STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF INSURANCE )

AND TREASURER, )

)

Petitioner, )

vs. ) CASE NO. 83-1200

) EDWARD WILLISON CAROLL, III, )

)

Respondent. )

/

RECOMMENDED ORDER

This is a disciplinary case brought by the Department of Insurance and Treasurer against its licensee, Edward Willison Carroll, III. This case was heard in Orlando, Florida, on March 9, 1984, by Stephen F. Dean, assigned Hearing Officer of the Division of Administrative Hearings. The Administrative Complaint filed by the Department of Insurance against Respondent Edward Willison Carroll, III, alleged various multiple violations of Chapter 626, Florida Statutes, relating to the Respondent's alleged misconduct as an insurance agent. The allegations of the complaint center around the Respondent's handling of the liability and comprehensive coverage on an automobile owned by Bobby and Janice Hancock. Specifically, the complaint alleges that the Respondent and his agency did not provide underwriting information as required by the insurance company, that as a result of this failure the insurance company cancelled the insurance coverage, that the Respondent failed to notify the Hancocks that the insurance had been cancelled, that the Respondent caused an application for insurance to be filed with another company to replace the cancelled coverage without the knowledge of the Hancocks, and that the signature of Bobby Hancock was placed upon the second application for insurance by someone other than Hancock without his knowledge or consent.

APPEARANCES

For Petitioner: Susan E. Koch, Esquire

Department of Insurance 413-B Larson Building

Tallahassee, Florida 32301

For Respondent: Thomas F. Woods, Esquire

1030 East Lafayette Street, Suite 112

Tallahassee, Florida 32301

The issues are whether the Respondent or his employees committed the acts as alleged and whether said acts constitute a violation of Chapter 626, Florida Statutes.

FINDINGS OF FACT

1. In October 1981, Respondent Edward Willison Carroll, III, purchased the Friendly Auto Insurance Agency from Richard Paul Jackson.

2. On or about February 5, 1982, Bobby L. Hancock and Janice Fels Hancock went to the Friendly Auto Insurance Agency to purchase liability coverage and comprehensive coverage on one of their vehicles.

   
   

3. An employee of Respondent, Judy Conrad, completed one application for liability and another for comprehensive insurance, listing the drivers as Bobby Hancock, Janice Hancock, and Michael Fels, who was Mrs. Hancock's 16-year-old son.

   
   

4. About two weeks later the Hancocks were notified that Michael Fels' driver license number was needed and that there was an error regarding Mr. Hancock's birth date which needed to be corrected. Very shortly after being notified, Mr. Hancock and Michael Fels returned to the Friendly Auto Insurance Agency to provide the requested information.

   
   

5. The underwriting information referred to in paragraph 4, supra, was not supplied to Protective Casualty Insurance Company, which provided the liability insurance on the Hancocks' vehicle through the negligence of the Respondent or his agents.

   
   

6. Protective Casualty mailed several requests for the missing underwriting information to the Friendly Auto Insurance Agency and finally, on April 1, 1982, mailed to Friendly Auto a notice of cancellation effective May 16, 1982.

   
   

7. Neither Respondent nor any of his employees at the Friendly Auto Insurance Agency notified the Hancocks of the cancellation of the liability coverage by Protective Casualty.

   
   

8. In July 1982, the Hancocks separated. Janice Hancock retained the vehicle which the Hancocks had insured through Respondent's agency, and she and her son continued to drive it.

   
   

9. On or about July 1, 1982, Respondent instructed his employee, Laurie Starr, to complete a second application for liability insurance for the Hancocks. Accordingly, Ms. Starr completed an application and signed Respondent's name to it.

   
   

10. Bobby Hancock's signature was placed upon the application to Allied by someone other than Bobby Hancock and without his knowledge or consent. Said application differed from the original application of Bobby and Janice Hancock by omitting coverage on Michael Fels, Mrs. Hancock's son. These were willful acts.

    
    

11. In October 1982, Janice Hancock received a partial refund from Perry, her insurance financing company. This check reflects a different policy number than the insurance policy issued by Protective Casualty Insurance Company, the policy which was cancelled.

    
    

12. It was only after the Hancocks received the refund checks that they became aware that their liability insurance had been cancelled and that the Allied policy had been obtained for their benefit by Respondent's agency.

    CONCLUSIONS OF LAW

    
    

13. This Recommended Order is entered pursuant to the provisions of Section 120.57(1), Florida Statutes. The Department of Insurance has jurisdiction to discipline the Respondent, who is a licensed insurance agent.

    
    

14. The Department has demonstrated by substantial and competent evidence that the Respondent or his employee failed to properly process the original application for insurance by Bobby and Janice Hancock. As a result of this failure, their liability coverage was cancelled. The record reflects that additional information was requested from the Hancocks and that this information was provided to Respondent's employees. The application to S & H Insurance Company bears the corrected date of birth of Bobby Hancock and the driver license number of Michael Fels. The Respondent or his employees were negligent in failing to provide this information to Protective Casualty Insurance Company, which was providing the liability insurance coverage. As a result of this failure, the liability coverage was eventually cancelled by Protective Casualty. Thereafter, the Respondent or his employees caused an application to be prepared and sent to Allied Insurance Company to replace the cancelled liability coverage. Mr. Hancock's signature was placed on this application by someone other than Hancock without his knowledge or consent. This application for the replacement liability coverage omitted Michael Fels as a driver of the vehicle. The acts of the Respondent and his employees in preparing and sending in the application for the substitute liability coverage were willfully deceptive acts which involved the forging of the signature of Bobby Hancock, and negligently omitted the name of Michael Fels as a driver of the vehicle.

    
    

15. While the conduct of Respondent constitutes a violation of Section 626.611(5), Florida Statutes, and constitutes a violation of Section 626.9541(5), Florida Statutes, there is no evidence that the conduct of the Respondent or his employees was made for the purpose of defrauding the Hancocks or an insurance company. It appears that this action was taken in good faith to provide the coverage for which the Hancocks had paid and to do so in the most expeditious fashion. It is noted that the Respondent refunded the premiums paid by the Hancocks.

    
    

16. The Petitioner has recommended a penalty of suspension of the Respondent's insurance licenses and eligibility for licensure for one year; however, this appears to be an unduly long period of suspension in light of the nature of Respondent's offense and does not address the costs to the state of prosecuting this offense. Therefore, pursuant to the provisions of Section 626.681(1) Florida Statutes, the Hearing Officer would recommend that in lieu of the period of suspension of one year, an administrative fine of $500 be assessed for the failure to forward the information, and a fine of $2,500 be assessed for the submission of the forged application, which was a willful violation. A total of $3,000 in lieu of the suspension for 1 year would be more equitable and would impress upon Respondent the seriousness of this misconduct.

DONE and RECOMMENDED this 3rd day of August, 1984, in Tallahassee, Florida.

STEPHEN F. DEAN

Hearing Officer

Division of Administrative Hearings 2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 3rd day of August, 1984.

COPIES FURNISHED:

Susan E. Koch, Esquire Department of Insurance 413-B Larson Building

Tallahassee, Florida 32301

Thomas F. Woods, Esquire 1030 East Lafayette Street Suite 112

Tallahassee, Florida 32301

The Honorable William Gunter State Treasurer and Insurance

Commissioner

The Capitol, Plaza Level Tallahassee, Florida 32301

Docket for Case No: 83-001200

Orders for Case No: 83-001200