STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

JUAN FRANCISCO BERENGUER, )

)

Petitioner, )

)

vs. ) Case No. 99-3010RX

)

DEPARTMENT OF INSURANCE, )

)

Respondent. )

)

SUMMARY FINAL ORDER

This cause came before the undersigned on the Department's Motion for Summary Final Order filed September 27, 1999; on Petitioner's Memorandum of Law in Opposition to Department of Insurance's Motion for Summary Final Order, together with Petitioner's Proposed Final Order, filed October 6, 1999; and on the depositions of William W. Tharpe, Jr., and Charles L. Gowland, Jr., filed by Petitioner on October 6, 1999.

FINDINGS OF FACT

1. On April 29, 1999, the Department filed an Administrative Complaint against Petitioner for allegedly violating several statutes regulating his conduct as an insurance agent in the State of Florida. Pursuant to his request for an evidentiary hearing regarding those allegations, that matter was referred to the Division of Administrative Hearings on June 10, 1999, and assigned DOAH Case No. 99-2593.

2. On July 12, 1999, Petitioner filed with the Division of Administrative Hearings the subject Petition to Determine Invalidity of Administrative Rules, and on July 15 he filed his Amended Petition to Determine Invalidity of Administrative Rules. Petitioner challenges Rules 4-211.031(21)(e), 4- 211.031(24) through (27), 4-231.150, and 4-231.160, Florida Administrative Code.

3. The Administrative Complaint charges Petitioner, inter

   
   

   alia, with violating Section 626.611(14), Florida Statutes. That Section provides for the mandatory revocation of licensure and appointment privileges based upon the commission of a crime

   involving moral turpitude. The statute does not define the term "moral turpitude" or direct the Department to do so. The Department has done so, however, in Rule 4-211.031(21)(e).

   Petitioner alleges that the Rule is an invalid exercise of delegated legislative authority in that it enlarges and modifies the statute, it exceeds the Department's rulemaking authority, it is vague and fails to establish adequate standards for the Department's decisions, and it vests unbridled discretion in the Department.

4. In conjunction therewith, Rules 4-211.031(24) through (27), Florida Administrative Code, divide crimes into Classes "A" through "D" and contain lists of specific crimes. Those which the Department considers crimes involving moral turpitude

   based upon the definition contained in Rule 4-211.031(21)(e) are marked with an asterisk. Petitioner alleges these Rules are invalid exercises of delegated legislative authority because the Rule upon which they are based is invalid, because they are arbitrary and capricious as demonstrated by their internal inconsistencies and irreconcilable conflict with court decisions in the State of Florida, and because they enlarge and modify the statute they presumably implement.

5. Petitioner asserts he is substantially affected by Rules 4-211.031(21)(e) and 4-211.031(24) through (27) in that the Administrative Complaint filed against him in DOAH Case No. 99-2593 charges him with entering a plea to aggravated battery, a crime designated by those Rules as involving moral turpitude. Rule 4-211.031(25) includes aggravated battery in its list of crimes involving moral turpitude.

6. Petitioner also contends that two Rules covering the penalty phase of the Department's disciplinary process are invalid. Rule 4-231.150, Florida Administrative Code, provides for mandatory suspension in the event a licensee is found guilty in an administrative proceeding of violating Sections 626.611(14) and/or 626.621(8), Florida Statutes, two statutes Petitioner is alleged to have violated. Rule 4-231.160, Florida Administrative Code, sets forth specific aggravating and mitigating factors to be considered by the Department in

   assessing the penalty for violating statutes governing the conduct of insurance agents.

7. As to Rule 4-231.150, Florida Administrative Code, Petitioner alleges that it is invalid because it requires mandatory suspension as the penalty for violating Section 626.621(8), Florida Statutes, but the statute provides that suspension is discretionary. Petitioner argues, therefore, that the Rule modifies or limits the statute and is an invalid exercise of delegated legislative authority.

8. As to Rule 4-231.160, Florida Administrative Code, Subsection (1) sets forth 12 factors to be considered in assessing a penalty where Rule 4-231.150 is not involved, and Subsection (2) sets forth 8 factors to be considered in assessing a penalty where Rule 4-231.150 is involved. Both Subsections do, however, provide that any other relevant factors may be considered. Petitioner argues that Rule 4-231.160 is invalid because Subsection (2), which applies when criminal conduct is involved, does not contain the factors in Subsection (1), which contains far-broader factors, and is, therefore, much more limited and unfair.

9. Petitioner further argues that the penalty schemes contained in Rules 4-231.150 and 4-231.160, calling for a mandatory suspension and offering an arbitrary and limited number of aggravating and mitigating circumstances are neither

   implied nor described by the pertinent statutes. The Rules, therefore, according to Petitioner, are invalid in that they substantially modify or limit the statutes at issue and are also arbitrary and capricious in their application of how disciplinary decisions should be made and what factors are to be considered. Petitioner further argues that Rule 4-231.160 is impermissibly vague, fails to establish adequate standards for agency decisions, and vests unbridled discretion in the Department by allowing for "other relevant factors" to be considered.

10. The Department's Motion for Summary Final Order argues that Petitioner lacks standing to challenge the Rules and that the Rules are not invalid exercises of delegated legislative authority.

    CONCLUSIONS OF LAW

    
    

11. Section 626.611, Florida Statutes, specifies grounds for the compulsory denial of licensure and for the compulsory suspension or revocation of an agent's licensure. Similarly, Section 626.621, Florida Statutes, specifies grounds for the discretionary denial of licensure and for the discretionary suspension or revocation of an agent's licensure. Both statutes, therefore, govern both application cases and disciplinary cases.

12. Rules 4-211.031(21)(e) and 4-211.031(24) through (27)

on their face only apply to applications for licensure. The title to Rule 4-211.031 is "Effect of Law Enforcement Records on Applications for Licensure."

1. The Department argues that since the Rules only apply to applications for licensure and Petitioner is already licensed, Petitioner lacks standing to challenge these Rules since they cannot be applied to Petitioner should the Petitioner be found guilty in DOAH Case No. 99-2593. Petitioner argues that it is possible that the Department's decision-makers and attorneys might "peek" at those Rules in determining whether Petitioner is guilty of the allegations contained in the Administrative Complaint filed against him.

2. It is always possible that the Department could look at those Rules or anything else. What the Department cannot do, however, is apply those Rules in the disciplinary proceeding pending against Petitioner since the Rules by their own terms do not pertain to actions against licensees. If the Department proceeds forward on its allegation that Petitioner has entered a plea to a crime involving moral turpitude, it will have to rely upon other law to support that allegation. Accordingly, the Department is correct that Petitioner lacks standing to challenge Rules 4-211.031(21)(e) and 4-211.031(24) through (27)

   since Petitioner is not substantially affected by those application Rules.

3. Rules 4-231.150 and 4-231.160 must be read in conjunction with each other since the latter refers to the former and since the latter divides aggravating and mitigating factors depending upon whether the former has been implicated. Petitioner is correct that the former imposes a mandatory suspension of licensure period without consideration of aggravating or mitigating factors. Those factors, however, are contained in the latter Rule.

4. Petitioner does have standing to challenge these two penalty phase Rules since he is substantially affected by them by virtue of his pending disciplinary case. Petitioner has, however, failed to show that these Rules are invalid exercises of delegated legislative authority.

5. Because the mandatory suspension period provided in Rule 4-231.150 can be modified by application of the factors contained in Rule 4-231.160 and any other relevant factors, the Rule does not expand or modify the statute making suspension discretionary. Sufficient mitigating factors may be present to avoid any period of license suspension.

6. Petitioner's argument that the penalty Rules are arbitrary because they limit the aggravating or mitigating circumstances is not persuasive. Subsections (1) and (2) of

   Rule 4-231.160 do contain different factors to be considered, depending upon whether Rule 4-231.150 was utilized. Yet, both Subsections specifically permit the consideration of any other relevant factors, even if those factors are found in the other Subsection. Accordingly, the factors that could be considered are more limitless than limited.

7. Similarly unpersuasive is Petitioner's argument that Rule 4-231.160(2) is impermissibly vague, failing to establish adequate standards for agency decisions and vesting unbridled discretion in the Department. Petitioner contends that the Rule is vague by allowing the consideration of relevant factors, a factor which benefits Petitioner by permitting him to offer evidence which may not be allowed by the remainder of the Rule. Further, the consideration of additional factors is limited by the requirement that they be relevant.

8. Petitioner further argues that the penalty Rules create an evidentiary presumption. They do not. Although Rule 4-231.150 does require a mandatory suspension period, that requirement is modified by Rule 4-231.160, Florida Administrative Code. Further, all relevant factors can be considered. The admissibility of evidence is not dictated, nor is the ultimate conclusion.

It is, therefore, ORDERED THAT:

1. The Department's Motion for Summary Final Order is hereby granted.

2. Petitioner's Amended Petition to Determine Invalidity of Administrative Rules is hereby dismissed.

DONE AND ORDERED this 8th day of November, 1999, in Tallahassee, Leon County, Florida.

LINDA M. RIGOT

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 8th day of November, 1999.

COPIES FURNISHED:

David J. Busch, Esquire Department of Insurance Division of Legal Services

200 East Gaines Street 645A Larson Building

Tallahassee, Florida 32312

Howard J. Hochman, Esquire 7695 Southwest 104th Street Suite 210

Miami, Florida 33156

Dickson E. Kesler, Esquire Department of Insurance

401 Northwest Second Avenue, Suite N-321

Miami, Florida 33128

Dickson E. Kesler, Esquire Department of Insurance Division of Legal Services

200 East Gaines Street 612 Larson Building

Tallahassee, Florida 32399-0333

Bill Nelson, State Treasurer and Insurance Commissioner

Department of Insurance

The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300

Daniel Y. Sumner, General Counsel Department of Insurance

The Capitol, Lower Level 26 Tallahassee, Florida 32399-0300

Carroll Webb

Executive Director and General Counsel Joint Administrative Procedures Committee Holland Building, Room 120

Tallahassee Florida 32399-1300

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this Summary Final Order is entitled to judicial review pursuant to Section 120.68, Florida Statutes. Review proceedings are governed by the Florida Rules of Appellate Procedure. Such proceedings are commenced by filing one copy of a Notice of Appeal with the agency clerk of the Division of Administrative Hearings and a second copy, accompanied by filing fees prescribed by law, with the District Court of Appeal, First District, or with the District Court of Appeal in the appellate district where the party resides. The Notice of Appeal must be filed within 30 days of rendition of the order to be reviewed.

Docket for Case No: 99-003010RX

Orders for Case No: 99-003010RX