STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CARLOS A. SALAS, )

)

Petitioner, )

)

vs. ) CASE NO. 93-0227

) DEPARTMENT OF INSURANCE AND ) TREASURER, )

)

Respondent. )

)

RECOMMENDED ORDER

Upon due notice, this cause came on for formal hearing on April 23, 1993, in Jacksonville, Florida, before Ella Jane P. Davis, a duly assigned Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Carlos A. Salas, pro se

10150 Arrowhead Drive East Unit #5

Jacksonville, Florida 32257

For Respondent: John R. Dunphy, Esquire

Division of Legal Services 612 Larson Building

Tallahassee, Florida 32399-0300 STATEMENT OF THE ISSUE

Whether or not Petitioner is entitled to sit for the examination for a 2-15 insurance license, life and variable annuity and health insurance agent.

PRELIMINARY STATEMENT

By Denial Letter filed November 9, 1992, the Respondent agency notified the Petitioner applicant that, as a result of his failure to disclose his criminal history and because of the nature of his criminal history, Petitioner's application for licensure as a life and variable annuity and health insurance agent was denied. Petitioner requested a formal hearing.

At formal hearing, Petitioner presented the oral testimony of Christopher

1. Murphy and testified on his own behalf.

   
   

   Petitioner offered in evidence five letters of recommendation which were admitted in evidence over objection as Composite P-1. Petitioner's P-2 was not admitted.

   
   

   Respondent presented no oral testimony but offered three exhibits in evidence, all of which were admitted without objection.

   The parties' Prehearing Stipulation was admitted as Hearing Officer's Exhibit A.

   
   

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

   
   

   FINDINGS OF FACT

   
   

   1. On March 23, 1992, Petitioner executed and subsequently submitted to Respondent agency his sworn application for licensure as a life and variable annuity and health insurance agent.

      
      

   2. On November 9, 1992, the Respondent notified Petitioner by Denial Letter that his application for licensure had been denied because his nondisclosure of past felony convictions and his representation that he had no such convictions was deemed a material misrepresentation and because the convictions themselves constituted a bar to licensure. The denial named the convictions and cited applicable statutes.

      
      

   3. On his application, Petitioner had been asked several questions in a run-on sentence. He filled in the answer NO to each element of the sentence as follows: "Have you ever been charged with or convicted of or pleaded guilty or no contest to a crime involving moral turpitude NO, or a felony NO or a crime punishable by imprisonment of one (1) year or more under the law of any state, territory or county, whether or not a judgment or conviction has been entered? NO"

      
      

   4. However, on June 3, 1985, Petitioner was charged in the United States District Court for the Eastern District of Virginia with one count of Possession with Intent to Distribute Cocaine, a felony punishable by one year or more of imprisonment in violation of Title 21 U.S.C. Section 841(a)(1) and Title 18

      U.S.C. Section 2, and one count of Travel in Interstate Commerce With Intent to Promote, Manage, Establish and Distribute Cocaine, a felony punishable by one year or more imprisonment in violation of Title 18 U.S.C. Sections 1952(a)(3) and (2).

      
      

   5. On August 23, 1985, Petitioner was found guilty and convicted of the foregoing felony charges and was sentenced to five years in federal prison followed by a special parole term of three years.

      
      

   6. At the time of formal hearing, Petitioner was serving his probationary term and was under parole supervision.

      
      

   7. On July 23, 1987, Petitioner was found guilty of criminal contempt of court in violation of Title 18 U.S.C. Section 401 and Rule 42 of the Federal Rules of Criminal Procedure and was sentenced to ninety days imprisonment.

      
      

   8. Petitioner has made significant amendment of life and life-style since his incarceration and during parole. He is gainfully employed, happily married, and the father of a seventeen month old child. He seeks employment in the insurance industry to further better himself and contribute to society.

   9. He testified that he answered the first part of the question as "no" because he did not consider his crimes to be crimes of moral turpitude, which, in his opinion, would be such crimes as fraud or child molestation. As to the rest of the question, he stated that he had no recollection of answering "no," but admitted he signed the application verifying the answer, "no" as true. He suggested that he may have been interpreting each successive element of the question as relating back to "crimes of moral turpitude," when he answered "no".

      
      

      CONCLUSIONS OF LAW

      
      

   10. The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this cause pursuant to Section 120.57(1), F.S.

       
       

   11. The burden of proof in a license denial case is upon the applicant to show entitlement to the license. See, Florida Department of Transportation v.

       J.W.C. Company, Inc., 396 So.2d 778 (Fla. 1981)

       
       

   12. The material statutes as in effect at all times material provided, in pertinent part, as follows:

       
       

       626.611 Grounds for compulsory refusal, suspension, or revocation of agent's, solicitor's adjuster's, service representative's, managing general agent's, or claims investigator's license or appointment. -- 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:

       1. Lack of one or more of the qualifications for the license or appointment as specified in this code.

       2. Material misstatement, misrepresentation, or fraud in obtaining the license or appointment or in attempting to obtain the license or appointment.

       ***

       (7) Demonstrated lack of fitness or trustworthiness 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 to 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. [Emphasis supplied]

       626.621 Grounds for discretionary refusal, suspension, or revocation of agent's, solicitor's, adjuster's, service representative's, managing general agent's, or claims investigator's license or appointment. -- The department may, in its discretion, 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 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 s. 626.611:

       (8) 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, without regard to whether a judgment of conviction has been entered by the court having jurisdiction of such cases. [Emphasis supplied]

       626.785 Qualification for license.--

       1. The department shall not grant or issue a license as life agent to any individual found by it to be untrustworthy or incompetent, or who does not meet the following qualifications:

          1. Must be a natural person or at least 18 years of age.

          2. Must be a bona fide resident of this state.

          3. Must not be an employee of the United States Veterans Administration or state service office, as referred to in s. 626.788.

          4. Must not be a funeral director or direct disposer, or an employee or representative thereof, or have an office in, or in connection with, a funeral establishment, except that a funeral establishment may contract with a life insurance agent to sell a preneed contract as defined in chapter 639. Notwithstanding other provisions of this chapter, such insurance agent may sell limited policies of insurance covering the expense of final disposition or burial of an insured in an amount not to exceed $7,500.

          5. Must take and pass any examination for license required under s. 626.221.

          6. Must be qualified as to knowledge, experience, or instruction in the business of insurance and meet the requirements relative thereto provided in s. 626.7851.

       
       

   13. Possession with Intent to Distribute Cocaine and Travel in Interstate Commerce with Intent to Distribute Cocaine are felonies involving moral turpitude, regardless of Petitioner's interpretation of the application question. See, Tullidge v. Hollingsworth, 146 So. 660 (Fla. 1933), wherein the Florida Supreme Court stated that:

       
       

       moral turpitude involves the idea of inherent baseness or depravity in the private social relations or duties owed by man or man or by man to society .... It has also been defined as anything done contrary to justice, honesty, principle, or good morals....

       
       

   14. Distribution of illegal drugs has long been established as a crime involving moral turpitude. In Pearl v. Florida Board of Real Estate, 394 So.2d

       189 (Fla. 3d DCA 1981), the court stated that "mere possession" did not constitute a crime involving moral turpitude, but found that substantial case law exists establishing moral turpitude in cases involving distribution of controlled substances.

       
       

   15. Likewise, similar crimes constitute a lack of fitness or trustworthiness to engage in the business of insurance. See, Natelson v. Department of Insurance, 454 So.2d 31 (Fla. 1st DCA 1984).

       
       

   16. The application question was inartfully worded in that it did not specifically require Petitioner to divulge federal felony convictions under the United States Code. Therefore, even though Petitioner has not raised that issue, it is not here concluded that he has made a "material mispresentation." See, Section 626.611(2) F.S.

       
       

   17. However, Petitioner's criminal history's without more, mandates denial of his application under Sections 626.611(1), (7), and (14) F.S.

       
       

   18. Accordingly, Petitioner's application must be denied.

RECOMMENDATION

Upon the foregoing findings of fact and conclusions of law, it is recommended that the Department of Insurance enter a final order ratifying its denial of Petitioner's application for licensure.

RECOMMENDED this 21st day of May, 1993, 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 21st day of May, 1993.

APPENDIX TO RECOMMENDED ORDER 92-2060

The following constitute specific rulings, pursuant to S120.59(2), F.S., upon the parties' respective proposed findings of fact (PFOF).

Petitioner's PFOF:

Petitioner's proposals are not numbered and constitute only admissions and argument. The admissions have been incorporated in the findings of fact as appropriate. The paragraphs of argument are rejected as argument and because they are not proposed findings of fact.

Respondent's PFOF:

Respondent's proposed findings of fact 1-9 are accepted in substance except where unnecessary, subordinate or cumulative.

COPIES FURNISHED:

Tom Gallagher

State Treasurer and Insurance Commissioner

The Capitol, Plaza Level Tallahassee, FL 32399-0300

Bill O'Neil, Esquire General Counsel

Department of Insurance and Treasurer

The Capitol, PL-11 Tallahassee, FL 32399-0300

John R. Dunphy, Esquire Department of Insurance and

Treasurer

612 Larson Building

Tallahassee, FL 32399-0300

Carlos A. Salas

10150 Arrowhead Drive East Unit #5

Jacksonville, FL 32257

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 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.

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AGENCY FINAL ORDER

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

OFFICE OF THE TREASURER DEPARTMENT OF INSURANCE

IN THE MATTER OF:

CARLOS A. SALAS CASE NO: 93-L-032DDH

/ DOAH 93-227

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. By letter dated November 9, 1992, the Department notified the applicant, Mr. Salas, that his application for licensure as a life and variable annuity and health insurance agent was denied due to his failure to disclose past felony convictions and because the existence of the convictions constituted a bar to licensure. The applicant timely filed a request for a formal proceeding pursuant to Section 120.57(1), Florida Statutes. Pursuant to notice, the matter was heard before Ella Jane P. Davis, Hearing Officer, Division of Administrative Hearings, on April 23, 1993 in Jacksonville, 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 affirming the denial of the applicant's application for licensure. The Department filed timely exceptions to the Recommended Order. The applicant did not file exceptions.

RULINGS ON DEPARTMENT'S EXCEPTIONS TO CONCLUSIONS OF LAW

1. The Department excepts to Conclusion of Law #16. The hearing officer concluded that the application question at issue was "inartfully worded in that it did not specifically require Petitioner to divulge federal felony convictions under the United States Code" and that, therefore, the applicant had not made a material misrepresentation.

The question at issue reads as follows on the application for licensure: "Have you ever been charged with or convicted of or pleaded guilty or no contest to a crime involving moral turpitude, ,or a felony , or a crime punishable by imprisonment of one (1) year or more under the law of any state, territory or county, whether or not a judgment or conviction has been entered? ". (The emphasis is as it is printed on the application.) From a simple reading of the question it is readily apparent that it is a three part question. The first part questions whether the applicant has ever been convicted of or pleaded guilty or no contest to a crime which involves moral turpitude. As "crime" can mean a felony or misdemeanor, the key information this question elicits is whether there is any past criminal history in the applicant's background involving moral turpitude. It was established at hearing, and in the hearing officer's Finding of Fact #9, that the applicant did not believe the felonies for which he was convicted were crimes of moral turpitude.

The second part of the question merely extends the first part to elicit whether there are any felonies in the applicant's history. The word "felony" is not limited in any way to exclude federal felony convictions. Sections 626.611(14) and 626.621(8), Florida Statutes, specifically require the Department to consider information concerning felonies, including federal felonies, in evaluating the qualifications of applicants applying for licensure. Therefore, the Department would clearly want to elicit information as to all felonies in an applicant's past. The evidence is uncontroverted that the applicant answered "no" to the question posed in this part. Further, the Recommended Order is devoid of any finding of fact that the applicant was under the belief that he need not disclose his prior felony convictions because they were obtained under federal law. Without such a finding, it must be concluded that the applicant made a material misrepresentation, pursuant to Section 626.611(2), Florida Statutes, by answering "no" to this part of the question.

The third part questions whether there are any crimes, either felonies or misdemeanors, in the applicant's past which are punishable by imprisonment of one year or more "under the law of any state, territory or county". The phrase "under the law of any state, territory or count" clearly modifies only the third part of the question. This question seeks to discover information about felonies/misdemeanors committed under any state, territory, or county law. This part of the question does not specify that federal felony convictions be reported.

Agencies are afforded wide discretion in the interpretation of statutes which they administer and will not be overturned on appeal unless clearly erroneous. Natelson v. Dept. of Insurance, 454 So.2d 31 (Fla. 1st DCA 1984). The application form was adopted under Chapter 4-211, Florida Administrative Code, per the authority in Section 624.308, Florida Statutes. The interpretation set forth above is reasonable based on a simple reading of the question at issue and the statutes requiring the Department to consider information of an applicant's criminal history.

Accordingly, the Department's exception is accepted.

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 in full as the Department's Findings of Fact.

   
   

2. The Conclusions of Law of the hearing officer, with the exception of paragraph 16, are adopted in full as the Department's Conclusions of Law.

   
   

3. The hearing officer's recommendation that the application for licensure of CARLOS A. SALAS be denied is ACCEPTED as being the appropriate disposition of this case.

ACCORDINGLY, the application for licensure of applicant, CARLOS A. SALAS, is DENIED.

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, Fla.R.App.P. 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 21st day of June, 1993.

TOM GALLAGHER

Treasurer and Insurance Commissioner

COPIES FURNISHED TO: HONORABLE ELLA JANE P. DAVIS

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

CARLOS A. SALAS

10150 Arrowhead Drive East, Unit #5

Jacksonville, Florida 32257

JOHN R. DUNPHY, ESQUIRE

Division of Legal Services Department of Insurance 612 Larson Building

Tallahassee, Florida 32399-0300

Docket for Case No: 93-000227

Orders for Case No: 93-000227