STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF INSURANCE )

AND TREASURER, )

)

Petitioner, )

vs. ) CASE NO. 84-0797

)

SHELBY DEWEY BLACKMAN, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal evidentiary hearing was held in this case in Pensacola, Florida, on June 29, 1984, before Michael M. Parrish, a duly designated Hearing Officer of the Division of Administrative Hearings. At the hearing the parties were represented by the following counsel:

For Petitioner: Daniel Y. Sumner, Esquire

Department of Insurance 413-B Larson Building Tallahassee, Florida 32301

For Respondent: Artice L. McGraw, Esquire

817 North Palafox Street Pensacola, Florida 32501

INTRODUCTION

At the commencement of the hearing, counsel for the Respondent made an ore tenus motion for continuance on the grounds that although counsel had sent written notice of the hearing to the Respondent, had sent letters to the Respondent advising him to contact his attorney, and had unsuccessfully attempted to reach the Respondent by telephone, the Respondent had not contacted his attorney since receipt of the Order rescheduling the hearing and the Respondent had not appeared at the hearing. Counsel for the Respondent had no information regarding why the Respondent had not replied to his communications and had not appeared at the hearing, but assumed that there must be some reason beyond the Respondent's control which accounted for his failure to appear. The Petitioner opposed the motion primarily on the grounds that the Petitioner had all of its witnesses in attendance and that a number of the witnesses had traveled substantial distances at personal inconvenience. The motion for continuance was denied and the hearing proceeded as scheduled, but counsel for the Respondent was advised that at any time prior to the issuance of this Recommended Order he could file a motion to reconvene the hearing if subsequent to the hearing he discovered facts which would have justified a continuance of the hearing. No such motion has been filed.

At the hearing the Petitioner presented the testimony of seven witnesses and offered eight exhibits, all of which were admitted into evidence without objection. The Respondent did not call any witnesses and did not offer any exhibits.

A transcript of the hearing was prepared and was filed with the Division of Administrative Hearings on July 11, 1984. The parties were given 15 days from the filing of the transcript within which to file proposed findings of fact, proposed conclusions of law, legal memoranda, or other post-hearing submissions to the Hearing Officer. On July 26, 1984, the Petitioner timely filed a proposed recommended order. The Respondent has not filed any post-hearing documents.

ISSUE

The issue in this case is whether, for the reasons alleged in the Administrative Complaint dated February 10, 1984, the Petitioner should revoke the Respondent's license and eligibility for licensure as an insurance agent or impose some lesser penalty authorized by statute.

FINDINGS OF FACT

Based on the testimony of the witnesses and the exhibits admitted into evidence, I make the following Findings of Fact: 1/

1. On June 16, 1982, the Respondent, Shelby Dewey Blackman, executed an Application for Qualification as Nonresident Life Agent, which application he thereafter caused to be filed with the Petitioner, Department of Insurance and Treasurer. In that application Mr. Blackman stated that his residence address and his business address in his state of residence were both "2549 New York Avenue, Pascagoula, Miss. 39567." (Pet. Ex. 1; Tr. 12-13)

   
   

2. The Department of Insurance and Treasurer does not issue Nonresident Life Agent licenses to people who are in fact residents of the State of Florida. Such licenses are only issued to people who are nonresidents of this state. Applicants for Resident Life Agent licenses are required to take an examination prior to licensure. Applicants for Nonresident Life Agent licenses are not required to take an examination prior to licensure. The Department would not have issued a Nonresident Life Agent license to Mr. Blackman if the Department had known that Mr. Blackman was a Florida resident. (Tr. 14)

   
   

3. As a result of the filing of the application described above, the Department issued to Mr. Blackman a license as a Nonresident Life and Health Agent for the American Sun Life Insurance Company, which was the only company he was authorized to write insurance for in the State of Florida. When Mr. Blackman received his license, the license listed the name of the the only company he was authorized to write insurance for in this state. Licensees who are authorized to represent more than one insurance company in this state receive a separate license for each company they are authorized to represent. Mr. Blackman had only the one license to represent one company. (Pet. Ex. 1 and 2; Tr. 14-18)

   
   

4. At all times material to this case, Mr. Blackman was a resident of Santa Rosa County, Florida. Specifically, Mr. Blackman was a resident of Santa Rosa County, Florida, at the time he applied for and was issued a Nonresident Life and Health Agent license and at the time of writing the four insurance applications which are described hereinafter. (Pet. Ex. 3; Tr. 20-21, 53)

5. Continental Bankers Life Insurance Company of the South does not currently hold, and has never held, a Certificate of Authority to write insurance in the State of Florida. In November of 1982 Continental Bankers Life Insurance Company of the South was licensed to write insurance in the State of Alabama and Mr. Blackman was authorized by Continental to write insurance for Continental in the State of Alabama. (Pat. Ex. 8; Tr. 24-25)

   
   

6. During November of 1982, Mr. Blackman wrote four applications for health insurance policies to be issued by the Continental Bankers Life Insurance Company of the South. One was an application dated November 2, 1982 from Mr. Thomas J. Barrow. Another was an application dated November 4, 1982, from Mr. Jimmie R. Williams. The last two were applications dated November 12, 1982, from Mr. Henry E. Marshall and Mr. Ercy L. Henderson, respectively. All four of the applications were written and signed in Jay, Florida. No part of the transactions which culminated in the writing of the four applications took place in the State of Alabama. On three of the applications Mr. Blackman wrote that the application was written and signed in Brewton, Alabama, and on one of the applications Mr. Blackman wrote that the application was written and signed in Flomaton, Alabama. The statements that the applications were written and signed in Alabama were false statements that Mr. Blackman knew to be false statements. (Pet. Ex. 4, 5, 6, 7; Tr. 37-38, 42, 49, 53-54)

   
   

7. The false statements written on the four applications described above were relied upon by the Continental Bankers Life Insurance Company of the South and were, therefore, material misrepresentations. If Mr. Blackman had truthfully written on the applications that they were written and signed in the State of Florida, Continental would not have issued policies on the basis of those four applications because Continental was not licensed to write insurance in the State of Florida. The MM-6 policy is an insurance policy that Continental markets in Alabama and the false statements on the applications which indicated that the policies were applied for and completed in Alabama induced Continental to issue the policies. (Tr. 25-27, 32, 34-35)

   
   

   CONCLUSIONS OF LAW

   
   

8. The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this case. Chapter 120, Florida Statutes.

   
   

9. Section 626.611, Florida Statutes (1383) , provides as follows, in pertinent part:

   
   

   The department shall deny, suspend, revoke, or refuse to renew or con- tinue the license of any agent, solicitor, or adjuster or the per- mit of any service representative, supervising or managing general agent, or claims investigator, and it shall suspend or revoke the eligibility to hold a license or permit of any such person, if it finds that as to the applicant, licensee, or permittee any one or more of the following applicable grounds exist:

   1. Lack of one or more of the

      qualifications for the license or permit as specified in this code.

   2. Material misstatement, mis- representation, or fraud in obtain- ing the license or permit or in attempting to obtain the license

      or permit. (3) * * *

      1. If the license or permit is willfully used, or to be used, to circumvent any of the requirements or prohibitions of this code.

      2. Willful misrepresentation of any insurance policy or annuity con- tract or willful deception with regard to any such policy or contract, done either in person or by any form of dissemination of information or adver- tising.

      (6) * * *

      1. Demonstrated lack of fitness or trustworthiness to engage in the business of insurance.

      2. Demonstrated lack of reasonably adequate knowledge and technical com- petence to engage in the transactions authorized by the license or permit.

      3. Fraudulent or dishonest prac- tices in the conduct of business under the license or permit.

      (10) * * * (11) * * * (12) * * *

      (13) willful failure to comply with, or willful violation of, any proper order or rule of the depart- ment or willful violation of any provision of this code.

      
      

10. Section 626.621, Florida Statutes (1983), reads as follows, in pertinent part:

    
    

    The department may, in its dis- cretion, 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 manag- ing general agent, or claims investi- gator, and it may suspend or revoke the eligibility to hold a license or permit of any such person, if it finds that as to the applicant, licensee, or

    permittee any one or more of the follow- ing applicable grounds exist under circum- stances for which such denial, suspension, revocation, or refusal is not mandatory

    under s. 626.611:

    1. Any cause for which issuance of the license or permit could have been refused had it then existed and been known to the department.

    2. Violation of any provision of this code or of any other law appli- cable to the business of insurance in the course of dealing under the license or permit.

       
       

11. Section 626.901(1), Florida Statutes (1983), reads as follows, in pertinent part:

    
    

    1. No person shall, from offices

       or by personnel or facilities located in this state or in any other state, directly or indirectly act as agent for, or otherwise represent or aid

       on behalf of another, any insurer not then authorized to transact such insurance in this state, or in any other state, in the solicitation, negotiation, procurement, or effectua- tion of insurance or annuity contracts, or renewals thereof; the dissemination of information as to coverage or rates; the forwarding of applications; the delivery of policies or contracts;

       the inspection of risks; the fixing

       of rates; the investigation or adjust- ment of claims or losses; or the collection or forwarding of premiums or in any other manner represent or assist such an insurer in the trans- action of insurance with respect to

       subjects of insurance resident, located, or to be performed in this state. ***

       
       

12. Section 626.9541(1)(a), Florida Statutes (1983), reads as follows, in pertinent part:

    
    

    1. UNFAIR METHODS OF COMPETITION

       AND UNFAIR OR DECEPTIVE ACTS.--The fol-

       lowing are defined as unfair methods of competition and unfair or deceptive acts or practices:

       1. Misrepresentations and false advertising of insurance policies.-- Knowingly making, issuing, circulating, or causing to be made, issued, or circu- lated, any estimate, illustration, cir- cular, statement, sales presentation, omission, or comparison which:

          1. Misrepresents the benefits, advantages, conditions, or terms of any insurance policy.

          2. * * *

          3. * * *

          4. * * *

          5. Uses any name or title of any insurance policy or class of insurance policies misrepresenting the true nature thereof.

          6. * * *

          7. * * *

          8. * * *

          
          

13. Mr. Shelby Dewey Blackman lacks one or more of the qualifications for a Nonresident Life and Health Agent license; specifically he lacks nonresident status. Therefore, his license and eligibility to hold a license are subject to suspension or revocation pursuant to Sections 626.611(1), Florida Statutes (1983).

    
    

14. Mr. Shelby Dewey Blackman made a material misstatement, misrepresentation, or fraudulent statement in obtaining his Nonresident Life and Health Agent license, specifically an intentional false statement of his place of residence. Therefore, his license and eligibility to hold a license are subject to suspension or revocation pursuant to Section 626.611(2), Florida Statutes (1983).

    
    

15. Mr. Shelby Dewey Blackman willfully used his license to circumvent the requirements and prohibitions of the Florida insurance code and demonstrated a lack of fitness or trustworthiness to engage in the business of insurance by intentionally writing insurance policy applications in Florida for a company he was not licensed to represent in Florida, by intentionally writing insurance policy applications in Florida for a company that was not licensed to engage in the insurance business in Florida, and by intentionally including false information on applications for insurance policies written in Florida. Therefore his license and eligibility to hold a license are subject to suspension or revocation pursuant to Section 626.611(4) and (7), Florida Statutes (1983)

    
    

16. By reason of the facts and actions described above Mr. Shelby Dewey Blackman's license and eligibility to hold a license are also subject to suspension or revocation pursuant to Section 626.611(5), (9), and (13); Section 626.621(1); Section 626.901; and Section 626.9541(1)(a), Florida Statutes (1983).

    
    

17. The Department of Insurance and Treasurer has also argued that Mr. Blackman's license and eligibility to hold a license are subject to suspension or revocation pursuant to Section 626.611(8), Florida Statutes (1983), which mandates such a penalty for "[d]emonstrated lack of reasonably adequate knowledge and technical competence to engage in the transactions authorized by the license or permit." To the contrary, I conclude from the evidence that Mr. Blackman was reasonably knowledgeable and competent. His deliberate resort to falsehoods in his application for licensure and in the four applications for insurance discussed above demonstrate that he was knowledgeable of the statutory requirements and clever enough to fashion a way around them. While the evidence is abundant to demonstrate that Mr. Blackman has an underdeveloped or under- utilized concept of honesty, it does not support a conclusion that he is ignorant or uninformed.

RECOMMENDATION

For all of the reasons set forth above, and particularly because of Mr.

Blackman's demonstrated disregard for the truth, I RECOMMEND that the Department of Insurance and Treasurer enter a Final Order revoking Mr. Blackman's license and eligibility to hold a license.

DONE AND ORDERED this 31st day of July, 1984, at Tallahassee, Florida.

MICHAEL M. PARRISH

Hearing Officer

Division of Administrative Hearings Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301 904/488-9575

Filed with the Clerk of the Division of Administrative Hearings this 31st day of July, 1984.

ENDNOTES

1/ The primary evidence supporting the findings of fact is noted parenthetically at the end of each paragraph of the findings of fact. References to the exhibits are noted as "Pet. Ex. ," and references to pages of the transcript are noted as "Tr. ."

2/ The evidence regarding Mr. Blackman's residence is circumstantial, but convincing. The evidence shows that on January 3, 1982, and again on January 3, 1984, Mr. Blackman signed forms to claim homestead exemption. (Pet. Ex. 3) On both forms he asserted that his address was Route 2, Box 523, Jay, Florida, and that he had been a Florida resident since 1977 or 1978. Mr. Blackman also had a son who played on the Little League football team at the Jay Recreation Park and Mr. Blackman solicited the purchase of insur- ance at the Jay Recreation Park on at least one occasion. Finally, on the four insurance applications that Mr.

Blackman solicited and wrote during November of 1982, he listed his own address as "P. O. Box 798, Jay, Florida 32568." (Pet. Ex. 4, 5, 6, 7)

COPIES FURNISHED:

Daniel Y. Sumner, Esquire Department of Insurance 413-B Larson Building Tallahassee, Florida 32301

Artice L. McGraw, Esquire 817 North Palafox Street Pensacola, Florida 32501

Honorable Bill Gunter Insurance Commissioner and

Treasurer The Capitol

Tallahassee, Florida 32301

Docket for Case No: 84-000797

Orders for Case No: 84-000797