STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF INSURANCE ) AND TREASURER, )

)

Petitioner, )

vs. ) CASE NO. 95-2363

) MARK EDWARD MCKINLEY, )

)

Respondent, )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its designated Hearing Officer, Joyous D. Parrish, held a formal hearing in the above-styled case on September 14, 1995, in Fort Lauderdale, Florida.

APPEARANCES

For Petitioner: Michael K. McCormick

Department of Insurance and Treasurer 612 Larson Building

Tallahassee, Florida 32399-0300 For Respondent: No Appearance

STATEMENT OF THE ISSUES

Whether the Respondent committed the violations alleged in the administrative complaint dated March 22, 1995; and, if so, what penalty should be imposed.

PRELIMINARY STATEMENT

This case began on March 22, 1995, when the Department of Insurance and Treasurer (Department) issued an administrative complaint against the Respondent, Mark Edward McKinley, that alleged eleven violations of the insurance code which stemmed from one factual statement. More specifically, the complaint alleged that as a general lines insurance agent Respondent had failed to remit monies owed, that a final judgment for same had been entered against Respondent, and that the judgment has remained unpaid for over thirty days.

Such conduct, it was alleged, demonstrated a lack of fitness or trustworthiness to engage in the business of insurance.

Respondent executed an election of rights denying the allegations dated April 18, 1995, and requested a formal hearing. The matter was then referred to the Division of Administrative Hearings for formal proceedings on May 8, 1995.

In response to the initial order entered in this matter, the parties filed a joint response that represented six hours would be needed to try the case.

Accordingly, a notice of hearing was entered on July 6, 1995, that scheduled the

hearing for September 14, 1995, beginning at "9:00 a.m., or as soon thereafter as can be heard." Both parties received this notice.

Due to travel constraints, the hearing officer did not arrive at the hearing location on September 14, 1995, until approximately 9:40 a.m. At that time, a note, reportedly from Respondent was discovered, marked for identification as Respondent's exhibit 1, which alleged "Was Here At 900 No Notice Of Change Signed In At 880 Please Call To Reschedule". The Respondent was then contacted by telephone and advised to return to the hearing location as the hearing was scheduled for six hours for that date and the matter would proceed. Further, the Respondent was advised that he would be granted until 11:30 a.m. to return.

At approximately 11:30 a.m. a note, marked for identification as Respondent's exhibit 2, was delivered to the hearing room. The hearing officer was requested to call "Marshall." That individual advised that Respondent could not return to the hearing location until 12:30 p.m. "Marshall" who did not represent himself to be an attorney was discourteous and argued whether Respondent should be required to attend the hearing. He was directed to advise Respondent to appear and that further delays would not be acceptable as it was undisputed the hearing had been scheduled for that date.

Finally, the hearing did not begin until after 12:00 p.m. and Respondent did not appear. The Respondent did not timely request a continuance in the case. Further, if the note left at the hearing location was intended to be such, it was denied on the record at the outset of the hearing. The transcript of the proceedings, pages 4 through 10, more specifically details the efforts made to assure Respondent's attendance at the hearing.

At the hearing, the Department presented the testimony of Agueda Bouza, an employee with the Department's division of rehabilitation and liquidation. The Department's exhibits numbered 1 through 13 were admitted into evidence. No evidence was presented on behalf of the Respondent.

The transcript of the proceedings was filed on September 28, 1995. The Department filed a proposed recommended order which has been considered in the preparation of this order. Specific rulings on the proposed findings of fact are included in the appendix at the conclusion of this order. The Respondent has not responded to the Department's proposed order.

The Respondent's request for a new hearing and different hearing officer, filed by the Department with the Division on October 11, 1995, is denied. The Respondent has not filed a proposed recommended order.

FINDINGS OF FACT

1. Respondent, Mark Edward McKinley, is licensed in Florida as a general lines insurance agent. At all times material to the allegations of the administrative complaint the Respondent was so licensed.

   
   

2. The Petitioner, Department of Insurance and Treasurer, has jurisdiction over insurance licenses issued in this state.

   
   

3. On or about December 9, 1991, an Order of Liquidation, Injunction and Notice of Automatic Stay was entered in the Circuit Court of the Second Judicial Circuit in and for Leon County, Florida, regarding the receivership of Great Oaks Casualty Insurance Company (Great Oaks).

4. Pursuant to such order all policies written with Great Oaks were cancelled effective January 9, 1992.

   
   

5. Subsequent to the order the Department conducted an audit of the Respondent's agent account. The audit consisted of a calculation of the unearned commissions on all Great Oaks policies issued through Respondent. Such unearned commissions were due and owed to the Department as the receiver.

   
   

6. On or about June 10, 1992, a statement of the amounts owed together with a letter outlining what the commission statement consisted of was mailed to the Respondent.

   
   

7. On or about December 22, 1992, after the Respondent failed to respond to the first letter, the Department mailed a first demand letter to the Respondent.

   
   

8. On or about July 2, 1993, when the Respondent failed to respond to the first demand letter, the Department issued, by certified mail, a demand letter to the Respondent requesting remittance of the monies owed to the receiver.

   
   

9. The certified receipt was returned to the Department, and it is found the Respondent received the demand letter of July 2, 1993.

   
   

10. The Respondent failed or otherwise refused to pay the amount owed. As a result, a Summary Order directing immediate delivery of funds was entered against the Respondent on December 21, 1993.

    
    

11. The Respondent failed to pay after entry of the Summary Order and a Final Order was issued on April 8, 1994.

    
    

12. The Respondent failed to pay the final judgment within thirty (30) days of entry of the judgment. To the date of hearing the Respondent has failed or otherwise refused to make payment on the amount owed.

    
    

    CONCLUSIONS OF LAW

    
    

13. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings.

    
    

14. Section 626.561, Florida Statutes, provides, in pertinent part:

    
    

    1. All premiums, return premiums, or other funds belonging to insurers or others received by an agent, solicitor, or adjuster in trans- actions under his license shall be trust funds so received by the licensee in a fiduciary capacity; and 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.

       
       

15. Section 626.611, Florida Statutes, provides, in pertinent part:

    
    

    The department shall deny, suspend, revoke, or refuse to renew or continue the license of any agent, solicitor, or adjuster or the permit of

    any service representation, supervising or managing general agent, or claims investigator, and it shall suspend or revoke the eligibility to hold a license or permit of any such person, if it finds that as to the applicant, licensee, or permittee any one or more of the following applicable grounds exist:

    * * *

    (7) Demonstrated lack of fitness or trust- worthiness to engage in the business of insurance.

    * * *

    (10) 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.

    * * *

    (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.

    
    

16. Section 626.621, Florida Statutes, provides, pertinent part:

    
    

    The department may, in its discretion, deny an application for, suspend, revoke, or refuse to renew or continue the license or appointment of any applicant, agent, title agency, solicitor, adjuster, customer service representative, managing general agent, or claims investigator, and it shall suspend or revoke the eligibility to hold a license or appointment of any such person, if it finds that as to the applicant, licensee, or appointee any one of more of the following applicable grounds exist:

    * * *

    (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.

    
    

17. Section 631.155, Florida Statutes, provides, in pertinent part:

    
    

    Premiums and unearned commissions which have been collected on behalf of an insurer by an agent, solicitor, agency or other entity for which the agent solicitor, agency or other entity has a duty to account to the receiver and to pay over amounts as may be due.

    * * *

    Compliance with this section and payment of sums determined to be owed by the court within

    30 days of judgment, or within other payment terms approved by the court, shall constitute requirements for continued licensure of a person holding a license under the Florida Insurance Code, and failure to comply with this section shall be sufficient grounds for the license revocation.

    
    

18. In this case, the Department has established, by clear and convincing evidence, that the Respondent failed to satisfy the judgment within thirty (30) days of its entry. The court documents and uncontroverted testimony of the Department's witness establish that a final judgment was entered against the Respondent and the Respondent failed to pay the judgment within thirty (30) days. Section 631.155, Florida Statutes, states that the failure to comply with this section shall be sufficient grounds for license revocation.

    
    

19. The Department has established, by clear and convincing evidence, that Respondent lacks the fitness and trustworthiness to engage in the business of insurance. As such, Respondent has violated Section 626.611(7), Florida Statutes. The Respondent was given ample notice to reach an agreement with the Department to pay back the money that is owed. He failed to do so. This failure to fulfill his fiduciary obligations coupled with his failure to abide by the insurance code demonstrate a lack of fitness and trustworthiness to engage in the business of insurance.

RECOMMENDATION

Based on the foregoing, it is, hereby, RECOMMENDED:

That the Department of Insurance and Treasurer enter a final order revoking Respondent's license as a general lines insurance agent.

DONE AND RECOMMENDED this 1st day of November, 1995, in Tallahassee, Leon County, Florida.

JOYOUS D. PARRISH

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 1st day of November, 1995.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 95-2363

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

1. Paragraphs 1 through 13 are accepted.

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

1. None submitted.

COPIES FURNISHED:

Mr. Bill Nelson State Treasurer and

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

Mr. Dan Sumner

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

Tallahassee, FL 32399-0300

Michael K. McCormick, Esq. Department of Insurance Division of Legal Services

412 Larson Building Tallahassee, FL 32399-0300

Mr. Mark Edward McKinley 2641 South University Drive Davie, FL 33314

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.

Docket for Case No: 95-002363

Orders for Case No: 95-002363