STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF INSURANCE )

AND TREASURER, )

)

Petitioner, )

)

vs. ) CASE NO. 92-0019

)

ERIC THOMAS FROMME, )

)

Respondent. )

)

RECOMMENDED ORDER

The above-styled case was heard pursuant to notice before Stephen F. Dean assigned Hearing Officer of the Division of Administrative Hearings on May 12, 1992, in Jacksonville, Florida.

APPEARANCES

For Petitioner: David D. Hershel, Esquire

Department of Insurance Division of Legal Services

412 Larson Building

Tallahassee, Florida 32399-0300

For Respondent: Shane C. Maddox, Esquire

337-C East Bay Street Jacksonville, Florida 32202

STATEMENT OF THE ISSUE

At issue is whether Respondent represented to Ms. Renee Benton that she had to purchase an auto club in order to buy automobile insurance, which is not true, contrary to the law, and a violation of various statutes.

PRELIMINARY STATEMENT

Background

On December 4, 1991, Petitioner filed a two-count Administrative Complaint against the Respondent seeking to impose penalties against the insurance licenses of Respondent in the State of Florida. The Administrative Complaint alleged that Respondent, while acting in this capacity as a licensed insurance agent, had violated various provisions of the Florida Insurance Code.

On December 26, 1991, Respondent, through counsel, filed with Petitioner his Request for Formal Administrative Proceeding wherein he denied allegations contained in the Administrative Complaint and requested a formal proceeding pursuant to section 120.57(1), Florida Statutes. The Hearing Officer issued his

Notice of Hearing and Order on February 5, 1992 wherein he scheduled the final hearing for May 12, 1992.

On May 4, 1992, Petitioner filed its unopposed Motion For Leave To File First Amended Administrative Complaint in this case wherein Count II from the Administrative Complaint was deleted and other changes were made. On May 6, 1992, the Hearing Officer issued his Order Granting Leave To Amend which substituted the First Amended Administrative Complaint for the Administrative Complaint in this case.

Witnesses

At the final hearing, Petitioner presented the testimony of Renee Benton.

Respondent testified on his own behalf.

Exhibits

At the final hearing, Petitioner's exhibits one through seven are admitted into evidence. Respondent's exhibit one was admitted into evidence.

References

References to exhibits entered into evidence at the final hearing will be made as (Pet. No. ). Although the proceedings were preserved pursuant to section 120.57(1)(b)7., Florida Statutes, by a court reporter, neither party ordered a transcript of the proceedings.

Both parties submitted proposed findings in the form of Proposed Recommended Orders. These proposals were read and considered. Appendix A to this order states which of those proposals were adopted, and which were rejected and why.

FINDINGS OF FACT

1 On February 1, 1991, Renee Benton went to Mid County Insurance Agency in Jacksonville, Florida for the purpose of obtaining automobile insurance.

1. At all times material hereto, Mid County Insurance Agency was a general lines insurance agency licensed by the State of Florida.

   
   

2. Respondent, Eric Thomas Fromme, was the President and owner of Mid County Insurance Company.

   
   

3. On February 1, 1991, Complainant, Renee Benton, purchased an automobile insurance policy from Mid County, more specifically from its owner, Eric Thomas Fromme.

   
   

4. Complainant, Renee Benton, testified that the Petitioner told her that he could not sell her automobile insurance unless she purchased a membership in a motor club.

   
   

5. Respondent, Eric Thomas Fromme, testified that he personally dealt with Complainant, Renee Benton, and that he did not tell Renee Benton that he could not sell her insurance without Motor Club Coverage.

6. Complainant, Renee Benton, was in a hurry on the day and time she went to Mid County to purchase automobile insurance and as a result did not read any of the documents she signed on February 1, 1991.

   
   

7. Renee Benton did not complain about the contract and was unaware of the matter until approached by agents of the Department. Until she reviewed the policy documents, she was unaware that she paid $100 to join the auto club.

   
   

8. At the time of the purchase the automobile insurance policy from Respondent, Renee Benton paid Respondent $153.00 and entered into a premium finance agreement to finance a portion of the policy premium. That agreement stated that Renee Benton had paid a $53.00 down payment. (Pet. No. 4.) A fee of

   $100.00 for the motor club was deducted from her payment at the time she purchased the insurance and motor club. (Testimony of Renee Benton.)

   
   

9. At the time that she purchased the automobile insurance, Renee Benton executed a form which stated that a motor club purchase was voluntary and that she was not required to purchase a motor club in order to purchase that insurance. (Pet. No. 7.)

   
   

10. Renee Benton testified she would not have financed any of premium, had she been able to purchase the automobile insurance without purchasing a motor club. (Testimony of Renee Benton.)

    
    

    CONCLUSIONS OF LAW

    
    

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

    
    

12. The burden of proof is upon the Department to prove the allegations of the administrative complaint. The standard of proof to be applied in this case is that of clear and convincing evidence. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987).

    
    

13. The First Amended Administrative Complaint alleged that Respondent violated sections 626.611(4), 626.611(5), 626.611(7), 626.611(9), 626.611(13), 626.621(2), 626.621(6), 626.9521, 626.9541(1)(a)1., 626.9541(1)(k)l., and 626.9541(1) (x)4., Florida Statutes. Those provisions provide as follows:

    
    

    626.611(4) If the license or appointment is willfully used, or to be used, to circumvent any of the requirements or prohibitions of this code.

    (5) Willful misrepresentation of any insur- ance policy or annuity contract or willful deception with regard to any such policy or contract, done either in person or by any form of dissemination or information or advertising.

    Demonstrated lack of fitness or trustworthi- ness to engage in the business of insurance.

    (9) Fraudulent or dishonest practices in the conduct of business under the license or permit.

    (13) Willful failure to comply with, or willful violation of, any proper order or rule

    of the department or willful violation of any provision of this code.

    * * *

    626.621(2) Violation of any provision of this code or of any other law applicable to the busi- ness of insurance in the course of dealing

    under the license or permit.

    (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.

    * * *

    626.9521 No person shall engage in this state in any trade practice which is defined in this part as, or determined pursuant to s. 626.9561 to be, an unfair method of competition or an unfair or deceptive act of practice involving the business of insurance. Any person who vio- lates any provision of this part shall be subject to the penalties provided in s. 627.381.

    * * *

    626.9541(1)(a)1. Misrepresents the bene-fits, advantages, conditions, or terms of any insurance policy.

    (1)(k)1. Knowingly making a false or fraudu- lent written or oral statement or representation on, or relative to, an application or negotiation for an insurance policy for the purpose of obtaining a fee, commission, money, or other benefit from any insurer, agent, broker, or individual.

    (1)(x)4. The insured's or applicant failure

    to purchase noninsurance services or commodities, including automobile services as defined in

    s. 624.124.

    
    

14. The factual allegations are that the Respondent told Ms. Benton she had to buy an auto club in order to buy the insurance. Such a statement is contrary to law and if the Respondent made such a statement, the Respondent violated the law.

    
    

15. The testimony of the two parties to the transaction Ms. Benton and the Respondent, are conflicting. The written record is deemed to be the best evidence of the transaction given the conflict in testimony of the two parties to the transaction. The written evidence reveals that Ms. Benton was advised she did not have to buy an auto club. The Department did not prove that the Respondent told Ms. Benton she had to purchase an auto club to buy the insurance. The Department did not prove the essential element in its case against the Respondent.

RECOMMENDATION

Based upon the foregoing proposed Findings of Fact and Conclusions of Law, it is, recommended that the Administrative Complaint be dismissed.

RECOMMENDED this 8th day of June, 1992, in Tallahassee, Florida.

STEPHEN F. DEAN

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 8th day of June, 1992.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-0019

The parties presented proposed findings of fact which were read and considered. The following findings, as indicated, were adopted, or rejected for the reason stated:

Petitioner's Findings of Fact:

Paragraph 1-3 Rejected in favor of Respondent's statement of these facts.

Paragraph 4,5 Rejected as conflicting with more credible evidence.

Paragraph 6-9 Adopted, but reordered. Respondent's Findings of Fact:

Paragraphs 1-8 Adopted.

COPIES FURNISHED:

David D. Hershel, Esquire Department of Insurance Division of Legal Services

412 Larson Building Tallahassee, FL 32399-0300

Shane C. Maddox, Esquire 337-C East Bay Street Jacksonville, FL 32202

Bill O'Neil, General Counsel Department of Legal Affairs The Capitol, Plaza Level 11 Tallahassee, FL 32399-0300

Tom Gallagher, State Treasurer and Insurance Commissioner

The Capitol, Plaza Level Tallahassee, FL 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. 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: 92-000019

Orders for Case No: 92-000019