STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

JOSE MIGUEL DELGADO, )

)

Petitioner, )

)

vs. ) CASE NO. 94-4893

) DEPARTMENT OF INSURANCE ) AND TREASURER, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal administrative hearing was conducted in this case by video teleconference on January 4, 1995, before J. Stephen Menton, a duly designated Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Julio Gutierrez, Esquire

2225 Coral Way

Miami, Florida 33145

For Respondent: Allen R. Moayad, Esquire

Division of Legal Services 612 Larson Building

Tallahassee, Florida 32399-0300 STATEMENT OF THE ISSUES

The issue in this case is whether Petitioner's application for licensure as a Limited Surety Agent should be approved.

PRELIMINARY STATEMENT

By letter dated July 20, 1994, the Department of Insurance and Treasurer (the "Department") notified Petitioner, Jose Miguel Delgado, that his application for licensure as a Limited Surety Insurance Agent (Bail Bondsman) was denied. The basis for the denial was Petitioner's alleged criminal record which included prior felony conviction(s). Petitioner requested a formal hearing on the denial. The case was referred to the Division of Administrative Hearings which noticed and conducted a hearing pursuant to Section 120.57(1), Florida Statutes. The hearing was conducted via video teleconference with the Hearing Officer and counsel for Respondent in Tallahassee. Petitioner, his attorney and all witnesses were in Miami, Florida with a court reporter who recorded the proceedings.

The Notice of Hearing and Amended Notice of Hearing incorrectly designated the Department as the Petitioner. At the commencement of the hearing, the parties were advised that, since Jose Miguel Delgado was an applicant seeking

licensure, he had the burden of proof in this proceeding and the style of the case has been modified to reflect that Jose Miguel Delgado is the Petitioner.

Before the hearing began, the parties agreed to stipulate to a number of underlying facts and documents. As a result of that stipulation, the following documents were accepted into evidence as Respondent's Exhibits: Respondent's Exhibit B was a State of Florida charging document in Case Number 80-105, charging Petitioner with trafficking in illegal substances; Respondent's Exhibit C was an Order of Judgment of Guilt, placing Petitioner on probation in Case Number 80-105; Respondent's Exhibit D was a State of Florida Indictment in Case Number 81-1191 CFG, charging Petitioner with violating Florida's RICO Act; Respondent's Exhibit E was an Order of Judgment of Guilt, placing Petitioner on probation in Case Number 81-1191 CFG; Respondent's Exhibit F was a United States Indictment in Case Number 83-6033-CR-EPS, charging Petitioner with conspiracy to import illegal drugs into the United States of America; Respondent's Exhibit G was an Order of Judgment of Guilt placing Petitioner on probation in Case Number 83-6033-CR-EPS; Respondent's Exhibit I was a United States Indictment in Case Number 83-6038-CR-NCR, charging Petitioner with intent to import and distribute illegal drugs into the United States of America; Respondent's Exhibit J was an Order of Judgment of Guilt, placing Petitioner on probation in Case Number 83- 6038-CR-NCR; and Respondent's Exhibit K was Respondent's Pre-Plea Agreement in Case Numbers 83-6033-CR-EPS and 83-6038-CR-NCR.

Petitioner testified on his own behalf and also presented the testimony of State Senator Roberto Casas, Elizabeth Delgado, Juan Huarte and Jose M. Delgado. Petitioner offered eight (8) exhibits into evidence, all of which were accepted. Petitioner's Exhibit 1 was an Order Terminating Probation in Case Number 81-1191 CF-G; Petitioner's Exhibit 2 was a Notice of Termination of Probation and Discharge in Case Number 83-6038 CR; Petitioner's Exhibit 3 was a Notice of Termination of Probation and Discharge in Case Number 83-6033 CR; Petitioner's Composite Exhibit 4 was comprised of six letters of recommendation; Petitioner's Exhibit 5 was a May 19, 1989 Certificate of Restoration of Civil Rights; Petitioner's Exhibit 6 was a May 23, 1990 Certificate of Restoration of Civil Rights; Petitioner's Exhibit 7 was a letter of recommendation; and Petitioner's Exhibit 8 was a letter of recommendation. Respondent's relevancy objections to all of Petitioner's Exhibits were overruled. In addition, Respondent's hearsay objections to Petitioner's Exhibits 4, 7 and 8 were overruled under the authority of Section 120.58(1), Florida Statutes.

At Petitioner's request, official recognition has been taken of Sections 648.32(f), 648.45(b), (e) and (k), 112.011(1)(b), 775.16 and 893.11, Florida

Statutes. At Respondent's request, official recognition has been taken of Sections 648.34(2), 648.34(6), 648.49, Florida Statutes.

A transcript of the proceedings has been filed. At the conclusion of the hearing, a schedule was established for filing proposed findings of fact and conclusions of law. Petitioner submitted a "Report of Referee" which contained nine proposed findings of fact. Respondent submitted a proposed recommended order. A ruling on each of the parties' proposed findings of fact is included in the Appendix to this Recommended Order.

FINDINGS OF FACT

Based upon the oral and documentary evidence adduced at the Final Hearing and the entire record in this proceeding, the following findings of fact are made:

1. On March 3, 1994 Petitioner submitted to the Department an application for licensure as a Limited Surety Agent (Bail Bondsman).

   
   

2. In a Denial Letter dated July 20, 1994, the Department notified Petitioner that his application for licensure was denied. The basis for the Department's denial of Petitioner's application was Petitioner's past felony convictions.

   
   

3. The evidence established that on or about December 4, 1980, Petitioner was charged in the Circuit Court for the Twelfth Judicial Circuit of Florida, Case Number 80-105 (the "First State Case"), with trafficking in illegal drugs and the use of a firearm during the commission of a felony in violation of Sections 893.135 and 790.07, Florida Statutes.

   
   

4. On June 5, 1981, Petitioner pled no contest in the First State Case to trafficking in excess of two thousand (2,000) pounds, but less than ten thousand (10,000) pounds of cannabis. Petitioner was fined and placed on probation for ten (10) years.

   
   

5. On or about June 14, 1981, Petitioner was charged in the United States District Court, Southern District of Florida, Case Numbers 83-6033-CR-EPS and

   83-6038-CR-NCR (the "Federal Cases"), with five felony counts of possession with intent to distribute illegal drugs and conspiracy to import illegal drugs into the United States of America, in violation of Title 21, Sections 841(a)(1), 846, 952(a), 960(a), 963, and 843(b), United States Code.

   
   

6. On or about November 5, 1981, Petitioner was charged in the Circuit Court for the Twentieth Judicial Circuit of Florida, Case Number 81-1191 CFG (the "Second State Case") with violation of the Florida Racketeer Influence and Corrupt Organization Act ("RICO"), Section 943.462, Florida Statutes.

   
   

7. Although the exact timing is not clear, at some point after his arrest, Petitioner began cooperating with authorities which led to plea bargains and a sentence which did not include any jail time.

   
   

8. On April 4, 1984, Petitioner pled guilty to one count in each of the Federal Cases to attempt and conspiracy to import marijuana and methaqualaudes into the United States of America.

   
   

9. As a result of his plea in the Federal Cases, Petitioner was fined and placed on 5 years probation.

   
   

10. On April 6, 1984, Petitioner pled guilty in the Second State Case, was fined $7,500.00 and placed on probation for fifteen (15) years. This plea was negotiated as part of the plea in the Federal Cases.

    
    

11. Petitioner's probation from the First State Case was terminated May 20, 1988.

    
    

12. Petitioner's probation from the Federal Cases was terminated on April 21, 1989 and September 11, 1989.

    
    

13. Petitioner's civil rights were restored pursuant to Executive Orders of the Office of Executive Clemency dated May 19, 1989 and May 23, 1990. It is not clear from the record if the Executive Orders constitute a "full pardon" as suggested by counsel for Petitioner at the hearing in this matter.

14. Petitioner down plays his role in the elaborate criminal scheme that led to his arrests and convictions. He suggests that all of the charges were related to the same scheme. Insufficient evidence was presented to reach any conclusions regarding the underlying criminal activity and/or Petitioner's exact involvement.

    
    

15. Petitioner has been very active in community affairs since his convictions. He has apparently been a good family man and claims to have rehabilitated himself.

    
    

16. Subsequent to his conviction, Petitioner and three other investors started a bail bond business. Petitioner claims he did not play an active role in the business. However, when the Department learned of his involvement, it required Petitioner to terminate any affiliation with the company. Petitioner's wife currently owns a bail bond company. Petitioner operates a "court services" business out of the same building where his wife's bail bond business operates. No evidence was presented of any improper involvement by Petitioner in his wife's business.

    
    

    CONCLUSIONS OF LAW

    
    

17. The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this proceeding. Chapters 624, 648, and Section 120.57(1), Florida Statutes.

    
    

18. The burden of proof in a license denial case is on the applicant to show entitlement to the license. Florida Department of Transportation v. J.W.C. Company, Inc., 396 So.2d 778 (Fla. 1981).

    
    

19. There is no dispute that Petitioner has been convicted of felonies in violation of the Florida Statutes and United States Code. The crimes of which he was convicted involve the importation of drugs and involve moral turpitude.

    
    

20. Section 648.34(2)(f) provides that to qualify as a bail bondsman it must affirmatively appear at the time of application that "[t]he applicant is a person of high character . . . and has not been convicted of or pleaded guilty or no contest to a felony, a crime involving moral turpitude, or a crime punishable by imprisonment of 1 year or more under the law of any state, territory, or country, whether or not a judgment of a conviction has been entered." Because of the Petitioner's criminal felony convictions, the application of Section 648.34(2)(f), Florida Statutes, requires that Petitioner's application for licensure be denied.

    
    

21. In Calhoun v. Department of Health and Rehabilitative Services, 500 So.2d 674 (Fla. 3rd DCA 1987), the court held that [t]here is clearly a certain moral unfitness which accompanies a felony conviction, and the state, without question, may rely on this unfitness in denying a convicted felon certain rights and privileges . . . ." Calhoun, at 678.

    
    

22. Petitioner argues that, pursuant to Section 112.011, Florida Statutes, the restoration of his civil rights by orders of the Governor entitles him to receive a limited surety license. However, Section 648.34(6) specifically provides that "[t]he provisions of [Section] 112.011, do not apply to bail bondsmen or runners or to applicants for licensure as bail bondsmen or runners."

    
    

23. Petitioner's convictions are a sufficient basis to conclude that Petitioner lacks the requisite fitness and trustworthiness for licensure. In

    Natelson v. Department of Insurance, 454 So.2d 31 (Fla. 1st DCA 1984), a licensee had pled guilty to charges involving the unconsummated conspiracy to distribute and possess with intent to distribute methaqualone, hashish and cannabis. In Natelson, the court held that "the department's construction of the term lack of fitness or trustworthiness to engage in the business of insurance as including conviction of criminal conspiracy to traffic in illicit drugs was well within the range of possible constructions." Natelson, at 32.

    
    

24. The criminal felonies of which the Petitioner has been convicted are classified as felonies involving moral turpitude. In Tullidge v. Hollingsworth,

    146 So. 660 (Fla. 1933), the Florida Supreme Court stated that "[m]oral turpitude involves the idea of inherent baseness or depravity in the private social relations or duties owed by man to man or by man to society.... It has also been defined as anything done contrary to justice, honesty, principle, or good morals . . . ." Distribution of illegal drugs has been recognized 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 the court concurred with the substantial case law establishing moral turpitude in cases involving distribution of controlled substances. Pearl, at 192.

    
    

25. Petitioner was convicted of felony crimes of trafficking in excess of two thousand (2,000) pounds, but less than ten thousand (10,000) pounds of cannabis, possession with intent to distribute illegal drugs and conspiracy to import illegal drugs into the United States of America. He was also convicted of violating the Florida RICO Act.

    
    

26. Petitioner claims that the Department has licensed some individuals as Limited Surety Agents even though they had been convicted of crimes similar to those that Petitioner was convicted. No evidence was presented to establish this contention.

    
    

27. In summary, a review of the applicable statutory provisions indicates that there is no discretion to approve Petitioner's application for licensure pursuant to Sections 648.34(2)(f) and 648.34(6), Florida Statutes. The clear legislative intent is that an individual convicted of a felony or a crime of moral turpitude should not be licensed as a Limited Surety Agent. In certain circumstances, a pardon and/or the restoration of civil rights may give a licensing agency discretion to determine whether an applicant who has been convicted of a felony should be disqualified from obtaining a license from the state. See, Calhoun v. Dept. of Health and Rehabilitative Services, 500 So.2d 674 (Fla. 3d DCA 1987). However, the legislature has specifically provided that the provisions of Section 112.011, Florida Statutes, which governs the restoration of civil rights, are not applicable to an applicant for licensure as bail bondsman. The Florida Supreme Court in Sandlin v. Criminal Justice Standards Training Commission, 531 So.2d 1344 (Fla. 1988) implied that such a blanket exclusion is an unconstitutional infringement on the executive's pardoning power, the Court did not specifically address a statutory provision such as Section 648.34(6), Florida Statutes. That statute can not be invalidated in this administrative proceeding.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Insurance and Treasurer enter a Final Order denying Petitioner's application for licensure as a Limited Surety Agent.

DONE AND RECOMMENDED this 2nd day of August, 1995, in Tallahassee, Leon County, Florida.

J. STEPHEN MENTON 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 2nd day of August, 1995.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 94-4893

Rulings on the proposed findings of fact submitted by the Petitioner:

1. Subordinate to findings of fact 4 through 10.

2. Subordinate to findings of fact 13.

3. Rejected as unnecessary.

4. Adopted in substance in findings of fact 1.

5. Adopted in substance in findings of fact 2.

6. Adopted in the Preliminary Statement.

7. Rejected as vague and unnecessary.

8. Subordinate to findings of fact 14 and 15.

9. Subordinate to findings of fact 14 and 15.

Rulings on the proposed findings of fact submitted by the Respondent:

1. Adopted in substance in findings of fact 1.

2. Adopted in substance in findings of fact 2.

3. Adopted in substance in findings of fact 2 through 10.

4. Subordinate to findings of fact 14.

5. Rejected as argumentative and unnecessary.

COPIES FURNISHED:

Bill Nelson State Treasurer

and Insurance Commissioner The Capitol, Plaza Level Tallahassee, FL 32399-0300

Dan Sumner

Acting General Counsel Department of Insurance The Capitol, PL-11 Tallahassee, FL 32399

Julio Gutierrez, Esq. 2225 Coral Way

Miami, FL 33145

Allen R. Moayad, Esq. Florida Department of Insurance and Treasurer 612 Larson Building

200 E. Gaines Street Tallahassee, FL 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 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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DISTRICT COURT OPINION

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NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION

AND, IF FILED, DISPOSITION OF.

JOSE MIGUEL DELGADO, IN THE DISTRICT COURT OF APPEAL OF FLORIDA

Appellant, THIRD DISTRICT

JULY TERM, A.D. 1996

vs.

CASE NO. 96-457

DEPARTMENT OF INSURANCE, DOAH CASE NO. 94-4893

Appellee.

/ Opinion filed October 23, 1996.

An appeal from the Department of Insurance and Treasurer. Quinon & Strafer and G. Richard Strafer, for appellant.

James A. Bossart, for appellee.

Before BARKDULL, NESBITT, and JORGENSON, JJ.

PER CURIAM.

Affirmed.

MANDATE

DISTRICT COURT OF APPEAL OF FLORIDA THIRD DISTRICT

JOSE MIGUEL DELGADO

vs. DCA No. 96-457

DOAH Case No. 94-4893

DEPARTMENT OF INSURANCE and TREASURER

This cause having been brought to this Court by appeal, and after due consideration the Court issued its opinion;

YOU ARE HEREBY COMMANDED that such futher proceedings be had in said cause in accordance with the opinion of ths Court attached hereto and incorporated as part of this order, and with the rules of procedure and laws of the State of Florida

Case No. 94-4893 DEPARTMENT

WITNESS the Honorable ALAN R. SCHWARTZ

Chief Judge of said District Court and seal of said Court at Miami, this 8th day of NOVEMBER, 1996.

(seal) Louis J. Spallone

Clerk, District Court of Appeal of Florida, Third District

Docket for Case No: 94-004893

Orders for Case No: 94-004893