Findings Of Fact The Respondent, Jeffrey Allan Azis, is licensed by the Florida Department of Insurance as a General Lines Agent and did business as the American Automobile Insurance Agency, Inc., 603 NW 10th Avenue, Gainesville, Florida, during the period of time delineated in the Amended Administrative Complaint. The Respondent transacted the sale of motor vehicle insurance and an automobile club membership to the persons identified in Counts I, II, IV and V of the Administrative Complaint. Each of the persons identified in Counts I, II, IV and V of the Amended Administrative Complaint was charged for membership in an automobile club by the Respondent or his employees. With respect to Counts I through VI of the Amended Administrative Complaint, the following findings are made: Count I James E. Rippy, Jr., purchased automobile insurance directly from the Respondent at the American Auto Insurance Agency, Inc., Gainesville, Florida, on or about June 10, 1979. He requested the minimum coverage necessary to insure his vehicle to obtain a license tag. (Vol. 1, T-35) Mr. Rippy did not request motor club coverage and was not aware of what a motor club covered. (Vol. 1, T- 32) Sometime after purchasing insurance from the Respondent, Mr. Rippy discovered that his coverage included membership in a motor club. (Vol. 1, T- 33-34) At the Respondent's office, Mr. Rippy and his wife Norma, signed documents which included a membership application in Nation Motor Club with a membership fee of $25.00 [Respondent Exhibit 2(1)] and an application for coverage which included the following disclosure statement also signed by Mr. Rippy in addition to the application form: I understand the Nation Motor Club (NMC) membership applied for this date 6/30/79, through the American Auto Insurance Agency, Inc. is a separate item, that pays in addition to my auto insurance policy. I understand the additional charge for this coverage is included with my down payment. Applicant (signed) Mr. Rippy was not pressured by the Respondent to sign these documents and could have taken additional time to read and ask questions if he had desired. (Vol. 1, T-49-50) write and do mathematics at a basic level. Count II On or about December 4, 1979, Deborah M. Zapp purchased automobile insurance from American Auto Insurance Agency, Inc. Gainesville, Florida, from an employee of the Respondent's identified as "Judy". (Vol. 1, T-17) Ms. Zapp was unclear regarding the coverage she requested from Judy, but was sure that she would not have purchased motor club membership since she regarded it as an "extra". (Vol. 1, T-18-20) While at the agency on December 4, 1979, Ms. Zapp was asked to sign various papers which she read before signing. (Vol. a, T-20) These included a membership application in Nation Motor Club (Respondent's Exhibit 1) and an application form which contained the following disclosure statement: I understand the Nation Motor Club membership applied for this date 12/4/79, though the American Auto Insurance Agency, Inc. is a separate item, that pays in addition to my auto insurance policy. I understand the additional charge for this coverage is included in my down payment. Applicant (signed) (Respondent's Exhibit 1) Ms. Zapp was not rushed while reading the documents presented to her for signing and could have taken as much time as she wanted to go over them. (Vol. 1, T-20) However, notwithstanding reading and signing the membership application and disclosure statement regarding the motor club, Ms. Zapp did not know she had purchased motor club coverage when she left the Respondent's office. (Vol. 1, T-21) Ms. Zapp is a graduate of Sante Fe Community College and attended a university for one year following her graduation. (Vol. 1, T-16) At the hearing on February 5, 1981, she appeared bright and fairly assertive. Count III In Count III, Petitioner alleges that the Respondent in the conduct of business under his license violated various provisions of the Insurance Code. The allegations of Count III requires an application of the facts found in Counts I and II to Sections 626.9521, 626.9541(11)(a), 626.9541(5)(a), 626.9541(15)(b), and 626.621(b), Florida Statutes. Count III is duplicated by Count VI and calls for legal conclusions which will be discussed in the conclusions of law section of this Recommended Order. Count IV The deposition of Charles D. Smith was admitted into evidence as Petitioner's Exhibit 10. Mr. Smith currently holds an insurance license and has a bachelor's degree. (Petitioner's Exhibit 10 at 4) Mr. Smith purchased automobile insurance from the American Auto Insurance Agency, Inc. on or about May 1, 1980 (Petitioner's Exhibit 10 at Appendix) Mr. Smith thought he was purchasing only Personal Injury Protection (PIP). (Petitioner's Exhibit 10 at 4) In order to get an auto tag, Mr. Smith requested the minimum coverage. (Petitioner's Exhibit 10 at 5) Like Mr. Rippy and Ms. Zapp, Mr. Smith signed an application for motor club membership and disclosure statement stating he understood he was purchasing motor club coverage at the time of his application for insurance. (Petitioner's Exhibit 10 at 7) Mr. Smith intended to purchase the minimum amount of insurance at the lowest price but did not require of either the Respondent or his employees whether motor club coverage was included in the price quoted. (Petitioner's Exhibit 10 at 8,9) Neither the Respondent nor his employees orally explained motor club coverage to Mr. Smith. At the bottom of Mr. Smith's insurance application the following disclosure statement was signed by him: I understand the interstate membership applied for this date 5/1/79, through the American Auto Insurance Agency, Inc. is a separate item that pays in addition to my auto insurance policy. I understand the additional charge for this coverage is included in my down payment. Applicant (signed) (Petitioner's Exhibit 10 at Appendix) Mr. Smith's decision to purchase from the Respondent was based solely on cost and not on any information provided by the Respondent or his employees. (Petitioner's Exhibit 10 at 13). Count V The deposition of Richard B. Divins was admitted into evidence as Petitioner's Exhibit 11. Mr. Divins' testimony parallels the other witnesses in that he also signed an application for motor club membership and a disclosure statement acknowledging the purchase and price. (Petitioner's Exhibit 11 at 11, 15, 16, 26) He purchased insurance and motor club coverage on July 13, 1979, from an employee of the Respondent at American Auto Insurance Agency, Inc., 603 NW 10th Avenue, Gainesville, Florida. (Petitioner's Exhibit 11 at 4,5) Mr. Divins thought he was purchasing only minimum liability insurance and was unaware that he had also purchased motor club coverage. (Petitioner's Exhibit 11 at 7,8) Mr. Divins is a senior in the School of Architecture at the University of Florida. (Petitioner's Exhibit 11 at 4. Count VI In Count VI, Petitioner alleges that the Respondent in the conduct of business under his license violated various provisions of the Insurance Code. Count VI requires an application of the facts found in Counts IV and V to Sections 626.9521, 626.9541 (11)(a), 626.9541(5)(a), 626.9541(15)(b) and 626.621(b), Florida Statutes. Count VI duplicates Count III and calls for legal conclusions and will therefore, be discussed in the legal conclusion section of this Recommended Order. Assuming that the witnesses who testified at the final hearing were representative of the Respondent's customers, his business was generally directed at persons who desired minimum automobile insurance coverage at the lowest possible price. (Vol. 1, T-17 and 31, Petitioner's Exhibit 11 at 7-8, Petitioner's Exhibit 10 at 8,9) An economic incentive existed to sell motor club memberships among agents whose customers desired minimum coverage due to the high commission rates associated with motor club policies. (Petitioner's Exhibit 9, Vol. 1, T-94-95, 97) Mr. Andrew Beverly was qualified as an expert witness on insurance matters and testified on behalf of the Respondent. (Vol. 1, T-29) Mr. Beverly owns the Florida Insurance School, serves as a consultant for several hundred insurance agencies and is a member of the Advisory Committee on Insurance Education of the Florida Insurance Department. (Vol. 1, T-78-79) A study by Mr. Beverly completed in 1979 for the Professional Insurance Agents Association of Florida demonstrated that insurance agents have been contacted by claimants or attorneys for claimants for failure to provide coverage or what is known in the industry as "errors and omissions." (Vol. 1, T-81-82) The Respondent is the first agent that Mr. Beverly has ever encountered who had difficulties arising from selling too much coverage. (Vol. 1, T-82-83) Mr. Beverly's conclusion concerning the value of motor club coverage and supplemental coverage generally is shared by Dr. Ronald T. Anderson, a colleague of Mr. Beverly's on the national faculty of the Society of Certified Insurance Counselors and an Insurance Commissioner of Colorado. (Vol. 1, T-83-85) In particular regard to this case, Mr. Beverly examined the application and disclosure statement signed by the witnesses for the Petitioner and responded to questions from counsel as follows: Q. Now, these documents -- if you would just take a look through those, you'll see in Respondent's Exhibits 3 and 4, I believe -- Respondent's Exhibit 1, for example, where in boldface type, the applicant for the insurance signs a statement regarding Motor Club. is that a common practice in the industry? A. It's a practice that is becoming extremely common with the careful and appropriate insurance agents to have a thorough documentation of each coverage, accepted or rejected by an injured. Q. And why is that? A. Partially because of the high incidents (sic) of Errors and Omissions insurance, claims coming in against insurance agents, and then partly so that the client himself will be completely aware of what it is that he's throwing away when he rejects a coverage so he'll know he hasn't bought that. Q. Does the type of procedure meet the standards of the industry in Florida for fire and casualty agents? A. It exceeds them. Q. Okay. What else, in your opinion, could Mr. Azis do in this type of situation other than have him sign the statements and advise him as he has testified to. A. Mr. Woods, there's nothing an insurance agent could possibly do, in my opinion, beyond explaining the coverage to the insured and then having him sign in his own handwriting. I can't believe that there is anything else that he could do. He's being as cautious as he possibly can. Q. You're not aware of any other practices or procedures that might even be better than this? A. I can't think of anything that you could do that could add to this great amount of documentation of the insurers election of what they purchased. Q. In your experience, is it common for people who have bought insurance to come back and question coverages? A. Yes, sir, it happens all the time. I have more than a hundred insurance agencies under contract at this hour, and I am constantly receiving long distance calls from agents: What do you do with this? What's the answer to it? Q. So, that's why they require the need for this documentation? A. Yes, sir. (Vol. 1, T-85-87) Mr. Beverly's testimony was not rebutted by the Petitioner and is accepted as credible. Although Respondent's license as a general lines agent in Florida expired as of August 30, 1980, he retains eligibility to become licensed for a period of two years from the date of licensure. Section 626.221(3)(f), Florida Statutes. (Petitioner's Exhibit 8)
Recommendation It is therefore RECOMMENDED that the Amended Administrative Complaint filed against the licensee, Jeffrey Allan Azis, be dismissed. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 3rd day of June, 1981. SHARYN L. SMITH Hearing Officer Division of Administrative Hearings Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of June, 1981. COPIES FURNISHED: Richard P. Harris, Esquire Department of Insurance 428-A Larson Building Tallahassee, Florida 32301 David Yon, Esquire Department of Insurance 428-A Larson Building Tallahassee, Florida 32301 Thomas F. Woods, Esquire 1030 East Lafayette Street Suite 112 Tallahassee, Florida 32301 =================================================================
Findings Of Fact Based on the evidence adduced at hearing, the undersigned makes the following findings of fact: Respondent holds a license issued by Petitioner which permits it to engage in the business of a motor vehicle dealer at 9901 N.W. 80th Avenue, Bay 3C, Hialeah Gardens, Florida. On Friday, September 9, 1988, during normal business hours, Karen Reyes, who is employed by Petitioner as a License and Registration Inspector, visited this location to attempt to conduct an annual inspection of Respondent's records. The doors to the warehouse where the business was supposed to be located were closed and locked and no one was around the dealership. Reyes left a note requesting that a representative of the dealership contact her. She then-departed. Reyes returned to the location on Tuesday, September 20, 1988. Although it was mid-morning, the warehouse doors were closed and locked and there was no one present. Before departing, Reyes left a second note asking that she be contacted by someone from the dealership. The following day Reyes attempted to telephone the dealership. No one answered the phone, however, when she called. Reyes reported her findings to her supervisor. As a result, on October 20, 1988, Respondent's President, Javier F. Rodriquez, was sent a letter in which he was advised that Petitioner proposed to revoke Respondent's motor vehicle dealer license on the ground that Respondent had closed and abandoned its licensed location. The letter further advised that Respondent had the right to request a formal hearing before any final action was taken against it. Rodriquez responded to the letter by requesting a hearing at which he would have the opportunity to present proof that the dealership had not been closed or abandoned. In view of this response, Reyes was instructed by her supervisor to pay another visit to the dealership. She made this visit on Tuesday, November 8, 1988. This time she encountered two men at the location. There were also a couple of cars there as well. One of the men, who claimed to be a representative of the dealership, telephoned Rodriquez's wife and had her speak with Reyes. During their telephone conversation, Mrs. Rodriquez informed Reyes that her husband was still active in the automobile sales business, but that he was conducting his business at their home. At the conclusion of their discussion, Reyes asked Mrs. Rodriquez to have her husband call Reyes' office. Mr. Rodriquez telephoned Reyes' office on November 16, 1988. Reyes was not in, so Rodriquez left a message. Later, that day, Reyes returned the call, but was unable to reach Rodriquez. The following day, Reyes went back to the dealership, where she found the same two men she had met there on November 8, 1988. Rodriquez, however, was not at the dealership. Reyes therefore left. She came back later in the day. This time Mr. Rodriquez was present and he spoke with Reyes. When asked by Reyes why there was no business activity nor records at the licensed business location, Rodriquez responded that the dealership was now open every day from 9:00 a.m. to 4:00 p.m. He provided Reyes with no additional information. Reyes revisited the dealership on Friday, January 13, 1989, Wednesday, January 18, 1989, Thursday, January 19, 1989, and Monday, January 23, 1989, during normal business hours. On each of these occasions, she found no one at the location and the doors to the warehouse closed and locked. She made another visit on Monday, January 30, 1989. Although it was during normal business hours, there was no indication of any activity at the dealership. Furthermore, the sign which had identified the business had been removed. This prompted Reyes to speak with the leasing agent at the warehouse complex. The leasing agent told Reyes that Respondent was no longer occupying space at the complex.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Petitioner enter a Final Order revoking Respondent's motor vehicle dealer license. DONE and ORDERED this 27th day of March, 1989, in Tallahassee, Florida. STUART M. LERNER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 27th day of March, 1989. COPIES FURNISHED: Michael J. Alderman, Esquire Neil Kirkman Building, A-432 Tallahassee, Florida 32399-0504 Javier F. Rodriquez, President Inrodar Auto Sales, Inc. 9901 N.W. 80th Avenue, Bay 3C Hialeah Gardens, Florida 33016 Charles J. Brantley, Director Department of Highway Safety And Motor Vehicles Neil Kirkman Building Tallahassee, Florida 32399-0500 Enoch Jon Whitney, Esquire General Counsel Department of Highway Safety And Motor Vehicles Neil Kirkman Building Tallahassee, Florida 32399-0500
Findings Of Fact Respondent Albert Wade Anderson holds a business degree from Washington University and a theology degree from Princeton University. After six years, he left the ministry to sell insurance. In 1965, he was licensed to sell life insurance in Minnesota, and continued selling life insurance after he moved to Fort Myers, Florida, in 1967. Respondent is licensed in Florida as an ordinary life, including disability, insurance agent and as a general lines agent. Petitioner's Exhibit No. 1. In May of 1980, Mr. Anderson, newly licensed by petitioner to sell property and casualty insurance, took a job with Atlas Insurance Agency's Fort Myers office. Atlas Insurance Agency paid respondent a weekly salary of $200 plus "$6.75 per program or deal," (T. 62), i.e., per customer. Almost invariably, respondent sold a motor club membership to any customer who bought a personal injury protection policy; Mr. Anderson could not recall with certainty a single exception. (T. 66.) "A motor club is an organization which provides certain designated services to motorists, including such things as guaranteed arrest bond certificates, towing and labor for disabled automobiles, map drawing services, often accidental death benefits, and similar related services . . . [for] motorists." Deposition of Andrew M. Beverly (Deposition), p. 6. Among motor club membership benefits are many services which are not included in "standard coverage." Deposition, p. 7. Motor club membership is "an important coverage . . . [An] insured should be made aware of this coverage." Deposition, p. 9. An insurance agent "should explain the different [motor club] coverages and options to a potential insured." Deposition, p. 19. COUNT ONE Jeanne Whyte, assistant head nurse at Lee Memorial Hospital on the 11- to-7 shift, came into the Fort Myers office of Atlas Insurance Agency on June 10, 1980. Ms. Whyte graduated from high school and has attended about a year's worth of college courses from time to time, in addition to her training as a nurse. When she went to the Atlas Insurance Agency, it was with the intent to purchase the least expensive automobile insurance available. She was already a member of the American Automobile Association. Respondent Anderson persuaded her, however, that she should also purchase liability insurance to protect her home and other assets. In explaining her potential benefits, Mr. Anderson said "something about towing, but [Ms. Whyte] didn't connect it with . . . a club or anything." (T. 27.) Before she left the office, she wrote a check for $275, and signed documents, including a membership application for American Touring Association, Inc., Respondent's Exhibit No. 1. Of the $275, $186 was used to purchase bodily injury liability, property damage liability, and personal injury protection, in the form of a combination automobile policy from Kenilworth Insurance Company, No. C-1-826686, Petitioner's Exhibit No. 3; $75 was used to purchase a membership in American Touring Association, Petitioner's Exhibit No. 4; and $14 was not accounted for by the evidence. When Ms. Whyte discovered that $75 had been used to purchase a membership in American Touring Association, she tried to obtain a refund from Atlas Insurance Agency, originally without success; but she eventually obtained a $75 refund, after contacting the Insurance Commissioner's office. This experience notwithstanding, Ms. Whyte purchased automobile insurance a year later from respondent, who by that time was employed with another insurance agency, "because [she didn't really think it was his idea to put [her] in the American Touring Club." (T. 29.) COUNT THREE When James Hanney, a high school graduate, entered Atlas Insurance Agency's office in Fort Myers, on or about August 11, 1980, he was under the impression that his parents' membership in the American Automobile Association inured to his benefit. Whether this impression was accurate was not clear from the evidence. In any case, Mr. Hanney told the woman he found in the Atlas Insurance Agency office that he wanted minimal insurance coverage. She sold him a $10,000 personal injury protection policy with an $8,000 deductible, issued by Fortune Insurance Company, No. AP 1-10-02821 with a premium of less than $50, and a membership in the Nation Motor Club for $35. Respondent and Mr. Hanney each signed the insurance policy. Petitioner's Exhibit No. 7. Among other documents, Mr. Hanney signed an application for membership in the Nation Motor Club, Inc., Respondent's Exhibit No. 2. COUNT FIVE On or about May 17, 1980, James Allen Foster, a high school graduate, went to the Fort Myers office of the Atlas Insurance Agency to buy whatever insurance was necessary to register the car he and Barbara Gonzalez (now Foster) had recently purchased. He did not ask for a motor club membership and would not have purchased such a membership if he had known it was optional. He did, however, sign an application for membership in the American Touring Association, Inc., Respondent's Exhibit No. 3, among other documents. After telling Mr. Foster and Ms. Gonzalez about potential benefits, including "towing and lost key coverage, Mr. Anderson sold them a $10,000 personal injury protection policy with an $8,000 deductible written on the American Specialty Insurance Company, No. PA 02 03 59, Petitioner's Exhibit No. 9, with a premium of $44, in addition to the membership in the American Touring Association. Howard Vogel and Kevin Cox were the principals of Atlas Insurance Agency, a Florida corporation owned by Cox, Vogel, Inc., during the time respondent Anderson worked for the agency. They instructed respondent to attempt to sell motor club memberships along with every automobile insurance policy he might sell, and told him how to go about it. The "technique was to package the benefits and quote one price," (T. 56; Testimony of Respondent), the aggregate of the motor club membership fee and the policy premium. Respondent was told by his employers "to not emphasize" the motor club memberships. Jeanne Whyte, James Hanney, and James Allen Foster each signed a form application for motor club membership, but only the application Mr. Hanney signed listed the membership fee or otherwise indicated that a separate fee or premium was being charged for the motor club membership. Respondent deliberately withheld this fact from Ms. Whyte and Mr. Foster when making his oral presentation and no document furnished to Ms. Whyte or to Mr. Foster disclosed the fact. Neither did respondent offer either of these customers a choice between memberships in different motor clubs. An insurance "agent has an absolute duty to the insured to explain to him what he is selling him and what it does for him," Deposition, p. 14, although the name of the policy is not nearly as important as the explanation of the coverage. Simply omitting the formal policy name would not fall below "the minimum standards of the business, the industry." Deposition, p. 16. "[T]he important thing is to explain to the insured he's buying something, and that what he is paying for is this." Id. Before making a sale, the insurance "agent owes it to the insured to explain each coverage and tell him he's paying for it and what the benefits of the coverage are." Deposition, p. 22. Both petitioner's recommended order to hearing officer and respondent's proposed order have been given careful consideration. Findings proposed by the parties which are not included in the foregoing findings of fact have been rejected as inconsistent with the evidence or omitted as irrelevant.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That petitioner suspend respondent's licensure under Chapter 626, Florida Statutes (1979), for a period of sixty (60) days. DONE AND ENTERED this 16th day of December, 1981, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 16th day of December, 1981. COPIES FURNISHED: David A. Yon, Esquire Department of Insurance 428-A Larson Building Tallahassee, Florida 32301 Thomas F. Woods, Esquire Suite 112 1030 East Lafayette Street Tallahassee, Florida 32301 The Honorable Bill Gunter State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32301
Findings Of Fact At all material times, Respondent has been licensed in Florida as a life and health insurance agent and general lines agent, Respondent was an officer or director of A Abacus Mr. Auto Insurance of Naples, Inc. (Mr. Auto), and Mr. Auto was an incorporated general lines insurance agency doing business at 2283 E. Tamiami Tr. in Naples. In late 1989 or early 1990, Respondent employed Maribelle Nunez to work at Mr. Auto. She was inexperienced in insurance. A supervisory employee trained Ms. Nunez in the manner that Respondent had approved. Ms. Nunez was trained to respond to frequent requests for the least expensive motor vehicle insurance or minimal motor vehicle insurance required by law. When customers requested quotes for such coverage, Ms. Nunez was instructed to include a "premium" for accidental death and dismemberment coverage. This training was consistent with the policy of Respondent and the practice of the other employees working for Respondent at Mr. Auto. In fact, the "premium" was a fee for joining the Colonial Touring Association, Inc., which was a motor club that provided its members accidental death and dismemberment coverage. The fee generally consisted of $30 or $45. Respondent's commission for the motor club memberships sold was 90 percent, but his commission on personal injury protection was only 17 percent. Ms. Nunez was trained to switch a customer to a different insurer if he rejected the accidental death and dismemberment coverage. The premium charged by the other insurer would be higher than the rate first quoted plus the motor club fee. After a customer agreed to purchase the insurance package presented to him, which consisted of minimal coverage plus accidental death and dismemberment, Ms. Nunez prepared the paperwork reflecting the customer's "choice" of the motor club membership. She then instructed the customer to sign where indicated. Well over 90 percent of Respondent's motor vehicle insurance sales included the motor club membership. On February 1, 1992, Joseph Benedetto visited Mr. Auto to purchase personal injury protection. He asked for the minimum coverage for his 1983 Ford pickup truck and 1972 Porsche 914. Either Ms. Nunez or another employee handled the transaction in the manner described above. Mr. Benedetto purchased what he believed was the minimum coverage required by law, even though it included a $30 fee for the motor club membership. However, even with the $30 fee included, Mr. Auto's rate was the lowest of the two or three agencies Mr. Benedetto had called. On December 10, 1991, Donna Erb visited Mr. Auto and asked for minimal insurance coverage plus collision because her 1990 Ford Probe was financed. Ms. Nunez handled the transaction in the manner described above. Ms. Erb purchased what she believed was the minimum coverage required by law, plus collision, even though it included a $30 fee for the motor club membership. However, even with the $30 fee included, Mr. Auto's rate was the cheapest that Ms. Erb could find. Petitioner presented no evidence regarding Mark Lane or Christina Harle, who are the alleged customers described in Counts III and IV. In December 1990, Gene Torsell visited Mr. Auto and asked for minimal insurance coverage for an automobile that he was using but did not own. Ms. Nunez handled the transaction in the manner described above. Mr. Torsell purchased what he believed was the minimum coverage required by law, even though it included a $45 fee for the motor club membership. However, even with the $45 fee included, Mr. Auto's rate was the cheapest of the two or three agencies that Mr. Torsell had checked. On October 19, 1990, Paul Pemberton visited Mr. Auto and asked for minimal insurance coverage for an automobile. Either Ms. Nunez or another employee handled the transaction in the manner described above. Mr. Pemberton purchased what he believed was the minimum coverage required by law, even though it included a $45 fee for the motor club membership. Consistent with the training that Respondent or his supervisory employees gave Ms. Nunez and other employees, Respondent's employees did not adequately disclose the optional nature of the motor club fee and wrongly refused to sell customers the cheapest insurance available if they declined the optional accidental death and dismemberment coverage. Respondent was aware of all such practices as they took place.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Department of Insurance and Treasurer enter a final order finding Respondent guilty of four violations of Section 626.9541(1)(x), Florida Statutes, and suspending his license for a total of six months. ENTERED on May 25, 1994, in Tallahassee, Florida. ROBERT E. MEALE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings on May 25, 1994. COPIES FURNISHED: Hon. Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, FL 32399-0300 Bill O'Neil, General Counsel Department of Insurance The Capitol, PL-11 Tallahassee, FL 32399-0300 Attorney William W. Tharpe, Jr. 612-L Larson Bldg. Tallahassee, FL 32399-0333 Attorney Donald T. Franke 1044 Castello Dr., #103 Naples, FL 33940
Findings Of Fact Respondent is licensed by Petitioner to act as a General Lines Agent and, as such, engages in the business of soliciting, procuring and transacting the sale of motor vehicle insurance in Gainesville, Florida, under the name "University Insurance". Prior to November 13, 1979 Petitioner undertook agency action in the form of inquiry and investigation calculated to determine whether Respondent was transacting the sale of automobile insurance in violation of Chapter 626, Florida Statutes, and that said agency action was undertaken without prior notice from Petitioner to Respondent and without Respondent's knowledge. On November 13, 1979 Petitioner filed and served an Administrative Complaint charging Respondent with several violations of the Florida Insurance Code and expressing Petitioner's intent to revoke Respondent's license to act as a General Lines Agent. On February 25, 1980 the aforesaid Administrative Complaint was dismissed without prejudice for reason that Petitioner had failed to provide Respondent with adequate notice of its belief that sufficient information existed to find probable cause for charging Respondent to the extent expressed in said Administrative Complaint. Subsequent to November 13, 1979, through October, 1980, without prior notice to Respondent, Petitioner continued to undertake agency action in the form of inquiry and investigation calculated to gather information supportive of Petitioner's previously made determination that Respondent follows a general business practice in transacting the sale of automobile insurance that is in violation of Chapter 626, Florida Statutes. Pursuant to the above-described agency action, on May 9, 1980, Petitioner served on Respondent a Notice of Intended Administrative Action charging Respondent with violation of Chapter 626, Florida Statutes, and expressing Petitioner's intent to revoke Respondent license to act as a General Lines Agent. On May 28, 1980, Petitioner supplemented the aforesaid Notice to add additional grounds for the charges made therein. Respondent, through counsel, replied to the aforesaid Notice and Supplement in writing, stating that the agency action taken by Petitioner in conducting the above-described inquiry and investigation and in making the above-described determinations is unlawful and wrongfully subjects Respondent to egregious loss and damage. On June 17, 1980, Petitioner filed and served an Administrative Complaint charging Respondent with violation of Chapter 626, Florida Statutes, and expressing Petitioner's intent to revoke Respondent's license to act as General Lines Agent. On August 25 and October 17, 1980, respectively, Petitioner amended the July 17, 1980 Administrative Complaint to add additional grounds for the aforesaid charges. The June 17, 1980 Administrative Complaint, amended as aforesaid, is the subject of administrative proceedings being conducted pursuant to Section 120.57(1), Florida Statutes, and in respect of the allegations set forth in said Administrative Complaint, as amended, the following material facts are admitted: That Respondent, as the General Lines Agent of Record d/b/a University Insurance Agency, Gainesville, Florida, or one of his agents or employees, transacted the sale of motor vehicle insurance and an automobile club membership to each of the persons identified in Counts I through XVIII on or about the dates stipulated in each of said Counts, excepting the date stipulated in Count V; That as an incidence of transacting each and every such sale, Respondent, or one of his agents or employees, charged each of the persons identified in Counts I through XVIII for a membership in an automobile club in addition to the cost charged for motor vehicle insurance; That as an incidence of transacting each such sale, Respondent, or one of his agents or employees, forwarded the respective applications executed and the premiums paid for motor vehicle insurance and an automobile club membership to the respective companies concerned; and That Deborah Zeller is one of Respondent's employees who participated in the transaction of the sale of motor vehicle insurance and an automobile club membership to Billy Joe Haynes; That Gail Livingston is one of Respondent's employees who participated in the transaction of the sale of motor vehicle insurance and an automobile club membership to Deborah E. Boyles, Delores C. Golden, and David or Sandra Maxey-Dickson; That Mona Cayce is one of Respondent's employees who participated in the transaction of the sale of motor vehicle insurance and an automobile club membership to Peter H. Gloodt, Jacquelyne C. Williams, and Susan F. Rudder; That Joan Roberts is one of Respondent's employees who participated in the transaction of the sale of motor vehicle insurance and an automobile club membership to Andrew J. Ciucio; That Pamela Polcover is one of Respondent's employees who participated in the transaction of the sale of motor vehicle insurance and an automobile club membership to Debborah [sic] Lee Abramson, Walter W. Griffin, and Emily L. Crep; That Cheryl McLaughlin is one of Respondent's employees who participated in the transaction of the sale of motor vehicle insurance and an automobile club membership to Robin Sweet and George L. Chamberlin; That Kim Gary is one of Respondent's employees who participated in the transaction of the sale of motor vehicle insurance and an automobile club membership to James E. Rippy, Jr., and Russell W. Rowe; That Elizabeth Borne is one of Respondent's employees who participated in the transaction of the sale of motor vehicle insurance and an automobile club membership to Louvenia Gainey and Robert E. Dow; and That Caren Frost is one of Respondent's employees who participated in the transaction of the sale of motor vehicle insurance and an automobile club membership to Barton K. Hulett. At all times here relevant Respondent was licensed as noted in Finding No. 1 above and was the General Lines Agent of record for the University Insurance Agency of Gainesville, Florida (University). University catered to young drivers generally with poor driving records who were uninsurable, or insurable only at high premiums by standard risk insurance companies. Respondent advertised for this class of clientele and specialized in providing automobile insurance through substandard companies. In addition to forms of automobile insurance sold, Respondent, by and through his employees, sold memberships in several motor clubs. Many of Respondent's customers wanted the minimum amount of automobile insurance necessary for them to comply with Florida law and expressed that desire when inquiring about the cost of coverage or when actually obtaining a policy. Respondent, during all times here relevant, employed several sales persons who wrote automobile insurance policies for clients which were accepted on behalf of the underwriter by Respondent as General Lines Agent. These employees were paid a bonus on the amount of insurance sold and an additional and separate bonus on the motor club memberships sold. Commissions on motor club memberships were as high as 80 percent of the premium and bonuses given by Respondent on motor club memberships were one- third of that commission. Florida Statutes, Section 627.733 requires owners of motor vehicles required to be registered in this state to maintain security to provide certain benefits without regard to fault. This security may be provided by the registrant taking out an insurance policy providing personal injury protection (PIP) in specified amounts. Accordingly, all clients of Respondent purchased PIP. Since the commission on PIP was 10 to 15 percent of the premium, if no additional coverage was purchased by the insured, the premium received by Respondent's agency was barely sufficient to cover the cost of writing PIP coverage When a call was received at University for a quote on the price for minimum coverage required by Florida the caller was usually given a total quote which included PIP and motor club membership without being told the quote included a separate charge for motor club membership. Motor club memberships came in several denominations with the cost varying with the additional services provided. Sometimes customers came in with their policy from another agency to see if University could give them a better price. Looking over the old policy the salesperson could determine how much they could save the customer, and often this savings would determine the class motor club membership sold to the customer. Even without the former policy, Respondent's employees knew generally how much the customer had to pay at another agency and, therefore, how much they could save the customer. Generally, the greater the difference between the price the customer paid for insurance at another agency and the price this coverage could be provided by Respondent, the more costly would be the motor club membership provided. Only if specific inquiry was made by a customer would he learn that he was paying (or being charged) extra for motor club membership in the total amount he was billed. Although Respondent's employees testified that they never intentionally deceived any customer or failed to advise customers regarding the costs of the coverages they were getting, on cross-examination these witnesses acknowledged that they emphasized only the total cost and gave no breakdown to the insured for PIP, uninsured motorist, liability, collision, comprehensive or motor club. When they did run down the coverages provided for the premium charged, they used the phrase "towing and road service" as being included rather than "motor club". Most of the complaining witnesses were unaware they were road service" Standard procedure followed at University was that after writing up the coverages, the salespeople had the customer sign several documents, among which was an application for motor club membership. Respondent contends that by having these applications signed, the customer was made aware that he was being charged extra for motor club membership. At one time during the period here involved, Mrs. Finn, wife of Respondent and a registered 220 Agent who helped Respondent manage the Gainesville office, inquired of the Deputy Insurance Commissioner in Gainesville, a Mr. Quigley if it was permissible to refuse to write PIP coverage only. She was told that was permissible and she instructed all of the employees writing policies that they were not to write PIP alone but to include motor club, liability or other coverages with this coverage. Some three months later, after customers complained about the refusal of University Insurance Agency to sell PIP alone and demanded their right to purchase only PIP if they so desired, Mrs. Finn again called Quigley to report that some customers had insisted they had the right to buy PIP alone and asked if that was correct. A day or two later Quigley advised Mrs. Finn that the Agency did have to offer PIP only if that is what the customer wants. (Tr. p. 581). Thereafter, Mrs. Finn testified, "We immediately changed and started writing PIP only if we really had to". (Tr. p. 582) The testimony of Respondent's witnesses who sold policies to the complaining witnesses has been considered in the light of this background and their admissions that they do not remember the specific transactions complained of. But for Count IV each count of the Administrative Complaint was supported by the testimony of a complaining witness. Respondent and his employees denied any intent to deceive or refuse to sell insurance without including motor club membership. With respect to Counts I through XVIII the following findings are made: Count I. Billy Joe Haynes purchased automobile insurance from University on September 11, 1978. After calling several agencies to get bids on the minimum coverage he was required to have, University gave him the lowest bid. He told them he wanted the minimum coverage which he understood to be PIP and collision insurance to protect the bank which had purchase money liens. He signed the papers prepared for him and was unaware that he had also purchased motor club membership until some time later. During his telephone conversation and his acceptance of the policy at the office the question of motor club membership never came up. Had Haynes been aware motor club membership was included in his coverage he would not have accepted the insurance policy. Count II. Deborah Boyles on April 16, 1979 purchased automobile insurance from University. She asked only for liability coverage and signed the papers presented to her. Later she learned that she had also been sold a motor club membership which she never asked for and which had never been discussed with her. She did not desire to purchase motor club membership and would have been unaware she had paid for such coverage had she not gone to the office of the Insurance Commissioner in Gainesville for another reason and been asked to check her papers for this membership. Count III. Peter Gloodt purchased automobile insurance from University on July 15, 1978. This policy included a motor club membership which Gloodt did not request, did not want, and was unaware that he had purchased. Gloodt went to University to purchase PIP only, told the girl processing his application he wanted minimum coverage he could buy, was quoted one price for the policy, signed the papers presented to and later learned that he had been sold and charged for a motor club membership. The explanation given him that the policy included road towing services was presented in such a manner Gloodt was not aware there was a separate charge for such service. When his policy accompanying papers arrived in the mail Gloodt became aware that he had been charged $50 for motor club membership. He went back to University to complain, talked to the person who had sold him his policy, was told that he had signed papers applying for such membership and that the agency did not like to write PIP only. When Gloodt got angry and raised his voice the employee gave him cancellation forms to sign and he left the agency. When some two months passed and he had not received a refund, Gloodt went to the office of Insurance Commissioner in Gainesville to complain. Thereafter he was refunded most of the premium paid for the motor club membership. Count IV Petitioner presented no evidence with respect to this count. Count V. Deborah Lee Abramson purchased automobile insurance from University on February 12, 1979. (Tr. p. 248). She asked for only the required coverage to permit her to "drive legally". After signing the papers prepared for her signature Ms. Abramson was told motor club membership was part of the package and that she had to take it. She protested that she had AAA and didn't need another motor club and did not want to pay for something she didn't need. However, she was told by one of Respondent's employees that she couldn't get the insurance without motor club membership. Count VI. Susan Rudder purchased automobile insurance from University on August 8, 1978. She, too, was a member of AAA, had no need for another motor club membership, and would not have accepted knowing a separate charge was involved. The person preparing Ms. Rudder's applications for her signature advised her that the price included all coverages desired and towing and road service. No additional price was indicated for the motor club and Ms. Rudder assumed from the manner in which motor club was presented, that there would be no separate charge for this road service. When she contacted the Insurance Commissioner's Gainesville office on another matter she learned she had paid $30 for a motor club membership. Count VII Robin Sweet purchased automobile insurance from University on May 8, 1979. Ms. Sweet was also a member of AAA and asked University for the necessary coverage to protect herself from liability in case she struck someone with her car. At the time she signed the papers prepared for her signature Ms. Sweet admits she didn't read them before signing but relied upon University to provide her with the coverage risked for. A short time later when contacted by the Deputy Commissioner's office in Gainesville to inquire if she had purchased motor club membership from University, Ms. Sweet replied no and was asked to check her policy. When she did she learned she had been charged $35 for a motor club membership she didn't want, didn't ask for, and would have refused if made aware she was being charged extra for this membership. Count VIII. Walter W. Griffin purchased automobile insurance from University on July 19, 1979. He, too, requested the minimum coverage to comply with Florida law and was told the premium would be $60-odd which included a separate charge for motor club membership. When he said he didn't want motor club membership and questioned the necessity of buying it, he was told the Insurance Commissioner had approved University's practice not to sell minimum coverage without including motor club membership. Count IX. George L. Chamberlin renewed his automobile insurance coverage with University on March 28, 1979. At this time he signed an application for motor club membership. No reference was made to the motor club membership and Chamberlin was unaware he was being sold motor club membership. Had he known, he would not have taken this road service coverage. When visiting the Insurance Commissioner's office in Gainesville to complain about another matter he learned that he had been charged for a motor club membership by University. Count X. James Edward Presley a/k/a James Elvis Rippy, Jr., before a recent name change, purchased automobile insurance from University on September 12, 1979. While his application was being prepared for his signature he noticed motor club membership was included which he did not want and did not believe he was required to buy. He even went to Finn to complain that he didn't want the motor club membership and didn't think he was required to take it. Finn talked to the girl preparing Presley's applications but the end result was that Presley had to take motor club if he wanted only PIP coverage. After signing the necessary papers, including an application for motor club membership, Presley complained to the Deputy Commissioner in Gainesville. Count XI. Emily L. Crep renewed her automobile insurance policy with University on January 27, 1980. She told the employee preparing her application that she wanted the same coverage she had the previous year. Ms. Crep was aware this included motor club membership but was not aware that she was being charged a separate fee of $25 for this membership. Had she known there was a separate charge, she would not have purchased it. Ms. Crep submitted a claim for towing service after she learned she had paid for motor club membership and had complained to the Deputy Insurance Commissioner. This claim was paid by the motor club but was not covered by the club membership. Ms. Crep had not refunded the money at the time of the hearing. Count XII. Delores Golden purchased automobile insurance on behalf of her husband, McIvor Golden, from University on November 2, 1978. At this time McIvor Golden's automobile insurance had been cancelled and Mrs. Golden told the University employee preparing her application that she wanted everything in the way of coverage needed to comply with the law. Several documents were prepared for her husband's signature and she signed his name on the documents presented for signature. Although Mrs. Golden denies that she or her husband signed Exhibit 15, application for motor club membership, it is concluded that this document was signed by her at the same time she signed the other documents at University. No discussion was made regarding motor club membership and Mrs. Golden didn't know she had applied for and had been charged for auto club membership until she went to the Insurance Commissioner's office in Gainesville to complain about another matter. COUNT XIII. Sandra Maxey-Dickson called University to discuss her car insurance following receipt of a renewal notice from University, She and her husband owned three cars and wanted only minimum coverage on the two older cars and more coverage on the newest car. She was quoted a price for the coverages she asked for. No mention was made of motor club membership and no request for such coverage was made. On May 5, 1979 David Maxey-Dickson, husband of Sandra, proceeded to University where he executed the papers that had been prepared for his signature. At the time he signed these papers, which included applications for motor club membership for the three cars, no mention was made of motor club membership and David Maxey-Dickson was unaware he was purchasing and being charged for this coverage. Had he known, he would not have taken motor club membership. Count XIV. Louvenia Gainey purchased automobile insurance from University on January 4, 1979, right after she had purchased a new car, and the dealer called University for coverage. At the time she signed the papers prepared by University she signed an application for motor club membership. She was not advised there was an extra charge for this motor club membership or that she even had this coverage. Had she been advised at the time, she would have declined to purchase motor club membership. Subsequently, Ms. Gainey was contacted by the Tallahassee office of Petitioner to inquire if she was aware she had motor club membership. She was not aware of this until she rechecked her policy and the accompanying documents. Count XV. Russell Rowe renewed his automobile insurance from University on December 22, 1978. He wanted property damage and liability and was quoted a price for this coverage. When the papers were presented for his signature, he saw that a motor club membership was included for an additional price which had been included in the quote given him. When he said he didn't want motor club, he was told they included motor club in all policies. To his statement they couldn't force him to buy motor club, the University employee responded they didn't have to sell him insurance. Since his policy was about to expire, Rowe accepted the motor club membership and shortly thereafter proceeded to the Insurance Commissioner's Gainesville office to ascertain where he stood with regard to motor club membership. He then cancelled his entire policy with University and moved his coverage to another company. Count XVI. Jacqueline Williams purchased automobile insurance from University on February 14, 1979. When she went to University she told the girl who served her that she wanted the minimum coverage to legally drive in Florida. She was given a quote of about $100. When the papers were presented for her signature Ms. Williams noted motor club membership was included and asked if this was to cost more. She told motor club was included in the price quoted . When her policy arrived, Ms. Williams saw that she had been charged $35 for motor club membership and called University to say she didn't want the motor club. The girl at University replied that it was their policy to sell motor club with PIP coverage. Count XVII. Barton K. Hewlett purchased automobile insurance from University on March 28, 1979. He desired liability coverage and in addition he received membership in an automobile club. Hewlett knew that he was paying fur a club membership but believed that it was part of a package deal which he had to take to get the liability coverage. Count XVIII. Robert F. Dow purchased automobile insurance from University on November 20, 1979. Before going to the office, he telephoned University and got a quote on the liability, comprehensive and collision coverage he desired. He then went to the office, discussed the coverage he was getting, signed the papers presented to him, made a down payment and financed the balance of the premium. The total premium was approximately $600. Motor club membership was not mentioned to him and he was unaware that his premium included a charge for a motor club membership. At the time, Dow was a member of the Amoco Motor Club and would have declined another motor club membership had he known he was being charged for one. Dow's testimony that he was unaware he was being charged extra for motor club membership is corroborated by comparing a copy of the premium finance agreement he was given at the time he purchased his automobile insurance (Exhibit 42) with carbon copy of the same premium finance agreement forwarded to Perry and Company, the premium finance company (Exhibit 28). Mr. Dow's copy of the finance agreement contains no notation of a charge for motor club membership, while the finance company copy shown $35 was charged to Dow for this membership. Respondent called as a witness each girl who prepared and sold the policies to the complaining witnesses in Finding 24 above. These witnesses denied that they ever deceived anyone, failed to explain to anyone the extent of their coverage, or refused to sell PIP insurance without including motor club or some other coverage. Thus this testimony is in direct conflict with the above findings. Several factors, other than their demeanor on the witness stand, led to the conclusion that the testimony of the complaining witnesses was more reliable. These factors include: Respondent stipulated that during a period of approximately two months the policy of the office, communicated to the girls writing insurance by Respondent, was that minimum coverage (PIP) would not be sold alone without including a motor club membership. (Tr. p. 313, 314) Mrs. Finn testified (Tr. p. 580, 581, 600) that after getting Mr. Quigley's concurrence that they could refuse to sell PIP alone, they operated in this manner for several months and she communicated this policy to the employees. After the second call to Quigley disclosed they could lot refuse to sell PIP only, Mrs. Finn testified, "So we immediately changed and started writing PIP only if we really had to." (Tr. p. 582, 600). Questions for minimum coverage given to customers all appear to have included motor club membership. A standard "rap" was developed which was given to customers (Tr. p. 550) in which the customer was advised. "'You have this, this, and this and this is how much it cost.' That was standard." A very high and separate bonus was given the employees on the motor club memberships they sold. Different classes (and charges) for motor club memberships were used by the employees depending on how much money they believed they saved the customer and the differences were seldom, if ever, explained. (Tr. p. 474) Respondent testified that "when Mr. Quigley said. . . that we could decline PIP, we did not decline." (Tr. p. 613) . This conflicts with more credible testimony. Kim Gary, who has been employed by Respondent since 1976, testified the procedure at University regarding the sale of motor club membership was essentially the same the date of the hearing as it had been during the four-plus years she was employed at University.
The Issue Should discipline be imposed by Petitioner against Respondent's licenses as a general lines agent (2-20) and Florida Residential Property and Casualty Joint Underwriters Association (FRPCJUA) agent (0-17), held pursuant to Chapter 626, Florida Statutes (2001)?
Findings Of Fact Facts Admitted by Answer Pursuant to Chapter 626, Florida Statutes, you Jennifer L. Faloon, currently are licensed in this state as a general lines (2-20) agent and a FRPCJUA (0-17) agent, and were so licensed at all times relevant to the dates and occurrences referenced herein. Your license identification no. is A080736. Pursuant to Chapter 626, Florida Statutes, the Department of Financial Services has jurisdiction over your licenses and appointments. At all times relevant to the dates and occurrences referenced herein you, Jennifer L. Faloon, were employed with Beck Insurance, in Jacksonville, Florida. Additional Facts Established by Responses to Requests for Admissions Respondent was licensed as a general lines (2-20), and a Florida Residential Property and Casualty Joint Underwriters Association (0-17) agent, in Florida, from June 25, 2001, until and including the present time. From June 25, 2001, until and including February 19, 2002, Respondent was employed with Beck Insurance, in Jacksonville, Florida. Respondent signed the insurance application on February 19, 2002, to bind coverage for Ms. Wilson (Danyetta Wilson). Respondent signed the insurance application on January 21, 2002, to bind coverage for Mr. Appling (Marc Appling). Respondent signed the insurance application on January 22, 2002, to bind coverage for Ms. Brown (Laura Brown). Anna Michelle Mack transacted insurance business with Laura Brown on January 22, 2002. Respondent signed the insurance application on June 25, 2001, to bind coverage for Mr. Henderson (William Henderson). Respondent's Duties at Beck Insurance Respondent began her employment with Beck Insurance, in September 1996. She began as an unlicensed person. While working with Beck Insurance she obtained her (4-42) license allowing limited customer service related to the sale of automobile insurance. She subsequently obtained her (2-20) insurance agent license related to property and casualty, which would allow the sale of automobile, homeowners, and commercial insurance. Prior to this case Respondent has had no complaints filed against her in her capacity as insurance agent. In addition to selling insurance at Beck Insurance, Respondent is familiar with ancillary products offered through that agency. In particular, she is familiar with the sale of contracts involving towing a disabled car operated by a party who has contracted for those services. Respondent is also conversant with rental car contracts sold at Beck Insurance. The rental car contract allows for the customer to rent a car when the customer's personal car is unavailable. During the years 2001 and 2002, the years in question in this case, Respondent served as a supervisor at Beck Insurance in her capacity as a licensed (2-20) agent for persons employed by Beck Insurance, both unlicensed and licensed. The licensed agents that she had supervisory responsibility for were (4-42) limited or unlimited customer service licenses for automobile insurance and (4-40) full customer service agents. Respondent also was expected to deal with issues of underwriting for the insurance policies sold. As few as five and as many as ten agents were employed with Beck Insurance in the relevant time frame. This included another supervising (2-20) agent named Lon Woodward. Both Respondent and Mr. Woodward supervised the licensed (4-42) and (4-40) agents at Beck Insurance, who could not conduct business without supervision from the licensed (2-20) agent. The office hours in the relevant time period were from 9:00 a.m. to 6:00 p.m. Monday through Friday, and 9:00 a.m. to 5:00 p.m. on Saturday. In any given month in excess of 100 customers might be served. Not all activities in providing service were in relation to writing insurance policies. Beck Insurance, at times relevant to the inquiry, represented numerous insurance companies involved with the sale of automobile insurance. The clientele that purchased automobile insurance from Beck Insurance was principally constituted of persons with problematic driving records, including suspensions, DUIs, lapses in coverage, as well as persons who only intended to pay the minimum amount necessary for a premium to obtain insurance that would allow that person to operate a motor vehicle in Florida. As a non-standard agency, the majority of Beck Insurance customers are persons who would not be provided insurance by the standard insurance companies such as State Farm, AllState, and Nationwide. Typically, when a customer initially contacted Beck Insurance by telephone they wanted the best price. In response, the Beck Insurance employee would consider the price structure among the 35 insurance companies represented by Beck Insurance to choose the most economical policy. When telephone inquiries were made about purchasing automobile insurance through Beck Insurance no mention was made of the All World towing and rental plan. Beck Insurance trains its employees in the manner those employees will serve the customers. Respondent was included in that training, having received training and provided training in those approaches. Ordinarily when a customer inquired concerning the purchase of automobile insurance at Beck Insurance, he or she was asked about the type coverage he or she was interested in purchasing. Information was gathered concerning the automobile to be insured. A questionnaire was completed. Within that document is a reference to towing and rental car reimbursement coverage, as well as information about the automobile insurance itself. The questionnaire which was used at times relevant to this case sought information about the customer and the use of the automobile that was being considered for coverage with blanks being provided to the left of the questions for initialing by the customer and blanks to the right for an affirmative or negative response. By contrast to other items, item 11 within the questionnaire was declarative in nature. It had a space for the initials of the customer, but not one to declare acceptance or rejection of what was described. By its terms it stated: "Motor Club - I am aware that towing and rental car reimbursement is optional. I want to carry this coverage. (This coverage can only be renewed by coming into the office, as it is not written with your auto carrier)." The parenthetical reference within item 11, was by smaller type, unlike the interrogatories that were found within the questionnaire. The statement in item 11 has an internal contradiction. In its initial sentence, it talks about the optional opportunity to obtain towing and rental car reimbursement, but it is followed by a sentence which says that the customer wants to carry the coverage with no apparent opportunity within the document to decline that coverage. Moreover, at the bottom of the questionnaire, there was the opportunity for the customer to say that he or she did not want to carry and was rejecting bodily injury liability, uninsured motorist, medical payments, comprehensive and collision, and custom or special equipment coverage, by initialing the blank provided with each category of coverage, but there was no similar opportunity to reject the towing and rental car reimbursement that was described earlier in the document. The insurance coverages were referred to as optional, as was towing and rental. An example of the text within the document, aside from its execution, is found as Petitioner's Exhibit numbered 5. The execution of that document will be discussed subsequently in relation to the customer Danyetta Wilson. According to Respondent, the typical customer for automobile insurance at Beck Insurance is told "In this price we are also giving you towing and rental reimbursement." The nature of the plan for towing and rental is described. For example, if it is Plan 3, the customer is told "you will receive free tow reimbursements for six months for $100.00 each. You will also receive -- -- if you are involved in an automobile accident with another vehicle and you have to have your vehicle in a shop for repair, you will receive $25.00 a day reimbursement for five days. These claims have to be filed through our agency. You bring us the receipt within 60 days, we file it." The towing and rental services being sold by Beck Insurance, which are the subject in this dispute, are offered through All World All Safe Drivers (All World), part of Beck Insurance. Once more specific discussion is entered into concerning the automobile insurance policy applied for, the Beck Insurance employee also returns to the discussion of the All World towing and rental products. Beyond the presentation of the information concerning the purchase of the insurance coverage that has been chosen, Respondent testified that during the time in question the customer would be told "this is your towing and rental reimbursement contract." The details concerning the towing and rental in the contemplated agreement between Beck Insurance and the customer are as set forth in Respondent's Exhibit numbered 28, a form application for towing and automobile rental reimbursement through All World. The form application which constitutes the basis for providing the coverage makes no mention concerning the charge for the various plans offered to the customer for the towing and rental. The terms set forth in the application bundle the reimbursement plan for automobile rental and towing services, as opposed to separate coverage for automobile rental reimbursement and towing reimbursement. Notwithstanding the lack of explanation within the form application for All World rental reimbursement and towing service reimbursement, concerning the costs for the various plans described, Respondent indicated in her testimony that those packages are $35, $60, and $75, in costs. The discussion of the amount charged for towing and rental is included in the price breakdown that also pertains to the costs for the automobile insurance purchased. Approximately 50 percent of the customers solicited purchased All World towing and rental contracts in the time in question. Customarily, the application for automobile insurance is signed by an appointed licensed (2-20) agent at Beck Insurance who has authority to review the application to make certain that it has been correctly executed. When the transaction is complete between a customer and the Beck Insurance employee, there is but one receipt provided to the customer. That receipt sets out the aggregate charges and then breaks out individual charges for the automobile insurance policy, All World, and the motor vehicle report (MVR) fee that some insurance companies charge. As the receipt suggests, the amount tendered at the time that the automobile insurance is purchased and towing and rental reimbursement is purchased is a single amount that would have cost components for the automobile insurance, towing and rental, and a MVR fee. Another form is provided to customers with Beck Insurance. An example is found as Respondent's Exhibit numbered 27. That form outlines automobile insurance coverage by providing explanations about the types of coverage and advice on making certain that the insurance company pays claims made by the customer. There is a reference within this form to a subject other than automobile insurance, namely a reference to towing and rental-car reimbursement wherein is stated: "Reimbursement for towing charge when your covered vehicle is unable to safely proceed under its own power. Reimbursement for rental car when your covered vehicle has been involved in an accident. This coverage is optional. Consult individual plans for different payment amounts and certain restrictions that may be applied to each optional plan." As anticipated by law, persons who work for Beck Insurance, other than the licensed (2-20) agent, may take information supporting the application for automobile insurance sold through Beck Insurance. Count II Danyetta Wilson Danyetta Wilson was interested in purchasing automobile insurance in February 2002. She called Beck Insurance and spoke to Respondent concerning that purchase. After receiving a telephone quote, Ms. Wilson immediately went to Beck Insurance to transact business. The date was February 19, 2002. Before arriving at Beck Insurance, Ms. Wilson had told Respondent what she wanted in the way of automobile insurance coverage, and Respondent indicated that everything necessary to conclude the transaction would be prepared in advance before Ms. Wilson arrived at Beck Insurance. Of course, the application for insurance had not been executed, but pertinent information had been written down by Respondent on scratch paper. Essentially Ms. Wilson told Respondent in the telephone call that she wanted a minimum down-payment and low monthly payments, without discussing the amount of the deductible. When Ms. Wilson arrived at Beck Insurance, she saw Respondent. Both the Respondent and Tracy Laroe assisted Ms. Wilson in the transaction. Ms. Laroe was employed by Beck Insurance. Her application to become a licensed (4-42) limited customer representative was authorized by Petitioner on December 11, 2001. Petitioner issued license no. EO10041 (4-42) to Ms. Laroe on March 8, 2002, as recognized by Beck Insurance on March 29, 2002. As of July 1, 2002, Ms. Laroe's license was inactive based upon cancellation by Beck Insurance as the appointing entity. On February 19, 2002, Respondent was responsible for Ms. Laroe as supervisor at Beck Insurance, in relation to Ms. Wilson's transaction with Beck Insurance in purchasing automobile insurance through Progressive Insurance and automobile rental and towing reimbursement through All World. Most of the activities involved with the transaction occurred between Ms. Wilson and Ms. Laroe when addressing the purchase of automobile insurance on the date in question. During the transaction at Beck Insurance, Ms. Laroe, while assisting Ms. Wilson, did not suggest possible interest in buying the motor club also referred to as a towing and rental contract. Nor was there mention of All World as the company to provide that ancillary product. What was established in discussion was the amount of down-payment and the monthly payments for the automobile insurance. The down-payment was made by cash. Ms. Wilson was told that the down-payment would be $332, which is the amount that she paid. Ms. Wilson completed and was provided copies of certain documents in the transaction. Petitioner's Exhibit numbered 2 is the application for the automobile insurance questionnaire that was completed by providing answers and initials in relation to the underwriting information that was requested in the application form. Ms. Wilson signed the application on February 19, 2002. She did not read the document carefully because she was, as she describes it, "in a rush." The completed application was counter-signed by Respondent as producing agent on February 19, 2002, at 1:41 p.m. On February 19, 2002, Ms. Wilson was provided a receipt indicating a total amount of $332. The receipt reflected that $269 was a down-payment for Progressive Insurance, an amount of $60 as related to All World rental and towing, and $3 for a MVR fee. Ms. Wilson did not examine the receipt at the time it was provided to her. The receipt was filled out by a cashier at Beck Insurance, a person other than Respondent and Ms. Laroe. No explanation was made concerning its several parts. In addition to the questionnaire associated with the application for insurance coverage pertaining to the Progressive Insurance policy, Ms. Wilson executed the Beck Insurance questionnaire which described automobile insurance generally and the All World towing and rental. That questionnaire is Petitioner's Exhibit numbered 5. Petitioner's Exhibit numbered 5 creates the impression that towing and rental is an integral part of the purchase of automobile insurance. It was signed by Ms. Wilson on February 19, 2002, and initialed in its numbered parts. Those parts included the reference to the motor club at number 11 where it stated, "Motor Club - I am aware that the towing and rental care reimbursement is optional. I want to carry this coverage. (This coverage can only be renewed by coming into the office, as it is not written with your auto carrier.)" Again, while the towing and rental car reimbursement was stated as being optional, the quoted material was ambiguous as to its optional nature, and there was no opportunity in the latter portion of the questionnaire to specifically decline this ancillary product. In connection with the rental and towing service through All World, Ms. Wilson signed as applicant for the product. This application which formed the basis for charging Ms. Wilson $60 for rental and towing is Petitioner's Exhibit numbered 4. It is in the manner described earlier as to its form, in which no indication is made concerning the amount charged to purchase Plan 3. Ms. Wilson did not read Petitioner's Exhibit numbered 4, which described the automobile rental and towing reimbursement offered through All World. She signed her name by a red "X" on the application line. The document which described the nature of the reimbursement plan offered through All World was not specifically explained to her. Ms. Wilson was not told that there was an additional charge for the towing and rental. She had no interest in towing and rental, having been provided similar services through her cell-phone plan. In this process, Respondent came over to the location where Ms. Wilson was seated and pointed out certain places in the insurance application to check-off and initial.1 Respondent did not sit at the desk with Ms. Wilson when the transaction took place. During the transaction, Ms. Laroe told Ms. Wilson that the questions she was asking would have to be directed to Respondent, in that Ms. Laroe could not help Ms. Wilson by providing the answers. Ms. Laroe mentioned that her participation was part of the customer service. Ms. Wilson also was involved with a sheet which was informational in nature describing the various types of insurance coverage. Respondent showed Ms. Wilson that form. It is Respondent's Exhibit numbered 1, which was signed by Ms. Wilson on February 19, 2002. It indicates that Ms. Wilson declined uninsured motorists and medical payments coverage. Zeros are placed next to those explanations. Within the document is a reference to towing and rental reimbursement, wherein it is stated: Towing and Rental Car Reimbursement. Reimbursement for towing coverage when your covered vehicles are unable to safely proceed under its own power. Reimbursement for rental car when your covered vehicle has been involved in an accident and is being repaired. This coverage is optional. Consult individual plans for different payment amounts and certain restrictions that may be applied to each optional plan. The towing and rental had a dash placed by that item together with the balance of the items on the information sheet that described insurance coverage. Respondent saw Ms. Wilson place the marks by the side of the forms of coverage and the information about towing and rental reimbursement, which is not part of automobile insurance coverage as such. The overall expectation within Respondent's Exhibit numbered 1 is to generally describe available products. It does not serve as an application. The status of the document is not changed by having Ms. Wilson sign the document. Respondent saw Ms. Wilson initial item 11, concerning the motor club found within Petitioner's Exhibit numbered 5. Ms. Wilson did not ask any questions of Respondent concerning Petitioner's Exhibit numbered 5. Respondent was present when Ms. Wilson signed the application for towing and rental, Petitioner's Exhibit numbered 4. Respondent in relation to that document asked if there were any questions. Ms. Wilson did not indicate that she had questions. In relation to Petitioner's Exhibit numbered 4, Respondent recalls the nature of the explanation that she gave to Ms. Wilson as: "What this is, is this is your towing and rental contract. It gives you three tows per six months, $100.00 reimbursement on every tow, on each tow with a limit of three per six months. The rental benefit is $25.00 a day for five days if you are involved in an automobile accident and you need reimbursement. All claims have to be brought here to the office within 60 days in the form of receipts. We file the claims for you. Now, I need you to sign there." Nothing in that explanation indicates that there was an opportunity to decline to participate. The explanation did not establish the cost for the plan. Respondent indicated hat Ms. Laroe in her participation in the transaction with Ms. Wilson was there to listen and learn. Count III Marc Appling On January 21, 2002, Marc Appling purchased automobile insurance from Beck Insurance. He wanted full coverage for his car. The amount quoted for the insurance as a down-payment was $288. On January 21, 2002, $200 was paid. On January 24, 2002, the additional $88 was paid. Of the $288 paid, $222 was a down- payment for automobile insurance through Superior American Insurance Company (Superior), $60 was for All World automobile towing and rental reimbursement, $3 for a MVR fee, and $3 for some unexplained charge. The receipt provided Mr. Appling when he paid the initial $200 reflects $222 for down-payment to Superior, $60 for All World, and $3 for a MVR fee. That receipt is Exhibit numbered 9 to the Appling deposition, Petitioner's Exhibit numbered 16. On January 21, 2002, Mr. Appling primarily dealt with Lance Moye, an employee of Beck Insurance who gave him a price quotation for the purchase of insurance through Superior. Mr. Moye explained to Mr. Appling the details, to include the amount of payment per month beyond the down-payment. Michelle Mack, an employee for Beck Insurance was sitting next to him. If Mr. Moye experienced problems in carrying out the transaction, he would ask Ms. Mack her opinion. Mr. Moye has never been licensed by the Petitioner in any capacity. During 1991 and 1993, he had applied for a (2-20) general lines property and casualty license. On the date in question, Michelle Mack, known to Petitioner for licensing purposes as Anna Michelle Mack, was licensed as a (4-42) limited customer representative agent. Mr. Appling executed the Beck Insurance questionnaire and acknowledgement form that has been previously described, to include initialing item 11, related to the motor club which says: "I am aware that the towing and rental car reimbursement is optional. I want to carry this coverage. (This coverage can only be renewed by coming into the office as it is not written with your auto carrier.)" This form that was signed and initialed and answered yes or no in various places was Exhibit numbered 8 to the Appling deposition, Petitioner's Exhibit numbered 16. Mr. Moye told Mr. Appling that "you pay," addressing Mr. Appling, "X amount of dollars for rental car coverage and everything like that." However, Mr. Appling was not satisfied with the explanation. The questionnaire Exhibit numbered 8 to the Appling deposition, describing towing and rental car reimbursement as optional, did not create below that statement the specific opportunity to decline that option as would have been the case as items such as uninsured motorist and medical payments. Mr. Appling was left with the impression that the motor club was part of the insurance policy that he purchased and that the $288 down-payment included the motor club. Because Mr. Appling was interested in full coverage, he believed that the automobile insurance itself would cover rental reimbursement. Notwithstanding that the form questionnaire, Exhibit numbered 8 to the Appling deposition referred to towing and rental car reimbursement as an optional item, Mr. Appling did not understand that it was an optional purchase. Had he been persuaded that it was a separate item he would not have purchased the motor club. Exhibit numbered 7 to the Appling deposition, Petitioner's Exhibit numbered 16, is the application for All World towing and rental reimbursement. The automobile insurance application through Superior is found as Exhibit numbered 5 to the Appling deposition, Petitioner's Exhibit numbered 16. It was executed and signed by Mr. Appling on the date in question, then was marked as bound and signed by Respondent on that date. Although Respondent signed the Appling application for automobile insurance with Superior, she had no specific recollection of the event and was not otherwise involved in the transaction. Count IV Laura Brown On January 21, 2002, Laura Brown purchased automobile insurance through Beck Insurance. She dealt with Valerie Lynn Webster and Anna Michelle Mack, employees at Beck Insurance. At various times in 2002 and 2003, Ms. Webster had applied to Petitioner to be licensed as a (2-14) life, including variable annuity agent and a limited customer representative (4-42). No licenses were issued to Ms. Webster. Before arriving at Beck Insurance, Ms. Brown had obtained a preliminary quotation by telephone from the agency related to the purchase of automobile insurance. Ms. Brown was interested in obtaining full coverage for her car. The nature of the discussion once Ms. Brown arrived at the agency was about the purchase of automobile insurance, not about a towing and rental contract, motor club membership or the All World plan. A down-payment was made with installments to follow, associated with the automobile insurance. Ms. Brown thought that the entire amount of the down-payment was for the insurance premium. No explanation was made to the effect that the motor club was separate from the automobile insurance policy. When Ms. Brown left the Beck Insurance agency, she did not realize that she had purchased anything other than automobile insurance. Petitioner's Exhibit numbered 12 is the automobile insurance application through Superior, executed by Ms. Brown on the date in question. It was signed by Respondent, noting that the policy was bound. Respondent had no other direct involvement in the transaction. Petitioner's Exhibit numbered 13 is a receipt dated January 22, 2002, issued to Ms. Brown by Ms. Webster and Ms. Mack, totaling $247 that Ms. Brown paid on that date. It is broken out as $184 for Superior, $60 for All World, and $3 for a MVR fee. Petitioner's Exhibit numbered 14 is an executed application for All World automobile reimbursement and towing service reimbursement executed by Ms. Brown for the period January 22, 2002, through June 22, 2002, under Plan 3 in the form that has been previously described. As reflected in Petitioner's Exhibit numbered 15, Ms. Brown executed the Beck Insurance questionnaire in the form that has previously been described that contains item 11, relating to the motor club stating, "I am aware that the towing and rental car reimbursement is optional. I want to carry this coverage. (This coverage can only be renewed by coming into the office, as it is not written with your auto carrier.)" The questionnaire additionally sets forth that the towing and rental car reimbursement is optional but without the opportunity to decline that option that is specifically described for other optional coverage in the form, such as uninsured motorists and medical payments. In an affidavit containing Ms. Brown's statement prepared on May 23, 2002, Ms. Brown stated, "I knew that I had purchased towing or rental reimbursement policy for my policy 1/22/2002/2003 because I saw the form and I asked questions about it. The lady in picture number 10 (Ms. Mack depicted on Petitioner's Exhibit numbered 17) told me I would get so many tows for free, she also told me it was from Beck Insurance." But in that affidavit Ms. Brown goes on to state, "I did not know that I paid an additional $60 for the towing policy. I thought this was just something I got with the car insurance policy." Again, nothing in Petitioner's Exhibit numbered 14, the application for All World towing and rental, reflects the cost of Plan 3. That was made known in the receipt, Petitioner's Exhibit numbered 13. Count V William Henderson On June 25, 2001, William Henderson purchased automobile insurance from Beck Insurance. He dealt with Daphne Ferrell, a person Respondent claims was a licensed agent at the time. No proof has been presented to contradict Respondent's position, and it is found that Ms. Ferrell was a licensed agent when the transaction took place. On the date in question, Mr. Henderson was interested in purchasing full coverage for his automobile. He executed an application with Atlanta Casualty Company (Atlanta Casualty) to purchase the automobile insurance. That application is Petitioner's Exhibit numbered 6. Respondent's involvement in the purchase was the signing of the application in the place indicated for the agent's statement vouching for the application's correctness. The automobile that was covered by the purchase was inspected by Ms. Laroe as evidenced in Petitioner's Exhibit numbered 7. The inspection was not a function that required a licensed person to perform. Mr. Henderson paid Atlanta Casualty $306 on June 25, 2001, for automobile insurance. That payment is reflected in Petitioner's Exhibit numbered 8, a copy of the check written to Atlanta Casualty. The money that was paid was acknowledged by a receipt from Ms. Ferrell dated June 25, 2001, Petitioner's Exhibit numbered 9. That receipt reflects $306 down-payment for the automobile insurance to Atlanta Casualty and $75 for a rental contract involved with All World, for a total of $381. Whether Mr. Henderson paid the $75 for towing and rental, aside from the $306 check written for the insurance to Atlanta Casualty, is not clear from the record. Mr. Henderson had made application on the form related to All World for auto rental reimbursement and towing service reimbursement, which has been previously described. The specific application by Mr. Henderson is Petitioner's Exhibit numbered 10, relating to Plan 3. Mr. Henderson executed the Beck Insurance questionnaire form that has been previously described setting forth item 11, the motor club, which states: "I am aware that the towing and rental car reimbursement is optional. I want to carry this coverage. (This coverage can only be renewed by coming into the office, as it is not written with your auto carrier.)" While Mr. Webster initialed item 11 on the form, as other customers had done in the circumstances addressed in the Administrative Complaint, the form he executed, as with other customers, did not create an opportunity to opt out of the motor club. While the form at item 11 spoke of the optional nature of the motor club, it was followed by a statement that made it appear that the opportunity to decline the coverage had already been determined, when it said: "I want to carry this coverage." The reference to the optional nature of the towing and rental car reimbursement in the latter portions of the form was not followed by an opportunity to specifically decline the motor club, as allowed in reference to other forms of optional insurance coverage pertaining to such items as uninsured motorist and medical payments, for example. The executed questionnaire is Petitioner's Exhibit numbered 11. In completing the Beck Insurance questionnaire, Petitioner's Exhibit numbered 11, his instructions were to initial where the solid arrow runs from items 1 through 14, at the top of the page, and by the Xs at the bottom of the page. The arrow and the Xs were placed by someone other than Mr. Webster. Only a brief explanation was given to Mr. Webster concerning the questionnaire. Mr. Webster has no recollection of someone specifically reading item 11, related to the motor club. During the transaction at issue, Mr. Webster remembers a discussion of towing and rental. He indicated that he was not interested in rental reimbursement. He did want towing. Mr. Webster, like the other customers who have been discussed, did not carefully read the documents presented to him for his consideration in purchasing the automobile insurance and in relation to the motor club. Mr. Webster has a vague recollection of someone placing an "X" on the applicant's signature line in Petitioner's Exhibit numbered 10 and signing that application for the All World motor club, but he thought that he was only purchasing towing not rental. The application covers both rental and towing.
Recommendation Upon the consideration of the facts found and the conclusions of law reached, it is RECOMMENDED: That a Final Order be entered finding Respondent in violation of those provisions within Count II that have been referred to, dismissing the others within that count, dismissing Counts III through V; suspending Respondent's licenses for nine months, placing Respondent on two years' probation and requiring attendance at such continuing education courses as deemed appropriate. DONE AND ENTERED this 3rd day of June, 2004, in Tallahassee, Leon County, Florida. S CHARLES C. ADAMS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 3rd day of June, 2004.
The Issue The issue is whether the registration of Robert T. Marsh as a motor vehicle service agreement company salesman should be revoked. The Superintendent of Insurance of the State of New York revoked the licensure of Mr. Marsh under Section 117 of the Insurance Law of that state and Mr. Marsh failed to acknowledge this on his application for licensure in Florida, despite a specific question requiring disclosure of such information. This demonstrates a lack of fitness or trustworthiness to engage in the business authorized under Chapter 634, Florida Statutes. Mr. Marsh's license should be revoked.
Findings Of Fact Mr. Marsh became licensed 1/ as a motor vehicle service agreement company salesman in Florida in 1984. On May 11, 1977, the Superintendent of Insurance of the State of New York revoked all casualty insurance licenses of Robert T. Marsh under Section 117 of the Insurance Law of the State of New York because he failed to account for premium funds collected from clients and violated agreements regarding the payment of unearned commissions due to insurers (Petitioner's Exhibit 2a, Tr. page 13, line 9). In his findings of fact, conclusion and decision the Superintendent of Insurance also found that letters directed to Mr. Marsh regarding complaints filed with the New York Insurance Department were ignored, and such action reflected adversely upon Mr. Marsh's trustworthiness (id). The Insurance Department of the State of New York notified Mr. Marsh that his license had been revoked by certified mail dated June 28, 1977. The return receipt for that letter shows that it was received by Mr. Marsh on June 28, 1977 (Petitioner's Exhibit 4); Mr. Marsh admitted during the hearing that he received the notification from the New York Department of Insurance (Transcript p. 13 lines 2 and 3). Mr. Marsh applied for registration in Florida as a motor vehicle service agreement company salesman using Department form DI4-161 on August 31, 1984 (Petitioner's Exhibit 1). That form posed the question "Has your application for license ever been declined by this or any other Insurance Department or has your license or eligibility to hold a license ever been declined, suspended, revoked, placed on probation or administrative fine levied? If answer is "YES," give full details: Mr. Marsh answered no. The Department of Insurance learned that Mr. Marsh's license in the State of New York had been revoked after he received his Florida motor vehicle service agreement salesman license. The Department then sought an explanation of his original answer to question 5 above in an amended application filed December 13, 1985 (Petitioner's Exhibit 3). In his amended application Mr. Marsh then stated "To my knowledge my license was never suspended or revoked . . . I had mail going to many different addresses and know that I didn't receive all of it." (Petitioner's Exhibit 3) Mr. Marsh's testimony at the hearing that he signed the return receipt for the revocation notice, as well as the copy of the return receipt for the revocation letter from the Insurance Department of the State of New York rendered this first explanation unworthy of belief. Mr. Marsh explained at the hearing that he thought question 5 referred only to discipline of a service agreement license, but the New York revocation was for a casualty license, and therefore did not have to be disclosed (Transcript, p. 13, lines 6-9). Not only is this a strained interpretation of the question, it is not the explanation Mr. Marsh gave to the Department in his amended application, and apparently was developed between the date of the amended application and the date of the final hearing. This belated excuse for nondisclosure of the New York license revocation is also rejected.
Recommendation It is recommended that the motor vehicle service agreement company salesman license issued to Robert T. Marsh be REVOKED for misstatements or misrepresentations made in his application for licensure which have demonstrated a lack of fitness or trustworthiness to engage in business authorized under Chapter 634, pursuant to Sections 634.181(1), (5) and 634.191(1), Florida Statutes (1983). DONE AND ORDERED this 7th day of May 1986, in Tallahassee, Florida. WILLIAM R. DORSEY, JR. Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 7th day of May 1986.
The Issue Whether the Petitioner committed the violations alleged in the Amended Administrative Complaint filed October 14, 2003, and, if so, the penalty that should be imposed.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made: The Department is the state agency responsible for issuing licenses for insurance agents in the State of Florida, and for regulating and disciplining licensed insurance agents. Sections 626.016, 626.611, and 626.281, Florida Statutes (2004). At all times material to this proceeding, Mr. Pomerantz was licensed in Florida as a property and casualty general lines insurance agent, which is referred to as a "2-20 license." At all times material to this proceeding, Mr. Pomerantz did business as A Able insurance agency, an unincorporated entity located at 124 South Federal Highway, Pompano Beach, Florida. Mr. Pomerantz owned the A Able insurance agency, worked in the office in Pompano Beach, and was the agent in charge of the office. Automobile insurance was the primary product sold at the Pompano Beach office of the A Able insurance agency. No primary agent for the A Able insurance agency office in Pompano Beach was registered with the Department, but Mr. Pomerantz functioned as its de facto primary agent at that location. An insurance agency known as the Wide World of Insurance was, and perhaps still is, located in Margate, Florida. Mr. Pomerantz's brother, Randy Pomerantz, operated this agency. In the summer of 2000, the two offices merged, but the merger dissolved in the early spring of 2002. During the time that the two agencies operated as a single entity, they continued to maintain the two office locations. Applications and other paperwork generated in the Pompano office were, as a rule, sent to the Margate office for processing. Prior to May 2003, however, when he began working in a general administrative capacity at the Margate office, Mr. Pomerantz did not work in the Margate office and had no personal knowledge of the operations of the Margate office or the applications for automobile insurance handled by that office. At the times material to this proceeding, Mr. Pomerantz was the appointed agent for Ocean Harbor Insurance Company ("Ocean Harbor"), Southern Group Indemnity, Inc. ("Southern Group"), and U.S. Security Insurance Company ("U.S. Security"). As an appointed agent, Mr. Pomerantz, as well as agents working in the Pompano Beach office of the A Able insurance agency, acted on behalf of these companies, and the agents could bind coverage with the companies and accept premium payments on behalf of these companies. An insurance agent can "bind" automobile insurance coverage with an insurance company that has appointed or registered the agent as its representative by calling the insurance company and getting a binder number and time of day. A binder obligates the insurance company to provide the coverage specified until the binder is converted into an insurance policy or the binder is cancelled. Southern Group's agreement with Mr. Pomerantz required him to send the signed application for a new automobile insurance policy, for a renewal of an existing policy, or an amendment to an existing policy, together with a check or draft for the premium net commissions, postmarked within 72 hours of the time at which the coverage was bound. Although not reduced to writing, the standard policy of U.S. Security requires its appointed agents to mail the application and payment to the company immediately upon coverage being bound. Ocean Harbor's general rules applicable to its appointed agents require that a completed application and the required premium, together with other documentation, be received by the company within five working days of the date on which coverage is bound. Within 20 to 30 days after coverage is bound on an application, each of these three companies sends a notice to the agent listing the binders for which the company has not received the application, premium, and other required paperwork. The notice advises the agent that the binder is cancelled. This means that the insurance company no longer provides automobile insurance coverage under the binder. If the application, premium, and other required paperwork is subsequently forwarded to the insurance company, the company, after review by its underwriters, can accept the application and issue a policy with an effective date retroactive to the effective date stated on the application for the policy. In some circumstances, the underwriting review will result in an additional premium being charged on the policy. In this circumstance, a notice is sent to the insured advising them of the additional premium due. At the time the application for automobile insurance coverage is completed and the coverage is bound by an agent appointed or registered by the company, the customer pays the insurance agent either the full amount of the premium determined by the agent to be due or a down payment on the premium when the premium is financed by a premium finance company. Insurance companies using appointed or registered agents do not, as a rule, accept payment directly from the customer; rather, the payment received from a customer is deposited in the agency's account, and the agency, after deducting its commission, sends an agency check to the insurance company. When the premium is financed, the down payment is deposited in the agency account, and the agency, after deducting its commission, sends an agency check to the premium finance company. When a customer finances his or her insurance premium through a premium finance company, the customer signs a premium finance agreement in which he or she agrees to pay monthly installments to the premium finance company for the total owed under the agreement; the premium finance company, in turn, pays the full premium to the insurance company at the time the application is submitted to the insurance company. Premium finance companies provide agents with whom they do business company drafts, which are prepared by the insurance agent on behalf of the premium finance company. Mr. Pomerantz and the A Able insurance agency did business with the premium finance company ETI Finance Corporation ("ETI Finance"), and A Able insurance agency was supplied with ETI Finance premium finance agreements and ETI Finance drafts. In ETI Finance's premium finance agreement, the customer agrees to assign to ETI Finance a security interest in any unearned return premiums that may become due upon the cancellation of the insurance policy. The insurance company sends this unearned return premium directly to ETI Finance if the insurance policy is cancelled. ETI Finance deducts any amounts owed under the premium finance agreement; if the amount of unearned return premium exceeds the amount the customer owes ETI Finance under the premium finance agreement, ETI Finance remits the balance owed to the customer to the insurance agent; if the amount of unearned return premium is insufficient to cover the amount the customer owes ETI Finance, ETI Finance bills the insurance agent for the balance owed under the premium finance agreement. ETI Finance handles unearned return premium credits and debits on an account current basis whereby a bi-monthly statement is prepared for each of the agents with whom it does business. The statement lists customers and all debits and credits to the agent's account for each of the customers listed. When an insurance policy is cancelled, the agent statement includes the amount of unearned return premium received by ETI Finance from the insurance company, and shows whether the customer is owed money, which is shown as a credit to the agent's account, or whether the agent owes ETI Finance money, which is shown as a debit to the agent's account. All of the debits and credits are totalled on the bi-monthly statement; if a total credit is shown, an ETI Finance check is included with the statement; if a total debit is shown, the agent is required to send ETI Finance a check to cover the amount owed. ETI Finance's agent statement advises the agent to review the statement carefully because the agent might owe a customer a refund. If a customer pays the agent the full premium and the agent then pays the premium with an agency check, the insurance company sends the agent an unearned return premium. It is the agent's responsibility to refund the unearned return premium to the customer. In addition to paying a customer any unearned return premium received upon cancellation of a policy, the agent is responsible for refunding any unearned commissions the agent was paid on the policy. Either the insurance company or the agent calculates the amount of the unearned commission, and this is included in the payment to the customer. At all times material to this proceeding, Alida High, nee Watson, held a "2-20 license" allowing her to sell property and casualty insurance in Florida. She was employed by the A Able insurance agency and worked in the office located at 124 South Federal Highway, Pompano Beach, Florida. She began working for the A Able insurance agency in July 1999, and was paid a weekly salary plus commissions Mr. Pomerantz and Ms. High were authorized signatories on the A Able insurance agency's Bank of America checking account number 91895073. Ms. High and Mr. Pomerantz signed the signature card on February 18, 2000. Ms. High functioned as a licensed insurance agent in the Pompano Beach office of the A Able insurance agency, and her responsibilities included working with customers to prepare applications for automobile insurance coverage, binding coverage with the insurance companies, receiving payment for the premiums on the policies or for the down payment on a premium finance agreement if the premium was financed, preparing the application package to be sent out to the insurance company, and issuing temporary identification cards. If a customer of the A Able insurance agency paid his or her premium for a policy in full, the cash or check was deposited in the agency's account, and the insurance agency issued a check payable to the insurance company for the premium minus the agency's commission. In this circumstance, Ms. High prepared the application package and placed it on Mr. Pomerantz's desk so that he could write the agency's check and send the application package and check to the appropriate insurance company. Ms. High followed this procedure throughout her employment at the A Able insurance agency, in accordance with the directions Mr. Pomerantz gave her when she began working for the A Able insurance agency. If one of Ms. High's customers financed part of the premium with a premium financing company, Ms. High routinely issued the drafts of the premium finance company for the premium owed for an insurance policy, and she mailed the draft and the application package to the insurance company. Ms. High also occasionally prepared and signed checks on the A Able insurance agency's Bank of America checking account payable to "BCRC"2 to pay for automobile tags and titles issued by Broward County and other, minor, miscellaneous items. During the summer and early fall of 2002, Ms. High prepared checks at Mr. Pomerantz's request and signed his name. Most of these checks were to "BCRC", but several were to pay for office expenses, and one was written to U.S. Security Insurance Company to pay a customer's additional insurance premium. Ms. High wrote checks on the A Able insurance agency account only when she had Mr. Pomerantz's permission to do so. Writing checks was not among her normal responsibilities at the A Able insurance agency, and Ms. High would not write checks on the agency's account without Mr. Pomerantz's express permission because she did not know anything about the account balance. Beginning in the summer of 2002, Mr. Pomerantz's interest in the business of the A Able insurance agency waned, according to Ms. High, and his visits to the office became more and more infrequent. Initially during this period Mr. Pomerantz came in every few days and wrote checks and sent application packages out to insurance companies, but eventually applications for insurance prepared and bound by Ms. High began to accumulate on Mr. Pomerantz's desk. When Ms. High reminded Mr. Pomerantz that the applications on his desk had been bound and needed agency checks cut so they could be sent to the insurance companies, Mr. Pomerantz told her to leave them, that he would take care of it. Ms. High became more and more concerned about the backlog of applications on Mr. Pomerantz's desk, and, when he was in the office, she constantly reminded him of the need to send the applications to the insurance companies. Count I: John Thierwechter In February 2002, John Thierwechter went to the A Able insurance agency to purchase the minimum amount of automobile insurance required by law for a 1993 Nissan Sentra. The total premium quoted was $1,550.00 for personal injury protection/physical damage/comprehensive/collision coverage with Ocean Harbor and for a policy covering reimbursement of the $500.00 deductible on the Ocean Harbor policy. Mr. Thierwechter decided to finance the premium, and Ms. High completed an ETI Finance premium finance agreement, which Mr. Thierwechter signed on February 21, 2002. The first installment on the Premium Finance Agreement signed by Mr. Thierwechter was due on March 23, 2002. Mr. Thierwechter owed a down payment of $289.00 under the Premium Finance Agreement. On February 22, 2002, he paid $200.00 of the down payment in cash, and he received a receipt signed by Mr. Pomerantz. Mr. Thierwechter returned to the agency on February 25, 2002, to pay the remaining $89.00, and he received a receipt signed by Ms. High. Mr. Thierwechter had previously had a bad experience with Ocean Harbor, and, within a few weeks, he purchased automobile insurance coverage from GEICO Casualty Company. This coverage was effective March 16, 2002. In a letter dated March 15, 2002, that he hand-delivered to the A Able insurance agency, Mr. Thierwechter requested that his Ocean Harbor policy be cancelled and that he receive a refund of "the unearned premium" . . . within the next 30 days." On March 16, 2002, Ms. High completed an All Purpose Endorsement requesting that Ocean Harbor cancel Mr. Thierwechter's insurance coverage effective March 16, 2002. This request was received by Ocean Harbor on March 23, 2002. Because Mr. Thierwechter had financed the premium for his Ocean Harbor policy with ETI Finance, Ocean Harbor sent the unearned return premium to ETI Finance, pursuant to the Premium Finance Agreement signed by Mr. Thierwechter. ETI Finance received the cancellation notice and check for the unearned return premium from Ocean Harbor on April 9, 2002. The amount of the unearned return premium was included on the agent's statement for the A Able insurance agency dated May 1, 2002. That statement reflected return premium in the amount of $757.35. This amount was less than the amount Mr. Thierwechter owed ETI Finance because Mr. Thierwechter had not made any of the monthly installments required by the Premium Finance Agreement. As a result, the May 1, 2002, agent's statement recorded a $63.47 debit against the account of the A Able insurance agency. The A Able insurance agency was responsible for paying Mr. Thierwechter the amount of unearned commission, if any, that exceeded the $63.47 it owed to ETI Finance. Pursuant to Mr. Pomerantz's calculations, Mr. Thierwechter was owed $70.16 in unearned commission retained by the A Able insurance agency, and Mr. Pomerantz wrote Mr. Thierwechter a check for that amount on the A Able insurance agency account on July 1, 2002. Mr. Thierwechter picked up the check on or about July 22, 2002. Count III: Shirley Shaffer On or about June 11, 2001, Shirley Shaffer purchased a 1996 Kia Sephia from the Coral Springs Auto Mall. Before Ms. Shaffer could drive the car off of the car lot, the car dealer required her to secure automobile insurance. The dealer called a person to assist Ms. Shaffer, and a man arrived at the dealership within a short period of time. This man presented Ms. Shaffer with a card on which was printed "Wide World of Insurance"; there was no individual's name on the card, but the card showed a Margate, Florida, address. Ms. Shaffer wanted to purchase only the basic coverage, and a U.S. Security application for a "physical damage only" policy was prepared specifying comprehensive and collision coverage only. The application identified the insurance agency as the A Able insurance agency, located in Pompano Beach. According to a notation on the application, the comprehensive and collision insurance coverage was bound with U.S. Security at 3:00 p.m. on June 12, 2001.3 In addition, Ms. Shaffer signed a Summary of Coverages and Cost Breakdown form carrying the name "Wide World of Insurance" and an address in Margate, Florida. This form was also dated June 12, 2001. At some point during the application process at the Coral Springs Auto Mall, the person representing the insurance agency went outside the dealership offices, telling Ms. Shaffer that he was going to take photographs of her car to attach to the application for insurance coverage. Ms. Shaffer financed the premium for her automobile insurance policy, and she paid a deposit of $200.00, which she charged on her credit card. U.S. Security received Ms. Shaffer's application for comprehensive and collision coverage on June 18, 2001, and a Physical Damage Policy was issued to Ms. Shaffer on June 26, 2001, with a policy term of June 13, 2001, to June 13, 2002. Ms. Shaffer received a copy of this policy. The agent identified on the policy was the A Able insurance agency in Pompano Beach. A Notice of Cancellation dated July 18, 2001, was sent to Ms. Shaffer by U.S. Security. In the notice, Ms. Shaffer was advised that her insurance policy would be cancelled effective September 2, 2001, because her application was incomplete. After she received the cancellation notice, Ms. Shaffer called the Margate office of the Wide World of Insurance insurance agency because that was the office whose address was on the card she was given when she applied for the U.S. Security insurance policy. Someone at the Margate office told her that, because she lived in Pompano Beach, her account was handled by the agency's Pompano Beach office and that she should call that office. Ms. Shaffer contacted the Pompano Beach office and spoke to a man who told her that everything about her policy looked fine in the computer and that she should not worry about the letter from U.S. Security. After this conversation, she contacted the Margate office again and was told that they knew nothing about the problem with the policy at that office. Ms. Shaffer then telephoned U.S. Security and was told that her insurance agent needed to take care of the problem, which she was led to believe was minor. Finally, Ms. Shaffer received a letter dated August 7, 2001, from a person named Gary. The letter carried the name "Wide World of Insurance" and the Margate address. In the letter, Gary requested that Ms. Shaffer "PLEASE STOP BY OUR OFFICE SO WE MAY TAKE PICTURES OF THE KIA. ORIGINAL ONES DID NOT COME OUT. ALSO NEED REGISTRATION. IMPT!!!!!" Gary stated in the letter that Ms. Shaffer needed to provide the requested information by August 21, 2001, "to avoid any further delays or cancellation requests from the insurance company." When she received the August 7, 2001, letter, which she recalled was on a Friday, Ms. Shaffer called the Margate office and arranged to bring her car in for photographs at 8:00 a.m. the following Monday.4 Ms. Shaffer arrived at the Margate office slightly before 8:00 a.m., and a few minutes later the man who had taken her application at the Coral Springs Auto Mall arrived at the office and took pictures of her car. Ms. Shaffer also provided a copy of her automobile registration, as requested in the August 7, 2001, letter. Ms. Shaffer also purchased personal liability insurance coverage from the Pompano Beach office of the A Able insurance agency, and she charged the $659.00 premium on her Visa credit card. Ms. Shaffer handled the entire transaction during a telephone conversation with a person in the Pompano Beach office, but she does not know the name of the person with whom she spoke. When Ms. Shaffer went to the Margate office in response to Gary's letter of August 7, 2001, she was given a receipt dated August 6, 2001, for the $659.00 premium she had paid for "addl liability coverage"; it was stated on the receipt that the coverage would be effective from September 1, 2001, to June 12, 2001. The person who signed the receipt was not identified, and the signature is indecipherable. The transaction date shown on Ms. Shaffer's credit card statement was August 7, 2001, and the statement showed that the charge was credited to "A ABLE WIDE WORLD OF I POMPANO BEACH FL." Ms. Shaffer also received a Florida Automobile Insurance Card confirming that she had personal injury protection benefits, property damage liability, and bodily injury liability coverage with U.S. Security; the agent identified on the card was "A Able Wide World of Insurance," with a post office box address in Margate, Florida. U.S. Security cancelled Ms. Shaffer's physical damage policy effective September 2, 2001, because her application was incomplete. U.S. Security sent a check dated September 26, 2001, to ETI Finance for $323.85, which was the unearned return premium owing on Ms. Shaffer's policy. U.S. Security never received an application for the "additional liability coverage" Ms. Shaffer requested and paid for on August 7, 2001. On October 22, 2001, Ms. Shaffer was caught in a flash flood, and she drove her Kia automobile into an area of water that was so deep her automobile floated. At one point, a bus drove through the water near the Kia, and the wake caused the Kia to wash into railroad ties that were used in the yard of a nearby home for landscaping. The railroad ties tore off the front of the car. The damage to the Kia was so extensive that it was considered a total loss. Ms. Shaffer filed a claim with U.S. Security, and received a letter dated October 25, 2001, from Corporate Claim Services, Inc., acknowledging receipt of her claim on behalf of U.S. Security. Ms. Shaffer then received a letter from Corporate Claim Services, Inc., dated October 26, 2001, advising her that her insurance policy with U.S. Security was cancelled effective September 2, 2001. Because Ms. Shaffer had no automobile insurance at the time her car was damaged, she had the Kia repaired at her own expense and incurred substantial expense and inconvenience because she had to arrange for alternative transportation during the year-and-a-half it took to have her car repaired. Ms. Shaffer did not receive any unearned premium or unearned commission refund after the cancellation of her policy. Ms. Shaffer never did business in person with Mr. Pomerantz. In fact, she met him for the first time the week before the final hearing, when her deposition was taken. Count IV: Terensinha Honczarenko On or about March 30, 2001, Terensinha Honczarenko went to the Margate office of the Wide World of Insurance insurance agency to purchase automobile insurance for a newly- purchased Toyota Corolla.5 Ms. Honczarenko had done business with the insurance agency located in Margate for a number of years. A man working at the Margate office named Greg completed Ms. Honczarenko's application for automobile insurance coverage with Southern Group, which she signed.6 The A Able insurance agency in Pompano Beach was identified in the application as the agent producing the application. Coverage on Ms. Honczarenko's policy was bound on the policy on March 30, 2001, and Southern Group received the application on April 4, 2001. The underwriting review of Ms. Honczarenko's application was completed on May 29, 2001, and Southern Group issued a policy to Ms. Honczarenko on June 26, 2001, with an effective date of March 31, 2001, through March 31, 2002. The A Able insurance agency in Pompano Beach was identified on the policy as the insurance agent. Ms. Honczarenko paid a $275.00 down payment on the total policy premium of $1098.00, and financed the remainder of the premium with ETI Finance.7 The Premium Finance Agreement was dated March 30, 2001, and was processed by ETI Finance on April 18, 2001. Ms. Honczarenko made payments pursuant to the Premium Finance Agreement from April 30, 2001, until August 2001. Ms. Honczarenko regularly made these payments at the Margate office, sometimes paying in cash and sometimes paying by check. When she took her August 2001 payment to the Margate office, Greg told her that there was a problem with her insurance policy and that she should come back in two days. When she returned to the Margate office, she was told that her automobile insurance policy had been cancelled. When she asked for her money back, Greg refused. At some point in June 2001, Southern Group sent Ms. Honczarenko a notice at her correct address advising her that she owed $263.00 in additional premium on Southern Group automobile insurance policy. She was given three options: To pay the additional premium by June 28, 2001, and keep the policy in force; to request by July 18, 2001, that Southern Group cancel the policy and refund any unearned premium; or to do nothing, in which case the policy would be cancelled effective July 18, 2001, and the unearned premium refunded. Ms. Honczarenko claims she never received this notice. Southern Group also sent Ms. Honczarenko a notice dated June 21, 2001, to her correct address, advising her that the vehicle identification number on her insurance application did not correspond to the vehicle identification number in their records. Southern Group asked Ms. Honczarenko to check her registration and return the letter to Southern Group with the correct information set forth on the bottom of the letter. Ms. Honczarenko claims she never received this notice. Southern Group also sent a copy of the notice to the "Wide World of Ins Pompano Bch." In a letter dated June 29, 2001, "Gary" advised Ms. Honczarenko that she needed to supply the Margate office with a copy of the registration for her 1985 Toyota. This letter was sent to the same address as the notices sent Ms. Honczarenko by Southern Group. Ms. Honczarenko received the June 29, 2001, letter from the Margate office of the Wide World of Insurance insurance agency.8 Because Southern Group received no response from Ms. Honczarenko to its notice that she owed additional premium on her automobile insurance policy, it cancelled her policy effective July 18, 2001, and sent her a notice of cancellation dated June 29, 2001. The notice was sent to the same address as was the notice of additional premium and the notice that there was a discrepancy in her automobile identification number. Ms. Honczarenko received the notice of cancellation. On August 10, 2001, Southern Group sent a check to ETI Finance for unearned return premium on Ms. Honczarenko's automobile insurance policy in the amount of $572.90. ETI Finance received the check on August 16, 2001, and included Ms. Honczarenko's unearned return premium in the statement it sent to the A Able insurance agency in Pompano Beach on or about August 31, 2001. The statement showed that ETI Finance had received $572.90 in unearned return premium on Ms. Honczarenko's account, and it included a credit to the A Able insurance agency of $71.95. Ms. Honczarenko did not receive any refund of unearned return premium or unearned commission from A Able insurance agency. Count V: Cecil Worrall On June 10, 2002, Cecil Worrall went to the A Able insurance agency in Pompano Beach to renew his automobile insurance within Southern Group. At that time, he had done business with A Able insurance agency in Pompano Beach for eight-to-ten years. Mr. Pomerantz completed Mr. Worrall's application, which Mr. Worrall signed. Mr. Worrall gave Mr. Pomerantz a check in the amount of $570.00 as payment of the full amount of the renewal premium. Mr. Pomerantz gave the application to Ms. High and expected her to bind the coverage and process the application. According to a notation of the application, coverage was bound on June 19, 2002, at 3:46 p.m., and, as was her custom, Ms. High put the application package on Mr. Pomerantz's desk for him to review, prepare an agency check for the premium net commission, and mail the application package and payment to Southern Group. Mr. Worrall's June 10, 2002, check was deposited into the account of "A Able Wide World of Insurance." Southern Group did not receive the application and agency check for the premium net commission on Mr. Worrall's renewal within the 72 hours required by Southern Group's agreement with Mr. Pomerantz. On July 12, 2002, a notice was sent to "Wide World of Insurance Pomp" at the A Able insurance agency address in Pompano Beach advising that Mr. Worrall's binder coverage had expired because Southern Group had not received the application.9 Southern Group advised the A Able insurance agency to check its records to make sure that the application package was not misplaced and further advised that a claim against the binder might result in a claim against its "Errors & Omissions Insurance." The Department of Insurance10 made an inquiry of Southern Group on October 16, 2002, regarding the status of Mr. Worrall's insurance policy, and Southern Group replied in a letter dated October 28, 2002, that, although coverage had been bound for Mr. Worrall, it had no record of having received Mr. Worrall's application and the premium payment or a response to its July 12, 2002, notice to the A Able insurance agency that the binder had expired. After Southern Group received the inquiry from the Department of Insurance, it sent a representative to the A Able insurance agency Pompano Beach office, where the Southern Group application for Mr. Worrall was retrieved. On December 10, 2002, Southern Group issued an automobile insurance policy to Mr. Worrall, with an effective date retroactive to June 26, 2002, the date the policy would have been effective had the application and premium payment been transmitted to Southern Group timely. Count VI: Cynthia Mousel Cynthia Mousel was a client of the A Able insurance agency Pompano office, and primarily Ms. High handled her business. On or about September 18, 2002, Ms. High completed an application within U.S. Security for automobile insurance coverage on behalf of Ms. Mousel. Ms. Mousel signed the application, and coverage was bound on September 18, 2002. Ms. Mousel paid the full premium of $524.00. As was her custom, Ms. High put the application package on Mr. Pomerantz's desk for him to review, prepare an agency check for the premium net commission, and mail the application package and payment to U.S. Security. In October 2002, the Department of Insurance sent an inquiry to U.S. Security regarding the status of Ms. Mousel's automobile insurance policy. In a letter dated October 30, 2002, U.S. Security advised the Department of Insurance that it had no record that, as of that date, it had received an application for automobile insurance coverage under Ms. Mousel's name.11 Count VII: Fred Hublitz Fred Hublitz was a long-time customer of the A Able insurance agency in Pompano Beach. On September 13, 2002, Mr. Hublitz visited the office, and Ms. High completed an Endorsement Request Form on his behalf to add coverage to his automobile insurance policy with Ocean Harbor for a 2000 Mercury Sable automobile. Mr. Hublitz signed the endorsement and wrote a check for $260.00, which was the full amount of the premium to add this coverage. The coverage was bound on September 13, 2002. As was her custom, Ms. High put the endorsement package on Mr. Pomerantz's desk for him to review, prepare an agency check for the premium net commission, and mail the endorsement and payment to Ocean Harbor. The check written by Mr. Hublitz on September 13, 2002, was deposited into the account of "A Able Wide World of Insurance." In a letter dated October 16, 2002, the Department of Insurance inquired of Ocean Harbor regarding the status of Mr. Hublitz's automobile insurance policy. Ocean Harbor responded in a letter dated November 7, 2002, that it had no record of having received the endorsement or premium payment for Mr. Hublitz's 2000 Mercury Sable. An Ocean Harbor representative went to the A Able insurance agency office in Pompano Beach on November 15, 2002, and picked up applications and endorsements for automobile insurance coverage. Among these documents was Mr. Hublitz's endorsement, and Ocean Harbor added the 2000 Mercury Sable to Mr. Hublitz's existing Ocean Harbor automobile insurance policy, effective retroactively.12 Count VIII: Lori O'Connell Lori O'Connell had obtained automobile insurance coverage from the A Able insurance agency in Pompano Beach. She had received a notice that her policy with Southern Group was to expire on August 14, 2002, and a friend, Joseph Balsamo, went to the A Able insurance agency office on July 9, 2002, and gave Ms. High a check for $364.00, which was full payment for the policy renewal. Ms. High bound the renewal on July 12, 2002. As was her custom, Ms. High put the application package on Mr. Pomerantz's desk for him to review, prepare an agency check for the premium net commission, and mail the renewal application package and payment to Southern Group. A month later, Ms. O'Connell had not received an insurance card or renewal policy, and Mr. Balsamo telephoned the A Able insurance agency Pompano Beach office and inquired about the policy. Ms. High told him that the insurance company was slow in processing the renewals and that Ms. O'Connell should receive the materials shortly. Ms. High knew, at the time, that the renewal application was sitting on Mr. Pomerantz's desk, waiting for him to write a check and mail the application and payment to Southern Group. Southern Group did not receive the renewal application and agency check for the premium net commission on Ms. O'Connell's renewal within the 72 hours required by Southern Group's agreement with Mr. Pomerantz. On August 2, 2002, a notice was sent to "Wide World of Insurance Pomp" at the A Able insurance agency address in Pompano Beach advising that Ms. O'Connell's binder coverage had expired because Southern Group had not received the renewal application.13 Southern Group advised the A Able insurance agency to check its records to make sure that the application package was not misplaced and further advised that a claim against the binder might result in a claim against its "Errors & Omissions Insurance." The Department of Insurance made an inquiry of Southern Group on October 16, 2002, regarding the status of Ms. O'Connell's renewal policy, and Southern Group replied in a letter dated October 28, 2002, that, although coverage had been bound for Ms. O'Connell on July 12, 2002, it had no record of having received Ms. O'Connell's renewal application and the premium payment or a response to its August 2, 2002, notice to the A Able insurance agency that the binder on Ms. O'Connell's renewal had expired. After Southern Group received the inquiry from the Department of Insurance, it sent a representative to the A Able insurance agency Pompano Beach office, where the Southern Group renewal application for Ms. O'Connell was retrieved. On November 26, 2002, Southern Group issued an automobile insurance policy renewal to Ms. O'Connell, with an effective date retroactive to August 14, 2002, the date the renewal would have been effective had the application and premium payment been transmitted to Southern Group timely. Count IX: Carol Scott On July 10, 2002, Ms. High prepared an application for automobile insurance coverage with Southern Group on behalf of Carol Scott. The premium for the coverage specified in the application was $655.00. Ms. High bound the coverage on July 10, 2002. Southern Group did not receive Ms. Scott's application and the agency check for the premium net commission within the 72 hours required by Southern Group's agreement with Mr. Pomerantz. On August 2, 2002, a notice was sent to "Wide World of Insurance Pomp" at the A Able insurance agency address in Pompano Beach advising that Ms. Scott's binder coverage had expired because Southern Group had not received the application. Southern Group advised the A Able insurance agency to check its records to make sure that the application package was not misplaced and further advised that a claim against the binder might result in a claim against its "Errors & Omissions Insurance." The Department of Insurance made an inquiry of Southern Group on October 16, 2002, regarding the status of Ms. Scott's automobile insurance policy, and Southern Group replied in a letter dated October 28, 2002, that, although coverage had been bound for Ms. Scott on July 10, 2002, it had no record of having received Ms. Scott's application and the premium payment or a response to its August 2, 2002, notice to the A Able insurance agency that the binder on Ms. Scott's application had expired. After Southern Group received the inquiry from the Department of Insurance, it sent a representative to the A Able insurance agency Pompano Beach office, where the Southern Group application for Ms. Scott was retrieved. On November 26, 2002, Southern Group issued an automobile insurance policy renewal to Ms. Scott, with an effective date retroactive to July 11, 2002, the date the renewal would have been effective had the application and premium payment been transmitted to Southern Group timely. Count X: Janice Misconis On or about June 25, 2003, Janice Misconis visited the A Able insurance agency office in Pompano Beach to renew her Ocean Harbor automobile insurance policy. Ms. High prepared a Summary of Coverages and Premium covering a 1990 Buick Skylark. Ms. High bound the coverage on June 24, 2002, for a renewal with a policy period commencing July 8, 2002. The premium shown on the summary totalled $570.00, and Ms. High prepared a receipt affirming that Ms. Misconis had paid the $570.00 renewal premium in full on June 25, 2002. In a letter dated October 16, 2002, the Department of Insurance inquired of Ocean Harbor regarding the status of Ms. Misconis's automobile insurance policy. Ocean Harbor responded in a letter dated November 7, 2002, that it had no record of having received an application or premium payment for Ms. Misconis's policy renewal. An Ocean Harbor representative went to the A Able insurance agency office in Pompano Beach on November 15, 2002, and picked up applications and endorsements for automobile insurance coverage. Among these documents was Ms. Misconis's renewal application, and Ocean Harbor issued a policy of automobile insurance coverage, effective retroactively to the date it would have been effective had the application and premium payment been forwarded to Ocean Harbor timely.14 Count IX: Diane Carroll In October 2001, Diane Carroll, a/k/a Diane Heinen, purchased an automobile insurance policy with the Aires Insurance Company ("Aires") from the Wide World of Insurance insurance agency in Margate. After she had an accident and her car was sitting in a repair shop, she cancelled this policy. In late January 2002, Ms. Carroll went again to the Wide World of Insurance office in Margate, and a person working in that office took her application for another automobile insurance policy. The policy was placed with Aires, and the total premium was $2,637.00. The effective date of the policy was February 1, 2002, for the term of one year. Ms. Carroll made a down payment of $660.00, and financed the balance of the premium with Assured Premium Finance Corporation, a company that is serviced by ETI Finance. Ms. Carroll made all of the payments required under the Premium Finance Agreement she signed in January 2002. Ms. Carroll took each of the payments to the Wide World of Insurance insurance agency office in Margate. On January 8, 2003, Ms. Carroll had an automobile accident. She called the Wide World of Insurance insurance agency in Margate to report a claim, and she was told that she did not have an insurance policy, that Aires "went under." The person at the Margate office of the Wide World of Insurance insurance agency told Ms. Carroll that she had been sent notification by mail. Ms. Carroll requested a copy of the letter, which she claims she did not receive. The letter is dated November 27, 2002, and bears the letterhead of "Wide World of Insurance," with a Margate post office address. The letter is addressed to Ms. Carroll at her then-correct address and provides notice that Aires has been "PLACED IN LIQUIDATION ON NOVEMBER 14, 2002, BY THE STATE OF FLORIDA. ALL INSURANCE POLICIES WITH THE ABOVE- CAPTIONED INSURANCE COMPANY SHALL CEASE AS OF 12:01 AM, DECEMBER 14, 2002. PLEASE CONTACT OUR OFFICE IMMEDIATELY TO REPLACE THIS INSURANCE COVERAGE." The name "A Able Wide World of Insurance" is included on the letter. There is no indication on the letter that it was sent by certified mail.15 Summary Count I: Mr. Thierwechter The evidence presented by the Department is sufficient to establish that the refund of unearned commission on Mr. Thierwechter's cancelled Ocean Harbor automobile insurance policy was not made timely by the A Able insurance agency, but was held by the A Able insurance agency from early May 2002, when the A Able insurance agency received the agent statement from ETI Finance showing the debit to the A Able insurance agency's account, until July 1, 2002, when Mr. Pomerantz issued a check for the amount of unearned commission the A Able insurance agency owed to Mr. Thierwechter. Count III: Ms. Shaffer The evidence presented by the Department is not sufficient to establish with the requisite degree of certainty that either Mr. Pomerantz or the Pompano Beach office of the A Able insurance agency was involved in any meaningful way in any transactions relating to Ms. Shaffer's physical damage automobile insurance policy. Although, during the summer and fall of 2001, the A Able insurance agency located in Pompano Beach and the Wide World of Insurance agency located in Margate had merged and were doing business as a single entity, Mr. Pomerantz was the agent in charge of the Pompano Beach office. There was no evidence presented to establish that Mr. Pomerantz ever operated in the Margate office or supervised the agents in that office. Even though the Pompano Beach office of the A Able insurance agency is identified as the agent on Ms. Shaffer's U.S. Security policy, there was no creditable evidence presented to establish that anyone in the Pompano Beach office prepared the application for Ms. Shaffer's physical damage insurance policy or was responsible for servicing the policy. The evidence presented by the Department regarding the "additional liability coverage" purchased by Ms. Shaffer is scanty. Although Ms. Shaffer handled the transaction over the telephone with a man in the Pompano Beach office of the insurance agency and the charge on Ms. Shaffer's credit card was credited to the A Able insurance agency in Pompano Beach, there is no evidence identifying the person who prepared the receipt for the premium payment. The totality of the evidence presented by the Department is not sufficient to support an inference that Mr. Pomerantz was personally involved in the transaction or that he knew or should have known of the transaction. Count IV: Terensinha Honczarenko The evidence presented by the Department is not sufficient to establish that Mr. Pomerantz caused Ms. Honczarenko's automobile insurance policy to be cancelled, either directly or through his negligence or the negligence of any of the agents working in the A Able insurance agency Pompano Beach office. All of her dealings were with the Margate office, and there was no evidence that a copy of the notice from Southern Group advising Ms. Honczarenko that she owed additional premium on her policy was sent to the A Able insurance agency at the Pompano Beach address or that it was the practice of Southern Group to send such notices to agents as well as to its insureds.16 The evidence presented by the Department is, however, sufficient to establish that A Able insurance agency received notice from ETI Finance that it owed Ms. Honczarenko a refund of unearned return premium in the amount of $71.95 and that Ms. Honczarenko did not receive this refund. Counts V, VI, VII, VIII, IX, and X: Mr. Worrall, Ms. Mousel, Mr. Hublitz, Ms. O'Connell, Ms. Scott, and Ms. Misconis The evidence presented by the Department is sufficient to establish that Mr. Pomerantz was personally responsible for writing agency checks for premium net commission and for sending applications for automobile insurance coverage generated in the A Able insurance agency Pompano Beach office and premium checks received in that office to the various insurance companies. During the summer and early fall of 2002, Ms. High constantly reminded Mr. Pomerantz that the applications accumulating on his desk needed attention, and Mr. Pomerantz assumed the responsibility for handling the applications when he told her that he would handle them. The evidence presented by the Department is also sufficient to establish that Mr. Pomerantz failed to forward the applications and premiums for Mr. Worrall, Ms. Mousel, Mr. Hublitz, Ms. O'Connell, Ms. Scott, and Ms. Misconis and that the A Able insurance agency had the benefit of the premium payments made by these individuals from the time the coverage binders expired until such time as the policy applications and payments were received by the various insurance companies who issued policies with coverage retroactive to the date of the applications and premium payments. Count XI: Ms. Carroll The evidence presented by the Department is not sufficient to establish with the requisite degree of certainty that either Mr. Pomerantz or any employee of the Pompano Beach office of the A Able insurance agency was involved in the transactions with respect to Ms. Carroll's automobile insurance policy with Aires. All of Ms. Carroll's business dealings with regard to this policy were at the Margate office of the Wide World of Insurance insurance agency. Even though the name "A Able Wide World of Insurance" appears on the letter dated November 27, 2002, notifying Ms. Carroll that Aires was in liquidation and that she needed to replace her automobile insurance policy, there was no evidence presented to establish that anyone in the Pompano Beach office prepared the application for Ms. Carroll's policy or had any dealings with her on this or any other automobile insurance policy.
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 that Jay Lawrence Pomerantz 1. Violated Sections 626.561(1), 626.611(4), (7), and (10), and 626.621(2) and (6), Florida Statutes (2002) with respect to Counts I, IV, V, VI, VII, VIII, IX, and X of the Amended Administrative Complaint filed October 14, 2003; Dismissing Counts II, III, and XI of the Amended Administrative Complaint20; and Revoking the property and casualty insurance agent's license of Jay Lawrence Pomerantz. DONE AND ENTERED this 30th day of April, 2004, in Tallahassee, Leon County, Florida. S PATRICIA HART MALONO 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 30th day of April, 2004.
