STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF INSURANCE AND ) TREASURER, )

)

Petitioner, )

)

vs. ) CASE NO. 92-2986

)

CARLOS FUMAGALI, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Michael M. Parrish, conducted a formal hearing in this case on January 5, 1993, at Miami, Florida. Appearance for the parties were as follows:

APPEARANCES

For Petitioner: David D. Hershel, Esquire

Department of Insurance Division of Legal Services 612 Larson Building

Tallahassee, Florida 32399-0300

For Respondent: Harold M. Braxton, Esquire

Suite 400, One Datran Center 9100 South Dadeland Boulevard Miami, Florida 33156

STATEMENT OF THE ISSUES

This is a license discipline proceeding in which the Respondent has been charged in a two-count administrative complaint with violation of the following statutory provisions: Sections 626.561(1), 626.611(4), 626.611(5), 626.611(7),

626.611(9), 626.611(10), 626.611(13), 626.621(2), 626.621(6), 626.9521, and

626.9541(1)(o)1., Florida Statutes.

PRELIMINARY STATEMENT

At the formal hearing the Petitioner presented the testimony of eight witnesses and offered sixteen exhibits, all of which were ultimately received in evidence. The Respondent testified on his own behalf and also presented the testimony of six other witnesses. The Respondent also offered one exhibit, which was received in evidence.

At the conclusion of the hearing the parties requested and were granted forty-five days from the date of the hearing within which to submit their proposed recommended orders. A transcript of the formal hearing appears to have been prepared, but it has not been filed with the Division of Administrative Hearings.

On February 11, 1993, the Respondent filed a motion seeking an extension of the deadline for filing the parties' proposed recommended orders. By order issued on February 15, 1993, the deadline for the filing of the parties' proposed recommended orders was extended to March 1, 1993. The Petitioner filed a timely proposed recommended order on March 1, 1993. The Respondent filed a tardy proposed recommended order on March 4, 1993.

On March 10, 1993, the Petitioner filed a Motion to Strike Respondent's Proposed Recommended Order in which it seeks an order striking the Respondent's proposed recommended order on the grounds that it was filed three days late.

Unexplained and unexcused tardiness in the submission of proposed recommended orders does not always warrant striking the tardy documents from the record.

The tardiness does, however, constitute a waiver of the tardy party's right to a specific ruling on each proposed finding of fact, because tardy submissions are inconsistent with the provisions of Rule 60Q-2.031(1), Florida Administrative Code. Accordingly, although the Hearing Officer has read and considered the proposed recommended order filed by the Respondent, the Appendix to this Recommended Order does not contain any specific rulings on the proposed findings submitted by the Respondent. The Appendix does contain specific rulings on the proposed findings submitted by the Petitioner.

FINDINGS OF FACT

Background facts

1. The Respondent, Carlos Fumagali, is currently licensed in this state as a life and health agent, as a general lines agency, as a health agent, and as a general lines public adjuster, and the Respondent has been so licensed at all times relevant and material to the issues in this case.

   
   

2. At all times relevant and material to the issues in this case, the Respondent was the corporate president, vice president, director, and resident agent of FMC Insurance Consultants, Inc., located in Miami, Florida.

   
   

3. At all times relevant and material to the issues in this case, FMC Insurance Consultants, Inc., was a general lines insurance agency incorporated under and existing by virtue of the laws of the State of Florida.

   
   

4. At all times relevant and material to the issues in this case, the Respondent maintained signatory authority over account number 0112527769-06 at Terrabank, N.A., in Miami, Florida, with said account being held in the name of FMC Insurance Consultants, Inc.

   
   

5. At all times relevant and material to the issues in this case, FMC Insurance Consultants, Inc., was operating under and was a party to a producer's agreement with Southern Underwriters, Inc. (hereinafter referred to as "Southern"), a managing general agent. That producer's agreement required FMC Insurance Consultants, Inc., to remit all net premiums to Southern by monthly statement issued by Southern, with payment to be made by no later than forty- five days following the month to which the statement was applicable. The

   Respondent was, and continues to be, a personal guarantor for all obligations arising under the aforementioned agreement.

   
   

6. FMC Insurance Consultants, Inc., was incorporated in 1984 by the Respondent and a Mr. Julio Moreno. By agreement between the Respondent and Moreno, the Respondent was primarily responsible for soliciting and procuring new business, and Moreno was primarily responsible for the internal operations of the business, including such matters as accounting and collecting and depositing funds.

   
   

7. In 1988 FMC Insurance Consultants, Inc., entered into some business agreements that resulted in large increases in FMC's overhead, but in only small increases in FMC's revenues. In January of 1989, Oscar Fumagali, Respondent's brother, was brought into FMC Insurance Consultants, Inc., in the expectation that Oscar would handle the internal operations of the business and that Moreno would devote his primary efforts to business solicitation and procurement. Following some internal disagreements and struggles for control of the company operations, the Respondent and his brother bought out Moreno's interest in FMC Insurance Consultants, Inc. Thereafter, the Respondent continued to be primarily involved in soliciting and procuring new business and his brother, Oscar Fumagali, was primarily involved in the internal operations of the business that had previously been the primary responsibility of Moreno.

   
   

8. In January of 1990, Oscar Fumagali first discovered that the financial problems at FMC Insurance Consultants were so severe that the business would be unable to make February accounts current. Upon discovering that the business would be unable to make February accounts current, Oscar Fumagali advised the Respondent of the business's financial circumstances.

   
   

9. In January of 1990, both the Respondent and Oscar Fumagali began negotiations with the concerned insurance companies in an effort to work out all of the financial problems of FMC Insurance Consultants, Inc., and to arrange payment to all creditors. FMC Insurance Consultants, Inc., retained an attorney to assist in the negotiations and to attempt to negotiate a payment plan.

   
   

10. Initially, a settlement was reached with Southern. However, Southern cancelled the settlement, collected customer files, and notified customers not to continue doing business with FMC Insurance Consultants, Inc. Ultimately, FMC Insurance Consultants, Inc., collapsed financially and ceased doing business.

    
    

11. Neither the Respondent nor Oscar Fumagali personally utilized any of the funds from the transactions involving either Operations South or My Chosen Delight.

    
    

12. Neither the Respondent nor Oscar Fumagali made any willful misrepresentations or attempts to deceive creditors.

    
    

13. As a result of the financial collapse of FMC Insurance Consultants, Inc., both the Respondent and Oscar Fumagali suffered severe personal financial difficulties and eventually both filed for personal bankruptcy.

    
    

    Facts regarding the "Operations South" transactions

    
    

14. On or about January 4, 1990, Paul Chase, an agent employed at FMC Insurance Consultants, Inc., solicited and procured from Operations South, Inc., d/b/a Sundays On The Bay At Haulover (hereinafter referred to as "Operations"), a business concern located at Key Biscayne, Florida, applications for a general

    liability policy to be issued by Colony Insurance Company, a fire insurance policy to be issued by Lloyds of London, and a criminal liability policy to be issued by Fidelity and Deposit Company of Maryland. Southern was operating in its capacity as managing general agent for Colony Insurance Company and Florida Risk Managers, Inc., was operating in its capacity as brokering agent for Lloyds of London.

    
    

15. In conjunction with the procurement of the aforementioned policy applications, Operations issued its premium down payment check in the amount of

    $11,775.20 to FMC Insurance Consultants, Inc. On or about January 8, 1990, that check was deposited into the agency bank account of FMC Insurance Consultants, Inc.

    
    

16. The total annual premiums for the aforementioned policies was

    $62,220.75. The remainder of the total premiums for the aforementioned policies was financed through AFCO, a premium finance company.

    
    

17. On or about January 5, 1990, and pursuant to the aforementioned policy application, Colony Insurance Company issued policy number CGL007530 to Operations. On or about January 5, 1990, and pursuant to the aforementioned policy application, Lloyds of London issued policy number G8310 to Operations.

    
    

18. On or about January 12, 1990, AFCO issued its premium payment draft in the amount of $49,776.75 made payable to FMC Insurance Consultants, Inc., which represented the financed premium for the aforementioned policies. That draft was deposited into the agency bank account of FMC Insurance Consultants, Inc., on or about January 12, 1990.

    
    

19. FMC Insurance Consultants, Inc., has failed to remit to Southern or to Colony Insurance Company the owed net premium in the amount of $30,074.50 as required for policy number CGL007530.

    
    

20. FMC Insurance Consultants, Inc., has failed to remit to Florida Risk Managers, Inc., or to Lloyds of London, the entire owed net premium in the amount of $21,937.50 as required for policy number G8310. FMC Insurance Consultants, Inc., did remit to Florida Risk Managers, Inc., approximately half of the owed net premium.

    
    

21. FMC Insurance Consultants, Inc., has failed to return the abovementioned $49,776.75 in premium payments to AFCO.

    
    

22. Although the net premiums described above were not remitted by FMC Insurance Consultants, Inc., the insurance policies remained in force.

    
    

23. The Respondent, Carlos Fumagali, has not individually made payment of any of the amounts described above as remaining unpaid by FMC Insurance Consultants, Inc.

    
    

    Facts regarding the "My Chosen Delight" transactions

    
    

24. On or about February 2, 1990, the Respondent solicited and procured from My Chosen Delight, a business concern located in Miami, Florida, an application for a general liability insurance policy to be issued by Cardinal Casualty Company, as well as a workers compensation insurance policy to be issued by First Alliance Insurance Company. With regard to these insurance transactions, Southern was operating in its capacity as a managing general agent for Cardinal Casualty Company.

25. In conjunction with the procurement of the policy applications, My Chosen Delight issued its premium down payment check in the amount of $4,630.00 to FMC Insurance Consultants, Inc. That check was deposited into the agency bank account of FMC Insurance Consultants, Inc., on or about February 7, 1990.

    
    

26. The total annual premiums for the aforementioned policies was

    $11,580.00. The remainder of the total premiums for those policies was financed through Plymouth, Inc., a premium finance company.

    
    

27. On or about February 5, 1990, pursuant to the aforementioned policy application, Cardinal Casualty Company issued policy number MPP 0009641 to My Chosen Delight.

    
    

28. On or about February 12, 1990, Plymouth, Inc., issued its premium payment draft number 16805 in the amount of $6,950.00 made payable to FMC Insurance Consultants, Inc., which represented the financed portion of the premium for the aforementioned policies. That draft was deposited in the agency bank account of FMC Insurance Consultants, Inc., on or about February 27, 1990.

    
    

29. FMC Insurance Consultants, Inc., has failed to remit to Southern or to Cardinal Casualty Company the owed net premium in the amount of $5,770.80 as required for policy number MPP 0009641. FMC Insurance Consultants, Inc., has failed to return the $6,950.00 premium payment to Plymouth, Inc. The Respondent Carlos Fumagali, has not individually made payment of either of the amounts described earlier in this paragraph.

    
    

30. Although the net premiums described above were not remitted by FMC Insurance Consultants, Inc., the insurance policies remained in force.

    
    

    CONCLUSIONS OF LAW

    
    

31. The following are a few basic legal conclusions relevant to this proceeding which seem so clear as not to require the citation of authority. The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this proceeding. In a disciplinary proceeding in which the agency seeks the penalty of suspension or revocation of a professional license, the agency bears the burden of proving its charges by clear and convincing evidence. Statutes providing for revocation of licenses must be strictly construed and any ambiguities in such statutes must be resolved in favor of the licensee. Agencies cannot take disciplinary action against a licensee on the basis of facts not alleged in the Administrative Complaint or on the basis of legal theories not asserted in the Administrative Complaint.

    
    

32. As explained in greater detail below, application of the basic legal conclusions summarized above to the facts in this case leads to the conclusion that the majority of the charges against the Respondent should be dismissed. In this regard it is noted that the explanations which follow are drawn in large part directly from the proposed conclusions of law submitted by the Respondent.

    
    

33. Because most of the charges against the Respondent involve imputed liability, attention is directed to Section 626.734, Florida Statutes (1989), which reads as follows:

    
    

    Any general lines insurance agent who is an officer, director, stockholder, or employee of an incorporated general lines insurance

    agency shall remain personally and fully liable and accountable for any wrongful acts, misconduct, or violations of any provisions of this code committed by such licensee or by any other person under his direct supervision and control while acting on behalf of the corporation.

    
    

34. Language such as the above that imputes liability for the conduct of another must be strictly construed in a disciplinary case. See, for example, Bach v. Florida State Board of Dentistry, 378 So.2d 34 (Fla. 1st DCA 1979), in which the court held that a dentist could not be disciplined for the improper actions of his employee absent proof that the dentist had actual knowledge of the employee's improper acts. At page 37 the Bach court noted: "In the absence of Dr. Bach's knowledge of his employee's unauthorized acts, it cannot be concluded that he impliedly permitted or ratified them." Similarly, the Respondent in this case cannot be subjected to disciplinary action based on the conduct of another person absent proof that the Respondent had actual knowledge of the other person's improper conduct.

    
    

35. At this point it is helpful to set forth the specific language of the statutory provisions the Respondent is alleged to have violated. The first of these is Section 626.561(1), Florida Statutes (1989), which reads as follows:

    
    

    1. 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.

       
       

36. Next are several subsections of Section 626.611, Florida Statutes (1989), which read as follows, in pertinent part:

    
    

    The department shall deny, suspend, revoke, or refuse to renew or continue the license of any agent, solicitor, or adjuster or the permit of any service representative, supervising or managing general agent, or claims investigator, 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 applicant, licensee, or permittee any one or more of the following applicable grounds exist:

    * * *

    1. If the license or permit is willfully used, or to be used, to circumvent any of the requirements or prohibitions of this code.

    2. Willful misrepresentation of any insurance 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 of information or advertising.

       * * *

       (7) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance.

       * * *

       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 insurers or insureds or beneficiaries or to others and received in conduct of business under the license.

       * * *

       (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.

       
       

37. The Respondent is also alleged to have violated subsections (2) and

    1. of Section 626.621, Florida Statutes (1989), reading as follows:

    
    

    The department may, in its discretion, deny, suspend, revoke, or refuse to renew or continue the license of any agent, solicitor, or adjuster or the permit of any service representative, supervising or managing general agent, or claims investigator, 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 applicant, licensee, or permittee any one or more of the following applicable grounds exist under circumstances for which such denial, suspension, revoca- tion, or refusal is not mandatory under s.

    626.611:

    * * *

    (2) Violation of any provision of this code or of any other law applicable to the business 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.

    
    

38. The Respondent is alleged to have violated Section 626.9521, Florida Statutes (1989), by engaging in an unfair or deceptive act or practice. Section 626.9521, Florida Statutes (1989), reads as follows:

    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 or practice involving the business of insurance. Any person who violates any provision of this part shall be subject to the penalties provided in s.

    627.381.

    
    

39. The Respondent is alleged to have violated Section 626.9541(1)(o)1., Florida Statutes (1989), which reads as follows:

    
    

    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:

       * * *

       (o) Illegal dealings in premiums; excess or reduced charges for insurance.--

       1. Knowingly collecting any sum as a premium or charge for insurance, which is not then provided, or is not in due course to be provided, subject to acceptance of the risk by the insurer, by an insurance policy issued by an insurer as permitted by this code.

       
       

40. Turning now to the specific allegations of the Administrative Complaint, in Count I(a) and Count II(a), it is alleged that the Respondent violated Section 626.561(1), Florida Statutes (1989). It is quite apparent from a reading of the language of Section 626.561(1), Florida Statutes (1989), that the Respondent, as the licensee, has the responsibility to account for and pay over funds received by FMC Insurance Consultants, Inc., that belong to insurers. However, neither the cited subsection nor any other part of Section 626.561, Florida Statutes (1989), contains language authorizing the Petitioner to bring an independent charge for a violation of the cited provision. Section 626.561(1) imposes a duty on each licensee. Any charges of violation of that duty should be brought under Sections 626.611 and/or 626.621, Florida Statutes (1989), which Petitioner has done. Consequently, the Respondent cannot be found guilty of any independent violation of Section 626.561(1), Florida Statutes (1989).

    
    

41. In Count I(b) and Count II(b) of the Administrative Complaint, it is alleged that the Respondent violated Section 626.611(4), Florida Statutes (1989). It is clear from the language of the cited statutory provision that allegations and proof of "willful" conduct are necessary prerequisites to establishing a violation of this subsection. The Administrative Complaint does not allege that the Respondent acted willfully, nor does the proof in this case establish that the Respondent acted willfully. To the contrary, the greater weight of the evidence is to the effect that the Respondent was attempting in good faith to fulfill all of the financial obligations of both himself and his company, and was simply unable to do so. Because there is neither allegation nor proof of willful conduct by the Respondent, the Respondent should not be found guilty of a violation of Section 626.611(4), Florida Statutes (1989).

42. In Count I(c) and Count II(c) of the Administrative Complaint it is alleged that the Respondent violated Section 626.611(5), Florida Statutes (1989). It is unclear why the Respondent has been charged with a violation of this Section. The Administrative Complaint does not allege that the Respondent made any "willful misrepresentation" or engaged in any "willful deception" with regard to any insurance policy or annuity contract. Similarly, there is no proof in the record of any such misrepresentations or deceptions by the Respondent. Because there is neither allegation nor proof of the conduct prohibited by Section 626.611(5), Florida Statutes, the Respondent should not be found guilty of a violation of this Section.

    
    

43. In Count I(d) and Count II(d) of the Administrative Complaint it is alleged that the Respondent violated Section 626.611(7), Florida Statutes (1989). The evidence is insufficient to establish that the Respondent lacks fitness or trustworthiness to engage in the business of insurance. The proof being insufficient, the Respondent should not be found guilty of a violation of this Section.

    
    

44. In Count I(e) and Count II(e) of the Administrative Complaint it is alleged that the Respondent violated Section 626.611(9), Florida Statutes (1989). It is unclear why the Respondent has been charged with a violation of this Section. The Administrative Complaint does not allege that the Respondent engaged in any "fraudulent or dishonest practices" in the course of the insurance business. Similarly, there is no proof in the record of any such practices by the Respondent. Because there is neither allegation nor proof of the conduct prohibited by Section 626.611(9), Florida Statutes, the Respondent should not be found guilty of a violation of this Section.

    
    

45. In Count I(f) and Count II(f) of the Administrative Complaint it is alleged that the Respondent violated Section 626.611(10), Florida Statutes (1989). The conduct prohibited by Section 626.611(10) is all conduct that involves some form of intentional or willful act. The evidence in this case is insufficient to establish that the Respondent engaged in any intentional or willful act that constituted "misappropriation, conversion, or unlawful withholding of moneys." To the contrary, the greater weight of the evidence is to the effect that the Respondent was attempting in good faith to fulfil all of the financial obligations of both himself and his company, and was simply unable to do so. Because the evidence is insufficient to establish that the Respondent engaged in misappropriation, conversion, or unlawful withholding of moneys, the Respondent should not be found guilty of a violation of Section 626.611(10), Florida Statutes (1989).

    
    

46. In Count I(g) and Count II(g) of the Administrative Complaint it is alleged that the Respondent violated Section 626.611(13), Florida Statutes (1989). As with the alleged violation of Section 626.611(4), Florida Statutes (1989), discussed above, it is clear from the language of the cited statutory provision that allegation and proof of "willful" conduct are necessary prerequisites to establishing a violation of this subsection. The Administrative Complaint does not allege that the Respondent acted willfully, nor does the proof in this case establish that the Respondent acted willfully. To the contrary, the greater weight of the evidence is to the effect that the Respondent was attempting in good faith to fulfill all of the financial obligations of both himself and his company, and was simply unable to do so. Because there is neither allegation nor proof of willful conduct by the Respondent, the Respondent should not be found guilty of a violation of Section 626.611(13), Florida Statutes (1989).

47. In Count I(h) and Count II(h) of the Administrative Complaint, it is alleged that the Respondent violated Section 626.621(2), Florida Statutes (1989). It has been alleged and proved that FMC Insurance Consultants, Inc., received premium funds for the policies issued to My Chosen Delight and to Operations South, and has failed to pay over the net premium due and owing for these policies. Such failure to pay over the net premiums constitutes a violation of Section 626.561(1), Florida Statutes (1989). As the licensee, the Respondent is personally liable and accountable for a violation of the Insurance Code by FMC Insurance Consultants, Inc. See Section 626.561(1), Florida Statutes (1989). Consequently, the Respondent is guilty of a violation of Section 616.621(2), Florida Statutes (1989), for the failure to pay over the net premium due and owing for the My Chosen Delight insurance policies and the Operations South policies.

    
    

48. In Count I(i) and Count II(ii) of the Administrative Complaint, it is alleged that the Respondent violated Section 626.621(6), Florida Statutes (1989). An allegation of a violation of Section 626.621(6) must, of necessity, refer to some specific provision of the statutory language that defines "unfair methods of competition" and "unfair or deceptive acts or practices." The only such mention in the Administrative Complaint is a mention of the language of Section 626.9541(1)(o)1., Florida Statutes (1989). The language of Section 626.9541(1)(o)1., Florida Statutes, is far from a model of clarity. Although the meaning of the subject statutory language is not entirely free from doubt, it appears to be the intent of the statutory language to apply to those situations where an insurance agent collects money for a policy which is never issued, or which is never intended to be issued. Such is not the case here.

    The insurance policies involved in this case were all issued and all remained in force even though there was a dispute about the distribution of the premium money. Consequently, the Respondent should not be found guilty of a violation of Section 626.621(6), Florida Statutes (1989).

    
    

49. In Count I(j) and Count II(j) of the Administrative Complaint it is alleged that the Respondent violated Section 626.9521, Florida Statutes (1989). This allegation is essentially identical to the allegation of a violation of Section 626.621(6), Florida Statutes (1989), discussed immediately above. For the reasons discussed in the immediately preceding paragraph, the Respondent should not be found guilty of a violation of Section 626.9521, Florida Statutes (1989).

    
    

50. In Count I(k) and Count II(k) of the Administrative Complaint it is alleged that the Respondent violated Section 626.9541(1)(o)1., Florida Statutes (1989). For the reasons discussed in the two immediately preceding paragraphs, the Respondent should not be found guilty of a violation of Section 626.9541(1)(o)1., Florida Statutes (1989).

    
    

51. In determining the appropriate penalty to impose in this case, consideration should be given to several mitigating facts, not the least of which are that the Respondent did not intentionally cause harm to anyone and that the Respondent did not do anything fraudulent or deceptive. Quite to the contrary, the Respondent appears to have been honest and above board in his business dealings and appears to have made a good faith, but unsuccessful, effort to resolve the financial problems that befell his insurance company. In this regard, attention is also directed to Section 626.681, Florida Statutes (1989), which authorizes the Department of Insurance, in cases such as this that do not involve willful violations, to impose an administrative fine in the amount of $500.00 in lieu of suspension or revocation of the license.

RECOMMENDATION

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

1. That the Respondent should be found guilty of violating Section 626.621(2), Florida Statutes (1989), as alleged in Count I(h) and Count II(h) of the Administrative Complaint.

   
   

2. That an administrative penalty should be imposed for the foregoing violation, as follows: (a) An administrative fine in the amount of $500.00, and

   (b) a one-year period of probation during which period the Respondent should be required to take one or more courses on the subject of the financial aspects of the insurance business.

   
   

3. That all other violations alleged in the Administrative Complaint should be dismissed.

DONE AND ENTERED this 24th day of June, 1993, in Tallahassee, Leon County, Florida.

MICHAEL M. PARRISH

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 24th day of June, 1993.

APPENDIX

The following are the Hearing Officer's specific rulings on all proposed findings of fact submitted by all parties.

Proposed findings of fact submitted by Petitioner:

Except as specifically noted below, all of the proposed findings of fact submitted by the Petitioner have been accepted.

Paragraph 5: Rejected as constituting conclusions of law, rather than findings of fact. (The referenced statute is quoted in the conclusions of law portion of this Recommended Order.)

Paragraphs 13, 19, 20, and 21: In the interest of clarity, the failures of Carlos Fumagali described in these paragraphs should also be described as failures of FMC Insurance Consultants, Inc.

Paragraph 21: In the interest of clarity, it should be noted that about half of the amount referred to in this paragraph was repaid by FMC Insurance Consultants, Inc.

Proposed findings of fact submitted by Respondent:

The Respondent's submission of a tardy proposed recommended order constitutes a waiver of the Respondent's right to a specific ruling on each proposed finding of fact submitted by the Respondent. Accordingly, no such rulings have been made. As noted in the Preliminary Statement, the Respondent's proposed recommended order has been considered by the Hearing Officer even though it was submitted late.

COPIES FURNISHED:

Harold A. Braxton, Esquire Suite 400, One Datran Center 9100 S. Dadeland Boulevard Miami, Florida 33156-7815

David D. Hershel, Esquire Division of Legal Services

412 Larson Building Tallahassee, Florida 32399-0300

Honorable Tom Gallagher

State Treasurer and Insurance Commissioner

The Capitol, Plaza Level Tallahassee, Florida 32399-0300

Bill O'Neil, General Counsel Department of Insurance

The Capitol, Plaza Level 11 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 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.

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

AGENCY FINAL ORDER

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

OFFICE OF THE TREASURER DEPARTMENT OF INSURANCE

IN THE MATTER OF: CASE NO: 92-L-167DDH CARLOS FUMAGALI 92-2986

/

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 13, 1992, an Administrative Complaint was filed charging Respondent with various violations of the Insurance Code. The Respondent timely filed a request for a formal proceeding pursuant to Section 120.57(1), Florida Statutes. Pursuant to notice, the matter was heard before Michael M. Parrish, Hearing Officer for the Division of Administrative Hearings, on January 5, 1993 in Miami, Florida.

After consideration of the evidence, argument and testimony presented at hearing, and subsequent written submissions by the parties, the hearing officer issued a Recommended Order. (Attached as Exhibit A). The hearing officer recommended that a Final Order be entered (1) Finding Respondent guilty of violating Section 626.621(2), Florida Statutes (1989) as alleged in Count I(h) and II(h) of the Administrative Complaint; (2) Imposing an administrative penalty of Five Hundred Dollars ($500.00) and a one (1) year period of Probation during which period, Respondent shall take one or more courses on the subject of the financial aspects of insurance business; and (3) dismissing all other violations alleged in the Administrative Complaint. The Petitioner filed timely exceptions to the Recommended Order. The Respondent filed no exceptions to Recommended Order but filed a Response To Petitioner's Exceptions to Recommended Order.

RULINGS ON PETITIONER'S EXCEPTIONS TO CONCLUSIONS OF LAW

1. Petitioner excepts to Conclusion of Law paragraph 34. In determining that Respondent could not be subject to disciplinary action based on the conduct of another person absent proof that Respondent had actual knowledge of the other person's improper conduct, the hearing officer relied on Bach v. Florida Board of Dentistry, 378 So.2d 34 (Fla. 1st DCA 1979). The court in Bach interpreted a separate and different statutory scheme (Section 466.38, Florida Statutes) which is not applicable to these proceedings and the hearing officer's reliance on this case is misplaced. Petitioner's exception is well taken.

   
   

2. Petitioner excepts to the conclusion of the hearing officer in paragraph 45 of the Recommended Order that conduct prohibited by Section 626.611(10) is all conduct that involves some form of intentional or willful act, and that the evidence is insufficient to establish that the Respondent engaged in misappropriation, conversion, or unlawful withholding of moneys. The hearing officer found as a factual matter supported by substantial competent

   evidence that Respondent's violation of the insurance code did not rise to the level of "willful". Therefore, Petitioner's exception is rejected.

   
   

3. Petitioner takes exception to the hearing officer's recommendation stating that a six month suspension is a more appropriate penalty for this case. Petitioner's exception is rejected for the reasons set forth in 2, above.

Respondent filed a Response to Petitioner's Exceptions To Recommended Order in this matter. However, there is no provision either in the Florida Statutes or the Florida Administrative Code relating to a response to exceptions and as such they are not addressed here.

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

ORDERED:

1. The Findings of Fact of the hearing officer are adopted as the Department's Findings of Fact;

   
   

2. The Conclusions of Law of the hearing officer are adopted, except for paragraph 34.

   
   

3. The hearing officer's recommendation that Respondent, Carlos Fumagali, a life and health agent, a general lines agent, a health agent, and a general lines public adjuster in this state, shall be placed on probation for a period of one (1) year, which term shall commence on the date of the rendition of this Order, during which period, Respondent shall take one or more courses on the subject of the financial aspects of insurance business; and that Respondent, Carlos Fumagali, shall pay an administrative fine in the amount of Five Hundred Dollars ($500.00) to the Department within (30) days after the entry of this Order is adopted.

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 petition or notice of appeal with the General Counsel, acting as the agency clerk, at 612 Larson Building, Tallahassee, Florida, and a copy of the same with the appropriate district court of appeal within thirty

(30) days of rendition of this Order.

DONE and ORDERED this 2nd day of September, 1993.

TOM GALLAGHER

Treasurer and Insurance Commissioner

COPIES FURNISHED TO:

HONORABLE MICHAEL M. PARRISH

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

HAROLD M. BRAXTON, ESQUIRE

Suite 400, One Datran Center 9100 South Dadeland Boulevard Miami, Florida 33156

DAVID D. HERSHEL, ESQUIRE

Division of Legal Services 612 Larson Building

Tallahassee, Florida 32399-0300

IN ORDER TO ENSURE THAT YOUR PAYMENT IS RECEIVED BY US AND PROPERLY CREDITED YOU MUST SEND YOUR PAYMENT AND A COPY OF THE FINAL ORDER TO THE FOLLOWING ADDRESS:

Treasurer and Department of Insurance Revenue Processing Section

Post Office Box 6100 Tallahassee, Florida 32314-6100

Docket for Case No: 92-002986

Orders for Case No: 92-002986