STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF INSURANCE, )

)

Petitioner, )

)

vs. ) CASE NO. 90-7221

)

MYRON IHOR OSTAPCHUK, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, William F. Quattlebaum, held a formal hearing in the above-styled case on April 27, 1991, in Tallahassee, Florida.

APPEARANCES

For Petitioner: S. Marc Herskovitz, Esq.

James A. Bossart, Esq.

412 Larson Building Tallahassee, Florida 32399-0300

For Respondent: No appearance made

STATEMENT OF THE ISSUE

Whether the allegations of the Administrative Complaint are correct and, if so, what penalty should be imposed.

PRELIMINARY STATEMENT

By Administrative Complaint filed October 17, 1990, the Petitioner alleged that the Respondent violated certain sections of Chapter 626, Florida Statutes. By letter dated November 6, 1990, the Respondent denied the allegations of the complaint and requested formal hearing. The Petitioner forwarded the request to the Division of Administrative Hearings which scheduled and conducted the hearing. 1/

Petitioner presented the testimony of Mary Spear, and offered into evidence six exhibits, including the deposition testimony of Harold Mark Johnson, Frances Conroy, and Katherine Marinakis. All exhibits were admitted into evidence. 2/ Respondent did not attend and was not represented at the hearing.

A transcript of the hearing was filed on April 23, 1991. The Petitioner filed a proposed recommended order. The proposed findings of fact are ruled upon either directly or indirectly as reflected in this Recommended Order, and in the Appendix which is attached and hereby made a part of this Recommended Order.

FINDINGS OF FACT

1. At all times material to this case, Myron Ihor Ostapchuk (hereinafter "Respondent") was eligible for and licensed as a non-resident life and health insurance agent in this state.

   
   

2. In June, 1990, Mark Harold Johnson and Frances Conroy jointly met with the Respondent in Jacksonville, Florida, to discuss their potential licensure as health insurance agents with Western Fidelity Insurance Company. During the meeting, the Respondent represented that he had the authority to hire agents on behalf of Western Fidelity. After hearing of the opportunity, Ms. Conroy, a friend of Mr. Johnson's, left to attend to other matters, while Mr. Johnson remained and obtained additional information.

   
   

3. Contrary to his representation to Mr. Johnson and Ms. Conroy, the Respondent was not authorized to hire agents on behalf of the Western Fidelity Insurance Company.

   
   

4. At the time of the meeting, the Respondent requested $150 from Mr. Johnson to cover the cost of licensure. Mr. Johnson examined the materials provided by the Respondent and determined that the Western Fidelity administrative fee was $25 and the state's licensing fee was $40. Mr. Johnson mentioned the matter to the Respondent who agreed to accept $65 as the total fee. Mr. Johnson obtained the necessary forms for both himself and Ms. Conroy and the meeting ended.

   
   

5. Ms. Conroy completed her forms and gave them to Mr. Johnson. After completing his forms, Mr. Johnson contacted the Respondent who resided in Tallahassee, and made arrangements to bring both his and Ms. Conroy's completed forms and required fees to the Respondent's home.

   
   

6. Mr. Johnson paid the $65 fee by check number 2895 dated June 12, 1989 drawn on Southeast Bank of Jacksonville made payable to "United Financial". The check was deposited into the First Florida Bank of Tampa account number 612131053 of "United Financial Consultants Group, Inc.", a business entity controlled by the Respondent.

   
   

7. Ms. Conroy paid the $65 fee by check number 4337 dated June 8, 1989 drawn on Barnett Bank of Jacksonville made payable to "United Financial Services". The check was deposited into the First Florida Bank of Tampa account number 612131053 of "United Financial Consultants Group, Inc."

   
   

8. The Respondent was not authorized to accept the funds on behalf of, and failed to submit such funds to, the Western Fidelity Insurance Company. The Respondent has not refunded the funds to either Mr. Johnson or Ms. Conroy. In order to become licensed, both Mr. Johnson and Ms. Conroy submitted additional funds to Western Fidelity Insurance Company.

   
   

9. On or about June 12, 1989, the Respondent met with and sold a policy of health insurance to Katherine Marinakis . Ms. Marinakis gave to the Respondent her check number 0854 in the amount of $232.00, dated June 12, 1989, drawn on First Florida Bank of Clearwater, and made payable to "U. F. C. G." The Respondent provided to Ms. Marinakis a receipt identifying her payment as the initial premium for the Western Fidelity Insurance Company policy.

10. Ms. Marinakis' check cleared through the First Florida Bank of Tampa, Florida, and the funds were deducted from her checking account. The Respondent failed to submit the premium payment to Western Fidelity Insurance Company. The Respondent has not refunded the premium payment to Ms. Marinakis.

    
    

    CONCLUSIONS OF LAW

    
    

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

    
    

12. The Petitioner has the burden of proving, by clear and convincing evidence, the allegations of the Administrative Complaint. Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987). The Petitioner has met the burden.

    
    

13. All premiums, return premiums, or other funds belonging to insurers or others received by an agent, solicitor, or adjuster 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. 626.561(1), Florida Statutes.

    
    

14. Section 626.611, Florida Statutes, in relevant part provides:

    
    

    The department shall...suspend, revoke, or refuse to renew or continue the license of any agent,...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...licensee...any one or more of the following applicable grounds exist:

    * * *

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

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

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

    4. 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.

15. Section 626.621, Florida Statutes, in relevant part provides: The department may, in its discretion,...

    suspend, revoke, or refuse to renew or continue the license of any agent,...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...licensee...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:

    
    

    (6) In the conduct of business under the license or permit, 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.

    
    

16. Section 626.9541, Florida Statutes, in relevant part provides:

    
    

    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:

       * * *

       1. False information and advertising generally. Knowingly making, publishing, disseminating, circulating, or placing before the public, or causing, directly or indirectly, to be made, published, disseminated, circulated, or placed before the public:

          1. In a newspaper, magazine, or other publication,

          2. In the form of a notice, circular, pamphlet, letter, or poster,

          3. Over any radio or television station,

             or

          4. In any other way,

    an advertisement, announcement, or

    statement containing any assertion, representation, or statement with respect to the business of insurance, which is untrue, deceptive, or misleading.

    * * *

    1. False statements and entries.

       1. Knowingly:

          1. Filing with any supervisory or other public official,

          2. Making, publishing, disseminating, circulating,

          3. Delivering to any person,

          4. Placing before the public,

          5. Causing, directly or indirectly, to be made, published, disseminated, circulated, delivered to any person, or placed before the public, any false material statement.

17. The uncontroverted evidence establishes that the Respondent collected fees and premium funds constituting trust funds received in his fiduciary capacity, which funds were not paid to the insurer or other appropriate party. The Respondent made false statements regarding his ability to have Mr. Johnson and Ms. Conroy licensed as agents for Western Reserve Insurance Company. He failed to account for or submit the licensing fees submitted by Mr. Johnson and Ms. Conroy and has not refunded such fees to them. The Respondent further failed to account for or submit Ms. Marinakis' premium payment to the Western Reserve Insurance Company and has failed to refund said payment to her.

RECOMMENDATION

Based on the foregoing, it is hereby

RECOMMENDED that the Department of Insurance enter a Final Order revoking the licensure and eligibility for licensure of Myron Ihor Ostapchuk as a non- resident life and health insurance agent in this state.

DONE and RECOMMENDED this 21st day of May, 1991, in Tallahassee, Florida.

WILLIAM F. QUATTLEBAUM

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, FL 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 21st day of May, 1991.

ENDNOTES

1/ The Notice of Hearing issued January 10, 1991, incorrectly identifies the case as #90-7721. The case was transferred to the undersigned Hearing Officer on February 7, 1991. The correct case number is 90-7221. The Petitioner's exhibits contain the incorrect case number as set forth on the Notice of Hearing.

2/ Petitioner's exhibit #6, a copy of a letter allegedly from the Respondent to the Insurance Commissioner was not authenticated and has been disregarded in this Recommended Order.

APPENDIX TO RECOMMENDED ORDER

The Respondent did not submit a proposed recommended order. The following constitutes rulings on proposed findings of facts submitted by the Petitioner.

Petitioner

The Petitioner's proposed findings numbered 8, 12, and 16 which refer to the "unlawful" withholding of funds, are rejected as conclusions of law. The Petitioner's remaining findings of fact are accepted as modified in the Recommended Order except as follows:

3. Rejected as to date of meeting, not supported by evidence cited. The meeting occurred in 1989.

1. The insurance sold to Ms. Marinakis was health insurance rather than life insurance.

   
   

2. Rejected. The evidence establishes only that the check given by Ms. Marinakis to the Respondent was deducted from her account and that the Respondent failed to submit the premium payment to the insurer. The evidence does not establish that the check was deposited into the Respondent's account.

COPIES FURNISHED:

Tom Gallagher

State Treasurer and Insurance Commissioner The Capitol, Plaza Level

Tallahassee, Florida 32399-0300

Bill O'Neil General Counsel

Office of State Treasurer The Capitol, Plaza Level

Tallahassee, Florida 32399-0300

S. Marc Herskovitz, Esq. James A. Bossart, Esq.

412 Larson Building Tallahassee, Florida 32399-0300

Myron Ihor Ostapchuk 4500 Shannon Lakes Plaza Suite 105

Tallahassee, Florida 32308

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 ten days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact 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.

Docket for Case No: 90-007221

Orders for Case No: 90-007221