vs. ) CASE NO. 90-3698
Respondent. )
vs. ) CASE NO. 90-6615
Respondent. )
Upon due notice, these causes came on for formal hearing on November 27, 1990 in Tallahassee, Florida, before Ella Jane P. Davis, a duly assigned Hearing Officer of the Division of Administrative Hearings.
For the Department of JOHN C. JORDAN, Esquire Insurance and Treasurer: Division of Legal Services
For Howell Vinson Peavy: W. DOUGLAS HALL, Esquire
R. VINCENT RUSSO, Esquire CYNTHIA S. TUNNICLIFF, Esquire Carlton, Fields, Ward,
Emmanuel, Smith & Cutler, P.A. Post Office Drawer 190 Tallahassee, Florida 32302
ALBERT J. DATZ, Esquire Datz, Jacobson and Lembcke
On April 17, 1990, the Department of Insurance and Treasurer (Department) filed a one-count Administrative Complaint against Howell Vinson Peavy (Peavy) alleging violations of Sections 626.611(7), (14), and 626.621(8) F.S. [1990] to the effect that Peavy had entered a plea of guilty and was convicted of a felony involving moral turpitude and seeking to discipline him accordingly. A timely request for formal hearing was filed, and this cause became DOAH Case No. 90- 3698.
By letter dated August 9, 1990, the Department notified Peavy that his application for a license to represent Bankers and Shippers Insurance Company as a general lines insurance agent had been denied. Another timely request for formal hearing was filed, and that cause became DOAH Case No. 90-6615.
The cases were thereafter consolidated.
Some confusion apparently occurred within the Department when it forwarded each case to The Division of Administrative Hearings (DOAH). Apparently the license disciplinary case bore the correct internal departmental number, 90-L- 125JCJ, but the license denial case was inadvertently referrred to DOAH with the internal departmental number, 90-L-116JCJ. At formal hearing, the parties stipulated that counsel for the Department would acknowledge the typographical error in the Department's proposed recommended order and the undersigned would make the appropriate numerical amendment within this Recommended Order so that the DOAH Clerk could conform all appropriate DOAH files. Accordingly, the style of this cause is amended as set out above to reflect the parties' stipulation to substitute a corrected Department of Insurance internal case number from the information provided in the Department's proposed recommended order.
At formal hearing, the Department called no witnesses and had two exhibits admitted in evidence. Peavy presented the oral testimony of Robert Gayle Mercer and testified on his own behalf. Peavy had four exhibits admitted in evidence, two of which were the transcribed depositions of C. B. Eisenbach and Etta Peterson. Mr. Mercer was tendered and accepted as an expert in the business of insurance.
A transcript of proceedings was filed December 3, 1990. Both parties' proposed recommended orders were timely filed December 24, 1990, the proposed facts of which have been ruled upon in the appendix to this Recommended Order, pursuant to Section 120.59(2) F.S.
Mr. Peavy is currently licensed and eligible for licensure and appointment in Florida as a life and health and general lines agent.
Mr. Peavy began work at the Citizens (formerly Ellis) Bank of Bunnell, Florida in 1952. A director of that bank owned an insurance agency in town. In 1964, the owner of the bank, Mr. Creal; his mother; the bank attorney; and Mr. Peavy bought the insurance agency.
Mr. Peavy continued to work at the Citizens Bank in the mornings and at the insurance agency in the afternoons and evenings. Mr. Peavy has been licensed by the Department of Insurance since purchasing the agency in 1964 and has had no previous disciplinary complaints against his insurance license(s) in the ensuing 26 years.
Approximately ten years ago, in 1980, during a stressful and transitional period of the Citizens Bank operation, a customer came into Mr. Peavy's office at the bank and sought to pay in excess of $10,000 in cash in connection with a land transaction. Mr. Peavy received the money and turned it over to a bank secretary to make the deposit. The secretary subsequently put the money in the bank's loan department cash drawer instead of taking it to the head teller, who was the bank employee responsible for filing the Currency Transaction Report required by the federal Internal Revenue Service for such cash transactions. Mr. Peavy did not initially know that a Currency Transaction Report had not been filed. Indeed, he had never personally filled out or filed such a report before, and doing so was not normally his responsibility. Mr. Peavy received no personal gain from the failure to file the report.
On July 13, 1985, approximately five years after Mr. Peavy's failure to file the Currency Transaction Report and five years before the instant state disciplinary charges were filed, a seven-count indictment was filed against Mr. Peavy in U.S. District Court in and for the Middle District of Florida, Case No. 85-99CR-JAX-12.
Approximately five years ago, on October 4, 1985, Mr. Peavy entered a plea of guilty to one count of violating Title 18, USC Sections 1001 and 1002 in that he knowingly and willfully concealed and covered up and caused to be concealed or covered up, material facts within the jurisdiction of the Department of the Treasurer of the United States to wit: knowingly and willfully failing to file a Currency Transaction Report for a transaction in excess of
$10,000. It appears that a total of $50,000 cash somehow wound up in an escrow account at the bank, but there is no evidence or admission to show that either Mr. Peavy or the bank realized any profit or benefit from the transaction. The transaction also was unconnected to Mr. Peavy's insurance business.
Mr. Peavy's federal guilty plea was accepted, and on December 4, 1985, he was adjudicated and convicted of the named felony. U.S. District Court Judge Howell Melton imposed a $5,000 fine and placed Mr. Peavy on three years' probation.
Prior to entering his guilty plea, Mr. Peavy had executed a "Stipulated Factual Basis for the Plea of Guilty to Count One of the Indictment." This document was not offered in evidence at formal hearing, but upon Mr. Peavy's testimony, it is found that he had the opportunity to review and sign this document before entering his guilty plea and knew that it confirmed his willful
failure to file the Currency Transaction Report and that his willful failure to file the Currency Transaction Report was for the purpose of concealing the
$50,000 cash transaction from the Internal Revenue Service.
At formal hearing, Mr. Peavy elaborated on his reasons for entering his plea of guilty in 1985 as being, in part, due to monetary reasons; his lawyer had advised him of the difference in cost of going to court and fighting the charges contained in seven counts as compared to working out a plea agreement to one count.
There is no dispute that Mr. Peavy pleaded guilty and was convicted of a felony punishable by imprisonment of one year or more under the law of the United States of America.
However, at the time Mr. Peavy entered his plea, Florida's insurance disciplinary statutes did not specifically address federal felonies. The material state statutes in effect at the time of Peavy's failure to file, at the time of his plea, and at the time of his conviction read:
626.611 Grounds for compulsory refusal, suspension, or revocation of agent's, solicitor's, or adjuster's license or service representative's, supervising or managing general agent's, or claims investigator's permit.--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 applicable grounds exist:
* * *
(14) Having been found guilty or, or having pleaded guilty or nolo contendere to, a felony in this state or any other state which involves moral turpitude, without regard to whether a judgement of conviction has been entered by the court having jurisdiction of such cases.
* * *
626.621 Grounds for discretionary refusal, suspension or revocation of agent's, solicitors, or adjuster's license or service representatives, supervising or managing general agent's, or claims investigator's permit.--The department may, in its discretion, deny, suspend, revoke, or refuse to renew or continue the license of any agent, solicitor, or adjuster or the permit of any service agent, solicitor, or adjuster or the permit of any service representative, supervising or managing general agent or claims investigator, and it may 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 under circumstances for which such denial, suspension, revocation, or refusal is not mandatory under Section 626.611:
* * *
(8) Having been found guilty of, or having pleaded guilty or nolo contendere to a felony in this state or any other state, without regard to whether a judgment of conviction has been entered by the court having jurisdiction of such cases.
Mr. Peavy paid his fine, successfully completed his probation, and was granted restoration of his civil rights on January 13, 1989, pursuant to Article IV, Section 8, Constitution of the State of Florida.
Robert Gayle Mercer is a Florida-licensed insurance agent in good standing. He was tendered and accepted over objection as an expert in the business of insurance. Mr. Mercer also has served for many years as a director of a state bank located in Kissimmeee, Florida. The bank of which Mr. Mercer is a director is substantially similar in all respects to the bank in Bunnell, Florida, where Mr. Peavy's legal difficulties arose. As a bank director, Mr. Mercer is familiar with the necessity that banks file Currency Transaction Reports. It was Mr. Mercer's expert professional opinion, rendered within his education, training, and experience as an insurance agent, that the failure to file a Currency Transaction Report is not directly related to the business of insurance and that such failure has not rendered Mr. Peavy unfit or untrustworthy to engage in the business of insurance. In assessing the weight and credibility to be assigned to Mr. Mercer's expert opinion, the undersigned is not unmindful that at some point in time the witness Mercer, and the accused, Peavy, practiced the insurance business together, but due to the lapse of time and the removal of Mr. Mercer from the immediate geographical community wherein Mr. Peavy resides and practices, Mr. Mercer's testimony is found to be credible in all respects. The agency offered no expert testimony/evidence to refute Mr. Mercer's opinion.
Mr. Peavy was held in the highest esteem by business, professional, and community service colleagues at the time the federal charges arose, plea was entered, and conviction adjudged. At that time, Mr. Peavy attempted to resign as a member of the Flagler County Chamber of Commerce; his colleagues, knowledgable of the federal charges, refused to accept his resignation. Many prominent community leaders knowledgeable of the nature of the federal charges also wrote to Judge Melton extolling Mr. Peavy's virtues and urging that he be placed on probation.
Mr. Peavy has lived in Bunnell, Florida, since 1939, except for a short period of military service. During the whole of that time, he has been a community leader and volunteer, serving at various times on the City Commission, the County School Board, the County Chamber of Commerce, and as a Governor- appointed member of the County Housing Authority. He is active in church and in service and charity organizations, particularly as a fund raiser for the Cystic Fibrosis Foundation, the March of Dimes, and the Humane Society.
Mr. Peavy's current reputation in his community is one of trust, confidence, fair dealing, and a respect for the rights of others. Upon the direct testimony of Captain C. B. Eisenbach, a retired captain of the Flagler County Sheriff's Department, and Mrs. Etta Peterson, Flagler County Supervisor of Elections, each rendered by deposition, and upon the hearsay evidence which may legitimately be characterized as "explaining or supplementing" direct evidence pursuant to Section 120.58(1) F.S., it is found that Mr. Peavy has consistently maintained and currently maintains an exemplary reputation in the community for honesty, trustworthiness, and good moral character, as well as a reputation for truth and veracity. In making the foregoing finding of fact, the undersigned has considered the somewhat vague understanding Ms. Peterson expressed with regard to the nature of Mr. Peavy's very stale federal crime/conviction but does not find that her vagueness on that legal concept detracts from the credibility or significance of her testimony concerning Mr. Peavy's current reputation and good character.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction of the parties and subject matter of this cause. See, Section 120.57(1) F.S.
The agency seeks to revoke Peavy's insurance agent's licenses alleging a violation of Sections 626.611(7) and (14) F.S. which currently provide as follows:
626.611 Grounds for compulsory refusal, suspension, or revocation of agent's, solicitor's, or adjuster's license or service representative's, supervising or managing general agent's, or claims investigator's permit.--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:
* * *
(7) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance.
* * *
(14) Having been found guilty of or having pleaded guilty or nolo contendere to a felony or a crime punishable by imprisonment of 1 year or more under the law of the United States of America or of any state thereof or under the law of any other country which involves moral turpitude, without regard to whether a judgment of conviction has been entered by the court having jurisdiction of such cases. [The emphasized language was not added until after Peavy's federal conviction]
and Section 626.621(8) F.S., which currently provides:
626.621 Grounds for discretionary refusal, suspension, or revocation of agent's, solicitor's, or adjuster's license or service representative's, supervising or managing general agent's, or claims investigator's permit.--The department may, in its discretion, 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 may 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 under circumstances for which such denial, suspension, revocation, or refusal is not mandatory under s. 626.611:
* * *
(8) Having been found guilty of or having pleaded guilty or nolo contendere to a felony or a crime punishable by imprisonment of 1 year or more under the law of the United States of America or of any state thereof or under the law of any other country, without regard to whether a judgment of conviction has been entered by the court having jurisdiction of such cases. [The emphasized language was not added until after Peavy's federal conviction]
The Department takes the position that a violation of Sections 626.611(7) or (14) F.S. mandates revocation, suspension, or denial of Peavy's license(s) under the facts as found and that Section 626.621(8) F.S. makes such revocation, suspension, or denial merely discretionary. The agency denied Peavy's license upon the same grounds.
The effect of Sections 626.611(14) and 626.621(8)
Sections 626.611(14) and 626.621.(8) F.S. as they existed at the time of Peavy's failure to file the Currency Transaction Report, as they existed at the time he entered into the plea agreement, and as they existed at the time of his federal judgment of conviction, did not provide that adjudication of felonies "under the law of the United States of America" would be grounds for revocation of an insurance agent's license. See, Finding of Fact 11. The state disciplinary statute was changed in the 1988 legislative session to read as set out in the administrative complaint herein and in Conclusion of Law 2, supra.
Prior to formal hearing, Peavy moved to dismiss the administrative complaint herein, alleging that it attempts to retroactively apply substantive law in violation of Article I, Section 9, Clause 3, of the Constitution of the United States and Art. 1, Section 12 of the Constitution of the State of Florida and because the charges are barred by the statute of limitations and by laches. That motion was denied but is revisited here.
The Department is absolutely correct that Peavy's motion to dismiss cannot be granted as to the issues of the statute of limitations and laches. See, Farzad v. Dept. of Professional Regulation (Board of Medicine), 443 So. 2d
373 (Fla. 1st DCA 1983) and Donaldson v. Dept. of Health and Rehabilitative Services, 425 So. 2d 145 (Fla. 1st DCA 1983).
The Department misconstrues the remainder of Peavy's motion as attempting to have part of the Florida Insurance Code ruled unconstitutional in this administrative forum. That is simply not the case, and it is a "given" that a hearing officer of the Division of Administrative Hearings has no jurisdiction or authority to so rule. Rather, it is the application of the current and charging statutes to Peavy's situation that is at issue here.
A substantive law is to be construed as having prospective application only, absent an explicit legislative expression to the contrary [see, Young v. Altenhaus, 472 So. 2d 1152 (Fla. 1985)], and courts are required to adopt the interpretation of a statute that favors the accused. See, Farzad v. Dept. of Professional Regulation, supra, Rotstein v. Department of Professional Regulation, 397 So. 2d 305 (Fla. 1st DCA 1981); Bowling v. Dept. of Insurance,
394 So. 2d 165 (Fla. 1st DCA 1984; and Bach v. Fla. Bd. of Dentistry, 378 So. 2d
34 (Fla. 1st DCA 1980). The rights of a defendant cannot be affected by statutory amendments and the defendant must be tried under the law in effect at the date of the commission of the offense. See, Lovett v. State, 14 So. 837 (1894).
The Department's argument that the legislative intent of the 1988 amendments to merely clarify departmental policy that federal crimes/felonies had always intended to be included in Subsections 626.611(14) and 626.621(8)
F.S. is not persuasive; the clear language of the amendments is substantive and far-reaching. Peavy's conduct which forms the basis of the charges against him predates the statutory amendments which would render his federal guilty plea and conviction grounds for discipline of his state insurance license. The state disciplinary statutes in existence at all times material to Peavy's underlying conduct in not filing the required Cash Transaction Report, his plea bargain, his plea, and his federal conviction would not have authorized sanctions against his state professional license under the facts as found, and there is no specific legislative expression to retroactively apply the new statutory provisions (These new statutory provisions are underlined in Conclusion of Law 2).
If these new state disciplinary amendments had been part of our statute at the time Peavy was charged in federal court, it is entirely possible he would not have entered his federal guilty plea; in retrospect, it is now too late for him to reconsider that action in contemplation of the intervening state amendments.
If the current statutory provisions were to be applied retroactively so as to impose greater punishment on Peavy than he would have exposed himself to in 1985 by the federal plea/conviction at the time he plead, then the prosecution of the administrative complaint herein violates the constitutional prohibition against ex post facto laws. See, also, Lovett v. State, supra.
The Department's suggestion that the constitutional safeguards against ex post facto laws do not apply here because this is a penal proceeding, not a criminal one, also is not persuasive. Florida courts have consistently held that statutes permitting revocation of professional licenses are penal in
nature, and that as such, the accused therein are entitled to a variety of constitutional safeguards. See, Ferris v. Turlington, 510 So. 2d 671 (Fla. 1974); Bach v. Fla. Bd. of Dentistry, supra; and Buchman v. State Bd. of Accountancy, 300 So. 2d 671 (Fla. 1974). An ex post facto law possesses three characteristics: it is a criminal or penal measure; it is applied retrospectively; and it imposes greater punishment. See, Weaver v. Graham, 450
U.S. 24, 101 S.Ct. 960, 67 L.Ed. 17 (1981). Such is the case at bar.
The First District Court of Appeal has, in two cases, very recently revisited the penal nature of professional license disciplinary cases, the duty of an administrative hearing officer to avoid imposing ex post facto discipline, and the need for clear notice to the accused of what constitutes proscribed professional conduct before the professional engages in such conduct so that he still has the opportunity to avoid such conduct. See, Willner v. Dept. of Professional Regulation (Board of Medicine), 15 F.L.W. 1723 (Fla. 1st DCA June 26, 1990), and Breesmen v. Dept. of Professional Regulation (Board of Medicine), 567 So. 2d 469 (Fla. 1st DCA 1990).
In Willner v. Dept. of Professional Regulation (Board of Medicine), supra, a medical physician argued that the fines imposed against him were in violation of the ex post facto provisions of the state and federal constitutions. In 1986, Section 458.331(2)(d) F.S. had been amended to increase the amount of the maximum administrative fine which could be assessed against a physician by the agency for violations of Section 458.331(1) F.S. The 1986 amendment increased the maximum fine from $1,000 per violation to $5,000 per violation. Since all the violations of which the appellant physician was found guilty occurred prior to the effective date of the 1986 amendment, the maximum disciplinary fine which could lawfully be imposed by the Board of Medicine was
$1,000 per violation. See, also, Florida Patient's Compensation Fund v. Scherer, 558 So. 2d 411 (Fla. 1990).
Removing this matter from the awe and majesty of constitutional considerations for a moment, and recognizing it specifically and simply for what it is, the Department seeks to apply statutory changes retroactively and impose a punishment greater than the disciplinary measures in effect at the time of the offense. The commission by Peavy of a felony "under the law of the United States of America" would not have given rise to any state insurance license revocation or suspension proceedings prior to 1988; since then, it does. In that context, Peavy's situation is analogous to the lack of notice situation arising in Breesmen v. Dept. of Professional Regulation (Board of Medicine), supra. That case, which once again reiterates the hoary but laudable rule of construction that statutes authorizing discipline of professional licenses must be strictly construed in favor of the licensee, see supra, held,
Basic due process requires that a professional or business license not be suspended or revoked without adequate notice to the licensee of the standard of conduct to which he or she must adhere.
[at pages 471-472]
Therein, a physician who had abided by his patient's request that he not record her refusal to undergo tests and treatment in her hospital chart was found not to have violated a statute requiring him to keep medical records justifying his course of treatment even though evidence showed that his action in so doing was not in keeping with other generally accepted standards which had never been codified into a statute or promulgated by a board rule pursuant to statute.
In light of the foregoing more recent case law, the undersigned rejects the Department's assertion that Natelson v. The Department of Insurance,
454 So. 2d 31 (Fla. 1st DCA 1984) and Paisley v. Department of Insurance, 526 So. 2d 167 (Fla. 1st DCA 1988) are controlling in the disciplinary case at bar simply because they address the same pre-1988 statutory language as was in effect when Peavy entered his federal guilty plea and was convicted. While both of those cases addressed the question of whether it was proper to construe the phrase "lack of fitness or trustworthiness to engage in the practice of insurance" so as to encompass federal convictions, in neither case was the issue of an ex post facto law specifically raised, as it has been raised here. In Natelson, the licensee entered a plea of guilty to conspiracy to distribute and possess with intent to distribute cannabis. Based upon Natelson's federal conviction, the Department filed an administrative complaint alleging violations of Sections 626.611(7), 626.611(14) and 626.621.(8) F.S. Natelson argued that his guilty plea alone was insufficient to subject him to the mandatory suspension or revocation of his license pursuant to Section 626.611 (7) F.S.
The court disagreed, citing the familiar rule that, "agencies are afforded wide discretion in the interpretation of a statute which it administers (sic) and will not be overturned on appeal unless clearly erroneous." The Natelson Court reasoned that a construction of 626.611(7) F.S. to include a federal conviction to distribute cannabis was within the range of possible constructions of that statute. In Paisley, the licensee was convicted in the U.S. District Court of the Middle District of Florida of (1) knowingly, intentionally, and unlawfully conspiring with another to commit an offense to defraud the United States, (2) mail fraud, and (3) using a fictitious name or address to commit mail fraud.
The hearing officer recommended dismissal of all counts because the evidence failed to prove that the offenses of which the licensee was convicted were felonies and the evidence failed to prove that he "demonstrated a lack of fitness or trustworthiness to engage in the business of insurance." The Department rejected the hearing officer's conclusion of law and entered a final order revoking Paisley's licenses based upon his conviction of the above offenses and held that the same demonstrated a lack of fitness or trustworthiness to engage in the business of insurance. The court agreed that Paisley's situation was controlled by the Natelson decision. In discussing the agency's discretion to construe the term "lack of fitness or trustworthiness to engage in the business of insurance," the court held that it was proper to construe this provision to include Paisley's convictions regardless of whether they involved crimes of moral turpitude, or for that matter, felonies at all.
Therefore, it is clear, based on the holdings in Natelson and Paisley that it is permissible for the Department to construe convictions of federal offenses as evidencing lack of fitness or trustworthiness to engage in the business of insurance [see, Subsection 626.611(7) F.S.], but it is not equally clear from these decisions that a federal conviction alone is sufficient to prove a violation of the pre-1988 Subsections 626.611(14) and 626.621(8) F.S.
The intrinsic unfairness of ex post facto laws was recognized and proscribed by the constitutional drafters. Applying a currently valid statute so as to have the effect of an ex post facto disciplinary measure is an equal affront to common concepts of fundamental fairness and due process and has been proscribed in the Willner and Breesmen cases which have come down to us since Natelson and Paisley, wherein the ex post facto issue was never raised. Moreover, a modern public policy consideration weighing against ex post facto procedures is that if every citizen's choice between negotiating a criminal plea bargain or electing to go to trial had to anticipate how the results of that plea or judgment may be altered by subsequent legislation in the state professional disciplinary fields, the chilling effect could cause our criminal
justice system to grind to a halt. Accordingly, upon the circumstances herein, Peavy cannot be found guilty and disciplined under Sections 626.611(14) and 626.621 (8) F.S.
Because of the foregoing conclusions eliminating Subsections 626.611(14) and 626.621(8) F.S., as charges against Peavy, it is not necessary to reach the issue of whether or not Peavy's federal conviction constitutes a "felony which involves moral turpitude" under Subsection 626.611 (14) F.S. However, nothing in this record evidences the heartlessness or depravity of mind that Florida cases have associated with moral turpitude. On that issue, see, Department of Insurance and Treasurer v. Hall, DOAH Case Nos. 90-3024 and 90- 3025 (Recommended Order entered January 14, 1991; no Final Order yet); Pearl v. Florida Real Estate Commission, 394 So. 2d 189 (Fla. 3d DCA 1981); Florida Board of Bar Examiners Re: G. W. L., 364 So. 2d 454, 458 (Fla. 1978); and Tullidge v. Hollingsworth, 146 So. 660, 661 (1933). See, also, McBride v. U.S., 225 F. 2d
249 (Ct. of Appeal 5th Circuit 1955). Cf. - Jordan v. DeGeorge, 341 U.S. 223, 71 S.Ct. 703, 95 L.Ed. 886 (1951).
The effect of Section 626.611(7) F.S.
Having said all of the foregoing, that is not to say that the Department ought not to be permitted to proceed to discipline Peavy's license pursuant to Subsection 626.611(7) F.S. That subsection has not undergone an amendment in the years intervening between Peavy's federal plea/conviction and the filing of the administrative complaint herein.
It is noted that the Department could have disciplined Peavy pursuant to Subsection 626.611(7) F.S. at any time upon an allegation of the illicit activity underlying the federal plea and conviction, but in the instant case, the Department has taken the position that the decisions in Natelson and Paisley, supra, constitute departmental policy that a conviction of any felony automatically translates into a lack of fitness or trustworthiness to engage in the business of insurance. Indeed, counsel has represented that such is the current "position" or policy of the Department of Insurance and cited the foregoing cases and Department of Insurance v. Midulla, 10 FALR 1077 (June 9, 1987). However, the Department has presented no evidence whatsoever that its policy or agency interpretation remains the same today as when the final orders in Natelson, Paisley, or Midulla were entered and appealed. Balanced against this lack of evidence is the unrefuted testimony of Robert Mercer, C. B. Eisenbach, and Etta Peterson that Peavy is trustworthy, plus the expert evidence of Mr. Mercer that Peavy is fit to engage in the business of insurance.
Even if it may be accepted that previous cases can establish the agency's current statutory interpretation so that that current agency interpretation of its statute can be weighed against direct, expert testimony, and even if the Department is afforded great latitude in the interpretation of its statute, the evidence presented in this case affirmatively establishes that Peavy's guilty plea to the federal felony was one of convenience. Also, from the facts presented at formal hearing in the instant case, the federal felony does not appear to be the type of crime which affected or adversely impacted Respondent's fiduciary relationship to either his banking or insurance clients. There is no evidence here that the cash tendered to Peavy ever left the bank or that it was ever misrouted internally within the bank to the benefit of anyone not entitled to its benefit, neither the customer, Peavy, nor the bank. Although the Department has presented a stack of cases (as opposed to a string of citations) which establish clearly that the Internal Revenue Service's purpose behind requiring banks to file a Cash Transaction Report is to trace
criminal tax irregularity, curtail the "laundering" of drug money, and keep tabs on other obviously criminal activities, and even though these cases further clearly establish that high level bank personnel are frequently and often successfully prosecuted for failure to file such Cash Transaction Reports where there is also proved some underlying scheme of fraud or conscious attempt to circumvent the filing of the Report by depositing just under $10,000 several times, there is nothing in this record to demonstrate that any underlying criminal or tax evasion activities were associated with what was essentially an inadvertent oversight on Peavy's part. Nor does anything in this record suggest that Peavy has the potential to engage in the criminal activity of money laundering or similar nefarious schemes in the future. Willful acts are not always crimes of moral turpitude [see, McBride, supra] and lack of trustworthiness and unfitness have not been proven here.
Even if the Department had the power and authority to discipline Peavy for his omission of filing the Cash Transaction Report and his felony plea/conviction, that would not necessarily render it a right course of action. The purpose of disciplining insurance agents is to protect the insurance-buying public. Nothing in this record suggests that the public has anything to fear from Mr. Peavy, and it has been affirmatively shown that he is fit and trustworthy in his insurance business and in his community.
The effect of Section 112.011(b) F.S.
Peavy asserted that the restoration of his civil rights pursuant to Section 112.011(b) F.S. precludes the disciplinary action herein as well as prohibiting the denial of a new license. The Department has argued that that statutory section affects only new applications for licensure and was not intended to place a barrier to the elaborate Florida scheme of disciplining persons already licensed in regulated professions, notwithstanding a contrary opinion of the Attorney General at AGO-073-355 (September 20, 1973) and inconclusive dicta in Calhoun v. HRS, 500 So. 2d 674 (Fla. 3d DCA 1989). Due to the foregoing conclusions of law on other issues raised, it is not necessary to address the effect of Section 112.011(b) F.S. on either case.
The licensing case
The licensing case is governed by the prior conclusions of law with regard to Subsection 626.611(7) F.S. Peavy has shown by a preponderance of the evidence that he is fit and trustworthy to engage in the business of insurance. See, J. W. C. Company v. Dept. of Transportation, 396 So. 2d 778 (Fla. 1st DCA 1981), Balino v. Dept. of Health and Rehabilitative Services, 348 So. 2d 349 (Fla. 1st DCA 1977), and fitness cases cited supra.
Upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Insurance enter a Final Order dismissing the administrative complaint in Case No. 90-3698 and granting Peavy a license to as a general lines agent for Bankers and Shippers Insurance in Case No. 90-6615.
DONE and ENTERED this 4th day of February, 1991 at Tallahassee, Florida.
ELLA JANE P. DAVIS, Hearing Officer Division of Administrative Hearings The DeSoto Building
Filed with the Clerk of the Division of Administrative Hearings this 4th day of February, 1991.
F.S. upon the parties' respective proposed findings of fact (PFOF):
1, 2, 3, and 4 are all accepted.
1-5, 7-10, and 12 are accepted and adopted with minor modifications to better express the record as a whole and to eliminate legal conclusions.
6, and 11 are rejected as subordinate or unnecessary to the facts as found; admissible and reliable hearsay has been assessed within the RO.
Albert J. Datz, Esquire Datz, Jacobson and Lembcke
W. Douglas Hall, Esquire
R. Vincent Russo, Esquire Cynthia S. Tunnicliff, Esquire Carlton, Fields, Ward, Emmanuel,
Smith & Cutler, P.A. Post Office Drawer 190
John C. Jordan, Esquire Division of Legal Services
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 agency 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.
================================================================= AGENCY FINAL ORDERS
THIS CAUSE came on for consideration upon the Settlement Stipulation of the parties for the entry of an Order, and, the Treasurer and Insurance Commissioner, having read and considered same, and having reviewed the file and being otherwise fully advised in the premises, hereby finds:
CYNTHIA S. TUNNICLIFF, ESQUIRE
Carlton, Fields, Ward, Emmanuel, Smith & Cutler, P.A.
WILLIAM W. THARPE, JR.
IN ORDER TO ENSURE THAT YOUR PAYMENT IS RECEIVED BY US AND PROPERLY CREDITED YOU MUST SEND YOUR PAYMENT AND A COPY OF THIS ORDER TO THE FOLLOWING ADDRESS:
IT IS HEREBY AGREED and STIPULATED between HOWELL VINSON PEAVY (hereinafter referred to as "Respondent") and the STATE OF FLORIDA, DEPARTMENT OF INSURANCE (hereinafter referred to as "Department") that:
CYNTHIA TUNNICLIFF, ESQUIRE JOHN C. JORDAN
Carlton, Fields, Ward, Division of Legal Services Emmanuel, Smith & Cutler, P.A. 412 Larson Building
Post Office Drawer 190 Tallahassee, Florida 32399-0300 Tallahassee, Florida 32302 (904) 488-4540
