STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF INSURANCE, )

)

Petitioner, )

)

vs. ) CASE NO. 82-2617

)

LARRY K. SECHREST, )

)

Respondent. )

)

RECOMMENDED ORDER

This matter came on for hearing on February 16, 1983, in Sarasota, Florida, before the Division of Administrative Hearings and its duly appointed Hearing Officer, R. T. Carpenter. The parties were represented by:

For Petitioner: Clark R. Jennings, Esquire

Department of Insurance The Capitol

Tallahassee, Florida 32301

For Respondent: Jerry Surfus, Esquire

150 East Avenue, South Sarasota, Florida 33577

This matter arose on Petitioner's four count Administrative Complaint charging Respondent with failing to account for funds due his insurer, improperly attempting to influence a prisoner in selecting a bailbondsman and attorney, improperly soliciting bonding business and issuing a bond for which he had no authority, all in violation of Sections 648.44 and 648.45, Florida Statutes (1981)(F.S.). The parties submitted proposed findings of fact which are incorporated herein to the extent they are relevant and consistent with the evidence.

FINDINGS OF FACT

1. Respondent, Larry K. Sechrest, was at all times relevant to the charges contained in the Administrative Complaint, licensed as limited surety agent in the State of Florida representing Allied Fidelity Insurance Company ("Allied").

   
   

2. In February, 1982, Respondent's accounts with Allied were audited by their representative at which time it was discovered that Respondent executed but did not report 202 powers of attorney.

   
   

3. The aforementioned powers represented $11,464.51 in premiums due Allied, and an additional $5,732 due the buildup fund.

   
   

4. On March 4, 1982, Allied demanded that the Respondent remit to them these premiums and buildup fund payments and account for and return the missing powers of attorney.

5. Respondent had failed to comply with Allied's demands as of the date this Administrative Complaint was filed by Petitioner (July 20, 1982).

   
   

6. Respondent subsequently offered to repay Allied at the rate of $1,000 per month, but this was refused. At the final hearing on February 16, 1983, Respondent offered to repay the total amount due within 30 days.

   
   

7. On April 29, 1981, Respondent attempted to post a ne exeat bond in the amount of $25,000 for Douglas R. Valentine of Manatee County, Florida, based on power of attorney number FL2800913 issued by Allied.

   
   

8. Respondent had not been given authority by Allied to post ne exeat bonds.

   
   

9. Power of attorney number FL2800913 was by its language to be issued for appearance bonds only.

   
   

   CONCLUSIONS OF LAW

   
   

10. Section 648.45, F.S., provides in pertinent part:

    
    

    1. The department may deny, suspend, revoke or refuse to renew any license issued under this law, or it may suspend or revoke the eligibility of any person to hold a license under this law, for any of the following causes or for any violation of the laws of this state relating to bail:

       * * *

       (b) Violation of any law relating to the business of bail bond insurance in the course of dealings under the license issued him by the department.

       * * *

       (d) Misappropriation, conversion or unlawful withholding of moneys belonging to insurers or others and received in the conduct of business under the license.

       * * *

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

       * * *

       (h) 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.

       * * *

       (j) When, in the judgment of the department, the licensee has, in the conduct of affairs under the license, demonstrated incompetency, or untrustworthiness, or conduct or practices rendering him unfit to carry on the bail bond business, or making his continuance in such business detrimental to the public interest,

       . . .

11. Respondent stipulated that he executed, but did not report, the 202 powers of attorney at issue here. Additionally, Respondent stipulated that he wrongfully withheld $11,464.51 in premiums due Allied and $5,732 due the buildup fund, and refused to comply with Allied's demands for the return of these funds as of the date of Petitioner's Administrative Complaint. In defense and mitigation, Respondent contends that he subsequently attempted to repay the monies owed Allied on a repayment schedule, and further pledged to make good all debts to Allied within 30 days of the final hearing.

    
    

12. However, Respondent wrongfully withheld these funds when they were due and made no attempt to at payment until after the audit by Allied revealed the discrepancies. Therefore, Respondent is guilty of unlawful withholding of monies in $ violation of Subsection 648.45(1)(d), F.S., quoted above, as charged in Count I of the Administrative Complaint. Additionally, Respondent's failure to pay these funds to Allied on demand was a violation of Subsection 648.45(1)(h), F.S., also quoted.

    
    

13. Petitioner has further charged Respondent with violating Subsections 648.45(1)(f) and (j), F.S. These provisions condemn fraud, dishonesty, untrustworthiness and incompetence in the conduct of bailbond business. As such, these provisions require proof of corrupt purpose or serious negligence.

    
    

14. Although Respondent's conduct of his business with respect to the Allied funds was unacceptable, there was no showing of corrupt intent. However, in the absence of an explanation for such nonpayment, Respondent must be found guilty of serious negligence and therefore of incompetence in the conduct of his bailbond business in violation of Subsection 648.45(1)(j), F.S., as further charged in Count I.

    
    

15. Section 648.44, F.S., provides in pertinent part:

    
    

    1. No bailbondsman or runners shall:

       1. Suggest or advise the employment of or name for employment any particular attorney to represent his principal.

       2. Solicit business in or about any place where prisoners are confined or in or about any court.

       
       

16. Evidence supporting the allegations that the Respondent violated the above-quoted provision was insufficient. The supporting testimony was elicited from witnesses, who lacked credibility and who were hostile to Respondent. The charges under Count II should therefore be dismissed.

    
    

17. The evidence is likewise insufficient to support the allegations contained in Count III. Robert B. Maginniss, Jr., the individual who was allegedly solicited by Respondent, did not testify. Since Petitioner's witnesses lacked direct knowledge of the alleged improper solicitation, the charges contained in this count should be dismissed.

    
    

18. Section 648.25(4), F.S., provides:

    "Limited Surety Agent" shall mean any in- dividual appointed by an insurer by power of attorney to execute or countersign bailbonds in connection with judicial proceedings and receives or is promised money or other things of value therefore.

    
    

19. Section 648.45, F.S., provides in pertinent part:

    
    

    1. The department may deny, suspend, revoke, refuse to renew any license issued under this law, or it may suspend or revoke the eligibility of any person to hold a license under this

       law, for any of the following causes or

       for any violation of the laws of this state relating to bail:

       * * *

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

       * * *

       (j) When, in the judgment of the depart- ment, the licensee has, in the conduct of affairs under the license, demonstrated incompetency, or untrustworthiness, . . .

       
       

20. Although Petitioner's evidence established that Respondent did attempt to issue a ne exeat bond without his insurer's authorization, this was merely a technical error and represented no improper conduct. Thus, charges contained in Count IV should also be dismissed.

RECOMMENDATION

Based on the foregoing, it is RECOMMENDED:

That Petitioner enter a Final Order finding Respondent guilty of violating Subsections 648.45(1)(d), (h) and (j), Florida Statutes (1981), as charged in Count I of the Administrative Complaint, and suspending his limited surety agent's license for one year; provided, however, that such license shall not be reinstated until Respondent has made restitution to the Allied Fidelity Insurance Company.

DONE and ENTERED this 20th day of May, 1983, in Tallahassee, Florida.

R. T. CARPENTER 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 20th day of May, 1983.

COPIES FURNISHED:

Clark R. Jennings, Esquire Department of Insurance The Capitol

Tallahassee, Florida 32301

Jerry Surfus, Esquire

150 East Avenue, South Sarasota, Florida 33577

The Honorable Bill Gunter Insurance Commissioner Department of Insurance The Capitol

Tallahassee, Florida 32301

================================================================= AGENCY FINAL ORDER

=================================================================

STATE OF FLORIDA DEPARTMENT OF INSURANCE AND TREASURER

IN THE MATTER OF LARRY K. SECHREST

Revocation of License and Case No. 82-L-162J Eligibility for Licensure DOAH Case No. 82-2617 Limited Surety Agent

/

ORDER REVOKING RESPONDENT'S LICENSES AND ELIGIBILITY TO HOLD LICENSES

THIS MATTER came on to be considered upon the transcript of record of hearing held on February 16, 1983, in Sarasota, Florida, and the Report, Findings, Conclusions and Recommendations of the Hearing Examiner dated May 20, 1983. Upon consideration thereof and being otherwise fully advised in the premises, it is ORDERED:

1. The Findings of Fact of the Hearing Examiner are adopted.

   
   

2. The Conclusions of Law of the Hearing Examiner are adopted.

   
   

3. The Recommendation of the Hearing Examiner is rejected for the following reasons:

   1. Section 648.49, Florida Statutes prohibits the establishment of a period of suspension in excess of one (1) year.

      
      

   2. The Department lacks the authority to condition any Order upon financial restitution by a Respondent to any aggrieved party listed in an Administrative Complaint.

      
      

   3. Revocation of license and eligibility for licensure is an appropriate remedy under the statutory authority cited in the Administrative Complaint, and the Hearing Officer's Conclusions of Law.

   
   

4. All licenses of the Respondent, LARRY K. SECHREST, heretofore issued within the purview of the Florida Department of Insurance and eligibility to hold said licenses be, and the same are hereby revoked.

DONE and ORDERED at Tallahassee, Florida, this 28th day of June , 1983.

BILL GUNTER

Insurance Commissioner and Treasurer

WILLIAM D. RUBIN

Assistant Insurance Commissioner and Treasurer

COPIES FURNISHED:

Jerry Surfus, Esquire

150 East Avenue, South Sarasota, Florida 33577

Clark R. Jennings, Esquire Department of Insurance 413-B Larson Building

Tallahassee, Florida 32301

Docket for Case No: 82-002617

Orders for Case No: 82-002617