Petitioner: DEPARTMENT OF INSURANCE
Respondent: PEDRO LUIS HEREU
Judges: JANE C. HAYMAN
Agency: Department of Financial Services
Locations: Miami, Florida
Filed: Sep. 08, 1989
Status: Closed
Recommended Order on Thursday, March 22, 1990.
Latest Update: Mar. 22, 1990
Summary: The issues presented are the following: Whether Respondent committed the offenses set forth in the administrative complaint filed in this case and, if so, what penalty should be imposed; Whether Respondent's application for licensure should be approved.Respondent failure to adust insured`s premium was not found to be willful misappropriation of funds or knowingly collecting premiums which were not provided.
89-4931.PDFSTATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF INSURANCE, )
)
Petitioner, )
)
vs. ) CASE NO. 89-4931
)
PEDRO LUIS HEREU, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Jane C. Hayman, held a formal hearing in the above- styled case on December 4, 1989, in Tallahassee, Florida.
APPEARANCES
For Petitioner: C. Christopher Anderson, Esquire
Department of Insurance
412 Larson Building
Tallahassee, Florida 32399-0300
For Respondent: Alex D. Barker, Esquire
Gatlin, Woods, Carlson & Cowdery 1709-D Mahan Drive
Tallahassee, Florida 32308 STATEMENT OF THE ISSUES
The issues presented are the following:
Whether Respondent committed the offenses set forth in the administrative complaint filed in this case and, if so, what penalty should be imposed;
Whether Respondent's application for licensure should be approved.
PRELIMINARY STATEMENT
On May 25, 1989, Petitioner filed an administrative complaint which charged that Respondent committed multiple violations of the Florida Insurance Code and sought to impose disciplinary penalties against Respondent. The gravamen of the charges was that Respondent received premium dollars, deposited the dollars in his agency account, failed to transmit the funds to the insurer or return them to the prospective insured. Also, on October 17, 1989, Petitioner denied Respondent's application for a resident license. The basis for the denial was the administrative complaint at issue.
On August 24, 1989, Respondent requested a formal hearing on the administrative complaint, and on September 6, 1989, Petitioner requested that the Division of Administrative Hearings appoint a Hearing Officer to conduct a formal hearing pursuant to Section 120.57(1). On October 23, 1989, Respondent also requested a formal hearing on the denial of his application for a resident agent's license. The basis for the denial was the administrative complaint filed in the disciplinary action.
On preliminary matters, the parties, by stipulated motion, requested that issues related to the denial be consolidated with those in the disciplinary action. Leave was granted to file the denial letter subsequent to the hearing. The denial letter and the request for hearing related thereto were filed on December 13, 1989 and are made part of the record in this proceeding.
Also, the parties stipulated to certain paragraphs contained in the administrative complaint. The stipulated paragraphs are considered admissions by Respondent and are incorporated in the findings of fact section below.
Proceeding with its case in chief, Petitioner requested leave to present the testimony of one witness by deposition with exhibits which was granted without objection. Petitioner also offered one exhibit which was received into evidence without objection. Respondent testified on his own behalf and offered four exhibits which were received into evidence.
A transcript of the proceeding was filed on December 20, 1989. By rule, proposed findings of fact were due on January 2, 1990. However, on January 3, 1990, Respondent filed a motion for extension of time. The motion was granted, and proposed recommended orders were due on January 5, 1990. Both parties timely filed their proposed recommended orders. A ruling on each finding of fact has been made and is reflected in the appendix to this recommended order.
FINDINGS OF FACT
At all times material hereto, Respondent, Pedro Luis Hereu, was licensed and eligible for licensure as a life and health and general lines insurance agent by Petitioner, Department of Insurance.
Respondent also served as President and registered agent of P.H. Insurance, Inc. P.H. Insurance, Inc. was an incorporated life, health, and general lines insurance agency engaged in the business of selling life, health and general lines insurance products through Respondent and other agency personnel acting under the supervision and control of Respondent. Respondent was licensed to represent Union Bankers Insurance Company as a health insurance agent. Sometime prior to October 17, 1989, Respondent applied to become a resident agent for U.S. Security Insurance Company.
On or around February 21, 1986, Respondent assisted Mr. Pablo Beade in the preparation of an application for health insurance for Mr. Beade and his family through Union Bankers Insurance Company.
Mr. Beade is not fluent in English, and the application is written in English. Respondent, however, speaks Spanish which is Mr. Beade's native language, and with Mr. Beade's permission read the application in Spanish to Mr. Beade and completed the form in English in Mr. Beade's presence. The form consists primarily of "yes" and "no" questions. Mr. Beade answered "no" to all but one question regarding medical treatment in the previous five years. Mr. Beade told Respondent that during that time he had visited a Dr. Gualberto
Navarro for a regular checkup only. Respondent noted the information on the form. In his testimony, Mr. Beade, however, stated that he informed Respondent that he had been treated for ulcers in addition to his regular checkup with Dr. Navarro. Respondent disagrees. Considering that Respondent was aware that the Union Bankers would verify Mr. Beade's health history prior to issuing the policy, that Respondent supplied the company with Dr. Navarro's telephone number and address and Respondent's demeanor at the hearing, Respondent's testimony is found to be credible.
During his visit with Mr. Beade, Respondent explained to Mr. Beade that the application did not assure that his coverage would be approved by the company. Then, after completing the application, reviewing it with Mr. Beade, and witnessing the execution of it by the Beade's, Respondent collected
$3,093.99 in premium dollars from Mr. Beade. Although it is Respondent's custom to collect funds in the form of a check payable to the insurer, Mr. Beade preferred to pay him in cash. Respondent accepted the cash and issued a receipt to Mr. Beade for it.
Respondent returned to the P.H. Insurance and gave the cash and the application to his secretary for deposit and processing. According to Respondent, his secretary deposited the cash in the agency trust account and forwarded the application and a deposit to Union Bankers. Respondent's agent's contract with Union Bankers and the regular course of business, which Respondent admitted, obligate him to submit all money collected on behalf of Union Bankers to it immediately upon receipt.
Union Banker's attempted to obtain more information from Dr. Navarro concerning Mr. Beade's health, and Respondent attempted to contact Dr. Navarro on behalf of Union Bankers. However, Union Bankers did not receive a response from Dr. Navarro and issued its policy, excluding Mr. Beade.
Since coverage of Mr. Beade was excluded from the policy, the premium owed by Mr. Beade required adjustment. Respondent, however, had left Miami during the Summer of 1986 and did not return until October, 1986. It was not until then that he became aware of the company's refusal to insure Mr. Beade. On several occasions Respondent tried to telephone Mr. Beade to discuss the premium adjustment and return of a portion of the premium. His attempts were unsuccessful. On January 30, 1987, he wrote Mr. Beade, but the letter was
returned. He physically went to the last known address which Respondent had for Mr. Beade, but no one was home. Respondent has not personally been contacted by Mr. Beade since Respondent's return to Miami. Mr. Beade did, however, file suit against Union Bankers and Respondent; however, the relevant evidence did not indicate the allegations or the judgment, if any, in the litigation.
Meanwhile the funds remained in the non-interest bearing trust account.
In May, 1989, Petitioner filed the instant complaint against Respondent, and on September 14, 1989, Respondent issued a check in the amount of $1,982.56 to Mr. Beade from the trust account.
On October 17, 1989, Petitioner issued its letter demonstrating its intent to deny Respondent's application to become a registered agent for U.S. Security Insurance Company.
The instant claim represents the first and only complaint filed with Petitioner against Respondent.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this proceeding. Section 120.57(1), Florida Statutes
Petitioner has the burden of proving by clear and convincing evidence the allegations against Respondent. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987).
The administrative complaint alleges that, by Respondent's failure to remit the premium dollars in the regular course of business to Union Bankers Insurance Company and his alleged failure to expeditiously return the adjusted premium to Mr. Beade, Respondent violated the following provisions of the Florida Insurance Code:
Section 624.11(1), Florida Statutes;
b. Section 626.611(7), (8), (10) and (13),
Florida Statutes;
Section 626.621(2), and (6), Florida Statutes;
Section 626.839, Florida Statutes;
Section 626.9521, Florida Statutes; and
Section 626.9541(1)(o)1, Florida Statutes.
Under Section 626.839, Florida Statutes, Respondent is accountable for his secretary's actions although he may not have become aware of her act until after she forwarded the deposit. Thus, Petitioner established by clear and convincing evidence that Respondent, through his secretary's action, failed to forward the full premium to Union Bankers in the regular course of business.
Arguably, Respondent's actions would constitute a violation of Section 626.611(10):
The department shall 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 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:
(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.
However, to prove a violation of Section 626.611(10), Petitioner must also demonstrate by clear and convincing evidence that Respondent either willfully misappropriated, converted or unlawfully withheld the funds. Bowling v.
Department of Insurance, 394 So.2d 165, 170-71 (Fla. 1st DCA 1981) (distinguished on other issues). Respondent consistently, until the suit was
filed, attempted to contact Mr. Beade to discuss with him that the premium must be adjusted. He tried to telephone him, write him and even visit his home.
Each of these attempts failed. The money remained in a non-interest bearing trust account, and the proof did not even suggest that Respondent attempted to use the funds for any alternative purpose. From that, it is clear that Respondent did not willfully withhold the money from the insurer or from Mr.
Beade.
In addition, the proof failed to demonstrate, clearly and convincingly, that Respondent's actions constituted a lack of fitness or trustworthiness as prohibited by Section 626.611(7), Florida Statutes. To the contrary, it was shown that Respondent actions were reasonable and in good faith when he attempted to return the funds. Section 626.611(7) provides as follows:
The department shall 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 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:
Demonstrated lack of fitness or trustworthiness to engage in the business of insurance.
Section 626.611(8) requires discipline against a licensee who has demonstrated a lack of reasonably adequate knowledge and technical competence to engage in the activities for which he is licensed. Section 626.611 provides, in pertinent part, as follows:
The department shall 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 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:
Demonstrated lack of reasonably adequate knowledge and technical competence to engage in the transactions authorized by the license or permit.
To be found in violation of this provision, the proof must be clear that Respondent committed both elements of the offense: a lack of reasonably adequate knowledge and a lack of reasonably adequate technical competence. Here, the proof is not clear that Respondent's actions demonstrated a lack of reasonably adequate knowledge much less any lack of technical competence on his part. Accordingly, Petitioner failed to show that Respondent violated the provisions of Section 626.611(8).
To demonstrate a violation of Section 626.621(6), 626.9521 or 626.9541, Florida Statues, Petitioner must prove, clearly and convincingly, that Respondent committed an unfair method of competition and unfair or deceptive act. The unfair method of competition and unfair or deceptive act in which Petitioner alleges that Respondent engaged is found in Section 626.9541(1)(o)1. and reads as follows:
(1) UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE ACTS. - The following are defined as unfair methods of competition and unfair or deceptive acts or practices:
(o) Illegal dealings in premiums; excess or reduced charges for insurance. -
1. Knowingly collecting any sum as a premium or charge for insurance, which is not then provided, or is not in due course to be provided, subject to acceptance of the risk by the insurer, by an insurance policy issued by an insurer as permitted by this code.
The proof, however, failed to demonstrate by clear and convincing evidence, that Respondent knowingly collected the premium for insurance which he knew would not be provided. Respondent had no knowledge that Mr. Beade would not be covered under the Union Bankers policy. In fact, he made reasonable attempts to assist in procuring the coverage by providing Union Bankers with Dr. Navarro's address and telephone number. He also attempted to contact Dr. Navarro on behalf of Union Bankers. However, Union Bankers refused the risk of Mr. Beade. Thus, Respondent cannot be said to have knowingly collected the premium for insurance which is then not provided subject to the acceptance of risk by the insurer.
Likewise, Petitioner did not establish, by clear and convincing evidence, that Respondent violated the remaining provisions of law with which he has been charged. Each of the remaining provisions require evidence of the violation of a provision of the Florida Insurance Code. Since no violation has been demonstrated, the charge as to the remaining provision must fail.
Although approximately three years elapsed between the time Respondent collected the premium from Mr. Beade and the return of the funds to him, Respondent's attempts to return the funds due Mr. Beade during that period were reasonable and diligent under the circumstances. The proof failed to demonstrate under the Ferris standard that Respondent violated the provisions of law with which he was charged.
As to the denial of Respondent's application, the sole issue for determination is whether Respondent committed the offenses alleged in the administrative complaint on which the denial was based. That Respondent committed the offenses is not supported by the record.
RECOMMENDATION
Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department of Insurance enter a final order which
dismisses the administrative complaint against Respondent, Pedro Luis Hereu, and approves the subject application.
DONE AND ORDERED in Tallahassee, Leon County, Florida, this 22 day of March 1990.
JANE C. HAYMAN
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 22 day of March 1990.
APPENDIX TO THE RECOMMENDED, ORDER IN CASE NO. 89-4931
The following rulings are made on the proposed findings of fact submitted by Petitioner:
The proposed findings of fact in paragraph 1 are
adopted in material part by paragraph 1 of the Recommended Order.
The proposed findings of fact in paragraph 2 are
adopted in material part by paragraph 1 of the Recommended Order.
The proposed findings of fact in paragraph 3 are
adopted in material part by paragraph 2 of the Recommended Order.
The proposed findings of fact in paragraph 4 are
adopted in material part by paragraph 2 of the Recommended Order.
The proposed findings of fact in paragraph 5 are
adopted as subordinate to paragraph 6 of the Recommended Order.
The proposed findings of fact in paragraph 6 are
adopted in material part by paragraph 2 of the Recommended Order.
The proposed findings of fact in paragraph 7 are adopted in material part in paragraphs 3.
The proposed findings of fact in paragraph 8 are adopted in material part in paragraphs 3.
The proposed findings of fact in paragraph 9 are adopted in material part by paragraphs 5 of the Recommended Order.
The proposed findings of fact in paragraph 10 are
adopted in material part by paragraph 9 of the Recommended Order.
The proposed findings of fact in paragraph 11 are
adopted in material part by paragraph 6 of the Recommended Order.
The proposed findings of fact in paragraph 12 are
adopted in material part by paragraph 6 of the Recommended Order.
The proposed findings of fact in paragraph 13 are
adopted in material part by paragraph 6 of the Recommended Order.
The proposed findings of fact in paragraph 14 are rejected as a conclusion of law.
The proposed findings of fact in paragraph 15 are
adopted in material part by paragraphs 8-10 of the Recommended Order.
The following rulings are made on the proposed findings of fact submitted by Respondent:
The proposed findings of fact in paragraph 1 are
adopted in material part in paragraph 1 of the Recommended Order.
The proposed findings of fact in paragraph 2 are
adopted in material part in paragraph 2 of the Recommended Order.
The proposed findings of fact in paragraph 3 are
adopted in material part in paragraphs 3-5 of the Recommended Order.
The proposed findings of fact in paragraph 4 are
adopted in material part in paragraph 4 the Recommended Order.
The proposed findings of fact in paragraph 5 are
adopted in material part in paragraph 5 of the Recommended Order.
The proposed findings of fact in paragraph 6 are adopted in material part in paragraph 6.
The proposed findings of fact in paragraph 7 are
adopted in material part in paragraph 7 of the Recommended Order.
The proposed findings of fact in paragraph 8 are adopted in material part in paragraph 7.
The proposed findings of fact in paragraph 9 are rejected as irrelevant.
The proposed findings of fact in paragraph 10 are
adopted in material part in paragraph 8 of the Recommended Order.
The proposed findings of fact in paragraph 11 are
adopted in material part in paragraph 8 of the Recommended Order.
The proposed findings of fact in paragraph 12 are
adopted in material part in paragraph 8 of the Recommended Order.
The proposed findings of fact in paragraph 12 are adopted in material part in paragraph 10 of the Recommended Order.
COPIES FURNISHED:
Christopher Anderson, Esquire Office of Legal Services
412 Larson Building Tallahassee, Florida 32399-0300
Thomas F. Woods, Esquire Alex D. Barker, Esquire GATLIN, WOODS, CARLSON &
COWDERY
1709-D Mahan Drive Tallahassee, Florida 32308
Don Dowdell General Counsel The Capitol Plaza Level
Tallahassee, Florida 32399-0300
Honorable Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level
Tallahassee, Florida 32399-0300
=================================================================
AGENCY FINAL ORDER
=================================================================
OFFICE OF THE TREASURER DEPARTMENT OF INSURANCE
INSURANCE COMMISSIONER FIRE MARSHAL
IN THE MATTER OF:
CASE NO. 89-L-309RCB
PEDRO LUIS HEREU DOAH CASE NO. 89-4931
/
CONSENT ORDER
THIS CAUSE came on for consideration and final agency action upon a Settlement Stipulation filed by the parties for the entry of an Order, and the Treasurer and Insurance Commissioner, having read and considered same, having reviewed the record, and being otherwise fully advised in the premises, hereby finds:
The Treasurer and Insurance Commissioner as agency head of the Department of Insurance (hereinafter "Department") has jurisdiction over the subject matter and parties thereto.
The entry of this Consent Order and compliance therewith shall conclude the administrative proceedings in Case No. 89-L-309RCB of the Department.
IT IS THEREFORE ORDERED:
The Settlement Stipulation For Consent Order executed by the parties and dated April 24, 1990, is hereby approved, incorporated by reference, attached hereto, and made a part hereof.
Pedro Luis Hereu (hereinafter "Applicant") is hereby placed on administrative probation, pursuant to Section 626.691, Florida Statutes, for a period of six (6) months, beginning the date of this Consent Order.
As a condition of said probation, Applicant shall abide by and strictly adhere to the Florida Insurance Code, the Rules and Regulations of the Department, and orders of the Treasurer and Insurance Commissioner.
If, during said probation, the Department has good cause to believe that the Applicant has violated any terms or conditions of said probation, it shall suspend, revoke, or refuse to renew or continue the licenses, permits, or registrations of the Applicant, and eligibility/qualifications for the same, based upon the original grounds alleged in the
Administrative Complaint filed in this matter or upon any other available grounds.
The Department will not deny new applications for agent licensure, qualifications/eligibility for the same, or registrations, of applicant, for the reasons outlined in the Administrative Complaint filed in this matter.
(f) Each party to this matter shall bear its own costs and attorney's fees.
DONE and ORDERED this 8th day of May , 1990.
TOM GALLAGHER
Treasurer and Insurance Commissioner
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true copy of the foregoing has been forwarded by Certified Mail to THOMAS F. WOODS, ESQUIRE and ALEX D. BARKER, ESQUIRE, Gatlin, Woods, Carlson & Cowdery, P.A., 1709-D Mahan Drive, Tallahassee, Florida 32308 this 8th day of May, 1990.
C. CHRISTOPHER ANDERSON Senior Attorney
Office of Legal Services
412 Larson Building Tallahassee, FL 32399-0300 (904) 488-4540
Attorney for the Department of Insurance
OFFICE OF THE TREASURER DEPARTMENT OF INSURANCE
INSURANCE COMMISSIONER FIRE MARSHAL IN THE MATTER OF:
PEDRO LUIS HEREU CASE NO: 89L-309RCB
/
SETTLEMENT STIPULATION FOR CONSENT ORDER
IT IS AGREED and STIPULATED by and between Pedro Luis Hereu (hereinafter "Applicant") and the State of Florida, Department of Insurance (hereinafter "Department"), that:
Applicant is licensed or eligible for licensure as an insurance agent in the State of Florida.
Department has jurisdiction over Applicant's licenses, eligibility for licensure, and applications for licensure.
Department made an investigation of Applicant in his capacity as an insurance agent and as a result thereof filed an Administrative Complaint against Applicant alleging that Applicant mishandled insurance premium funds belonging to Pablo Beade.
The Department, by letter dated October 17, 1989, denied Applicant's Application For Resident License To Represent U.S. Security Insurance Company As a General Lines Agent, based upon said Administrative Complaint.
Applicant requested a formal hearing on said Administrative Complaint and said denial, the Administrative Complaint and denial were consolidated for hearing, a formal hearing was held before the Division of Administrative Hearings, Proposed Recommended Orders were filed by both
parties, the Hearing Officer issued a Recommended Order, the Department filed exception to said Recommended Order, and the matter is awaiting the issuance of a Final Order.
All parties to this matter waive the notice of entry of an order by the Treasurer, in his capacity as Insurance Commissioner, or his assistant.
By execution of this Settlement Stipulation For Consent Order and by the entry of the subsequent Consent Order in this matter, Applicant and Department intend to and do resolve the aforesaid Administrative Complaint and denial.
Said October 17, 1989 letter of denial is affirmed.
No party will appeal this Settlement Stipulation For Consent Order or the Consent Order to be issued in this matter and the parties knowingly waive notice of their right to appeal as required by Section 120.59(4), Florida Statutes. Respondent voluntarily waives his right to a hearing in this matter.
This Settlement Stipulation For `Consent Order is subject to the approval of the Treasurer, in his capacity as Insurance Commissioner. Upon his approval, and without further notice, the Treasurer or his assistant may issue an order providing for the following:
Incorporation by reference of all the terms and conditions of this Settlement Stipulation For Consent Order.
The placing of Applicant on administrative probation,
pursuant to Section 626.691, Florida Statutes, for a period of six (6) months, beginning the date said Consent order is issued.
As a condition of said probation, Applicant shall abide by and strictly adhere to the Florida Insurance Code, the rules and regulations of the Department, and orders of the Treasurer and Insurance Commissioner.
If, during said probation, Department has good cause to believe that Applicant has violated any terms or conditions of said probation, it shall take action to suspend, revoke, refuse to renew, or refuse to
continue the licenses, permits, or registrations of Applicant and eligibility/qualifi- cations for the same, based upon the original grounds alleged in the Administrative Complaint filed herein or upon any other available grounds.
Department will not deny new applications for agent licensure, qualifications/eligibility for the same, or registrations of Applicant,
for the reasons outlined in the Administrative Complaint filed herein.
Each party to this matter shall bear its own costs and attorney's fees.
Executed as appears below.
THOMAS F. WOODS, ESQUIRE C. CHRISTOPHER ANDERSON III
or ALEX D. BARKER, ESQUIRE Senior Attorney
Gatlin, Woods, Carlson & Office of Legal Services Cowdery, P.A. 412 Larson Building
1709-D Mahan Drive Tallahassee, FL 32399-0300 Tallahassee, Florida 32308 (904) 488-4540
(904) 877-7191
Attorney for Applicant Attorney for Department
of Insurance
Docket for Case No: 89-004931
Orders for Case No: 89-004931
| Issue Date |
Document |
Summary |
|
May 08, 1990 |
Agency Final Order
|
Settlement Stipulation for Consent Order executed on April 24, 1990, was approved.
|
|
Mar. 22, 1990 |
Recommended Order
|
Respondent failure to adust insured`s premium was not found to be willful misappropriation of funds or knowingly collecting premiums which were not provided.
|
