STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF INSURANCE,
Petitioner,
vs.
LOUIS FRANCIS ROBERT, JR.,
Respondent.
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) Case No. 02-0166PL
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RECOMMENDED ORDER
Pursuant to notice, a formal hearing was held in this case on April 25, 2002, by video teleconference at sites in Tampa and Tallahassee, Florida, before Carolyn S. Holifield, a duly- designated Administrative Law Judge of the Division of Administrative Hearings.
APPEARANCES
For Petitioner: Dean Andrews, Esquire
Department of Insurance Division of Legal Services
200 East Gaines Street Tallahassee, Florida 32399-0333
For Respondent: James V. Caltagirone, Esquire
111 South Moody Avenue Tampa, Florida 33609
STATEMENT OF THE ISSUE
The issue is whether Respondent committed the offenses alleged in the Amended Administrative Complaint and, if so, what
disciplinary action should be imposed on his licenses and appointments as a life, life and health, and health agent.
PRELIMINARY STATEMENT
On December 20, 2001, Petitioner, the Department of Insurance (Department), filed a two-count Amended Administrative Complaint (Amended Complaint) alleging that during the course of his conducting transactions with two elderly women, Respondent, Louis Francis Robert, Jr. (Respondent), violated various provisions of Chapter 626, Florida Statutes. The Amended Complaint charged that, as a result of the alleged conduct, Respondent "violated or [is] accountable" under the following provisions: Subsections 626.611(5), (7), (9), and (13), Florida
Statutes; Subsections 626.621(2), (3), (6), and (9), Florida Statutes; Subsections 626.9521(1) and (2), Florida Statutes; Subsections 626.9541(1)(a)1. and 6., Florida Statutes; Subsections 626.9541(1)(b) and (k)1., Florida Statutes; and Rule 4-215.230, Florida Administrative Code.
Respondent disputed the allegations and requested a formal hearing. On January 11, 2002, the case was forwarded to the Division of Administrative Hearings for assignment of an administrative law judge to conduct the hearing.
By Notice of Hearing dated February 6, 2002, a final hearing was scheduled for March 20, 2002. Prior to the scheduled final hearing date, on February 20, 2002, Respondent
filed a Motion for Continuance (Motion). The Motion was granted, and the final hearing was rescheduled for
April 9, 2002. Respondent filed a second Motion for Continuance on April 4, 2002, which was granted. Thereafter, the final hearing was rescheduled and conducted as noticed in the Order issued April 10, 2002.
Pursuant to the Pre-hearing Order issued in this cause, the parties stipulated to certain facts that required no proof at hearing. Those stipulated facts have been incorporated in this Recommended Order. At hearing, the Department presented the testimony of two witnesses, Grace P. Newson and Erma Clark. The Department offered no exhibits into evidence. Respondent testified on his own behalf and called one witness, Robert Barry. Respondent offered and had seven exhibits received into evidence.
At the conclusion of the hearing, Respondent requested that the parties be given more than ten days from the date the transcript was filed to file proposed recommended orders. The parties agreed to confer and advise the undersigned as to how much additional time was needed. On April 25, 2002, the parties filed a Stipulation indicating that the parties agreed, subject to the undersigned's approval, to file proposed recommended orders thirty days after the filing of the transcript. By Order
issued May 16, 2002, the time for filing proposed recommended orders was set for thirty days after the transcript was filed.
A Transcript of the proceeding was filed on May 6, 2002.
Both parties timely filed Proposed Recommended Orders under the extended time frame.
FINDINGS OF FACT
At all times material to this action, Respondent, Louis Francis Robert, Jr. (Respondent), was a licensed insurance agent and under the jurisdiction of Petitioner, the Department of Insurance (Department). Respondent has been licensed in the State of Florida for fifteen years.
Grace Newson is an elderly widow, presently age eighty- one (81) who lives alone and who lived alone at all times material to the occurrences in this matter.
Mrs. Newson first met Respondent on September 10, 1998, when he made an unannounced visit to her home in Plant City, Florida. During this initial visit, Respondent told Mrs. Newson that he was in the area and the purpose of his visit was to see if she wanted to change her annuity policy.
Respondent's initial visit with Mrs. Newson was about two months after Mrs. Newson's husband died.
Mrs. Newson had never met or spoken with Respondent prior to his September 10, 1998, visit to her home. However, it was apparent to Mrs. Newson that based on Respondent's comments
to her during the visit that he knew her husband had recently died. Moreover, it was also apparent to Mrs. Newson that at the time of Respondent's initial visit, he was aware that she owned an annuity policy.
The annuity policy owned by Mrs. Newson prior to and at the time she met Respondent had been issued by Fidelity and Guaranty Life Insurance Company (Fidelity and Guaranty). The policy number was 1-00127454.
After his initial visit to Mrs. Newson's house, Respondent continued to visit Mrs. Newson whenever he was in the Plant City area and/or to call her. Each time Respondent contacted Mrs. Newson, he attempted to sell her another annuity policy. In response, Mrs. Newson repeatedly told Respondent that she did not need another policy. Nonetheless, Mrs. Newson's credible testimony was that Respondent was "insistent in trying to put [Mrs. Newson] in a new product."
At one point, Mrs. Newson told Respondent that she wanted her deceased husband's name removed from her annuity policy that had been issued by Fidelity and Guaranty.
Mrs. Newson told Respondent that the annuity was for her handicapped nephew and that the reason she wanted her husband's name removed from the annuity was so that her nephew would not have difficulty receiving the benefits after her death.
Respondent agreed to have Mrs. Newson's deceased husband's name
removed from the annuity and requested that she give him the annuity documents in her possession. Mrs. Newson complied with this request.
After Mrs. Newson told Respondent to have her deceased husband's name removed from the annuity, he went to her house and delivered two documents for her to sign. Mrs. Newson assumed that the two printed documents were necessary only for the purpose of removing her deceased husband's name from the existing annuity.
At no time did Respondent advise Mrs. Newson that the documents he was requesting her to sign were for a new annuity policy and for a death claim benefit.
Mrs. Newson signed the documents on the designated signature lines and next to the hand-written "X" on each of those lines, as instructed by Respondent.
At the time Mrs. Newson signed the documents, she believed that the documents were for the purpose of removing her deceased husband's name from her annuity issued by Fidelity and Guaranty. Accordingly, she did not thoroughly review or read the documents.
One of the documents that Respondent gave to Mrs.
Newson to sign was an application form which requested information regarding the "premium amount paid with the application." In the space provided for the response to that
inquiry, there is a hand-written "0" with a diagonal line drawn through it that had been scratched out. Immediately below the scratched out "0" was written $32,282.04 and the word, "TRANSFER."
Next to the space on the application form that requested "the premium amount paid with the application" was another space that requested "additional information." In that space, the following was written: "Funds coming from death claim on policy #1127454." This was the number of Mrs. Newson's annuity policy that she owned prior to and at the time she met Respondent.
The documents were completed by Respondent and signed by Mrs. Newson. However, it is unknown whether all the hand- written information on the documents was on the forms when they were delivered to Mrs. Newson for her signature.
In or around October 1998, Respondent processed the forms signed by Mrs. Newson to cause a death claim on the existing annuity previously issued by Fidelity and Guaranty, and to use the proceeds therefrom for the purchase and issuance of a new annuity by that company. Respondent's actions were taken without Mrs. Newson's knowledge or consent.
After the forms were processed, Respondent delivered to Mrs. Newson a newly numbered policy issued by Fidelity and Guaranty. Mrs. Newson assumed that the policy simply eliminated
her deceased husband's name from the annuity that she owned when she first met Respondent. Based on that assumption, Mrs. Newson merely filed that policy and did not know or understand that it was a new annuity policy which Respondent had caused to be issued without her knowledge.
Subsequently, Mrs. Newson received a Form 1099 from the Internal Revenue Service, calling to her attention that her initial annuity had been caused to be surrendered and the proceeds therefrom had been used for the purchase of a new annuity. This was her first knowledge of this occurrence.
Immediately, Mrs. Newson immediately contacted Fidelity and Guaranty to inform the company that she did not authorize the purchase of a new annuity policy. She further advised the company that she desired to be immediately returned to ownership of her previously existing policy. During Mrs. Newson's discussions with staff of Fidelity and Guaranty, it was confirmed that Respondent had filed a death claim against her Fidelity and Guaranty annuity, surrendered her initial annuity, and issued a new policy in Mrs. Newson's name.
After Mrs. Newson confirmed Respondent's actions, she demanded that Fidelity and Guaranty straighten out the matter. In response, Fidelity and Guaranty canceled the new policy that Respondent had issued to Mrs. Newson and reinstated her original annuity policy.
Respondent collected a commission in the amount of
$3,758.43 for issuing the new policy to Mrs. Newson. However, Respondent had to reimburse the company for the commission he received as a result of his issuing a new policy to Mrs. Newson, which she had not authorized or requested.
Had Mrs. Newson not discovered what had occurred relative to her initial annuity and had the new annuity policy rescinded, Respondent would have received a substantial commission from the transaction.
Mrs. Newson never authorized or directed Respondent to file a death claim against her annuity. According to Mrs. Newson, she had no reason to do so because her husband's funeral had been pre-paid and he had a government policy. Furthermore, Mrs. Newson never agreed to purchase a new annuity from Respondent and had repeatedly declined his offers to sell her a new annuity.
Erma Clark is an elderly woman, presently aged eighty- eight (88), who lives alone and lived alone at all times material herein.
Prior to meeting Respondent, Mrs. Clark was the owner of two (2) annuity policies issued by IDS Life Insurance Company. The policy numbers were 9300-425987 and 9300-04085461.
In or around early 2001, Respondent came to the home Mrs. Erma Clark unannounced and without a prior appointment, and
asked to see her existing annuities. Respondent then proceeded to attempt to persuade Mrs. Clark to surrender her existing policies and purchase a new annuity that would earn more interest. Mrs. Clark refused to surrender her existing policies and to purchase a new annuity from Respondent.
After his initial visit to Mrs. Clark's home in early 2001, Respondent returned to Mrs. Clark's home several times and continued to attempt to convince her to surrender her existing policies and purchase a new annuity policy. Mrs. Clark repeatedly informed Respondent that she did not wish to nor would she do so.
On one of Respondent's subsequent visits to Mrs.
Clark's home, she told Respondent that she wanted to change the beneficiaries presently reflected on her existing annuities.
Respondent agreed to accomplish this task for her.
Thereafter, in or around May 2001, Respondent again visited the home of Mrs. Clark and presented her with forms that she assumed were necessary only for the purpose of changing beneficiaries on her existing annuities. She did not carefully review these papers and executed them as instructed by Respondent. In fact, the forms presented by Respondent to Mrs. Clark were those necessary to cause the surrender of her existing annuities and for the purchase of a new annuity to be issued by American Investors Life Insurance Company.
In or around May 2001, after Mrs. Clark executed the papers that were presented to her by Respondent, he processed the forms to cause surrender of her existing annuities and the purchase and the issuance of a new annuity from the proceeds thereof. This action by Respondent was without Mrs. Clark's knowledge and consent.
In or around June 2001, Mrs. Clark was contacted by IDS Insurance Company, insurer of her previously existing annuities, inquiring as to why she was surrendering the annuities. This was her first knowledge of such occurrence.
Upon becoming aware of Respondent's actions, Mrs.
Clark immediately informed IDS that at no time did she have knowledge of Respondent's actions nor did she authorize or desire to surrender her existing annuities to purchase any new annuity. She informed IDS that she desired to retain ownership of her two existing annuities.
Mrs. Clark then discovered that Respondent had caused National States Insurance Company to issue a new annuity policy to her, policy number HC1-1-0946693. She immediately informed the company that she wanted that policy canceled. On or about June 6, 2001, National States Insurance Company acknowledged cancellation of the new annuity policy that had been effected by the actions of Respondent.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of this proceeding. Sections 120.569 and 120.57(1), Florida Statutes.
Pursuant to Section 626.611, Florida Statutes, the Department is empowered to revoke, suspend, or otherwise discipline the licenses of insurance agents upon a determination that the licensee engaged in any of the acts enumerated in that provision.
The Department seeks to impose discipline which may include the possibility of suspension or revocation of Respondent's licenses to sell insurance. Therefore, it has the burden of proving by clear and convincing evidence that he committed the violations alleged in the Amended Administrative Complaint. Department of Banking and Finance, Division of Securities and Investor Protection v. Osborne Stern and Co., 670 So. 2d 932 (Fla. 1996); Ferris v. Turlington, 510 So. 2d. 292 (Fla. 1987).
The nature of clear and convincing evidence has been described in Slomowitz v. Walker, 429 So. 2d 797, at 800 (Fla. 4th DCA 1983), as follows:
[C]lear and convincing evidence requires that evidence must be found to be credible; that the facts to which the witnesses testify must be distinctly
remembered; the testimony must be precise and explicit and the witnesses must be lacking in confusion as to the facts in issue. The evidence must be of such weight that it produces in the mind of the trier of fact a firm belief or conviction, without hesitancy, as to be truth of the allegations sought to be established.
The Amended Administrative Complaint in this case alleges in two counts that Respondent, as an insurance agent, engaged in insurance transactions with Grace Newson and Erma Clark. The Department further alleges that in each of these transactions, Respondent engaged in conduct that is proscribed by various provisions of Chapter 626, Florida Statutes, that constitutes violations of the Insurance Code and rules of the Department, and that is grounds for suspension or revocation of Respondent's licenses and appointments as an insurance agent.
Specifically, the Amended Complaint alleges that Respondent engaged in conduct proscribed by and/or defined by Subsections 626.611(5), 626.611(7), 626.611(9), 626.611(13), 626.621(2), 626.621(3), 626.621(6), 626.621(9), 626.9521(1), 626.9521(2), 626.9541(1)(a)1. and 6., and 626.9541(1)(b) and (k)1., Florida Statutes, and Rule 4-215.230, Florida Administrative Code, as more fully set forth below.
Section 626.611, Florida Statutes, mandates suspension or revocation of an agent's license if the Department finds that such agent engaged in conduct within the scope of that
provision. In the instant case, the relevant provisions of that section are Subsections 626.611(5), (7), (9), and (13), Florida Statutes, which provide the following:
The [D]epartment shall deny an application for, suspend, revoke, or refuse to renew or continue the license or appointment of any applicant, 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:
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(5) Willful misrepresentation of any insurance policy or annuity contract or willful deception with regard to any such policy or contract, done either in person or by any form of dissemination of information or advertising.
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(7) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance.
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(9) Fraudulent or dishonest practices in the conduct of business under the license or appointment.
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(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.
Pursuant to Section 626.621, Florida Statutes, the Department has the discretion to revoke, suspend or otherwise
discipline the license or appointment of an insurance agent if it finds that the agent has committed any of the acts set forth in the section. The Amended Complaint alleges that Subsections 626.621(2), (3), (6), and (9), Florida Statutes, are the grounds upon which the Department may impose disciplinary action in this case. The relevant portions of Section 626.621, Florida Statutes, state the following:
The [D]epartment may, in its discretion, deny an application for, suspend, revoke, or refuse to renew or continue the license or appointment or any applicant, 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:
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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.
Violation of any lawful order or rule of the department.
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(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 IX of this chapter, or having otherwise shown himself or herself to be a source of injury or loss to the public or detrimental to the public interest.
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(9) If a life agent, violation of the code of ethics.
The Amended Complaint alleges that Respondent engaged in unfair methods of competition and/or unfair and/or deceptive acts or practices that are prohibited under Chapter 626, Part IX, Florida Statues, titled, Unfair Insurance Trade Practices. The provisions of that part which are relevant to this proceeding are Sections 626.9521 and 626.9541, Florida Statutes.
Section 626.9521, Florida Statutes, which proscribes persons from engaging in conduct which is determined to be an unfair method of competition, or an unfair or deceptive practice and establishes penalties for violations of the same, provides the following:
No person shall engage in this state in any trade practice which is defined in this part as, or determined pursuant to
s. 626.951 or s. 626.9561 to be, an unfair method of competition or an unfair or deceptive act or practice involving the business of insurance.
Any person who violates any provision of this part shall be subject to a fine in an amount not greater than $2,500 for each nonwillful violation and not greater than
$20,000 for each willful violation. Fines under this subsection may not exceed an aggregate of $10,000 for all nonwillful violations arising out of the same action or an aggregate amount of $100,000 for all willful violations arising out of the same action. The fines authorized by this
subsection may be imposed in addition to any other applicable penalty.
Section 626.9541, Florida Statutes, defines unfair methods of competition and unfair or deceptive acts or practices. That section provides in relevant part the following:
UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE ACTS.-The following are defined as unfair methods of competition and unfair or deceptive acts or practices:
Misrepresentations and false advertising of insurance policies.- Knowingly making, issuing, circulating, or causing to be made, issued, or circulated, any estimate, illustration, circular, statement, sales presentation, omission, or comparison which:
1. Misrepresents the benefits, advantages, conditions, or terms or any insurance policy.
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6. Is a misrepresentation for the purpose of inducing, or tending to induce, the lapse, forfeiture, exchange, conversion, or surrender of any insurance policy.
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False information and advertising generally.-Knowingly making, publishing, disseminating, circulating, or placing before the public, or causing, directly or indirectly, to be made, published, disseminated, circulated, or placed before the public.
In a newspaper, magazine, or other publication.
In the form of a notice, circular, pamphlet, letter, or poster.
Over any radio or television station,
or
In any other way,
an advertisement, announcement, or statement containing any assertion, representation, of statement with respect to the business or insurance, which is untrue, deceptive, or misleading.
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(k) Misrepresentation in insurance applications.
1. Knowingly making a false or fraudulent written or oral statement or representation on, or relative to, an application or negotiation for an insurance policy for the purpose of obtaining a fee, commission, money, or other benefit from any insurer, broker, or individual.
The Amended Complaint alleges that Respondent violated Rule 4-215.230, Florida Administrative Code, which provides the following:
Misrepresentations are declared to be unethical. No person shall make, issue, circulate, or cause to be made, issued, or circulated, any estimate, circular, or statement misrepresenting the terms of any policy issued or to be issued or the benefits or advantages promised thereby or the dividends or share of the surplus to be received thereon, or make any false or misleading statement as to the dividends or share of surplus previously paid on similar policies, or make any misleading representation or any misrepresentation as
to the financial condition of any insurer, or as to the legal reserve system upon which any life insurer operates, or use any name or title of any policy or class of policies misrepresenting the true nature thereof.
No person shall make, publish, disseminate, circulate, or place before the public, or cause, directly or indirectly, to be made, published, disseminated, circulated, or placed before the public, in a newspaper, magazine, or other publication, or in the form of a notice, circular, pamphlet, letter or poster, or over any radio or television station, or in any other way, any advertisement, announcement or statement containing any assertion, representation or statement with respect to the business of insurance or with respect to any person in the conduct of his insurance business, which is untrue, deceptive or misleading.
The Department met its burden of proof with regard to the charges that Respondent violated Subsections 626.611(5), (7), (9), and (13), Florida Statutes.
The clear and convincing evidence in this case established that Respondent caused the existing annuity policies owned by Grace Newson and by Erma Clark to be surrendered with the proceeds therefrom to be utilized for the purchase of new annuities, all without the understanding, knowledge or consent of these elderly women and contrary to their specific advices to him. Moreover, the clear and convincing evidence established that, in the transaction with Mrs. Newson, Respondent filed a
death claim against an annuity owned by Mrs. Newson without her knowledge and consent.
The clear and convincing evidence adduced at hearing established that Respondent willfully misrepresented insurance policies or annuity contracts to Mrs. Newson and Mrs. Clark, or willfully deceived them with regard to the policies or contracts, which are the subject of this proceeding. Moreover, the clear and convincing evidence established that Respondent's conduct, during the course of those transactions, demonstrated his lack of fitness or trustworthiness to engage in the business of insurance. Finally, the clear and convincing evidence established that the conduct engaged in by the Respondent constituted fraudulent or dishonest practices in the conduct of business under his insurance license or appointment and that Respondent's actions were a willful violation of the Insurance Code.
The Department proved by clear and convincing evidence that the conduct engaged in by Respondent constitutes grounds for discipline set forth is Subsections 626.621(2), (3), (6), and (9), Florida Statutes. The evidence established that Respondent violated provisions of the Insurance Code and rules of the Department, engaged in conduct which has shown him to be a source of injury or detriment to the public interest, and violated the code of ethics.
The Department also proved by clear and convincing evidence that the conduct in which Respondent engaged constitutes deceptive acts or practices within the meaning of Subsection 626.9541(1)(k)1., Florida Statutes. Therefore, Respondent has violated and is subject to discipline pursuant to Section 626.9521, Florida Statutes.
The evidence established that Respondent engaged in conduct that is proscribed by Rule 4-215.230, Florida Administrative Code, by misrepresenting to Mrs. Newson and Mrs. Clark the true nature of the documents he presented to them for their signatures. Such misrepresentations are declared in the rule to be unethical.
Having established the underlying allegations contained in the Amended Complaint, the Department has met its burden of proof and has established that Respondent engaged in conduct proscribed by the provisions of Chapter 626, Florida Statutes, and Rule 4-215.230, Florida Administrative Code.
The conduct engaged in by Respondent constitutes grounds for mandatory disciplinary action under Section 626.611, Florida Statutes. Pursuant to that section, the Department is required to either suspend or revoke Respondent's insurance license. In this case, the Department proposes or seeks to suspend Respondent's insurance license for eighteen months.
Based on the foregoing Findings of Facts and Conclusions of Law, it is recommended that the Department of Insurance enter a final order finding that Louis Francis Robert, Jr. committed the offenses alleged in the Amended Administrative Complaint and suspending his insurance license for eighteen months.
DONE AND ENTERED this 25th day of July, 2002, in Tallahassee, Leon County, Florida.
CAROLYN S. HOLIFIELD
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 25th day of July, 2002.
COPIES FURNISHED:
Dean Andrews, Esquire Department of Insurance Division of Legal Services
200 East Gaines Street Tallahassee, Florida 32399-0333
James V. Caltagirone, Esquire
111 South Moody Avenue Tampa, Florida 33609
Honorable Tom Gallagher
State Treasurer/Insurance Commissioner Department of Insurance
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.
| Issue Date | Document | Summary |
|---|---|---|
| Aug. 27, 2002 | Agency Final Order | |
| Jul. 25, 2002 | Recommended Order | Respondent caused the surrender of the annuities of two elderly women and used the proceeds therefrom to purchase new annuities for them without their knowledge or consent. Recommend suspension of license. |
