STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF INSURANCE AND ) TREASURER, )

)

Petitioner, )

vs. ) CASE NO. 93-1222

)

WILLIE FRANK DENNIS, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, this cause came on for formal hearing before P. Michael Ruff, duly-designated Hearing Officer of the Division of Administrative Hearings, in Jacksonville, Florida.

APPEARANCES

For Petitioner: William C. Childers, Esquire

Department of Insurance and TreasurerDivision of Legal Services 612 Larson Building

Tallahassee, Florida 32399-0300

For Respondent: Willie Frank Dennis, pro se

1113 Kennard Street, Apartment No. 2

Jacksonville, Florida 32202 STATEMENT OF THE ISSUES

The issues to be resolved in this proceeding concern whether the Respondent's insurance agent licenses and eligibility for licensure should be the subject of disciplinary sanctions, based upon the alleged violations contained in the Administrative Complaint and, if so, what discipline should be imposed.

PRELIMINARY STATEMENT

This cause arose upon the filing of an Administrative Complaint by the Petitioner, Department of Insurance and Treasurer (Department), in which it charges that the Respondent, who is a life and health insurance agent, committed various violations of Chapter 626, Florida Statutes, involving failure to remit premiums over to the insurance company for whom he sold policies and for whom he collected premiums. The Department seeks to impose disciplinary sanctions against the Respondent's licenses and his eligibility for licensure. The Respondent timely requested a formal administrative proceeding, pursuant to Section 120.57, Florida Statutes, and this proceeding ensued.

The cause came on for hearing as noticed. The Petitioner presented the testimony of one witness, Mr. Tom Reynolds, at the final hearing. The Respondent testified on his own behalf. The Petitioner offered four (4) exhibits which were received into evidence as Petitioner's exhibits 1, 2, 4 and

1. The Respondent offered exhibits 1 and 2 which were received into evidence.

   
   

   The parties requested an extended briefing schedule at the conclusion of the hearing. That was granted, and in due course, the Petitioner submitted a Proposed Recommended Order containing proposed findings of fact. The Respondent submitted no Proposed Recommended Order. The proposed findings of fact submitted by the Petitioner have been addressed in this Recommended Order and are again ruled upon in the Appendix attached hereto and incorporated by reference herein.

   
   

   FINDINGS OF FACT

   
   

   1. The parties have stipulated to the truth of the allegations of paragraph 1-7 of the Administrative Complaint.

      
      

   2. The Respondent is currently licensed in the State of Florida as a life and health (debit) agent, as well as a life and health agent. Pursuant to Chapter 626, Florida Statutes, the Florida Department of Insurance, the Petitioner, has jurisdiction over the insurance licenses and appointments of the Respondent.

      
      

   3. On August 26, 1983, the Respondent entered into an agent contractual agreement with Capital Security Life Insurance Company (Capital). The agent's contract required that the Respondent account for and remit to Capital all premiums collected and received on behalf of that company.

      
      

   4. On or about October 18, 1991, Capital terminated its appointment of the Respondent, as one of its agents. This had the effect of cancelling the agent contract of the Respondent. The Respondent was terminated because Capital had detected the fact that certain premium monies collected by the Respondent from policy holders had not been remitted over to Capital on a repetitive basis. On or about October 18, 1991, Capital conducted an audit of the account of the Respondent. It was thus shown through the subject audit and work papers in evidence, as well as the testimony of Mr. Reynolds for the Petitioner, that the account of the Respondent contained a proven deficiency in the sum of $812.41 in insurance premiums collected but not remitted to Capital. Other than protest that the deficiency was a mistake and the result of computer error or that the financial information resulting in that figure had been erroneously input into Capital's computer by Capital's office personnel in charge of accounting for such matters and monies, no cogent credible explanation for the failure to remit over that sum of money referenced above has been established. The testimony of Mr. Reynolds is accepted over that of the Respondent as more credible and worthy of belief. It has thus been established that the Respondent misappropriated and converted to his own use and benefit, and unlawfully withheld, premium monies rightfully belonging to Capital while engaged in the applicable and ordinary course of his business as an agent for Capital.

      CONCLUSIONS OF LAW

      
      

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

      
      

   6. The Department has an obligation to establish proof of the facts and violations alleged in the Administrative Complaint preparatory to imposing discipline against an insurance license by the standard of clear and convincing evidence. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987). The relevant statutory provisions at issue in this proceeding are as follows:

      
      

      626.561(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 fiduciarycapacity. An agent shall keep the funds belonging to each insurer for which he is not appointed, other than a surplus lines insurer, in a separate account so as to allow the department to properly audit such funds. 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.

      
      

      626.611 Grounds for compulsory 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.

      * * *

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

      * * *

      1. Demonstrated lack of fitness or trustworthiness to engage in the business of insurance.

      2. Demonstrated lack of reasonably adequate knowledge and technical competence to engage

         in the transactions authorized by the license or appointment.

      3. Fraudulent or dishonest practices in the conduct of business under the license or appointment.

      4. 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 or appointment.

      * * *

      (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 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.

      * * *

      (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.

      * * *

      (4) Failure or refusal, upon demand, to pay over to any insurer he represents or has represented any money coming into his hands belonging to the insurer.

      * * *

      (6) In the conduct of business under the license or appointment, 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 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, Florida Statutes.

      
      

   7. It has been established that the Respondent failed to forward health insurance premiums to the insurer company issuing the subject policies and entitled to the premiums. The Respondent has, therefore, violated Section 626.561(1), Florida Statutes. The Respondent's conduct, in misappropriating insurance premiums, amounted to a use of his license in a way that circumvented the requirements and prohibitions of the insurance code in violation of Section 626.611(4), Florida Statutes.

      
      

   8. The Respondent's conduct has deprived Capital Security Life Insurance Company of the opportunity to receive the insurance premiums owed to them, thereby demonstrating a lack of fitness and trustworthiness to sell insurance. See Section 626.611(7), Florida Statutes. It has not been established by clear and convincing evidence, however, that the Respondent lacks reasonably adequate knowledge and technical competence to engage in transactions authorized by his licenses or appointments and, therefore, it has not been proven that he violated Section 626.611(8), Florida Statutes.

   9. The Respondent's failure to forward premiums to the insurer amounts to fraudulent and dishonest practice in the conduct of business entity licenses or appointments in violation of Section 626.611(9), Florida Statutes.

      
      

   10. The Respondent's conduct amounts to a misappropriation of monies belonging to an insurer or to others received in the conduct of business under the licenses which is a violation under Section 626.611(10), Florida Statutes. This conduct amounts to a willful violation of a provision of the insurance code which is in itself a derivative violation of Section 626.611(13), as well as Section 626.621(2), Florida Statutes.

       
       

   11. It has not been established that the Respondent violated Section 626.9521 by engaging in unfair and deceptive trade practices in the business of insurance. While he may have been unfair and deceptive to his company in failure to remit premiums to the company, the intent of this statute is directed more to unfair and deceptive trade practices between companies or between agents and the public. There is no evidence that Mr. Dennis engaged in any such unfair or deceptive trade practice with policy holders, but rather he merely failed to pay over to the company the premiums that were due the company. While it is true that the failure to forward premiums to the company could at some point result in a cancellation of the policy holders' policies, that did not occur and the reprehensible nature of the Respondent's conduct and that possible eventuality is adequately redressed by the finding of the other violations of the other statutory provisions mentioned above.

       
       

   12. Additionally, the failure to forward premiums to the company amounts to a failure or refusal, upon demand (here repeated demands), to pay over to any insurer an agent represents, or has represented, any money coming in to his hands belonging to the insurer, in violation of Section 626.621(4), Florida Statutes. So too, this conduct is a detriment to the insurance buying public of Florida and is, therefore, in violation of Section 626.621(6), Florida Statutes.

RECOMMENDATION

Having considered the foregoing Findings of Fact and Conclusions of Law, the evidence of record, and the candor and demeanor of the witnesses, it is, therefore,

RECOMMENDED that a Final Order be entered by the Petitioner agency finding that the Respondent, Willie Frank Dennis, is guilty of the violations set forth as and in the manner in the Conclusions of Law above and that, therefore, his licenses and eligibility for licensure be revoked pursuant to Sections 626.611 and 626.621, Florida Statutes.

DONE AND ENTERED this 3rd day of November, 1993, in Tallahassee, Florida.

P. MICHAEL RUFF 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 3rd day of November 1993.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-1222

Petitioner's proposed findings of fact: 1-9. Accepted.

COPIES FURNISHED:

William C. Childers, Esquire Department of Insurance

and Treasurer

Division of Legal Services 612 Larson Building

Tallahassee, Florida 32399-0300

Willie Frank Dennis

1113 Kennard Street, Apartment No. 2

Jacksonville, Florida 32202

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, PL-11

Tallahassee, Florida 32399-0300

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit to the agency 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.

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

MOTION FOR CORRECTIVE ORDER

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

November 17, 1993

Honorable P. Michael Ruff Hearing Officer

Division of Administrative Hearings

RE: Department of Insurance vs.

Willie F. Dennis

Case No: 93-1222 This is in reference to the July 15, 1993 Hearing held in Jacksonville, FL.

Mr. Ruff in reference to your preliminary statement that I did not submit a proposed Recommended Order is incorrect. I submitted my Proposed Recommended Order before the 30 days limit was expired. I am sending you a copy of the letter I sent through Certified Mail and someone from your office sign for it on 8-11-93.

Also in reference to your Finding of Facts, Item #4, states that I was terminated because Capital detected that I was not remitted Premium monies collected from Policy holders on a repetitive basis is In Correct. I was terminated because of a clause in the Company contract that states that your arrears must be under 40 percent for 3 months.

Mr. Ruff please find what happen to my Proposed Recommended Order and read some of my conclusion and Reconsider your Final Proposed Recommended Order. I talk with Mr. Bill O'Neil and he told me to write you this letter and explain what happen and why you did not Receive my Recommended Order.

The Respondent

Willie F. Dennis

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

AGENCY FINAL ORDER

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

STATE OF FLORIDA DEPARTMENT OF INSURANCE OFFICE OF THE TREASURER

IN THE MATTER OF: DOAH CASE NO. 93-1222 CASE NO: 92-L-563C&S

WILLIE FRANK DENNIS

/

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 December 9, 1992, an Administrative Complaint was filed charing 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 P. Michael Ruff, Hearing Officer, Division of Administrative Hearings, on July 15, 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 revoking the insurance licenses of Respondent. The Respondent filed exceptions to the Recommended Order and they are addressed below even though they were not submitted within the time period specified in the Recommended Order. The Petitioner did not file exceptions.

RULINGS ON RESPONDENT'S EXCEPTIONS

1. Respondent takes exception to the hearing officer's preliminary statement. Specifically, the following statement: "(t)he Respondent submitted no Proposed Recommended Order." It is noted that Respondent did submit a Proposed Recommended Order dated August 6, 1993 which was received by the Division of Administrative Hearings on August 11, 1993. The Respondent's Proposed Recommended Order was reviewed and considered in preparing this Final Order.

   
   

   Accordingly, exception 1 as it appears in the Respondent's exceptions is accepted and Respondent's Proposed Recommended Order is recognized as timely submitted.

   
   

2. Respondent's next exception is to the hearing officer's finding of fact, paragraph 4, which discussed the reasons for Respondent's being terminated. Respondent excepts to the reason for his termination by the insurance company as stated by the hearing officer. This exception is rejected as it is not relevant to the issue in the case which is whether Respondent misappropriated insurance premiums due an insurer.

3. Respondent's next exception is to the hearing officer's Conclusion of Law, paragraph 7 (incorrectly cited by Respondent as a Finding of Fact), which found that Respondent failed to forward health insurance premiums to the insurer. Respondent excepts to that conclusion and states that 90% of his debit book was life insurance and at the hearing shortages were not separated between life and health. This exception is also rejected as irrelevant to the issue in this case which is whether Respondent misappropriated premiums. (emphasis added) Premiums can be for either life or health insurance.

   
   

4. Petitioner also excepts to the hearing officer's Conclusion of Law, paragraph 12 (incorrectly cited by Respondent as a Finding of Fact), which states that the insurance company made repeated demands to Respondent for return of their money. This exception is also rejected as irrelevant as only one demand by an insurer is necessary to trigger a violation of Section 626.621(4), Florida Statutes.

   
   

5. Finally, implicit in Petitioner's exceptions is the penalty of revocation as the appropriate disposition of his case. This exception must be accepted as neither the Department's Proposed Recommended Order or the hearing officer's Recommended Order addressed or considered the Department's rule which specifies penalties according to Insurance Code Sections violated. Rules interpret Statutes and must be followed. Rule 4-231.040, Florida Administrative Code, clearly sets forth how penalties are to be arrived at in disciplining agents. As the hearing officer found no mitigating or aggravating factors, Rule 4-231.110(2) would require the Respondent to receive a nine-month suspension.

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 are adopted in full as the Department's Conclusions of Law.

   
   

3. The hearing officer's recommendation that the insurance licenses and eligibility for licensure of WILLIE FRANK DENNIS be REVOKED is REJECTED in light of the final exception accepted above.

ACCORDINGLY, all licenses and eligibility for licensure held by WILLIE FRANK DENNIS are hereby SUSPENDED for a period of nine months from the date of this Order, pursuant to Section 626.641(1), Florida Statutes.

Pursuant to Section 626.641(4), Florida Statutes, Respondent shall not engage or attempt or profess to engage in any transaction for which a license or permit is required under the insurance code or be employed in any manner by an insurance agent or agency.

At the conclusion of the nine month suspension period, Respondent must petition the Department for reinstatement, however, reinstatement shall not be granted if the Department finds that the circumstance or circumstances for which the license, appointment or eligibility was suspended still exist or are likely to recur.

NOTICE OF RIGHTS

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 12th day of April, 1994.

TOM GALLAGHER

Treasurer and Insurance Commissioner

COPIES FURNISHED TO: HONORABLE P. MICHAEL RUFF

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, FL 32399-1550

WILLIE FRANK DENNIS

1113 Kennard Street, Apt. #2

Jacksonville, FL 32202

WILLIAM C. CHILDERS, ESQUIRE

Division of Legal Services Department of Insurance 612 Larson Building

Tallahassee, FL 32399-0333

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

CORRECTED RECOMMENDED ORDER

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

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF INSURANCE AND ) TREASURER, )

)

Petitioner, )

)

vs. ) CASE NO. 93-1222

)

WILLIE FRANK DENNIS, )

)

Respondent. )

)

ORDER

THIS CAUSE comes before the undersigned Hearing Officer pursuant to a letter from Respondent filed with the Hearing Officer after this case was closed by Recommended Order. In that letter, which the Hearing Officer will treat as a motion for corrective order, the Respondent stated that, contrary to the finding in the Hearing Officer's Recommended Order to the effect that the Respondent had not filed a Proposed Recommended Order for the Hearing Officer's consideration, in fact, the Respondent had filed a Proposed Recommended Order. Indeed, the Respondent did submit a timely Proposed Recommended Order which, for unknown reasons, was not brought to the Hearing Officer's attention before the Recommended Order herein was entered. Consequently, although the Hearing Officer technically is without jurisdiction once the Recommended Order is entered and the matter transmitted back to the Final Order agency, the letter referenced will be treated as a motion for corrective order. The Hearing Officer has, therefore, considered the Proposed Recommended Order submitted by the Respondent. Upon consideration of that Proposed Recommended Order, however, the Hearing Officer determines that nothing asserted therein demonstrates cause for the Hearing Officer to alter the Findings of Fact and Conclusions of Law entered in the previous Recommended Order. That Recommended Order was entered and findings of fact made based upon competent, substantial evidence of record and the Hearing Officer's judgment of the candor and credibility of the witnesses, with conclusions of law then being based upon the Hearing Officer's view of the applicable legal principles, applied to those findings of fact.

Accordingly, being fully advised in the premises, it is

ORDERED that the Recommended Order previously entered in this case is adhered to as presently entered, and the matter now awaits entry of a Final Order by the Department of Insurance and Treasurer.

DONE AND ORDERED this 20th day of September, 1994, at Tallahassee, Leon County, Florida.

P. MICHAEL RUFF 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 September, 1994.

COPIES FURNISHED:

Mr. Willie F. Dennis 1113 Kennard St., Apt. 2

Jacksonville, FL 32208

William C. Childers, Esq. Department of Insurance Division of Legal Services 612 Larson Building

Tallahassee, FL 32399-0300

Tom Gallagher

State Treasurer and Insurance Commissioner

The Capitol, Plaza Level Tallahassee, FL 32399-0300

Bill O'Neil, Esq. General Counsel Department of Insurance The Capitol, PL-11

Tallahassee, FL 32399-0300

Docket for Case No: 93-001222

Orders for Case No: 93-001222