STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF FINANCIAL SERVICES,
Petitioner,
vs.
ANNA MICHELLE MACK,
Respondent.
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) Case No. 03-3802PL
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RECOMMENDED ORDER
Notice was provided and on February 5 and 6, 2004, a formal hearing was held in this case.1 The hearing was reconvened on March 12, 2004. Authority for conducting the hearing is set forth in Sections 120.569 and 120.57(1), Florida Statutes (2003). The hearing was conducted by video-teleconferencing.
The administrative law judge was located at a site in Tallahassee, Florida. The remaining participants were located at a site in Jacksonville, Florida. The hearing was conducted by Charles C. Adams, Administrative Law Judge.
APPEARANCES
For Petitioner: Greg S. Marr, Esquire
David J. Busch, Esquire Department of Financial Services Division of Legal Services
200 East Gaines Street 612 Larson Building
Tallahassee, Florida 32399-0333
For Respondent: Jed Berman, Esquire
Infantino and Berman
180 South Knowles Avenue, Suite 7 Winter Park, Florida 32789
STATEMENT OF THE ISSUE
Should discipline be imposed by Petitioner against Respondent's license as a limited customer representative (4-42), held pursuant to Chapter 626, Florida Statutes?
PRELIMINARY STATEMENT
By an Administrative Complaint in Case No. 64689-03-AG, dated September 23, 2003, Petitioner accused Respondent, in three separate counts, of violating various provisions within Chapters 624 and 626, Florida Statutes and Florida Administrative Code Chapter 4-213.
As instructed, Respondent elected her right to dispute factual allegations in the Administrative Complaint through a formal hearing pursuant to Section 120.57(1), Florida Statutes (2003). That election was made on September 25, 2003. Although not required, Respondent filed an Answer to the Administrative Complaint, admitting paragraphs 1 through 4 and acknowledging the extent of that involvement as expressed in paragraphs 5, 15, and 17. Otherwise Respondent did not accept the allegations set forth in the Administrative Complaint. Her Answer was served on October 6, 2003, through counsel. On that same date, Respondent
made known her opposition to the allegations in the Administrative Complaint by a filing under authority of Florida Administrative Code Chapter 28-106.
On October 14, 2003, the Division of Administrative Hearings (DOAH) received a request for conduct of a hearing in accordance with Section 120.57(1), Florida Statutes (2003).
The case was set to be heard December 8, 2003, by video- teleconferencing.
On November 18, 2003, a joint motion was filed to reschedule the hearing. That motion was granted and the hearing was reset to be heard on January 8, 2004, by video- teleconferencing.
Respondent moved to strike Count III to the Administrative Complaint and for the award of attorneys' fees. The motion was opposed.
Respondent moved to enforce what she claimed was a settlement between the parties. That motion was opposed.
Petitioner moved for a protective order against the giving of a deposition by an agency employee who had knowledge about the sales of ancillary products by licensed agents and clerical employees of insurance agencies. That motion was opposed.
On December 15, 2003, an order was entered denying the enforcement of the claimed settlement.
On December 16, 2003, an order was entered denying the motion to strike Count III and any attorneys' fees and costs.
On December 17, 2003, Respondent moved for a continuance. On that same date an order was entered granting a continuance and rescheduling the case for hearing on February 6, 2004, by video-teleconferencing.
On December 22, 2003, an order was entered which addressed the motion for protection against the giving of a deposition by Petitioner's designated employee, with instructions concerning the manner in which the deposition could be conducted.
On January 7, 2004, Petitioner filed a written response to the requirements set forth in the order dealing with the giving of a deposition by Petitioner's employee, in relation to any knowledge concerning sales of ancillary products by licensed agents and clerical employees of insurance agencies. Following that filing, Respondent moved to impose sanctions against Petitioner, to include the striking of the underlying Administrative Complaint and for the award of attorneys' fees. Petitioner filed in opposition to the motion for sanctions. On January 22, 2004, an order was entered denying Respondent's motion for sanctions and attorneys' fees in that instance.
Respondent filed a motion calling for the administrative law judge to attend the final hearing at the same location as other participants. On February 3, 2004, an order was entered
denying the motion to require the administrative law judge to attend the final hearing in Jacksonville, where other participants would be located.
Respondent moved to suppress evidence obtained by Petitioner in its investigation at Beck Insurance, and evidence delivered beyond that time which led to the charges against the Respondent in the present case. Petitioner filed in opposition to the motion. On February 5, 2004, an order was entered denying the motion to suppress.
Respondent moved for clarification of the January 22, 2004, order, when considered in context of the December 22, 2003, order. On January 28, 2004, an order was entered denying the motion for clarification.
Petitioner moved to amend the Administrative Complaint to reflect a correction to the date of transaction set forth in Count I. The motion was unopposed. On February 18, 2004, an order was entered granting the motion.
As has been explained, February 5 and 6, 2004, were hearing dates principally designed to address the case of Department of Financial Services v. Jennifer L. Faloon, DOAH Case
No. 03-3666PL. Some of the testimony in the case involving Jennifer L. Faloon had application to the present case. To that extent the testimony given by Laura Brown, Linda Davis, Jennifer L. Faloon, and Monica Beck, in DOAH Case No. 03-3666PL,
which was transcribed and Petitioner's Exhibits numbered 12 through 15, 17, 19, and 22, and Respondent's Exhibits
numbered 12 through 15, 18 through 25, 27, and 28, from that hearing are utilized to determine the outcome in the present case. In addition, on March 12, 2004, limited solely to DOAH Case No. 03-3802PL, against Anna Michelle Mack, Linda Davis testified again, as did Laura Brown, witnesses called by Petitioner. Carolyn Grant and Nelson Yettman testified on behalf of Petitioner in DOAH Case No. 03-3802PL. Petitioner's Exhibits numbered 1, 2, and 4 through 11, were admitted in the present case. Ruling was reserved on the admission of Petitioner's Exhibit numbered 3. Through the Proposed Recommended Order submitted by Petitioner, Petitioner's Exhibit numbered 3 has effectively been withdrawn.
In the present case Respondent, Anna Michelle Mack, testified on her own behalf and presented Jennifer L. Faloon and Monica Beck as her witnesses. Respondent's Exhibits numbered 1 and 2 were admitted in the present case.
The hearing transcript in DOAH Case No. 03-3666PL, was filed on March 29, 2004. The transcript in relation to the March 12, 2004, session limited to DOAH Case No. 03-3802PL, was filed on that same date. The parties timely filed Proposed Recommended Orders in DOAH Case No. 03-3802PL, on or before the extended deadline for submission of those pleadings. The
proposed orders have been considered in preparing the Recommended Order in the present case. By requesting additional time to file post-hearing submissions, the parties waived the time requirements for entry of the Recommended Order, in the present case, set forth in Florida Administrative Code
Rule 28-106.216.
FINDINGS OF FACT
Facts Admitted by Answer
Pursuant to Chapter 626, Florida Statutes, you,
Anna Michelle Mack, currently are licensed in this state as a limited customer representative (4-42), and were so licensed at all times relevant to the dates and occurrences referenced herein. Your license identification no. is A161579.
Pursuant to Chapter 626, Florida Statutes, the Florida Department of Financial Services has jurisdiction over your license and appointments.
At all times relevant to the dates and occurrences referenced herein you, Anna Michelle Mack, were employed with Beck Insurance, in Jacksonville, Florida.
At all times relevant to the dates and occurrences referenced herein you, Anna Michelle Mack, had a duly-appointed supervising agent, Monica Beck.
Count I - Nelson Yettman
On July 20, 2001, Nelson Yettman purchased mobile home homeowner's insurance from Beck Insurance. In the interest of obtaining the insurance policy he completed an application upon a form related to the Florida Residential Property and Casualty Joint Underwriting Association (FRPCJUA), Petitioner's Exhibit numbered 4. He signed the application. It reflects the signature of Monica Beck as agent, but Mr. Yettman dealt with the Respondent in the details involved with the transaction.
On July 21, 2001, the only person that Mr. Yettman did business with at Beck Insurance from the beginning until the end of the transaction was the Respondent. Respondent made no explanation to Mr. Yettman as to her status as an insurance agent or not. At the time, Respondent was a limited customer representative (4-42), as she has remained.
Monica Beck bound the mobile home homeowner's policy as the primary agent for Beck Insurance.
On July 20, 2001, Mr. Yettman paid $377 for the mobile home homeowner's policy premium. In return Respondent provided Mr. Yettman a receipt noting that payment, Petitioner's Exhibit numbered 5. The receipt had Respondent's first name affixed. The receipt also referred to a $75 charge for "Nation Homeowners." That amount was not tendered on July 20, 2001. The reference to "Nation Homeowners" refers to a product from
Nation Safe Drivers described as Homeowners/Renters contract customer service. Mr. Yettman signed for Plan 3, the $75 Plan within that service. This arrangement was one in which, according to the document, executed the agreement between the contracting parties as set forth in Petitioner's Exhibit numbered 6, was "NATION HOMEOWNERS/RENTERS PLAN agrees that the person named in the schedule made a part heheof [sic], in consideration of the payment of fee [sic] provided in paid schedule, is a nw/amed [sic] member of the NATION HOMEOWNERS/RENTERS PLAN, and entitled to all the services benefits and proviledges [sic] hereof, for and in connection with the ownership, or rental of a home or apartment in the name of the member, for the period set forth, within the United States of America, its territories, possessions, or Canada, . .
. ." In particular, the services being offered were related to: Burglary & Vandalism Reward and Emblem: Nation Homeowners/Renters Plan; Extra Living Expense; Credit Card Protection; Major Appliance Allowance; Ambulance Service; Lock and Key Service; Notary Public Service; Touring and Travel Services; World Wide Tour Service; and Post Office Box.
Mr. Yettman acknowledges signing Petitioner's Exhibit numbered 6, the Homeowners/Renters contract and that on July 23, 2001, he paid the $75 called for in the contract. To that end,
on July 23, 2001, Respondent provided a receipt to Mr. Yettman with her first name affixed noting payment of the additional $75 Petitioner's Exhibit numbered 5.
While Mr. Yettman realizes that he paid $75 for the Homeowners/Renters contract, no explanation was given to him by Respondent concerning the purchase. Mr. Yettman did not realize that it was an optional item unrelated to his mobile home homeowner's policy. He did not realize that there was an additional charge for the purchase until he paid the $377 for the mobile home homeowner's policy and was reminded that he owned an additional $75 which he eventually paid.
Mr. Yettman asked what the additional $75 was for.
Respondent told Mr. Yettman in response that he needed to pay another $75.
Mr. Yettman went home and discussed the extra payment with his wife, and returned two days later to pay the extra $75. Mr. Yettman returned to make payment with the belief that the extra $75 was something in relation to the mobile home homeowner's insurance premium.
Mr. Yettman had not read the details set forth in the Homeowners/Renters contract, Petitioner's Exhibit numbered 6.
When Mr. Yettman returned on July 23, 2001, to pay the additional $75 he found out that the money was in relation to the Homeowners/Renters contract. With this knowledge he did not
reject the contract at that time. Nonetheless, his overall impression remained that $452 paid in the aggregate was for a homeowner's insurance policy.
As Respondent identified in her testimony, she is aware that her limited customer representative license (4-42) pertains to her opportunity to write and discuss automobile insurance. It is limited to that activity. It is unrelated to the ability to write insurance for property and casualty insurance, such as homeowner's insurance, an opportunity reserved to a general lines agent (2-20). Notwithstanding this limitation, Respondent believes that she was entitled to obtain experience while employed at Beck Insurance, under supervision leading to her licensure as a general lines agent (2-20). Respondent asserts that she was undergoing training toward that goal from Jennifer L. Faloon, a Beck Insurance employee who held a general lines agent (2-20) license. In this connection, to the knowledge of Respondent, only three or four homeowner's policies are written at Beck Insurance per month.
Respondent asked Jennifer Faloon to help her in processing the application for mobile home homeowner's insurance completed by Mr. Yettman, in such matters as an item referred to as a cost estimator. Respondent wrote in the information on the application, as well as the receipts for payment that have been previously described.
Respondent, in her testimony, acknowledged that the Homeowners/Renters contract was involved with items unrelated to the mobile home homeowner's insurance policy, which Mr. Yettman had come to Beck Insurance to purchase.
Respondent describes the manner in which she would have presented the Homeowners/Renters contract to Mr. Yettman by telling him what it covers. "It covers the ambulance, it covers lock and key, notary, touring, covers major appliance allowance, credit cards, and stuff like that." Respondent indicated that the signature of the customer is obtained for the Homeowners/Renters contract "to let them know that they have this." This is a similar concept, as a product, to the towing and rental product sold to customer Laura Brown, whose transaction is also discussed in this case. Respondent's remarks about her description to Mr. Yettman are perceived as being what would be typical in dealing with a Homeowners/Renters contract with a customer, not specifically related to
Mr. Yettman. Respondent does not recall any specific questions, which Mr. Yettman may have had about the Homeowners/Renters contract. When asked if Mr. Yettman signed the contract in her presence, she replied "Yes, Sir, he would have," meaning again that this would be the expected outcome. Respondent explained that the different plans described in the Homeowners/Renters contract are not presented to the customer by any method.
Count II - Carolyn Grant
On March 12, 2001, Carolyn Grant purchased automobile insurance from Beck Insurance, together with auto rental reimbursement and towing service reimbursement from All World All Safe Drivers (All World). These transactions are evidenced in applications, questionnaires, an inspection form and a receipt for payment, variously described in Petitioner's Exhibits numbered 8 through 11, and Respondent's Exhibit numbered 1. Respondent did not deal with Ms. Grant in the transactions.
Count III - Laura Brown
On January 21, 2002, Laura Brown purchased automobile insurance through Beck Insurance. She dealt with Valerie Webster and Anna Michelle Mack, employees at Beck Insurance. Ms. Brown dealt primarily with Ms. Webster during the transaction, with Ms. Mack there to assist Ms. Webster on and off.
At various times in 2002 and 2003 Valerie Lynn Webster had applied to Petitioner to be licensed as a (2-14) life, including variable annuity agent and a limited customer representative (4-42). No licenses were issued to Ms. Webster.
Before arriving at Beck Insurance, Ms. Brown had obtained a preliminary quotation by telephone from the agency related to the purchase of automobile insurance. Ms. Brown was interested in obtaining full coverage for her car.
The nature of the discussion at the agency was about the purchase of automobile insurance, not about a towing and rental contract, motor club membership, or the All World plan. A down-payment was made with installments to follow, associated with the automobile insurance. Ms. Brown thought that the entire amount of the down-payment was for the insurance premium. No explanation was made to the effect that the motor club was separate from the automobile insurance policy. When Ms. Brown left the Beck Insurance agency, she did not realize that she had purchased anything other than automobile insurance.
Petitioner's Exhibit numbered 12 (DOAH Case
No. 03-3666PL) is the automobile insurance application through Superior executed by Ms. Brown on the date in question. It was signed by Ms. Faloon noting that the policy was bound.
Ms. Faloon had no other direct involvement in the transaction.
Petitioner's Exhibit numbered 13 (DOAH Case
No. 03-3666PL) is a receipt dated January 22, 2002, issued to Ms. Brown by Ms. Webster and Ms. Mack, totaling $247 that
Ms. Brown paid on that date. It is broken out as $184 for Superior, $60 for All World Motor Club, and $3 for a motor vehicle report.
Petitioner's Exhibit numbered 14 (DOAH Case No. 03-3666PL), is an executed application for All World
automobile rental and towing service reimbursement executed by Ms. Brown for a period January 22, 2002, through June 22, 2002, under Plan 3. This form does not reflect the cost of that plan.
Ms. Brown executed the Beck Insurance questionnaire, Petitioner's Exhibit numbered 15 (DOAH Case No. 03-3666PL) that contains item 11 relating to the motor club stating, "I am aware that the towing and rental car reimbursement is optional. I want to carry this coverage. (This coverage can only be renewed by coming into the office, as it is not written with your auto carrier.)" This creates an option to purchase then immediately withdraws the option. The form additionally sets forth in another place, that the towing and rental car reimbursement is optional but without the opportunity to decline that option that is specifically described for other optional coverage in the form, such as uninsured motorists and medical payments.
In an affidavit containing Ms. Brown's statement prepared on May 23, 2002, Ms. Brown stated, "I knew that I had purchased towing or rental reimbursement policy for my policy 1/22/2002/2003 because I saw the form and I asked questions
about it. The lady in picture number 10 (Ms. Mack depicted in Petitioner's Exhibit numbered 17, DOAH Case No. 03-3666PL), told me I would get so many tows for free, she also told me it was from Beck Insurance." But in that affidavit Ms. Brown goes on to state, "I did not know that I paid an additional $60 for the towing policy. I thought this was just something I got with the car insurance policy." Nothing in Petitioner's Exhibit numbered
14 (DOAH Case No. 03-3666PL), the application for All World towing and rental reflects the cost of Plan 3. That was made known in the receipt, Petitioner's Exhibit numbered 13 (DOAH Case No. 03-3666PL).
Ms. Brown does not recall whether Ms. Mack, in her participation in the transaction, indicated that Ms. Mack's status at the Beck Insurance agency was other than that of an insurance agent.
Disciplinary History
Respondent has no prior disciplinary history.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this proceeding in accordance with Sections 120.569 and 120.57(1), Florida Statutes (2003).
This is a disciplinary case. Therefore, Petitioner has the burden of proving the allegations in the Amended
Administrative Complaint by clear and convincing evidence. See Section 120.57(1)(j), Florida Statutes (2003); See Department of
Banking and Finance, Division of Investor Protection v. Osborne Stern and Company, 670 So. 2d 932 (Fla. 1996); Ferris v.
Turlington, 510 So. 2d 292 (Fla. 1987); and Pou v. Department of Insurance and Treasurer, 707 So. 2d 941 (Fla. 3d DCA 1998).
In pertinent part the Amended Administrative Complaint alleges:
COUNT I
On or about July 20, 2001, you,
ANNA MICHELLE MACK, in your capacity as an employee of Beck Insurance, transacted business with Nelson Yettman regarding a mobile home homeowners policy. During the course of this transaction, you
ANNA MICHELLE MACK, completed the policy application on behalf of Nelson Yettman without discussing its various provisions, accepted premium payments from Nelson Yettman, issued receipts to Nelson Yettman for said payments, and, left Nelson Yettman with the impression that you were his insurance agent.
During the course of this transaction, you, ANNA MICHELLE MACK, sold Nelson Yettman a homeowners/renters policy without informing Nelson Yettman that this was separate from and an additional expense to the homeowners policy.
Subsequent correspondence between FRPCJUA and you, ANNA MICHELLE MACK, and/or Beck Insurance, regarding the above- referenced policy, reveals that the original policy application prepared by you,
ANNA MICHELLE MACK, omitted required information, omitted a required form, and
that you, ANNA MICHELLE MACK, were not familiar with the FRPCJUA requirements and forms for procuring mobile home homeowners coverage.
COUNT II
16. On or about March 12, 2001, you,
ANNA MICHELLE MACK, in your capacity as an employee of Beck Insurance, completed an automobile insurance policy application for Carolyn Grant without properly determining the insured's desires as to coverage, deductibles, or the procurement of a separate product for towing and rental.
Carolyn Grant was left with the impression that the towing and rental coverage was included in the automobile policy at no extra or separate charge, and that you,
ANNA MICHELLE MACK, were his [sic] insurance agent.[2]
COUNT III
18. On or about January 22, 2002, you, ANNA MICHELLE MACK, in your capacity as an employee of Beck Insurance, worked in conjunction with another Beck Insurance employee, Valerie Webster, a person not licensed by the Department to transact insurance business in Florida, to sell a private passenger motor vehicle insurance policy to Laura Brown. Ms. Webster
completed the application questionnaire with little or no input from Laura Brown, provided insufficient explanation of coverage being purchased, sold Laura Brown a towing and rental contract while leading Laura Brown to believe that this was not a separate contract carrying an additional fee, and selected a deductible amount for personal injury protection without explaining the implications. This entire
episode occurred while you, ANNA MICHELLE MACK, were fully aware of its occurrence and from time to time participated in it, yet you provided Ms. Webster insufficient supervision.
In connection with Count I, the Amended Administrative Complaint refers within statutes and rules to the expectations for a limited customer representative. The Amended Administrative Complaint refers to Section 626.015(13), Florida Statutes (2003), in actuality Section 626.015(11), Florida Statutes (2003), as it defines "limited customer representative." At the time of this case a "limited customer representative" was defined at Section 626.072(2), Florida Statutes (2001) as:
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A 'limited customer representative' is a customer representative appointed by a general lines agent or general lines agency to assist the agent or agency in transacting only the business of private passenger motor vehicle insurance from the office of the agent or agency. A limited customer representative is subject to this code in the same manner as a customer representative unless otherwise specified.
The Florida Administrative Code references related in the Amended Administrative Complaint describe the responsibilities of customer representatives and their
supervisors in relation to Florida Administrative Code Chapter 4-213. Those rules are now found in Florida Administrative Code Chapter 69B-213, which states:
Fla. Admin. Code R. 69B-213.110.
A customer representative shall comply with the lawful instructions and directions of the supervising agent as well as all
applicable provisions of the Florida Insurance Code, and rules and orders of the Department.
A customer representative has a duty to ensure that their appointment and supervision is in compliance with this rule chapter, with other rules of the Department, and with the Insurance Code.
The customer representative shall exercise great care in not going beyond the licensure, training, expertise and experience of the customer representative. In the event of uncertainty as to whether the customer representative is competent to advise or perform regarding any insurance matter, the uncertainty shall be resolved in favor of referring the matter to the supervising agent.
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Fla. Admin. Code R. 69B-213.130.
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(5) A customer representative must always identify himself/herself as a customer representative working for the named agent, and must never make or allow the impression that the customer representative is an agent.
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Fla. Admin. Code R. 69B-213.100.
The designated supervising agent is jointly and severally accountable and responsible with the agency to the Department, for the acts and representations of the customer representative.
An agent who is designated to supervise a customer representative thereby incurs the following obligations, in addition to those otherwise set out in this rule:
The agent must supervise the customer representative, as described in this rule. This duty shall not be delegated. This duty remains on the designated supervising agent even when the customer representative is performing customer representative services for other agents within the agency.
The agent must assure that the customer representative does not exceed the allowable scope of the customer representative's licensure, duties and authority.
A designated supervising agent may terminate his or her status as designated supervising agent, at any time, as explained in this rule chapter.
In association with the responsibilities and duties incumbent upon a limited customer representative, Respondent in relation to Count I is alleged to have violated the following:
§ 624.11, Fla. Stat. (2001).
(1) No person shall transact insurance in this state, or relative to a subject of insurance resident, located, or to be performed in this state, without complying with the applicable provisions of this code.
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§ 626.611, Fla. Stat. (2001).
The department shall deny an application for, suspend, revoke, or refuse to renew or continue the license or appointment of any applicant, agent, title agency, solicitor, adjuster, customer representative, service representative, or managing general agent, and it shall suspend or revoke the eligibility to hold a license or appointment of any such person, it if 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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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.
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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.
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§ 626.621, Fla. Stat. (2001).
The department may, in its discretion, deny an application for, suspend, revoke, or refuse to renew or continue the license or appointment of any applicant, agent, solicitor, adjuster, customer representative, service representative, or managing general agent, and it may suspend or revoke the eligibility to hold a license or appointment of any such person, 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 of rule of the department.
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(12) Knowingly aiding, assisting, procuring, advising, or abetting any person in the violation of or to violate a provision of the insurance code or any order or rule of the department.
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§ 626.9521, Fla. Stat. (2001).
(1) 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.
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§ 626.9541, Fla. Stat. (2001).
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:
(1)(z). Sliding.-- Sliding is the act or practice of:
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Representing to the applicant that a specific ancillary coverage or product is included in the motor vehicle policy applied for without an additional charge when such charge is required; or
Charging an applicant for a specific ancillary coverage or product, in addition to the cost of the motor vehicle insurance coverage applied for, without the informed consent of the applicant.
Section 624.10, Florida Statutes (2001), defines transacting insurance as:
'Transact' with respect to insurance includes any of the following, in addition to other applicable provisions of this code:
Solicitation or inducement.
Preliminary negotiations.
Effectuation of a contract of insurance.
Transaction of matters subsequent to effectuation of a contract of insurance and arising out of it.
When considering Respondent's conduct in the transactions at issue, it is with the recognition that Respondent has a fiduciary relationship, both with her customers and the insurance companies. See Natelson v. Department of Insurance, 454 So. 2d 31 (Fla. 1st DCA 1984).
Count I envisions several forms of misconduct by Respondent. The first is in relation to acting in a capacity as a general lines agent in selling the mobile home homeowner's policy. The second relates to selling the ancillary homeowners/renters product without describing its separate nature from the mobile home homeowner's insurance policy and its additional cost. The third complaint has to do with the omission of certain information in a form necessary to satisfy the requirements imposed by FRPCJUA. Concerning the latter allegation, no proof was advanced to sustain the complaint. The first two items were proven by clear and convincing evidence, in that Respondent acted as if she were a general lines agent entitled to sell the mobile home homeowner's insurance policy, when in fact she knew that she was not licensed in that capacity. Respondent recognized the limitations of her license as a limited customer representative defined in the rules that have been quoted but ignored those limitations in conducting business with Mr. Yettman during his purchase of the mobile home homeowner's insurance policy. Contrary to the assertions by
Respondent in her defense, the nature of her limited involvement in that form of property insurance, could not properly be considered to be part of a one-year performance of insurance duties as a substantially full-time bonafide employee in all lines of property and casualty insurance as contemplated by Section 626.732(1)(c), Florida Statutes (2001), having to do with necessary experience to qualify as a general lines agent.
Likewise, the explanation which Respondent gave Mr. Yettman concerning the Nation Safe Drivers Homeowners/Renters contract did not adequately inform him that this was separate from his mobile home homeowner's insurance policy and carried an additional expense. In that sense, it was inadequate to meet the expectations of Thomas v. State of Florida, Department of Insurance and Treasurer, 559 So. 2d 419 (Fla. 2nd DCA 1990), Rev. denied, 577 So. 2d 1307. As a consequence Respondent has violated Sections 624.11(1), 626.611(5), (7), (8), and (13),
626.621(2), (3), and (12), and 626.9541(1)(z),2., and 3.,
Florida Statutes (2001), but not Section 626.9521(1), Florida Statutes (2001), a criminal offense to be considered in court.
In reference to Count III, Respondent and Valerie Webster, who was not licensed, are accused of
misconduct. The person who is principally accused of these failures is Ms. Webster, as to the specific nature of the failures. They are: (1) that Ms. Webster sold the automobile
insurance policy to Laura Brown with little or no input from Ms. Brown in completing the application for the automobile insurance; (2) Ms. Webster sold the customer a rental and towing contract, while leading Ms. Brown to believe that this was not a separate contract which carried an additional fee; and
(3) Ms. Webster selected a deductible amount for their personal injury protection within the automobile insurance policy without explaining the implications.
More generally, it is alleged that Respondent and
Ms. Webster worked in conjunction to sell the private passenger motor vehicle insurance policy to Laura Brown. Having in mind the general activities pertaining to Respondent and Ms. Webster and the more specific activities pertaining to Ms. Webster alone, Respondent is accused of various violations. Those violations pertain to Sections 624.11(1), 626.611(7), (8), and
(13), 626.621(2), (3), and (12), 626.9521(1), and
626.9541(1)(z),2., and 3., Florida Statutes (2001).
The actionable part of Count III, if any responsibility is to be found, on the part of Respondent, is based upon Ms. Webster's specific conduct in several respects and the manner in which Respondent may have knowingly aided, assisted, advised, or abetted Ms. Webster in that pursuit. Ms. Webster's conduct in completing the insurance application questionnaire was not shown as constituting insufficient
explanation of the coverage in the insurance policies being purchased. Ms. Webster did sell a towing and rental contract in a manner that led Ms. Brown to conclude that it was not a separate contract carrying an additional fee and was knowingly supported in this purpose by Respondent. See Thomas, supra.
Finally, there was no showing that Ms. Webster, with the knowledge of and participation by Respondent selected a deductible amount for personal injury protection without explaining the applications of that choice.
There is the related question brought about by the Amended Administrative Complaint concerning the extent to which Respondent was required to provide any form of supervision to Ms. Webster. Given that there was no requirement to supervise, the sufficiency of that supervision may not be called into question. The expectations within Florida Administrative Code Chapter 69B-213, contemplate that Respondent herself, as a limited customer representative, would be subject to supervision, and not act in the capacity of supervising another. Respondent cannot be held accountable, as supervisor for the failure by Ms. Webster to act appropriately.
Under the circumstances, Respondent in answerable for Ms. Webster's conduct to the extent that she has violated Section 626.621(12), Florida Statutes (2001), alone in relation to Count III.
In addition to the penalties that have been related previously, Petitioner had the opportunity to impose discipline consistent with Sections 626.681 and 626.691, Florida Statutes (2001), in association with possible administrative fines and probation as a means of punishment.
In recommending the penalty for misconduct resort is made to the guidelines set forth in Florida Administrative Code Chapter 4-231, now 69B-231, or 69O-231. In particular references are made to 69B-231.040, 69B-231.080, 69B-231.090, 69B-231.100, and 69B-231.160.
Upon consideration of the facts found and the conclusions of law reached, it is
RECOMMENDED:
That a final order be entered finding Respondent in violation of those provisions within Counts I and III that have been referred to, dismissing the others within those Counts, dismissing Count II, suspending her license for one-year, placing Respondent on two years probation, and requiring attendance at such continuing education courses as deemed appropriate.
DONE AND ENTERED this 3rd day of June, 2004, in Tallahassee, Leon County, Florida.
S
CHARLES C. ADAMS
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 3rd day of June, 2004.
ENDNOTES
1/ By agreement of the parties and the undersigned, the presentation that was made in the hearing primarily convened to consider the case Department of Financial Services v.
Jennifer L. Faloon, DOAH Case No. 03-3666PL, was used in the present case, in particular, proof concerning the January 21, 2002, transaction at Beck Insurance, Inc. (Beck Insurance), involving Laura Brown, that was common to both cases.
2/ Through the Petitioner's Proposed Recommended Order, counsel has conceded the insufficiency of the proof to establish by clear and convincing evidence the allegations set forth in Count II to the Amended Administrative Complaint. This concession is in accordance with the view held by the undersigned. Therefore, without further discussion, it will be recommended that Count II be dismissed.
COPIES FURNISHED:
Greg S. Marr, Esquire David J. Busch, Esquire
Department of Financial Services Division of Legal Services
200 East Gaines Street 612 Larson Building
Tallahassee, Florida 32399-0333
Jed Berman, Esquire Infantino and Berman
180 South Knowles Avenue, Suite 7 Winter Park, Florida 32789
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 |
|---|---|---|
| Jul. 20, 2004 | Agency Final Order | |
| Jun. 03, 2004 | Recommended Order | Respondent engaged in unfair practices and sliding related to auto insurance sales. |
INSURANCE SERVICES OFFICE, ET AL. vs. DEPARTMENT OF INSURANCE, 03-003802PL (2003)
DEPARTMENT OF INSURANCE vs MARILYN DIANNE MASSEY, 03-003802PL (2003)
DEPARTMENT OF FINANCIAL SERVICES vs JENNIFER L. FALOON, 03-003802PL (2003)
DEPARTMENT OF INSURANCE vs ARTHUR LLOYD THORNTON, 03-003802PL (2003)
DEPARTMENT OF FINANCIAL SERVICES vs JAY LAWRENCE POMERANTZ, 03-003802PL (2003)
