The Issue This is a license discipline case in which Petitioner seeks to take disciplinary action against Respondent on the basis of allegations of misconduct set forth in an Administrative Complaint dated August 13, 2003.
Findings Of Fact At all times material to this case, Respondent Jean- Rene Joseph has been licensed in the State of Florida as a bail bond agent. At all times material to this case, Respondent worked as a bail bond agent with a bail bond company named America's Best Bail Bonds, Inc. At approximately 2:30 or 3:00 a.m. on the morning of January 29, 2002, Santacroce contacted Respondent for the purpose of arranging bail for a friend of hers named John Raymond Moyer ("Moyer"). Moyer needed a bond in the amount of $1,500.00. Respondent agreed to provide, and did provide, the requested bail bond for a fee of $150.00. On the morning of January 29, 2002, Santacroce paid $150.00 cash for the bail bond fee. Santacroce also agreed to furnish collateral for the bail bond issued on behalf of Moyer. In this regard, Santacroce agreed that she would either deliver the title to a specified automobile as collateral, or she would make payments of $250.00 per week until the bail bond on behalf of Moyer was fully collateralized. In the early morning hours of January 29, 2002, Santacroce did not have an original certificate of title to an automobile with her. Instead, she gave Respondent a color photocopy of title number 50460657, which was a certificate of title to an automobile. The certificate showed title to a 1986 Chevrolet in the name of a registered owner named Oliver C. Todd ("Todd"). Handwritten information on the certificate indicated that the registered owner had sold the automobile to AAA National Auto Sales, who in turn had sold the automobile to Santacroce. Santacroce also had with her at that time an affidavit signed by Todd that authorized Santacroce to retrieve the subject automobile from a towing company, as well as a document from Festa Towing Service, Inc, itemizing towing and storage charges. During the early morning hours of January 29, 2002, Respondent and Santacroce both signed a receipt document numbered 11122. Section 4 of that document describes the collateral or collateral documents as consisting of a promissory note and "Fl car title #50460657 or weekly payment of $250.00." Santacroce never made any payments towards collateralization of the subject bail bond. Moreover, Santacroce never delivered to Respondent the original of the certificate of title described above. Less than two weeks later, Moyer was arrested and jailed on other criminal charges. Through another bail bond company, Moyer posted bail on the second arrest. Santacroce no longer wished to have any liability on the bail bond issued on January 29, 2002. Accordingly, she asked Respondent to "surrender" the bond and have Moyer returned to jail. Moyer failed to appear for his court appearance that was guaranteed by the bail bond obtained by Santacroce. A bond forfeiture order was issued on February 12, 2002. Eventually, Moyer appeared, the forfeiture order was set aside, and the surety was discharged. Respondent's employer incurred expenses in the amount of $50.00 to have the forfeiture order set aside. At some point after the surety was discharged, Santacroce asked Respondent to return what Santacroce described as the certificate of title she had given to Respondent. Respondent could not return a certificate of title to Santacroce, because Respondent never received a certificate of title from Santacroce. Respondent never returned the photocopy of the certificate of title to Santacroce. That photocopy was still in Respondent's possession as of the day of the final hearing.
Recommendation On the basis of all of the foregoing, it is RECOMMENDED that the Administrative Complaint in this case be dismissed because there is no clear and convincing evidence that Respondent received "car title #50460657" or anything else of value as collateral security for the subject bail bond. DONE AND ENTERED this 7th day of May, 2004, in Tallahassee, Leon County, Florida. S MICHAEL M. PARRISH 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 7th day of May, 2004. COPIES FURNISHED: Dickson E. Kesler, Esquire Department of Financial Services Suite N-321 401 Northwest Second Avenue Miami, Florida 33128 Hernan Hernandez, Esquire 1431 Ponce de Leon Boulevard Coral Gables, Florida 33134 Honorable Tom Gallagher Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Mark Casteel, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
Findings Of Fact Prior to July 1, 1978, and at all times pertinent to this cause, H. B. Canning & Associates, Inc., in the person of Harold B. Canning, Jr., was the holder of a yacht and ship broker license under terms of Chapter 537, Florida Statutes. A copy of this license may be found as the State of Florida, Department of Business Regulation, Division of General Regulation Exhibit No. 1 admitted into evidence. The Division of General Regulation, prior to July 1, 1978, had as one of its duties the regulation and licensure of yacht and ship brokers operating in the State of Florida. Under the terms of Subsection 537.04(8), Florida Statutes, all applicants for a broker's license or renewal of that license were required to post a surety bond issued by a company authorized to do business in Florida, and that bond amount was $5,000.00. The purpose of the bond was to protect those individuals who were dealing with licensees such as H. B. Canning & Associates, Inc. If any person was of the opinion that he/she had been injured by the fraud, deceit or willful negligence of any yacht and ship broker or one of their salesmen or for reason that any broker or salesman failed to comply with the conditions of Chapter 537, Florida Statutes, an action could be brought in any court of competent jurisdiction to recover damages on the basis of the aforementioned potential allegations. Furthermore, in the event that a broker failed to pay a sum of money owed to any creditors arising out of business transactions of those creditors in which the yacht and ship broker was acting in that capacity, the Division of General Regulation was required to hold a hearing to determine the names of the creditors and to determine the amounts due unto them. These rights to recovery are set forth in Subsection 537.04(10), Florida Statutes. That subsection further states that the form of notice of hearing before the Division of General Regulation shall be as set out in a newspaper and magazine of general circulation devoted to news of yacht and ship business and that each creditor shall file a verified claim with the Division. Once these verified claims are considered, a demand can be made on the bond in behalf of the claimants whose statements have been filed with the Division of General Regulation. Furthermore, the Division would have the power to settle those claims with the surety company and may release said bond and order a discharge of further liability. Should the surety company refuse to pay the bond after that demand, then the Division of General Regulation may bring an action upon the bond in behalf of the creditors. (Although Chapter 537, Florida Statutes, has been repealed by Chapter 76-168, Section 3(1)(gg), Laws of Florida, Sections 6 and 11 of that same statutory provision have allowed for the consideration of causes of action which accrued prior to the termination of the responsibility of the Division of General Regulation under Chapter 537, Florida Statutes. The effective date of repeal of Chapter 537, Florida Statutes, was July 1, 1978, and those actions which accrued prior to that date and are prosecuted prior to July 1, 1979, may be entertained by the Division of General Regulation.) In this case in keeping with the terms and conditions of Subsection 537.04(8), Florida Statutes, H. B. Canning & Associates, Inc., made a bond in the amount of $5,000.00 through the surety, State Automobile Mutual Ins. Co. of Columbus, Ohio. A copy of that bond may be found as the Division of General Regulation Exhibit No. 2 admitted into evidence. The Division of General Regulation was subsequently made aware of the claims of certain creditors against the licensee and on December 14, 1978, by written correspondence of their counsel forwarded the case to the Division of Administrative Hearings for consideration pursuant to Section 120.57(1), Florida Statutes. The Division of General Regulation later filed a notice of a hearing to be conducted in Room 103, Collins Building, Corner of Gaines and Adams Streets, Tallahassee, Florida, at 10:00 a.m., Wednesday, February 21, 1979. This Public Notice indicated that consideration would be made of the claims of creditors against the bond which has been referred to herein. This Public Notice of hearing was made in a newspaper of general circulation devoted to the news of yacht and ship business and constitutes good and sufficient notice of that hearing. The Division of General Regulation Exhibit No. 3 admitted into evidence is a copy of that newspaper advertisement. The hearing was held to consider the claims of creditors against the bond of H. B. Canning & Associates, Inc. Prior to that hearing, the surety, State Automobile Mutual Ins. Co. of Columbus, Ohio, was made aware of the date, time and place of the public hearing and is believed to have notified H. B. Canning & Associates, Inc. At the hearing the cases of two claimants were presented. One claim was presented in writing by having the counsel for the Division of General Regulation place into the record a Final Judgment of one Dwight Coombs, Plaintiff vs. H. B. Canning & Associates, Inc., Defendant, in Case No. 78-2841 CA(1) 01 G, in the Circuit Court of the 15th Judicial Circuit, in and for Palm Beach County, Florida. This copy was certified and was accompanied by a letter addressed to the Florida Department of Business Regulation, Division of General Regulation from John D. Kurtz, Esquire, as counsel for Dwight Coombs. The Final Judgment and copy of the Kurtz letter may be found as Division of General Regulation Exhibits No. 4 and 5, respectively, admitted into evidence in the course of the hearing. The second claim offered in the course of the hearing was in the person of Daniel P. Hagaman, who appeared and offered testimony and documentary evidence. The Exhibit No. 4 by the Division of General Regulation demonstrates that H. B. Canning & Associates, Inc., owes $3,251.52 to Dwight Coombs by reason of a claim arising out of a transaction in which H. B. Canning & Associates, Inc., was acting in the capacity of a broker and misappropriated funds of Coombs in contravention of Chapter 537, Florida Statutes. Likewise, this Final Judgment proves that the claim accrued prior to July 1, 1978. Daniel P. Hagaman, through his testimony and documentation which is found in the Hagaman Exhibits 1 through 12, established that he had given a deposit for the purchase of a boat from H. B. Canning & Associates, Inc. in a transaction in which that organization acted as a broker. The testimony further establishes that the sale was not consummated and that H. B. Canning & Associates, Inc., should have reimbursed the $3,000.00 and failed to do so, under a claim prior to July 1, 1978. Under the circumstances, it would not appear that either the Coombs claim or the Hagaman claim would have priority. Therefore, Coombs and Hagaman are entitled to a pro rata share of the $5,000.00 bond amount premised on the amount owed to them, which is $3,251.50 for Coombs and $3,000.00 for Hagaman.
Recommendation It is recommended that the State of Florida, Department of Business Regulation, Division of General Regulation make a pro rata disposition of the bond amount of the bond of H. B. Canning & Associates, Inc., through the surety, State Automobile Ins. Co. of Columbus, Ohio, in a pro rata amount for the benefit of Dwight Coombs and Daniel P. Hagaman, premised upon the amount owed to those parties, and do so by the method of an execution and delivery of a release of said bond, which further discharges State Automobile Mutual Ins. Co. of Columbus, Ohio, of liability. DONE AND ENTERED this 15th day of March, 1979, in Tallahassee, Florida. CHARLES C. ADAMS Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32304 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of March, 1979. COPIES FURNISHED: David M. Hudson, Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32304 John D. Kurtz, Esquire Hustad & Kurtz 388 South Military Trail West Palm Beach, Florida 33406 Daniel P Hagaman 140 Park Drive Fort Oglethorpe, Georgia 30742 H. B. Canning & Associates, Inc. 40 Southeast First Avenue Boca Raton, Florida 33432 State Automobile Mutual Ins. Co. of Columbus, Ohio Branch Claims Office 1010 South Dixie Highway Lake Worth, Florida 33460 Attention: Sharon Rogers, Claims Adjuster
The Issue The issue presented is whether Respondent is guilty of the allegations contained in the Administrative Complaint filed against him, and, if so, what disciplinary action should be taken, if any.
Findings Of Fact At all times material hereto, Respondent was licensed by the Department as a limited surety bail bond agent. He was employed by and authorized to write bail bond business for County Bonding Agency. When Respondent was hired by County Bonding Agency, the office procedures for receiving and accounting for all paperwork and money were explained to him by Deolinda E. Stolowilsky, the owner and operator, and Olympia Delgado, the office manager. Licensed employees were issued a certain number of bail bond powers of attorney on Monday of each week. Each agent was given a "pay sheet" listing the number of each power of attorney. When a power was used, the agent would write on the pay sheet next to that power the defendant's name, the amount of the bail bond, and the date the power was executed. On the following Monday each agent would turn in all files with executed bail bonds. All unused powers of attorney would be re-issued to the agent and any additional needed powers would be issued. The agent's compensation was computed based on the amount of bail bond business the agent had performed during the preceding reporting period. Each Monday when files with executed bail bonds were turned in to County Bonding Agency, all premiums received by the agent for those executed bonds were required to be turned in with the executed bonds. The office manager would make a notation on the outside of that defendant's file that the premium had been paid. Some of the agents working for County Bonding Agency routinely watched to make sure that the office manager made the proper notation on the file when they gave her money. County Bonding Agency did not give its agents receipts for the money received from them. Although County Bonding Agency had an informal policy that an agent receiving a large amount of money should turn that money in on the same day or the following day, there was no specificity for what would constitute a large amount of money. Further, there was no particular consequence for failure to accommodate the owner's preference that such be done. Much of County Bonding Agency's business was written in its office rather than at the jail. In other words, much of the money received by County Bonding Agency came from indemnitors coming to the office and paying the premium there. When that occurred, the agent sent to the jail to execute the bond received no premium money since the money had already been paid at the office. On June 20, 1998, Respondent went to County Bonding Agency. He turned in files and premiums and was issued powers to be used for future bonds. On June 23, Respondent went to County Bonding Agency and was issued new powers. Thereafter, office manager Delgado began telephoning Respondent and writing to him stating that he had failed to turn in the premium money for five defendants. She also filed a police report and contacted the Department alleging that Respondent had failed to turn in money that he had collected. On July 20, 1998, a courier delivered to County Bonding Agency from Respondent folders for six defendants. The folders did not contain any money. On July 22, Respondent went to County Bonding Agency to turn in his beeper, receipt book, and unused powers. The bond money for four defendants is at issue in this proceeding. Their folders were among the six delivered by courier to County Bonding Agency. At the final hearing, Delgado admitted that one of the six defendants was an office bond, and she could not remember one of the defendants. The four at issue are Alain Yara, Seon T. Carter, Demetrius Robertson, and Stanley Bailey. The Department's exhibits admitted in evidence at the final hearing include the paperwork for those four defendants. The paperwork for Yara includes a receipt for $300 and a collateral receipt. Both are signed by Respondent and dated June 21, 1998, two days before Respondent went to County Bonding Agency and was issued new powers. The paperwork for Carter contains a premium receipt for $550 (10 percent of the $5,500 bond) dated June 21, 1998, and signed by Respondent and a collateral receipt signed by "Curly" for what appears to be the same $5,500. The paperwork for both Robertson and Bailey contain premium receipts and collateral receipts dated June 24, 1998. All four receipts are signed "Curly." "Curly" is the nickname of Irwin Stolowilsky. At the final hearing, Delgado admitted signing Curly's name to receipts for bonds when the premium money was received by the office and the agent went to the jail only to obtain the remaining paperwork and write the bond. Delgado is not licensed by the Department and, therefore, she is not authorized to receive premiums for bail. Accordingly, when guarantors came to County Bonding Agency's office to pay premium money, she signed Curly's name, representing that a licensed person rather than an unlicensed person had in fact received the money.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered finding Respondent not guilty and dismissing the Administrative Complaint filed against him in this cause. DONE AND ENTERED this 11th day of October, 2000, in Tallahassee, Leon County, Florida. 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 11th day of October, 2000. COPIES FURNISHED: Dickson E. Kesler, Esquire Department of Insurance Division of Legal Services 401 Northwest Second Avenue Suite N-321 Miami, Florida 33128 Miguel J. Alvarez 8501 Northwest 8th Street Apartment 311 Miami, Florida 33126 Honorable Bill Nelson State Treasurer and Insurance Commissioner Department of Insurance The Capitol, Plaza Level 02 Tallahassee, Florida 32399-0300 Daniel Y. Sumner, General Counsel Department of Insurance The Capitol, Lower Level 26 Tallahassee, Florida 32399-0307
The Issue The central issue in this case is whether the Respondent is indebted to the Petitioner for agricultural products and, if so, in what amount.
Findings Of Fact Based upon the testimony of the witnesses and the documentary evidence received at the hearing, I make the following findings of fact: Petitioner, Oglesby Nursery, Inc., is a commercial nursery providing a variety of landscape agricultural products. The principal office for Petitioner is located at 3714 SW 52nd Avenues Hollywood, Florida. Respondent, Garden of Eden Landscape and Nursery, Inc., is an agricultural dealer with its office located at 3317 So. Dixie Highway, Delray Beach, Florida. Respondent, Garden of Eden, is subject to the licensing requirements of the Department of Agriculture and Consumer Services. As such, Garden of Eden is obligated to obtain and to post a surety bond to ensure that payment is made to producers for agricultural products purchased by the dealer. To meet this requirement, Garden of Eden delivered a certificate of deposit from Sun Bank of Palm Beach County to the Department. On or about August 22, 1986, Garden of Eden ordered and received delivery of $7673.40 worth of agricultural products from Petitioner. This purchase consisted of nine may pan coconuts and thirty green malayans trees. All of the trees were accepted and no issue was made as to their condition. On or about September 2, 1986, Garden of Eden ordered and received delivery of $1190.00 worth of agricultural products from Petitioner. This purchase consisted of seven coconut malayans dwarf trees. All of the trees were accepted and no issue was made as to their condition. The total amount of the agricultural products purchased by Garden of Eden from Petitioner was $8863.40. The total amount Garden of Eden paid on this account was $5000.00. The balance of indebtedness owed by Garden of Eden t o Petitioner for the purchases listed above is $3863.40. Petitioner claims it is due an additional sum of $247.77 representing interest on the unpaid account since the assessment of interest to an unpaid balance is standard practice in the industry and since Respondent took delivery of additional products knowing interest on past due accounts to be Petitioner's policy. No written agreement of acknowledgment executed by Garden of Eden was presented with regard to the interest claim.
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made: Petitioner is a Florida corporation. It was incorporated on September 10, 1991. On August 25, 1995, it was administratively dissolved for failure to file its annual report. It has not been reinstated. At present, Petitioner has no assets. Its liabilities exceed $250,000.00 and include a judgment against it in the amount of $11,857.00 (plus interest) and numerous unpaid bills. Before its demise as an active corporation, 3/ Petitioner was a provider of travel services. It was registered as a "seller of travel" with the Agency in 1992 (from January 1 to December 31) and in 1993 (also from January 1 to December 31), during which time it held Seller of Travel Registration Number 14223. As part of the registration process, Petitioner posted with the Agency a $10,000.00 performance bond effective for the one year period commencing November 19, 1991 (the 1991-92 Performance Bond) and another $10,000.00 performance bond effective for the one year period commencing November 19, 1992 (the 1992-93 Performance Bond). 4/ The surety on these two performance bonds (the 1991-92 Performance Bond and the 1992-93 Performance Bond) was the Hartford Fire Insurance Company (the Hartford). Edward Volz, in his capacity as Petitioner's President, signed an indemnity agreement obligating Petitioner to indemnify the Hartford for any payments made by the Hartford "by reason or in consequence of its suretyship." 5/ Consumer claims against Petitioner were received by the Agency. By letter dated February 28, 1994, the Agency advised Petitioner of these "claims on the above referenced security" and of the Agency's intention "to make a demand under its [the security's] terms." By letter to the Hartford dated February 28, 1994, the Agency made "a demand on the surety bond." 6/ The letter read as follows: This is to notify your company that the Department of Agriculture and Consumer Services is in possession of claims made by persons who purchased travel-related services from the above-mentioned seller of travel [Petitioner]. This bond was issued by your company to secure the services of the seller of travel or to provide a refund to those customers who do not receive the services purchased. Please accept this letter as a demand on the surety bond. We would appreciate your advising this office in writing within fifteen (15) days from the date of this letter as to the form and information you require in order to make payment pursuant to the bonded obligation. If you have any questions please contact me at 904-922-2972 or Mr. Wayne Searcy, 904-922-2920. In or around March of 1994, Petitioner filed an application with the Agency to renew its "seller of travel" registration. In conjunction with the filing of its application, Petitioner posted with the Agency a $25,000.00 performance bond effective for the one year period commencing November 19, 1993 (the 1993-94 Performance Bond). The surety on the bond was the Hartford. 7/ By letter dated June 22, 1994, the Agency notified Petitioner that Petitioner's application for renewal of its registration had ben denied for failure "to provide a financial statement prepared by an independent public accountant." After receiving the Agency's June 22, 1994, letter, Petitioner discontinued its business operations. Having received additional claims against Petitioner since it had sent its February 28, 1994, demand letter to the Hartford and not having received any response from the Hartford to that letter, the Agency sent a second letter, dated September 29, 1994, to the Hartford. The letter read as follows: Subject: Excell Travel Club, Inc. 1239 East Newport Ctr., [Number] 113 Deerfield Beach, Florida 33442 Surety Bonds [Number] 41770-77 ($25,000) and [Number] 41770-77 ($10,000) Effective November 19, 1993/ Effective November 19, 1992 Dear Sir: The Department of Agriculture has claims exceeding the amount of the bonds [the 1992- 93 Performance Bond and the 1993-94 Performance Bond] from persons who purchased travel-related services from the above- mentioned seller of travel [Petitioner]. Therefore, the Department of Agriculture is making a demand on the bonds. The bonds were issued by your company to secure the services of the seller of travel or to provide a refund to those customers who do not receive the services purchased. Please accept this letter as a follow up demand on the surety bonds. We would appreciate your advising this office in writing within ten (10) days from the date of this letter as to the form and infor- mation you require in order to make payment to the bonded obligation. If you have any questions please contact me at 904-922-2820. A copy of this letter was sent to Petitioner. The Hartford sent a letter, dated October 18, 1994, to the Agency acknowledging receipt of the Agency's September 29, 1994, letter. Subsequently, the Hartford sent a second letter, dated November 2, 1994, to the Agency. The letter read as follows: RE: Our file: 319 S 26747 and 319 S 26748 Principal: Excell Travel Club, Inc. Dear Mr. Cloud: Enclosed are our checks totalling $35,000.00 which are in settlement of the two surety bonds with effective periods 11/19/92 to 11/19/93 and 11/19/93 to 11/19/94. Please acknowledge receipt of these two checks and acknowledge that our bonds are exonerated. Thank you for your advices concerning these matters. Appearing on both of the two checks that were enclosed with the Hartford's November 2, 1994, letter was the notation, "full and final settlement." Each of the checks also had a "loss date" written on it. The "loss date" written on the $10,000.00 check was November 18, 1993. The "loss date" written on the $25,000.00 check was September 29, 1994. Petitioner had no advance notice that the Hartford was going to make a "settlement" with the Agency. By letter dated May 17, 1995, the Agency advised Petitioner of its intention "to make distribution of the entire bond proceeds to the claimants on a pro rata basis." Thereafter, Petitioner filed a petition requesting an administrative hearing on such proposed action. Petitioner has not repaid any of the $35,000.00 that the Hartford paid the Agency for the benefit of those who filed claims against Petitioner, nor has the Hartford instituted legal proceedings to require Petitioner to indemnify it for having made such payment to the Agency.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Agency enter a final order dismissing, on the ground of lack of standing, Petitioner's petition requesting an administrative hearing on the Agency's proposed action to distribute the proceeds of the 1992-93 and 1993-94 Performance Bonds to claimants on a pro rata basis. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 8th day of October, 1996. STUART M. LERNER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 8th day of October, 1996.
The Issue Whether the licenses as a limited surety (bail bond) agent and as a legal expense agent held by Latesia Lashonda Chavis should be revoked.
Findings Of Fact Chavis has been licensed in Florida as a limited surety (bail bond) agent, pursuant to Chapter 648, Florida Statutes and as a legal expense agent, pursuant to Chapter 642, Florida Statutes, since 1994, and has performed related work since 1991. In an application dated April 27, 2006, Chavis sought to receive an additional license as a resident managing general insurance (bail bond) agent. On that Application, Chavis answered "NO" to the following questions: Have you ever had any insurance agency contract terminated by an insurance company or managing general agent for any alleged cause? Are you currently indebted to any insurer, managing general agent, agent, or premium finance company? The Department alleged in Count I of the Administrative Complaint that Chavis’ answers to those two questions were false. In Count II, the Department alleged that Chavis owed money for checks that had been returned for insufficient funds for premiums and a build up fund ("BUF") account due, based on a contractual relationship with the Al Estes General Agency, Inc. (the "Estes Agency"), Chavis' managing general agent. Count III alleged that Chavis misappropriated, converted and withheld funds owed to the Estes Agency. Count I Chavis testified that, on April 27, 2007, when she filed the pending application, she was not aware that her contract with the Estes Agency had been terminated, having not been informed until she was contacted by the Department's investigator, Terry Flynn, sometime in August 2006. Chavis also testified that she had been in touch with Al Estes, in January, February, and March about her family problems that were taking her away from devoting herself to the bail bond business and offered to take out a loan to pay him what she owed him. She testified that she was trying to help run a family business, a group home, that her aunt died of cancer in April, and that her mother is still battling cancer. Estes confirmed in his testimony that he recalled her telling him that her husband had used her checkbook to take money out of her account and that her mother was sick. It is undisputed that a letter from the Estes Agency, dated February 9, 2006, was sent to Chavis at her address-of- record with the Estes Agency on that date, in Cocoa, Florida. The letter was "A Termination Notice and Demand for Payment and Accounting." Chavis testified that she did not receive the letter. The Estes Agency also sent, on February 9, 2007, a "Termination Request" for Chavis to be terminated as an agent to their insurer, Safety National Casualty Corporation in Iowa. In addition, the Estes Agency notified the Department of the termination of Chavis as their agent by letter dated February 17, 2006, sent to the Department's Orlando office. In that letter, the Estes Agency listed the following reasons for its actions: Un-report [sic] executed powers, owes premium N.S.F. checks for Premium and BUF accounts Unpaid Premium an (sic) BUF Unpaid Forfeitures and judgments Business phone has been turned off. No response to correspondence sent Will not return phone calls On or about March 27, 2006, the Estes Agency sent as its representative, Norman Britten who was apparently accompanied by other people, to Chavis' Cocoa address to seize the files. When Britten arrived, a neighbor told him that Chavis had moved. The neighbor telephoned Chavis, and asked her if he should tell Britten where she had moved. Britten then also talked to Chavis by telephone and she gave him her address in Fort Pierce, and agreed to meet him at her new address to give him the files on pending cases and accounts. Chavis agreed that these activities took place in late March or early April, just before her aunt's death. The files were taken so that the Estes Agency could meet the requirements and minimize the risks of having unpaid forfeitures become judgments within sixty days that, if not paid within thirty-five days, would result in the State's prohibiting an agency from posting additional bonds. The files were also taken to keep an accounting of remissions, and refunds of forfeited bonds after criminal defendants have been caught. Given the conversations concerning moneys owed, notices, seizure of files, and investigations, all activities that took place in January, February and March 2006, it is reasonable to conclude that Flynn testified truthfully that he informed Chavis of her termination while he was conducting the Department's investigation of her in March 2006. Chavis's testimony to the contrary, that she did not know prior to filing the application in April 2006, that she was answering the two questions cited in the Complaint falsely is rejected as untrue. Nor is Chavis relieved of her personal responsibility to be truthful, because she testified that some other unnamed company with whom she planned to become affiliated told her to give the false answers to those questions, because her BUF account should take care of any money that she owed. There is no showing that the other company knew of the returned checks and unpaid premiums and no reasonable expectation that these debts that were not incurred in the regular course of business would be covered by a BUF account. Additional evidence of her actual knowledge of the termination of her contract with the Estes Agency is the fact that Chavis was negotiating with and seeking licensure with another company, while she admittedly was still dealing with her family's problems that were causing her to neglect her bail bond business. The Department proved the allegations in Count I of its Administrative Complaint that Chavis made material misstatements in response to two questions on an application dated April 27, 2006. Counts II and III Contrary to her explanation that she filed the pending application thinking the BUF account would cover any funds owed to the Estes Agency, Chavis testified that, in conversations with Estes in February and March, she offered to take out a loan to pay the money owed to the Estes Agency, and that he mentioned that she owed approximately $12,000. She said she offered to take out a loan because she did not have the money, but that she did not think that either of them had taken into account the BUF account at that time. Chavis agreed that once the BUF account was depleted, if she still owed money to the Estes Agency, she has not paid it. She also testified that she has not paid anything to cover the checks she issued with insufficient funds and does not deny that she owes that money to the Estes Agency. The senior agent for the Estes Agency testified that, after taking into consideration insufficient funds checks, unpaid and unremitted premiums, the BUF account, and remissions total liabilities incurred by or on behalf of Chavis are $18,851.00. The Department proved the allegations of Counts II and III that Chavis owes money to the Estes Agency, that was misappropriated, converted, or willfully and improperly withheld.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered finding that all licenses held by the Respondent under the Code are revoked and that her pending application be denied. DONE AND ENTERED this 6th day of November, 2007, in Tallahassee, Leon County, Florida. S ELEANOR M. HUNTER 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 6th day of November 2007.
Findings Of Fact C & W Sales, Inc., was licensed as a dealer in agricultural products under license No. 1367 and was so licensed at all times here relevant. At the time of the incorporation of C & W Sales, Inc., Henry T. Watson was listed as an officer (President) and director of the company. The company was run by Philip A. Roberts, the brother-in-law of Watson. Roberts applied on behalf of C & W Sales, Inc., to FFB for an agriculture bond in the amount of $20,000 for the period 5/19/79 until 5/19/80 (Exhibit 1) . As a condition for issuing this bond FFB required and obtained a general agreement of indemnity from Roberts and Watson and their wives (Exhibit 2) which was executed on 2 May 1979. In addition to agreeing to save Florida Farm Bureau harmless from all claims arising out of the bond paragraph 14 provided: That this indemnity is continuing and will apply to any and all bonds, as provided in the opening paragraph of this Agreement which the Company may have executed or procured the execution of from time to time, and over an indefinite period of years; however, any Indemnitor may by written notice to the Company at its Home Office, Gainesville, Florida disavow his liability as to bond(s) which may be executed by the Company subsequent to fifteen days after receipt by the Company of such notice. Agriculture bond (Exhibit 4) was issued on 5/19/79 for one year and upon expiration on 5/19/80 the bond was renewed for an additional period of one year (Exhibit 5). Subsequent to the expiration of the 1979-80 bond (Exhibit 4) and reissuance of the 1980-81 bond (Exhibit 5) but within the prescribed time for submitting a claim against the agriculture dealer and his bond, John T. Brantley, Jr., filed a claim against C & W Sales in the amount of $8,317.05 for payment owed on a transaction which occurred during the 1979-80 period. When C & W Sales failed to pay or respond to the Commissioner of Agriculture's demands for payment, claim was made on the 1979-80 bond and FFB remitted to the Commissioner of Agriculture a check for the Brantley claim (Exhibit 6). Around February 1980 Watson became disenchanted with Roberts' running of C & W Sales, Inc. and wanted out. He told Roberts to get someone to buy his (Watson) stock and to get his name out of the company. Roberts said he would. Watson never advised FFB that he would no longer be an indemnitor under the bond. During the period covered by the bond year beginning 5/19/80 claims against C & W Sales, Inc., were submitted to the Commissioner of Agriculture by Henry L. Watson in the amount of $32,326.50; Hugh D. Martin in the amount of $1,932.80; Jesse J. Wilson in the amount of $1,490.00; John T. Brantley, Jr., in the amount of $15,024.40; and Philip Dean and Willie Bass in the amount of $4,919.13, for a total of $55,692.83. The Commissioner of Agriculture notified C & W Sales of these claims and advised them of the opportunity to contest the validity of the claims. No response was received from C & W Sales and Roberts appears to have departed the area to parts unknown. An order demanding payment was submitted to C & W Sales and when payment of these claims was not made, FFB, as surety on the bond, was notified by the department of its surety on the bond, was notified by the department of its obligation under the bond and a demand for payment of $20,000 to the department was made. There is no dispute regarding the accuracy or validly of the claims against C & W Sales contained in Finding 7 above. Nor does FFB contest its liability under the agriculture bond it issued for the 1980-81 bond year. However, FFB claimed an equitable setoff for the percentage of the $20,000 that would go to Watson. This setoff is claimed by virtue of Watson's indemnity agreement. By the stipulation the parties have agreed that the FFB is entitled to the pro rata share of the $20,000 to Watson.
The Issue The issues in this case are whether the Department of Transportation ("Department") erred by considering Willeby Construction, Inc. ("Willeby") a qualified bidder; whether the requirement to submit a bid bond or certified funds check or draft (hereafter "security on the bid") with the bid was a material requirement; whether the Department erred in treating Willeby’s failure to include security on the bid with its bid proposal as a minor, and, thereby, an irregularity which could be waived; and whether said decision of the Department was contrary to the terms of the bid, contrary to law, or arbitrary and capricious.
Findings Of Fact On November 14, 2000, the Department issued a bid solicitation notice for Financial Project No. 40509417201/Contract No. E3A78, a contract for routine mowing of grassed and vegetated roadside areas and litter removal from within the Department’s highway right-of-way in Gadsden and Leon Counties. The invitation to bid stated: In a letter dated November 17, 2000 from Richard Norris of the Department District Contracts Office to all prospective bidders, the Department reiterated the bid bond requirement stating "[i]f your bid is over $150,000, a Bid Bond of 5 percent of the bid amount is required and must be attached to your bid proposal. Failure to submit this with your bid will result in your bid being rejected." (Emphasis is in original.) The invitation to bid further stated: BID OR PROPOSAL BOND (If bid is over $150,000): Must be completely executed if bid is over $150,000. This 5 percent bid bond is required and must be included in your bid package. If bid is less than $150,000 no bid bond shall be necessary, however, the successful bidder shall be required to obtain a performance bond upon execution of the contract. The purpose of the requirement for security on the bid is to compensate the Department for damages in the event the low bidder fails to enter into the contract. The Department received bid proposals from six firms in response to its bid solicitation by the due date of December 7, 2000. The lowest bidder for Contract No. E3A78 was Willeby. Willeby submitted a business check drawn on Willeby’s business account no. 02-140168-01 with Farmers & Merchants Bank. This was an unsecured, personal check. At the time the bids were opened, Willeby’s Account No. 02-140168-01 contained insufficient funds to cover the check Willeby submitted as its bid bond in the amount of $11,996.52 for Contract No. E3A78. Willeby failed to submit the required security on the bid in the form of a cashier’s check, bank money order, bank draft of any national or state bank, or surety bond, payable to the State of Florida, Department of Transportation as required by the solicitation. The Petitioner, Phoenix, was the second lowest bidder. Phoenix submitted a bid bond equal to 5 percent of its total bid with its bid package. Phoenix fully complied with all the requirements of the invitation to bid. Bids for Contract No. E3A78 were opened on Thursday December 7, 2000. At that time, the Department's personnel discovered that Willeby had failed to submit security on bid as required by the terms of the bid solicitation. On December 15, 2000, eight days after the Department discovered that Willeby’s bid submittal was deficient, Starsky Harrell, the contract specialist with the District III office of the Department, telephoned W.J. Willeby, the president of Willeby Construction. Harrell informed Mr. Willeby that Willeby’s bid was non-conforming, and gave Willeby the opportunity to cure its non-responsive bid by submitting a check for certified funds or a bid bond as required by the bid solicitation. Willeby, at this point, had the opportunity to cure the defect or refuse to cure the defect, thereby, negating his bid. This gave Willeby an advantage not enjoyed by the other bidders. Willeby chose to cure its non-responsive bid, and submitted a certified check as its security on the bid. Willeby, thereafter, entered into the contract with the Department on Monday, December 18, 2000, eleven days after the bids were opened. The Department posted its intent to award Contract No. E3A78 on December 21, 2000, indicating its intent to award the contract to Willeby Construction. Phoenix timely filed this formal protest in opposition to the award of Contract No. E3A78 as contrary to Section 120.57(3)(f), Florida Statutes (2000). Regarding the requirements for security on the bid required in the solicitation for the bid and accompanying materials, Richard Norris, the contracts administrator, made the decision to emphasize the language by having it in bold-face type and underlined. His purpose for underlining and placing in bold-face type this language was to "put some accent on it, to make it stand out." A basic tenet of competitive procurement is to protect the integrity of the bidding process and ensure open and fair competition. A responsive bid is one which meets all the requirements of the proposal documents. Mr. Willeby has entered bids on Department contracts seventeen times in the past. Willeby is an experienced participant in the bid process. A bidder who has the option of taking a contract or not taking a contract after the bidder knows what the other bids are on a project has a competitive advantage over other bidders. If the bidder has bid too close to the profit margin, the bidder can refuse to cure the bid defect and avoid performance on the unprofitable contract. It is not only less expensive for a person to submit a personal check for security on a bid, but a stop payment order can be issued on a personal check. The bid bond posted by the Petitioner cost $800.00. This amount is not refundable. However, the proposal provides alternatives to a bid bond to establish security on the bid; therefore, paying the cost of the bond is not a competitive disadvantage. It is noted that a personal check is not among the alternatives, and the bid proposal's provisions for bid security specifically provide that checks or drafts for less than 5 percent of the bid amount will invalidate the bid. The only checks or drafts permitted under the terms of the bid proposal are those checks secured by the banking institution's funds and not subject to stop payment orders of the person in whose behalf the check is issued. It is consistent with the stated terms of invalidation, that, in addition to an insufficient amount, that an instrument not meeting the stated terms of the provision would also invalidate the bid. If being a dollar short on the secured amount is disqualifying, being short the entire amount in secured funds would be similarly disqualifying. Evidence was received regarding whether Willeby was a qualified bidder. This information related to the nature and amount of the equipment which Willeby had, and its financial ability to obtain additional equipment. Although Willeby did not have some of the equipment necessary to handle this job and its other contract obligations, he had ordered this equipment and his bank indicated that it would loan him the money. It was not developed whether the bank's willingness was dependent upon the pendency of the challenged contract award, and it is concluded that Willeby is a qualified bidder.
Recommendation Based upon the findings of fact and conclusions of law, it is RECOMMENDED: That the bid of Willeby Construction on Contract No. E3A78 be rejected, and the contract be awarded to the Petitioner. DONE AND ENTERED this 25th day of April, 2001, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN 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 25th day of April, 2001. COPIES FURNISHED: Julius F. Parker, III, Esquire Pennington, Moore, Wilkinson, Bell & Dunbar, P.A. 215 South Monroe Street, Suite 200 Tallahassee, Florida 32301 Brian A. Crumbaker, Esquire Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399-0450 James C. Myers, Clerk Department of Transportation Haydon Burns Building, Mail Station 58 605 Suwannee Street Tallahassee, Florida 32399-0450 Pamela Leslie, General Counsel Department of Transportation Haydon Burns Building, Mail Station 58 605 Suwannee Street Tallahassee, Florida 32399-0450
