STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL SERVICES,

Petitioner,

vs.

DAVID K. GEMMELL,

Respondent.

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) Case No. 07-0921PL

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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 10, 2007, by video teleconference with sites in Pensacola and in Tallahassee, Florida.

APPEARANCES

For Petitioner: David J. Busch, Esquire

Department of Financial Services Division of Legal Services

612 Larson Building

200 East Gaines Street Tallahassee, Florida 32399-0333

For Respondent: did not appear and was not represented STATEMENT OF THE ISSUE

The issue presented is whether Respondent is guilty of the allegations in the Amended Administrative Complaint filed

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

PRELIMINARY STATEMENT

On February 20, 2007, Petitioner, Department of Financial Services, filed its Amended Administrative Complaint, alleging that Respondent, David K. Gemmell, had violated certain statutes regulating his conduct as an insurance agent.

By Notice of Hearing by Video Teleconference, this cause was scheduled for final hearing on April 10, 2007. Respondent failed to appear at the final hearing, and no one appeared on his behalf. To date, Respondent has filed no document or pleading regarding his failure to attend the final hearing.

The Department presented the testimony of Donald C. Spencer. The Department's Exhibits lettered A through D were admitted in evidence.

The transcript of the final hearing was filed on April 16, and the Department filed its Proposed Recommended Order on April 18, 2007. Those documents have been considered in the entry of this Recommended Order.

FINDINGS OF FACT

1. On October 27, 2005, Respondent was charged in the Circuit Court of Escambia County, Florida, in a two-count criminal information in Case No. 2005 CF 005245. The first count alleged that he had misappropriated insurance funds of

   more than $300 but less than $20,000, which insurance funds he had received in his capacity as an insurance agent and while acting as an insurance agent under his license. The second count charged him with uttering a forged instrument, to-wit: a declaration page.

2. On November 21, 2006, a jury found Respondent guilty as charged on both counts.

3. On May 10, 2006, Respondent was again charged in the Circuit Court of Escambia County, Florida, in a one-count information in Case No. 2006 CF 002108. That information alleged that he had misappropriated insurance funds of more than

   $300 but less than $20,000, which insurance funds he had received in his capacity as an insurance agent and while acting as an insurance agent under his license.

4. Respondent entered a plea of nolo contendere in that case.

5. On January 3, 2007, an Order Withholding Adjudication of Guilt and Placing Defendant on Probation was entered in the Circuit Court of Escambia County, Florida, as to all three felonies. That Order further placed Respondent on probation for a period of five years as to each count, to run concurrently. That Order also prohibited Respondent from working as an insurance agent during his term of probation.

   CONCLUSIONS OF LAW

   
   

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

7. The Department seeks to revoke Respondent's licensure as an insurance agent in this proceeding. The Department, therefore, has the burden of proving the allegations in the Amended 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). The Department has met its burden.

8. The Amended Administrative Complaint filed in this cause contains two counts. The first relates to the two felonies of which the jury found the Respondent guilty, and the second relates to the one felony to which Respondent pled nolo contendere. Both counts enumerate statutory violations the Department alleges Respondent committed as a result of his conduct which resulted in the guilty verdict and the nolo

   contendere plea.

   
   

9. Section 626.611, Florida Statutes, makes mandatory the suspension or revocation of an agent's licenses and appointments for various reasons. Subsection (14) requires such disciplinary action if an agent has been found guilty or pled nolo contendere

   to a felony which involves moral turpitude, without regard to whether a judgment of conviction has been entered.

10. By way of contrast, Section 626.621, Florida Statutes, provides for discretionary suspension or revocation under circumstances for which suspension or revocation is not mandatory under Section 626.611. Section 626.621(8) includes within such discretionary discipline a licensee who has been found guilty or has pled nolo contendere to a felony without regard to whether a judgment of conviction has been entered.

11. Similarly, Section 626.6215(3) affords the Department the discretion as to disciplinary action against an insurance agency if a ". . . majority owner, partner, manager, director, officer, or other person who manages or controls such insurance agency. . ." has been found guilty of, or has pled nolo

    contendere to a felony relating to the business of insurance without regard to whether a judgment of conviction has been entered. There is no evidence regarding Respondent's relationship to any insurance agency, and no insurance agency was named as a party in this proceeding. The Department has, therefore, failed to prove that Respondent violated Section 626.6215(3) as alleged in the Amended Administrative Complaint.

12. The Department has proven that Respondent violated Section 626.621(8). However, that Section only applies if suspension or revocation is not mandatory under Section 626.611.

13. The Amended Administrative Complaint also relies upon Florida Administrative Code Rule 69B-231.150(2) and (3)(a). Subsection (2) requires revocation for a licensee who has been found guilty or pled nolo contendere to a crime involving moral turpitude and breach of trust or dishonesty. Similarly, Subsection (3)(a) requires revocation for a licensee who has been found guilty or pled nolo contendere to a crime involving moral turpitude or involving breach of trust or dishonesty if the crime directly relates to activities involving the business of insurance.

14. Misappropriating insurance monies and uttering a forged declaration page are crimes involving breach of trust and dishonesty. Moreover, they are directly related to activities involving the business of insurance. Revocation is, therefore, the only appropriate penalty in this case, and no evidence has been offered in mitigation of that penalty.

15. Section 626.641(4), Florida Statutes, further requires that during the suspension or revocation of a license, the former licensee shall not engage in any transaction or business for which an insurance license or appointment is required. Further, the former licensee shall not directly or indirectly own, control, or be employed in any manner by any insurance agent or agency. Accordingly, although Respondent's conditions of probation in the criminal cases included a prohibition

against Respondent working as an insurance agent during his probation, this revocation of Respondent's insurance licenses precludes him from even working, directly or indirectly, for any insurance agent or agency.

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 the allegations in the Amended Administrative Complaint and revoking Respondent's insurance licenses.

DONE AND ENTERED this 3rd 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 3rd day of May, 2007.

COPIES FURNISHED:

Honorable Alex Sink Chief Financial Officer

Department of Financial Services The Capitol, Plaza Level II Tallahassee, Florida 32399-0300

Daniel Sumner, General Counsel Department of Financial Services The Capitol, Plaza Level II Tallahassee, Florida 32399-0307

David J. Busch, Esquire Department of Financial Services

Division of Legal Services 612 Larson Building

200 East Gaines Street Tallahassee, Florida 32399-0333

David K. Gemmell 6584 Lakeshore Drive

Milton, Florida 32570

David K. Gemmell

A All American Insurance Agency of Pensacola, Inc.

3960 West Navy Boulevard, Suite 21

Pensacola, Florida 32507-1268

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: 07-000921PL

Orders for Case No: 07-000921PL