STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF INSURANCE )

AND TREASURER, )

)

Petitioner, )

)

vs. ) CASE NO. 91-1726

)

ROBERT MITCHELL THOMAS, )

)

Respondent. )

)

)

)

RECOMMENDED ORDER

Pursuant to notice, the above matter was heard before the Division of Administrative Hearings by its duly designated Hearing Officer, Donald R. Alexander, on July 9, 1991, in Fort Myers, Florida.

APPEARANCES

For Petitioner: Donald E. Petersen, Esquire

412 Larson Building Tallahassee, Florida 32399-0300

For Respondent: Robert Mitchell Thomas, pro se

P. O. Box 1088

Fort Myers, Florida 33902 STATEMENT OF THE ISSUES

The issue is whether respondent's license as a limited surety agent (bail bondsman) should be disciplined for the reasons stated in the administrative complaint.

PRELIMINARY STATEMENT

In a single count administrative complaint filed on February 21, 1991, petitioner, Department of Insurance and Treasurer, charged that respondent, Robert Mitchell Thomas, licensed as a limited surety agent, had violated certain provisions within Chapter 648, Florida Statutes (1989). More specifically, the complaint alleged that on November 16, 1989, respondent agreed to post $2,500 to secure the release of Richard Rahn from the Lee County jail and accepted $250 cash from Rahn's wife in return for that service. The complaint also alleged that respondent induced the wife to sign an unexecuted security agreement and deliver her automobile title to respondent. The complaint alleged further that after the wife had subsequently filed spouse abuse charges against her husband, and respondent picked up and surrendered the husband to authorities, she was told by respondent that she must pay respondent an additional $250 pickup fee and, unless she did so, her automobile title would not be returned. The

complaint alleged that the foregoing conduct constituted a violation of numerous provisions within Sections 648.44 and 648.45, Florida Statutes (1989).

Respondent disputed the above allegations and requested a formal hearing pursuant to Subsection 120.57(1), Florida Statutes (1989). The matter was referred by petitioner to the Division of Administrative Hearings on March 18, 1991, with a request that a hearing officer be assigned to conduct a formal hearing. By notice of hearing dated April 12, 1991, a final hearing was scheduled on July 9, 1991, in Fort Myers, Florida.

At final hearing petitioner presented the testimony of Debra Rahn and Ronald W. Millette. It also offered petitioner's exhibits 1-6. All exhibits were received in evidence. Respondent testified on his own behalf and offered respondent's exhibit 1 which was received in evidence.

The transcript of hearing was filed on August 2, 1991. Proposed findings of fact and conclusion of law were filed by petitioner on August 16, 1991. A ruling on each proposed finding has been made in the Appendix attached to this Recommended Order.

FINDINGS OF FACT

Based upon all of the evidence, the following findings of fact are determined:

1. At all times relevant hereto, respondent, Robert Mitchell Thomas, was licensed and eligible for licensure and appointment as a limited surety agent (bail bondsman) by petitioner, Department of Insurance and Treasurer (Department). When the events herein occurred, respondent was employed as manager/agent of the Fort Myers office of Hamilton Bonding, Inc. (Hamilton). At hearing respondent represented he has been licensed as a bail bondsman for approximately fifteen years.

   
   

2. The facts which underlie this dispute are as follows. On November 16, 1989, Debra Rahn, a resident of Cape Coral, Florida and the wife of Richard A. Rahn, had Richard arrested for possession of a controlled substance and/or narcotic paraphanelia. She did this so that Richard could be placed in a drug treatment program. His bond was thereafter set in the amount of $2500.

   
   

3. In order to get Richard released from jail and placed in the drug program, Debra contacted respondent at Hamilton's Fort Myers office and, after conferring with respondent, agreed to enter into an indemnity agreement with Thomas wherein respondent, acting as agent for Hamilton, agreed to post a $2500 surety bond with the Lee County Sheriff's Department for the release of Richard. In return for this service, Debra paid respondent a premium in the amount of

   $250. In addition to paying the foregoing sum of money, Debra was asked to sign a blank security agreement, notice of lien and power of attorney, and to deliver to respondent the title to her 1983 Chevrolet Chevette. After doing so, she received a receipt for the premium and automobile title. Finally, Debra was told there would be no other fees for this service.

   
   

4. A few weeks later, Debra decided she wanted off of the bond because Richard was not responding favorably to the drug treatment. She accordingly telephoned Thomas who offered her several alternatives. One alternative suggested by respondent was for Debra to file new charges against Richard so that he would be arrested and shown to be in violation of the terms of the bond.

5. Acting on respondent's advice, in early January 1990 Debra filed additional unspecified charges against her husband. On January 10, 1990, Ronald

   W. Millette, a licensed bail bondsman who had worked for respondent on previous occasions, was told by respondent that Debra wanted off of the bond and to pick up Richard and return him to the Lee County jail. He was paid a $50 fee for this service. That evening Millette went to Debra's house and advised her to go to respondent's office because Richard might seek retribution against her. Later on that evening, Millette apprehended Richard and carried him to respondent's office. Respondent and Millette then transported Richard to the

   jail. It may be reasonably inferred from the evidence that on a later date, the obligation of the surety on the bond was released by the court.

   
   

6. In accordance with Millette's instructions, Debra went to respondent's office the evening of January 10 and was told by respondent that Richard was handcuffed in the next room. Whether this statement was accurate is not of record. In any event, respondent told Debra she must pay an additional $250 pick-up fee or he would not return her automobile title. This amount was derived by taking ten percent of the original $2500 bond. Respondent requested this fee even though there is no evidence that he forfeited any portion of Richard's bond or that the court ordered any fees. Debra replied she did not have the money but would return on Saturday to pay the money due.

   
   

7. On a later undisclosed date, Debra's Chevette was "totaled" in an automobile accident. Because of this, she claimed she was unable to promptly pay the $250 fee. Even so, respondent continued to make demands for the money. The record does not show whether the automobile title was returned to Debra although Millette believes another employee in respondent's office did so at a later date.

   
   

8. On May 29, 1990, respondent sent Debra a letter in which he again demanded payment of the $250 fee. However, based upon advice from a Department employee, he apologized to her for calling the fee a "pick-up fee" and instead characterized the charge as a "principal's apprehension fee" for expenses incurred in having Millette place Richard in custody on January 10. The record reflects that on June 10, 1990, Debra sent respondent a $10 check as partial payment on the demand but the check was never cashed.

   
   

9. There is no evidence that respondent's license has ever been disciplined during his lengthy tenure as a bail bondsman.

   
   

   CONCLUSIONS OF LAW

   
   

10. The Division of Administrative Hearings has jurisdiction of the subject matter and the parties hereto pursuant to Subsection 120.57(1), Florida Statutes (1989).

    
    

11. Since respondent's license as a limited surety agency is at risk, the Department is obliged to establish by clear and convincing evidence that the charges in the administrative complaint are true. See, e. g., Pascale and Chandler v. Department of Insurance, 525 So.2d 992 (Fla. 3rd DCA 1988).

12. The administrative complaint, which is not a model of clarity, alleges that respondent violated a number of statutes by his conduct in the Rahn affair. First, he is charged with having violated Subsection 648.44(1)(g), Florida Statutes (1989), which provides as follows:

    
    

    1. No bail bondsman or runner shall

       * * *

       (g) Accept anything of value from a principal for providing a bail bond except the premium and transfer fee authorized by the department, except that the bondsman shall be permitted

       to accept collateral security or other indemnity from the principal or another person in accordance with the provisions of s.

       648.442.

       * * *

       
       

       Respondent is also charged with violating Subsection 648.45(2), Florida Statutes (1989) in six respects. 1/ Those violations, if proven to be true, would subject respondent to compulsory suspension or revocation of his license or eligibility to hold the same. The alleged statutory violations are as follows:

       
       

    2. The department shall deny, suspend, revoke, or refuse to renew any license issued under this chapter or the insurance code, and it shall suspend or revoke the eligibility of any person to hold a license under this chapter or the insurance code, for any violation of the laws of this state relating to bail or any violation of the insurance code or for any of the following causes:

       * * *

       1. Willful use, or intended use, of the license or permit to circumvent any of the requirements or prohibitions of this chapter or the insurance code.

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

       * * *

       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 a surety, a principal, or others and received in the conduct of business under a license.

       * * *

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

       * * *

       (l) Demonstrated lack of good faith in carrying out contractual obligations and agreements.

       * * *

       
       

       Respondent is further charged with violating Subsection 648.45(3), Florida Statutes (1989) in two respects. That statute grants discretionary authority to the Department to suspend or revoke respondent's license if he is found guilty of certain violations. As is relevant to this proceeding, the alleged statutory violations are as follows:

       
       

       (b) Violation of any law relating to the business of bail bond insurance or violation of any provision of the insurance code.

       * * *

       (d) Showing himself to be a source of injury or loss to the public or detrimental to the public interest or being found by the department to be no longer carrying on the bail bond business in good faith.

       
       

       In addition, although not cited in the complaint, Rule 4-1.005, Florida Administrative Code, was referred to by the parties at hearing and is relevant to this controversy. That rule provides the following limitation on the acceptance of fees by a bail bondsman:

       
       

       No surety, bail bondsman or general lines agent engaged in the bail bond business shall make any charge, collect, or receive any fee or consideration other than the premium based on rates in current use, provided, however, that nothing in this section shall prohibit collateral security or co-indemnity agreements, and provided further that in instances where an additional surety, bail bondsman or general lines agent located in a county or state different from the originating agent or bail bondsman executes the bond the premium may additionally include as a part thereof an execution and transfer fee, not to exceed a total of fifty ($50.00) dollars for any one defendant.

       
       

       Finally, Section 648.571, Florida Statutes (1989) provides in relevant part:

       
       

       A bondsman who has taken collateral as security for a bail bond shall, upon demand, return the collateral to the person from whom it was received within 21 days after the bail bond has been discharged in writing by the court.

       
       

13. Although the complaint cites numerous provisions within chapter 648 as having been violated, virtually all violations are dependent upon a showing that subsection 648.44(1)(g) has been contravened. That subsection prohibits a bail bondsman from accepting anything of value from a principal except the premium and transfer fee, except collateral security or other indemnity may also be accepted. This proscription is also codified in rule 4-1.005.

14. The evidence shows clearly and convincingly that, after a premium on a bond had already been charged and collected from the indemnitor (Rahn), and no forfeiture of the bond had occurred, respondent attempted to charge Rahn an additional "pick-up" fee of $250 and threatened to withhold her automobile certificate of title until she did so. By doing so, it is concluded that respondent violated the foregoing statute and rule. Since Thomas acknowledged that he has been in the business for at least fifteen years, and thus should have been familiar with the law and agency rules, it is further concluded that he willfully violated a prohibition in chapter 648 and willfully intended to circumvent a prohibition in the chapter thereby violating subsections 648.45(2)(d) and (j), respectively. In addition, respondent's conduct constitutes a "dishonest practice in the conduct of the business" as proscribed by subsection 648.45(2)(g), a violation of a law relating to the business of bail bond insurance within the meaning of subsection 648.45(3)(b), a demonstrated lack of good faith in carrying out contractual oblications in violation of subsection 648.45(2)(l), and "a source of injury or loss to the public or detrimental to the public interest" as proscribed by subsection 648.45(3)(d). Finally, there was no evidence to establish that respondent demonstrated a lack of fitness and trustworthiness to engage in the business as proscribed by subsection 648.45(2)(e) or that he withheld "moneys" belonging to Rahn within the meaning of subsection 648.45(2)(h). 2/

    
    

15. In reaching the above conclusions, the undersigned has considered Thomas' contention at hearing that he mistakenly characterized the second charge as a pick-up fee and that it was actually an apprehension fee authorized by Section 648.571 (Supp. 1990). However, the portion of the statute upon which he relied did not become effective until after the illicit conduct occurred, and in any event, authorized an apprehension fee only when there has been a forfeiture of a bond or judgment under Section 903.29, Florida Statutes (1989), circumstances not present in this case. Moreover, even then the fee may cover only "undisputed" or reasonable expenses, which in this case did not exceed $50. Thomas also contended that the additional fee was authorized by the indemnity agreement and thus no disciplinary action should lie. This contention is also rejected since a licensee's conduct is governed by chapter 648 and Department rules, and where a conflict between an agreement and the law exists, the general law must obviously apply. Finally, at hearing respondent suggested that Section 648.442, Florida Statutes (1989) authorized his actions. That section pertains to the acceptance by a bail bondsman of collateral security. Subsection (4) thereof provides that when the obligation of the surety on the bond has been released in writing by a court, the collateral must be released to the owner as agreed in the indemnity agreement. Although Thomas did not fully explain his theory, it is assumed he is contending that since the indemnity agreement required Rahn to indemnify him for all expenses, he was free to retain the automobile title until Rahn paid such fees as Thomas deemed to be appropriate. This argument is misplaced because section 648.442 merely defines the terms under which collateral security may be retained and disposed of, and does not prescribe the type of fees that may be collected by a bail bondsman. Moveover, under Thomas' theory, the indemnity agreement would legitimize any fee collected by a bail bondsman notwithstanding contrary statutory provisions, a contention rejected above.

    
    

16. In his proposed order, agency counsel suggests a penalty of two years' probation and a $2,500 administrative fine. Since Thomas has violated several provisions within subsection 648.45(2), the agency has no discretion but to suspend or revoke his license. Given the circumstances in this case, and the fact that Thomas has never been disciplined by the Department during his tenure

as a licensed bail bondsman, a ten day suspension of his license and a $500 administrative fine is appropriate.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that respondent be found guilty of violating Subsections

648.44(1)(g), 648.45(2)(d), (g), (j), (l), and 648.45(3)b) and (d), Florida

Statutes (1989), and that his license be suspended for ten days and a $500 administrative fine be imposed.

DONE and ENTERED this 22nd day of August, 1991, in Tallahassee, Florida.

DONALD R. ALEXANDER

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 22nd day of August, 1991.

ENDNOTES

1/ Although the statutory citations in the complaint are replete with typographical errors, respondent did not question these citations and any objection thereto is deemed to have been waived. See, e. g., Jacker v. School Board of Dade County, 426 So.2d 1129 (Fla. 3d DCA 1983). The correct statutory references are cited in this Recommended Order.

2/ While it is true that Thomas unlawfully withheld Rahn's automobile title for an undisclosed period of time, the statute calls for an unlawful withholding of "moneys" as opposed to property and thus this subsection has no application to this proceeding.

APPENDIX TO RECOMMENDED ORDER

Petitioner:

1-2. Partially adopted in finding of fact 1. 3-8. Partially adopted in finding of fact 3. 9-11. Partially adopted in finding of fact 4.

1. Partially adopted in finding of fact 5.

2. Partially adopted in finding of fact 4.

3. Partially adopted in finding of fact 6.

4. Partially adopted in finding of fact 5.

5. Partially adopted in finding of fact 7.

6. Rejected as being irrelevant.

COPIES FURNISHED:

Mr. Robert Mitchell Thomas Post Office Box 1088

Fort Myers, FL 33902

Donald E. Petersen, Esquire

412 Larson Building Tallahassee, FL 32399-0300

Tom Gallagher

State Treasurer and Insurance Commissioner

The Capitol, Plaza Level Tallahassee, FL 32399-0300

William O'Neil, III, Esquire Department of Insurance

The Capitol, Plaza Level Tallahassee, FL 32399-0300

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to the 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: 91-001726

Orders for Case No: 91-001726