vs. ) Case No. 00-0455
Pursuant to notice, a final hearing was held in this case on March 22, 2000, by video teleconference between Tallahassee and West Palm Beach, Florida, before Claude B. Arrington, a duly-designated Administrative Law Judge of the Division of Administrative Hearings.
Whether Respondent, a licensed insurance agent, committed the offenses alleged in the Amended Administrative Complaint and, if so, the penalties that should be imposed.
On April 14, 1999, Petitioner filed an Administrative Complaint against Respondent that contained three counts. Respondent timely challenged the allegations of the Administrative Complaint, the matter was referred to the Division of Administrative Hearings, and this proceeding followed.
On May 16, 2000, Petitioner filed its motion to amend the Administrative Complaint, to which Respondent did not object. Petitioner attached to its motion the proposed Amended Administrative Complaint, which essentially dismissed one of the three counts of the Administrative Complaint. On May 23, 2000, the undersigned granted Petitioner's motion by an order which authorized the filing of the Amended Administrative Complaint.
Count I of the Amended Administrative Complaint alleged certain facts pertaining to a plea of nolo contendere entered by Respondent in 1997 to a charge of possession of cocaine, which is a third degree felony. Count I charged Respondent with multiple violations of the Florida Insurance Code. Those
alleged violations are set forth in the Conclusions of Law section of this Recommended Order.
Count II of the Amended Administrative Complaint alleged that Respondent failed to notify Petitioner within 30 days of doing so that he had entered a plea of nolo contendere in the
criminal proceeding as required by Section 893.13(6)(a), Florida Statutes. Count II charged Respondent with multiple violations of the Florida Insurance Code. Those alleged violations are also set forth in the Conclusions of Law section of this Recommended Order.
The parties entered into a Pre-Hearing Stipulation that contained certain factual stipulations, which have been incorporated as findings of fact to the extent they are relevant.
At the final hearing, Petitioner offered three exhibits, each of which was accepted into evidence.
Respondent testified on his own behalf and presented the additional testimony of five other witnesses who know Respondent, who have worked with Respondent, and/or who have had business dealings with Respondent. Respondent offered four exhibits, each of which was accepted into evidence.
In rebuttal, Petitioner presented the testimony of Peter Fountain, the Bureau Chief, Agent and Agency Investigations, Florida Department of Insurance.
No transcript of the proceedings has been filed. Each party filed a Proposed Recommended Order, which has been duly- considered by the undersigned in the preparation of this Recommended Order.
Petitioner is a licensing and regulatory agency of the State of Florida charged with the responsibility and duty to enforce the provisions of the Florida Insurance Code, which consists of Chapters 624-632, 634, 635, 641, 642, 648, and 651, Florida Statutes. See Section 624.307(1), Florida Statutes.
Respondent has been continuously licensed in the State of Florida as a life insurance agent (a 2-16 license) and a general license agent (a 2-20 license) since March 1974, and continuously as a RPCJUA insurance agent (a 00-17 license) since March 1993.
On November 4, 1996, Respondent was charged with possession of cocaine in violation of Section 893.13(6)(a), Florida Statutes. This charge, filed in Palm Beach County Circuit Court and assigned Case Number 96-12206 CFA02, is a third degree felony.
On May 14, 1997, Respondent entered a plea of nolo contendere to the charge of possession of cocaine, which was accepted. Adjudication of guilt was withheld and Respondent was placed on probation for a period of 18 months. The terms and
conditions of Respondent's probation included working at a lawful occupation, intensive drug and alcohol evaluation, successful completion of any recommended treatment, payment of a fine in the amount of $250.00 and court costs in the amount of
$461.00, performance of 100 hours of community service, random testing for the use of alcohol and drugs, six months' suspension of driver's license, and DUI school.
Respondent successfully completed his probation on November 13, 1998. Respondent continued to work as an insurance agent during the term of his probation.
Respondent voluntarily reported the incident to State Farm shortly after its occurrence. As a result, State Farm placed Respondent on probation and conducted a series of random alcohol and drug tests, which Respondent satisfactorily completed.
Section 626.621(11), Florida Statutes, provides that the following constitutes grounds for the discretionary discipline of an agent's licensure:
(11) Failure to inform the department in writing within 30 days after pleading guilty or nolo contendere to, or being convicted or found guilty of, any felony or a crime punishable by imprisonment of 1 year or more under the law of the United States or of any state thereof, or under the law of any other country without regard to whether a judgment of conviction has been entered by the court having jurisdiction of the case.
Respondent failed to report to Petitioner within 30 days of doing so that he entered a plea of nolo contendere to a third degree felony charge of possession of cocaine in Case Number 96-12206 CFA02 on May 14, 1997.
On or about March 18, 1998, Respondent applied for licensure as a Variable Annuity Insurance Agent (a 2-19 license). That application contained Question 18, which provides as follows and to which Respondent answered "yes":
Have you ever been convicted, found guilty, or pleaded guilty or nolo contendere (no contest) to a felony under the laws of any municipality, county, state, territory or country, whether or not a judgment of conviction has been entered.
As a result of his answer to Question 18, Petitioner started an investigation, with which Respondent fully cooperated. As a result of that investigation, Petitioner learned the details of Respondent's plea in the criminal proceeding. Respondent testified, credibly, that he did not timely report the entry of his plea in the criminal proceeding because he did not know he was required to do so. 1/
Respondent has continuously worked as an insurance agent licensed by Petitioner in the State of Florida since March 1974. Respondent has been continuously appointed by State Farm and has built up a successful insurance business.
This proceeding is the first disciplinary proceeding brought against Respondent's insurance licenses. There have been no other complaints filed by anyone in this state against Respondent's insurance licenses. Respondent's insurance licenses have not been previously disciplined in the State of Florida.
The testimony of Respondent's witnesses established that he enjoys a good reputation for honesty, trustworthiness, truthfulness, and integrity in his community. He has engaged in charitable works, including work with the food bank, the Guardian Ad Litem Program, and Brazilian Indians. Respondent's witnesses also established that they had been pleased with their business dealings with Respondent, and that he has the ability and trustworthiness to successfully engage in the business of insurance.
Respondent testified that State Farm will terminate his appointment as an agent if his license is suspended. Respondent testified that he will lose his business and his employees will lose their employment.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction of the parties to and the subject of this proceeding. Section 120.57(1), Florida Statutes.
Petitioner has the burden of proving by clear and convincing evidence the allegations against Respondent. See Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987); Evans Packing Co. v. Department of Agriculture and Consumer Services, 550
So. 2d 112 (Fla. 1st DCA 1989); and Inquiry Concerning a Judge,
645 So. 2d 398 (Fla. 1994).
Section 626.611, Florida Statutes, provides for compulsory discipline of a license, in pertinent part, as
follows:
Grounds for compulsory refusal, suspension, or revocation of agent's, title agency's, solicitor's, adjuster's, customer representative's, service representative's, or managing general agent's license or appointment.
The department shall 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 representative, service representative, or managing general agent, 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 or more of the following applicable grounds exist:
(1) Lack of one or more of the qualifications for the license or appointment as specified in this code.
* * *
(7) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance.
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.
* * *
Having been found guilty of or having pleaded guilty or nolo contendere to a felony or a crime punishable by imprisonment of 1 year or more under the law of the United States of America or of any state thereof or under the law of any other country which involves moral turpitude, without regard to whether a judgment of conviction has been entered by the court having jurisdiction of such cases. . . .
Section 626.621, Florida Statutes, provides for the discretionary discipline of a license, in pertinent part, as
follows:
Grounds for discretionary refusal, suspension, or revocation of agent's, solicitor's, adjuster's, customer representative's, service representative's, or managing general agent's license or appointment.
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, solicitor, adjuster, customer representative, service representative, or managing general agent, and it may 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 or more of the following applicable grounds exist under circumstances for which such denial, suspension, revocation, or refusal is not mandatory under s. 626.611:
Any cause for which issuance of the license or appointment could have been refused had it then existed and been known to the department.
Violation of any provision of this code or of any other law applicable to the business of insurance in the course of dealing under the license or appointment.
* * *
(8) Having been found guilty of or having pleaded guilty or nolo contendere to a felony or a crime punishable by imprisonment of 1 year or more under the law of the United States of America or of any state thereof or under the law of any other country, without regard to whether a judgment of conviction has been entered by the court having jurisdiction of such cases.
* * *
(11) Failure to inform the department in writing within 30 days after pleading guilty or nolo contendere to, or being convicted or found guilty of, any felony or a crime punishable by imprisonment of 1 year or more under the law of the United States or of any state thereof, or under the law of any other country without regard to whether a judgment of conviction has been entered by the court having jurisdiction of the case. . . .
Petitioner established by clear and convincing evidence that Respondent entered a plea of nolo contendere to
possession of cocaine, a third degree felony, and that he failed to notify Petitioner of that fact in writing within 30 days, thereby violating the provisions of Section 626.621(11), Florida Statutes.
Count I of the Amended Administrative Complaint alleged that Respondent's plea established the following violations of the Florida Insurance Code:
Lack of one or more of the qualifications for the license or appointment as specified in the Florida Insurance Code, in violation of Section 626.611(1), Florida Statutes.
Demonstrated lack of fitness or
trustworthiness to engage in the business of insurance, in violation of Section 626.611(7), Florida Statutes.
Willful failure to comply with, or willful violation of, any proper order or rule of the department or willful violation of any provision of the Florida Insurance Code, in violation of Section 626.611(13), Florida Statutes.
Having been found guilty of or having pleaded guilty or nolo contendere to a felony or a crime punishable by imprisonment of 1 year or more under the law of the United States of America or of any state thereof or under the law of any other country which involves moral turpitude, without regard to whether a judgment of conviction has been entered by the court having jurisdiction of
such cases, in violation of Section 626.611(14), Florida Statutes.
Any cause for which issuance of the license or appointment could have been refused had it then existed and been known to the department, in violation of Section 626.621(2), Florida Statutes.
Violation of any provision of this code or of any other law applicable to the business of insurance in the course of dealing under the license or appointment, in violation of Section 626.621(2), Florida Statutes.
Having been found guilty of or having pleaded guilty or nolo contendere to a felony or a crime punishable by imprisonment of 1 year or more under the law of the United States of America or of any state thereof or under the law of any other country, without regard to whether a judgment of conviction has been entered by the court having jurisdiction of such cases, in violation of Section 626.621(8), Florida Statutes.
The principal dispute as to Count I is whether the crime of possession of cocaine is a crime which involves moral
turpitude. If it is, Respondent is subject to discipline under the compulsory disciplinary provisions of Section 626.611(14), Florida Statutes. If it is not, Respondent is subject to
discipline under the discretionary provisions of Section 626.621(8), Florida Statutes.
Natelson v. Department of Insurance, 454 So. 2d 31 (Fla. 1st DCA 1984), the only case cited by Petitioner in support of its argument that possession of cocaine is a crime which involves moral turpitude, involved trafficking in illegal drugs, which is properly considered a more serious offense than possession without selling or attempting to sell contraband.
The more persuasive view is that the mere possession of cocaine is not a crime which involves moral turpitude. Pearl v. Florida Board of Real Estate, 394 So. 2d 189 (Fla. 3rd DCA
1981), discussed various definitions of the term moral turpitude before concluding that the mere possession of a controlled substance is not a crime involving moral turpitude. Milliken v. Department of Business, 709 So. 2d 595 (Fla. 5th DCA 1998),
recognized that mere possession does not involve moral turpitude while holding that possession with intent to sell does involve moral turpitude.
Respondent is subject to discipline pursuant to the discretionary provisions of Section 626.621(8), Florida
Statutes, but not to the compulsory provisions of Section 626.611(14), Florida Statutes.
Count II of the Amended Administrative Complaint alleged that by failing to notify the Petitioner within 30 days of his plea in the criminal proceeding as required by Section 893.13(6)(a), Florida Statutes, Respondent was subject to being disciplined on the following grounds:
Demonstrated lack of fitness or trustworthiness to engage in the business of insurance. [Section 626.611(7), Florida Statutes.]
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. Section 626.611(13), Florida Statutes.]
Any cause for which issuance of the license or appointment could have been refused had it then existed and been known to the department. [Section 626.621(2), Florida Statutes.]
Violation of any provision of this code or of any other law applicable to the business of insurance in the course of dealing under the license or appointment. [Section 626.621(2), Florida Statutes.]
Failure to inform the department in writing within 30 days after pleading guilty or nolo contendere to, or being convicted of found guilty or, any felony or a crime punishable by imprisonment of 1 year or more under the law of the United States of America or of any state thereof, or under the law of any other country without regard to whether a judgment of conviction has been entered by the court having jurisdiction of the case. [Section 626.621(11), Florida Statutes.]
Petitioner established by clear and convincing evidence that Respondent failed to comply with the provisions of Section 626.621(11), Florida Statutes, and that he is subject to being disciplined for that violation.
As to Counts I and II, Petitioner failed to establish by clear and convincing evidence that Respondent lacked the qualifications, including trustworthiness, to engage in the business of insurance. Likewise, Petitioner failed to establish any intentional or willful violation on the part of the Respondent. The remaining alleged violations set forth in
Count I and Count II not specifically rejected above are found to be subsumed in the violations of Sections 626.621(8) and 626.621(11), Florida Statutes, respectively.
Rule 4-231.150(3)(c), Florida Administrative Code, provides the pertinent disciplinary guideline for the violation of Section 626.621(8), Florida Statutes. That subsection should be applied because the possession of cocaine was not shown to be related to the business of insurance. The appropriate guideline is suspension of Respondent's insurance licensure for two months.
Rule 4-231.090(11), Florida Administrative Code, provides the pertinent disciplinary guideline for the violation of Section 626.621(11), Florida Statutes. The appropriate
guideline is suspension of Respondent's insurance license for three months.
Rule 4-231.040(2) and (3), Florida Administrative Code, provides for the calculating of the penalty when multiple counts are involved, as follows:
Total Penalty. Each penalty per count shall be added together, and the sum shall be referred to as the "total penalty."
Final Penalty. The final penalty which will be imposed against a licensee under these rules shall be the total penalty, as adjusted to take into consideration any aggravating or mitigating factors; provided, however, the department shall convert the total penalty to an administrative fine and probation in the absence of a violation of section 626.611, Florida Statutes, if warranted upon the Department's consideration of the factors set forth in rule subsection 4-231.160(1).
Rule 4-231.160, Florida Administrative Code, provides aggravating or mitigating factors that should be considered in determining the final penalty to be imposed on a licensee as follows:
The Department shall consider the following aggravating and mitigating factors and apply them to the total penalty in reaching the final penalty assessed against a licensee under this rule chapter. After consideration and application of these factors, the Department shall, if warranted by the Department's consideration of the factors, either decrease or increase the penalty to any penalty authorized by law.
For penalties other than those assessed under rule 4-231.150:
willfulness of licensee's conduct;
degree of actual injury to victim;
degree of potential injury to victim;
age or capacity of victim;
timely restitution;
motivation of agent;
financial gain or loss to agent;
cooperation with the Department;
vicarious or personal responsibility;
related criminal charge; disposition;
existence of secondary violations in counts;
previous disciplinary orders or prior warning by the Department; and
other relevant factors.
For penalties assessed under rule 4-
231.150 for violations of sections 626.611(14) and 626.621(8), F.S.:
Number of years that have passed since criminal proceeding;
Age of licensee at time the crime was committed;
Whether licensee served time in jail;
Whether or not licensee violated criminal probation;
Whether or not licensee is still on criminal probation;
Whether or not licensee's actions or behavior resulted in substantial injury to victim;
Whether or not restitution was, or is being, timely paid;
Whether or not licensee's civil rights have been restored; and
other relevant factors.
Respondent makes various arguments as to the existence of mitigating factors that would justify the imposition of an administrative fine and probation in lieu of suspension. 2/ As to both counts, Respondent presented evidence of his good
reputation, his charitable work, the fact that he has never previously been disciplined, and his cooperation with Petitioner in its investigation. Specifically as to Count I, Respondent argues that it has been three years since his plea, he was not adjudicated guilty, he successfully completed his probation, he did not serve jail time and he did not lose his civil rights.
Specifically as to Count II, Respondent argues that his failure to timely notify Petitioner of his plea was the result of ignorance and was not intentional. After carefully reviewing the arguments made by Respondent as to the existence of mitigating factors, the undersigned concludes that Respondent's licensure should be suspended as set forth in the disciplinary guidelines, but that the two suspensions run concurrently, instead of consecutively.
The fact that Respondent may lose his appointment from State Farm if his license is suspended is not considered by the undersigned to be a mitigating factor. State Farm's internal policies should have no bearing on Petitioner's disciplinary policies. State Farm agents should not be disciplined any differently than any other agent.
Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a final order finding Respondent guilty of violating Section 626.621(8),
Florida Statutes, as alleged in Count I of the Amended Administrative Complaint, and guilty of violating Section 626.621(11), Florida Statutes, as alleged in Count II of the Amended Administrative Complaint. It is further recommended that Respondent's licensure as an insurance agent be suspended for two months for the violation of Count I and for three months for the violation of Count II, to run concurrently.
DONE AND ENTERED this 30th day of June, 2000, in Tallahassee, Leon County, Florida.
CLAUDE B. ARRINGTON
Filed with the Clerk of the Division of Administrative Hearings this 30th day of June, 2000.
1/ A finding that Respondent intentionally or willfully failed to comply with the reporting requirement is not supported by the evidence.
2/ The following discussion is not intended to be an exhaustive discussion of the arguments as to mitigation made by Respondent at hearing and in his post-hearing submittal.
Miguel Oxamendi, Esquire Department of Insurance Division of Legal Services 612 Larson Building
Melissa Fletcher Allaman, Esquire Ervin, Varn, Jacob, and Ervin Post Office Drawer 1170 Tallahassee, Florida 32302
Daniel Y. Sumner, General Counsel Department of Insurance
15 days from the date of this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.
