vs. ) Case No. 06-1211PL
Respondent. )
Pursuant to notice, a hearing was conducted in this case on August 16, 2006, in Tallahassee, Florida, before Stuart M. Lerner, a duly-designated Administrative Law Judge of the Division of Administrative Hearings (DOAH).
Whether Respondent committed the violations alleged in the Administrative Complaint issued against him and, if so, what penalty should be imposed.
On November 28, 2005, Petitioner issued a two-count Administrative Complaint alleging that Respondent had violated Section 626.611(14), Florida Statutes, by entering a plea of nolo contendere to the felony offense of "Scheme to Defraud" (Count I), and that he had violated Section 626.621(11), Florida Statutes, by failing to inform Petitioner of the plea within 30 days of its entry (Count II). On or about March 1, 2006, Respondent "request[ed] a hearing [on the matter] pursuant to Section 120.57(1), Florida Statutes, to be held before the Division of Administrative Hearings." On April 7, 2006, the matter was referred to DOAH.
The hearing Respondent requested was originally scheduled for June 30, 2006, but was continued at Respondent's request and rescheduled for August 16, 2006. As noted above, the hearing was held on August 16, 2006, as scheduled. Two witnesses, Respondent and Sonya Anderson, testified at the hearing. In addition, five exhibits (Petitioner's Exhibits 1 through 3, and Respondent Exhibits 1 and 2) were offered and received into evidence.
At the close of the taking of evidence, the undersigned established a deadline (21 days from the date of the filing of the hearing transcript with DOAH) for the filing of proposed recommended orders.
The hearing transcript (consisting of one volume) was filed with DOAH on September 5, 2006.
Respondent timely filed his Proposed Recommended Order on September 22, 2006. To date, Petitioner has not filed any post- hearing submittal.
Based on the evidence adduced at hearing, and the record as a whole, the following findings of fact are made:
Respondent is licensed as a general lines insurance agent in the State of Florida. The "original issue date" of his license was August 16, 1994.
Respondent was formerly licensed as an insurance adjuster. He surrendered his adjuster's license in 2005.
In September of 2004, a criminal information was filed against Respondent in Orange County (Florida) Circuit Court Case No. 48-2004-CF006694-O. The information alleged that Respondent, between July 1, 2002, and April 15, 2003, "did in violation of Florida Statute 817.034(4)(a)(3), engage in a systematic, ongoing course of conduct with intent to defraud ONE
(1) or more persons, to wit: WORKMEN'S AUTO INSURANCE COMPANY,
or to obtain property from one (1) or more persons by false or fraudulent pretenses, representations, or promises, or willful misrepresentations of a future act, and who so obtained property, to wit: United States Money Curren[cy] from one or more of said persons, to wit: WORKMEN'S AUTO INSURANCE COMPANY." The charge stemmed from conduct that Respondent engaged in while acting in his capacity as an insurance adjuster for Workmen's Auto Insurance Company. Respondent was approximately 34 years of age at the time.
On March 29, 2005, Respondent freely and voluntarily pled nolo contendere to the crime alleged in the information, adjudication of guilt was withheld, and he was placed on four years' probation, with "special conditions" that included: surrendering his insurance adjuster's license by April 29, 2005; performing 150 hours of community service; "inform[ing] any future employers of this crime"; "serv[ing] 1 Day[] in the County Jail, with 1 Day[] credit for time served; and "pay[ing]
$17,312.87 restitution to Workmen's Insurance Group."
Respondent failed to inform Petitioner in writing, within 30 days of March 29, 2005, that he had entered this plea of nolo contendere (although he did immediately inform his then employer of his plea). He did not realize that he was under an obligation to provide Petitioner with such notification. He
assumed, given Petitioner's involvement in the prosecution, that it knew about the plea.
Respondent has surrendered his insurance adjuster's license, as required by the order of probation.
Respondent has completed the 150 hours of community service required by the order of probation.
Respondent has made timely monthly restitution payments to Workmen's Insurance Group in accordance with a payment plan approved by the sentencing court, but has yet to make full restitution.
Respondent is still on probation.
Respondent is presently employed as a customer service representative with Freedom Insurance Agency, Inc. (Freedom) in Fort Lauderdale, Florida.
The owner of Freedom, Julius Ridolfi, has written a letter expressing his desire to "offer [Respondent] a permanent position with Freedom Insurance as a licensed 2-20 Agent with full agent responsibilities," if Respondent's license is not revoked as a result of this proceeding.
CONCLUSIONS OF LAW
DOAH has jurisdiction over the subject matter of this proceeding and of the parties hereto pursuant to Chapter 120, Florida Statutes.
13. "Chapters 624-632, 634, 635, 636, 641, 642, 648, and
651 constitute the 'Florida Insurance Code.'" § 624.01, Fla. Stat.
It is Petitioner's responsibility to "enforce the provisions of this code." § 624.307, Fla. Stat.
Among Petitioner's duties under the Code is to license and discipline insurance agents.
Petitioner may take disciplinary action against a licensee only after the licensee has been given reasonable written notice of the charges and an adequate opportunity to request a proceeding pursuant to Sections 120.569 and 120.57, Florida Statutes.
An evidentiary hearing must be held if requested by the licensee when there are disputed issues of material fact.
§§ 120.569(1) and 120.57(1), Fla. Stat.
At the hearing, Petitioner bears the burden of proving that the licensee engaged in the conduct, and thereby committed the violations, alleged in the charging instrument.
Proof greater than a mere preponderance of the evidence must be presented by Petitioner to meet its burden of proof. Clear and convincing evidence of the licensee's guilt is required. See Department of Banking and Finance, Division of
Securities and Investor Protection v. Osborne Stern and Company, 670 So. 2d 932, 935 (Fla. 1996); Ferris v. Turlington, 510 So.
2d 292, 294 (Fla. 1987); Pou v. Department of Insurance and Treasurer, 707 So. 2d 941 (Fla. 3d DCA 1998); and § 120.57(1)(j), Fla. Stat. ("Findings of fact shall be based upon a preponderance of the evidence, except in penal or licensure disciplinary proceedings or except as otherwise provided by statute ").
Clear and convincing evidence "requires more proof than a 'preponderance of the evidence' but less than 'beyond and to the exclusion of a reasonable doubt.'" In re Graziano, 696 So. 2d 744, 753 (Fla. 1997). It is an "intermediate standard." Id. For proof to be considered "'clear and convincing' . . .
the evidence must be found to be credible; the facts to which the witnesses testify must be distinctly remembered; the testimony must be precise and explicit; and the witnesses must be lacking in confusion as to the facts in issue. The evidence must be of such weight that it produces in the mind of the trier of fact a firm belief or conviction, without hesitancy, as to the truth of the allegations sought to be established." In re
Davey, 645 So. 2d 398, 404 (Fla. 1994), quoting, with approval, from Slomowitz v. Walker, 429 So. 2d 797, 800 (Fla. 4th DCA 1983). "Although this standard of proof may be met where the evidence is in conflict, . . . it seems to preclude evidence that is ambiguous." Westinghouse Electric Corporation, Inc. v. Shuler Bros., Inc., 590 So. 2d 986, 989 (Fla. 1st DCA 1991).
In determining whether Petitioner has met its burden of proof, it is necessary to evaluate its evidentiary presentation in light of the specific allegations of wrongdoing made in the charging instrument. Due process prohibits Petitioner from taking disciplinary action against a licensee based on matters not specifically alleged in the charging instrument, unless those matters have been tried by consent. See Shore Village Property Owners' Association, Inc. v. Department of Environmental Protection, 824 So. 2d 208, 210 (Fla. 4th DCA 2002); Cottrill v. Department of Insurance, 685 So. 2d 1371, 1372 (Fla. 1st DCA 1996); and Delk v. Department of Professional Regulation, 595 So. 2d 966, 967 (Fla. 5th DCA 1992).
The charging instrument in the instant case, the Administrative Complaint, alleges: in Count I, that Respondent violated Section 626.611(14), Florida Statutes, as a consequence of his having pled nolo contendere on March 29, 2005, in Orange County (Florida) Circuit Court Case No. 48-2004-CF006694-O, to the felony of "Scheme to Defraud," in violation of Section 817.034(4)(a)(3), Florida Statutes; and, in Count II, that he violated Section 626.621(11), Florida Statutes, by "fail[ing] to inform [Petitioner] in writing within thirty (30) days" that he had entered such plea.
Section 626.611(14), Florida Statutes, provides as follows:
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, 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:
Having been found guilty of or having pleaded guilty or nolo contendere to a felony or a crime punishable by imprisonment of 1 year or more under the law of the United States of America or of any state thereof or under the law of any other country which involves moral turpitude, without regard to whether a judgment of conviction has been entered by the court having jurisdiction of such cases.
Section 626.621(11), Florida Statutes, provides as follows:
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, 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:
Failure to inform the department in writing within 30 days after pleading guilty or nolo contendere to, or being convicted or found guilty of, any felony or a crime punishable by imprisonment of 1 year or more under the law of the United States or of any state thereof, or under the law of any other country without regard to whether a judgment of conviction has been entered by the court having jurisdiction of the case.
It is undisputed, and the record evidence clearly and convincingly establishes, that: as alleged in Count I of the Administrative Complaint, on March 29, 2005, in Orange County (Florida) Circuit Court Case No. 48-2004-CF006694-O, Respondent pled nolo contendere to having committed, while acting in his capacity as an insurance adjuster, the felony crime of "[s]cheme to [d]efraud," in violation of Section 817.034(4)(a)3, Florida Statutes, which provides as follows:
Any person who engages in a scheme to defraud and obtains property thereby is guilty of organized fraud, punishable as follows:
If the amount of property obtained has an aggregate value of less than $ 20,000, the violator is guilty of a felony of the third degree, punishable as provided in s.
775.082, s. 775.083, or s. 775.084;
and, as alleged in Count II of the Administrative Complaint, Respondent failed to notify Petitioner of his plea within 30 days of its entry.
A "scheme to defraud," as used in Section 817.034(4)(a)3, Florida Statutes, is defined in Section
817.034(3)(d), Florida Statutes, as "a systematic, ongoing course of conduct with intent to defraud one or more persons, or with intent to obtain property from one or more persons by false or fraudulent pretenses, representations, or promises or willful misrepresentations of a future act." Such a "systematic, ongoing course of conduct" involves dishonesty and moral turpitude. See Winestock v. Immigration & Naturalization Service, 576 F.2d 234, 235 (9th Cir. 1978)("A crime having as an element the intent to defraud is clearly a crime involving moral turpitude."); Bill Nelson in the Matter of: Perry Murray
Wilson, No. 21884-97-A, 1998 Fla. Div. Adm. Hear. LEXIS 6215 *4 (Fla. DOI December 21, 1998)(Final Order)("[A] felonious scheme to defraud is a crime involving moral turpitude . . . ."); and Fla. Admin Code R. 69B-211.042(21)(w)("The Department finds that each felony crime listed in this subsection is a crime of moral turpitude: Fraud.").
Having pled nolo contendere to a felonious "scheme to defraud," Respondent is subject to mandatory suspension or revocation of his general lines insurance license pursuant to Section 626.611(14), Florida Statutes; and having failed to notify Petitioner of his plea within 30 days of its entry, he is subject to discretionary suspension or revocation of his license pursuant to Section 626.621(11), Florida Statutes.
To determine whether Respondent's license should be revoked or just suspended (and, if so, for how long) pursuant to Section 626.611(14), Florida Statutes, and Section 626.621(11), Florida Statutes, it is necessary to consult Petitioner's "penalty guidelines" set forth in Florida Administrative Code Rule Chapter 69B-231, which impose restrictions and limitations on the exercise of Petitioner's disciplinary authority. See Parrot Heads, Inc. v. Department of Business and Professional Regulation, 741 So. 2d 1231, 1233 (Fla. 5th DCA 1999)("An administrative agency is bound by its own rules . . . creat[ing] guidelines for disciplinary penalties."); cf. State v. Jenkins,
469 So. 2d 733, 734 (Fla. 1985)("[A]gency rules and regulations, duly promulgated under the authority of law, have the effect of law."); Buffa v. Singletary, 652 So. 2d 885, 886 (Fla. 1st DCA 1995)("An agency must comply with its own rules."); Decarion v. Martinez, 537 So. 2d 1083, 1084 (Fla. 1st 1989)("Until amended or abrogated, an agency must honor its rules."); and Williams v. Department of Transportation, 531 So. 2d 994, 996 (Fla. 1st DCA 1988)(agency is required to comply with its disciplinary guidelines in taking disciplinary action against its employees).
Florida Administrative Code Rule 69B-231.040 explains how Petitioner goes about "[c]alculating [a] penalty." It provides as follows:
Penalty Per Count.
The Department is authorized to find that multiple grounds exist under Sections 626.611 and 626.621, F.S., for disciplinary action against the licensee based upon a single count in an administrative complaint based upon a single act of misconduct by a licensee. However, for the purpose of this rule chapter, only the violation specifying the highest stated penalty will be considered for that count. The highest stated penalty thus established for each count is referred to as the "penalty per count".
The requirement for a single highest stated penalty for each count in an administrative complaint shall be applicable regardless of the number or nature of the violations established in a single count of an administrative complaint.
Total Penalty. Each penalty per count shall be added together and the sum shall be referred to as the "total penalty".
Final Penalty.
The final penalty which will be imposed against a licensee under these rules shall be the total penalty, as adjusted to take into consideration any aggravating or mitigating factors;
The Department may convert the total penalty to an administrative fine and probation if the licensee has not previously been subjected to an administrative penalty and the current action does not involve a violation of Section 626.611, F.S.;
The Department will consider the factors set forth in rule subsection 69B- 231.160(1), F.A.C., in determining whether to convert the total penalty to an administrative fine and probation.
In the event that the final penalty would exceed a suspension of twenty-four
(24) months, the final penalty shall be revocation.
Florida Administrative Code Rule 69B-231.080 is entitled, "Penalties for Violation of Section 626.611." It provides, in pertinent part, as follows:
If it is found that the licensee has violated any of the following subsections of Section 626.611, F.S., for which compulsory suspension or revocation is required, the following stated penalty shall apply:
* * *
(14) Section 626.611(14), F.S. -- see Rule 69B-231.150, F.A.C.
Florida Administrative Code Rule 69B-231.150 provides, in pertinent part, as follows:
* * *
(2) If a licensee is not convicted of, but has been found guilty of or has pleaded guilty or nolo contendere to, a felony or a crime punishable by imprisonment of 1 year or more under the law of the United States of America or of any state thereof or under the law of any other country, which is a crime involving moral turpitude and is a crime involving breach of trust or dishonesty, the penalty shall be revocation.
* * *
Florida Administrative Code Rule 69B-231.090 is entitled, "Penalties for Violation of Section 626.621." It provides, in pertinent part, as follows:
If it is found that the licensee has violated any of the following subsections of Section 626.621, F.S., for which suspension or revocation of license(s) and appointment(s) is discretionary, the following stated penalty shall apply:
* * *
(11) Section 626.621(11), F.S. - suspension
3 months
* * *
In the instant case, the "penalty per count" for Count I of the Administrative Complaint is revocation and the "penalty per count" for Count II of the Administrative Complaint is a three-month suspension, making the "total penalty" revocation plus a three month suspension.
The "aggravating/mitigating factors" that must be considered to determine whether any "adjust[ment]" should be made to this "total penalty" are set forth in Florida Administrative Code Rule 69B-231.160, which provides as follows:
The Department shall consider the following aggravating and mitigating factors and apply them to the total penalty in reaching the final penalty assessed against a licensee under this rule chapter. After consideration and application of these factors, the Department shall, if warranted by the Department's consideration of the factors, either decrease or increase the penalty to any penalty authorized by law.
For penalties other than those assessed under Rule 69B-231.150, F.A.C.:
Willfulness of licensee's conduct;
Degree of actual injury to victim;
Degree of potential injury to victim;
Age or capacity of victim;
Timely restitution;
Motivation of licensee;
Financial gain or loss to licensee;
Cooperation with the Department;
Vicarious or personal responsibility;
Related criminal charge; disposition;
Existence of secondary violations in counts;
Previous disciplinary orders or prior warning by the Department; and
Other relevant factors.
For penalties assessed under Rule 69B- 231.150, F.A.C., for violations of Sections 626.611(14) and 626.621(8), F.S.:
Number of years that have passed since criminal proceeding;
Age of licensee at time the crime was committed;
Whether licensee served time in jail;
Whether or not licensee violated criminal probation;
Whether or not licensee is still on criminal probation;
Whether or not licensee's actions or
behavior resulted in substantial injury to victim;
Whether or not restitution was, or is being timely paid;
Whether or not licensee's civil rights have been restored; and
Other relevant factors.
Examining the evidentiary record in the instant case in light of these "aggravating/mitigating factors," it does not appear (particularly given the relatively short amount of time that has passed since the entry of Respondent's nolo contendere plea and that Respondent is still on criminal probation) that a decrease of the "total penalty" is warranted.
Accordingly, the "final penalty" that Petitioner should impose in the instant case is the revocation of Respondent's license.
RECOMMENDED that Petitioner issue a Final Order revoking Respondent's general lines insurance license.
DONE AND ENTERED this 29th day of September, 2006, in Tallahassee, Leon County, Florida.
STUART M. LERNER
Filed with the Clerk of the Division of Administrative Hearings this 29th day of September, 2006.
Gautier Kitchen, Esquire Department of Financial Services Division of Legal Services
Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
Carlos 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.
