STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL SERVICES,

Petitioner,

vs.

FREDRIC STUART ZELANKA,

Respondent.

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) Case No. 07-0573PL

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RECOMMENDED ORDER

Pursuant to notice, this cause was heard by Linda M. Rigot, the assigned Administrative Law Judge of the Division of Administrative Hearings, on April 20, 2007, by video teleconference with sites in Lauderdale Lakes and Tallahassee, Florida.

APPEARANCES

For Petitioner: Robert Alan Fox, Esquire

Department of Financial Services

200 East Gaines Street Tallahassee, Florida 32399-0333

For Respondent: Fredric Zelanka, pro se

5099 Monterey Lane

Delray Beach, Florida 33484 STATEMENT OF THE ISSUE

The issue presented is whether Respondent is guilty of the allegations contained in the Administrative Complaint, and, if

so, what disciplinary action should be taken against him, if any.

PRELIMINARY STATEMENT

On October 30, 2006, Petitioner, Department of Financial Services, filed an Administrative Complaint against Respondent, Fredric Stuart Zelanka, alleging that he has violated several statutes regulating his conduct as an insurance agent. In response, Respondent requested an administrative hearing to contest the Department's allegations. This cause was thereafter transferred to the Division of Administrative Hearings to conduct the evidentiary proceeding.

The Department presented the testimony of Respondent and of Charmaine Davis-Matthei. Respondent also testified on his own behalf. The Department's Exhibits numbered 1, 2, 4-7, 9-14, 18, and 23 were admitted in evidence. Respondent's ore tenus motion to dismiss the Administrative Complaint made at the beginning of the final hearing was denied.

The Transcript of the final hearing was filed on May 4, 2007. Respondent waived his right to submit a proposed recommended order, and the Department's Proposed Recommended Order was filed May 10, 2007.

FINDINGS OF FACT

1. At all times material hereto, Respondent, Fredric Stuart Zelanka, has been licensed by Petitioner,

   Department of Financial Services, as an insurance agent, holding license number A293609.

2. Jerrod Keith Zelanka is Respondent's son. Jerrod Keith Zelanka also uses the name Rod Keith. Using one name or the other, Jerrod Keith Zelanka was the owner, president, and director of American Professional Insurance Services, Inc., also known as AmPro Insurance.

3. Respondent's insurance agency had been Accredited Insurance Group, Inc. Due to his health problems in 2000, Respondent turned his insurance business over to his son and thereafter was employed by AmPro.

4. On September 11, 2003, the Department entered a Final Order suspending Jerrod Keith Zelanka's insurance license and eligibility for licensure for a period of nine months. Respondent knew that Jerrod Keith Zelanka's insurance license and eligibility for licensure had been suspended, not only because of their relationship but also because the administrative proceeding which resulted in Jerrod Keith Zelanka's suspension had been consolidated with a disciplinary proceeding against Respondent. Respondent received a three- month suspension as a result of that proceeding.

5. Due to a stay of Jerrod Keith Zelanka's suspension entered by the appellate court, which was terminated after the court affirmed the Department's Final Order in that case, his

   suspension did not begin until July 16, 2004, and ended April 15, 2005.

6. Both the Final Order suspending Jerrod Keith Zelanka's license and the Final Order suspending Respondent's license advised them that, during their periods of suspension, they were prohibited from engaging in or attempting to engage in any transaction or business for which a license is required or to directly or indirectly own, control, or be employed in any manner by an insurance agent or agency.

7. In March 2005, Jerrod Keith Zelanka requested that the Department reinstate his suspended insurance license, effective April 16, 2005. On April 19, 2005, the Department issued its Notice of Denial, denying reinstatement. Jerrod Keith Zelanka requested an administrative hearing on that denial. A hearing was held, and on February 23, 2006, the Department entered a Final Order denying his application for reinstatement of his suspended license. Accordingly, Jerrod Keith Zelanka has not been a licensed insurance agent since July 16, 2004.

8. On October 13, 2005, Charmaine Davis-Matthei called AmPro, which was located very close to her office, during her lunch break to obtain a quote to insure her two vehicles. Since the quote she was given was favorable, she went there when she finished working at 5:00 p.m., that day.

9. The only person at AmPro's office during the time she was there was Jerrod Keith Zelanka, who identified himself as "Rod" and proceeded to wait on her. He reviewed her necessary information, explained different options to her, explained the coverage being purchased, typed the information into the computer, created her policy, printed it and had her sign it, obtained the down payment on the policy from her, and gave her a receipt for her premium payment.

10. On October 21, 2005, after purchasing a new vehicle, Davis-Matthei returned to AmPro to change her auto insurance policy. On that date, Respondent waited on her, made the required changes, and gave her a receipt for the additional money she was required to pay for the change in her policy.

11. The applications for coverage dated October 13 and October 21, 2007, both carry Respondent's name and license number as the insurance agent binding the coverage. Both carry an unreadable but dissimilar signature.

12. Since Respondent was not present at AmPro on

    
    

    October 13, 2005, during the Davis-Matthei transaction and only Jerrod Keith Zelanka was, there are few possible conclusions.

    One is that Respondent allowed Jerrod to sign Respondent's name when Jerrod engaged in the business of insurance. Another is that Respondent signed his name although he was not present when Jerrod sold insurance to Davis-Matthei. Since the record in

    this case suggests that Respondent was the only licensed agent at AmPro at the time in question, it can only be concluded that he knew that Jerrod was engaging in the unlicensed transaction of insurance business at AmPro.

13. In addition to the 2003 three-month suspension imposed upon Respondent briefly described above, the Department imposed a $750 administrative fine and one-year probation against Respondent pursuant to a Consent Order entered February 19, 1999.

    CONCLUSIONS OF LAW

    
    

14. The Division of Administrative Hearings has jurisdiction over the subject matter hereof and the parties hereto. §§ 120.569 and 120.57(1), Fla. Stat.

15. The Department seeks to take disciplinary action against Respondent in this proceeding. The burden of proof, therefore, is on the Department, and the Department must prove the allegations in its Administrative Complaint by clear and convincing evidence. Dept. of Banking & Finance, Division of

    Securities & Investor Protection v. Osborne Stern & Co., 670 So. 2d 932 (Fla. 1996).

16. The Administrative Complaint filed in this cause alleges that Respondent violated Sections 626.611(7) and (8) and Section 626.621(12), Florida Statutes, as to the Davis-Matthei transaction on October 13, 2005. The threshold question is

    whether Jerrod Keith Zelanka's conduct was unlawful on

    
    

    October 13, 2005. It is clear that he engaged in an insurance transaction on that day without being a licensed insurance agent, in violation of statutes regulating the insurance business. See §§ 626.112(1) and 626.7315, Fla. Stat.

17. Section 626.611(7), Florida Statutes, requires the Department to suspend or revoke an agent's license if he has demonstrated a lack of fitness or trustworthiness to engage in the business of insurance. Allowing Jerrod Keith Zelanka to engage in insurance transactions without a license to do so by using Respondent's name and license number demonstrates a lack of fitness or trustworthiness. The Department has proven this allegation by clear and convincing evidence.

18. Section 626.611(8), Florida Statutes, requires disciplinary action against an agent who demonstrates a lack of reasonably adequate knowledge and technical competence to engage in insurance transactions. The Department offered no evidence that Respondent lacks reasonably adequate knowledge and/or technical competence to conduct insurance transactions. The Department has, therefore, failed to prove this allegation.

19. Section 626.621(12), Florida Statutes, authorizes, but does not require, the Department to revoke an agent's license for knowingly aiding or abetting any person to violate the insurance laws of this State. The Department has proven by

    clear and convincing evidence that Respondent either allowed Jerrod to use Respondent's name and license number or signed his own name to an application procured by an unlicensed individual. Accordingly, Respondent has violated Section 626.621(12), Florida Statutes, as alleged in the Administrative Complaint.

20. The Department has promulgated rules for determining the penalty to be assessed if a statutory violation has been found. Florida Administrative Code Rule 69B-231.040(1) provides that where there is a single-count Administrative Complaint, as in this case, the statutory violation with the highest-stated penalty will control. In this case, the Department has proven a violation of two statutes: Sections 626.611(7) and 626.621(12), Florida Statutes.

21. A violation of Section 626.611(7) requires a licensure suspension of six months, according to Florida Administrative Code Rule 69B-231.080(7). Similarly, a violation of Section 626.621(12), Florida Statutes, requires a licensure suspension of six months, according to Florida Administrative Code Rule 69B-231.090(12). Accordingly, a suspension of licensure for six-months is the applicable penalty in this case.

22. Florida Administrative Code Rule 69B-231.160 requires the consideration of aggravating and mitigating factors to be applied in reaching a final penalty assessed against a licensee. In this case, the only aggravating factor is that Respondent has

been disciplined twice previously. This factor, however, is offset by the lack of injury to Davis-Matthei as a result of the October 13, 2005, transaction. Accordingly, there is no basis for either increasing or decreasing the required six-month suspension. A six-month suspension is also the penalty recommended by the Department in its proposed recommended order.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is

RECOMMENDED that a final order be entered finding Respondent guilty of violating Sections 626.611(7) and 626.621(12), Florida Statutes; finding Respondent not guilty of violating Section 626.611(8), Florida Statutes; and suspending Respondent's license and eligibility for licensure for a period of six months.

DONE AND ENTERED this 24th day of May, 2007, in Tallahassee, Leon County, Florida.

S

LINDA M. RIGOT

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 24th day of May, 2007.

COPIES FURNISHED:

Alex Sink, Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300

Daniel Sumner, General Counsel The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300

Robert Alan Fox, Esquire Department of Financial Services

200 East Gaines Street Tallahassee, Florida 32399-0333

Fredric Zelanka 5099 Monterey Lane

Delray Beach, Florida 33484

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.

Docket for Case No: 07-000573PL

Orders for Case No: 07-000573PL