STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF INSURANCE, )

)

Petitioner, )

)

vs. ) CASE NO. 90-2656

)

TIM CALVIN OLK, d/b/a )

TIMOTHY CALVIN OLK, )

)

Respondent. )

)

RECOMMENDED ORDER

A hearing was held in this case before Arnold H. Pollock, a Hearing Officer with the Division of Administrative Hearings, in Venice, Florida on August 2 & 3, 1990, and January 23, 1991.

APPEARANCES

For the Petitioner: Gordon Thomas Nicol, Esquire

Department of Insurance

412 Larson Bldg.

Tallahassee, Florida 32399-0300

For the Respondent: Michael P. Sampson, Esquire

Holland & Knight, P.A.

92 Lake Wire Drive

P.O. Box 32092 Lakeland, Florida 33802

STATEMENT OF THE ISSUES

The issue for consideration herein is whether the Respondent's licenses and eligibility for licensure in the insurance field as a life insurance agent, (216); life and health insurance agent, (218); and solicitor for property, surety and miscellaneous lines, (420), should be disciplined because of the misconduct outlined in the Administrative Complaint filed herein.

PRELIMINARY STATEMENT

By an Administrative Complaint dated February 6, 1990, the Treasurer and Insurance Commissioner of the State of Florida, sought to discipline the Respondent's licenses as outlined above, and his further eligibility for licensure, because of alleged violations of Chapter 626, Florida Statutes, which include:

1. a failure to account for trust funds,

2. a failure of qualification,

3. a demonstrated lack of fitness or trustworthiness to engage in the business of insurance,

4. fraud or dishonest practices,

5. misappropriation, conversion or unlawful withholding of money,

6. willful failure to comply with or violation of an order or rule of the department,

7. a violation of the insurance code or other law,

8. a violation of an order or rule of the department,

9. a failure to pay over on demand, and

10. engaging in unfair competition or in deceptive acts or practices.

Specifically, Respondent is alleged to have misappropriated $3,000.00 paid to him as an insurance premium by Dante's Ristorante, resulting in the client being without insurance coverage; misappropriated another $1,000.00 premium check from Gulf Coast Water & Waste, Inc.; and failed to secure additional information on a prospective insured contacted by him, which was requested by the company, which left the client uninsured even after paying its premium.

Thereafter, on April 24, 1990, through counsel, Respondent submitted his Request for Formal Hearing and Answer to Administrative Complaint, and on May 1, 1990, the matter was forwarded to the Division of Administrative Hearings for appointment of a Hearing Officer. After responses to the Initial Order were received from counsel, the undersigned, by Notice of Hearing dated May 30, 1990, set the case for hearing in Venice on August 2 and 3, 1990, at which time the hearing was convened as scheduled. After Petitioner submitted its evidence, at the request of the Respondent the matter was continued until January 23, 1991, at which time the hearing was reconvened.

At the hearing, Petitioner presented the testimony of Michael P. Piscopo, owner of Dante's Ristorante; Thomas M. Dignam, president of Key Insurance Agency; Jane O. McK. Italiano, principal with Italiano Insurance Services, Inc.; Bryce W. Hawkins, president of 1st Commercial Bank of Manatee County; Barbara Lee Griffith, office manager of Gulf Coast Water & Waste, Inc.; Kevin M. Regan, manager of Italiano's Englewood office; Karen M. King, co-owner of Symbiotic Services Corporation; Mary S. Baxter, assistant cashier at 1st American Bank of Charlotte County; Joan F. Waters, operations officer of the 1st National Bank of Venice; and Kyle C. James, a certified contractor. Petitioner also introduced Petitioner's Exhibits 1 - 4, 6 - 17 and 19 - 20. Included were the depositions taken of Nat Italiano, Sr., and Nat Italiano, II.

Respondent introduced the testimony of Linda Anne Regan, a sales producer with Blalock Insurance Agency and formerly with the Italiano agency; and by deposition, that of Michael P. Piscopo, Thomas Dignam and Mrs. Italiano, all of whom had previously testified for the Petitioner. Their depositions were included among Respondent's Exhibits A - D, F - J, and L - N.

A transcript was provided. Respondent's counsel submitted a closing statement in writing. Only counsel for Petitioner, however, submitted Proposed Findings of Fact. These have been accepted and are incorporated herein.

FINDINGS OF FACT

1. At all times pertinent to the allegations herein, the Petitioner, Department of Insurance, was the state agency responsible for the regulation of the insurance industry in Florida. This included the licensing of insurance agents and solicitors.

   
   

2. At the same time, the Respondent, Tim Calvin Olk, was licensed or eligible for licensure in this state as a life and health agent, a life insurance agent, and a solicitor for property, surety, and miscellaneous lines. He is currently eligible for licensure and appointment in this state in the same capacities.

   
   

3. On or about November 10, 1988, Respondent contacted Gulf Coast Water & Waste, Inc., in Engelwood, Florida, and sold that company workers' compensation insurance coverage to be effective that date. He received a check for $1,000.00 payable to Brokerage Central as a premium for the coverage from Kyle James and Barbara Griffith, which, on November 14, 1988, he endorsed "Brokerage Central" and deposited into the Brokerage Central account at First American Bank. At that time, Respondent maintained an account with First American in the name of Brokerage Central which he used for his own funds. After making the deposit to the Brokerage Central account, Respondent failed to submit either the premium funds paid to him or a policy application on behalf of Gulf Coast Water & Waste, Inc. to his agency, Key Agency, Inc.. Instead, he used the $1,000.00 for his personal purposes.

   
   

4. Since Gulf Coast Water & Waste, Inc. had been informed by the Respondent that effective November 10, 1988, the day of the application, it had worker's compensation coverage, the company thereafter utilized its employees in work activities under the mistaken belief they were covered. In reality they were not and they remained uncovered until Mr. James, at some date subsequent to November 10, 1988, actually procured the coverage from Key Agency, Inc..

   
   

5. On or about December 15, 1988, Respondent contacted Michael Piscopo, owner of Dante's Ristorante in Venice, Florida, with a view toward selling him business insurance to be effective that date, for one year through December 15, 1989. He collected a premium check for $3,000.00 payable to Key Agency to pay for this coverage, and on or about December 19, 1988, endorsed that check with the name, "Key Agency", and cashed it, receiving the $3,000.00 in cash.

   
   

6. At the time, Mr. Olk represented Key Agency, Inc. as a solicitor for property, surety, and miscellaneous lines, having been hired on August 6, 1985. His relationship with Key Agency continued until December 19, 1988 but at no time included authority to convert agency funds to his own use.

   
   

7. Notwithstanding the fact he had secured both a policy application and the $3,000.00 premium check from Mr. Piscopo for Dante's, Respondent failed to turn over either the check or the application to the agency, thereby leaving Mr. Piscopo without the coverage he had purchased.

   
   

8. Instead of transferring the funds to his agency as he was required to do, Mr. Olk converted the money to his own use, attempting to conceal his actions by the issuing and reissuing of cashier's checks to various parties.

9. On or about January 28, 1989, Joanna Pappas allegedly was injured while a patron in Dante's Ristorante. When the claim was processed through Key Agency, Inc., Mr. Piscopo first learned that he had no insurance coverage notwithstanding his submittal of an application and payment of the premium to the Respondent. As a result of Respondent's actions, Mr. Piscopo was without insurance coverage for the Pappas incident.

   
   

10. It wasn't until on or about February 14, 1989 that Respondent attempted to obtain insurance coverage for Dante's Ristorante through Italiano Insurance Services, Inc., with whom he began employment as a solicitor for property, surety and miscellaneous lines on January 4, 1989. To pay for the coverage he sought for Dante's, Mr. Olk issued his personal check to Italiano. On this personal check, Respondent indicated that Dante's had paid him the

    $3,000.00 for the premium in cash, when in reality the premium payment was made by Mr. Piscopo by check. The check issued by Mr. Olk on his own account to Italiano to pay for the Piscopo coverage was subsequently dishonored by the bank because of insufficient funds in the account to cover it.

    
    

11. On or about February 24, 1989, while employed as a solicitor for Italiano Insurance Services, Inc., Respondent sold group health insurance to Karen and Steven King of Symbiotic Systems Corporation of Engelwood, Florida, to be effective on or about March 1, 1989, for which he received a check for

    $1,420.40. Approximately two days later, on February 26, 1989, Respondent submitted both the premium check and the insurance application to Creative Planning Insurance Agency, an entity with which he was not authorized to deal directly. Some three days later, the agency returned the application to the Respondent without issuing a binder, with instructions to obtain additional information from the applicant. He did not do so right away, however, and it was not until April 1, 1989, that Respondent secured the proposed coverage.

    From March 1, 1989 to April 1, 1989, Symbiotic Systems Corporation employees did not have the coverage for which their employers had paid. During that period, the company did not know it was not covered.

    
    

12. Evidence introduced at the hearing indicates that the Respondent improperly advised Symbiotic that its employees would be covered as of March 1, 1989, and did not mention to the company thereafter that from March 1 to April 1, 1989, the coverage was not in force. In addition to this failure, Respondent also improperly advised the company that its monthly premium would be $1,420.40, when in reality, the premium for the coverage applied for was $1,737.85.

    
    

    CONCLUSIONS OF LAW

    
    

13. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter in this case. Section 120.57(1), Florida Statutes.

    
    

14. In its Administrative Complaint, Petitioner seeks to discipline the Respondent's licenses and eligibility for licensure by alleging, in three separate counts, that he violated a total of eleven subsections of the Florida Insurance Code, Chapter 626, Florida Statutes. In order to prevail herein, Petitioner must present clear and convincing evidence of the Respondent's guilt of that alleged misconduct. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987).

15. In Count I of the Administrative Complaint, Petitioner alleges that in his dealings with Mr. Piscopo, in the course of business conducted under his licenses regarding business insurance for Dante's Ristorante, by accepting a check for the coverage premium and thereafter converting that money to his own use leaving Mr. Piscopo without the coverage he had paid for, Respondent:

    
    

    1. failed to account for and pay over to the proper party trust funds he had received in the form of premium payment, (Sections 626.561(1) and 626.621(4));

    2. demonstrated a lack of the requisite qualifications for his licenses, (Section 626.611(1));

    3. demonstrated a lack of fitness or trustworthiness for the insurance business, (Section 626.611(7));

    4. engaged in fraudulent or dishonest practices under his licenses, (Sections 626.611(9) and 626.621(6));

    5. misappropriated and converted money belonging to insurers or insured, (Section 626.611(10)); and

    6. willfully violated rules of the department or sections of the Insurance Code, (Sections 626,611(13), 626.621(2) & (3)).

       
       

16. In Count II, Petitioner alleges that by converting the premium check he received from Gulf Coast Water & Waste, Inc. to his own use, leaving his client without the workers' compensation insurance they purchased, in the course of his insurance business he violated the same provisions cited above.

    
    

17. In Count III of the Complaint, Petitioner alleges that by failing to obtain and submit to the carrier additional information about a proposed insured, Symbiotic Systems Corporation, which had paid him an advance premium to initiate employee health insurance coverage, resulting in a lack of coverage for the employees for one month; and by advising the insured of the incorrect premium amount required for the desired coverage, Respondent violated many of the same code provisions previously cited, and in addition, willfully misrepresented an insurance policy in violation of Section 626.611(5), Florida Statutes.

    
    

18. Pertinent portions of the relevant statutes are as follows:

    
    

    1. Section 626.561, Florida Statutes:

       (1) All premiums, return premiums, or other funds belonging to insurers or others received by an agent, solicitor, or adjustor 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.

    2. Section 626.611, Florida Statutes:

       The Department [shall discipline the license or permit of] any agent solicitor, or adjuster

       ... if it finds that as to [such individual] applicable grounds exist:

       (1) Lack of one or more of the qualifications for the license or permit as specified in this code.

       (5) Willful misrepresentation of any insurance policy ... or willful deception with regard

       to such policy ... , done either in person or by any form of dissemination of information or advertising.

       (7) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance.

       1. Fraudulent or dishonest practices in the conduct of business under the license or permit.

       2. Misappropriation, conversion, or unlawful withholding of moneys belonging to insurers

       or insured or beneficiaries or to others and received in the conduct of business under the license.

       (13) 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 code.

    3. Section 626.621, Florida Statutes:

    The department may [discipline the license or permit] of any [licensed person], and it may [also discipline the eligibility to hold a license or permit] of [such an individual] if it finds that any one or more of the following applicable grounds exist ....

    1. 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.

    2. Violation of any lawful order or rule of the Department.

    3. Failure or refusal, upon demand, to pay over to any insurer he represents or has represented any money coming into his hands belonging to the insurer.

    (6) In the conduct of business under the license ... , engaging in unfair methods of competition or in unfair or deceptive acts or practices, as prohibited under part X 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.

19. Respondent claims that the evidence of his guilt of the allegations in Count I is not clear and convincing. He refers to Mr. Piscopo's trust in him and the fact that he was, as early as January 6, 1989, trying to obtain coverage for Dante's. Notwithstanding, however, that Respondent may have been trusted by

    Piscopo and by his employer at the Key Agency, Mr. Dignam, the fact remains that he collected money from a client to be used for insurance coverage and did not provide that coverage. Also notwithstanding the banker at the institution where Respondent cashed the premium check for Dante's coverage had dealt with him before and believed he was authorized to act on behalf of that agency, the evidence clearly establishes that Olk did not use those funds for any purpose related to procuring that coverage. What has been clearly demonstrated is a blatant misappropriation of funds tendered to purchase insurance. No such coverage was provided or timely sought by Respondent; the money was not transmitted to Key Agency; and Dante's suffered a loss which should and would have been covered by the insurance sought if Respondent had submitted the check to his agency when given to him. Even when he tendered his check to Italiano, some two months after his receipt of Piscopo's check, the check was dishonored when presented because there was insufficient funds in Respondent's, not Key's, account to honor it. Notwithstanding he may have been entitled to some commissions earned while working at the Italiano agency, Respondent had no legitimate basis to offset those potential earnings against a premium check he held in a fiduciary capacity for a potential insured.

    
    

20. To be sure, Respondent's conduct in this regard clearly indicates he failed to account for and pay to the insurer, (Key or Italiano) the trust funds he had received to pay for the Dante coverage; that he clearly demonstrated his lack of trustworthiness to engage in the insurance business; that he engaged in fraudulent and dishonest practices under his license; and that he misappropriated and converted money belonging to an insurer. These actions constitute willful violations of the Insurance Code as alleged. He is also subject to discipline because he has demonstrated a lack of trustworthiness and even incompetence, both of which are qualifications for licensure as outlined in Section 626.785(1), Florida Statutes.

    
    

21. With regard to Count II, relating to the failure to submit the policy application for worker's compensation insurance executed by the owners of Gulf Coast Water & Waste, Inc., again the same analysis applies. The evidence of record clearly and convincingly establishes the Respondent's culpability and suitability for discipline again for the reasons that he accepted funds for coverage and thereafter unlawfully converted those funds to his own use. This misconduct is aggravated by the fact that by his actions, he left a trusting employer without the insurance coverage it though it had. It is not mitigated by any prior dealings Olk may have had with Dignam in the latter's capacity as a banker. Prior experience, and for that matter, subsequent efforts in Respondent's behalf, neither excuses nor justifies his conversion to his own purposes of funds held as a fiduciary Even accepting, arguendo, it would have been appropriate for Respondent to deposit the premium check to his own account, he cannot legitimately claim this entitled him to leave a client without coverage for an extended period.

    
    

22. With reference to the Respondent's dealings with Symbiotic Systems, Inc., the evidence of record clearly demonstrates that though he submitted the application and the premium to the company in a timely manner, the amount he collected from his client as the first monthly premium was incorrect, and, when directed by the company to secure additional information from the proposed insured necessary to implement the coverage requested, he failed to do so in a timely manner. Again, the purchaser was left, at least for a time, without the coverage he thought he was getting and for which he had, at least in part, paid. Here, as in the case of Gulf Coast Waste & Water, Respondent is guilty of the offenses alleged with possibly one exception. That relates to the notification to Symbiotic of the incorrect premium amount. In that case, the Department has

    failed to demonstrate by clear and convincing evidence that Respondent engaged in deceptive acts or practices. More likely, his misinformation was the result of his ineptitude or his incompetence, but in any case, it showed him to be, clearly, a source of injury and loss at least to his client, a member of the public, and detrimental to that client's interest.

    
    

23. In that regard, the insurance industry, perhaps more than most, is one in which the consuming public must be able to trust in the competence, honesty and integrity of the companies with which it deals and the agents of those companies. Because of this, the courts have classified the relationship between the agent and the public as well as the company he represents as a fiduciary one, calling for the highest degree of performance by the licensed professional. Clearly, Respondent has demonstrated that he possesses neither the competence or the integrity to serve as an insurance agent in this state.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore:

RECOMMENDED that a Final Order be entered in this case revoking all licenses and eligibility for licensure and appointment in the insurance industry in this state held by the Respondent herein, Tim Calvin Olk, a/k/a Timothy Calvin Olk.

RECOMMENDED this 18th day of March, 1991, in Tallahassee, Florida.

ARNOLD H. POLLOCK, 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 18th day of March, 1991.

COPIES FURNISHED:

Gordon Thomas Nicol, Esquire Department of Insurance

412 Larson Building Tallahassee, Florida 32399-0300

Michael P. Sampson, Esquire Holland & Knight, P.A.

92 Lake Wire Drive

P.O. Box 32092 Lakeland, Florida 33802

Tom Gallagher

State Treasurer and Insurance Commissioner

The Capitol, Plaza Level Tallahassee, Florida 32399-0300

Bill O'Neill General Counsel

Department of Insurance The Capitol, Plaza Level

Tallahassee, Florida 32399-0300

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should consult with the agency that will issue the final order in this case concerning their rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.

Docket for Case No: 90-002656

Orders for Case No: 90-002656