STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF INSURANCE, )

)

Petitioner, )

)

vs. ) Case No. 01-1595PL

)

FRITS THEODOOR FORRER, )

)

Respondent. )

________________________________)

RECOMMENDED ORDER

A hearing was held pursuant to notice, on July 9, 2001, by Barbara J. Staros, assigned Administrative Law Judge of the Division of Administrative Hearings, in Pensacola, Florida.

APPEARANCES

For Petitioner: Richard Santurri, Esquire

Department of Insurance

200 East Gaines Street Tallahassee, Florida 32399-0300

For Respondent: Frits Theodoor Forrer, pro se

32 Highpoint Drive

Gulf Breeze, Florida 32561-4014 STATEMENT OF THE ISSUE

Whether the Respondent's license as a life insurance agent should be suspended or revoked based on the allegations set forth in the Department's Amended Administrative Complaint.

PRELIMINARY STATEMENT

On or about March 12, 2001, the Department of Insurance (Department) filed an Administrative Complaint against Respondent, which was amended on April 27, 2001. The three- count Amended Administrative Complaint alleged that Respondent violated various provisions of Chapter 626, Florida Statutes, by failing to divulge that he had been charged with felonies on applications for licensure dated June 1, 1988, and September 20, 1988, and by failing to notify the Department of an address change.

Respondent disputed the allegations in the Amended Administrative Complaint and timely filed a request for a formal proceeding to be conducted pursuant to Sections 120.569 and 120.57(1), Florida Statutes. The case was referred to the Division of Administrative Hearings on or about April 27, 2001. A formal hearing was set for July 9, 2001.

At hearing, Respondent made an ore tenus motion to dismiss, which was denied. Petitioner presented the testimony of Respondent as its only witness. Petitioner's Exhibits numbered 1 through 6 were admitted into evidence. Respondent testified on his own behalf and did not offer any exhibits.

A Transcript, consisting of one volume, was filed on July 18, 2001. On July 25, 2001, Petitioner timely filed a Proposed Recommended Order, which has been considered in the preparation of this Recommended Order. Respondent did not file any post-hearing submission.

FINDINGS OF FACT

1. Respondent is currently licensed by the Department as a life insurance agent.

2. On or about January 29, 1987, Respondent was charged with the felony, Misapplication of Funds, in the Circuit Court of the Thirteenth Judicial Circuit in and for the County of Hillsborough, Florida, Case No. 86-10485B.

3. On or about February 12, 1987, Respondent was charged with the felony, Misapplication of Funds, in the Circuit Court of the Thirteenth Judicial Circuit in and for the County of Hillsborough, Florida, Case No. 87-1826B.

4. On or about March 27, 1987, Respondent pled nolo contendre to two counts of Misapplication of Funds, a felony. The court withheld adjudication and placed Respondent on five years' probation for each count, to run concurrently; required Respondent to perform community service; and to pay restitution and court costs.

5. On or about June 1, 1988, Respondent submitted an application to the Department for licensure as a health agent.

   Question 8 of the application asked, "Have you ever been charged with a felony?" Respondent answered "no" to that question.

6. On or about September 20, 1988, Respondent submitted an application to the Department for licensure as a life insurance agent. Question 8 of the application asked, "Have you ever been charged with a felony?" Respondent answered "no" to that question.

7. On the application dated June 1, 1988, and on the application dated September 20, 1988, Respondent signed and swore to the statement that read:

   I do solemnly swear that I will not directly or indirectly divide my commissions with any person other than a qualified life and/or health insurance agent, licensed by the State of Florida; that all answers to the foregoing questions are true and correct to the best of my knowledge and belief; that I will in good faith conduct myself in a manner befitting the insurance profession as set forth in the Code of Ethics; that I have not or will not withhold any information on myself that will in any way affect my qualifications as an insurance agent. (emphasis supplied)

   
   

8. On or about August 15, 1991, the court revoked Respondent's probation because of a probation violation and Respondent was convicted of a felony, Misapplication of Funds, in Case Nos. 86-10485 and 87-1826. Respondent was sentenced to three and one-half years in prison followed by community

   control and probation. Respondent was incarcerated in both county jail and state prison for this felony conviction.

9. Respondent's civil rights have not been restored.

   
   

10. On or about May 21, 2000, Respondent completed and submitted an application for a health insurance agent license to the Department as his health agent license apparently had expired. Respondent answered "yes" to questions 3 and 4 on the application which inquired whether the applicant had ever been convicted, found guilty, or pled nolo contendre to a felony or to a crime punishable by imprisonment of one year or more.

11. From November 1998 to March 2000, Respondent resided in Tucson, Arizona.

12. Respondent did not notify the Department of his address change or his move from Florida to Arizona until May of 2000, when he submitted his health agent application.

    CONCLUSIONS OF LAW

    
    

13. The Department of Insurance has jurisdiction over the licensing of agents pursuant to Chapter 626, Florida Statutes.

14. The Division of Administrative Hearings has jurisdiction over the parties and subject matter in this case pursuant to Sections 120.569 and 120.57(1), Florida Statutes.

15. The Department has the burden of proving by clear and convincing evidence the allegations in the Amended Administrative Complaint. See Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987).

16. Section 626.551, Florida Statutes, states in pertinent part:

    Every licensee shall notify the department in writing within 30 days after a change of name, residence address, principal business street address, or mailing address. Any licensed agent who has moved his or her residence from this state shall have his or her license and all appointments immediately terminated by the department.

    
    

17. Section 626.611, Florida Statutes, states, in pertinent part:

    The department shall deny an application for, suspend, revoke, or refuse to renew or continue the license or appointment of any applicant, agent . . . if it finds that as to the applicant [or] licensee . . . 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.

       
       

    2. Material misstatement, misrepresentation, or fraud in obtaining the license or appointment or in attempting to obtain the license or appointment.

       
       

       * * *

       
       

       (7) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance.

       * * *

       
       

       1. 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.

          
          

       2. Having been found guilty of or having pleaded guilty or nolo contendere to a felony or a crime punishable by imprisonment of one year or more under the law of the United States of America or 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.

       
       

18. Section 626.621, Florida Statutes, provides, in 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 [or] agent . .

    . if it finds that as to the applicant [or] licensee . . . any one or more of the following applicable grounds exist under circumstances for which such denial, suspension, revocation, or refusal is not mandatory under Section 626.611.

    
    

    1. Any cause for which issuance of the license or appointment could have been refused had it then existed and been known to the department.

       
       

    2. 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 one 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.

       
       

19. Respondent asserts that because adjudication was withheld in 1987 on the criminal charges, that it was his understanding that he did not have a criminal record and, therefore, that his answers to the questions regarding criminal history were truthful. However, the question on the 1988 applications asked whether the applicant had ever been charged with a felony, not whether the applicant had been convicted of a felony. Moreover, he pled nolo contendre to the two counts of misapplication of funds. It is unreasonable to think that "no" is a truthful answer to the question asked on the 1988 applications.

20. Respondent was charged with a felony, Misapplication of Funds, on two occasions in 1987. It cannot be disputed that an applicant's prior criminal history is material to the Department's decision to license the applicant. Thus, Respondent's failure to disclose his prior felony charges were material misstatements and misrepresentations of fact and are

    therefore, in violation of Section 626.611(2), Florida Statutes.

21. Respondent's failure to truthfully disclose material information on a sworn application reflects unfavorably on his trustworthiness and his fitness for licensure. Moreover, Respondent's conviction for misapplication of fiduciary funds further evidences lack of trustworthiness and his unfitness for licensure which is in violation of Section 626.611(7), Florida Statutes.

22. Respondent knew that he had been twice charged with felonious misapplication of funds when he completed his June 1, 1988, application and when he completed his September 20, 1988, application. Respondent knew that he was required to truthfully disclose this information on these applications yet he willfully failed to divulge the information in violation of Section 626.611(13), Florida Statutes.

23. Respondent's conviction of a felony, Misapplication of Funds, a crime involving moral turpitude, constitutes a violation of Sections 626.611(14) and 626.621(8), Florida Statutes.

24. Respondent's failure to divulge material information on his applications denied the Department the opportunity to fully review his criminal history at the time of licensure. Since the Department could have, and most likely would have,

    denied his 1988 applications if it had known about his prior criminal charges, his failure to divulge this information constitutes a violation of Section 626.621(1), Florida Statutes.

25. Respondent claims that the statute that he was charged with violating, Section 713.34(3), Florida Statutes, was declared unconstitutional and is no longer in existence. Respondent concludes that he, therefore, has not committed a crime.

26. The constitutionality of Section 713.34(3), Florida Statutes (1979) was challenged in State v. Ferrari, 398 So. 2d 804 (Fla. 1981). In Ferrari, the Florida Supreme Court held that Section 713.34(3), Florida Statutes (1979) is constitutional. The Eleventh Circuit disagreed with this holding in Miller v. Norvell, 775 F.2d 1572 (11th Cir. 1985). However, the Florida Supreme Court reaffirmed the Ferrari holding in Marcolini v. State, 673 So. 2d 3 (Fla. 1996) emphasizing that it, not the federal court, has the final word on matters of state statutory interpretation.1

27. Moreover, nothing changes the fact that Respondent was charged with a felony in 1987 and was convicted of that felony in 1991.

28. Respondent's failure to notify the Department of his change of address and his move out of the State of Florida

    constitutes a violation of Sections 626.551 and 626.621(2), Florida Statutes.

29. The Amended Administrative Complaint charged Respondent with violation of Section 626.611(1), Florida Statutes. The proof-of-record does not support that allegation.

30. The Department has met its burden of presenting clear and convincing evidence showing that Respondent was charged with, and convicted of, the felony, Misapplication of Funds; that Respondent willfully failed to disclose information pertaining to his prior criminal conduct on applications for licensure; and that Respondent moved out of the State of Florida without notifying the Department. Therefore, the appropriate penalty for Respondent's violation of Sections 626.611, 626.621, and 626.551, Florida Statutes, is revocation of Respondent's license.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is

RECOMMENDED:

That the Department of Insurance enter a final order finding that Respondent violated Sections 626.611, 626.621, and 626.551, Florida Statutes, and revoking Respondent's life insurance agent license.

DONE AND ENTERED this 10th day of August, 2001, in Tallahassee, Leon County, Florida.

Hearings

Hearings

BARBARA J. STAROS

Administrative Law Judge

Division of Administrative

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

this 10th day of August, 2001.

ENDNOTE

1/ Much of the substantive language of Section 713.34(3), Florida Statutes (1979), is now codified in Section 713.345, Florida Statutes (2000).

COPIES FURNISHED:

Richard Santurri, Esquire Department of Insurance

200 East Gaines Street Tallahassee, Florida 32399-0300

Frits T. Forrer

32 Highpoint Drive

Gulf Breeze, Florida 32561-4014

Tom Gallagher, State Treasurer and Insurance Commissioner

The Capitol, Plaza Level 02 Tallahassee, Florida 32399-0300

Mark Casteel, General Counsel Department of Insurance

The Capitol, Lower Level 26 Tallahassee, Florida 32399-0307

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

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.

Docket for Case No: 01-001595PL

Orders for Case No: 01-001595PL