 626.112(2), 626.551, 626.611(7), (8), (9), and (13), 626.621(2) and (6) , 626.747, and 626.9541(5)(a) and (b)

Florida Statutes (1977); (2) Respondent solicited, took application for, accepted premium and sold two automobile policies to one Lowell McLean, III; that said applications listed his wife as the producing agent without her knowledge and approval; and that said acts constitute a violation of Sections 626.041(2)(a), (b), (c) and (e), 626.112(2), 626.611(5) - (9) and (13),

626.621(2) and (6) , 626.9541(5)(b), (11)(a), and (21)(b), Florida Statutes (1977); and (3) Respondent solicited, took application for, accepted premium for, and sold an automobile policy to one Michael J. Hallen; that said application listed his wife as the producing agent without her knowledge and

approval; and that said acts constitute a violation of Sections 626.041(2)(a), (b), (c) and (e) , 626.112 (2), 626.611(5)-(9), and (13), 626.621(2) and (6),

626.9541(5)(b), (11)(a), and (21)(b), Florida Statutes (1977)

Respondent disputed the factual allegations contained in the Department's complaint and requested a formal hearing pursuant to Section 120.57(1), Florida Statutes (1977). On January 12, 1981, the Department forwarded his request to the Division of Administrative Hearings, and asked that a Hearing Officer be assigned to conduct such a hearing. By Notice of Hearing dated February 16, 1981, the final hearing was scheduled for March 25, 1981, in Miami, Florida.

At the final hearing, the Department called William Midkiff, Maren Jorgensen, Lowell G. McLean, III, William Parker and Leslie R. Lloyd as its witnesses and offered Petitioner's Exhibits 1-7, each of which was received into evidence. Respondent testified on his own behalf and offered Respondent's Exhibits 1-4, each of which was received into evidence.

Proposed findings of fact and conclusions of law were filed by the parties on April 13 and 15, 1981, and have been considered by the undersigned in the preparation of this Order. Findings of fact not included in this Recommended Order were not considered relevant to the issues, were not supported by competent and substantial evidence, or were considered immaterial to the results reached.

The issue to be resolved herein is whether Respondent's insurance license and/or eligibility for future licenses should be revoked or suspended or whether other disciplinary action should be taken against Respondent for the violations set forth in the Administrative Complaint.

Based upon the evidence, the following facts are determined:

FINDINGS OF FACT

1. At all times relevant to this proceeding, Respondent, Carl Austin Jorgensen, was licensed by the Petitioner, Department of Insurance, as an ordinary-combination life including disability insurance agent and a solicitor for property, casualty, surety and miscellaneous lines insurance. He has held a license since 1956. During the time in which the alleged violations occurred, Respondent was employed by Simons and Rose Agency, an insurance firm located in Coconut Grove, Florida.

   
   

2. Respondent wished to establish an insurance agency with his wife, Maren Jorgensen, who was licensed as a general lines agent. He discussed this with her on several occasions in 1977, but she would not agree. Her consent was necessary since agency applications must be submitted by a licensed general lines agent.

   
   

3. On or about August 10, 1977, Respondent prepared and submitted an application for agency appointment to the Florida Joint Underwriters Association (FJUA) . The Association is the successor to the automobile assigned risk plan in Florida and was established to provide insurance coverage to those automobile drivers who are otherwise unable to obtain voluntary insurance coverage. The application was submitted under the name of All Lines Insurance Agency, 222 NorthEast 20th Street, Miami, Florida, and bore the name and signature of Maren Jorgensen, the Respondent's wife (Petitioner's Exhibit 2). The application was actually signed by Respondent, who had forged his wife's name (Petitioner's Exhibit 7).

4. As a licensed general lines agent, Maren Jorgensen held a 2-20 license. This license was required in order to be qualified to sell insurance through the FJUA. Respondent held no such license, and as such, was unqualified to write policies. Upon receipt of the application, the FJUA reviewed it, and having determined that Maren Jorgensen held an appropriate license, assigned Nationwide Mutual Fire Insurance Company to write policies for All Lines' customers.

   
   

5. Maren Jorgensen was unaware of the application being filed, and did not consent to the use of her name. At no time did she participate in or otherwise supervise the running of the business. Rather, Respondent himself operated the agency until early 1978, when it ceased to do business.

   
   

6. On or about December 23, 1977, Respondent solicited and sold two automobile insurance policies to Lowell McLean, III, a long-time acquaintance. These policies were issued by Nationwide Mutual Fire Insurance Company and were numbered J58721 and J57869 (Petitioner's Exhibits 3 and 5) The applications bore the name and signature of his wife as producing agent. However, the applications were prepared and submitted by Respondent without her knowledge and consent. The Florida Department of Law Enforcement (FDLE) verified that Respondent had forged her signature (Petitioner's Exhibit 7)

   
   

7. On or about November 26, 1977, Respondent solicited and sold an automobile insurance policy to Michael J. Halen. This policy was issued by Nationwide Mutual Fire Insurance Company and was numbered J56852 (Petitioner's Exhibit 4). It bore the name and signature of Respondent's wife as producing agent. However, the application was prepared and submitted without the knowledge and consent of Maren Jorgensen. Again, the FDLE verified that Respondent had actually signed her name (Petitioner's Exhibit 7).

   
   

8. Two relatively small commission checks were sent by Nationwide to Maren Jorgensen as producing agent for the sale of the three policies. The checks were mailed to the address of All Lines, without the knowledge of the wife. Respondent appropriated one of the checks for his own personal use. His wife accidentally discovered the other in her husband's wallet and then cashed it herself.

   
   

9. Respondent sold only three policies involving two customers during his association with All Lines. None of the three transactions resulted in harm or financial loss to either the customers or the insurance company.

   
   

10. During the period when the aforesaid events occurred, Respondent and his wife, although living together, were experiencing marital difficulties. In fact, his wife characterized this time-frame as being a "rather stormy period". They are now separated. Respondent acknowledged the charges in the complaint, but attributed these indiscretions to his desire to rehabilitate the marriage by cultivating a successful insurance business with his wife.

    
    

    CONCLUSIONS OF LAW

    
    

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

    
    

12. The Administrative Complaint contains three counts and alleges that Respondent has violated numerous provisions of chapter 626, Florida Statutes (1977). Of importance here is Section 626.611, Florida Statutes (1977) , which

    contains grounds for the compulsory suspension or revocation of an insurance agent's license. It is contended that Respondent's license should be revoked or suspended because of the following violations of that section:

    
    

    1. For demonstrated lack of fitness or trust- worthiness to engage in the business of insurance.

    2. For demonstrated lack of reasonably adequate knowledge and technical competence to engage in the transactions authorized by the license or permit.

    3. Fraudulent or dishonest practices in the conduct of business under the license or permit.

       (13) Willful failure to comply with, or willful violation of, any proper order, rule, or regulation of the department or willful violation of any provision of this code.

       
       

       In conjunction with Subsection (13) above, it is charged that willful violations of Section 626.112(2), 626.551, 626.747(1), 626.9541(5)(a), 11(a), and 21(b),

       Florida Statutes (1977) , have occurred. If true, suspension or revocation is required for such conduct. See Bowling v. Department of Insurance, 394 So.2d 165, 170 (Fla. 1st DCA 1981). Thus, if the allegations are substantiated, the licensee must suffer the loss of his license, either through suspension or revocation, depending upon the severity of his actions.

       
       

13. Petitioner also contends that certain portions of Section 626.621, Florida Statutes (1977) have been violated, and provide additional bases for suspension or revocation of the license. That section makes suspension or revocation discretionary rather than mandatory, and as is pertinent here, the Respondent is alleged to have violated the following subsections therein:

    
    

    (2) 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 permit.

    (6) If in the conduct of business under the license or permit he has engaged in unfair methods of competition or in unfair or deceptive acts or practices, as

    prohibited under Part VII of this Chapter, or has otherwise shown himself to be a source of injury or loss to the public or detrimental to the public interest.

    
    

    The relevant distinction between Sections 626.611 and 626.621 is the element of willfulness that is required by the former statute for certain acts proscribed therein. If the element of willfulness is not shown, the latter statute is controlling and a lesser penalty may be imposed.

    
    

14. Respondent concedes that the "basic allegations of the Complaint are true". (Closing argument of Respondent) However, he contends that his actions do not constitute violations of all the sections alleged, nor were they willful or deliberate. He argues that given the circumstances under which the transgressions occurred, only a modest penalty (probation) should be imposed.

15. Other than his own testimony, Respondent offered no evidence in mitigation of the offenses for which he is charged. The mitigating evidence and argument offered by Respondent may be summarized as follows:

    
    

    1. When the events in question occurred, Respondent was undergoing a "stormy" relationship with his wife, which ultimately ended in separation. Respondent desired to improve this relationship, and believed that a successful business venture involving he and his wife could revitalize a dying marriage.

       In 1977, he approached his wife on several occasions and asked that they form an agency, but was rebuffed on each occasion. Despite her disapproval, and without her knowledge or consent, Respondent nevertheless proceeded to establish an agency and sell three policies using his wife's license number under the mistaken belief that this could rehabilitate the marriage. Ultimately, both the marriage and the agency failed. Respondent claims his overriding concern throughout this time period was a desire to reestablish a harmonious relationship with his wife, rather than to circumvent the law for personal gain.

       
       

    2. The extent and magnitude of unlawful transactions by Respondent were not great. They consisted of only three automobile policies written over a 2-month period, of which two were policies to a long-time acquaintance for whom Respondent had written other types of insurance over a number of years. Neither of the two customers or the insurance company suffered any harm or financial loss by virtue of the policies being written.

       
       

    3. Respondent has been engaged in the insurance business for approximately 25 years. There is no evidence of any prior disciplinary action being taken against him, nor of any act that might bring disfavor or discredit upon the insurance profession.

    
    

16. While the above factors may serve to mitigate the penalty that can be imposed, consideration must also be given to the fact that Respondent was a long-time member of the insurance profession who was familiar with its laws and regulations, and the consequences of his illegal conduct. He acknowledged that he knew the filing of the application and selling the policies were a violation of the code, and that such acts, if discovered, could result in a forfeiture of his license. Nevertheless, he was still willing to take this chance in an effort to save his marriage, or for whatever other motives he may have had. Under these circumstances, the element of willfulness or guilty knowledge must be ascribed to his conduct since his acts were intentional and voluntary, and he acted with apparent indifference to the consequences.

    
    

17. Having established that his conduct was willful and deliberate, it is not necessary to consider that portion of the charges that pertain to violations of Section 626.621, supra, for they merely make suspension or revocation of a license discretionary. Accordingly, it is concluded that the following violations of Chapter 626, Florida Statutes (1977) as set forth in the Administrative Complaint, have occurred.

    
    

18. Count I - For having willfully prepared and submitted an application for agency appointment to the FJUA on August 10, 1977, and using the name, license number and signature of another person without their consent or approval, and there being no licensed general lines agent in active full time charge of the agency, it is concluded Respondent is guilty of violating Sections 626.112(2), 626.747, 626.9541(5)(a) and (b), and 626.611(7), (9) and (13), Florida Statutes (1977). Argument by Respondent that the submission of the application did not constitute the delivering and publishing of a false material statement as prescribed by Section 626.9541(5)(a) is rejected since the

    acceptance of the application by FJUA was based solely upon the representation that the application was signed by Respondent's wife. A contention that his acts were not dishonest, unfair or demonstrative of a lack of trustworthiness is similarly rejected as being contrary to the weight of the evidence. Further argument by Respondent that he was authorized to sell automobile insurance under his solicitor's license, and therefore did not hold himself out to be an agent as to a kind of insurance as to which he was not licensed under a currently effective license (see Section 626.112(2), F.S.), must also be rejected. A solicitor is defined as "an individual appointed by a general lines agent to solicit applications for insurance as a representative of such agent." Section 626.071(1), Florida Statutes. Because Respondent had not been appointed by a general lines agent to solicit for All Lines, any transactions conducted on behalf of All Lines were illegal and beyond the scope of his authority.

    However, the Department has not established that Respondent failed to promptly notify the Department in writing of a change in his principal business address (Section 626.551, F.S.), or that he demonstrated a lack of reasonably and adequate knowledge and technical competence to engage in the transactions authorized by his license (Section 626.611(8)) Accordingly, these charges should be dismissed.

    
    

19. Count II - For having willfully solicited, taken application for, accepted premium for, and sold two automobile insurance policies to one Lowell McLean, III on or about December 23, 1977, and having used the name, insurance number and signature of another person as producing agent without their consent or approval, it is concluded Respondent is guilty of violating Sections 626.041(2)(a), (b), (c) and (e), 626.112(2), 626.9541(5)(a) and (b), 626.9541(11)(a), 626.9541(21)(b) 626.611(5), (7), (9), and (13), Florida Statutes (1977) The Respondent again contends that the submission of the two policies did not constitute the delivering and publishing of a false material statement within the meaning of Section 626.9541(5)(a); however, this contention is rejected for the same reason discussed in Count I. Argument that he did not represent himself to be an agent of a general lines insurer, or solicit a kind of insurance as to which he was not licensed, or receive money on account of or for a general lines insurer, is unsound for all transactions were made in the name of, and under the authority of, All Lines Insurance Agency. A contention that the selling of the policies was not unfair or deceptive is similarly rejected as being contrary to the weight of the evidence. However, charges that Respondent demonstrated a lack of reasonably adequate knowledge and technical competence to engage in the transaction authorized by his license (Section 626.611(8), F.S.) were not proven by the Department and should be dismissed.

    
    

20. Count III - For having willfully solicited, taken application for, accepted premium for, and sold one automobile policy to one Michael J. Halen on or about November 26, 1977, and having used the name, insurance number and signature of another as producing agent without their consent or approval, it is concluded Respondent is guilty of violating Sections 626.041(2)(a), (b), (c) and (e), 626.112(2), 626.9541(5)(a) and 626.9541(11)(a), 626.9541(21)(b), 626.611(5)(7), (9) and (13), Florida Statutes (1977). The charge which alleges a demonstrated lack of reasonably adequate knowledge and technical competence to engage in the transactions authorized by the license of Respondent (Section 626.611(8), F.S.) was not supported by the evidence and should be dismissed.

    The same arguments made by Respondent with respect to Count II have been considered and rejected for the reasons stated therein.

    
    

21. The actions of Respondent are serious and should not be taken lightly. They include, inter alia, the forging of his wife's signature on at least four occasions, and engaging in three transactions beyond the scope of his licensed

authority, all of which are deceptive, dishonest and demonstrative of untrustworthiness on the part of Respondent. The gravity of these offenses is such that the Legislature has mandated the suspension or revocation of the license of any person who violates these provisions. In mitigation, it must be recognized that no member of the public suffered harm by virtue of these transactions. Moreover, some consideration must be given to the mental state of Respondent, who was suffering through a stormy and deteriorating marriage when the acts occurred. After taking these circumstances into account, it is concluded Respondent's ordinary-combination life including disability insurance license should be suspended for a period of eighteen (18) months.

RECOMMENDATION

Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Respondent Carl Austin Jorgensen's ordinary-combination

life including disability insurance license be suspended for a period of eighteen (18) months from the date of the final order entered in this proceeding for those violations of Chapter 626, Florida Statutes (1977) described herein above.

DONE and ENTERED this 22nd day of April, 1981, in Tallahassee, Florida.

DONALD R. ALEXANDER

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 22nd day of April, 1981.

COPIES FURNISHED:

Deborah A. Getzoff, Esquire Department of Insurance

428-A Larson Building Tallahassee, Florida 32301

William A. Meadows Jr., Esquire 6101 SW 76th Street

South Miami, Florida 33143

Docket for Case No: 81-000093

Orders for Case No: 81-000093