STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF INSURANCE AND )

TREASURER, )

)

Petitioner, )

)

vs. ) CASE NO. 88-4431

)

JOSEPH MAURICE COLLIER, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Veronica E. Donnelly, held a formal hearing in the above-styled case on April 20, 1989, in Myers, Florida.

APPEARANCES

For Petitioner: Robert C. Byerts, Esquire

Office of Legal Services Department of Insurance

412 Larson Building Tallahassee, Florida 32399-0300

For Respondent: Thomas F. Woods, Esquire

GATLIN, WOODS, CARLSON & COWDERY

1709-D Mahan Drive Tallahassee, Florida 32308

STATEMENT OF THE ISSUES

Whether the Respondent committed the alleged multiple violations of Chapter 626, Florida Statutes, as set forth in the Administrative Complaint.

PRELIMINARY STATEMENT

In an Amended Administrative Complaint filed September 13, 1988, Petitioner, Department of Insurance and Treasurer (hereinafter the Department), charged Respondent, Joseph Maurice Collier (hereinafter Collier), a general lines agent and President of A. Collier Insurance Agency, Inc., with a series of violations of Chapter 626, Florida Statutes. In essence, the allegations set forth in the administrative complaint state that Respondent Collier, or salespersons under his supervision, failed to complete insurance transactions with insurers on behalf of potential insureds in thirteen separate instances.

Applications and initial premium payments were accepted by the Respondent or his salespersons, but these were not timely processed in order to grant the potential insureds the coverage sought through A. Collier Insurance Agency, Inc.

During the hearing, the Respondent admitted that the applications and premiums were not submitted in a timely manner in all thirteen instances, as set forth in the administrative complaint. The Respondent's answers to Petitioner's Request for Admissions, with its forty-eight attachments, were moved into evidence by Petitioner, along with an additional exhibit marked as Petitioner's Exhibit A. As a prima facie case had been stipulated to between the parties, the Petitioner did not call witnesses in its case-in-chief. The Respondent testified in his own behalf and submitted four composite exhibits. All of the exhibits were admitted into evidence. In rebuttal, the Petitioner presented three witnesses.

A transcript of the proceeding was filed with the Hearing Officer on June 26, 1989. The parties were granted leave until August 7, 1989, to file proposed recommended orders. The requirement that a recommended order be filed within thirty days of the transcript filing was waived by the parties. Rulings on the proposed findings of fact submitted by the parties are in the Appendix to the Recommended Order.

FINDINGS OF FACT

1. Petitioner is the state agency charged with licensing insurance agents of all types, regulating licensure status, and enforcing the practice standards of licensed agents within the powers granted by the Legislature in Chapter 626, Florida Statutes.

   
   

2. At all times material to these proceedings, the Respondent was licensed as a General Lines Agent, Ordinary Life, including Health Agent, Ordinary Health Agent, and a Legal Expense Insurance sales representative.

   
   

3. Respondent Collier conducted business through A. Collier Insurance Agency, Inc. (hereinafter Collier Agency), in Fort Myers, Bonita Springs, and Naples, Florida. Collier Agency was a general lines insurance agency which sold automobile insurance through a licensed agent and unlicensed sales personnel. The unlicensed sales personnel acted through the supervision and control of the Respondent, the licensed general lines agent of record at Collier Agency. The Respondent is also the President and director of the insurance agency. All of Collier Agency's personnel who accepted the insurance applications and premiums addressed in this proceeding acted under the supervision and control of Respondent.

   
   

4. One of the ways in which the Respondent supervised and controlled unlicensed sales personnel who sold automobile insurance, was to personally review each application for insurance and to issue each agency check required by the selected insurance company. The Respondent conducted business in this manner at all three office locations along Florida's southwest coast on a daily basis.

   
   

5. Between August 15, 1986, and January 12, 1987, the Respondent failed to promptly submit nine applications for automobile insurance to insurance companies on behalf of potential insureds, in spite of the insurance agency's receipt of completed applications and premium payments from the nine customers seeking automobile insurance. As a result of the Respondent's failure to timely submit the applications and premiums, these customers were not insured during the time period requested, contrary to representations that the insurances would be in effect during the agreed upon time periods.

6. Between October 2, 1987, and January 30, 1987, the Respondent personally accepted four applications and initial premiums from four customers seeking automobile insurance. The applications were not timely processed and sent to the respective insurance companies to assure that the customers would receive insurance coverage during the time periods requested by the customers and agreed upon by Respondent on behalf of the insurance companies. As a result, the customers were not insured during the time periods requested.

   
   

7. In mitigation of the violations, it should be noted that the Respondent's failure to timely process applications occurred as a result of negligence. There was no scheme to intentionally deprive the customers of funds or to disregard the Respondent's fiduciary responsibilities to the potential insureds. The Respondent misjudged his own ability to handle the supervisory work of three busy and fast-paced insurance offices. It should also be noted that this is the first disciplinary action taken against the Respondent in over twenty years as a practicing, licensed insurance agent.

   
   

8. In five of the cases, the applications were processed at a later date by Respondent, without any prejudice to the potential insureds in the interim period of time in which they were not insured. In two cases, the Respondent paid claims made by the customers out of his own pocket as if the insurance policies had been in effect, as represented during the acceptance of these applications within Collier Agency. One case was settled, and a release was obtained by Respondent from the potential insured.

   
   

   CONCLUSIONS OF LAW

   
   

9. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter pursuant to Section 120.57(1), Florida Statutes.

   
   

10. In a proceeding to discipline a professional license, the Petitioner has the burden of proof, and must prove by clear and convincing evidence that the Respondent committed the violations set forth in the administrative complaint. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987).

    
    

11. Section 626.611, Florida Statutes, empowers the Department to suspend, revoke, or refuse to renew the license of any agent if it finds that any one or more of the following grounds exist:

    
    

    * * *

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

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

    3. Fraudulent or dishonest practices in

       the conduct of business under the license or permit.

    4. 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.

12. Section 626.561(1), Florida Statutes, provides:

    
    

    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.

    
    

13. Violation of the foregoing allows the Department to exercise its discretion to revoke, suspend, or refuse to renew the license of any agent if it finds that a violation of any provision of the Insurance Code, such as the violation of Section 626.561(1), Florida Statutes, has occurred in the agent's course of dealing under the license.

    
    

14. The evidence presented at hearing in this case reveals that in thirteen instances, the Respondent or his agents accepted premiums from agency customers for the purpose of securing automobile insurance policies on their behalf. These funds were held in a fiduciary capacity. The Respondent had a common law fiduciary and statutory duty to account for and pay the funds received to the insurer, or to promptly return these funds to his customers. In most instances, the Respondent either did nothing or allowed the funds to remain in the agency's financial accounts. This course of conduct violates Section 626.561(1), Florida Statutes. Failure to return the funds was a withholding of money which violates Section 626.611(10), Florida Statutes.

    
    

15. When the Respondent failed to follow through with the insurance applications on behalf of the agency customers and failed to even attempt to secure the requested automobile insurance policies, he breached another fiduciary duty to the agency customers. See In the Matter of White, 10 FALR 1664 (Final Order 4-10-87). In the Matter of Anderson, 9 FALR 1186 (Final Order 10-2-86). Such conduct demonstrates a lack of fitness or trustworthiness to engage in the business of insurance pursuant to Section 626.611(7), Florida Statutes.

    
    

16. While it has been established that the Respondent's breaches of duty were based upon nonfeasance as opposed to misfeasance, this fact does not negate the Respondent's responsibilities under the Insurance Code as a licensed agent.

RECOMMENDATION

Based upon the foregoing, it is RECOMMENDED:

1. That the Respondent be found guilty of the thirteen violations of Sections 626.611(7) and (10), Florida Statutes, and the thirteen violations of Section 626.561(1), Florida Statutes.

   
   

2. That Respondent's licenses as General Lines Agent, Ordinary Life, including Health Agent, Ordinary Health Agent, and a Legal Expense Insurance sales representative be suspended for a period of one year.

DONE and ENTERED this 28th of August, 1989, in Tallahassee, Leon County, Florida.

VERONICA D. D0NNELLY

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904)488-9675

Filed with the Clerk of the Division of Administrative Hearings this 28th day of August, 1989.

APPENDIX TO RECOMMENDED ORDER IN CASE NO. 88-4431

Petitioner's proposed findings of fact are addressed as follows:

1. Accepted. See HO #2.

2-3. Accepted. See HO #3.

4-7. Accepted. See HO #4.

8-20. Accepted. See HO #5 - #6.

Respondent's proposed findings of fact are addressed as follows:

1. Rejected. Improper conclusion of law. However, see HO #7.

2. Rejected. See HO #8.

3. Accepted, except for the thirteen counts in the complaint. See HO #5 - #6.

COPIES FURNISHED:

Robert C. Byerts, Esquire Office of Legal Services Department of Insurance

412 Larson Building Tallahassee, Florida 32399-0300

Thomas F. Woods, Esquire

GATLIN, WOODS, CARLSON & COWDERY

1709-D Mahan Drive Tallahassee, Florida 32308

Don Dowdell, Esquire General Counsel Department of Insurance The Capitol, Plaza Level

Tallahassee, Florida 32399-0300

Honorable Tom Gallagher

State Treasurer and Insurance Commissioner

The Capitol, Plaza Level Tallahassee, Florida 32399-0300

Docket for Case No: 88-004431

Orders for Case No: 88-004431