STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ALBERT J. DESROCHERS and )

MICHAEL F. DESROCHERS, )

)

Petitioners, )

)

vs. ) CASE NO. 92-2711

)

DEPARTMENT OF INSURANCE AND ) TREASURER and PRUDENTIAL PROPERTY ) AND CASUALTY INSURANCE COMPANY, )

)

Respondents. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, James E. Bradwell, held a formal hearing in this case on September 9, 1992 in Winter Haven, Florida.

APPEARANCES

For Petitioner: Albert J. Desrochers Michael F. Desrochers

1335 37th Street, Northwest Winter Haven, Florida 338881

For Respondent Department Thomas E. Valentine, Esquire of Insurance and Treasurer: Department of Insurance and

Treasurer

200 East Gaines Street

562 Fletcher Building Tallahassee, Florida 32399-0300

For Respondent Prudential Karl J. Brandes, Esquire Property and Casualty Holland & Knight Insurance Company: 400 North Ashley

Post Office Box 1288 Tampa, Florida 33601

STATEMENT OF THE ISSUE

Whether or not Prudential's September 19, 1991 non-renewal notice was proper.

PRELIMINARY STATEMENT

By letter dated April 15, 1992, Petitioners, Albert J. and Michael F. Desrochers, requested a formal hearing pursuant to Section 120.57(1), Florida Statutes, to challenge Petitioner's non-renewal notice of an automobile insurance policy. By way of background, Petitioners had initially filed a

complaint with the Department of Insurance and Treasurer ("the Department") with respect to Prudential's non-renewal. The Department conducted an informal hearing on the matter and determined that the September 19, 1991 non-renewal notice provided by Prudential was proper. Petitioners were assessed the Statutory $7.50 fee as the losing party in the informal hearing examiner's January 23, 1992 finding. Petitioners thereafter appealed the Department's ruling to Florida Second District Court of Appeal, which court dismissed the appeal for failure to obtain a final order. Petitioners have now requested a formal hearing and the matter is now at issue before the Division of Administrative Hearings. At the hearing, Petitioners presented the testimony of David A. West, an underwriting consultant employed by Prudential, Petitioner Christopher Desrochers and Tony Pressley, a senior claims representative employed by Prudential. Prudential's exhibits 1 through 14 were offered and received into evidence at the hearing.

The parties did not submit proposed recommended orders. A copy of the transcript was received by the Division of Administrative Hearings on October 2, 1992 and was reviewed in preparation of this recommended order.

FINDINGS OF FACT

1. On June 18, 1990, the insurer, Prudential Property and Casualty Insurance Company (Prudential) issued to the insured, Albert J. Desrochers, its insurance policy number 38-4A815703 covering three vehicles, a 1976 Plymouth, a 1980 Ford pick-up, and a 1979 Ford Ranger.

   
   

2. During June, 1991, Tony Pressley, a senior claims representative with Prudential was called to inspect an accident claim that the Petitioners had been involved in with the 1979 Ford Ranger.

   
   

3. As a result, on June 21, 1991, Tony Pressley went to the Petitioners' residence and inspected the 1979 Ford Ranger. Pressley's inspection revealed that the frame was bent between the core support and the cowl area. The actual bend was near the front suspension area of the vehicle. The repair estimate is

   $1,920.72. The average bank value of the vehicle is $1,775.00.

   
   

4. Pressley's estimate for repairs indicate that the cost of the repairs exceeded 80% of the actual cash value of the vehicle and it was therefore considered a total loss.

   
   

5. Petitioners were advised of Pressley's decision that the vehicle was a total loss and they expressed a desire to retain the salvage. Prudential agreed and made payment to the Petitioners for the vehicle less the deductible and the agreed upon figure of $266.25 for Petitioners' retention of the salvage.

   
   

6. Based on the degree of bend to the frame area of the 1979 Ford Ranger, it would have been unsafe to section the subject vehicle as the structural integrity of the frame was weakened and would have been unsafe to operate on public highways.

   
   

7. Prudential reviews its files every two to three months to determine which policies will not be renewed or which policies should be placed in a higher rate category based on accidents and other underwriting factors.

   
   

8. Petitioners' policy came up for review and when the underwriting department advised the risk manager (of Prudential) that there were underwriting problems with the Petitioners' policy, Prudential determined that it was

   necessary to non-renew the policy based upon the accident record of Mr. Albert

   J. Desrochers and his son, Michael, and the unsafe operating condition of the 1979 Ford Ranger.

   
   

9. On September 19, 1991, Prudential issued a non-renewal notice to Petitioners with an effective date of December 18, 1991, thereby providing the non-renewal 45 day notice required by statute. Section 627.728(4)(a), Florida Statutes. The expiration date of the policy contract was the effective date of the non-renewal.

   
   

10. As an aside, Prudential did agree to renew the policy excepting the 1979 Ford Ranger. However, Petitioners initially agreed and then reneged on their acceptance of Prudential's offer.

    
    

11. Prudential has a policy, in its underwriting department, which prohibits the extension of insurance coverage to vehicles which have been deemed a total loss. The 1979 Ford Ranger owned by the Petitioners was a total loss as of June 21, 1991.

    
    

    CONCLUSIONS OF LAW

    
    

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

    
    

13. The parties were duly noticed pursuant to Chapter 120, Florida Statutes.

    
    

14. The authority of the Department of Insurance is derived from Chapter 627, Florida Statutes.

    
    

15. Section 627.728, Florida Statutes, sets forth the provisions for cancellations and non-renewals of insurance policies.

    
    

16. The notice given to Petitioners by Prudential dated September 19, 1991 with an effective date of December 18, 1991, provides the requisite 45 day notice for non-renewal as required by Section 627.728(4)(a), Florida Statutes. The expiration date was the effective date for the non-renewal of the policy and, therefore, Prudential's non-renewal was not a cancellation. The non- renewal was proper.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that:

Respondent, Department of Insurance and Treasurer, enter a final order finding that Prudential's September 19, 1991 non-renewal notice was proper.

DONE AND ENTERED this 12th day of November, 1992, in Tallahassee, Leon County, Florida.

JAMES E. BRADWELL

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 12th day of November, 1992.

COPIES FURNISHED:

Thomas D. Valentine, Esquire Department of Insurance and Treasurer

562 Fletcher Building Tallahassee, Florida 32399

Albert J. Desrochers Michael F. Desrochers

1335 37th Street, Northwest Winter Haven, Florida 33881

Karl J. Brandes, Esquire Holland & Knight

Post Office Box 1288 Tampa, Florida 33601

Tom Gallagher

State Treasurer and Insurance Commissioner

The Capitol, Plaza Level Tallahassee, Florida 32399-0300

Bill O'Neill General Counsel

Department of Insurance The Capitol, PL-11

Tallahassee, Florida 32399-0300

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

ALL PARTIES HAVE THE RIGHT TO SUBMIT TO THE DEPARTMENT OF INSURANCE AND TREASURER 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 CONSULT WITH THE DEPARTMENT OF INSURANCE AND TREASURER CONCERNING ITS RULES ON THE DEADLINE FOR FILING EXCEPTIONS TO THIS RECOMMENDED ORDER.

Docket for Case No: 92-002711

Orders for Case No: 92-002711