STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF FINANCIAL )
SERVICES, )
)
Petitioner, )
)
vs. ) Case No. 03-3655PL
)
JAY LAWRENCE POMERANTZ, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice, a formal hearing was held in this case on December 15 through 17, 2003, in Ft. Lauderdale, Florida, before Patricia Hart Malono, a duly-designated Administrative Law Judge of the Division of Administrative Hearings.
APPEARANCES
For Petitioner: David J. Busch, Esquire
Philip M. Payne, Esquire Department of Financial Services Division of Legal Services
612 Larson Building
200 East Gaines Street Tallahassee, Florida 32399-0333
For Respondent: Sandy P. Fay, Esquire
Colodny, Fass, Talenfeld, Karlinsky & Abate, P.A.
2000 West Commercial Boulevard, Suite 232 Ft. Lauderdale, Florida 33309
STATEMENT OF THE ISSUE
Whether the Petitioner committed the violations alleged in the Amended Administrative Complaint filed October 14, 2003, and, if so, the penalty that should be imposed.
PRELIMINARY STATEMENT
In a ten-count Administrative Complaint dated August 22, 2003, the Department of Financial Services ("Department") charged Jay Lawrence Pomerantz with having violated various sections of the Florida Insurance Code in his dealings with ten customers of his insurance agency, A Able Wide World Insurance ("A Able"). Mr. Pomerantz timely requested an administrative hearing involving disputed issues of fact, and the Department forwarded the matter to the Division of Administrative Hearings for assignment of an administrative law judge. In a notice issued on October 22, 2003, the final hearing was scheduled for December 15 through 17, 2003.
In an order dated October 30, 2003, the Department was given leave to amend its complaint to add an eleventh count to the complaint, and the Amended Administrative Complaint filed October 14, 2003, is the charging document for purposes of this proceeding. In Counts I through X of the Amended Administrative Complaint, the Department has charged Mr. Pomerantz with violations of the following sections of the Florida Statutes:1 Section 626.561(1) and (3); Section 626.592(1) and (5);
Section 626.611(4) and (7) through (10); and Section 626.621(2) and (6). In Counts V and X of the Amended Administrative Complaint, the Department has, in addition, charged
Mr. Pomerantz with having violated Section 626.9541(1)(z)3., Florida Statutes (2002), and in Count XI, the Department has charged Mr. Pomerantz with having violated Sections 626.611(4), (7), and (8) and 631.34(2), Florida Statutes (2002). These charges arose out of Mr. Pomerantz's activities as a licensed property and casualty insurance agent and presumed primary agent for the A Able insurance agency.
The factual bases for the violations alleged in the Amended Administrative Complaint are as follows: In Count I, the Department alleges that Mr. Pomerantz failed to return unearned premium to an insured within a reasonable time after the insured cancelled his automobile insurance policy; in Count II, the Department alleges that Mr. Pomerantz failed to return unearned premiums to an insured after the insured cancelled his automobile insurance policy; in Count III, the Department alleges that Mr. Pomerantz failed to submit to an insurance company an application and premium payment for automobile liability insurance and failed to provide the insurance company with complete information in an application for an automobile collision policy; in Count IV, the Department alleges that
Mr. Pomerantz failed to return unearned premiums to an insured
after the insured's automobile insurance policy was cancelled; in Counts V, VI, VII, VIII, IX, and X, the Department alleges that Mr. Pomerantz failed to secure automobile insurance coverage for clients after accepting payment for such coverage and failed to refund the premium paid for the coverage within a reasonable time; in Count XI, the Department alleges that
Mr. Pomerantz failed to notify an insured that the insurance company with which her automobile insurance had been placed had gone into liquidation and failed to place or attempt to place her automobile insurance with another company; and in Counts V and X, the Department alleges that Mr. Pomerantz charged clients for optional coverage that was not explained and that the clients did not want.
At the hearing, the Department presented the testimony of the following witnesses: Fred Hublitz; John Thierwechter; Judith Stanley; Joseph Balsamo; Janice Misconis; Shirley Staple Shaffer; Terensinha Honczarenko; Cecil Worrall; Alex Pazon; Alida Ann High; Carmen Valdes; Llaylett Vazquez; Jeffrey Cohn; Roberto Nieves; and Diane M. Carroll, whose testimony was presented through the transcript of her deposition taken December 11, 2003. Petitioner's Exhibits 1 through 40 were offered and received into evidence; the transcript of
Ms. Carroll's testimony was received as Petitioner's Exhibit 40.
Mr. Pomerantz testified in his own behalf, and Respondent's Exhibits 1 through 14 were offered and received into evidence.
At the conclusion of the hearing, the Department voluntarily dismissed Count II of the Amended Administrative Complaint and the charges in Counts V and X that Mr. Pomerantz violated Section 626.9541(1)(z)3., Florida Statutes. The Department requested that it be permitted to file their proposed findings of fact and conclusions of law 30 days after the date the transcript of the proceedings was filed with the Division of Administrative Hearings. Counsel for Mr. Pomerantz had no objection, and the request was granted.
The four-volume transcript of the proceedings was filed with the Division of Administrative Hearings on January 16, 2004. On February 11, 2004, the Department requested an extension of time for filing proposed findings of fact and conclusions of law, and an extension until March 5, 2004, was granted in an Order entered February 12, 2004. On March 3, 2004, counsel for Mr. Pomerantz filed a motion to withdraw as Mr. Pomerantz's attorney. An Order granting the motion was entered on March 5, 2004, and Mr. Pomerantz was given an extension until March 19, 2004, to file his proposed findings of fact and conclusions of law. The Department timely filed its proposed findings of fact and conclusions of law, which have been considered in the preparation of this Recommended Order.
No post-hearing submittal was filed by or on behalf of Mr. Pomerantz.
FINDINGS OF FACT
Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made:
The Department is the state agency responsible for issuing licenses for insurance agents in the State of Florida, and for regulating and disciplining licensed insurance agents. Sections 626.016, 626.611, and 626.281, Florida Statutes (2004).
At all times material to this proceeding, Mr. Pomerantz was licensed in Florida as a property and casualty general lines insurance agent, which is referred to as a "2-20 license."
At all times material to this proceeding, Mr. Pomerantz did business as A Able insurance agency, an unincorporated entity located at 124 South Federal Highway, Pompano Beach, Florida.
Mr. Pomerantz owned the A Able insurance agency, worked in the office in Pompano Beach, and was the agent in charge of the office. Automobile insurance was the primary product sold at the Pompano Beach office of the A Able insurance agency.
No primary agent for the A Able insurance agency office in Pompano Beach was registered with the Department, but
Mr. Pomerantz functioned as its de facto primary agent at that location.
An insurance agency known as the Wide World of Insurance was, and perhaps still is, located in Margate, Florida. Mr. Pomerantz's brother, Randy Pomerantz, operated this agency. In the summer of 2000, the two offices merged, but the merger dissolved in the early spring of 2002. During the time that the two agencies operated as a single entity, they continued to maintain the two office locations. Applications and other paperwork generated in the Pompano office were, as a rule, sent to the Margate office for processing.
Prior to May 2003, however, when he began working in a general administrative capacity at the Margate office,
Mr. Pomerantz did not work in the Margate office and had no personal knowledge of the operations of the Margate office or the applications for automobile insurance handled by that office.
At the times material to this proceeding, Mr. Pomerantz was the appointed agent for Ocean Harbor Insurance Company ("Ocean Harbor"), Southern Group Indemnity, Inc. ("Southern Group"), and U.S. Security Insurance Company ("U.S. Security"). As an appointed agent, Mr. Pomerantz, as well as agents working in the Pompano Beach office of the A Able insurance agency, acted on behalf of these companies, and the agents could bind
coverage with the companies and accept premium payments on behalf of these companies.
An insurance agent can "bind" automobile insurance coverage with an insurance company that has appointed or registered the agent as its representative by calling the insurance company and getting a binder number and time of day. A binder obligates the insurance company to provide the coverage specified until the binder is converted into an insurance policy or the binder is cancelled. Southern Group's agreement with Mr. Pomerantz required him to send the signed application for a new automobile insurance policy, for a renewal of an existing policy, or an amendment to an existing policy, together with a check or draft for the premium net commissions, postmarked within 72 hours of the time at which the coverage was bound. Although not reduced to writing, the standard policy of U.S. Security requires its appointed agents to mail the application and payment to the company immediately upon coverage being bound. Ocean Harbor's general rules applicable to its appointed agents require that a completed application and the required premium, together with other documentation, be received by the company within five working days of the date on which coverage is bound.
Within 20 to 30 days after coverage is bound on an application, each of these three companies sends a notice to the
agent listing the binders for which the company has not received the application, premium, and other required paperwork. The notice advises the agent that the binder is cancelled. This means that the insurance company no longer provides automobile insurance coverage under the binder. If the application, premium, and other required paperwork is subsequently forwarded to the insurance company, the company, after review by its underwriters, can accept the application and issue a policy with an effective date retroactive to the effective date stated on the application for the policy. In some circumstances, the underwriting review will result in an additional premium being charged on the policy. In this circumstance, a notice is sent to the insured advising them of the additional premium due.
At the time the application for automobile insurance coverage is completed and the coverage is bound by an agent appointed or registered by the company, the customer pays the insurance agent either the full amount of the premium determined by the agent to be due or a down payment on the premium when the premium is financed by a premium finance company. Insurance companies using appointed or registered agents do not, as a rule, accept payment directly from the customer; rather, the payment received from a customer is deposited in the agency's account, and the agency, after deducting its commission, sends an agency check to the insurance company. When the premium is
financed, the down payment is deposited in the agency account, and the agency, after deducting its commission, sends an agency check to the premium finance company.
When a customer finances his or her insurance premium through a premium finance company, the customer signs a premium finance agreement in which he or she agrees to pay monthly installments to the premium finance company for the total owed under the agreement; the premium finance company, in turn, pays the full premium to the insurance company at the time the application is submitted to the insurance company. Premium finance companies provide agents with whom they do business company drafts, which are prepared by the insurance agent on behalf of the premium finance company.
Mr. Pomerantz and the A Able insurance agency did business with the premium finance company ETI Finance Corporation ("ETI Finance"), and A Able insurance agency was supplied with ETI Finance premium finance agreements and ETI Finance drafts. In ETI Finance's premium finance agreement, the customer agrees to assign to ETI Finance a security interest in any unearned return premiums that may become due upon the cancellation of the insurance policy. The insurance company sends this unearned return premium directly to ETI Finance if the insurance policy is cancelled. ETI Finance deducts any amounts owed under the premium finance agreement; if the amount
of unearned return premium exceeds the amount the customer owes ETI Finance under the premium finance agreement, ETI Finance remits the balance owed to the customer to the insurance agent; if the amount of unearned return premium is insufficient to cover the amount the customer owes ETI Finance, ETI Finance bills the insurance agent for the balance owed under the premium finance agreement.
ETI Finance handles unearned return premium credits and debits on an account current basis whereby a bi-monthly statement is prepared for each of the agents with whom it does business. The statement lists customers and all debits and credits to the agent's account for each of the customers listed. When an insurance policy is cancelled, the agent statement includes the amount of unearned return premium received by ETI Finance from the insurance company, and shows whether the customer is owed money, which is shown as a credit to the agent's account, or whether the agent owes ETI Finance money, which is shown as a debit to the agent's account. All of the debits and credits are totalled on the bi-monthly statement; if a total credit is shown, an ETI Finance check is included with the statement; if a total debit is shown, the agent is required to send ETI Finance a check to cover the amount owed. ETI Finance's agent statement advises the agent to review the
statement carefully because the agent might owe a customer a refund.
If a customer pays the agent the full premium and the agent then pays the premium with an agency check, the insurance company sends the agent an unearned return premium. It is the agent's responsibility to refund the unearned return premium to the customer.
In addition to paying a customer any unearned return premium received upon cancellation of a policy, the agent is responsible for refunding any unearned commissions the agent was paid on the policy. Either the insurance company or the agent calculates the amount of the unearned commission, and this is included in the payment to the customer.
At all times material to this proceeding, Alida High, nee Watson, held a "2-20 license" allowing her to sell property and casualty insurance in Florida. She was employed by the
A Able insurance agency and worked in the office located at 124 South Federal Highway, Pompano Beach, Florida. She began working for the A Able insurance agency in July 1999, and was paid a weekly salary plus commissions
Mr. Pomerantz and Ms. High were authorized signatories on the A Able insurance agency's Bank of America checking account number 91895073. Ms. High and Mr. Pomerantz signed the signature card on February 18, 2000.
Ms. High functioned as a licensed insurance agent in the Pompano Beach office of the A Able insurance agency, and her responsibilities included working with customers to prepare applications for automobile insurance coverage, binding coverage with the insurance companies, receiving payment for the premiums on the policies or for the down payment on a premium finance agreement if the premium was financed, preparing the application package to be sent out to the insurance company, and issuing temporary identification cards.
If a customer of the A Able insurance agency paid his or her premium for a policy in full, the cash or check was deposited in the agency's account, and the insurance agency issued a check payable to the insurance company for the premium minus the agency's commission. In this circumstance, Ms. High prepared the application package and placed it on
Mr. Pomerantz's desk so that he could write the agency's check and send the application package and check to the appropriate insurance company. Ms. High followed this procedure throughout her employment at the A Able insurance agency, in accordance with the directions Mr. Pomerantz gave her when she began working for the A Able insurance agency.
If one of Ms. High's customers financed part of the premium with a premium financing company, Ms. High routinely issued the drafts of the premium finance company for the premium
owed for an insurance policy, and she mailed the draft and the application package to the insurance company.
Ms. High also occasionally prepared and signed checks on the A Able insurance agency's Bank of America checking account payable to "BCRC"2 to pay for automobile tags and titles issued by Broward County and other, minor, miscellaneous items.
During the summer and early fall of 2002, Ms. High prepared checks at Mr. Pomerantz's request and signed his name. Most of these checks were to "BCRC", but several were to pay for office expenses, and one was written to U.S. Security Insurance Company to pay a customer's additional insurance premium.
Ms. High wrote checks on the A Able insurance agency account only when she had Mr. Pomerantz's permission to do so. Writing checks was not among her normal responsibilities at the A Able insurance agency, and Ms. High would not write checks on the agency's account without Mr. Pomerantz's express permission because she did not know anything about the account balance.
Beginning in the summer of 2002, Mr. Pomerantz's interest in the business of the A Able insurance agency waned, according to Ms. High, and his visits to the office became more and more infrequent. Initially during this period Mr. Pomerantz came in every few days and wrote checks and sent application packages out to insurance companies, but eventually applications for insurance prepared and bound by Ms. High began to accumulate
on Mr. Pomerantz's desk. When Ms. High reminded Mr. Pomerantz that the applications on his desk had been bound and needed agency checks cut so they could be sent to the insurance companies, Mr. Pomerantz told her to leave them, that he would take care of it. Ms. High became more and more concerned about the backlog of applications on Mr. Pomerantz's desk, and, when he was in the office, she constantly reminded him of the need to send the applications to the insurance companies.
Count I: John Thierwechter
In February 2002, John Thierwechter went to the A Able insurance agency to purchase the minimum amount of automobile insurance required by law for a 1993 Nissan Sentra. The total premium quoted was $1,550.00 for personal injury protection/physical damage/comprehensive/collision coverage with Ocean Harbor and for a policy covering reimbursement of the
$500.00 deductible on the Ocean Harbor policy. Mr. Thierwechter decided to finance the premium, and Ms. High completed an ETI Finance premium finance agreement, which Mr. Thierwechter signed on February 21, 2002. The first installment on the Premium Finance Agreement signed by Mr. Thierwechter was due on
March 23, 2002.
Mr. Thierwechter owed a down payment of $289.00 under the Premium Finance Agreement. On February 22, 2002, he paid
$200.00 of the down payment in cash, and he received a receipt
signed by Mr. Pomerantz. Mr. Thierwechter returned to the agency on February 25, 2002, to pay the remaining $89.00, and he received a receipt signed by Ms. High.
Mr. Thierwechter had previously had a bad experience with Ocean Harbor, and, within a few weeks, he purchased automobile insurance coverage from GEICO Casualty Company. This coverage was effective March 16, 2002. In a letter dated
March 15, 2002, that he hand-delivered to the A Able insurance agency, Mr. Thierwechter requested that his Ocean Harbor policy be cancelled and that he receive a refund of "the unearned premium" . . . within the next 30 days."
On March 16, 2002, Ms. High completed an All Purpose Endorsement requesting that Ocean Harbor cancel
Mr. Thierwechter's insurance coverage effective March 16, 2002. This request was received by Ocean Harbor on March 23, 2002.
Because Mr. Thierwechter had financed the premium for his Ocean Harbor policy with ETI Finance, Ocean Harbor sent the unearned return premium to ETI Finance, pursuant to the Premium Finance Agreement signed by Mr. Thierwechter. ETI Finance received the cancellation notice and check for the unearned return premium from Ocean Harbor on April 9, 2002.
The amount of the unearned return premium was included on the agent's statement for the A Able insurance agency dated May 1, 2002. That statement reflected return premium in the
amount of $757.35. This amount was less than the amount
Mr. Thierwechter owed ETI Finance because Mr. Thierwechter had not made any of the monthly installments required by the Premium Finance Agreement. As a result, the May 1, 2002, agent's statement recorded a $63.47 debit against the account of the
A Able insurance agency. The A Able insurance agency was responsible for paying Mr. Thierwechter the amount of unearned commission, if any, that exceeded the $63.47 it owed to ETI Finance.
Pursuant to Mr. Pomerantz's calculations,
Mr. Thierwechter was owed $70.16 in unearned commission retained by the A Able insurance agency, and Mr. Pomerantz wrote
Mr. Thierwechter a check for that amount on the A Able insurance agency account on July 1, 2002. Mr. Thierwechter picked up the check on or about July 22, 2002.
Count III: Shirley Shaffer
On or about June 11, 2001, Shirley Shaffer purchased a 1996 Kia Sephia from the Coral Springs Auto Mall. Before
Ms. Shaffer could drive the car off of the car lot, the car dealer required her to secure automobile insurance. The dealer called a person to assist Ms. Shaffer, and a man arrived at the dealership within a short period of time. This man presented Ms. Shaffer with a card on which was printed "Wide World of
Insurance"; there was no individual's name on the card, but the card showed a Margate, Florida, address.
Ms. Shaffer wanted to purchase only the basic coverage, and a U.S. Security application for a "physical damage only" policy was prepared specifying comprehensive and collision coverage only. The application identified the insurance agency as the A Able insurance agency, located in Pompano Beach. According to a notation on the application, the comprehensive and collision insurance coverage was bound with U.S. Security at 3:00 p.m. on June 12, 2001.3
In addition, Ms. Shaffer signed a Summary of Coverages and Cost Breakdown form carrying the name "Wide World of Insurance" and an address in Margate, Florida. This form was also dated June 12, 2001.
At some point during the application process at the Coral Springs Auto Mall, the person representing the insurance agency went outside the dealership offices, telling Ms. Shaffer that he was going to take photographs of her car to attach to the application for insurance coverage.
Ms. Shaffer financed the premium for her automobile insurance policy, and she paid a deposit of $200.00, which she charged on her credit card.
U.S. Security received Ms. Shaffer's application for comprehensive and collision coverage on June 18, 2001, and a
Physical Damage Policy was issued to Ms. Shaffer on June 26, 2001, with a policy term of June 13, 2001, to June 13, 2002. Ms. Shaffer received a copy of this policy. The agent identified on the policy was the A Able insurance agency in Pompano Beach.
A Notice of Cancellation dated July 18, 2001, was sent to Ms. Shaffer by U.S. Security. In the notice, Ms. Shaffer was advised that her insurance policy would be cancelled effective September 2, 2001, because her application was incomplete.
After she received the cancellation notice,
Ms. Shaffer called the Margate office of the Wide World of Insurance insurance agency because that was the office whose address was on the card she was given when she applied for the
U.S. Security insurance policy. Someone at the Margate office told her that, because she lived in Pompano Beach, her account was handled by the agency's Pompano Beach office and that she should call that office.
Ms. Shaffer contacted the Pompano Beach office and spoke to a man who told her that everything about her policy looked fine in the computer and that she should not worry about the letter from U.S. Security. After this conversation, she contacted the Margate office again and was told that they knew nothing about the problem with the policy at that office.
Ms. Shaffer then telephoned U.S. Security and was told that her insurance agent needed to take care of the problem, which she was led to believe was minor.
Finally, Ms. Shaffer received a letter dated August 7, 2001, from a person named Gary. The letter carried the name "Wide World of Insurance" and the Margate address. In the letter, Gary requested that Ms. Shaffer "PLEASE STOP BY OUR OFFICE SO WE MAY TAKE PICTURES OF THE KIA. ORIGINAL ONES DID NOT COME OUT. ALSO NEED REGISTRATION. IMPT!!!!!" Gary stated in the letter that Ms. Shaffer needed to provide the requested information by August 21, 2001, "to avoid any further delays or cancellation requests from the insurance company."
When she received the August 7, 2001, letter, which she recalled was on a Friday, Ms. Shaffer called the Margate office and arranged to bring her car in for photographs at 8:00
a.m. the following Monday.4
Ms. Shaffer arrived at the Margate office slightly before 8:00 a.m., and a few minutes later the man who had taken her application at the Coral Springs Auto Mall arrived at the office and took pictures of her car. Ms. Shaffer also provided a copy of her automobile registration, as requested in the August 7, 2001, letter.
Ms. Shaffer also purchased personal liability insurance coverage from the Pompano Beach office of the A Able
insurance agency, and she charged the $659.00 premium on her Visa credit card. Ms. Shaffer handled the entire transaction during a telephone conversation with a person in the Pompano Beach office, but she does not know the name of the person with whom she spoke.
When Ms. Shaffer went to the Margate office in response to Gary's letter of August 7, 2001, she was given a receipt dated August 6, 2001, for the $659.00 premium she had paid for "addl liability coverage"; it was stated on the receipt that the coverage would be effective from September 1, 2001, to June 12, 2001. The person who signed the receipt was not identified, and the signature is indecipherable.
The transaction date shown on Ms. Shaffer's credit card statement was August 7, 2001, and the statement showed that the charge was credited to "A ABLE WIDE WORLD OF I POMPANO BEACH FL."
Ms. Shaffer also received a Florida Automobile Insurance Card confirming that she had personal injury protection benefits, property damage liability, and bodily injury liability coverage with U.S. Security; the agent identified on the card was "A Able Wide World of Insurance," with a post office box address in Margate, Florida.
U.S. Security cancelled Ms. Shaffer's physical damage policy effective September 2, 2001, because her application was
incomplete. U.S. Security sent a check dated September 26, 2001, to ETI Finance for $323.85, which was the unearned return premium owing on Ms. Shaffer's policy. U.S. Security never received an application for the "additional liability coverage" Ms. Shaffer requested and paid for on August 7, 2001.
On October 22, 2001, Ms. Shaffer was caught in a flash flood, and she drove her Kia automobile into an area of water that was so deep her automobile floated. At one point, a bus drove through the water near the Kia, and the wake caused the Kia to wash into railroad ties that were used in the yard of a nearby home for landscaping. The railroad ties tore off the front of the car. The damage to the Kia was so extensive that it was considered a total loss.
Ms. Shaffer filed a claim with U.S. Security, and received a letter dated October 25, 2001, from Corporate Claim Services, Inc., acknowledging receipt of her claim on behalf of
U.S. Security.
Ms. Shaffer then received a letter from Corporate Claim Services, Inc., dated October 26, 2001, advising her that her insurance policy with U.S. Security was cancelled effective September 2, 2001.
Because Ms. Shaffer had no automobile insurance at the time her car was damaged, she had the Kia repaired at her own expense and incurred substantial expense and inconvenience
because she had to arrange for alternative transportation during the year-and-a-half it took to have her car repaired.
Ms. Shaffer did not receive any unearned premium or unearned commission refund after the cancellation of her policy.
Ms. Shaffer never did business in person with
Mr. Pomerantz. In fact, she met him for the first time the week before the final hearing, when her deposition was taken.
Count IV: Terensinha Honczarenko
On or about March 30, 2001, Terensinha Honczarenko went to the Margate office of the Wide World of Insurance insurance agency to purchase automobile insurance for a newly- purchased Toyota Corolla.5 Ms. Honczarenko had done business with the insurance agency located in Margate for a number of years.
A man working at the Margate office named Greg completed Ms. Honczarenko's application for automobile insurance coverage with Southern Group, which she signed.6 The A Able insurance agency in Pompano Beach was identified in the application as the agent producing the application. Coverage on Ms. Honczarenko's policy was bound on the policy on March 30, 2001, and Southern Group received the application on April 4, 2001.
The underwriting review of Ms. Honczarenko's application was completed on May 29, 2001, and Southern Group
issued a policy to Ms. Honczarenko on June 26, 2001, with an effective date of March 31, 2001, through March 31, 2002. The A Able insurance agency in Pompano Beach was identified on the policy as the insurance agent.
Ms. Honczarenko paid a $275.00 down payment on the total policy premium of $1098.00, and financed the remainder of the premium with ETI Finance.7 The Premium Finance Agreement was dated March 30, 2001, and was processed by ETI Finance on
April 18, 2001.
Ms. Honczarenko made payments pursuant to the Premium Finance Agreement from April 30, 2001, until August 2001.
Ms. Honczarenko regularly made these payments at the Margate office, sometimes paying in cash and sometimes paying by check. When she took her August 2001 payment to the Margate office, Greg told her that there was a problem with her insurance policy and that she should come back in two days. When she returned to the Margate office, she was told that her automobile insurance policy had been cancelled. When she asked for her money back, Greg refused.
At some point in June 2001, Southern Group sent Ms. Honczarenko a notice at her correct address advising her
that she owed $263.00 in additional premium on Southern Group automobile insurance policy. She was given three options: To pay the additional premium by June 28, 2001, and keep the policy
in force; to request by July 18, 2001, that Southern Group cancel the policy and refund any unearned premium; or to do nothing, in which case the policy would be cancelled effective July 18, 2001, and the unearned premium refunded.
Ms. Honczarenko claims she never received this notice.
Southern Group also sent Ms. Honczarenko a notice dated June 21, 2001, to her correct address, advising her that the vehicle identification number on her insurance application did not correspond to the vehicle identification number in their records. Southern Group asked Ms. Honczarenko to check her registration and return the letter to Southern Group with the correct information set forth on the bottom of the letter.
Ms. Honczarenko claims she never received this notice. Southern Group also sent a copy of the notice to the "Wide World of Ins Pompano Bch."
In a letter dated June 29, 2001, "Gary" advised Ms. Honczarenko that she needed to supply the Margate office with a copy of the registration for her 1985 Toyota. This letter was sent to the same address as the notices sent
Ms. Honczarenko by Southern Group. Ms. Honczarenko received the June 29, 2001, letter from the Margate office of the Wide World of Insurance insurance agency.8
Because Southern Group received no response from Ms. Honczarenko to its notice that she owed additional premium
on her automobile insurance policy, it cancelled her policy effective July 18, 2001, and sent her a notice of cancellation dated June 29, 2001. The notice was sent to the same address as was the notice of additional premium and the notice that there was a discrepancy in her automobile identification number.
Ms. Honczarenko received the notice of cancellation.
On August 10, 2001, Southern Group sent a check to ETI Finance for unearned return premium on Ms. Honczarenko's automobile insurance policy in the amount of $572.90. ETI Finance received the check on August 16, 2001, and included
Ms. Honczarenko's unearned return premium in the statement it sent to the A Able insurance agency in Pompano Beach on or about August 31, 2001. The statement showed that ETI Finance had received $572.90 in unearned return premium on Ms. Honczarenko's account, and it included a credit to the A Able insurance agency of $71.95.
Ms. Honczarenko did not receive any refund of unearned return premium or unearned commission from A Able insurance agency.
Count V: Cecil Worrall
On June 10, 2002, Cecil Worrall went to the A Able insurance agency in Pompano Beach to renew his automobile insurance within Southern Group. At that time, he had done
business with A Able insurance agency in Pompano Beach for eight-to-ten years.
Mr. Pomerantz completed Mr. Worrall's application, which Mr. Worrall signed. Mr. Worrall gave Mr. Pomerantz a check in the amount of $570.00 as payment of the full amount of the renewal premium.
Mr. Pomerantz gave the application to Ms. High and expected her to bind the coverage and process the application. According to a notation of the application, coverage was bound on June 19, 2002, at 3:46 p.m., and, as was her custom, Ms. High put the application package on Mr. Pomerantz's desk for him to review, prepare an agency check for the premium net commission, and mail the application package and payment to Southern Group.
Mr. Worrall's June 10, 2002, check was deposited into the account of "A Able Wide World of Insurance."
Southern Group did not receive the application and agency check for the premium net commission on Mr. Worrall's renewal within the 72 hours required by Southern Group's agreement with Mr. Pomerantz. On July 12, 2002, a notice was sent to "Wide World of Insurance Pomp" at the A Able insurance agency address in Pompano Beach advising that Mr. Worrall's binder coverage had expired because Southern Group had not received the application.9 Southern Group advised the A Able insurance agency to check its records to make sure that the
application package was not misplaced and further advised that a claim against the binder might result in a claim against its "Errors & Omissions Insurance."
The Department of Insurance10 made an inquiry of Southern Group on October 16, 2002, regarding the status of
Mr. Worrall's insurance policy, and Southern Group replied in a letter dated October 28, 2002, that, although coverage had been bound for Mr. Worrall, it had no record of having received
Mr. Worrall's application and the premium payment or a response to its July 12, 2002, notice to the A Able insurance agency that the binder had expired.
After Southern Group received the inquiry from the Department of Insurance, it sent a representative to the A Able insurance agency Pompano Beach office, where the Southern Group application for Mr. Worrall was retrieved. On December 10, 2002, Southern Group issued an automobile insurance policy to Mr. Worrall, with an effective date retroactive to June 26, 2002, the date the policy would have been effective had the application and premium payment been transmitted to Southern Group timely.
Count VI: Cynthia Mousel
Cynthia Mousel was a client of the A Able insurance agency Pompano office, and primarily Ms. High handled her business. On or about September 18, 2002, Ms. High completed an
application within U.S. Security for automobile insurance coverage on behalf of Ms. Mousel. Ms. Mousel signed the application, and coverage was bound on September 18, 2002. Ms. Mousel paid the full premium of $524.00.
As was her custom, Ms. High put the application package on Mr. Pomerantz's desk for him to review, prepare an agency check for the premium net commission, and mail the application package and payment to U.S. Security.
In October 2002, the Department of Insurance sent an inquiry to U.S. Security regarding the status of Ms. Mousel's automobile insurance policy. In a letter dated October 30, 2002, U.S. Security advised the Department of Insurance that it had no record that, as of that date, it had received an application for automobile insurance coverage under Ms. Mousel's name.11
Count VII: Fred Hublitz
Fred Hublitz was a long-time customer of the A Able insurance agency in Pompano Beach. On September 13, 2002, Mr. Hublitz visited the office, and Ms. High completed an Endorsement Request Form on his behalf to add coverage to his
automobile insurance policy with Ocean Harbor for a 2000 Mercury Sable automobile. Mr. Hublitz signed the endorsement and wrote a check for $260.00, which was the full amount of the premium to
add this coverage. The coverage was bound on September 13, 2002.
As was her custom, Ms. High put the endorsement package on Mr. Pomerantz's desk for him to review, prepare an agency check for the premium net commission, and mail the endorsement and payment to Ocean Harbor.
The check written by Mr. Hublitz on September 13, 2002, was deposited into the account of "A Able Wide World of Insurance."
In a letter dated October 16, 2002, the Department of Insurance inquired of Ocean Harbor regarding the status of
Mr. Hublitz's automobile insurance policy. Ocean Harbor responded in a letter dated November 7, 2002, that it had no record of having received the endorsement or premium payment for Mr. Hublitz's 2000 Mercury Sable.
An Ocean Harbor representative went to the A Able insurance agency office in Pompano Beach on November 15, 2002, and picked up applications and endorsements for automobile insurance coverage. Among these documents was Mr. Hublitz's endorsement, and Ocean Harbor added the 2000 Mercury Sable to Mr. Hublitz's existing Ocean Harbor automobile insurance policy, effective retroactively.12
Count VIII: Lori O'Connell
Lori O'Connell had obtained automobile insurance coverage from the A Able insurance agency in Pompano Beach. She had received a notice that her policy with Southern Group was to expire on August 14, 2002, and a friend, Joseph Balsamo, went to the A Able insurance agency office on July 9, 2002, and gave Ms. High a check for $364.00, which was full payment for the policy renewal. Ms. High bound the renewal on July 12, 2002.
As was her custom, Ms. High put the application package on Mr. Pomerantz's desk for him to review, prepare an agency check for the premium net commission, and mail the renewal application package and payment to Southern Group.
A month later, Ms. O'Connell had not received an insurance card or renewal policy, and Mr. Balsamo telephoned the A Able insurance agency Pompano Beach office and inquired about the policy. Ms. High told him that the insurance company was slow in processing the renewals and that Ms. O'Connell should receive the materials shortly. Ms. High knew, at the time, that the renewal application was sitting on Mr. Pomerantz's desk, waiting for him to write a check and mail the application and payment to Southern Group.
Southern Group did not receive the renewal application and agency check for the premium net commission on
Ms. O'Connell's renewal within the 72 hours required by Southern
Group's agreement with Mr. Pomerantz. On August 2, 2002, a notice was sent to "Wide World of Insurance Pomp" at the A Able insurance agency address in Pompano Beach advising that
Ms. O'Connell's binder coverage had expired because Southern Group had not received the renewal application.13 Southern Group advised the A Able insurance agency to check its records to make sure that the application package was not misplaced and further advised that a claim against the binder might result in a claim against its "Errors & Omissions Insurance."
The Department of Insurance made an inquiry of Southern Group on October 16, 2002, regarding the status of
Ms. O'Connell's renewal policy, and Southern Group replied in a letter dated October 28, 2002, that, although coverage had been bound for Ms. O'Connell on July 12, 2002, it had no record of having received Ms. O'Connell's renewal application and the premium payment or a response to its August 2, 2002, notice to the A Able insurance agency that the binder on Ms. O'Connell's renewal had expired.
After Southern Group received the inquiry from the Department of Insurance, it sent a representative to the A Able insurance agency Pompano Beach office, where the Southern Group renewal application for Ms. O'Connell was retrieved. On November 26, 2002, Southern Group issued an automobile insurance policy renewal to Ms. O'Connell, with an effective date
retroactive to August 14, 2002, the date the renewal would have been effective had the application and premium payment been transmitted to Southern Group timely.
Count IX: Carol Scott
On July 10, 2002, Ms. High prepared an application for automobile insurance coverage with Southern Group on behalf of Carol Scott. The premium for the coverage specified in the application was $655.00. Ms. High bound the coverage on
July 10, 2002.
Southern Group did not receive Ms. Scott's application and the agency check for the premium net commission within the
72 hours required by Southern Group's agreement with
Mr. Pomerantz. On August 2, 2002, a notice was sent to "Wide World of Insurance Pomp" at the A Able insurance agency address in Pompano Beach advising that Ms. Scott's binder coverage had expired because Southern Group had not received the application. Southern Group advised the A Able insurance agency to check its records to make sure that the application package was not misplaced and further advised that a claim against the binder might result in a claim against its "Errors & Omissions Insurance."
The Department of Insurance made an inquiry of Southern Group on October 16, 2002, regarding the status of Ms. Scott's automobile insurance policy, and Southern Group
replied in a letter dated October 28, 2002, that, although coverage had been bound for Ms. Scott on July 10, 2002, it had no record of having received Ms. Scott's application and the premium payment or a response to its August 2, 2002, notice to the A Able insurance agency that the binder on Ms. Scott's application had expired.
After Southern Group received the inquiry from the Department of Insurance, it sent a representative to the A Able insurance agency Pompano Beach office, where the Southern Group application for Ms. Scott was retrieved. On November 26, 2002, Southern Group issued an automobile insurance policy renewal to Ms. Scott, with an effective date retroactive to July 11, 2002, the date the renewal would have been effective had the application and premium payment been transmitted to Southern Group timely.
Count X: Janice Misconis
On or about June 25, 2003, Janice Misconis visited the A Able insurance agency office in Pompano Beach to renew her Ocean Harbor automobile insurance policy. Ms. High prepared a Summary of Coverages and Premium covering a 1990 Buick Skylark. Ms. High bound the coverage on June 24, 2002, for a renewal with a policy period commencing July 8, 2002.
The premium shown on the summary totalled $570.00, and Ms. High prepared a receipt affirming that Ms. Misconis had paid the $570.00 renewal premium in full on June 25, 2002.
In a letter dated October 16, 2002, the Department of Insurance inquired of Ocean Harbor regarding the status of
Ms. Misconis's automobile insurance policy. Ocean Harbor responded in a letter dated November 7, 2002, that it had no record of having received an application or premium payment for Ms. Misconis's policy renewal.
An Ocean Harbor representative went to the A Able insurance agency office in Pompano Beach on November 15, 2002, and picked up applications and endorsements for automobile insurance coverage. Among these documents was Ms. Misconis's renewal application, and Ocean Harbor issued a policy of automobile insurance coverage, effective retroactively to the date it would have been effective had the application and premium payment been forwarded to Ocean Harbor timely.14 Count IX: Diane Carroll
In October 2001, Diane Carroll, a/k/a Diane Heinen, purchased an automobile insurance policy with the Aires Insurance Company ("Aires") from the Wide World of Insurance insurance agency in Margate. After she had an accident and her car was sitting in a repair shop, she cancelled this policy.
In late January 2002, Ms. Carroll went again to the Wide World of Insurance office in Margate, and a person working in that office took her application for another automobile insurance policy. The policy was placed with Aires, and the total premium was $2,637.00. The effective date of the policy was February 1, 2002, for the term of one year.
Ms. Carroll made a down payment of $660.00, and financed the balance of the premium with Assured Premium Finance Corporation, a company that is serviced by ETI Finance.
Ms. Carroll made all of the payments required under the Premium Finance Agreement she signed in January 2002. Ms. Carroll took each of the payments to the Wide World of Insurance insurance agency office in Margate.
On January 8, 2003, Ms. Carroll had an automobile accident. She called the Wide World of Insurance insurance agency in Margate to report a claim, and she was told that she did not have an insurance policy, that Aires "went under." The person at the Margate office of the Wide World of Insurance insurance agency told Ms. Carroll that she had been sent notification by mail.
Ms. Carroll requested a copy of the letter, which she claims she did not receive. The letter is dated November 27, 2002, and bears the letterhead of "Wide World of Insurance," with a Margate post office address. The letter is addressed to
Ms. Carroll at her then-correct address and provides notice that Aires has been "PLACED IN LIQUIDATION ON NOVEMBER 14, 2002, BY THE STATE OF FLORIDA. ALL INSURANCE POLICIES WITH THE ABOVE- CAPTIONED INSURANCE COMPANY SHALL CEASE AS OF 12:01 AM, DECEMBER 14, 2002. PLEASE CONTACT OUR OFFICE IMMEDIATELY TO
REPLACE THIS INSURANCE COVERAGE." The name "A Able Wide World of Insurance" is included on the letter. There is no indication on the letter that it was sent by certified mail.15
Summary
Count I: Mr. Thierwechter
The evidence presented by the Department is sufficient to establish that the refund of unearned commission on Mr. Thierwechter's cancelled Ocean Harbor automobile insurance policy was not made timely by the A Able insurance agency, but was held by the A Able insurance agency from early May 2002, when the A Able insurance agency received the agent statement from ETI Finance showing the debit to the A Able insurance agency's account, until July 1, 2002, when
Mr. Pomerantz issued a check for the amount of unearned commission the A Able insurance agency owed to Mr. Thierwechter.
Count III: Ms. Shaffer
The evidence presented by the Department is not sufficient to establish with the requisite degree of certainty that either Mr. Pomerantz or the Pompano Beach office of the
A Able insurance agency was involved in any meaningful way in any transactions relating to Ms. Shaffer's physical damage automobile insurance policy. Although, during the summer and fall of 2001, the A Able insurance agency located in Pompano Beach and the Wide World of Insurance agency located in Margate had merged and were doing business as a single entity,
Mr. Pomerantz was the agent in charge of the Pompano Beach office. There was no evidence presented to establish that
Mr. Pomerantz ever operated in the Margate office or supervised the agents in that office. Even though the Pompano Beach office of the A Able insurance agency is identified as the agent on Ms. Shaffer's U.S. Security policy, there was no creditable evidence presented to establish that anyone in the Pompano Beach office prepared the application for Ms. Shaffer's physical damage insurance policy or was responsible for servicing the policy.
The evidence presented by the Department regarding the "additional liability coverage" purchased by Ms. Shaffer is scanty. Although Ms. Shaffer handled the transaction over the telephone with a man in the Pompano Beach office of the insurance agency and the charge on Ms. Shaffer's credit card was credited to the A Able insurance agency in Pompano Beach, there is no evidence identifying the person who prepared the receipt for the premium payment. The totality of the evidence presented
by the Department is not sufficient to support an inference that Mr. Pomerantz was personally involved in the transaction or that he knew or should have known of the transaction.
Count IV: Terensinha Honczarenko
The evidence presented by the Department is not sufficient to establish that Mr. Pomerantz caused
Ms. Honczarenko's automobile insurance policy to be cancelled, either directly or through his negligence or the negligence of any of the agents working in the A Able insurance agency Pompano Beach office. All of her dealings were with the Margate office, and there was no evidence that a copy of the notice from Southern Group advising Ms. Honczarenko that she owed additional premium on her policy was sent to the A Able insurance agency at the Pompano Beach address or that it was the practice of Southern Group to send such notices to agents as well as to its insureds.16
The evidence presented by the Department is, however, sufficient to establish that A Able insurance agency received notice from ETI Finance that it owed Ms. Honczarenko a refund of unearned return premium in the amount of $71.95 and that
Ms. Honczarenko did not receive this refund.
Counts V, VI, VII, VIII, IX, and X: Mr. Worrall, Ms. Mousel, Mr. Hublitz, Ms. O'Connell, Ms. Scott, and Ms. Misconis
The evidence presented by the Department is sufficient to establish that Mr. Pomerantz was personally responsible for writing agency checks for premium net commission and for sending applications for automobile insurance coverage generated in the A Able insurance agency Pompano Beach office and premium checks received in that office to the various insurance companies. During the summer and early fall of 2002, Ms. High constantly reminded Mr. Pomerantz that the applications accumulating on his desk needed attention, and Mr. Pomerantz assumed the responsibility for handling the applications when he told her that he would handle them.
The evidence presented by the Department is also sufficient to establish that Mr. Pomerantz failed to forward the applications and premiums for Mr. Worrall, Ms. Mousel,
Mr. Hublitz, Ms. O'Connell, Ms. Scott, and Ms. Misconis and that the A Able insurance agency had the benefit of the premium payments made by these individuals from the time the coverage binders expired until such time as the policy applications and payments were received by the various insurance companies who issued policies with coverage retroactive to the date of the applications and premium payments.
Count XI: Ms. Carroll
The evidence presented by the Department is not sufficient to establish with the requisite degree of certainty that either Mr. Pomerantz or any employee of the Pompano Beach office of the A Able insurance agency was involved in the transactions with respect to Ms. Carroll's automobile insurance policy with Aires. All of Ms. Carroll's business dealings with regard to this policy were at the Margate office of the Wide World of Insurance insurance agency. Even though the name
"A Able Wide World of Insurance" appears on the letter dated November 27, 2002, notifying Ms. Carroll that Aires was in liquidation and that she needed to replace her automobile insurance policy, there was no evidence presented to establish that anyone in the Pompano Beach office prepared the application for Ms. Carroll's policy or had any dealings with her on this or any other automobile insurance policy.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter of this proceeding and of the parties thereto pursuant to Sections 120.569 and 120.57(1), Florida Statutes (2004).
Because the Department seeks in its Amended Administrative Complaint to revoke or suspend Mr. Pomerantz's license as an insurance agent, the Department must prove the
allegations in the Amended Administrative Complaint by clear and convincing evidence. Department of Banking and Finance,
Division of Securities and Investor Protection v. Osborne Stern and Co., 670 So. 2d 932 (Fla. 1996); and Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987).
In Evans Packing Co. v. Department of Agriculture and
Consumer Services, 550 So. 2d 112, 116, n. 5 (Fla. 1st DCA 1989), the court explained:
[C]lear and convincing evidence requires that the evidence must be found to be credible; the facts to which the witnesses testify must be distinctly remembered; the evidence 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 the firm belief of conviction, without hesitancy, as to the truth of the allegations sought to be established.
Slomowitz v. Walker, 429 So. 2d 797, 800 (Fla. 4th DCA 1983).
Judge Sharp, in her dissenting opinion in Walker v. Florida Department of Business and Professional Regulation, 705 So. 2d 652, 655 (Fla. 5th DCA 1998)(Sharp, J., dissenting), reviewed recent pronouncements on clear and convincing evidence:
Clear and convincing evidence requires more proof than preponderance of evidence, but less than beyond a reasonable doubt. In re Inquiry Concerning a Judge re Graziano,
696 So. 2d 744 (Fla. 1997). It is an intermediate level of proof that entails both qualitative and quantative [sic] elements. In re Adoption of Baby E.A.W.,
658 So. 2d 961, 967 (Fla. 1995), cert.
denied, 516 U.S. 1051, 116 S. Ct. 719, 133
L. Ed. 2d 672 (1996). The sum total of evidence must be sufficient to convince the trier of fact without any hesitancy. Id. It must produce in the mind of the trier of fact a firm belief or conviction as to the truth of the allegations sought to be established. Inquiry Concerning Davie, 645 So. 2d 398, 404 (Fla. 1994).
Section 626.592, Florida Statutes (2002), provides in pertinent part:
Each person operating an insurance agency and each location of a multiple location agency shall designate a primary agent for each insurance agency location and shall file the name of the person so designated, and the address of the insurance agency location where he or she is primary agent, with the department, on a form approved by the department. The designation of the primary agent may be changed at the option of the agency, and any change shall be effective upon notification to the department. Notice of change must be sent to the department within 30 days after such change.
For the purpose of this section, a "primary agent" is the licensed agent who is responsible for the hiring and supervision of all individuals within an insurance agency location whether such individuals deal with the public in the solicitation or negotiation of insurance contracts or in the collection or accounting of moneys from the general public. An agent may be designated as primary agent for only one insurance agency location.
For the purpose of this section, an "insurance agency" is a location where any agent is engaged in the business of insurance.
* * *
(5) The primary agent in an unincorporated agency, or the primary agent in an incorporated agency in which no officer, director, or stockholder is an agent, shall be responsible and accountable for the acts of salaried employees under his or her direct supervision and control, while acting on behalf of the agency. Nothing in this section shall be construed to render any person criminally liable or subject to any disciplinary proceedings for any act unless such person personally committed or knew or should have known of such act and of the facts constituting a violation of this chapter.
The Department has proven by clear and convincing evidence that Mr. Pomerantz was not registered as the primary agent of the A Able insurance agency and that no primary agent was registered for the Pompano Beach office of the agency. Mr. Pomerantz has, however, admitted that he functioned as the de facto "primary agent" for the Pompano Beach office of the
A Able insurance agency, responsible for hiring and supervising the employees of the agency at the Pompano Beach location and for operating the office. Therefore, even though he was not formally registered as the primary agent, he is liable to the same extent that a duly registered primary agent of the Pompano Beach office would be liable pursuant to Section 626.592(5).
The Department presented no evidence explaining the relationship between the A Able insurance agency in Pompano
Beach and the Wide World of Insurance insurance agency in Margate except the explanation of Ms. High that the two agencies merged and operated as one entity for a time and that she sent applications and premium payments to the Margate office for processing during the time the agencies were merged.
Furthermore, the Department presented no evidence to establish that Mr. Pomerantz ever transacted business in the Margate office of the Wide World of Insurance insurance agency or that he hired or supervised any employees in the Margate office or functioned in any respect as a "primary agent" in that office.
With respect to Count III of the Amended Administrative Complaint, based on the findings of fact herein, the Department has failed to prove by clear and convincing evidence that Mr. Pomerantz knew or should have known about
Ms. Shaffer's application for additional liability coverage on her automobile, that Mr. Pomerantz had any contact with
Ms. Shaffer with respect to her automobile insurance coverage, or that he willfully or negligently caused her automobile physical damage insurance policy to be cancelled.
With respect to Count IV of the Amended Administrative Complaint, based on the findings of fact herein, the Department has failed to prove by clear and convincing evidence that Mr. Pomerantz willfully or negligently caused
Ms. Honczarenko's automobile insurance policy to be cancelled.
The evidence presented by the Department establishes that
Ms. Honczarenko dealt only with the Margate office of the Wide World of Insurance insurance agency, and the Department presented no evidence that Mr. Pomerantz had any dealings whatsoever with Ms. Honczarenko with respect to the purchase and servicing of her automobile insurance policy.
With respect to Count XI of the Amended Administrative Complaint, based on the findings of fact herein, the Department has failed to prove by clear and convincing evidence that Mr. Pomerantz had any obligation to replace or attempt to replace Ms. Carroll's automobile insurance policy when Aires was placed into liquidation or that Mr. Pomerantz had any obligation to notify Ms. Carroll that Aires had been placed into liquidation.17 The evidence presented by the Department establishes that all of Ms. Carroll's dealings with respect to her automobile insurance policy were with the Margate office of the Wide World of Insurance insurance agency, and no evidence was presented to establish that Mr. Pomerantz or anyone in the Pompano Beach office of the A Able insurance agency had any business dealings with Ms. Carroll.
Section 626.561(1), Florida Statutes (2002), provides:
All premiums, return premiums, or other funds belonging to insurers or others received by an agent, customer
representative, or adjuster in transactions under his or her license are trust funds received by the licensee in a fiduciary capacity. An agent shall keep the funds belonging to each insurer for which he or she is not appointed, other than a surplus lines insurer, in a separate account so as to allow the department or office to properly audit such funds. The licensee in the applicable regular course of business shall account for and pay the same to the insurer, insured, or other person entitled thereto.
* * *
Any agent, customer representative, or adjuster who, not being lawfully entitled thereto, either temporarily or permanently diverts or misappropriates such funds or any portion thereof or deprives the other person of a benefit therefrom commits the offenses specified below: . . .[18]
With respect to Count I of the Amended Administrative Complaint, based on the findings of fact herein, the Department has proven by clear and convincing evidence that Mr. Pomerantz violated Section 626.561(1) by failing to refund unearned commission owed to Mr. Thierwechter within a reasonable time after the A Able insurance agency was notified that ETI Finance had received a check from Ocean Harbor for the unearned return premium due after Mr. Thierwechter cancelled his automobile insurance policy.19
With respect to Count IV of the Amended Administrative Complaint, the Department has proven by clear and convincing evidence that Mr. Pomerantz violated
Section 626.561(1) by failing to refund unearned return premium and unearned commission owed to Ms. Honczarenko after her automobile insurance policy was cancelled for non-payment of additional premium.
With respect to Counts V, VI, VII, VII, IX, and X of the Amended Administrative Complaint, the Department has proven by clear and convincing evidence that Mr. Pomerantz violated Section 626.561(1) by failing to pay to the various insurance companies the premiums paid to the A Able insurance agency received from Mr. Worrall, Ms. Mousel, Mr. Hublitz,
Ms. O'Connell, Ms. Scott, and Ms. Misconis for the purchase of automobile insurance coverage.
Section 626.611, Florida Statutes (2002), provides in pertinent part:
The department or office shall deny an application for, suspend, revoke, or refuse to renew or continue the license or appointment of any applicant, agent, title agency, 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:
* * *
If the license or appointment is willfully used, or to be used, to circumvent any of the requirements or prohibitions of this code.
* * *
Demonstrated lack of fitness or trustworthiness to engage in the business of insurance.
Demonstrated lack of reasonably adequate knowledge and technical competence to engage in the transactions authorized by the license or appointment.
Fraudulent or dishonest practices in the conduct of business under the license or appointment.
Misappropriation, conversion, or unlawful withholding of moneys belonging to insurers or insureds or beneficiaries or to others and received in conduct of business under the license or appointment.
The findings of fact herein and the violations of Florida's Insurance Code committed by Mr. Pomerantz set forth above demonstrate that Mr. Pomerantz lacks trustworthiness to engage in the business of insurance. See § 626.611(7), Fla. Stat. (2002). Mr. Pomerantz knew that applications for insurance coverage were waiting on his desk and that he needed only to issue checks for premium net commission and mail the applications and checks to the various insurance companies. It is concluded that Mr. Pomerantz's acted willfully and in disregard of his statutory responsibilities to his customers in failing to send the applications for automobile insurance coverage and premium payments net commission to the various insurance companies on behalf of Mr. Worrall, Ms. Mousel,
Mr. Hublitz, Ms. O'Connell, Ms. Scott, and Ms. Misconis, in failing to remit unearned commissions to Mr. Thierwechter in a timely manner, and in failing to remit unearned return premium and unearned commission to Ms. Honczarenko. See § 626.611(4), Fla. Stat. (2002). Mr. Pomerantz's omission with respect to these individuals also constituted the unlawful withholding of monies belonging to insurers and consumers because he was under a statutory duty to remit the monies to the insurers and the consumers. See § 626.611(10), Fla. Stat. (2002). Pursuant to Section 626.611, the Department must suspend or revoke
Mr. Pomerantz's license on these grounds.
It cannot, however, be concluded, on the findings of fact herein, that Mr. Pomerantz lacked the knowledge or technical competence to transact business as a property and casualty insurance agent. See §626.611(9), Fla. Stat. (2002). Although the findings of fact herein support the conclusion that Mr. Pomerantz acted willfully in dealing with the applications and the premium and commission refunds, it cannot be concluded that Mr. Pomerantz's omissions were fraudulent or dishonest. See § 626.611(9), Fla. Stat. (2002).
Section 626.621, Florida Statutes (2002), provides in pertinent part:
The department or office may, in its discretion, deny an application for, suspend, revoke, or refuse to renew or
continue the license or appointment of any applicant, agent, 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:
* * *
(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.
* * *
(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.
As concluded above, Mr. Pomerantz has, on the findings of facts herein, violated a provision of the Florida Insurance Code in the course of dealing under his agent's license; specifically, Mr. Pomerantz has violated
Section 626.561(1), for failing to account properly in the course of his business as an insurance agent for funds received by A Able insurance agency belonging to several insurers and consumers. See § 626.621(2), Fla. Stat. (2002). With respect
to Mr. Worrall, Ms. Mousel, Mr. Hublitz, Ms. O'Connell,
Ms. Scott, and Ms. Misconis, Mr. Pomerantz's conduct of business was detrimental to the public interest in that these individuals drove automobiles for which they had no insurance even though they reasonably assumed they had secured such coverage. See
§ 626.621(6), Fla. Stat. (2002).
The penalties for violations of the statutes pertinent to this proceeding are found in Florida Administrative Code Rules 69-231.080, .090, and .110. Pursuant to Florida Administrative Code Rule 69-231.110(9), the penalty for a violation of Section 626.561(1), Florida Statutes (2002), is a nine-month suspension. Florida Administrative Code Rules 69-
231.080 and .090 specify penalties for violations of
Section 626.611(4), (7), and (10) and Section 626.621(2) and (6), Florida Statutes (2002), but it is not necessary to calculate these penalties because Florida Administrative Code Rule 69-231.040(1)(a) provides that a nine-month penalty is the maximum penalty that can be imposed for any one count of an administrative complaint.
Mr. Pomerantz is, therefore, subject to a nine-month suspension for having violated Section 626.561(1) with respect to Counts I, IV, V, VI, VII, VIII, IX, and X of the Amended Administrative Complaint, which results in a total penalty of
72 months. Section 626.641(1), Florida Statutes (2004),
provides, however, that an agent's license may not be suspended for more than 24 months. The Department interprets this statute to mean that any suspension in excess of 24 months "is to be treated as a revocation." In the Matter of: Matthew Lawrence Klein, Case No. 62170-02-AG, DOAH Case No. 03-0421PL (Department of Financial Services, Final Order, June 24, 2003).
Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Financial Services enter a final order finding that Jay Lawrence Pomerantz
1. Violated Sections 626.561(1), 626.611(4), (7), and
(10), and 626.621(2) and (6), Florida Statutes (2002) with respect to Counts I, IV, V, VI, VII, VIII, IX, and X of the Amended Administrative Complaint filed October 14, 2003;
Dismissing Counts II, III, and XI of the Amended Administrative Complaint20; and
Revoking the property and casualty insurance agent's license of Jay Lawrence Pomerantz.
DONE AND ENTERED this 30th day of April, 2004, in Tallahassee, Leon County, Florida.
S
PATRICIA HART MALONO
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 30th day of April, 2004.
ENDNOTES
1/ Although the Department did not specify in the Amended Administrative Complaint the relevant edition of the Florida Statutes, it is presumed from the date of the violations alleged that it is referring to the 2002 edition of the Florida Statutes.
2/ This is the abbreviation for the Broward County Revenue Collector.
3/ It is noted that Ms. Shaffer denied that the signatures of the "applicant" on the application were her signatures.
4/ It is likely that the Friday Ms. Shaffer referred to in her testimony was August 10, 2001, and that the Monday was
August 13, 2001.
5/ Although the application identifies the automobile at issue as a Toyota Corolla, Ms. Honczarenko insisted in her testimony that the automobile was a Toyota Cressida. This discrepancy is
noted but ignored because it is not determinative of any of the issues in this proceeding.
6/ It is noted that Ms. Honczarenko denies that the signatures of the "applicant" on the application received into evidence as part of Petitioner's Exhibit 13 are her signatures.
7/ It is noted that Ms. Honczarenko testified that the signature for the "insured" on the Premium Finance Agreement dated
March 30, 2001, is not her signature.
8/ It is not clear from Ms. Honczarenko's testimony whether she responded to the June 29, 2001, letter and took her registration to the Margate office as requested.
9/ Pursuant to Southern Group's policy, binders expire after
20 days.
10/ The Department of Insurance is now the Department of Financial Services.
11/ Ms. Valdes, a representative of U.S. Security, testified that the company received an application for automobile insurance coverage under Ms. Mousel's name on December 6, 2002. There was, however, no testimony to indicate that this was the same application that was bound by Ms. High on September 18, 2002.
12/ Ocean Harbor cancelled Mr. Hublitz's policy for non-payment of additional premium in the amount of $7.00. Ocean Harbor refunded $180 in unearned return premium on Mr. Hublitz's policy to the A Able insurance agency. There was, however, no testimony elicited from Mr. Hublitz regarding any refund from
A Able insurance agency.
13/ Pursuant to Southern Group's policy, binders expire after
20 days.
14/ On May 13, 2003, Ocean Harbor sent Ms. Misconis a notice advising that her automobile insurance policy would terminate on July 8, 2003, because "A Able Wide World of Insurance" no longer represented the company. Ms. Misconis obtained a renewal policy from the Cline Insurance Agency on June 18, 2003, for the policy term July 8, 2002, to July 8, 2003.
15/ Ms. Carroll's testimony was presented by deposition transcript. Attached to the deposition transcript as Respondent's Exhibit 3 is a rather cryptic note, which states: "The letter was not sent to her because Aires was showing cancelled - Our computer would not have generated a letter on a cancelled policy. See above copy of Aires Ins. computer screen." Ms. Carroll testified that the investigator from the Department of Insurance with whom she was in contact told her that this document had been received from Wide World of Insurance. The investigator did not testify at the final hearing, and the testimony from Ms. Carroll regarding the origin of this note is hearsay that does not supplement or explain other evidence in the record and, on this record, would not be admissible over objection in a civil action. Accordingly, the origin of the notes has not been established by creditable evidence. See § 120.57(1), Fla. Stat. (2004).
16/ Even though it does not directly bear on this finding of fact, it is noted that Ms. Honczarenko's testimony that she did not receive any of the notices sent to her correct address by Southern Group is rejected as not credible.
17/ Section 631.341, Florida Statutes (2002), provides in pertinent part:
631.341 -- Notice of insolvency to policyholders by insurer, general agent, or agent.
The receiver shall, immediately after appointment in any delinquency proceeding against an insurer in which the policies have been canceled, give written notice of such proceeding to each general agent and licensed agent of the insurer in this state. Each general agent and licensed agent of the insurer in this state shall forthwith give written notice of such proceeding to all subagents, producing agents, brokers, and service representatives writing business through such general agent or licensed agent, whether or not such subagents, producing agents, brokers, and servicing representatives are licensed or permitted by the insurer and whether or not they are operating under a written agency contract.
Unless, within 15 days subsequent to the date of such notice, all agents referred to in subsection (1) have either replaced or reinsured in a solvent authorized insurer the insurance coverages placed by or through such agent in the delinquent insurer, such agents shall then, by registered or certified mail, send to the last known address of any policyholder a written notice of the insolvency of the delinquent insurer.
18/ In Counts I through X of the Amended Administrative Complaint, the Department charged that Mr. Pomerantz had violated Section 626.561(3), Florida Statutes (2002), and the Department has included reference to this statutory section in its Proposed Recommended Order as quoted herein. The Department did not, however, specify either in its Amended Administrative Complaint or in its Proposed Recommended Order the "offense specified below" that Mr. Pomerantz is charged with having committed. It is, therefore, not possible to determine if
Mr. Pomerantz has violated Section 626.561(3).
19/ The Department did not reference any statute or rule defining the time within which an insurance agent must refund unearned premium to a consumer. The Department's automobile insurance expert testified, however, that the agent is acting for the insurer and is, therefore, bound by the same time constraints on the refund of unearned return premium and unearned commissions as an insurer. Prior to July 1, 2002, insurers were required to refund unearned return premium within
30 days of the date an automobile insurance policy was cancelled by either the insured or the insurer; subsequent to July 1, 2002, the time has been shortened to 15 days when the insurer cancels the policy. See § 627.7283(1), Fla. Stat. (2001), and
§ 627.7283(1) and (2), Fla. Stat. (2002). Even though the expert's reasoning on this matter is not compelling, it must be concluded that two months constitutes an unreasonable delay in the refund of unearned return premium and unearned commission.
20/ The Department voluntarily dismissed Count II.
COPIES FURNISHED:
David J. Busch, Esquire Department of Financial Services Division of Legal Services
612 Larson Building
200 East Gaines Street Tallahassee, Florida 32399-0333
Jay Lawrence Pomerantz
535 North State Road 7 Margate, Florida 33063
Honorable Tom Gallagher Chief Financial Officer
Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
Mark Casteel, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
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 |
|---|---|---|
| Jun. 21, 2004 | Agency Final Order | |
| Apr. 30, 2004 | Recommended Order | Respondent did not send applications and premium payments to insurance companies for automobile insurance coverage and did not remit unearned return premiums and commissions timely after collecting them. Recommend revocation of license. |
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