STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF INSURANCE, )

)

Petitioner, )

)

vs. ) CASE NO. 81-2782

)

THOMAS STEPHEN PILLER, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held before the Division of Administrative Hearings by its duly designated Hearing Officer, DONALD R. ALEXANDER, on February 2, 1982, in Sebring, Florida.

APPEARANCES

For Petitioner: Julie St. John, Esquire

Room 428-A, Larson Building Tallahassee, Florida 32301

For Respondent: David B. Higginbottom, Esquire

Post Office Box 697 Frostproof, Florida 33843

BACKGROUND

By Administrative Complaint dated October 28, 1981, Petitioner, Department of Insurance, has charged that Respondent, Thomas S. Piller, has violated Chapter 626, Florida Statutes, and certain rules promulgated thereunder. In summary form it is charged that Respondent, a licensed disability insurance agent, ordinary life agent and ordinary combination life, including disability agent, visited one Elleta Y. Thomas in Sebring, Florida, on May 11, 1981, and advised her that her insurance carrier was being changed from American Sun Life Insurance Company (American) to United General Life Insurance Company (General) when in fact this was untrue; that Respondent accepted a check from Thomas in the amount of $512 made payable to General which represented one year's coverage under a medicare supplement insurance policy to be issued by General; that Respondent indicated on the General application that the policy was not intended to replace another company's policy even though he knew or should have known that Thomas was replacing a medicare supplement policy of American with one of General; that Respondent represented to General that Thomas had no other medicare supplement policy; that Respondent failed to present or leave a completed Notice to Applicant Regarding Replacement of Accident and Sickness Insurance as required by Department rule; and that by reason of the foregoing Respondent is guilty of violating Subsections 626.611(5), (7), (8), (9) and

(13), 626.621(2), (3), (5) and (6), and 626.9541 (1)(f), (5)(a), (11)(a) and

1. , Florida Statutes, and Rules 4-44.05 and 4-46.03(3), Florida Administrative Code.

   Respondent disputed the allegations set forth in the Administrative Complaint and requested a formal hearing pursuant to Subsection 120.57(1), Florida Statutes, to contest the charges. The matter was transmitted to the Division of Administrative Hearings on November 5, 1981, with a request that a Hearing Officer be assigned to conduct a hearing. By Notice of Hearing dated December 7, 1981, the final hearing was scheduled for February 2, 1982, in Sebring, Florida.

   
   

   At the final hearing Petitioner presented the testimony of Elleta Y. Thomas and Roland T. Weiner, and offered Petitioner's Exhibits 1-3, each of which was received into evidence. Respondent testified on his own behalf, presented the testimony of Hazel Comer and offered Respondent's Exhibit l, which was received into evidence.

   
   

   The transcript of hearing was filed on March 3, 1982 Proposed findings of fact and conclusions of law were filed by Respondent and Petitioner on March 3 and 8, 1982, respectively, and have been considered by the undersigned in the preparation of this order. Findings of fact not included in this order were not considered relevant, were not supported by competent and substantial evidence, or were considered immaterial to the results reached.

   
   

   The issue herein is whether Respondent's insurance license should be revoked or suspended, or whether he should be otherwise disciplined for alleged violations set forth in the Administrative Complaint.

   
   

   Based upon all the evidence, the following facts are determined:

   
   

   FINDINGS OF FACT

   
   

   1. At all times relevant hereto, Respondent, Thomas S. Piller, was licensed by Petitioner, Department of Insurance, as an ordinary life, including disability insurance agent. His offices are located at 103 South Circle, Sebring, Florida.

      
      

   2. In June, 1980, Piller met one Elleta Y. Thomas, then 74 years old, who resided in Sebring, Florida, with her husband, William Filler sold Mr. and Mrs. Thomas two policies with American Sun Life Insurance Company effective June 10, 1980. The policies provided supplements for medicare.

      
      

   3. In January, 1981, William Thomas suffered a heart attack and was hospitalized. He died on March 3, 1981. During the period when Mr. Thomas was hospitalized, and continuing after his death, Elleta Thomas telephoned or visited Respondent's office a number of times to obtain assistance in filing insurance claims for her husband's medical bills and death.

      
      

   4. On or about May 11, 1981, Respondent received a telephone call from Elleta Thomas asking that he assist her in filling out various insurance forms. Piller went to her residence where he stayed for approximately three hours. During that time, he assisted her in filling out claim forms with three insurance companies.

      
      

   5. While there, Piller sold Thomas Policy Nos. MC 783 Florida and NS 775 with United General Life Insurance Company which provided Thomas additional medical coverage. The total annual premium was $512 which Thomas paid by check.

   6. On the application, question one asks whether the insurance is intended to replace any plan of insurance with another company. Respondent marked "no" in the blank. The policy also stated in paragraph two that "preexisting conditions are covered after this policy currently being applied for has been in effect for 6 months." Elleta Thomas signed a certification form acknowledging that she had read and understood the policy, and was being furnished a copy of that form. Although Thomas could not remember signing the form, she did admit that the signature on the form was her own.

      
      

   7. There were no representations by Piller that the new policy replaced an existing policy, or that American Sun Life Insurance Company had been consolidated into United General Life Insurance Company, or otherwise changed its name. Neither was there a representation that the American Sun policies had been cancelled. In fact, Thomas admitted that Piller had not told her to turn the American policies in, or to "disregard" them.

      
      

   8. On June 3, 1981, Thomas was injured in an accident at her home and sometime thereafter examined her General policy to see if a claim could be filed. Because the accident was apparently caused by a "preexisting condition", she did not file a claim. Even though Thomas had two current and effective policies with American Sun which provided accident coverage, she was under the impression that they had been replaced by the General policy purchased in May, 1981.

      
      

   9. With the assistance of her daughter, Thomas then filed a complaint with the Department of Insurance alleging misrepresentation on the part of Piller. Thomas later received a refund of her $512 premium and the General policy was cancelled. Her American Sun policies were never cancelled and are apparently still in force.

      
      

      CONCLUSIONS OF LAW

      
      

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

       
       

   11. Section 626.611, Florida Statutes, enumerates the grounds for compulsory suspension or revocation of a license. Pursuant to that statute, and in conjunction with the Thomas transaction, Respondent is charged with having made a false misrepresentation [s626.611(5)], having demonstrated a lack of fitness or trustworthiness in the insurance business [s626.611(7)], having demonstrated a lack of reasonably adequate knowledge and technical competence in a transaction [s626.611(6)], having engaged in fraudulent or dishonest conduct [s626.611(9)], and having willfully failed to comply with a Department rule [s626.611(13)].

       
       

   12. Section 626.621, Florida Statutes, sets forth the grounds for discretionary suspension or revocation of a license. Under the terms of that statute, and in conjunction with the same transaction, Respondent has been charged with having violated a provision of the insurance code [s626.621(2)], having violated a Department rule [s626.621(3)], having violated the provision against "twisting" [s626.621(5)], and with having engaged in unfair or deceptive acts [s626.621(6)].

   13. Respondent is also charged with having perpetrated certain unfair methods of competition and unfair or deceptive acts or practices proscribed by Section 626.9541, Florida Statutes. These include making a misrepresentation for the purpose of inducing the lapse, surrender or conversion of an insurance policy [s626.9541(1)(f)] , knowingly making a false material statement to any person [s626.9541 (5)(a)], knowingly making a false statement to any person to obtain a commission [s626.9541(11)(a)], and violating the provision against twisting [s626.9541(12)].

       
       

   14. Finally, Respondent is charged with having failed to furnish Thomas upon the issuance of a new policy, a notice regarding replacement of accident and sickness insurance (Rule 4-44.05, F.A.C.), and by misrepresentations or incomplete comparisons with having induced Thomas, a medicare eligible person, to purchase a new policy that merely duplicated coverage already In force (Rule 4-46.02(3), F.A.C.).

       
       

   15. Because the proceeding is clearly penal in nature, for revocation of Respondent's license is sought, the proceeding takes on special significance in terms of evidentiary requirements. That is to say, the Department must establish that the alleged violations occurred "... by evidence which weighs as substantially' on a scale suitable for evidence as the penalty does on the scale of penalties." Bowling v. Department of Insurance, 394 So.2d 165, 172 (Fla. 1st DCA 1981). In other words, the proof must be commensurate with the potential penalty. Henderson Signs v. Florida Department of Transportation, 397 So.2d 769, 773 (Fla. 1st DCA 1981).

       
       

   16. All charges herein stem from the Thomas transaction on May 11, 1981, and must stand or fall on the validity of the allegation that Piller used deception and misrepresentations in inducing Thomas to purchase a new policy.

       
       

   17. The testimony of the principals in this proceeding is completely at odds, for each gave a wholly different version of what transpired. In sorting through the conflicting claims, it is recognized that the complainant had no apparent reason to fabricate her tale. At the same time, it must be noted that she is elderly, seemed confused at times, and had no clear recollection as to when certain events occurred, when her husband died, how often she had contacted Respondent for assistance or advice, and the number and types of Insurance policies she held. She did not file a complaint against Respondent in this matter until her daughter urged her to do so. On the other hand, Respondent gave clear and convincing testimony as to the transaction in question, as well as his other dealings with Thomas. For these reasons, the testimony of Piller is accepted as being more credible and persuasive, and accordingly his account of the transaction is accepted.

       
       

   18. With one exception, all charges under Sections 626.611, 626.621, 626.9541 and Rule 4-46.03(3) are based upon the alleged misrepresentations by Piller to Thomas. Because the evidence does not support these charges, and clearly does not weigh "...as `substantially' on a scale suitable for evidence as the penalty does on the scale of penalties..." Bowling, supra at 172, those portions of the complaint should be dismissed.

       
       

   19. The remaining charge involves the alleged failure of Respondent to furnish Thomas a notice regarding replacement of accident and sickness insurance as required by Rule 4-44.05.. Since no insurance policy was replaced by the issuance of the General policy, the rule has no application to the proceeding at bar. Accordingly, the remaining charge should also be dismissed.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that all charges against Respondent, Thomas Stephen Piller, be

DISMISSED.

DONE and ENTERED this 16th day of March, 1982, in Tallahassee, Florida.

DONALD R. ALEXANDER

Hearing Officer

Department of Administration Oakland Office Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 16th day of March, 1982.

COPIES FURNISHED:

Julie St. John, Esquire Room 428-A, Larson Building Tallahassee, Florida 32301

David B. Higginbottom, Esquire Post Office Box 697 Frostproof, Florida 33843

Docket for Case No: 81-002782

Orders for Case No: 81-002782