STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF INSURANCE, )

)

Petitioner, )

)

vs. ) CASE NO. 93-3306

)

RANDY CLINTON LATTA, )

)

Respondent. )

)

RECOMMENDED ORDER

A hearing was held in this case in Orlando, Florida on October 22, 1993, before Arnold H. Pollock, a Hearing Officer with the Division of Administrative Hearings.

APPEARANCES

For the Petitioner: William Childers, Esquire

Division of Legal Services 612 Larson Building

Tallahassee, Florida 32399-0300

For the Respondent: Randy Clinton Latta, pro se

2114 Karolina

Winter Park, Florida 32789 STATEMENT OF THE ISSUES

The issue for consideration in this case is whether Respondent's licenses as a life and health (debit) agent, a life and health agent, a general lines agent - limited to industrial fire, and as a health insurance agent in Florida should be disciplined because of the allegations of misconduct outlined in the Administrative Complaint filed herein.

PRELIMINARY MATTERS

By Administrative Complaint dated January 6, 1993, Tom Gallagher, Insurance Commissioner for the State of Florida, alleged that Respondent had failed to account for and remit to his company all premiums collected and received on its behalf, in violation of various provisions of Chapter 626, Florida Statutes, and sought to discipline Respondent's licenses because of that. On January 18, 1993, (the form indicates 1992 but this is deemed to be in error), Respondent formally disputed the Department's factual allegations and requested a formal hearing.

The matter was thereafter forwarded to the Division of Administrative Hearings on June 14, 1993 where by Notice of Hearing dated July 12, 1993, issued after receipt of the parties' responses to the Initial Order, Hearing Officer

Daniel Manry set the matter for hearing in Orlando on October 22, 1993. The case was subsequently heard as scheduled by the undersigned to whom it had been transferred in the interim.

At the hearing, Petitioner presented the testimony of Russell Hickenbottom, Orlando District Manager for United Insurance Company of America, and introduced Petitioner's Exhibits 1 - 7 and 9 - 11. Respondent testified in his own behalf and introduced Respondent's Exhibit A.

No transcript was presented and neither party submitted Proposed Findings of Fact even though the Hearing Officer waited more than the allowed time for filing before preparing this Recommended Order.

FINDINGS OF FACT

1. At all times pertinent to the allegations herein, Respondent, Randy Clinton Latta, was licensed by the Insurance Commissioner of the State of Florida as a life and health, (debit), agent; a life and health agent; a general lines agent limited to industrial fire; and a health insurance agent. He was employed as a sales representative by the United Insurance Company of America, (United). The Petitioner, Department of Insurance, was the state agency responsible for the licensing and regulation of insurance agents in Florida.

   
   

2. When Respondent was hired by United, he was issued a copy of the company's compensation plan brochure which outlined the way the agent was compensated for sales on the company's behalf and the agent's responsibilities for remitting premium collections to it. Respondent acknowledged receipt and acceptance of the terms of the plan on May 6, 1990. At page 22, the brochure provides:

   
   

   Any money you receive on behalf of United must be properly accounted for and promptly paid to United. All money must be deposited with the Company on or before the weekly settlement day.

   United may, at any time, audit your books and accounts.

   Books or records that contain entries made by you that show you collected money for United are conclusive evidence that you have collected the money.

   
   

3. On March 19, 1992, United terminated Respondent from employment with the company because an audit of his and the company's records regarding his accounts reflected a deficiency. The records indicated that he had collected but not remitted to the company the sum of $1,655.48. Offset against that figure was the sum of $324.07 representing credits to his account and a deposit he made. The initial net shortage was $1,331.41.

   
   

4. In addition to the initial shortage, supplemental field audits reflected two additional shortages of $27.43 and $29.79 which created a total shortage of $1,388.63. From that amount was subsequently deducted Respondent's bond of $258.34, leaving a final debt to the company of $1,100.50.

   
   

5. Respondent admits to collecting some of the money claimed to be owed by him but not all. He asserts he has requested proof of his obligation from the company on several occasions but has not been given what he considers to be

   adequate evidence of his debt and wrongdoing. He claims to have also asked the office of the Insurance Commissioner for all supporting documentation and the premium receipt books relating to his accounts without success.

   
   

6. He claims he resigned from employment with United on March 16, 1992, (the form shows involuntary termination as well as voluntary), because he was not satisfied with the conditions of employment. At that time, he was advised there was a deficiency in his accounts but it was not proven to his satisfaction. Respondent claims not to know if his books were in error or not. He contends that his letter to the company of May 11, 1992, in which he refers to "my bookkeeping error" was not an admission of error but merely acknowledges the company's allegation of error.

   
   

7. Respondent presented no records of the funds he collected or what funds he remitted to the company. He claims there was no requirement he keep copies of the forms he submitted to the company, and, therefore, he has no documentary evidence to support his claims of compliance with the requirements of the remittance provision. In light of the above, there is no reasonable alternative to accept the company's figures as to the amount owed.

   
   

8. Mr. Latta was subsequently charged with grand theft in regard to the shortages alleged. Though he claims he plead nolo contendere to the charge, the court document introduced into evidence at this hearing reflects he plead guilty and was placed on probation for 2 years on condition of paying restitution. He has been meeting the terms of his probation by making the required restitution payments to the court for transmittal to the company.

   
   

   CONCLUSIONS OF LAW

   
   

9. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter in this case. Section 120.57(1), Florida Statutes.

   
   

10. Petitioner seeks to discipline Respondent's licenses as an insurance agent in various lines because of his alleged failure to remit to the company all monies collected by him on its behalf. If proven, this constitutes a violation of Section 626.561(1). If proven, the misconduct may also constitute violations of other subsections of Chapter 626 including utilizing his license to circumvent the requirements or prohibitions of the insurance code, (626.611(4); a demonstrated unfitness to engage in the insurance business, (626,611(7); a lack of reasonably adequate knowledge and technical competence to engage in the business authorized by the license, (626.611(8); fraudulent or dishonest practices, (626.611(9); misappropriation, conversion or unlawful withholding of money belonging to insurers, (626.611(10); willful violation of rules of the department or provisions of the insurance code, (626.621(2); violation of the insurance code or any law applicable to the business of insurance, (626.621(2); and engaging in unfair or deceptive acts or practices, (626.621(6).

    
    

11. In order to succeed in its prosecution, the Department must establish the Respondent's guilt of the misconduct alleged by clear and convincing evidence. Ferris v. Turlington. 510 So.2d 292 (Fla. 1987).

    
    

12. The evidence of record clearly and convincingly shows Respondent collected money from the policy holders on his debit, as alleged, and thereafter failed to fully account for the funds as required by both the company compensation brochure and the Florida Statutes. His actions constitute a clear

    violation of those provisions of the insurance code which require strict accountability of premiums; demonstrate a lack of fitness and trustworthiness to engage in the insurance business; fraud or, at least, dishonest practices; conversion and unlawful withholding of money belonging to his company; and a willful violation of the insurance code. It cannot be said, however, that the evidence supports unfair methods of competition or unfair or deceptive acts or practices, since this provision would appear to relate more to relations with customers or other insurance agents. By the same token, it cannot be said the evidence indicates any lack of knowledge or technical competence in the Respondent.

    
    

13. Respondent was unable to present any evidence, other than his own denials, that the evidence of his misconduct presented by the Department and the company was incorrect or inaccurate. Under the circumstances of this case, it is impossible to conclude other than that Respondent should not be permitted to engage in the insurance business in any form.

RECOMMENDATION

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

RECOMMENDED that Respondent, Randy Clinton Latta's licenses as a life and health (debit) agent; a life and health agent; a general lines agent - limited to industrial fire, and a health insurance agent in Florida be revoked.

RECOMMENDED this 10th day of November, 1993, in Tallahassee, Florida.

ARNOLD H. POLLOCK, 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 10th day of November, 1993.

COPIES FURNISHED:

William C. Childers, Esquire Division of Legal Services 612 Larson Building

Tallahassee, Florida 32399-0300

Randy Clinton Latta 2114 Karolina

Winter Park, Florida 32789

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 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 consult with the agency which will issue the Final Order in this case concerning its rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency which will issue the Final Order in this case.

Docket for Case No: 93-003306

Orders for Case No: 93-003306