Findings Of Fact The Petitioner, Florida Department of Insurance (hereinafter referred to as Department) is the state agency authorized to regulate and enforce the provisions of Chapter 629, Florida Statutes. Nautical Management Reciprocal Insurers, Respondent, is a licensed domestic commercial reciprocal insurer, subject to the jurisdiction and regulation of the Department, pursuant to Chapter 629, Florida Statutes. The Department conducted a detailed review of Respondent's 1989 Annual Statement, and certain other information prior to issuing the Order to Show Cause. On October 17, 1985, Respondent submitted its Plan of Operations to the Department for its first three years of business in connection with its application for a certificate of authority as a domestic reciprocal insurer under Section 629.081, Florida Statutes, with the purpose of seeking its initial business in the area of ship/boat coverage and other related marine coverage, such as seafood cargo. On August 19, 1986, Respondent converted its Section 629.081 reciprocal application into a limited commercial reciprocal insurer application pursuant to Section 629.50 and reaffirmed its October 17, 1985 Plan of Operations to the Department. In Respondent's Plan of Operations, the insurer stated the objective of Respondent is "to provide a stable, reasonable (insurance) marketplace for the commercial marine members . . . . In summary, Florida should have the first insurance program in the nation whereby the commercial fishing industry can look forward to direct (member) advisory committee involvement (in Nautical Management)." Respondent is an unincorporated aggregation of subscribers operating individually and collectively through an attorney-in-fact that is organized for, and the primary activities of which consist of assuming and spreading all or any portion of the commercial property or commercial casualty exposure of its subscribers. On January 6, 1987, Respondent was granted a certificate of authority as a licensed domestic limited commercial reciprocal insurer "ocean marine" pursuant to Section 629.50(1), Florida Statutes. Respondent was authorized to transact the business of ocean marine insurance on a restricted basis for the purpose stated in its application. The application's stated purpose was to pool and spread the commercial property or casualty marine liabilities of Respondent's commercial fishing industry subscribers. Respondent's certificate of authority requires that the ocean marine insurance business written by Respondent as a domestic limited commercial reciprocal insurer shall only be for those owners/operators of commercial fishing vessels domiciled in the State of Florida that engage in commercial marine businesses. The terms "ocean marine" and "pleasure craft" are not defined by the Insurance Code or Department rules. The term "private pleasure vessel" is not synonymous with the term "commercial marine vessel." Respondent, during 1989, covered private pleasure craft in addition to commercial vessels under policies of insurance. The Respondent clearly disclosed on its annual and quarterly reports filed with the Department that it was engaged in underwriting pleasure craft. At no time did Respondent conceal or mislead the Department regarding its writing policies of insurance covering pleasure craft in addition to commercial vessels. Since on or about October 15, 1987, Respondent has made periodic inquiries of the Department regarding the capital surplus and other requirements necessary to convert its certificate of authority to that of a "full" reciprocal insurer. Additionally, Respondent has engaged in other direct correspondence with members of Petitioner's staff regarding, among other things, reinsurance, the identity of its subscribers, and has submitted certain collateral pledge agreements and debentures to determine their sufficiency as capital surplus. On May 22, 1990, the Department received the cover sheet which showed the distinction between pleasure and commercial vessels. In May, 1990, the Department determined that as of December 31, 1989, Respondent had insured a total of 1,693 vessels of various types. Of those 1,693 vessels, 1,615 or 95.4% were private pleasure vessels, and only 78 or 4.6% were commercial vessels. Based upon its 1989 gross premiums recorded in its Annual Statement, Respondent's estimated total gross written premium volume for year 1990 will be $1,381,171.32 on its 1,615 covered private pleasure vessels and only $355,717.85 on its 78 commercial vessels. Respondent has a ratio of premiums written or projected to surplus as to policyholders that exceeds 4 to 1. Respondent is in an impaired or insolvent financial condition. Although Respondent's officers and directors were not certain they would be allowed to write marine private pleasure boats under Section 629.50, Florida Statutes, they proceeded to write pleasure boat insurance prior to receiving Department approval. Respondent contends that the classification for "ocean marine insurance" means "marine insurance on anything that operates on navigable waterways". There are several lines of insurance under the ocean marine classification which differentiates between the lines of insurance for commercial vessels and pleasure craft. Respondent did not amend its Plan of Operations to indicate that it intended to insure any risks other than the commercial vessels indicated in the Plan of Operations as filed with the Department. A limited commercial reciprocal insurer must maintain a minimum surplus of at least $100,000 pursuant to Section 629.50, Florida Statutes. A general reciprocal insurer must maintain a minimum surplus of $250,000, and in addition to this, when first authorized, needs a minimum expendable surplus of $750,000 pursuant to Sections 629.071(1) and (2), Florida Statutes. At the time of its initial application, Respondent was unable to meet the financial requirements for authorization as a general reciprocal insurer and had to convert its application to that of a limited commercial reciprocal insurer. The commercial marine industry is a highly volatile industry with few insurers over whom these risk are spread. Respondent may not now meet or may not be able to meet in the future all its financial obligations toward members of the general insurance buying public it has insured and/or it has entered into business relationships with in the State of Florida. If so, these persons would suffer irreparable financial injury.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED as follows: Respondent, Nautical Management Reciprocal Insurers, be found guilty of: Using methods and practices in the conduct of its business as to render its further transaction of insurance in this state hazardous or injurious to its policyholders or the public, in violation of Section 624.418(1)(d), Florida Statutes (1989); No longer meeting the requirements for the authority originally granted, in violation of Section 624.418(2)(a), Florida Statutes (1989); and Violating a lawful order or rule of the Department or any provision of the Insurance Code, in violation of Section 624.418(2)(a), Florida Statutes. Respondent, Nautical Management Reciprocal Insurers, be found not guilty of being composed of management offices or directors which are incompetent or untrustworthy or so lacking in insurance experience, ability and standing as to jeopardize the reasonable promise of successful insurer operations. [Sections 624.404(3)(a) and 624.404(3)(b), Florida Statutes (1989)]. Respondent, Nautical Management's certificate of authority be suspended for a period of one year. The imposition of the penalty shall be abated upon compliance with the following conditions: Respondent cease and desist immediately the solicitation and underwriting of all new subscribers who are owners of pleasure craft; That policies of insurance for present subscribers who are owners of pleasure craft may only be renewed for a period not to exceed six months; and That within a reasonable time not to exceed six months, as determined by the Commission Respondent comply with all requirements necessary to convert its Certificate Authority to that of a full reciprocal, pursuant to Section 629.081, Florida Statutes (1989). Such other and additional reasonable conditions as the Commissioner may require. DONE AND ENTERED this 1st day of March, 1991, in Tallahassee, Leon County, Florida. DANIEL M. KILBRIDE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 1st day of March, 1991. APPENDIX TO RECOMMENDED ORDER The following constitutes my specific rulings, in accordance with section 120.59, Florida Statutes, on findings of fact submitted by the parties. Petitioner's proposed findings of fact: Accepted in substance: Paragraphs 1,2,3,4,5,6,7,8,9,10,11,12,14,16,17,18,19,20,21,22. Rejected as not proven by clear and convincing evidence: Paragraphs 13,15. Respondent's proposed findings of fact: Accepted in substance: Paragraphs 1,2,3 (in part), 4,5,6,7 (in part), 8. Rejected as against the greater weight of the evidence: Paragraph 3 (in part). Rejected as irrelevant: Paragraphs 7 (in part), 9. COPIES FURNISHED: Michael C. Godwin, Esquire Elizabeth Gregovits, Esquire Department of Insurance Division of Legal Services 412 Larson Building Tallahassee, FL 32399-0300 William E. Powers, Jr., Esquire Powers and Ferris 2544 Blairstone Pines Drive Suite A Tallahassee, FL 32301 Bill O'Neil General Counsel Department of Insurance and Treasure The Capitol, Plaza Level Tallahassee, FL 32399-0300 Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, FL 32399-0300
The Issue At issue in this proceeding is whether Respondents committed the offenses set forth in the Administrative Complaints and, if so, what penalty should be imposed.
Findings Of Fact Preliminary matters Petitioner, Department of Business and Professional Regulation, Division of Real Estate (Department), is a state government licensing and regulatory agency charged, inter alia, with the responsibility and duty to prosecute administrative complaints pursuant to the laws of the State of Florida, including Chapters 455 and 475, Florida Statutes. Respondent, Mizeral Robinson (Robinson), is now and was at all times material hereto a licensed real estate broker in the State of Florida, having been issued license number 0484257. From July 18, 1988, through January 5, 1997, Robinson was registered with the Department as a broker/officer of Wakefield Realty, Inc. (Wakefield Realty), a broker-corporation, and from January 6, 1997, through June 30, 1997, Robinson was registered as an active broker-salesperson with Township Realty, Inc., a broker-corporation located at 1333 South State Road 7, North Lauderdale, Florida. Since June 30, 1997, Robinson has been registered as a broker-salesperson without a current employer, with an address of 6372 Harbor Bend, Margate, Florida. From July 18, 1988, through January 6, 1997, Wakefield Realty was registered with the Department as a broker-corporation (registration number 0255869), with an address of 4699 North State Road 7, Fort Lauderdale, Florida. However, in October 1996, without notice to the Florida Real Estate Commission, Wakefield Realty relocated its offices to 2240 Woolbright Road, Boynton Beach, Florida. On January 6, 1997, the license of its corporate broker, Robinson, was reissued as a broker-salesperson with Township Realty, Inc., and, no active broker having been appointed to fill the vacancy within 14 calendar days, Wakefield Realty's corporate registration was cancelled. Rule 61J2-5.018, Florida Administrative Code. The Dobson contract and related matters (DOAH Case No. 97-5041) On October 31, 1995, Respondents, Robinson and Wakefield Realty, as agents for Hubert and Ruth Dobson, the Buyers, presented a written offer to purchase a house owned by Adrienne and Nancy Cutler, the Sellers, at 951 Southwest 88th Terrace, Pembroke Pines, Florida. On November 7, 1995, following negotiations, the Dobsons' offer was accepted by the Sellers. The agreed purchase price was $123,480, with the method of payment as follows: a $2,000 deposit tendered with the offer; an additional deposit of $4,000 "due within 10 United States banking days after date of acceptance"; the proceeds ($117,306) of a new conventional mortgage to be secured by the buyers; and, a balance of $174 to be paid by the buyers at closing. All deposits were to be held in escrow by Wakefield Realty. In addition to the provisions of the agreement relating to the deposits, discussed supra, the agreement contained the following pertinent provisions: D. NEW MORTGAGES: . . . if this Contract provides for Buyer to obtain a new mortgage, then Buyer's performance under this Contract shall be contingent upon Buyer's obtaining said mortgage financing upon the terms stated, or if none are stated, than upon the terms generally prevailing at such time in the county where the property is located. The buyer agrees to apply within 5 banking days . . . and to make a good faith, diligent effort to obtain the mortgage financing. In the event a commitment for said financing is not obtained within 45 banking days . . . from the date of this Contract, then the other party may terminate this Contract by delivery of written notice to the other party or his agent, the deposit shall be returned to the Buyer and all parties shall be released from all further obligations hereunder. This right of termination shall cease upon the Buyer obtaining a written commitment letter for mortgage financing at the rate and terms of payment previously specified herein prior to the delivery of the notice of termination. * * * X. DEFAULT: In the event of default of either party, the rights of the non- defaulting party and the broker shall be as provided herein and such rights shall be deemed to be the sole and exclusive rights in such event; (a) If Buyer fails to perform any of the covenants of this Contract, all money paid or deposited pursuant to this Contract by the Buyer shall be retained by or for the account of the Seller as consideration for the execution of this Contract as agreed and liquidated damages and in full settlement of any claims for damages and specific performance by the Seller against the Buyer. . . . * * * (CHECK and COMPLETE THE ONE APPLICABLE) (X) IF A WRITTEN LISTING AGREEMENT IS CURRENTLY IN EFFECT: Seller agrees to pay the Broker named above including cooperating sub-agents and/or cooperating Buyers Agents named, according to the terms of an existing, separate written agreement; * * * If Buyer fails to perform and deposit(s) is retained, 50% thereof, but not exceeding the Broker's fee above provided, shall be paid Broker, as full consideration for Broker's services including costs expended by Broker, and the balance shall be paid to Seller. To finance the purchase, Robinson submitted an application on the Dobsons' behalf for a conventional residential mortgage loan with Citizens Federal Bank. That application was denied January 8, 1996. Following the denial of their application, the Dobsons made demand of Respondents, under the mortgage contingency provision of the purchase agreement, for the return of their $6,000 deposit.3 Respondents, notwithstanding the rejection of the Dobsons' application for financing and the Sellers' execution of a release of deposit, which directed the escrow agent to disburse the escrow deposit of $6,000 to the Dobsons, failed and refused to return any portion of the deposit to the Dobsons. To date, such failure continues, and the proof is compelling that Respondents have converted the deposit to their own use and benefit.4 The Rafiee contract and related matters (DOAH Case No. 98-0003) On October 25, 1996, Respondent, Mizeral Robinson, procured a written offer from Iran Rafiee to purchase a triplex owned by Henry Sweigart, located at 11460 Northwest 39th Street, Coral Springs, Florida. The stated purchase price was $195,000, with the method of payment as follows: a $1,000 deposit tendered with the offer; an additional deposit of $9,000 "due within 5 United States banking days after date of acceptance"; the proceeds ($156,000) of a new conventional mortgage to be secured by the buyer; and, a balance of $30,000 [sic] to be paid by the buyer at closing. All deposits were to be held by Wakefield Realty, Inc., Mizeral Robinson, escrow agent. According to the "Deposit Receipt and Contract for Sale and Purchase," Rafiee's offer was accepted on what appears to be October 27, 1996 (Petitioner's Exhibit 12), and Rafiee's initial deposit, which was in Robinson's possession by at least October 25, 1996,5 was deposited on October 30, 1996.6 Accepting October 25, 1996, as the date Robinson received the check, the check was deposited "no later than the end of the third business day following receipt."7 Rule 61J2-14.008(d), Florida Administrative Code. In addition to the provisions of the agreement relating to the deposits, discussed supra, the agreement contained the following pertinent provisions: 29. DEFAULT: In the event of default of either party, the rights of the non- defaulting party and the broker shall be as provided herein and such rights shall be deemed to be the sole and exclusive rights in such event. If Buyer fails to perform any of the covenants of this Contract, all money paid or to be paid as deposits pursuant to this Contract by the Buyer shall be retained by or for the account of the Seller as consideration for the execution of this Contract as agreed and liquidated damages and in full settlement of any claims for damages and specific performance by the Seller against the Buyer. * * * (CHECK AND COMPLETE THE ONE APPLICABLE) (X) IF A WRITTEN LISTING AGREEMENT IS CURRENTLY IN EFFECT: Seller agrees to pay the Broker(s) named above according to the terms of an existing, separate written professional service fee agreement; * * * If Buyer fails to perform and deposit(s) is retained, 50% thereof, but not exceeding the Broker's fee above provided, shall be paid Broker, as full consideration for Broker's services including costs expended by Broker, and the balance shall be paid to Seller. Within days of the acceptance of her offer, Ms. Rafiee decided that she no longer desired to purchase the property and, on or about October 31, 1996, notified Robinson of her decision and requested the return of her deposit. At the time, Robinson was noncommittal and, observing that the check had only recently been deposited and likely had not yet been paid, stated they would have to speak of the matter at a later date. Thereafter, when pressed regarding the return of Ms. Rafiee's deposit, Robinson informed her that the deposit had been given to the seller, as required by the contract. Nevertheless, when Ms. Rafiee voiced her intention to pursue the matter further, Robinson agreed to pay her $800 (the parties agreeing that Robinson was entitled to $200 for her efforts) by December 20, 1996. Following the passage of a number of deadlines, and one check returned for insufficient funds, Robinson, in or about May 1997, eventually paid Ms. Rafiee the $800.00. At hearing, Robinson averred that because of Ms. Rafiee's default, she and the seller were, under the terms of the contract, each entitled to 50% of the $1,000 deposit, and that she disbursed the deposit accordingly. As for her offer to pay Ms. Rafiee $800, it was Robinson's view that such offer was made to appease Ms. Rafiee, since Robinson expected to secure further business from her, and should not be considered an admission that Ms. Rafiee was entitled to the return of any of her deposit. Given Ms. Rafiee's default under the purchase agreement, it must be concluded that Robinson, as the broker, had apparent authority to retain 50% ($500) of the deposit and to remit the remaining 50% ($500) to the seller. This is what Robinson avers she did and, given the proof or, stated differently, the lack thereof, it cannot be resolved, with the requisite degree of certainty, that she did otherwise.8
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered revoking Respondents' licensure and eligibility for licensure. DONE AND ENTERED this 29th day of May, 1998, in Tallahassee, Leon County, Florida. WILLIAM J. KENDRICK 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 Filed with the Clerk of the Division of Administrative Hearings this 29th day of May, 1998.
Conclusions THIS CAUSE came on before the undersigned Treasurer of the State, of Florida, acting in his capacity as Insurance Commissioner, for consideration and final agency action. On February 26, 1996, the Department of Insurance (the “Department” ) issued a First Amended Denial Letter (the “Denial Letter”), which denied Petitioner's application for licensure as a limited surety agent. The Denial Letter alleged that: (1) Petitioner had been found guilty of conspiracy, arson, and mail fraud; (2) Petitioner's prior limited surety license had been revoked; and, (2) Petitioner had not met the pre-licensing educational requirements. Petitioner timely filed a request for a formal proceeding pursuant to section 120.57(1), Florida Stazures. Pursuant to notice, the matter was heard before Carolyn 5. Ne Holifield, Administrative Law Judge, Division of Administrative Hearings, on December 16, 1997. After consideration of the record and argument presented at hearing, the Administrative Law Judge issued a Recommended Order on March 2, 1998. (Attached as Exhibit A). The Administrative Law Judge recommended that the Department enter a Final Order denying the Petitioner's application for a limited surety agent's license. On March 10, 1998, Respondent timely filed exceptions to the Recommended Order. Respondent excepted to the Conclusions of Law. Each exception is addressed below. RULINGS ON PETITIONER'S EXCEPTIONS 1. Respondent excepts to paragraph 20 of the Administrative Law Judge’s Conclusions of Law. In paragraph 20 a scrivener’s error inaccurately references “above in paragraph 20”, which should read “above in paragraph 19”. Accordingly the first exception is accepted and Conclusion of Law paragraph 20 is modified as follows: In 1995, when Petitioner applied for relicensure, in addition to the licensure requirement cited above in paragraph 19, applicants were required to have completed: (1) a basic certificate course in the he criminal justice system, and (2) a 2 correspondence course for bail bondsmen approved by the Department. See, Section 648.34(2) (d), Florida Statutes (1995). Petitioner’s alleged failure to meet these educational requirements was one of the reasons the Department denied his application for relicensure. . 2. In paragraph 21, Respondent agreed with the Administrative Law Judge’s finding that the evidence established that Petitioner did not meet the educational requirements for licensure as a limited surety agent. Respondent excepts the Administrative Law Judge’s finding, “that fact. is of no import” and her summary of the law, relating to the changes in Section 648.34(2), Florida Statutes, which became effective on July 1, 1996. It is well settled that a constitutional right to pursue a lawful business or occupation is not a fundamental right, but a privilege. Dept. of Banking and Finance v. Osborne Stern and Co., 670 So.2d 932 (Fla. 1996); Polakoff v. Dept. of Insurance and Treasurer, 551 So.2d 1223, 1225 (Fla. 1st DCA 1989). Therefore, Petitioner did not have a vested right in his limited surety agent license. It is also well established, that a person without a vested right in their license is subject to further (vs) regulation or even revocation. See, Davidson v. City of Coral Gables, (Fla. 3rd DCA 1960). On February 25, 1995, Petitioner submitted an application for a limited surety agent license to the Department. At that time, the legislative requirements, in Section 648.34, Florida Statutes, required that: (2) To qualify as a bail bondsman, it must - affirmatively appear at the time of application and throughout the period of licensure that: Kk (d) Within 4 years prior to the date of his application, the applicant has successfully completed a basic certification course in the criminal justice system, consisting of not less than 80 hours and has successfully completed a correspondence course for bail bondsmen approved by the department. Section 648.34(2) (dad), Florida Statutes (1995). At the time he applied, Petitioner had not satisfied the educational requirements mandated in Section 648.34(2) (d), Florida Statutes (1995). It is of no import that the requirements of Section 648.34(2), Florida Statutes changed after Petitioner applied for a limited surety agent license. Therefore, Petitioner’s failure to meet the educational requirements, at the time he applied, was also an appropriate condition to properly deny his application for relicensure. Moreover, Petitioner’s argument that the Department should apply the educational requirements that existed in 1989 is without merit. Petitioner first reapplied in late 1989 and the Department notified him by letter that he was not eligible to reapply pursuant to Section 648.49(2), Florida Statutes. At that time, Petitioner had the right to challenge the Department’s interpretation of Section 648.49(2), Florida Statutes. A party may waive any rights to which they are legally entitled, by actions or conduct warranting an inference that a known right has been relinquished. Torres v. K-Site 500 Assoc., 632 So.2d 110, 112 (Fla. 3rd DCA 1994). Waiver occurs when “one in pessession of any right whether conferred by law or by contract forbears the doing of something inconsistently with the existence of the right .. . and is precluded from claiming anything by reason of it afterwards.” County of Brevard v. Miorelli Engineering, Inc., 1997 WL 664779 (Fla. 1997). Petitioner waived his right to challenge the Department’s interpretation of Section 648.49, Plorida Statutes by not seeking review of the Department's decision. Therefore, when Petitioner reapplied for a limited surety agent license on February 25, 1995, he had to satisfy the licensure requirements at the time of he submitted his application. Accordingly, the second exception is accepted and Conclusion of Law paragraph 21 is modified as follows: The evidence established that Petitioner did not meet the aforementioned educational requirements. Therefore, the Department cf Insurance properly denied Petitioner’s application for a limited surety agent license due to his failure meet these educational requirements. ORDERED: 1. The Findings of Fact of the Administrative Law Judge are adopted in full as the Department's Findings of Fact. 2. The Conclusions of Law of the Administrative Law Judge are adopted, as modified, as the Department's Conclusions of Law. 3. That the Hearing Officer's recommendation derlying JOHN D. FISHER's application for licensure as a limited surety agent is approved and accepted as being the appropriate disposition of this case. ACCORDINGLY, Petitioner, JOHN D. FISHER’s, application for licensure as a limited surety agent is DENIED.
