STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL SERVICES,

Petitioner,

vs.

SPENCER WILLIAM COOTWARE,

Respondent.

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) Case No. 10-0510PL

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RECOMMENDED ORDER

Administrative Law Judge (ALJ) Daniel Manry conducted the final hearing of this case for the Division of Administrative Hearings (DOAH) on August 3, 2010. The ALJ conducted the hearing by video teleconference in Tallahassee and Fort Myers, Florida.

APPEARANCES

For Petitioner: Thomas A. David, Esquire

Department of Financial Services

200 East Gaines Street Tallahassee, Florida 32399-0333

For Respondent: Michelle Hill, Esquire

Law Office of Michelle Hill 2345 Stanford Court, Suite 602

Naples, Florida 34112 STATEMENT OF THE ISSUES

The issues are whether Respondent violated Chapter 648, Florida Statutes (2007),1 by charging more for a bail bond than

the statutorily allowed amount, withholding and failing to return money to his principal or the principal’s wife, and suggesting employment of a particular attorney to represent the principal, and, if so, what, if any, penalty should be imposed against Respondent’s limited surety (bail bond) license.

PRELIMINARY STATEMENT

Petitioner filed an Administrative Complaint against Respondent on November 5, 2009. Respondent timely requested an administrative hearing. Petitioner referred the request to DOAH to assign an ALJ to conduct the hearing.

At the hearing, the parties submitted 14 joint exhibits and a pre-hearing stipulation, agreeing on stipulated facts of record. Petitioner presented the testimony of four witnesses and submitted two exhibits for admission into evidence.

Respondent testified and presented the testimony of two other witnesses.

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 August 19, 2010. Petitioner timely filed its Proposed Recommended Order (PRO) on August 30, 2010.

Respondent did not file a PRO.

FINDINGS OF FACT

1. Petitioner is the state agency responsible, in relevant part, for regulating limited surety licensees (bail bond agents)

   
   

   in Florida pursuant to Chapter 648. Respondent is licensed as a bail bond agent in Florida pursuant to license number A054475.

2. Respondent conducts business as the sole owner of Nickel American Bail Bonds (Nickel). Nickel is located at 2641 Airport Road, Naples, Florida 34112-4878. Respondent is the primary agent for Nickel.

3. Respondent employs Mr. Anthony Robert Bennett (Tony Bennett) directly through Nickel and through SWFLGPS Monitoring Solutions (GPS Solutions). GPS Solutions is a fictitious name registered to Freedom 247, Inc. (Freedom), a Florida, for-profit corporation, for which Respondent is a principal and controlling shareholder.

4. At the time of the events at issue in this proceeding, Mr. Tony Bennett was licensed as a temporary bail bond agent through Nickel. At the time of the hearing, Mr. Tony Bennett was a licensed bail bond agent through Nickel.

5. At the time of the events at issue in this proceeding, Respondent also employed Ms. Michelle Blake. Respondent employed Ms. Blake directly and through Nickel. Ms. Blake sometimes performed minor tasks for GPS Solutions.

6. Sometime in December 2007, the Sheriff for Collier County, Florida (Collier County Sheriff), arrested Mr. Edel Rodriguez and incarcerated Mr. Rodriguez in the Collier County

   
   

   Jail. The court set bond in the amount of $202,000.00 for all charges.

7. During December 2007, Ms. Ana Cabrera, the wife of Mr. Rodriguez, attempted to arrange bond for her husband with Respondent, but was unsuccessful. She successfully obtained a bond when she returned to Respondent’s office on January 2,

   2008, with two friends who were willing to secure the bond with mortgages on their homes.

8. Bankers Insurance Company (Bankers) issued a bond in the aggregate amount of $202,000.00 pursuant to what is identified in the record as three separate identification numbers. Bankers issued identification numbers 510505690-0 and 510505182-2, each for $100,000.00, and identification number 580036136-7 for $2,000.00.

9. The Collier County Sheriff released Mr. Rodriguez from custody on January 2, 2008. Mr. Rodriguez enjoyed approximately

   72 days of freedom until March 15, 2008, at 8:50 p.m., when Respondent re-arrested Mr. Rodriguez, where Mr. Rodriguez worked, and returned Mr. Rodriguez to the custody of the Collier County Sheriff.

10. The maximum amount that Respondent was permitted under Florida law to charge Mr. Rodriguez for his 72 days of freedom was 10 percent of $202,000.00, or $20,200.00. Respondent

    
    

    charged Mr. Rodriguez $22,040.00 in violation of Section 648.33 and Florida Administrative Code Rule 69B-221.105(2).

11. Ms. Cabrera paid $20,200.00 on January 2, 2008, when she signed the bond documents.2 Mr. Rodriguez paid an additional

    $1,840.00 in fees related to the use of the GPS device required by Respondent.

12. The GPS device was a cost of the bail bond transaction that was required by Respondent. Respondent paid a company identified in the record as Secure Alert up to $9.00 a day to monitor the GPS device and charged Mr. Rodriguez $12.00 a day for a monthly profit of $90.00, but at a gross monthly cost to Mr. Rodriguez of $360.00. Respondent allowed Mr. Rodriguez to spend the first 24 hours of his release from jail without a

    GPS device without fear that Mr. Rodriguez was a flight danger.

    
    

13. As will be discussed in greater detail, Mr. Rodriguez eventually cut the GPS device from his leg. For reasons discussed hereinafter, the fact-finder finds that the act of cutting the device from Mr. Rodriguez's leg represented more of a financial threat to Respondent than a threat of flight by

    Mr. Rodriguez.

    
    

14. The court did not order Mr. Rodriguez to wear a GPS device as a condition of his release. The Bankers bond documents did not require a GPS device as a condition of the

    
    

    bond documents. Florida Administrative Code Rule 69B-221.100 does not require a GPS device as a condition of release.

15. Florida Administrative Code Rule 69B-221.100 prohibits Mr. Rodriguez from: departing the jurisdiction of the court, which was Collier County, Florida; moving from one address to another; demonstrating any intention to cause a forfeiture of the bond; and being arrested or incarcerated for any offense while on bond. There is no credible and persuasive evidence that any one of the foregoing factors were present in this case.

16. Respondent testified that the GPS device was not a cost of the bail bond transaction. For reasons previously discussed in paragraphs 12 and 13, the fact-finder finds Respondent’s testimony to be less than credible and persuasive. Other testimony by Respondent belies his disclaimer. For example, Respondent testified, in substantial effect, that he would not have participated without the GPS device and that he did not intend to re-arrest Mr. Rodriguez until he discovered that Mr. Rodriguez had cut the GPS strap from his leg. For reasons discussed in paragraphs 12 and 13, the overwhelming evidence shows that Respondent’s decision to re-arrest

    Mr. Rodriguez had nothing to do with a threat of flight and had everything to do with a financial threat to Respondent.

17. Mr. Rodriguez cut the GPS strap because the GPS strap was malfunctioning while Mr. Rodriguez was at work at the Wal-

    
    

    Mart located at 11748 Tamiami Trail, Naples, Florida, in Collier County, Florida, within the jurisdiction of the court. The malfunctioning device caused Mr. Rodriguez embarrassment, irritation, and discomfort on the job. Mr. Rodriguez was a plumber by trade, did not understand much English, and needed his job to pay the $360.00 monthly fee Respondent charged for the GPS device.

18. Mr. Rodriguez placed the severed GPS device in his personal vehicle. The severed device continued to accurately disclose the location of Mr. Rodriguez at his job.

19. Mr. Rodriguez telephoned Mr. Tony Bennett for instructions. While Mr. Tony Bennett had some difficulty understanding Mr. Rodriguez, Mr. Tony Bennett understood enough to instruct Mr. Rodriguez to bring the defective device in on Monday for repair or exchange. There was no attempt at flight or to evade Respondent.

20. When Respondent arrived at the Wal-Mart, Mr. Rodriguez continued to work. It was approximately 8:50 p.m. None of this activity violated any of the court ordered conditions of release, applicable rules, or the conditions of the Bankers bond instruments.

21. Respondent surrendered Mr. Rodriguez back to the Collier County Sheriff's office. On the statement of surrender

    
    

    form, Respondent indicated that Mr. Rodriguez had violated the bail agreement. That assertion is incorrect.

22. Mr. Rodriguez acted in good faith to comply with the bail agreement and was in material compliance with the terms of the agreement at all times. Mr. Rodriguez did not violate the terms of release ordered by the court, the Bankers bond instruments, or applicable rules.

23. Respondent has not refunded any of the excess premium to Mr. Rodriguez. Respondent is not entitled to retain the excess premium.

24. At some point between December 2007 and January 2, 2008, Respondent recommended that Ms. Cabrera retain a specific attorney identified in the record as Mr. Josh Faett. In doing so, Respondent violated Subsection 648.44(1)(a).3

25. Neither Mr. Rodriguez nor Ms. Cabrera speaks or reads English. Ms. Blake filled in the blanks on the application for bond for Ms. Cabrera and provided little, if any, explanation to Ms. Cabrera.

    CONCLUSIONS OF LAW

    
    

26. DOAH has jurisdiction over the subject matter and parties in this proceeding. §§ 120.569 and 120.57(1), Fla. Stat. (2009). DOAH provided the parties with adequate notice of the formal hearing.

    
    

27. The burden of proof is on Petitioner. Petitioner must show by clear and convincing evidence that Respondent committed the acts alleged in the Administrative Complaint and the reasonableness of the proposed penalty. Department of Banking and Finance, Division of Securities and Investor Protection v. Osborne Stern and Company, 670 So. 2d 932 (Fla. 1996).

28. For the reasons stated in the Findings of Fact, the evidence is clear and convincing that Respondent committed the acts alleged in the Administrative Complaint. The fact-finder finds the evidence submitted by Petitioner to be credible and persuasive. The evidence is of sufficient weight to convince the fact-finder, without hesitancy, as to the truth of the specific allegations against Respondent. Inquiry Concerning a

    Judge No. 93-62, 645 So. 2d 398, 404 (Fla. 1994); Lee County v. Sunbelt Equities, II, Limited Partnership, 619 So. 2d 996, 1006

    n. 13 (Fla. 2d DCA 1993); Slomowitz v. Walker, 429 So. 2d 797, 800 (Fla. 4th DCA 1983).

29. Respondent enjoys the benefit of public trust and stands in a fiduciary relationship with his customers. Natelson v. Department of Insurance, 454 So. 2d 31, 32 (Fla. 1st DCA 1984). A person acting in a fiduciary capacity generally has a duty to make a full and fair disclosure of material facts to the person reposing confidence in the fiduciary. Federal Deposit

    
    

    Insurance Corporation v. Martin, et al., 801 F. Supp. 617, 620 (M.D. Fla. 1992) (citations omitted).

30. The victims in this case speak little English. They are economically dis-empowered and vulnerable. They are not in an equal negotiating position with Respondent.

31. It is clear and convincing to the trier of fact that the acts committed by Respondent were willful. Willfulness is an issue of fact to be determined by the trier of fact. Roche Security and Casualty Company, Inc. v. Department of Financial

    Services, Office of Insurance Regulation, 895 So. 2d 1139, 1141 (Fla. 2d DCA 2005).

32. The fact-finder is not persuaded by testimony from Respondent that he was fearful that Mr. Rodriguez was a flight risk. The GPS device was not required by Bankers, the court, or applicable administrative rules. Only Respondent required the GPS device, and the GPS device was, in the vernacular, a cash cow for Respondent and Secure Alert, not a security device. The bond was secured by two mortgages.

33. The premium charged by Respondent includes any service fee or similar fee or excess money in addition to the premium. Respondent cannot circumvent the prohibition against excess fees by classifying the fee as something else, including a GPS fee.

    §§ 627.041 and 627.043; Fla. Admin. Code R. 69B-221.105(2).

    
    

34. Petitioner articulated technical reasons for deference to agency expertise. Johnston, M.D. v. Department of

    Professional Regulation, Board of Medical Examiners, 456 So. 2d 939, 943-944 (Fla. 1st DCA 1984). Protection of the public is a valid policy reason for the statutory interpretation adopted by Petitioner. Cf. Liberty Care Plan, 710 So. 2d 202, 207

    (Fla. 1st DCA 1998) (approving the cited principle but reversing declaratory statement that home care plan was health insurance).

35. The acts committed by Respondent violate Subsections 648.33(2), 648.44(1)(a), 648.45(2)(d), 648.45(2)(e), 648.45(2)(g), 648.45(2)(h), 648.45(2)(j), 648.45(3)(c), and 648.45(3)(e). Petitioner’s PRO seeks a suspension of Respondent’s license for a period of seven months and an administrative fine of $22,040.00 pursuant to Section 648.52. The proposed penalty is reasonable under the facts and circumstances evidenced in this proceeding.

RECOMMENDATION

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

RECOMMENDED that the Department of Financial Services enter a final order finding Respondent guilty of violating the statutory provisions cited in paragraph 35, suspending Respondent’s license for seven months, and imposing an administrative fine in the amount of $22,040.00.

DONE AND ENTERED this 23rd day of September, 2010, in Tallahassee, Leon County, Florida.

S

DANIEL MANRY

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 23rd day of September, 2010.

ENDNOTES

1/ References to chapters, sections, and subsections are to Florida Statutes (2007), unless otherwise stated. The specific statutory subsections at issue in this proceeding are 648.33(2), 648.44(1)(a), 648.45(2)(d), 648.45(2)(e), 648.45(2)(g),

648.45(2)(h), 648.45(2)(j), 648.45(3)(c), and 648.45(3)(e).

2/ Ms. Cabrera may have paid $200.00 of the $20,200.00 at a later time, but the timing is immaterial.

3/ The fact-finder finds the testimony of Ms. Cabrera to be credible and persuasive.

COPIES FURNISHED:

Thomas A. David, Esquire Department of Financial Services

200 East Gaines Street Tallahassee, Florida 32399-0333

Michelle Hill, Esquire

Law Office of Michelle Hill 2345 Stanford Court, Suite 602

Naples, Florida 34112

Julie Jones, CP, FRP, Agency Clerk Department of Financial Services Division of Legal Services

200 East Gaines Street Tallahassee, Florida 32399-0390

Honorable Alex Sink Chief Financial Officer

Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300

Benjamin Diamond, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0307

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: 10-000510PL

Orders for Case No: 10-000510PL