DOAH Case No. 98-3712
CHARITA MICHELLE STRODE DOI Case No. 23534-98-AG
THIS CAUSE came on before the undersigned Treasurer of the State of Florida, acting in his capacity as Insurance Commissioner, for consideration and final agency action. On or about January 22, 1998, Charita Michelle Strode (hereinafter referred to as "Petitioner") executed and submitted an application to the Department of Insurance (hereinafter referred to as "Department"), for licensure as a Life and Variable Annuity and Health Insurance Agent. On May 5,1998, the Department issued a letter denying Petitioner's application for licensure.
Thereafter, on July 6,1998, the Department issued an Amended Denial Letter to Petitioner which indicated that she did not meet the pre-licensing requirements set forth in Sections 626.611 (1) and (7), and 626.785 (1), Florida Statutes. The Petitioner challenged the Department's decision and requested a hearing and on August 20, 1998, the case was forwarded to the Division of Administrative Hearings and assigned to Administrative Law Judge Carolyn S. Holifield. The formal administrative hearing was held on November 16,1998, in Tampa, Florida.
After consideration of the record and argument presented at hearing, the ALJ issued the Recommended Order in this case on February 16, 1999 (Attached as Exhibit A). The ALJ recommended that the Department issue the Petitioner a license as a Life and Variable Annuity and Health Insurance Agent. The Department timely filed exceptions to the Findings of Fact and Conclusions of Law in the Recommended Order, which are addressed below.
Section 120.57(1)(1), Florida Statutes (1998 Supplement), reads in part:
The agency may not reject or modify the findings of fact unless the agency first determines from a review of the entire record, and states with particularity in the order, that the findings of fact were not based upon competent substantial evidence or
that the proceedings on which the findings were based did not comply with essential requirements of law.
This standard does not allow the agency to reweigh the evidence or reject findings of fact if they are based on competent substantial evidence. Furthermore, it is the Administrative Law Judge's function to consider all the evidence presented, resolve conflicts, judge credibility of witnesses, draw permissible inferences from the evidence, and reach ultimate findings of fact based on competent, substantial evidence. Heifetz v. Department of Business Regulation, 475 So.2d 1277 (Fla. 1st DCA 1985).
In Gruman v. State, 379 So.2d 1313 (Fla. 2nd DCA 1980), the court states: The findings of a trier of fact are entitled to as much weight and respect as the verdict of a jury. Hamilton v.
Title Insurance Agency of Tampa, Inc. 338 So.2d 569 (Fla. 2d DCA 1976). Also, the agency may not reweigh the evidence, even if conflicting, where there is competent evidence in the record to support the findings of the Administrative Law Judge AT&T Communications v Marks 515 So 2d 741 (Fla 1987).
The Department first excepts to Finding of Fact number 5 of the Recommended Order. The Department alleges that the ALJ erred in finding that the Petitioner was a vice-president of Nations Bank. Although there was conflicting testimony at the hearing, including the testimony of bank officials that the Petitioner was never named a vice-president, the record contains competent substantial evidence which arguably supports the ALJ's finding that the Petitioner had been promoted or named a Vice- President as well as a banking center manager. It is within the purview of the ALJ to weigh the conflicting evidence and make a determination as to the credibility and interpretation of the facts presented, as recited earlier there was sufficient evidence presented to support the ALJ's finding. Therefore, this exception is rejected.
The Department excepts to Finding of Fact number 9 of the Recommended Order. The Department apparently does not dispute the correctness of the ALJ's finding, but questions the court's failure to find that due to the Petitioner's advice, eight to ten people lost the entire amount of their investments in the H.O.M.E. Program. The ALJ had the opportunity to consider all the facts presented at the hearing. It is the ALJ's function to consider all the evidence presented, resolve conflicts, judge the credibility of witnesses, draw permissible inferences from the evidence, and reach ultimate findings of fact based on competent and substantial evidence. Heifetz v. Department of Business Regulation, supra. It appears from the transcript, the ALJ has fairly considered the evidence and the record of the
administrative proceeding is supported by competent substantial evidence and therefore the Department's exception is rejected.
The Department excepts to the Finding of Fact number 15 of the Recommended Order. The Department apparently does not dispute the correctness of the ALJ's finding, but disagrees with the court's failure to establish that the Petitioner took no remedial steps following her confrontation with the President of the H.O.M.E. Program. Weighing the testimony presented at the hearing and making inferences based on the testimony are clearly within the realm of the ALJ's permissible function. The record of the proceeding contains competent substantial evidence to support the ALJ's findings in the Recommended Order. For this reason, the Department's exception is rejected.
The Department excepts to Findings of Fact number 20,
21 and 22 of the Recommended Order. The Department disputes the accuracy of the ALJ's finding concerning the verbal agreement between Ms. McSweeney, a Nations Bank representative, and the Petitioner. The ALJ found, after listening to the testimony and assessing the credibility of the witnesses that the agreement called for no check activity in contrast to the no debit activity as alleged by the Department. Although the testimony is conflicting and it would have been illogical for the bank to permit the type of withdrawal that the Petitioner made as it would be inconsistent with the bank's concerns, i.e., that monies be available to cover chargebacks, it is still within the purview of the ALJ to weigh the conflicting evidence and make a determination as to the credibility and interpretation of the facts presented. Although it may not be the best view, the record contains competent substantial evidence which supports the ALJ's finding that arguably there may not have been a full understanding of the agreement between the parties, and therefore that no intentional flouting of the bank's procedures occurred by Petitioner. For this reason, the Department's exception is rejected.
The Department excepts to Finding of Fact number 26 of the Recommended Order. The Department appears to be highlighting favorable contrary evidence to rebut the ALJ's finding that the Petitioner's interpretation of the agreement was the correct version of events. The Petitioner testified that her understanding of the agreement only precluded the H.O.M.E. Program from writing checks to third parties from the program's account, whereas bank officials testified that the understanding was that the account should remain open for the express purpose of receiving two electronic deposits. Although the bank's testimony appears more logical, the record arguably contains competent substantial evidence which supports the ALJ's finding. Accordingly, the Department's exception is rejected.
The Department excepts to Finding of Fact number 30 of the Recommended Order. The Department states that the ALJ's finding does not accurately reflect the evidence presented at the hearing. Specifically, the Department's witness, Ms. Shumate, testified that she told the Petitioner the H.O.M.E. account was a no-debit account. The Petitioner testified that her understanding of the conversation was that there could be no check activity to third parties, but she was not precluded from withdrawing funds for daily operations. Although Petitioner's testimony is less than compelling and inconsistent with the reasonable expectations of the bank, it cannot be said that the record is devoid of competent and substantial evidence to support the ALJ's finding. For this reason, the Department's exception is rejected.
The Department excepts to Findings of Fact number 34 and 35 of the Recommended Order. It appears the Department is essentially in agreement with the ALJ's finding, but attempts to reargue and reweigh evidence contrary to the findings of the AW. The record of the administrative proceeding contains some competent substantial evidence which supports the ALJ's finding that the Petitioner transferred the funds to the new H.O.M.E. Program account at First Union to meet the program's expenses and that Petitioner never anticipated the transfer would result in or contribute to a loss by NationsBank. The Department's exception is thus rejected.
The Department excepts to Finding of Fact number 37 of the Recommended Order. According to the Department's witness, Ms. McSweeney spoke with Petitioner in the morning of November 20, 1998. The Petitioner refutes this recollection, saying that the call took place later that afternoon. The record of the proceeding arguably contains competent substantial evidence which supports the ALJ's finding that the call took place in the morning. For this reason, the Department's exception is rejected.
The Department excepts to Findings of Fact number 39 and 40 of the Recommended Order. The Department takes exception to the ALJ's findings that NationsBank's loss may have been the product of other account signatories withdrawing funds. The ALJ found particularly compelling that NationsBank officials could not unequivocally state that other authorized persons had not made withdrawals from the account. A review of the record contains competent substantial evidence which supports the ALJ's finding that other individuals may have withdrawn funds from the account contributing to the bank's loss. The Department's exception is rejected.
The Department excepts to Finding of Fact number 52 of the Recommended Order. The Department objects to the ALJ's failure to make a connection between the funds transferred by the Petitioner and funds allegedly transferred by the H.O.M.E. Program President, Jerome Ellington. The source of this controversy is the Attorney General's complaint, in which the Petitioner and other officers of the H.O.M.E. Program were named as defendants. The Department has interpreted the Recommended order to mean that Petitioner never made the transfer of funds from NationsBank to First Union. From a reading of the relevant documents it appears the Department has misconstrued the ALJ's finding. In the finding of fact the ALJ is merely reciting the allegations made in the Attorney General's complaint. This exception attempts to reassert the fact that the Petitioner initiated the transfer of funds on November 20, 1999 from the
H.O.M.E. account to a newly-formed account at First Union. This
fact has already been established in a previous finding by the ALJ and is supported by the testimony of the witnesses involved, including the Petitioner. The record contains competent substantial evidence which supports the ALJ's finding that the Attorney General's complaint names the Petitioner as a defendant and that the funds were transferred from the program's account at NationsBank into another account at First Union. Accordingly, the Department's exception is rejected.
The Department excepts to Findings of Fact number 57 of the Recommended Order. The Department objects to the ALJ finding that the information used by the Department in making its decision to deny the Petitioner's license was uncorroborated.
The Department goes on to review its documentary evidence, the testimony of its witnesses and to recite its reasoning for denying Petitioner's license. Although it is the function of the ALJ to draw inferences and reach the ultimate finding of fact based on the evidence presented, in this instance the record of the administrative proceeding fails to support the ALJ's finding. A thorough review of the record reveals that the Department did base its decision on information corroborated from both verbal and written sources. Accordingly, the Department's exception is accepted.
The Department excepts to Finding of Fact number 61 of the Recommended Order. The Department takes issue with the ALJ's finding that the Petitioner was removed from the H.O.M.E.
program board because of her efforts to implement financial controls for the funds it was collecting and expending. Although the evidence and testimony was conflicting, the record of the administrative proceeding contains competent substantial evidence which supports the ALJ's finding that the Petitioner was removed from the Board because of her attempts to put stricter controls
on the financial reporting requirements of the H.O.M.E. Program. For this reason, the Department's exception is rejected.
RULINGS ON RESPONDENTS EXCEPTIONS TO CONCLUSIONS OF LAW
The Department's excepts to Conclusion of Law number 69 of the Recommended Order, wherein the ALJ determined that the Department is required, as a part of its case-in-chief, to present evidence that Petitioner committed the alleged offenses and, as a result thereof, is unfit and untrustworthy and should not be licensed. The Department agrees that it must present evidence to show that the offenses occurred, but argues that it is not required to take the extra step of bearing the evidentiary burden of proving that Petitioner is unfit and untrustworthy.
The Department maintains that the ultimate burden is on the Petitioner to prove her fitness for the position. The Department is correct in its assertion. It is well-established that there are different standards of proof depending on the underlying nature of the proceedings. Department Of Banking And Finance.
Division Of Securities and Investor Protection v. Osborne Stern And Company, 670 So.2d 932 (Fla. 1996). In a case where a loss of livelihood is implicated, as in a license revocation proceeding, the courts have imposed a higher evidentiary burden to protect the rights of individuals accused of administrative misconduct. In such instances, the courts apply a clear and convincing evidence standard. Id. at 933. In the matter currently before the court, the controversy involves the granting of a license. Courts have seen fit to apply a different burden of proof in these cases as this type of proceeding does not involve the loss of one's present livelihood. Id. at 934. The Department's burden in a license denial proceeding is to merely present evidence showing that the acts alleged in its charging document have occurred and nothing more. Id. It is incumbent on the Petitioner to prove that the acts alleged in the denial letter do not rise to such a level as to prove that she is unfit or untrustworthy. Id. As the ALJ correctly states "the applicant bears the ultimate burden of persuasion in licensing matters". However, the ALJ fails to acknowledge that in matters where it is alleged that a petitioner has violated a law or statute, that is a prima facie case that a person is unfit or untrustworthy, and the burden is still on the petitioner to show that if the illegal act occurred they are still fit to hold a license as an insurance agent. The Department's burden is in showing that those acts occurred. It is the Petitioner's burden to prove to the ALJ that the illegal acts, either did not occur or that these acts do not rise to the level of unfitness. For these reasons, the Department's exception is granted.
The Department excepts to Conclusion of Law number 70 of the Recommended Order, wherein the ALJ determined that the
Petitioner presented competent and substantial evidence establishing that she was fit and trustworthy. Although there is conflicting testimony on this point and Petitioner's testimony was less than compelling, under the existing standard of review for an ALJ's findings of fact, it cannot be said that the record is devoid of competent substantial evidence that supports the ALJ's conclusion that Petitioner is fit for licensure.
Consequently, although it does not appear that the Petitioner evidenced the level of responsibility and competence expected of insurance agents in the transaction of the business of insurance in Florida, the findings and attendant conclusions of the ALJ will not be overturned. The Department's exception is rejected.
The Department excepts to Conclusion of Law number 71 of the Recommended Order, wherein the ALJ determined that the Petitioner's actions in withdrawing money from the H.O.M.E. Program account was the result of a miscommunication between Petitioner and bank officials and that her actions were not a willful violation of her supervisor's orders. For the reasons stated above, the record of the administrative proceeding arguably contains competent substantial evidence which supports the ALJ's conclusion that there was no intentional violation of a supervisor's direct orders. For this reason, the Department's exception is rejected.
The Department excepts to Conclusion of Law number 72 of the Recommended Order, wherein the ALJ chose not to take into consideration the decision of the Unemployment Compensation Appeal Bureau. Although the Unemployment Compensation Appeal Bureau's decision would appear to be probative, it cannot be said that the decision requires deference from the ALJ. For this reason, the Department's exception is rejected.
The Department excepts to Conclusion of Law number 74 of the Recommended Order, wherein the ALJ determined that the Department failed to establish that the Petitioner committed any of the offenses or acts alleged in the Amended Denial Letter. As previously stated, although the evidence was conflicting, the record of the administrative proceeding arguably contains competent substantial evidence which supports the ALJ's finding. For this reason, the Department's exception is rejected.
The Department finally excepts to Conclusion of Law number 75 of the Recommended Order, wherein the ALJ determined that the Petitioner is fit and trustworthy for licensure as an insurance agent. As previously stated, the record of the administrative proceeding arguably contains competent substantial evidence which supports the ALJ's conclusion. For this reason, the Department's exception is rejected.
Upon careful consideration of the record, the submissions of the parties, and being otherwise fully advised in the premises, it is ORDERED that:
Any party to these proceedings adversely affected by this Order is entitled to seek review of the Order pursuant to Section 120.68, Florida Statutes, and Rule 9.110, Fla.R.App.P. Review proceedings must be instituted by filing a petition or Notice of Appeal with the General Counsel, acting as the agency clerk, at
200 East Gaines Street, Tallahassee, FL 32399-0333, and a copy of the same and the filing fee with the appropriate District Court of Appeal within thirty (30) days of the rendition of this Order.
Honorable Carolyn S. Holifield Administrative Law Judge
Steve Baker, Esquire Delano S. Stuart, Esquire
Stewart, Joyner, Jordan-Holmes & Holmes, P.A.
1112 East Kennedy Blvd. Tampa, FL 33672-2297
Elenita Gomez, Esquire Mechele McBride, Esquire Division of Legal Services 612 Larson Building
