STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF INSURANCE AND ) TREASURER, )

)

Petitioner, )

)

vs. ) CASE NO. 89-2356

)

GERALD CARPENTER, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Claude B. Arrington, held a formal hearing in the above-styled case on June 20, 1989, in Miami, Florida.

APPEARANCES

For Petitioner: Brian Norton, Esquire

Office of Legal Services

412 Larson Building Tallahassee, Florida 32399-0300

For Respondent: Randolph Q. Ferguson, Esquire

1644 Northwest 17th Avenue Miami, Florida 33125

STATEMENT OF THE ISSUES

Whether Respondent committed the offenses set forth in the Administrative Complaint and, if so, the penalty which should be imposed.

PRELIMINARY STATEMENT

Respondent is a bail bondsman licensed by Petitioner to do business in the State of Florida. An Administrative Complaint was filed by Petitioner against Respondent alleging that he violated several provisions of the laws regulating bail bondsmen in the State of Florida. Respondent denied the allegations of the Administrative Complaint and timely requested a formal hearing. This proceeding followed.

The hearing in this matter was held June 20, 1989, in Miami, Florida. At the hearing, Petitioner presented the testimony of one witness and introduced two documentary exhibits. Respondent presented the testimony of two witnesses and introduced one documentary exhibit. All exhibits were accepted into evidence.

A transcript of the hearing has been filed. At the parties' request, the deadline for filing post-hearing submissions was set for more than ten days

following the filing of the transcript. Consequently, the parties waived the requirement that a recommended order be rendered within thirty days after the transcript is filed. Rule 22I-6.031, Florida Administrative Code. Petitioner did not submit a proposed recommended order on or before September 15, 1989, the deadline set for the filing of post-hearing submissions. The proposed findings of fact contained in the Proposed Recommended Order filed by Petitioner on September 25, 1989, will not be ruled upon because the Proposed Recommended Order was not timely filed. The rulings on the proposed findings submitted by the Respondent are addressed in the appendix to this recommended order.

FINDINGS OF FACT

1. Respondent was at all times relevant hereto licensed by Petitioner in the State of Florida as a Limited Surety Agent (Bail Bondsman) and as a Life and Health Insurance Agent.

   
   

2. On January 1, 1988, Daniel Del Sardo was arrested and incarcerated in Broward County, Florida, on charges of forgery, uttering a forged instrument, grand theft of the second degree, and possession of a stolen credit card. His bail was set in the amount of $3,100.00.

   
   

3. On March 29, 1988, Sabastian Del Sardo (Complainant), the father of Daniel Del Sardo, and Respondent entered into an agreement for Accredited Surety & Casualty Company, Inc., for whom Respondent acted as agent and attorney in fact, to post the bail bond for Daniel Del Sardo. Complainant paid Respondent the sum of $350.00 as the premium for the bail bond and agreed to indemnify Accredited Surety & Casualty Company, Inc., the surety on the bond, in the event the surety suffered a loss on the bail bond. In addition, Complainant tendered to Respondent, as additional security, a check in the amount of $1,000.00 and the title to a 1979 Cadillac. Complainant told Respondent to hold the check until April 3, 1988, the date Complainant was scheduled to receive his social security check.

   
   

4. On April 4, 1988, Complainant gave to Respondent the sum of $750.00 in cash in exchange for the $1,000.00 check that Respondent had been holding since March 29, 1988.

   
   

5. The collateral security was accepted by Respondent as attorney in fact and in trust for Accredited Surety & Casualty Company, Inc. By the terms of the agreement executed by Complainant and Respondent, Complainant was entitled to a return of the collateral security within 21 days after the bail bond was discharged in writing by the court.

   
   

6. On or about April 7, 1988, Complainant asked Respondent to take Daniel Del Sardo back into custody because Daniel had gotten back on drugs and had been stealing from Complainant and Complainant's wife.

   
   

7. Respondent had sufficient justification to return Daniel Del Sardo to custody. While there was a verbal agreement between Complainant and Respondent that Respondent would return Daniel to custody, there was no agreement as to how, or whether, Respondent was to be compensated for doing so.

   
   

8. Respondent incurred expenses in locating Daniel Del Sardo and in returning him to custody. Respondent and one of his employees spent over twenty hours looking for Daniel Del Sardo. When he was located, Daniel Del Sardo was high on drugs and did not go to jail peaceably. While he was in the process of taking Daniel Del Sardo back into custody, Respondent's clothing was damaged.

   Respondent's employee transported Daniel Del Sardo from Miami, Florida, to the Broward County, Florida, jail on April 10, 1988.

   
   

9. On April 20, 1988, Daniel Del Sardo changed his plea from not guilty to guilty on the four counts and was sentenced to a total of four years in prison. The bond posted on behalf of Daniel Del Sardo was discharged on April 26, 1988.

   
   

10. On April 28, 1988, Complainant asked Respondent to return the car title and the $750.00 security deposit he had given Respondent. Respondent refused to return the entire deposit and told Complainant that he was going to keep the sum of $525.00 to reimburse himself for expenses he had incurred in taking Daniel Del Sardo back into custody. Complainant did not agree that Respondent was entitled to reimbursement of expenses. Further, Complainant did not agree that $525.00 was a reasonable figure for the expenses Respondent had incurred. In response to Complainant's demand that his entire deposit be refunded, Respondent, on April 28, 1988, returned the car title and the sum of

    $225.00 to Complainant. Respondent kept the sum of $525.00 to reimburse himself for the expenses he incurred in returning Daniel to custody.

    
    

11. In charging Complainant for the expenses he incurred in returning Daniel Del Sardo to custody and in deducting those expenses from the collateral security, Respondent was following a practice that has developed among those engaged in the bail bond business in Dade County, Florida.

    
    

12. Complainant filed a complaint with Petitioner on the grounds that his entire deposit of $750.00 had not been returned, asserting that there had been no agreement that he would pay Respondent's expenses for taking Daniel back into custody. On or about June 20, 1988, one of Petitioner's investigators contacted Respondent about the complaint. On June 21, 1988, Respondent paid to Complainant the sum of $525.00, representing the balance of the security deposit he had earlier received from Complainant.

    
    

13. On January 26, 1989, Petitioner filed an administrative complaint against Respondent based on his dealings with Sabastian Del Sardo. The administrative complaint charged Respondent with violating the following:

    
    

    1. Section 648.44(1)(g), Florida Statutes,

    2. Section 648.442(1), Florida Statutes,

    3. Section 648.442(4), Florida Statutes,

    4. Section 648.45(2)(e), Florida Statutes,

    5. Section 648.45(2)(f), Florida Statutes, and

    6. Section 648.45(2)(j), Florida Statutes.

       
       

14. Respondent denied the allegations of the Administrative Complaint and timely requested a formal hearing.

    
    

15. There was no evidence that Respondent has been previously disciplined by Petitioner.

    
    

    CONCLUSIONS OF LAW

    
    

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

17. Petitioner has the burden of proving by clear and convincing evidence the allegations against Respondent. See Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987).

    
    

18. Section 648.44(1)(g), Florida Statutes, provides:

    
    

    (1) No bail bondsman or runner shall:

    (g) Accept anything of value from a principal for providing a bail bond except the premium and transfer fee authorized by the department, except that the bondsman shall be permitted to accept collateral security or other indemnity from the principal or another person in accordance with the provisions of s. 648.442.

    
    

19. Petitioner failed to establish by clear and convincing evidence that Respondent violated the provisions of Section 648.44(1)(g), Florida Statutes. The collateral security is not within the purview of Section 648.44(1)(g), Florida Statutes, because the principal of the undertaking, Daniel Del Sardo, did not post the collateral security. The acceptance of collateral security by a bail bondsman from an indemnitor such as Sabastian Del Sardo is regulated by Section 648.442, Florida Statutes.

    
    

20. Section 648.442, Florida Statutes, provides, in pertinent part, as follows:

    
    

    (1) Collateral security or other indemnity accepted by a bail bondsman, except a promissory note or an indemnity agreement, shall be returned upon final termination of liability on the bond....

    * * *

    1. Such collateral security shall be received in the insurer's name by the bail bondsman in his fiduciary capacity...

    2. When the obligation of the surety on the bond or bonds has been released in writing by the court, the collateral shall be returned to the rightful owner as agreed in the indemnity agreement unless another disposition is provided for by legal assignment of the right to receive the collateral to another person.

    
    

21. Section 648.45, Florida Statutes, provides, in pertinent part, as follows:

    
    

    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:

       * * *

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

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

       * * *

       (j) Willful failure to comply with or willful violation of any proper order or rule of the department or willful violation of any provision of this chapter or the insurance code.

       
       

22. Petitioner established by clear and convincing evidence that Respondent knowingly violated the provisions of Sections 648.442(1) and (4), Florida Statutes, and, consequently, the provisions of Section 648.45(2)(j), Florida Statutes. These violations were established by Respondent's unilateral action in deducting his expenses from Sabastian Del Sardo's collateral security after the bail bond had been discharged and after Sabastian Del Sardo had demanded the return of his collateral security. These provisions required Respondent to return all of the collateral security to Sabastian Del Sardo. The indemnity agreement between Sabastian Del Sardo and Accredited Surety & Casualty Company, Inc. did not authorize Respondent's actions in deducting his expenses from these fiduciary funds. Although Respondent was following a practice common in the bail bondsman business in Dade County, Florida, he acted at his peril in dealing with these fiduciary funds in a way that is inconsistent with the regulatory laws.

    
    

23. Petitioner failed to establish by clear and convincing evidence that Respondent violated Section 648.45(2)(e), Florida Statutes, or Section 648.45(2)(f), Florida Statutes. Respondent's dealings with Sabastian Del Sardo's collateral security deposit, while a violation of law as found above, do not establish Respondent's lack of fitness or trustworthiness within the meaning of Section 648.45(2)(e), Florida Statutes. Likewise, these dealings do not establish Respondent's lack of reasonable knowledge or technical competence within the meaning of Section 648.45(2)(f), Florida Statutes.

    
    

24. Section 648.45(3), Florida Statutes, provides, in pertinent part, as follows:

    
    

    1. The department may deny, suspend, revoke, or refuse to renew any license issued under this chapter of the insurance code, or it may suspend or revoke the eligibility of any person to hold a license under this chapter of 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.

    
    

25. Section 648.52(1), Florida Statutes, provides, in pertinent part, as follows:

    
    

    (1) If ... the department finds that one or more causes exist for the suspension of, revocation of, or refusal to renew or continue any license issued under this chapter, the department may, in its discretion, in lieu of or in addition to such suspension, revocation, or refusal, and except on a second offense, impose upon the licensee an administrative penalty up to $1,000. ...

    
    

26. Section 648.53, Florida Statutes, provides, in pertinent part, as follows:

    
    

    1. If ... the department finds that one or more causes exist for a fine, or for the suspension of, revocation of, or refusal to renew or continue any license issued under this chapter, the department may in addition to any other penalties required herein, in its discretion, in lieu of such suspension, revocation, or refusal or in connection with any administrative monetary penalty imposed under s. 648.52, place the offending licensee on probation for a period, not to exceed 2 years, as specified in its order.

    2. As a condition to such probation or in connection therewith, the department may specify in its order reasonable

    terms and conditions to be fulfilled by the probationer during the probation period. If during the probation period the department has good cause to believe that the probationer has violated such terms and conditions or any of them, it shall forthwith suspend, revoke, or refuse to renew or continue the license of the probationer, as upon the original causes referred to in subsection (1).

    
    

27. The department has adopted no disciplinary guidelines applicable to this proceeding.

    
    

28. In determining the penalty to be imposed against Respondent, it is appropriate to consider that he did incur expenses in returning Daniel Del Sardo, that he was following a common practice in deducting those expenses from

the collateral security, and that he promptly reimbursed Sabastian Del Sardo after being contacted by the Department's investigator.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law it is RECOMMENDED that Petitioner, Florida Department of Insurance, enter a final order which finds that Respondent, Gerald Carpenter, violated the provisions of Sections 648.422(1) and (4), Florida Statutes, and Section 648.45(2)(j), Florida Statutes. It is further RECOMMENDED that an administrative fine in the amount of $500.00 be levied against Respondent.

DONE AND ENTERED this 6th day of October, 1989, in Tallahassee, Leon County, Florida.

CLAUDE B. ARRINGTON

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 6th day of October, 1989.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 89-2356

The following rulings are made on the proposed findings of fact submitted by Respondent:

1. The proposed findings of paragraph 1 are rejected as being unnecessary to the results reached. Whether Respondent was justified in returning Daniel Del Sardo to custody is not in issue.

2. The proposed findings of paragraph 2 are rejected as being speculation.

3. The proposed findings of paragraph 3 are rejected as being subordinate to the findings made.

4. The proposed findings of paragraph 4 are rejected as being conclusions of law.

COPIES FURNISHED:

Brian Norton, Esquire Office of Legal Services

412 Larson Building Tallahassee, Florida 32399-0300

Randolph Q. Ferguson

1644 Northwest 17th Avenue Miami, Florida 33125

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: 89-002356

Orders for Case No: 89-002356