STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF INSURANCE )

AND TREASURER, )

)

Petitioner, )

)

vs. ) CASE NO. 89-2193

)

KENNETH ALFORD DURHAM, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a final hearing in the above-styled matter was held on September 7, 1989, in Fort Pierce, Florida, before Joyous D. Parrish, a Hearing Officer of the Division of Administrative Hearings. The parties were represented at the hearing as follows:

APPEARANCES

For Petitioner: Clyde W. Galloway, Jr.

Office of Legal Services

412 Larson Building Tallahassee, Florida 32399-0300

For Respondent: Ralph L. Flowers

Post Office Box 3668

Fort Pierce, Florida 34948 STATEMENT OF THE ISSUES

The central issue in this case is whether the Respondent is guilty of the violations alleged in the Administrative Complaint dated December 28, 1988; and, if so, what penalty should be imposed.

PRELIMINARY STATEMENT

This case began on December 28, 1988, when the Department of Insurance and Treasurer (Department) filed an administrative complaint against the Respondent which alleged that Respondent had violated Section 648.365, Florida Statutes, by failing to file, within 30 days after the end of the period, statistical reporting information; had demonstrated a lack of reasonably adequate knowledge and technical competence to engage in the transactions authorized by his license in violation of Section 648.45(2)(f), Florida Statutes; had violated a law related to the business of bail bond insurance or a provision of the insurance code, Section 648.45(3)(b), Florida Statutes; and had shown himself to be a source of injury or loss to the public or detrimental to the public interest or no longer carrying on the bail bond business in good faith contrary to Section 648.45(3)(d), Florida Statutes. Thereafter, Respondent timely contested the issues of fact and requested a formal hearing pursuant to Section 120.57(1),

Florida Statutes. The case was forwarded to the Division of Administrative Hearings for formal proceedings on April 26, 1989.

At the hearing, the Department presented exhibits A and B which were admitted into evidence. Respondent testified in his own behalf and presented exhibits 1 through 4 which were admitted into evidence. The transcript of the proceedings was filed with the Division of Administrative Hearings on September 15, 1989.

After the hearing, the parties filed proposed recommended orders which have been considered in the preparation of this order. Specific rulings on the proposed findings of fact are included in the attached appendix.

FINDINGS OF FACT

Based upon the testimony of the witness and the documentary evidence received at the hearing, the following findings of fact are made:

1. At all times material to the allegations of the administrative complaint, Respondent was licensed and was eligible for licensure as a limited surety agent in the State of Florida. Respondent's application for examination for limited surety agent was filed in June, 1986. This application represented that Respondent would be employed by Carroll Collins Bonding when licensed. At the time of the hearing, Respondent was not licensed as a bail bondsman.

   
   

2. During the period January through June, 1988, Respondent was licensed as a limited surety agent for Allegheny Mutual Casualty Company (Allegheny). This license had been issued in April, 1987, based upon a form application submitted on Respondent's behalf by an employee of Carroll Collins Bonding. The information submitted on that application (such as social security number, date of birth, and home address) was accurate and was identical to that which had been included in Respondent's application for examination. While Respondent admitted he had signed a contract to work with Collins, he claimed that he was unaware that the Allegheny license had been sought and approved. I find such claim not credible. Respondent did not, however, work for Carroll Collins in a bonding capacity. Whether he worked for him in some other role was not addressed at the hearing.

   
   

3. Respondent did not timely provide statistical reports to the Department for Allegheny. When contacted by the Department, Respondent submitted a report which indicated no activity for Allegheny for the subject period, and requested that the license be cancelled.

   
   

4. No one from Carroll Collins Bond testified at the hearing. Consequently, no explanation for why the Allegheny application was filed for Respondent was offered. It can reasonably be inferred that Carroll Collins Bond pursued the Allegheny application based upon information Respondent had given them and that Respondent should have known of its submittal.

   CONCLUSIONS OF LAW

   
   

5. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of these proceedings.

   
   

6. Section 648.45, Florida Statutes, provides, in pertinent part:

   
   

   1. The department shall deny, suspend, revoke, or refuse to renew any license issued under this chapter or the

      insurance code, and it shall suspend or revoke the eligibility of any person to hold a license under this chapter or the insurance code, for any violation of the laws of this state relating to bail or any violation of the insurance code or for any of the following causes:

      * * *

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

      * * *

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

      * * *

      (b) Violation of any law relating to the business of bail bond insurance or violation of any provision of the insurance code.

      * * *

      (d) Showing himself to be a source of injury or loss to the public or detrimental to the public interest or being found by the department to be no longer carrying on the bail bond business in good faith.

      
      

7. Section 648.365, Florida Statutes, requires each insurer and each bail bondsman engaged in the bail bond business to file a report transmitting certain information on a semiannual basis to the department. Such report must be filed within 30 days after the end of the period. Consequently, reports required for the period January through June would be filed on or before July 30. While the intentional failure to file this information is a misdemeanor pursuant to Section 648.365(4), Florida Statutes, the unintentional failure to file is still contrary to law.

   
   

8. In this case, Respondent failed to file the required report in a timely fashion. Consequently, Respondent has breached a duty placed upon him by chapter 648, and has, therefore, violated a law relating to the business of bail bond insurance.

9. Contrary to the Department's allegation in the administrative complaint, however, no evidence was offered which suggests that Respondent has shown himself to be a source of injury or loss to the public or detrimental to the public interest or that he no longer carries on the bail bond business in good faith. Consequently, Respondent has not violated Section 648.45(3)(d), Florida Statutes.

   
   

10. Similarly, the Department has failed to establish that Respondent has demonstrated a lack of reasonably adequate knowledge and technical competence to engage in the transactions for which he is licensed. That he failed to file a report is not evidence of a lack of knowledge or competence. Therefore, Respondent has not violated Section 648.45(2)(f), Florida Statutes.

    
    

11. Section 648.52, Florida Statutes, authorizes the Department to impose an administrative penalty in an amount up to $1000 for a violation of the chapter. Evidence as to a proper penalty under the facts of this case was not submitted.

RECOMMENDATION

Based on the foregoing, it is RECOMMENDED:

That the Department of Insurance and Treasurer enter a final order imposing an administrative fine in the amount of $250.00 against Respondent, Kenneth Alford Durham.

DONE and ENTERED this 31st day of October, 1989, in Tallahassee, Leon County, Florida.

JOYOUS D. PARRISH

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 31st day of October, 1989.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 89-2193

Rulings On The Proposed Findings of Fact Submitted By Petitioner:

1. Paragraphs 1 through 3 are accepted.

Rulings On The Proposed Findings of Fact Submitted By Respondent:

Since Respondent submission was in one paragraph, each sentence has been considered a separate proposed fact and is ruled upon accordingly.

1. The first six sentences are accepted

2. The seventh sentence is rejected as unsupported by the record or hearsay.

3. The ninth and tenth sentences are accepted.

COPIES FURNISHED:

Clyde W. Galloway, Jr. Office of Legal Services

412 Larson Building Tallahassee, Florida 32399-0300

Ralph L. Flowers Post Office Box 3668

Fort Pierce, Florida 34948

Honorable Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level

Tallahassee, Florida 32399-0300

Don Dowdell General Counsel

Department of Insurance and Treasurer

The Capitol, Plaza Level Tallahassee, Florida 32399-0300

Docket for Case No: 89-002193

Orders for Case No: 89-002193