STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF INSURANCE )

AND TREASURER, )

)

Petitioner, )

)

vs. ) CASE NO. 93-2244

)

JOHN SAMUEL SORANNO, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the above matter was heard before the Division of Administrative Hearings by its duly designated Hearing Officer, Donald R. Alexander, on June 3, 1993, in Inverness, Florida.

APPEARANCES

For Petitioner: Joseph D. Mandt, Esquire

612 Larson Building

Tallahassee, Florida 32399-0300

For Respondent: James F. Spindler, Jr., Esquire

3858 North Citrus Avenue Crystal River, Florida 34428

STATEMENT OF THE ISSUE

The issue is whether respondent's license as a title insurance agent should be disciplined for the reasons cited in the administrative complaint filed on April 6, 1993.

PRELIMINARY STATEMENT

In an administrative complaint filed on April 6, 1993, petitioner, Department of Insurance and Treasurer, charged that respondent, John Samuel Soranno, had violated various provisions within Sections 626.8437 and 626.844, Florida Statutes, by falsely indicating on his application for licensure by experience that he had "been employed by Land Title Insurance of Citrus County, Inc. since March of 1982".

Respondent disputed this allegation and requested a formal hearing pursuant to Subsection 120.57(1), Florida Statutes, to contest the proposed agency action. The matter was referred by petitioner to the Division of Administrative Hearings on April 22, 1993, with a request that a Hearing Officer be assigned to conduct a hearing. By notice of hearing dated May 17, 1993, a final hearing was scheduled on June 3, 1993, in Inverness, Florida.

At final hearing, petitioner presented the testimony of William J. Hudson and Kathleen S. Johnson. Also, it offered petitioner's exhibits 1 and 2. Both exhibits were received in evidence. Respondent testified on his own behalf and presented the testimony of S. Michael Mountjoy, Mark Szenas, Scott G. Lyons, Ronald D. Hill, and Janice A. Curry. Also, he offered respondent's exhibits 1-

1. All exhibits were received in evidence.

   
   

   There is no transcript of hearing. Proposed findings of fact and conclusions of law were filed by respondent and petitioner on June 9 and 11, 1993, respectively. A ruling on each proposed finding is set forth in the Appendix attached to this Recommended Order.

   
   

   FINDINGS OF FACT

   
   

   Based upon all the evidence, the following findings of fact are determined:

   
   

   1. On November 30, 1992, respondent, John Samuel Soranno, signed and executed his application for licensure as a title insurance agent with petitioner, Department of Insurance and Treasurer (Department). In section 6 of the application, respondent was asked to disclose his record of employment for the last five years. Respondent indicated that he had been employed by Land Title Insurance of Citrus County, Inc. (Land Title) since March 7, 1982. In section 8 of the application, respondent was required to sign a notarized statement declaring himself eligible to qualify by prior experience for licensure with the Department. Respondent signed the notarized statement indicating he had been a "substantially full-time bona fide employee" of Land Title from March 7, 1982, to the time he signed the application. The application and a resume were later hand-delivered to Tallahassee, and Department records indicate the application was stamped as received on December 31, 1992. Relying on the representations in the application, the Department issued respondent a title insurance agent license on an undisclosed date in January 1993.

      
      

   2. On January 13, 1993, the president of Land Title, William J. Hudson, wrote the Department a letter in which he stated that:

      
      

      At no time has . . . John Soranno been employed as a substantially full-time bona fide employee of Land Title Insurance of Citrus County, Inc., or of William J. "Skip" Hudson. To my certain knowledge, neither

      . . . (has) John Soranno devoted full time to title insurance during the last five (5) years. Further, John Soranno has (not) performed the functions of preparation of title insurance policies, preparing closing statements and conducting closings, handling of escrow or trust funds including the disbursement of trust funds, preparation of documents or gained knowledge of title insurance work and office management in a title insurance office in the past five years.

      
      

      Hudson went on to recommend that the Department investigate respondent "for possible criminal violations". Acting on this advice, the Department conducted an investigation and later suspended respondent's license on an emergency basis. It also issued an administrative complaint charging respondent with violating

      various statutes on the ground he had made a material misrepresentation on his application. The license remains suspended pending the outcome of this proceeding.

      
      

   3. Respondent has been involved in the title insurance business for the last twenty-one years. He first worked for Citrus Title Company, Inc. from March 15, 1973, through September 15, 1975, as a title researcher. Beginning in October 1975, he worked with Coastal Bonded Title Company, Inc., first as assistant manager and then as manager of the Crystal River office. His main responsibilities were performing title searches and examinations, issuing commitment letters, handling closings, and making escrow disbursements. From August 1, 1977, through January 22, 1982, respondent was employed by Crystal River Title Company in Inverness. In that job, he was responsible for conducting title searches and examinations.

      
      

   4. In early 1982, Hudson approached respondent and asked him to work for Land Title to perform title searches and examinations. Because Hudson did not want to incur the additional costs associated with hiring an "employee", he hired respondent as an independent contractor. Respondent was also required to execute a contract with Hudson whereby he agreed to work exclusively for Land Title. As compensation, respondent received a flat fee for a base title search and a larger fee for those cases requiring a full search. Respondent began employment with Land Title under this arrangement on March 7, 1982. For tax purposes, respondent created a Subchapter S corporation named JOKAR, Inc. and had his paychecks from Land Title made payable to his corporation.

      
      

   5. Respondent did not work in the offices of Land Title. Instead, he worked at the county courthouse in Inverness and in his home. Under a special arrangement with courthouse personnel, he typically began work each morning (Monday through Friday) at 7:30 a.m. in the courthouse (before it officially opened for business each day) searching through courthouse records. Depending on his workload, which averaged between five and seven files per day, respondent left the courthouse anywhere between 12:30 p.m. and 2:00 p.m. and returned to his home where he spent time on the telephone with underwriters, attorneys or Land Title employees regarding title and underwriting problems and language to be used in closing documents. He also prepared written reports for Land Title, and he spent several hours reviewing the files for the next day's work. At 6:00

      p.m. each workday, a Land Title employee came by his house and picked up his day's work and dropped off new files. Based upon the amount of time respondent devoted to his job, which averaged more than eight hours each work day, it is found that respondent worked "full-time" for Land Title.

      
      

   6. As a part of respondent's job responsibilities, he was required to speak with underwriters on a recurring basis to resolve various underwriting problems which arose as a result of his research. It was generally accepted that respondent was the most experienced and competent Land Title employee with regard to title searches, examinations and underwriting. Indeed, respondent did the title search and underwriting on well over 10,000 files while employed with that firm.

      
      

   7. During his tenure with Land Title, respondent was covered under the same health insurance policy as other Land Title employees, and he made various claims under his policy. Although Hudson denied that respondent was an employee of his firm, it is found that from March 1982 until January 1993, respondent was a bona fide, full-time employee of Land Title.

   8. In late 1988, Scott Lyons was hired as an employee by Land Title. He was later elected a vice-president of the corporation by its board of directors and assumed the role of manager of the Crystal River office. Although Hudson denied Lyons had any authority as a corporate officer, it is found that Hudson did not place any limitation on Lyons' authority and he was a bona fide officer of the corporation.

      
      

   9. In the fall of 1992, Lyons began considering the possibility of opening his own title company in Citrus County and approached respondent about joining such a venture. Although respondent gave Lyons no assurance that he would work with him, respondent considered this possibility. On December 4, 1992, Lyons told Hudson of his plans to start a new title company named Nature Coast Title Company, Inc. Immensely displeasured at the thought of competition, Hudson immediately fired Lyons effective that date. Because Hudson thought that respondent might also be intending to leave the firm, he initially decided to terminate respondent. After learning that respondent had no firm commitment with Lyons, Hudson changed his mind. In early January 1993, Hudson made a new and more lucrative job offer to keep respondent on his payroll but withdrew it a short time later. On January 21, 1993, Hudson learned that respondent had accepted Lyons' offer to join the new title company and severed respondent's relationship with Land Title that day. It may be reasonably inferred from the evidence that Hudson's motivation in sending the complaint letter to the Department was his desire to eliminate competition rather than having the law enforced.

      
      

   10. In 1992, the legislature enacted Chapter 92-318, Laws of Florida, which provided, among other things, for the licensure by the Department of title insurance agents. The law stipulated that those "who had been actively engaged with responsible duties in the title insurance business in the state for 5 consecutive years before the date of application for examination" would not have to take an examination for a license if an application for licensure was filed with the Department no later than March 31, 1993. Respondent decided to "protect his career" and apply for licensure under the grandfather provisions of the law. Accordingly, on November 30, 1992, respondent had a friend type his application for licensure. The application form required those who sought to qualify for licensure by experience to have their employer verify that the applicant had been working as a "substantially full-time, bona fide employee" during the time indicated. Because no other officers of Land Title were in the office at the time respondent sought to obtain written verification of his employment history, respondent got Lyons, as a corporate officer of Land Title, to acknowledge that he was a "bona fide full-time employee" of Land Title from March 1982 until that date. Although Lyons had worked at Land Title only since late 1988, he had knowledge that respondent had been employed full-time by Land Title since March 1982 and he was aware of respondent's job responsibilities during that period of time.

       
       

   11. Respondent was described by the district manager of a large title insurance underwriter as being "very knowledgeable" in the area of underwriting. Also, based upon his dealings with respondent over the last eight years, he rated respondent as "very high" in the area of title searching and examination. A co-worker at Land Title since 1985 also considered respondent to be "very knowledgeable" in the business, pointed out that Hudson had given her instructions to call respondent on any questions regarding document preparation, and was under the impression respondent was a full-time employee of Land Title.

   12. Respondent's representation on the application regarding his employment history was not false. Rather, he worked full-time as a bona fide employee of Land Title from March 1982 to January 1993. By virtue of his experience over the last twenty-one years, he is qualified for licensure as a title insurance agent.

       
       

       CONCLUSIONS OF LAW

       
       

   13. The Division of Administrative Hearings has jurisdiction of the subject matter and the parties hereto pursuant to Subsection 120.57(1), Florida Statutes.

       
       

   14. Because respondent's license is at risk, the Department must prove the allegations in the complaint by clear and convincing evidence. Pascale & Chandler v. Department of Insurance, 525 So.2d 922 (Fla. 3d DCA 1988).

       
       

   15. The administrative complaint alleges that, by falsely indicating on his application he had previously worked full-time for a title company since 1982, respondent violated Subsections 626.8437(1), (2), (4), (5), (6), and (9) and 626.844(1) and (3), Florida Statutes. The former subsection makes suspension or revocation of a license compulsory whenever the Department finds any one or more of the following grounds to exist:

       
       

       1. Lack of one or more of the qualifica- tions for the license or appointment as specified in s. 626.8417.

       2. Material misstatement, misrepresenta- tion, or fraud in obtaining, or attempting to obtain, the license or appointment.

          * * *

          1. Demonstrated lack of fitness or trust- worthiness to represent a title insurer in the issuance of its commitments, binders, policies of title insurance, or guarantees of title.

          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.

          * * *

          (9) Willful failure to comply with, or will- ful violation of, any proper order or rule of the department or willful violation of any provision of this act.

          * * *

          The latter statute gives the Department the discretion to discipline a licensee if it finds any one or more of the following grounds to exist:

          
          

          (1) Any cause for which issuance of the license or appointment could have been refused had it then existed and been known to the department.

          * * *

          (3) Violation of any lawful order or rule of the department.

          * * *

          
          

          All of the foregoing violations turn on the single factual issue of whether respondent made a false statement on his application in attempting to obtain his license. Since the more credible evidence supports a finding that he did not, it is concluded that the charges must fail.

          
          

   16. Under the terms of Subsection 626.8414(2), Florida Statutes (Supp. 1992), if an applicant "has been actively engaged with responsible duties in the title insurance business in the state for 5 consecutive years before the date of the application", he is not required to take the examination. Because respondent has been engaged full-time "with responsible duties" in the title insurance business for the last twenty-one years, he is qualified for licensure. Therefore, his license should be reinstated.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered dismissing the administrative

complaint with prejudice, vacating the emergency order of suspension, and reinstating respondent's license as a title insurance agent.

DONE AND ENTERED this 14th day of June, 1993, in Tallahassee, Florida.

DONALD R. ALEXANDER

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 14th day of June, 1993.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-2244

Petitioner:

1-3. Partially accepted in finding of fact 1.

4. Partially accepted in finding of fact 10. 5-6. Partially accepted in finding of fact 1.

1. Rejected as being contrary to the evidence.

2. Partially accepted in finding of fact 1. The last sentence has been rejected as being contrary to the evidence.

Respondent:

1. Partially accepted in finding of fact 7. 1a-b. Partially accepted in finding of fact 5. 1c. Partially accepted in finding of fact 7.

2. Partially accepted in finding of fact 7. 2a. Rejected as being unnecessary.

2b-c. Partially accepted in finding of fact 5. 2d. Partially accepted in finding of fact 4. 3a-b. Partially accepted in finding of fact 8.

4. Partially accepted in finding of fact 10. 5-6a. Partially accepted in finding of fact 3.

Note - Where a proposed finding has been partially accepted, the remainder has been rejected as being unnecessary, irrelevant, subordinate, not supported by the more credible and persuasive evidence, or a conclusion of law.

COPIES FURNISHED:

Honorable Tom Gallagher Insurance Commissioner The Capitol, Plaza Level

Tallahassee, FL 32399-0300

Bill O'Neil, Esquire Department of Insurance The Capitol, PL-11

Tallahassee, FL 32399-0300

Joseph D. Mandt, Esquire 612 Larson Building

Tallahassee, FL 32399-0300

James F. Spindler, Jr., Esquire 3858 North Citrus Avenue Crystal River, FL 34428

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.

Docket for Case No: 93-002244

Orders for Case No: 93-002244