STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF INSURANCE AND )

TREASURER, )

)

Petitioner, )

)

vs. ) CASE NO. 93-2589

)

GARY LEE SHEPHERD, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, James E. Bradwell held a formal hearing in this case on March 7, 1994, in Tallahassee, Florida.

APPEARANCES

For Petitioner: David D. Hershel, Esquire

Department of Insurance and Treasurer Division of Legal Services

612 Larson Building

Tallahassee, Florida 32399-0333 For Respondent: (no appearance) /1

STATEMENT OF THE ISSUES

Whether or not Respondent engaged in misconduct in the insurance business as is more particularly set forth in the Administrative Complaint filed herein signed December 7, 1992.

PRELIMINARY STATEMENT

By its Administrative Complaint filed herein, Petitioner seeks to impose disciplinary sanctions against Respondent's license as a life and health and general lines agent. Respondent disputed the allegations of the Administrative Complaint and requested a formal hearing. The matter was thereafter noticed for hearing, but was twice continued at Respondent's behest.

On December 8, 1993, Petitioner served on Respondent its first set of interrogatories and request for admissions. Respondent failed to file any response or objection to either the request for admissions or the interrogatories.

On January 21, 1994, Petitioner moved that the undersigned Hearing Officer make findings of fact based on Respondent's failure to respond to Petitioner's request for admissions.

On February 1, 1994, an Order to Show Cause was entered herein allowing Respondent to file a written response delineating why Petitioner's Motion to Make Findings of Fact due to Respondent's Failure to Respond to Petitioner's Requests for Admissions, should not be granted. Respondent failed to respond to the Order to Show Cause, and on February 22, 1994, an Order was entered herein deeming admitted by Respondent those matters set forth in Petitioner's request for admissions (first set). Based on the Order to Show Cause and the Order entered herein on February 22, 1994, Petitioner also requested at hearing, that in addition to the Order on the admissions, that a recommended order be entered based on the matters deemed admitted. There was no testimony or evidence introduced at the final hearing. Likewise, the parties did not file Proposed Recommended Orders.

As noted, Respondent did not appear at the hearing; however, he did call later on during the day of hearing, March 7, 1994, requesting a further continuance, which was denied. Based on the pleadings and other evidence of record, including the discovery request and the Order to Show Cause, I hereby make the following relevant:

FINDINGS OF FACT

1. Respondent is currently licensed in this state as a life, health and a general lines agent.

   
   

2. At all times relevant to the dates and occurrences referred to in the administrative Complaint in this matter, filed December 7, 1992, Respondent was licensed in this state as a life and health agent and a general lines agent.

   
   

3. At all times relevant in this matter, Respondent was a corporate director of Gary Shepherd and Associates, Inc., a general lines insurance agency located in Panama City, Florida, (hereinafter "Associates").

   
   

4. Associates was, at all times relevant in this matter, incorporated under and existing by virtue of the laws of the State of Florida.

   
   

5. Pursuant to Section 626.734, Florida Statues, as a general lines agent and corporate director of Associates, Respondent was and remains personally and fully liable and accountable for any wrongful acts, misconduct, or violation of any provision of the Florida Insurance Code which Respondent, or others acting under his supervision and control, committed while acting on behalf of Associates.

   
   

6. At all times relevant in this matter, and pursuant to Section 626.561(1), Florida Statutes, all premiums, return premiums, or other funds belonging to others received by Respondent constituted trust funds, received in a fiduciary capacity, and Respondent was and remains obligated to account for and pay the same to the insurer, insured, or other persons lawfully entitled thereto in the applicable regular course of business.

   
   

7. At all times relevant in this matter, Respondent did maintain signatory authority over account no. 0464000168823 at Sun Commercial Bank in Panama City, Florida, with said account being held in the name of Gary L. Shepherd d/b/a Gary Shepherd and Associates.

   
   

8. On or about July 31, 1991, Respondent did solicit and procure from Craig Cook of Panama City, Florida, a renewal policy (no. 7000244) to be issued by American Surety and Casualty Company to provide coverages for marine

   properties owned by Craig Cook. In conjunction with the procurement of said renewal policy, Respondent received from Craig Cook his $186.00 premium down payment in the form of Craig Cook's personal check no. 672 drawn on account no. 0130000353528 at Peoples First Savings & Loan in Panama City Beach, Florida.

   
   

9. On or about August 1, 1991, Respondent deposited the aforementioned

   $186.00 premium payment check into the agency bank account of Associates as more fully described in paragraph seven above.

   
   

10. Respondent thereafter failed to forward to American Surety and Casualty Company the aforementioned policy renewal for Craig Cook and accompanying premium payments as required.

    
    

11. Respondent thereafter altered and submitted to Sunshine State Bank in Fort Walton Beach, Florida, a certificate of insurance which falsely indicated that Craig Cook had coverage in place for the aforementioned marine properties.

    
    

    CONCLUSIONS OF LAW

    
    

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

    
    

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

    
    

14. The authority of the Petitioner is derived from Chapter 626, Florida Statutes.

    
    

15. Respondent, a licensed life and health and general lines insurance agent, is subject to the disciplinary provisions of Chapter 626, Florida Statutes.

    
    

16. Respondent's acceptance of a $186.00 premium down-payment from Craig Cook on July 31, 1991, which was not thereafter timely forwarded to American Surety and Casualty Company amounted to an act of misconduct by Respondent, and his later alteration and submission to Sunshine State Bank in Fort Walton Beach, Florida, a certificate of insurance which falsely indicated that Cook had coverages in place for certain marine properties, were acts of misconduct within the purview of subsections 626.611(5),(7),(9), and (13), Florida Statutes. Respondent thereby also engaged in a derivative violation of subsection 626.621(2), Florida Statutes.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that:

Petitioner enter a Final Order revoking Respondent's licenses as a life and health and general lines agent.

RECOMMENDED in Tallahassee, Leon County, Florida, this 29th day of April, 1994.

JAMES E. BRADWELL

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 29th day of April, 1994.

ENDNOTES

1/ Although duly noticed of the hearing, Respondent, or a representative on his behalf, did not appear at the hearing to contest or otherwise refute the allegations of the Administrative Complaint.

COPIES FURNISHED:

David D. Hershel, Esquire Division of Legal Services 612 Larson Building

Tallahassee, Florida 32399-0333

Gary Lee Shepherd 2802 Jamedon Drive

Panama City, Florida 32405-3440

Tom Gallagher

State Treasurer and Insurance Commissioner

The Capitol, Plaza Level Tallahassee, Florida 32399-0300

Bill O'Neil General Counsel

Department of Insurance and Treasurer

The Capitol, PL-11

Tallahassee, Florida 32399-0300

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to the 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 consult with the agency that will issue the Final Order in this case concerning their 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.1 Although duly notice of the hearing, Respondent or a representative on his behalf, did not appear at the hearing to contest or otherwise refute the allegations of the Administrative Complaint.

Docket for Case No: 93-002589

Orders for Case No: 93-002589