STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF INSURANCE AND ) TREASURER, )

)

Petitioner, )

)

vs. ) CASE NO. 91-3109

)

WILLIAM HOUSTON KING, )

)

Respondent. )

)

RECOMMENDED ORDER

Upon due notice, this cause came on for formal hearing on January 3, 1992 in Gainesville, Florida, before Ella Jane P. Davis, a duly assigned Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Michele Guy, Esquire

Department of Insurance

412 Larson Building

Tallahassee, Florida 32399-0300

For Respondent: S. Scott Walker, Esquire

Watson, Folds, Steadham, et al.

P. O. Box 1070 Gainesville, Florida

STATEMENT OF THE ISSUES

By a two-count Amended Administrative Complaint, the Department of Insurance has charged Respondent, a licensed Florida life and health insurance agent, pursuant to Count I with violations of Sections 626.611(7), 626.611(14) and 626.621(8), F.S. arising out of his plea of nolo contendere to a felony charge of grand theft, and pursuant to Count II with violating Section 626.611(7) F.S. arising out of adjudication of guilt to multiple misdemeanor charges of issuing worthless bank checks.

PRELIMINARY STATEMENT

At formal hearing, Petitioner presented no oral testimony but had ten exhibits admitted in evidence. Respondent presented the oral testimony of the Reverend L. D. J. Berry and testified on his own behalf. The Respondent offered no exhibits.

Pursuant to stipulation of the parties, the record was left open for 60 days to permit the filing, by Respondent, of two additional exhibits: one directed to whether or not the circuit court plea underlying the allegations of Count I of the amended administrative complaint had been set aside by the

circuit court and one directed to the degree (or completeness) of restitution made by Respondent with regard to the plea/judgment underlying the allegations contained in Count II of the amended administrative complaint.

On March 4, 1992, Respondent filed one exhibit showing that only on March 3, 1992, had Respondent filed with the appropriate circuit court a motion for post-conviction relief.

On March 4, 1992, Respondent also filed a Motion for Extension of Time for Record to Remain Open which was opposed by Petitioner. The motion was denied and the record closed by Order entered March 5, 1992.

No transcript was provided, but all timely filed proposed findings of fact and conclusions of law have been considered, the findings of fact of which have been ruled on in the appendix of this recommended order, pursuant to Section 120.59(2), F.S.

FINDINGS OF FACT

1. Respondent is currently eligible for licensure and licensed in Florida as a life insurance agent and as a health insurance agent. He has been so licensed since 1985, and except for the facts, as set out infra., no disciplinary charges have ever been filed against him.

   
   

   Count I of the Amended Administrative Complaint

   
   

2. On December 6, 1989, Respondent was charged by Information in the Circuit Court of the Eighth Judicial Circuit, in and for Alachua County, Florida, in Case No. 89-4842-CF, with a felony, to wit: Grand Theft in the third degree, a violation of Section 812.014, F.S.

   
   

3. Respondent admitted that Case No. 89-4842-CF arose out of his writing a check on First Union Bank to cover computers previously contracted for by Respondent for his insurance agency. When he wrote the check, Respondent knew that he was short of funds but expected to deposit sufficient funds to the appropriate account before his check was presented for payment. When this "kiting" episode occurred, Respondent was short of funds due to an illegal conversion of funds perpetrated by one of his employee agents. Respondent did not get the money into his account in a timely manner and did not later "make the check good" before prosecution began.

   
   

4. In accord with the appropriate regulatory rules, Respondent reported the illegal conversion by his employee agent to the Petitioner Department of Insurance and cooperated with that agency. He also reported the offending employee agent's illegal conversion to the local State Attorney. He cooperated in a criminal prosecution and filed a civil action in his own right against the offending agent. These events further depleted his assets and in part accounted for his being unable to make his check good.

   
   

5. On July 19, 1990, in response to the Information filed against him, Respondent entered a plea of nolo contendere to grand theft, a felony in the third degree, in Circuit Court Case No. 89-4842-CF. With adjudication of guilt withheld, Respondent was placed on probation for one year and ordered to pay restitution in the amount of $7,139.29 to First Union Bank. Pursuant to court papers and Respondent's testimony, it appears that he was first given until July 19, 1991 to complete restitution on this charge. Respondent testified without refutation that he had received an extension from the circuit court until July

   of 1993 in which to make this restitution. That date had not yet been reached as of the date of formal hearing.

   
   

6. With regard to his nolo contendere plea to a third degree felony, adjudication withheld, Respondent's unrefuted testimony is that he was represented by an attorney, Johnny Smiley, until Mr. Smiley was suspended from practicing law by the Florida Bar and that Mr. Smiley failed several times to appear on his behalf in court, did not advise him of any alternative misdemeanor pleas, and never properly advised him of all the potential consequences of pleading nolo contedere to a felony charge of grand theft, including that if that offense is construed as an offense involving moral turpitude, then Section 626.611(14), F.S. may be read to mandate revocation or suspension of his professional insurance licenses. It may be inferred from Respondent's testimony that Respondent, the prosecutor, and the circuit court judge assumed that Respondent would be able to continue selling insurance and thereby would be able to meet the restitution requirements of his plea bargain and probation.

   
   

7. At formal hearing on January 3, 1992, Respondent represented that he had made some restitution and hoped to complete restitution under the foregoing circuit court order by January 31, 1992.

   
   

8. Respondent further represented that a circuit judge had indicated that once Respondent made restitution on all charges (including those misdemeanor adjudications that gave rise to Count II of the instant amended administrative complaint, see infra.), the court would entertain a motion to set aside his grand theft plea. What the circuit judge may or may not have indicated is not admissible for proof of the matters asserted, but it is admissible to show Respondent's reliance thereon and his motivation beyond the obvious motivations for making restitution as soon as possible. By stipulation of the parties, the record in this instant disciplinary cause was left open for 60 days after formal hearing so that Respondent could amplify on this testimony.

   
   

9. Pursuant to Fla. Rule of Criminal Procedure 3.850, and Art. I Section

   16 of the Florida Constitution, Respondent has filed a Motion for Post- Conviction Relief in Circuit Court Case No. 89-4842-CF. However, a copy of this motion was not filed as an exhibit with the Division of Administrative Hearings until the day before the record herein closed by Order of March 5, 1992.

   Because the record was closed, the outcome, if any, of that circuit court motion/exhibit is not before the undersigned. Also, Respondent's motion/exhibit alone is not sufficient evidence for the undersigned to infer that Respondent has paid all required restitution amounts as of the date of this recommended order.

   
   

   Count II of the Amended Administrative Complaint

   
   

10. From September 7, 1990 through July 30, 1991, the Respondent was charged by several Informations in the Circuit Court of the Eighth Judicial Court, in and for Alachua County, Florida, in Case Nos. 90-3267-CF-A, 90-3310- CF-A, 90-3881-CF-A, 91-2236-CF-A, 91-2237-CF-A, 91-2238-CF-A, 91-2712-CF-A, and 91-2713-CF-A, with one count per case of a third degree felony, to wit: Issuing a Worthless Check, a violation of Section 832.05(4), F.S.

    
    

11. According to Respondent's unrefuted testimony, the negative balance situation arising from his earlier felony plea bargain, the need to make restitution in that case, and his attorney fees and costs associated with suing the agent who had taken money from Respondent's agency and one of Respondent's insurance carriers had caused an additional shortage of personal funds at a time

    Respondent was desperately fighting to save his marriage and keep his family, consisting of a wife and two small daughters, together. He admitted that he had issued seventeen worthless bank checks during this stressful period for personal expenses, primarily for telephone charges, groceries, and furniture.

    Nonetheless, Respondent's marriage failed and the couple is now divorced.

    
    

12. By a plea bargain executed July 30, 1991, Respondent agreed to enter a nolo contendere plea to four first degree misdemeanor charges of issuing worthless bank checks and agreed to make restitution totalling $6,492.88 on thirteen others. The restitution agreement covering 17 checks included restitution for nine worthless checks for which the State had agreed to allow deferred prosecution. Five check charges were to be dismissed.

    
    

13. What happened next is not entirely clear because, despite an order of the circuit court accepting the plea bargain, the case numbers in the plea bargain and on the subsequent judgments do not match, and it appears that on July 30, 1991, Respondent plead nolo contendere and was adjudicated guilty of eight first degree misdemeanor charges, ordered to serve six months probation on each, the probations to run concurrently, and was further ordered to make restitution pursuant to the plea/restitution agreement. Pursuant to court papers and Respondent's testimony, it appears that he was also given six months, or until approximately January 31, 1992, to make restitution on these cases. That date had not yet been reached as of the date of formal hearing.

    
    

14. Respondent remained on probation as of the date of formal hearing.

    
    

15. Respondent testified at formal hearing that he hoped to make full restitution on these cases by January 31, 1992, and that unless he also made full restitution on the grand theft case, he could not file a motion to vacate his plea therein. (See, Finding of Fact 7, supra.) Respondent did not file any evidence of restitution in these misdemeanor cases, although he was given until March 5, 1992 to do so. The filing as an exhibit herein of his Motion for Post- Conviction Relief in the circuit court felony case covered in Count I of the instant amended administrative complaint is not sufficient for the undersigned to infer that Respondent has made full restitution on these misdemeanor charges covered in Count II of the instant amended administrative complaint. (See, Finding of Fact 8, supra.)

    
    

16. Respondent presented the testimony of Reverend L.D.J. Berry, pastor of a Baptist Church in St. Thomas, Florida, to the effect that the minister has bought insurance from Respondent and has always found him to be helpful and honest in insurance matters. Although Reverend Berry has counselled with Respondent, Respondent is not a member of Reverend Berry's parish. Reverend Berry has never been a recipient of one of Respondent's bad checks. Reverend Berry considered the Respondent to be of good character, even knowing of his bad check history.

    
    

    CONCLUSIONS OF LAW

    
    

17. The Division of Administrative Hearings has jurisdiction of the parties and subject matter of this cause. See, Section 120.57(1) F.S.

    
    

18. The standard of evidence to discipline an insurance license is that of clear and convincing evidence. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987).

    
    

19. The Amended Administrative Complaint alleges with regard to Count I that the Respondent violated Sections 626.611(7); 626.611(14); and 626.621(8),

    F.S. It alleges with regard to Count II that Respondent has violated Section 626.611(7), F.S. The applicable statutory provisions provide as follows:

    
    

    626.611 Grounds for compulsory refusal, suspension, or revocation of agent's solici- tor'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 or appointment of any agent, solicitor, adjuster, service representative, managing general agent, or claims investigator, and it shall suspend

    or revoke the eligibility to hold a license or appointment of any such person, if it finds

    that as to the applicant, licensee, or appointee any one or more of the following applicable grounds exist:

    * * *

    (7) Demonstrated lack of fitness or trustworthi- ness 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.

    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 discre- tion, deny, suspend, revoke, or refuse to renew or continue the license or appointment of any agent, solicitor, adjuster, service represen- tative, managing general agent, or claims investigator, and it may suspend or revoke the eligibility to hold a license or appointment

    of any such person, if it finds that as to the applicant, licensee, or appointee 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 convic- tion has been entered by the court having jurisdiction. [Emphasis supplied]

20. As to Count I, the Respondent was charged with, and plead nolo contendere to, grand theft in the third degree, a felony punishable by imprisonment of one year or more under Florida law. See, Section 812.014 F.S. Grand theft is a felony that clearly involves moral turpitude. See, Soetarto v. Immigration and Naturalization Service, 516 F.2nd 778 (7th Cir. 1975). The Respondent has therefore violated Section 626.611(14), F.S. and the Department is required to suspend or revoke his insurance licenses. Section 626.621(8)

    F.S. does not require a felony to involve moral turpitude and allows the agency to exercise its discretion in taking action against an agent's license when, as here, a plea has been entered. Section 626.611(7) F.S. requires revocation or suspension if Respondent is shown to have demonstrated lack of fitness or trustworthiness to engage in the business of insurance by virtue of his grand theft plea of nolo contendere.

    
    

21. Under Count II, Respondent is only charged with unfitness/untrustworthiness, a violation of Section 626.611(7) F.S., arising out of his adjudication of guilt subsequent to a nolo contendere plea to at least four, possibly eight, misdemeanors of passing worthless bank checks. Therefore, under Count II, Respondent's license is required to be suspended or revoked if adjudication of guilt on the misdemeanors demonstrates lack of fitness or trustworthiness to engage in the business of insurance.

    
    

22. The Florida Insurance Code requires the Petitioner agency to suspend or revoke the license of an agent if it finds a "demonstrated lack of fitness or trustworthiness to engage in the business of insurance." See, Section 626.611(7), F.S. The First District Court in Natelson v. Department of Insurance, 454 So.2d 31, 32 (Fla. 1st DCA 1984) held that "(a)gencies are afforded wide discretion in the interpretation of a statute it [sic] administers and will not be overturned on appeal unless clearly erroneous" and "(t)he reviewing court will defer to any interpretation within the range of possible interpretations." Within the Department's discretion is the authority to interpret "the term 'lack of fitness or trustworthiness to engage in the business of insurance'". Id. at 32.

    
    

23. The Court in Natelson recognized that "(i)nsurance is a business greatly affected by the public trust, and the holder of an agent's license stands in a fiduciary relationship to both the client and insurance company". Id. at 32. Therein, the Court upheld the revocation of an agent's license based on his guilty plea to conspiracy to distribute and possess with intent to distribute cannabis, finding upon the plea of guilty to that felony that the Department properly concluded that the agent was neither fit nor trustworthy to maintain the trusted fiduciary position necessary to be an insurance agent.

    
    

24. Herein, the situation is analogous to the one in Natelson, but not identical. First, with regard to Count I, adjudication on the felony herein was withheld so there is no "conviction." Despite the clear language of Section 626.611(14) F.S. that a felony plea of nolo contendere is grounds for mandatory suspension or revocation if the felony involves moral turpitude "without regard to whether a judgment of conviction has been entered," the prosecuting agency has seen fit to consider the distinction between a guilty plea and a nolo contendere plea with regard to penalty, where the Respondent also has been charged under Section 626.611(7) F.S. See, Department of Insurance v. Askea, (Amended Recommended Order entered 2/27/90; Final Order entered 5/11/90), 13 FALR 734 (1990).

25. Additionally, from the evidence presented at formal hearing, it is very difficult to understand what, other than questionable advice of counsel, could have persuaded Respondent to plead nolo contendere to a felony charge of grand theft under the circumstances. The Petitioner agency frequently has not revoked licenses where pleas of convenience have been entered. In Department of Insurance v. Pomerantz, DOAH Case No. 90-4430 (RO entered 2/27/91; FO entered 4/18/91), the respondent had entered a nolo contendere plea to grand theft. Under a plea bargain which dropped numerous very serious charges, adjudication on the grand theft charge was withheld, and probation and restitution was assigned. Under the facts of that case, the agency gave the respondent/agent a one year license suspension under Sections 626.611(7) and (14) and 626.621(8)

    F.S. and withheld relicensing until restitution was made. In Department of Insurance v. Hall, DOAH Case Nos. 90-3024 and 90-3025 (RO entered 1/14/90; FO entered 3/3/91) the respondent was also charged under Sections 626.611(7) and

    (14) and 626.621(8), F.S. and received only a six month license suspension after a guilty "plea of convenience" to three felony counts, all of which involved moral turpitude. Although the final order concentrated on what constitutes moral turpitude for purposes of Section 626.611(14), it also rejected the hearing officer's conclusion that violation of Section 626.611(7), F.S. had not been proven. Herein, Respondent King's nolo contendere plea of convenience on the felony charge appears to also have been a plea of ignorance, or at least of vulnerability, and adjudication has been withheld.

    
    

26. With regard to Count II, Respondent has been adjudicated (convicted) of guilt, despite a nolo contendere plea, but for misdemeanors only.

    
    

27. The situation in Count I of the instant case is very similar to that considered by the license disciplinary agency in Department of Insurance v. Askea, supra. Therein, Ms. Askea was arrested and formally charged with grand theft of over $20,000 and three counts of perjury. The criminal charges arose in connection with her relationship with an elderly woman who was stricken with cancer. After the woman died, a controversy arose regarding certain transfers of property to Ms. Askea and a will executed by the deceased woman naming Ms. Askea as beneficiary. A civil law suit was filed contesting the will and the property transfers to Ms. Askea. Ultimately, the will which left all of the elderly woman's property to Ms. Askea was disallowed and certain transfers of property to her were overturned. Criminal charges were initiated against her by the prevailing heir. As part of a plea bargain arrangement, Ms. Askea entered a plea of guilty to the charge of grand theft and the three perjury counts were dismissed. Adjudication on the grand theft count was withheld, Ms. Askea was placed on probation for ten years with a requirement that she make restitution to the victim, the heir of the estate. The restitution required as part of the criminal proceeding was intended to compensate the prevailing heir for attorney's fees incurred in connection with the civil action. In the subsequent license disciplinary action, Ms. Askea denied any wrongdoing but claimed she had had inadequate resources to fight the criminal matter. In entering into the plea arrangement, Ms. Askea, the judge, and the prosecutor all anticipated that she would be able to continue in the insurance business. At the time of her formal disciplinary hearing, Ms. Askea was making restitution payments as required by her probation and was dependent upon the continuation of her insurance business in order to make those payments in the future. The recommended order found guilt under Sections 626.611(14) and 626.621(8), but declined to find guilt under 626.611(7) F.S. It would seem axiomatic that a violation of Section 626.611(7) F.S. (untrustworthiness/unfitness to engage in the business of insurance) must involve something more than just a plea, regardless of adjudication, and/or conviction of guilt of a described felony. Otherwise, Sections 626.611(14) and 626.621(8) F.S. would be superfluous or

    redundant. However, the agency's final order disagreed with the recommended order to the extent that it determined that a trial de novo in the administrative disciplinary action on the issue of untrustworthiness/unfitness is not permitted where there has been a felony plea of guilty. The final order held that it is enough that the respondent plead guilty to a felony charge of grand theft for the agency to construe that plea alone as unfitness/untrustworthiness under Section 626.611(7) F.S. Nonetheless, the agency's final order upheld, based on the circumstances of that case including the mitigating factors, the hearing officer's recommendation of a six month's suspension from licensure and eligibility for licensure. The final order also specifically held that mitigation evidence should be considered in assigning a penalty under Section 626.611 (7) F.S.

    
    

28. By pleading nolo contendere, Respondent herein has made no plea or admission of guilt. Adjudication was withheld. The misdeed admitted at formal hearing did not impinge upon his insurance practice. Accordingly, it is determined that the greater weight of authority is that while a plea of guilty constitutes unfitness/untrustworthiness, a plea of nolo contendere does not necessarily constitute unfitness/untrustworthiness, and even it did, in this case, the evidence of mitigation is significant. It is determined that Respondent herein is not guilty of violating Section 626.611(7) F.S. under the facts as proven under Count I of the Amended Administrative Complaint.

    
    

29. Herein, Respondent King has presented considerable evidence to distance himself from characterization as morally unfit and has presented himself as merely a desperate man in a desperate situation. This evidence should be considered in mitigation.

    
    

30. Although Respondent must bear the responsibility for his own misdeeds in "kiting" the First Union check, it has not been shown that this misdeed directly impacted upon any of his insurance customers or any of the insurance carriers for whom he wrote policies. At least one of his customers, Reverend Berry, is not daunted by Respondent's personal bad check record.

    
    

31. Also, despite his self-initiated predicament, Respondent has partially been the victim of a con-man employee agent and a less-than-thorough criminal defense lawyer. With regard to his employee agent's misdeeds, Respondent has affirmatively sought out all avenues of redress to protect himself and his insurance carriers. He has cooperated with the Petitioner regulatory/disciplinary agency and the state attorney in this effort. His cooperation in this regard is evidence of good character and of his attempt to comply with all insurance regulations.

    
    

32. Respondent has made at least some restitution and is attempting to complete restitution. The plea and probation agreements contemplated Respondent being able to continue in his profession of insurance agent. If Respondent's license is revoked he probably will not be able to make restitution.

    
    

33. Despite representations at formal hearing that the grand theft felony plea of nolo contendere might soon be entirely set aside by the circuit court, that had not yet come to pass in the additional time afforded Respondent before this record closed. However, if it were to come to pass prior to the entry of a final order in this cause, there is a possibility that remand would result or that the agency would otherwise have to consider it under the holding enunciated in Board of Medicine v. Mata, 561 So. 2d 364 (Fla. 1st DCA 1990). If an agency must consider adverse evidence presented anew before the rendition of the final order, it stands to reason it must likewise consider favorable evidence

    presented in the same time frame. Cf.--Lora v. Department of State Division of Licensure, 569 So. 2d 840 (Fla. 1st DCA 1990).

    
    

34. Upon all the facts and the law, a suspension rather than outright revocation is deemed appropriate with regard to the two violations proven under Count I. The undersigned has reviewed the agency's own penalty history and has considered both the evidence of aggravation and mitigation within this record in making the following recommendation for the violations proven Under Count I of the Amended Administrative Complaint.

    
    

35. As to the guilty adjudications of misdemeanors alleged under Count II of the Amended Administrative Complaint, the undersigned has searched backwards through two years of cases, and has been unable to locate any case wherein the Department of Insurance has prosecuted adjudications of guilt in misdemeanor cases as violations of Section 626.611(7) F.S. The closest case by analogy seems to be Department of Insurance v. Barnes, DOAH Case No. 90-7320 (RO entered 6/19/91;FO entered 9/3/91), wherein the respondent was suspended for six months as "unfit" under Section 626.611(7) F.S. where a criminal case against him had been dropped after he paid an insurance premium restitution to an insurance customer. Obviously, that licensee's misdeeds directly impacted on his insurance customers. In the instant case, no violation of any provision of the insurance code has related to Respondent King's kiting personal bank checks, unconnected with his insurance business, for food, telephone bills, and household furniture. Therefore, this Respondent's misdemeanor adjudications for those bad personal checks bear no similarity to the actions judicially sanctioned as establishing a basis upon which a violation of Section 626.611(7)

1. can be found.

   
   

   RECOMMENDATION

   
   

   Upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Insurance enter a final order that:

   
   

   1. Finds Respondent guilty of violating Sections 626.611(14) F.S. and 626.621(8) F.S. and not guilty of violating Section 626.611(7), F.S. as alleged in Count I of the Amended Administrative Complaint;

      
      

   2. Finds Respondent not guilty of violating Section 626.611(7) F.S. as alleged in Count II of the Amended Administrative Complaint; and

      
      

   3. Suspends Respondent's licensure and eligibility for licensure as a life and health insurance agent for six months and provides for a probationary period subsequent to reinstatement of his licenses to run concurrently with any criminal probations left for him to serve, up to the maximum of two years provided by Section 626.691 F.S., during which period of license probation, Respondent's insurance business shall be monitored by the Department of Insurance upon such terms as the Department shall determine to be appropriate.

RECOMMENDED this 29th day of April, 1992, at Tallahassee, Florida.

ELLA JANE P. DAVIS, 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 29th day of April, 1992.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 91-3109

The following constitute specific rulings pursuant to Section 120.59(2)

F.S. upon the parties' respective proposed findings of fact (PFOF): Petitioner's PFOF:

Accepted substantially; modified to eliminate subordinate, unnecessary, and cumulative findings: 1, 2, 3, 4, 5, 7, 13, and 15.

Rejected because as stated, it is a mischracterization of the weight of the evidence, but sunstantially covered within the recommended order: 6, 8, 14, 16.

Accepted as modified. What has been rejected has been rejected so that the recommended order conforms the greater weight of the credible record evidence as a whole: 9, 10, 11, 12, 17.

Respondent's PFOF:

Accepted substantially, but modified to eliminate subordinate unnecessary, and cumulative findings or otherwise C, D, E, F.

Accepted as modified. What has been rejected was rejected to conform the recommended order to the greater weight of the credible record as a whole: A, B.

COPIES FURNISHED:

Michele Guy, Esquire Department of Insurance

412 Larson Building

Tallahassee, Florida 32399-0300

S. Scott Walker, Esquire Watson, Folds, Steadham, et al.

P. O. Box 1070

Gainesville, Florida 32602

Tom Gallagher

State Treasurer and

Insurance Commissioner The Capitol, Plaza Level

Tallahassee, Florida 32399-0300

Don Dowdell, General Counsel Department of Insurance and Treasurer

200 E. Gaines Street

412 Larson Building

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 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 ORDER

=================================================================

OFFICE OF THE TREASURER DEPARTMENT OF INSURANCE

IN THE MATTER OF:

WILLIAM HOUSTON KING CASE NO: 91-L-181JB DOAH CASE NO: 91-3109

/

FINAL ORDER

THIS CAUSE came on before the undersigned Treasurer of the State of Florida, acting in his capacity as Insurance Commissioner, for consideration and final agency action. On April 18, 1991, the Department filed an Administrative Complaint against the life and health insurance licenses of the Respondent alleging violations of Sections 626.611(7), 626.611(14) and 626.621(8), Florida Statutes, arising out of the Respondent's plea of nolo contendere to a felony charge of grand theft. The Respondent timely filed a request for a formal proceeding pursuant to Section 120.57(2), Florida Statutes.

On December 9, 1991, the Department was granted leave to file an Amended Administrative Complaint, which added a second count alleging a violation of 626.611(7), F.S., based upon the Respondent's adjudication of guilt to multiple misdemeanor charges of issuing worthless bank checks. Pursuant to notice, the matter was heard before Ella P. Davis, Hearing Officer, Division of Administrative Hearings, on January 3, 1992.

After consideration of the evidence, argument and testimony presented at hearing, and subsequent written submissions by the parties, the Hearing Officer issued her Recommended Order on April 29, 1992. In that Recommended Order, the Hearing Officer found the Respondent guilty of violating Sections 626.611(14) and 626.621(8), F.S., but found the Respondent not guilty of violating 626.611(7), F.S. relative to Count I of the Amended Administrative Complaint.

Relative to Count II, the Hearing Officer found the Respondent not guilty of violating Section 626.611(7), F.S. Based upon those findings, the Hearing Officer recommended that the Respondent's licenses and eligibility for licensure as a life and health insurance agent be suspended for a period of six months and further recommended the imposition of a probationary period subsequent to reinstatement of his licensure, to run concurrently with any criminal probations left for him to serve, up to the maximum of two years provided by Section 626.691, F.S., during which period of license probation, the Respondent's insurance business would be monitored by the Department of Insurance upon such terms as the Department would determine to be appropriate. The Respondent timely filed exceptions to the Hearing Officer's Recommended Order on May 8, 1992.

DISCUSSION

The Hearing Officer appears to suggest in paragraphs 7-12 of her Recommended Order that a plea of nolo contendere may be viewed merely as a "plea of convenience" that should be treated differently in terms of proof of a lack of fitness or trustworthiness pursuant to Section 626.611(7), F.S. However, there is no legal authority for such a position. It is axiomatic that a plea of nolo contendere or "no contest" means that the defendant admits the facts for the purpose of the prosecution and said plea has the effect of a guilty plea on the question of innocence and guilt and for purposes of punishment. United States v. Norris, 281 U.S. 619, 50 S.Ct. 424, 74 L.Ed. 1076 (1930); Vinson v.

State of Florida, 345 So.2d 711, 713 (1977). Consequently, there is no legal basis for the Department treating a plea of nolo contendere any differently than a plea of guilty in determining whether a violation of Section 626.611(7), F.S. has occurred.

Thus, when a defendant respondent pleads nolo contendere to a felony, in violation of Sections 626.611(14) and 626.621(8), the respondent is likewise not entitled to a trial de novo regarding the plea or the charges themselves, but may present evidence of mitigating circumstances. See McGraw v. Department of State, Division of Licensing 491 So.2d 1193 (Fla. 1st DCA 1986); Department of Insurance vs. Askea, 13 FALR 734 (1990). Furthermore, it is determined herein that a plea of nolo contendere to a charge of grand theft will always constitute a "lack of fitness or trustworthiness" pursuant to Section 626.611(7), at least at the time the Defendant pleads to the charge. An insurance agent functions in a fiduciary capacity relative to his solicitation and collection of insurance premiums. Clearly, conduct giving rise to a charge of grand theft and a resulting plea of no contest raises serious issues involving fiduciary and fiscal responsibility at least at the time the conduct occurred. However, as noted, a respondent may present evidence of restitution or other mitigating circumstances at hearing relative to the present fitness or trustworthiness, or the penalty to be imposed. In the instant case, the misconduct occurred less than two years ago and the Respondent has not completed his making of restitution. (Finding of Fact #8 of the Recommended Order). Accordingly, and for the reasons stated above, the Hearing Officer's Conclusion of Law #12 is rejected and the Respondent is determined to have violated Section 626.611(7), Florida Statutes as alleged in Count I of the Administrative Complaint.

Relative to Count II of the Administrative Complaint, the Hearing Officer based her conclusion that the Respondent had not committed a violation of 626.611(7), F.S. (demonstrating a lack of fitness or trustworthiness) on her review of Department final orders, which indicated that the Department had not previously prosecuted adjudications of guilt in misdemeanor cases as violations of Section 626.611(7), F.S. However, that fact does not in any way preclude the Department from charging a violation of that statutory section in adjudications of guilt in misdemeanor cases if the Department concludes that the conduct in question in a particular case directly demonstrates an agent's lack of fitness or trustworthiness to engage in the business of insurance, regardless of whether the conduct occurred in the context of his insurance activities. See Natelson v. Department of Insurance, 454 So.2d 31,32 (Fla. 1st DCA 1984). Therefore, to the extent that the Hearing Officer implies that the Department lacks this discretion, Conclusion of Law #19 is rejected.

RULINGS ON RESPONDENT'S EXCEPTIONS

Respondent first excepts (apparently) to the Hearing Officer's finding that the Respondent violated Sections 626.611(14) and 626.621(8), F.S. relative

to Count I of the Administrative Complaint, on the basis that the Respondent expects the grand theft charge in question, which is currently under review by the Eighth Judicial Circuit, to be vacated. However, as of this date, the Respondent has not submitted any evidence to the Department that said charge has been vacated. Consequently, it cannot be plausibly maintained that the Department should consider that judgement vacated for purposes of this Order, based solely upon the Respondent's expectations. Additionally, it should be noted that the Hearing Officer never expressly found the Respondent's previous counsel to be "incompetent" as suggested in Respondent's Exception #1. Accordingly, for the reasons stated herein, Respondent's Exception #1 is REJECTED.

Respondent's Exception #2, which merely indicates that the Respondent's actions have never caused a "problem with a client through his Insurance Agency", does not actually constitute a proper exception. Rather, this language merely appears to argue for mitigation of the recommended penalty of a six month suspension. However, it is clear that the Hearing Officer already took this fact into reasonable account in determining that a six month suspension of Respondent's licensure is appropriate in this case. See Conclusions of Law Nos.

14 and l8 of the Recommended Order. Accordingly, Respondent's Exception #2 is REJECTED.

Respondent's Exception #3 apparently excepts to the Hearing Officer's recommendation of a six month suspension as being inappropriately severe, based upon the arguments outlined in the Respondent's previous two exceptions.

However, the Hearing Officer correctly found that the Respondent had indisputably violated Sections 626.611(14) and 626.621(8), F.S. relative to Count I. Consequently, the Hearing Officer properly concluded that a violation of the first statutory section requires suspension or revocation of the Respondent's licensure, while a violation of the second statutory section allows the Department the discretion to suspend or revoke the Respondent's licensure. Thus, the recommended six month suspension would appear to be reasonable based upon the repeated pattern of misconduct and the failure of the Respondent to complete his restitution to the individuals he has injured by his improper actions.

Upon careful consideration of the record, the submissions of the parties and being otherwise advised in the premises, it is

ORDERED that:

1. The Findings of Fact of the Hearing Officer are adopted in full as the Department's Findings of Fact.

   
   

2. With the exception of rejected Conclusion of Law #12, the Conclusions of Law of the Hearing Officer are adopted to the extent they do not conflict with this Order.

   
   

3. The Hearing Officer's recommendation of a six month suspension and an attendant probationary period is approved and accepted as being the appropriate disposition of this case, with the exception of that portion of the recommendation that finds the Respondent "not guilty of violating Section 626.611(7), F.S. as alleged in Count I of the Amended Administrative Complaint". As previously indicated, the Department herein determines that the Respondent did violate that statutory section.

ACCORDINGLY, WILLIAN HOUSTON KING's licensure and eligibility for licensure as a life and health agent are suspended for a period of six months, and a probationary period is imposed subsequent to reinstatement of his licensure to run concurrently with any criminal probations left for him to serve, up to the maximum of two years provided by Section 626.691 F.S., during which period of license probation, Respondent's insurance business shall be monitored by the Department of Insurance upon such terms as the Department shall determine to be appropriate. Any party to these proceedings adversely affected by this Order is entitled to seek review of this Order pursuant to Section 120.68, Florida Statutes, and Rule 9.110, Florida Rules of Appellate Procedure. Review proceedings must be instituted by filing a Notice of Appeal with the General Counsel, acting as the agency clerk, at 412 Larson Building, Tallahassee, Florida 32399-0300, and a copy of the same and the filing fee with the appropriate District Court of Appeal within thirty (30) days of rendition of this Order.

DONE and ORDERED this 30 of July, 1992.

Tom Gallagher Treasurer and Insurance Commissioner

COPIES FURNISHED

William Houston King

P.O. Box 2957

Gainesville, Florida 32601

S. Scott Walker, Esquire Post Office Box 1070 Gainesville, Florida 32602

Ella Jane P. Davis, Hearing Officer Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

Michelle Guy, Esquire Department of Insurance Division of Legal Services

412 Larson Building Tallahassee, Florida 32399-0300

Docket for Case No: 91-003109

Orders for Case No: 91-003109