vs.
Respondent.
) Case No. 05-4351
Administrative Law Judge (ALJ) Daniel Manry conducted the formal hearing in this proceeding on March 31, 2006, in Dade City, Florida, on behalf of the Division of Administrative Hearings (DOAH).
The issue presented is whether Respondent should deny Petitioner's application to be licensed as a resident personal lines insurance agent.
Petitioner submitted a license application to Respondent on October 29, 2004. On October 13, 2005, Respondent notified Petitioner that Respondent proposed to deny the license application. Petitioner timely requested a formal hearing, and Respondent referred the matter to DOAH to conduct the hearing.
At the hearing, Petitioner testified in her own behalf and submitted three exhibits for admission into evidence.
Respondent called no witnesses, but submitted four exhibits for admission into evidence.
The identity of the witnesses and exhibits and the rulings regarding each are reported in the one-volume Transcript of the hearing filed with DOAH on April 6, 2006. Petitioner and Respondent filed their respective Proposed Recommended Orders (PROs) on April 18 and 17, 2006.
Respondent is the state agency responsible for licensing insurance agents in the state pursuant to Chapter 626, Florida Statutes (2004). On October 29, 2004, Respondent received Petitioner's application to be licensed as a resident personal lines insurance agent (insurance agent).
On October 13, 2005, Respondent issued a Notice of Denial to Petitioner. Respondent based the denial on several grounds that fall into three categories.
The first category is based on Petitioner's prior criminal history. In relevant part, the Notice of Denial denies the application because Petitioner pled nolo contendere to a crime punishable by imprisonment of one year or more.
The Notice of Denial further states that the crime was one of moral turpitude and that Subsection 626.611(14), Florida Statutes (2004), makes denial of the application compulsory. Even if the crime were not one of moral turpitude, the Notice of Denial states that the plea of nolo contendere provides a discretionary ground to deny the application pursuant to Subsection 626.621(8), Florida Statutes (2004).
The Notice of Denial states a second category of grounds that are also compulsory. The second category of grounds may be fairly summarized as alleging a lack of fitness or trustworthiness to engage in the business of insurance.
The second category of grounds generally relates to turpitude inherent in the criminal offense and an inaccurate application answer stating that Petitioner had no prior criminal record. The Notice of Denial states that Petitioner lacks one or more qualifications for the license, that Petitioner committed a material misstatement or misrepresentation on her application, and that Petitioner demonstrated a lack of fitness or trustworthiness to engage in the business of insurance as
provided in Subsections 626.611(1), 626.611(2), and 626.611(7),
Florida Statutes (2004).
The third category of grounds relates to waiting periods. The Notice of Denial states that Petitioner must wait
17 years from the date she pled nolo contendere before applying for a license as an insurance agent. The waiting period is based on agency rules in Florida Administrative Code
Rules 69B-211.042(4)(b) and 69B-211.042(8) that are promulgated pursuant to Subsection 626.207(1), Florida Statutes (2004).
The remaining Findings of Fact address the factual sufficiency of the second category of grounds for denial. The conclusions of law, in relevant part, address the legal sufficiency of the remaining grounds for denial.
The criminal record of Petitioner is not disputed. On October 4, 2004, Petitioner pled nolo contendere to a third degree felony of grand theft in the Circuit Court in and for Pasco County, Florida, Case No. CRCO4-1177-CFAES.
The court withheld adjudication of guilt and imposed fines and costs of $395. Petitioner served 30 days in the Pasco County jail. The court placed Petitioner on supervised probation for 18 months, which Petitioner successfully terminated early on September 27, 2005.
Petitioner contests neither the inaccuracy of the application answer stating she had no prior criminal record nor
the materiality of the inaccuracy. However, Petitioner does contest the agency's assertion that Petitioner possessed the culpable knowledge or scienter required to misstate, misrepresent, or commit fraud in attempting to obtain a license within the meaning of Subsection 626.611(2), Florida Statutes (2004). Petitioner also contests the assertions that she
lacks one or more qualifications for licensure and that she lacks fitness or trustworthiness within the meaning of Subsections 626.611(1), 626.611(2), and 626.611(7), Florida
Statutes (2004).
Petitioner testified that her employer submitted her application electronically. Petitioner testified that she gave her employer accurate information concerning her application, but she did not review the application before transmission.
The trier of fact finds the testimony concerning Petitioner's lack of culpable knowledge to be credible and persuasive. Petitioner testified with extraordinary candor. Her demeanor was frank and unguarded. Her denial of culpable intent to mislead the agency is consistent with the totality of evidence in this proceeding and with Petitioner's demonstrated fitness and trustworthiness after November 2002.
After Petitioner gave birth to a son on March 20, 2002, her treating physician advised her to undergo a tubal ligation, and the subsequent surgery was successful. The
resulting inability to bear more children, however, led Petitioner into a mental state that was subsequently diagnosed as severe clinical depression.
Petitioner returned to work approximately 12 weeks after surgery. From August 2002 through November 2002, Petitioner engaged in an episode of compulsive spending in which she incurred approximately $70,000 in credit card debt that she charged to personal and business credit cards.
In order to pay the debt, Petitioner began taking money from her employer. Petitioner describes her hedonistic offense in her own words:
[T]his incident occurred when I was suffering from severe depression that was [subsequently] diagnosed by a physician. I have been under the treatment of a psychiatrist and also a psychologist. I still see my psychiatrist quarterly to make sure that all is well with my medications
. . . . The psychologist released me from her care because she felt that I can now deal with everyday stress. . . .
So in order to fill that void [of no more children] I started shopping. And I would - I would go to the mall in a day and I would spend several thousand dollars on absolute garbage, you know, when you look. I mean.
I started buying clothes; I bought furniture. I just was a shopaholic. I would go every Saturday and Sunday and spend time at the mall and just shop like crazy.
[M]y husband had no idea of our finances. He just gave the paycheck and said: You do what you need to do. As long as he could have cash he didn't care. So he had no
idea. He didn't even know how much money I made; he didn't know how much our mortgage was; he didn't know anything about our finances.
And then once I started having all these credit card bills then I was, you know, robbing Peter to pay Paul . . . . And then it just got where I snapped . . . .
And . . . unfortunately it looked like the easy way out. It was an answer to my problems and I could continue doing what I needed to do.
[T]he attorney [employer] pretty much left me to do what I needed to do. I wrote all of his court motions, and I wrote all of his pleadings, and accountings, and inventories, and he didn't even look at them. He would just sign them. He didn't review them at all.
And so when I would give him checks to sign
. . . I would just take him the check and say, "I need you to sign a check," and he would sign the check and wouldn't even look to see . . . it was [to me].
Transcript (TR), pages 15 and 24-26.
After November 2002, Petitioner voluntarily disclosed her offense to her employer. Petitioner's effort to reclaim her integrity and trustworthiness was both epiphanic and Herculean. The effort is best described in her own words:
I started contemplating suicide and said: Oh, well, this will take care of all the problems. But then I had read up and didn't want my kids to grow up without a parent or think that for some reason they caused me to do it.
So at that point in time I was just - I didn't know what to do or where to turn. I was just completely lost.
And so I hadn't been to church in like a year. For whatever reason the Sunday before the Monday that I went to [an] attorney I went to church and they told a story. And I said: You know, I'm willing to confess to what I've done at whatever cost because I can't - I can't keep going like this, and I can't keep pretending like nothing is wrong, and laying in bed and the couch all day.
So I went to [an] attorney the very next day.
Q. Do you need a moment?
A. I'm okay.
* * *
In January 2003, I'm sorry. This is hard reliving it.
THE COURT: That's okay. Take your time and if you need a recess just let me know.
A. This is the first time that I just really said it out loud.
THE COURT: Yes.
A. In January of 2003, I contacted [an attorney]. I informed him . . . that I had done something wrong and I didn't know where to turn to or who to turn to. At this point in time I hadn't told my family and nobody knew. All they knew is that something was wrong with me. I wasn't myself. I was withdrawn and I stayed in bed . . . all day.
The attorney immediately contacted my former employer to advise that there was a problem with his accounting system. Up until this
time he had no knowledge of any . . . problems.
My attorney also contacted a doctor for me to see immediately because he could tell that something was not right with me.
At this time that my attorney contacted my former employer I offered to make immediate restitution, which I did [over time].
At this point in time my employer said that he did not want to contact any authorities because he didn't want the publicity in a small town. And as far as I knew, the situation was taken care of. I was making restitution and I thought it was over.
At some point in time my former employer contacted the Federal Bureau of Investigation (FBI). After meeting with the FBI, I agreed to assist them because my former employer was billing my time as the attorney's time in guardianship cases. This would cause clients to run out of money and become eligible for Medicaid and other state governmental services.
The federal government ended up dropping the charge against me and I . . . agreed to assist them in any cases against my employer.
When things were not moving along in the federal case my former employer also contacted the local authorities. I was arrested on May 1 of 2004. And this was almost - this was almost a year-and-a-half after I had first come forward.
And then in September 2004, my attorney was ready to go to trial. At the last minute the State Attorney offered a plea deal. I was told that I could finally put this nightmare behind me by pleading no contest and I would have no criminal record because the court would withhold adjudication.
[T]he judge made a point to mention that adjudication was being withheld so I would have no felony criminal record. And also at this time there was no restitution ordered because I had already paid it all back.
TR at 15-18.
Petitioner paid approximately $85,000 in restitution.
Restitution was a Sisyphean effort, as Petitioner explains:
I paid back cash. I had taken - I had calculated $40,000. He said that I calculated - that I had taken $60,000 and then he raised it to $80,000 for his time. But I - I paid back $45,000 in cash. The credit card companies, he contacted every credit card company that I paid and they all reversed all of their [charges]. So I ended up owing, you know, another $45,000 back in credit cards that he had . . . all the payments reversed. . . . So I paid a
total - it was $85,000.
* * *
[W]e sold everything we had. . . . We sold our home. I had bought my husband a third vehicle. We sold that. We had a motorcycle that sold. We had a lot of toys.
TR at 27-28.
The trier of fact is not persuaded that Petitioner would have lied on her license application in October 2005 after voluntarily disclosing her offense in January 2003. When Petitioner exercised a conscious choice to confess her offense, she knew with certainty that shame would follow her exposure to her husband and children. Petitioner also knew that her choice
would subject her family to the financial hardship and social upheaval inherent in selling everything they owned to make restitution to her former employer. Petitioner learned a new occupation, contributed to her family's recovery, and testified candidly and frankly about her offense.
When the court sentenced Petitioner to 30 days in jail, Petitioner requested that she be allowed to serve the sentence every other weekend. Petitioner worked during the week and did not want to be away from her children all week and every weekend. The judge granted the request.
The trier of fact finds that Petitioner neither misstated nor misrepresented her criminal record on her license application. Nor did Petitioner commit fraud in answering the questions on the application within the meaning of Subsection 626.611(2), Florida Statutes (2004).
The trier of fact finds that Petitioner does not lack one or more of the qualifications for licensure required in Subsection 626.611(1), Florida Statutes (2004).1 Nor does Petitioner demonstrate a lack of fitness or trustworthiness to engage in the business of insurance within the meaning of Subsection 626.611(7), Florida Statutes (2004).
CONCLUSIONS OF LAW
Respondent lacks statutory authority to deny Petitioner's license application. Respondent did not deny the
application within 90 days, and the application was approved on January 28, 2005, by operation of Subsection 120.60(1), Florida Statutes (2004). If Respondent were to issue a final order inconsistent with the statute, Respondent's final order may be subject to remand upon timely appeal by Petitioner.
§ 120.68(7)(e)1., Fla. Stat. (2005); Florida Academy of Cosmetic
Surgery, Inc. v. State of Florida, Department of Health, Board of Medicine, 771 So. 2d 602 (Fla. 1st DCA 2000).
Petitioner submitted her application on October 29, 2004. Respondent issued the proposed denial on October 13, 2005. The Notice of Denial admits "the application for licensure . . . [was] received by the Department on October 29, 2004."
No evidence of record shows that the application was incomplete when the Department received it. No evidence of record shows that Petitioner voluntarily waived or extended the 90-day statutory time limit. No evidence of record shows that Respondent provided oral notice of intent to deny the license application within the 90-day statutory time limit. Compare Department of
Transportation v. Calusa Trace Development Corporation, Inc., 571 So. 2d 543 (Fla. 2d DCA 1990); Sumner v. Department of Professional Regulation, 555 So. 2d 919 (Fla. 1st DCA 1990).
An administrative agency organized under the executive branch of government, including Respondent, cannot interpret a statute in a manner that amends, modifies, enlarges, or
contravenes the statute. § 120.58(1), Fla. Stat. (2005). Agency action that interprets a statute in such a manner risks violation of the separation of powers clause. Art. 2, § 3, Fla. Const.; Ch. 20, Fla. Stat. (2005).
The statutory time limit may not be interpreted as delegating the right to exercise unbridled discretion in applying the law. The non-delegation doctrine requires the legislature to provide standards and guidelines in an enactment that are ascertainable by reference to the terms of the enactment. Bush v. Shiavo, 885 So. 2d 321 (Fla. 2004); B.H. v.
State, 645 So. 2d 987, 992-994 (Fla. 1994); Askew v. Cross Key
Waterways, 372 So. 2d 913, 925 (Fla. 1978).
If Respondent were to have statutory authority to deny the application, DOAH would have jurisdiction over the parties and subject matter in this proceeding. §§ 120.569 and 120.57(1), Fla. Stat. (2002). DOAH provided the parties with adequate notice of the formal hearing.
Petitioner bears the ultimate burden of proving entitlement to a license. Florida Department of Transportation v. J.W.C. Co., Inc., 396 So. 2d 778 (Fla. 1st DCA 1981). Petitioner must show by a preponderance of the evidence that the grounds stated in the Notice of Denial are factually and legally insufficient to deny the license application.
Petitioner satisfied her burden of proof concerning the second category of grounds for denial. Petitioner showed by a preponderance of the evidence that she does not lack one or more of the qualifications for licensure; that she did not commit a material misstatement or misrepresentation on her application or fraud in attempting to obtain her license; and that she has not failed to demonstrate the necessary fitness and trustworthiness to engage in the business of insurance. §§ 626.611(1), 626.611(2), and 626.611(7), Fla. Stat. (2004).
Petitioner satisfied her burden of proof concerning the third category of grounds for denial involving waiting periods. Subsection 626.207(1), Florida Statutes (2004), requires Respondent to "adopt rules establishing specific waiting periods for applicants to become eligible for licensure following denial." (emphasis supplied)
Respondent incorrectly construes the phrase "following denial" to mean following Petitioner's entry of a plea of nolo contendere. Similarly, Respondent misconstrues the quoted phrase to mean that Respondent may utilize a waiting period as a ground for initial denial of a license rather than as a ground "following denial."
A state agency, including Respondent, is statutorily prohibited from interpreting a statute in a manner that modifies or amends the statute. § 120.52(8), Fla. Stat (2004). A state
agency organized under the executive branch of government that modifies or amends a statute violates the separation of powers clause. Art. 2, § 3, Fla. Const.; Ch. 20, Fla. Stat. (2005).
The statutory authority in Subsection 626.207(1), Florida Statutes (2004), for Respondent to adopt rules pertaining to waiting periods cannot be construed to authorize Respondent to adopt a rule that amends or modifies the statutory phrase "following denial." A statute may not delegate to the executive branch of government the power to enact a law or the right to exercise unrestricted discretion in applying the law. Shiavo, 885 So. 2d at 321; B.H., 645 So. 2d at 992-994 (Fla. 1994); Cross Key Waterways, 372 So. 2d at 925 (Fla. 1978). Statutes granting power to the executive branch must clearly define the power delegated, preclude unbridled discretion, preclude the enlargement or modification of the law implemented, and ensure the availability of meaningful judicial review. Shiavo, 885 So. 2d at 332.
The first category of grounds for denial presents issues that are largely issues of law rather than issues of fact. Subsections 626.611(14) and 626.621(8), Florida Statutes (2004), in relevant part, authorize Respondent to deny Petitioner's license application if Petitioner pled nolo contendere to a felony.2
The term "felony" is statutorily defined by how an offense is "punishable under the laws of the state."3
Section 775.08, Florida Statutes (2005), provides, in relevant part:
When used in the laws of this state:
The term "felony" shall mean any criminal offense that is punishable under the laws of this state . . . by . . . imprisonment in a state penitentiary. . . . A person shall be imprisoned in the state penitentiary for each sentence which . . . exceeds 1 year. (emphasis supplied)
The term "punishable" is not defined by statute. The common and ordinary meaning of the term is "liable to punishment." The American Heritage Dictionary of the English Language, page 1060 (Houghton Mifflin Company 1981).
The phrase "punishable under the laws of this state" lends itself to two competing interpretations. One interpretation construes "the laws of this state" to exclude the laws of this state that prescribe sentencing guidelines. The competing interpretation construes the "laws of this state" literally to include statutory limits on sentences.
If the quoted phrase were construed to exclude the laws of this state that limit sentences, any offense labeled as a felony would satisfy the statutory definition of a felony in Subsection 775.08(1), Florida Statutes (2005), even though the offense was not punishable in the state penitentiary under the
laws of this state that prescribe sentences. If the phrase "punishable under the laws of this state" were construed literally to include the laws of this state that prescribe sentences, an offense labeled as a felony would not satisfy the statutory definition of a felony if the statutory limits on sentences precluded imprisonment in the state penitentiary.
Statutory sentencing guidelines determine prison sentences by total prison score. § 921.0014(2), Fla. Stat. (2004). Petitioner's prison score was insufficient for the offense she committed to be punishable by imprisonment in the state penitentiary within the meaning of Subsection 775.08(1), Florida Statutes (2004).
The highest level of severity for third degree grand theft is level four.4 A level four grand theft carries a maximum of 22 points for the primary offense. §§ 921.0012(3) (Level 4) and 921.0014(1)(a), Fla. Stat. (2004) (level 4 carries a 22 primary offense points).
Petitioner's total sentence points did not exceed 22.
Petitioner had no additional offenses, victim injury,5 prior record, legal status, community sanction violations, or other similar factors that could have increased the total sentence points above the primary offense score.6
State prison months are determined by reducing total sentence points by 28 points. § 921.0014(2), Fla. Stat. (2004).
When 28 points are subtracted from Petitioner's 22 points, the mathematical remainder is a negative six points.
Respondent proposes an interpretation of the phrase "punishable under the laws of this state" that does not include the laws of this state that limit sentences. The proposed interpretation is not a literal interpretation of the quoted phrase. The proposed interpretation construes terms that are not defined by statute in a manner that departs from their common and ordinary meaning.
Respondent did not articulate in the record any underlying technical reasons for deference to agency expertise in the interpretation of statutory terms. Johnston, M.D. v. Department of Professional Regulation, Board of Medical Examiners, 456 So. 2d 939, 943-944 (Fla. 1st DCA 1984). The agency did not explicate policy considerations that infuse the proposed statutory interpretation and entitle it to great deference.
The effect of the proposed agency interpretation would be to define an offense as a felony by its label rather than by the sentence mandated in Subsections 775.08(1) and 921.0014(2), Florida Statutes (2004). It is unnecessary in this proceeding to determine whether the legislature intended such an effect.
Petitioner by operation of law pursuant to Subsection 120.60(1), Florida Statutes (2004).
RECOMMENDED that Respondent enter a final order determining that Petitioner's license application has been granted by operation of law.
DONE AND ENTERED this 17th day of May, 2006, in Tallahassee, Leon County, Florida.
Filed with the Clerk of the Division of Administrative Hearings this 17th day of May, 2006.
1/ This finding does not pertain to the statutory qualifications prescribed for compulsory and discretionary denial of a license application when an applicant pleads nolo contendere to a felony. §§ 626.611(14) and 626.621(8), Fla. Stat. (2004). That issue is addressed in the conclusions of law.
2/ Denial of a license application is mandatory in Subsection 626.611(14), Florida Statutes (2005), but discretionary in Subsection 626.621(8), Florida Statutes.
Denial is mandatory if the felony involves moral turpitude, but discretionary if the felony does not involve moral turpitude.
Grand theft has been held to be a crime of moral turpitude. Bruner v. Board of Real Estate, Department of Professional Regulation, 399 So. 2d 4 (Fla. 5th DCA 1981). Both statutes authorize denial, in relevant part, upon the entry of a plea of nolo contendere to a crime that is punishable by imprisonment of one year or more in a federal jurisdiction or other state, but the "one year or more" language is inapposite to this
proceeding. Goodwin v. Department of Insurance, Case No. 00-3503 (DOAH November 14, 2000).
3/ Other statutes classify various types of crimes that satisfy the definition of a felony or misdemeanor. § 775.081, Fla.
Stat. (2005).
4/ Ch. 921, Fla. Stat. (2004). The original charge against Petitioner was grand theft in the second degree. See
§ 812.014(2)(b)1., Fla. Stat. (2004) (property valued at $20,000 or more, but less than $100,000). However, Petitioner pled guilty to grand theft in the third degree. See § 812.014(2)(c), Fla. Stat. (2004).
5/ The term "victim injury" means physical injury.
§ 921.0021(7)(a), Fla. Stat. (2004).
6/ The statute defining grand theft in the third degree contains subparagraphs 1 through 12. § 812.014(2)(c)1.-12., Fla. Stat. (2004). The copy of the judgment that was admitted into evidence in this proceeding accepts a plea of nolo contendere to "812.014 3rd Degree Felony." The offense committed did not involve any subject matter included in subparagraphs 4 through 12. § 812.014(2)(c)4.-12., Fla. Stat. (2004). A determination of which of the remaining subparagraphs to which Petitioner pled would determine the offense severity level to be used in determining a sentence. Compare
§ 921.0012(3), Fla. Stat. (2004) (Level 2 offenses include
§ 812.014(2)(c)1., Fla. Stat.) with § 921.0012(3), Fla. Stat. (Level 3 offenses include § 812.014(2)(c)2., Fla. Stat.) and
§ 921.0012(3), Fla. Stat. (Level 4 offenses include
§ 812.014(2)(c)3., Fla. Stat.). It is unnecessary to determine which level of severity is correct because the highest level of severity would not result in imprisonment for a term equal to or greater than a year and a day.
William W. Tharpe, Jr., Esquire Department of Financial Services 612 Larson Building
Angelique Knox, Esquire Department of Financial Services Division of Legal Services
Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
Carlos G. Muñiz, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
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.
