vs. ) CASE NO. 84-3430
Respondent. )
Pursuant to Notice, a formal hearing was held in this case on December 20, 1984, in Tampa, Florida, before the Division of Administrative Hearings by its duly designated Hearing Officer, Diane K. Kiesling.
For Petitioner: Daniel Y. Sumner
For Respondent: Jack H. Weech, Jr.
The issue in this case is whether Respondent's license as a General Lines Agent, Ordinary Life Agent, and Ordinary Combination Life Agent should be revoked or otherwise penalized for violations of Sections 626.561(1), 626.611(4), 626.611(7), 626.611(8), 626.611(9), 626.611(10), 626.611(13),
626.621(2), and 626.621(6), Florida Statutes.
Petitioner, Department of Insurance and Treasurer (DIT), presented the testimony of Madeline Lavoro and introduced ten exhibits into evidence. The Respondent presented his own testimony and that of his wife, Patricia J. Hodes, together with eight exhibits.
The parties filed proposed findings of fact and conclusions of law. All proposed findings of fact and conclusions law have been considered. To the extent that the proposed findings and conclusions submitted are in accordance with the Findings, Conclusions and views submitted herein, they have been accepted and adopted in substance. Those findings not adopted are considered to be subordinate, cumulative, immaterial, unnecessary, or not supported by the competent and credible evidence.
Vincent Davide died on December 7, 1982. At the time of his death, Mr. Davide was the holder of a life insurance policy with Metropolitan Life Insurance Company. The beneficiary of Mr. Davide's life insurance policy was Madeline Lavoro.
Ronald Conrad Hodes, Patricia Hodes, Madeline Lavoro, and Vincent Davide had known each other for approximately two years and had become friends. Upon Mr. Davide's death, Mr. and Mrs. Hodes offered to be of whatever assistance they could to Madeline Lavoro. Mr. Hodes was a licensed agent with Metropolitan Life Insurance Company. He offered to assist Ms. Lavoro with processing of her insurance claims with Metropolitan Life Insurance Company. Mr. Hodes acted as the company representative for Metropolitan Life Insurance Company with regard to the processing of the death claim on Vincent Davide. He had the responsibility as a life insurance agent to see that the proper beneficiary received the death benefits.
At the request of Ms. Lavoro, Mr. and Mrs. Hodes assisted Ms. Lavoro in financial planning, bill paying, and personal bookkeeping. Mr. Hodes, acting as a Metropolitan agent, filled out and submitted the death claim forms on the policy of Mr. Davide. Mr. Hodes signed these forms as the company representative. Only an insurance agent is authorized to submit death claim forms.
Three main forms wore submitted to Metropolitan on Mr. Davide's policy: Life Insurance Proof of Death Form, Statement of Company Representative; Life Insurance Proof of Death Form, Physicians Statement; and Funeral Expense Authorization Form. These forms were filled in by Mr. Hodes and identified Madeline Lavoro as the claimant. On both Life Insurance Proof of Death Forms, Mr. Hodes used his home address as the claimant's address but on the Funeral Expense Authorization Form, which related to funeral expenses rather than payment to the beneficiary, Mr. Hodes used Ms. Lavoro's correct home address.
As field representative for Metropolitan, Mr. Hodes received and signed a receipt for two benefit checks on behalf of Mr. Lavoro: A benefit check in the amount of four thousand seventy-seven dollars and sixty-three cents ($4,077.63) and the funeral home check in the amount of nine hundred eight-six dollars and fifty cents ($986.50). These checks were received by Mr. Hodes on January 3, 1963.
The funeral home check was forwarded to the funeral home and a receipt for the payment was furnished to Ms. Lavoro.
On January 5, 1983, Ms. Lavoro and Mr. and Mrs. Hodes went to the Deerfield Beach Branch of Barnett Bank to open a joint checking account for Ms. Lavoro and Mrs. Hodes. The account was to be opened in order to facilitate Mrs. Hodes assisting Ms. Lavoro in paying her bills. At this time, the benefit check #01929715-2 payable to Madeline Lavoro in the amount of $4,077.63 was cashed.
It is undisputed that Mr. Hodes left the bank with the cash in his possession. What actually transpired, however, is clearly in dispute. According to Mr.
Hodes, Ms. Lavoro knew that the Hodeses were in financial difficulty and agreed to lend the death benefits to the Hodeses. This arrangement is allegedly evidenced by a written agreement dated December 30, 1982, and purportedly signed by Madeline Lavoro. However, no promissory note existed. According to Ms.
Lavoro, she made no loan to Mr. Hodes and had no knowledge that the death benefit check had been paid until she contacted Metropolitan Life Insurance Company on March 15, 1983.
On March 16, 1983, Ms. Lavoro contacted Mr. Hodes and requested payment of the $4,077.63. Mr. Hodes gave Ms. Lavoro a personal check in that amount and requested that she not cash the check until April 1, 1983. On April 1, 1983, Ms. Lavoro attempted to cash the check which was refused for insufficient funds.
The Agreement dated December 30, 1982, was prepared by Mr. and Mrs. Hodes and states in pertinent part:
I Madeline Lavoro loan the sum of $4,077.63 to Ron Hodes which are my portion of the proceeds from Metropolitan Life Insurance Company claim payment on the death of Vincent Davide Policy #716908217 A. The principal
sum in the amount of $4,077.63 is being loaned for a period of 3 years at a rate of
interest of 10 percent. Interest only payable annually, to be paid at the end of each twelve month period. The principal to be repaid at the end of the third year. [sic]
I hereby want it known that Ron and Patricia Hodes have my full and acknowledged concent to assist me in setteling Vincent Davide's estate, as well as assisting me personally in any and all financial matters pertaining to me personally. This agreement is being written for the Hodes's protection so that no one at a later date could make statements that the Hodeses had done anything without my full concent. The assistance the Hodes are giving has been asked for by me. [sic]
I fully understand the contents of this agreement and I am signing it of my own free will and under no pressure or deress from anyone. [sic]
This Agreement and the check from Metropolitan Life Insurance Company bear the purported signature of Madeline Lavoro. Ms. Lavoro denies having signed either the agreement or the check, but does remember on several occasions, including January 5, 1983 at the Barnett Bank, signing a number of papers and forms at the request of Mr. Hodes without being fully aware of their content.
Under the circumstances, it is found that the Agreement is self serving and devoid of credibility in relation to an arms- length loan transaction. It is further found that Ms. Lavoro did not knowingly sign the agreement or the check and did not knowingly consent to lend the death benefits to Mr. Hodes. These findings are further supported by the fact that during the relevant time period, Ms. Lavoro was not working, was receiving worker's
compensation in the amount of $86.00 every two weeks, and had to take out a personal loan because she had no money. Under these circumstances, it is incredible to believe that Ms. Lavoro knowingly consented to loan the entire proceeds from Mr. Davide's life insurance to Mr. Hodes.
Mr. Hodes proposed findings of fact regarding alleged threats upon his family and alleged investigations by Metropolitan Life Insurance Company and Barnett Bank. It is found that there is insufficient credible evidence to support these findings and they are hereby rejected.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction of the parties to and the subject matter of these proceedings. Section 120.57(1), Florida Statutes (1963). By Administrative Complaint, Respondent, Ronald Conrad Hodes, is charged with violating the following sections:
626.561(1). All premiums, return premiums, or other funds belonging to insurers or others
received by an agent, solicitor, or adjuster in transactions under his license shall be trust funds so received by the licensee in a fiduciary capacity; and the licensee in the applicable regular course of business shall account
for and pay the same to the insurer, insured, or other person entitled thereto.
626.611(4). If the license or permit is willfully used or to be used, to circumvent any of the requirements or prohibitions of this code.
626.611(7). Demonstrated lack of fitness or trustworthiness to engage in the business of insurance.
626.611(8). Demonstrated lack of reasonably adequate knowledge and technical competence to engage in the transactions authorized by the license or permit.
626.611(9). Fraudulent or dishonest practices in the conduct of business under the license or permit.
626.611(10). Misappropriation, conversion, or unlawful withholding of moneys belonging to insurers or insureds or beneficiaries or to others and received in conduct of business under the license.
626.611(13). Willful failure to comply with or willful violation of, any proper order or rule of the department or willful violations of any provision of this code.
626.621(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.
626.621(6). In the conduct of business under the license or permit, engaging in unfair methods of competition or in unfair or deceptive acts or practices, as prohibited under part VII of this chapter, or having otherwise shown himself to be a source of injury or loss to
the public or detrimental to the public interest.
It is concluded that Ronald Conrad Hodes did receive funds belonging to Madeline Lavoro in a transaction under his license, which funds were trust funds received in a fiduciary capacity, and which funds Hodes failed to account for or pay to Madeline Lavoro in the regular course of business. Hodes is therefore guilty of violating Section 626.561(1), Florida Statutes.
It is concluded that there is not competent, substantial evidence to find that Hodes willfully circumvented the prohibitions of the insurance code. Bodes is therefore not guilty of violating Section 626.611(4), Florida Statutes.
It is concluded that Hodes demonstrated a lack of fitness or trustworthiness to engage in the business of insurance. He has therefore violated Section 626.611(7), Florida Statutes.
It is concluded that Hodes had not demonstrated a lack of reasonable and adequate knowledge and technical competence to engage in the transactions authorized by his license. Be has therefore not violated Section 626.611(8), Florida Statutes.
It is concluded that Hodes engaged in fraudulent or dishonest practices in his dealings with Madeline Lavoro. He is therefore guilty of violating Section 626.611(9), Florida Statutes.
It is concluded that Hodes misappropriated moneys belonging to Madeline Lavoro which were received by him in the conduct of business under his license. He has therefore violated Section 626.611(10), Florida Statutes.
It is concluded that as a result of violating Section 626.561(1), Hodes has willfully violated a provision of the insurance code. He has therefore violated Section 626.611(13), Florida Statutes.
It is concluded that Hodes violated provisions of the insurance code and is therefore guilty of violating Section 626.621(2), Florida Statutes.
It is concluded that Hodes has shown himself to be a source of injury or loss to Madeline Lavoro. He has therefore violated Section 626.621(6), Florida Statutes.
Based upon foregoing findings of fact and conclusions of law, it is RECOMMENDED THAT:
The insurance license of Ronald Conrad Hodes be suspended for a period of two years. In making this recommendation, it is recognized in mitigation that Mr. Hodes has been in the insurance business for twenty years and has not had any previous complaints made against him.
DONE and ENTERED this 15 day of March, 1985, in Tallahassee, Florida.
DIANE K. KIESLING
FILED with the Clerk of the Division of Administrative Hearings this 15th day of March, 1985.
Daniel Y. Sumner Attorney at law Department of Insurance 413-B Larson Building
Jack H. Weech, Jr.
1625 S. Florida Avenue Lakeland, Florida 33803
