The Issue Whether petitioner should take disciplinary action against respondent for the reasons alleged in the administrative complaint?
Findings Of Fact Daniel Bruce Caughey has been licensed by petitioner as an insurance agent at least since 1981. He began working for Caughey Insurance Agency, Inc. in 1971 as a file clerk. Once he was licensed, he worked as a salesman. In 1977, he assumed the executive vice-presidency of the agency, a position he still holds. Until the middle of March, 1983, respondent'- father, William Edward Caughey, managed the agency. He continues to own all 1,000 shares the corporation has issued, although he has not written a policy since he turned management of the agency over to the respondent and his brother Randy in 1983. In 1982 and thereafter until Jordan Roberts and Company, Inc. (JORO), a multi-line general agency, stopped underwriting automobile insurance, Caughey Insurance Agency, Inc. brokered automobile insurance through JORO. When an account current bookkeeping dispute arose between Caughey Insurance Agency, Inc. and JORO, William Edward Caughey retained an accounting firm, Sizemore. On Sizemore's advice, he rejected JORO's claim for more than $20,900. On October 21, 1983, a JORO representative told Daniel Bruce Caughey that JORO would no longer deal with Caughey Insurance Agency, Inc. unless he signed an "Individual Guarantee Agreement," personally guaranteeing the insurance agency's corporate indebtedness; and executed a promissory note in JORO's favor in the amount of $16,941. Respondent executed the documents. On December 3, 1986, JORO brought suit against the corporation and respondent personally. No. 86-21454 (Fla. 13th Cir.). On August 13, 1987, the court entered judgment against both defendants in the amount of $6,595.94. Jordan Roberts & Co. v. Cauqhey, No. 86-21454 (Fla. 13th Cir.; Aug. 13, 1987). Neither respondent nor the agency has paid the judgment. With the possible exception of filing the complaint that eventuated in the present proceedings, JORO has made no effort to collect. In Count I, JORO's complaint alleges the existence of a brokerage agreement between JORO and Caughey Insurance Agency, Inc., entered into "[o]n or about April 27, 1982"; execution and delivery of respondent's guarantee "[o]n or about October 21, 1983"; and the agency's indebtedness "for premiums on policies underwritten by [JORO] for the sum of $20,975.36." Petitioner's Exhibit No. 3. In Count II, the complaint also alleges execution and delivery of a promissory note "[o]n or about October 21, 1983," without, however, explicitly indicating its relationship (if any) with the guarantee executed the same date. Petitioner's Exhibit No. 3. The final judgment does not specify which count(s) JORO recovered on. Petitioner's Exhibit No. 4. Attached to the complaint are copies of the promissory note, executed by ?CAUGHEY INSURANCE AGENCY, INC., By: D B Caughey Vice President"; the guarantee, executed in the same way; and the brokerage agreement, executed on behalf of Caughey Insurance Agency by "William E. Caughey, President." Although the Individual Guarantee Agreement names respondent as guarantor in the opening paragraph, the corporation is shown as guarantor on the signature line. At hearing, both Daniel Bruce Caughey and William Edward Caughey testified that neither had withheld premiums owed JORO, and this testimony was not controverted.
Recommendation It is accordingly, RECOMMENDED: That petitioner dismiss the administrative complaint filed against respondent. DONE and ENTERED this 2nd day of April, 1990, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 2nd day of April, 1990. APPENDIX Petitioner's proposed findings of fact Nos. 1, 2, 4, 5, 6, 8 and 9 have been adopted, in substance, insofar as material. With respect to petitioner's proposed finding of fact No. 3, respondent became an officer after the brokerage agreement had been executed. With respect to petitioner's proposed finding of fact No. 7, the judgment could also be based on the promissory note. With respect to petitioner's proposed finding of fact No. 6, respondent did not sign as an individual guarantor. Respondent's proposed findings of fact Nos. 1 through 10 and 12 through 18 have been adopted, in substance, insofar as material. With respect to respondent's proposed finding of fact No. 11, evidence respondent himself adduced showed that the judgment had not been satisfied. COPIES FURNISHED: Robert V. Elias, Esquire 412 Larson Building Tallahassee, FL 32399-0300 Bruce A. McDonald, Esquire McDonald, Fleming & Moorehead 700 South Palafox Street Suite 3-C Pensacola, FL 32501 Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, FL 32399-0300 Don Dowdell, General Counsel Department of Insurance and Treasurer 131 Montgomery Building 2562 Executive Center Circle, East Tallahassee, FL 32399-0300
The Issue As to DOAH Case No. 90-3698: Whether Howell Vinson Peavy's insurance licenses should be disciplined for violations of Sections 626.611(7) and (14) and 626.621(8) F.S., and As to DOAH Case No. 90-6615: Whether Howell Vinson Peavy should be licensed to represent Bankers and Shippers Insurance Company as a general lines insurance agent.
Findings Of Fact Mr. Peavy is currently licensed and eligible for licensure and appointment in Florida as a life and health and general lines agent. Mr. Peavy began work at the Citizens (formerly Ellis) Bank of Bunnell, Florida in 1952. A director of that bank owned an insurance agency in town. In 1964, the owner of the bank, Mr. Creal; his mother; the bank attorney; and Mr. Peavy bought the insurance agency. Mr. Peavy continued to work at the Citizens Bank in the mornings and at the insurance agency in the afternoons and evenings. Mr. Peavy has been licensed by the Department of Insurance since purchasing the agency in 1964 and has had no previous disciplinary complaints against his insurance license(s) in the ensuing 26 years. Approximately ten years ago, in 1980, during a stressful and transitional period of the Citizens Bank operation, a customer came into Mr. Peavy's office at the bank and sought to pay in excess of $10,000 in cash in connection with a land transaction. Mr. Peavy received the money and turned it over to a bank secretary to make the deposit. The secretary subsequently put the money in the bank's loan department cash drawer instead of taking it to the head teller, who was the bank employee responsible for filing the Currency Transaction Report required by the federal Internal Revenue Service for such cash transactions. Mr. Peavy did not initially know that a Currency Transaction Report had not been filed. Indeed, he had never personally filled out or filed such a report before, and doing so was not normally his responsibility. Mr. Peavy received no personal gain from the failure to file the report. On July 13, 1985, approximately five years after Mr. Peavy's failure to file the Currency Transaction Report and five years before the instant state disciplinary charges were filed, a seven-count indictment was filed against Mr. Peavy in U.S. District Court in and for the Middle District of Florida, Case No. 85-99CR-JAX-12. Approximately five years ago, on October 4, 1985, Mr. Peavy entered a plea of guilty to one count of violating Title 18, USC Sections 1001 and 1002 in that he knowingly and willfully concealed and covered up and caused to be concealed or covered up, material facts within the jurisdiction of the Department of the Treasurer of the United States to wit: knowingly and willfully failing to file a Currency Transaction Report for a transaction in excess of $10,000. It appears that a total of $50,000 cash somehow wound up in an escrow account at the bank, but there is no evidence or admission to show that either Mr. Peavy or the bank realized any profit or benefit from the transaction. The transaction also was unconnected to Mr. Peavy's insurance business. Mr. Peavy's federal guilty plea was accepted, and on December 4, 1985, he was adjudicated and convicted of the named felony. U.S. District Court Judge Howell Melton imposed a $5,000 fine and placed Mr. Peavy on three years' probation. Prior to entering his guilty plea, Mr. Peavy had executed a "Stipulated Factual Basis for the Plea of Guilty to Count One of the Indictment." This document was not offered in evidence at formal hearing, but upon Mr. Peavy's testimony, it is found that he had the opportunity to review and sign this document before entering his guilty plea and knew that it confirmed his willful failure to file the Currency Transaction Report and that his willful failure to file the Currency Transaction Report was for the purpose of concealing the $50,000 cash transaction from the Internal Revenue Service. At formal hearing, Mr. Peavy elaborated on his reasons for entering his plea of guilty in 1985 as being, in part, due to monetary reasons; his lawyer had advised him of the difference in cost of going to court and fighting the charges contained in seven counts as compared to working out a plea agreement to one count. There is no dispute that Mr. Peavy pleaded guilty and was convicted of a felony punishable by imprisonment of one year or more under the law of the United States of America. However, at the time Mr. Peavy entered his plea, Florida's insurance disciplinary statutes did not specifically address federal felonies. The material state statutes in effect at the time of Peavy's failure to file, at the time of his plea, and at the time of his conviction read: 626.611 Grounds for compulsory refusal, suspension, or revocation of agent's, solicitor's, or adjuster's license or service representative's, supervising or managing general agent's, or claims investigator's permit.--The department shall deny, suspend, revoke, or refuse to renew or continue the license of any agent, solicitor, or adjuster or the permit of any service representative, supervising, or managing general agent, or claims investigator, and it shall suspend or revoke the eligibility to hold a license or permit of any such person, if it finds that as to the applicant, licensee, or permittee any one or more of the applicable grounds exist: * * * (14) Having been found guilty or, or having pleaded guilty or nolo contendere to, a felony in this state or any other state which involves moral turpitude, without regard to whether a judgement of conviction has been entered by the court having jurisdiction of such cases. * * * 626.621 Grounds for discretionary refusal, suspension or revocation of agent's, solicitors, or adjuster's license or service representatives, supervising or managing general agent's, or claims investigator's permit.--The department may, in its discretion, deny, suspend, revoke, or refuse to renew or continue the license of any agent, solicitor, or adjuster or the permit of any service agent, solicitor, or adjuster or the permit of any service representative, supervising or managing general agent or claims investigator, and it may suspend or revoke the eligibility to hold a license or permit of any such person, if it finds that as to the applicant, licensee, or permittee any one or more of the following applicable grounds exist under circumstances for which such denial, suspension, revocation, or refusal is not mandatory under Section 626.611: * * * (8) Having been found guilty of, or having pleaded guilty or nolo contendere to a felony in this state or any other state, without regard to whether a judgment of conviction has been entered by the court having jurisdiction of such cases. Mr. Peavy paid his fine, successfully completed his probation, and was granted restoration of his civil rights on January 13, 1989, pursuant to Article IV, Section 8, Constitution of the State of Florida. Robert Gayle Mercer is a Florida-licensed insurance agent in good standing. He was tendered and accepted over objection as an expert in the business of insurance. Mr. Mercer also has served for many years as a director of a state bank located in Kissimmeee, Florida. The bank of which Mr. Mercer is a director is substantially similar in all respects to the bank in Bunnell, Florida, where Mr. Peavy's legal difficulties arose. As a bank director, Mr. Mercer is familiar with the necessity that banks file Currency Transaction Reports. It was Mr. Mercer's expert professional opinion, rendered within his education, training, and experience as an insurance agent, that the failure to file a Currency Transaction Report is not directly related to the business of insurance and that such failure has not rendered Mr. Peavy unfit or untrustworthy to engage in the business of insurance. In assessing the weight and credibility to be assigned to Mr. Mercer's expert opinion, the undersigned is not unmindful that at some point in time the witness Mercer, and the accused, Peavy, practiced the insurance business together, but due to the lapse of time and the removal of Mr. Mercer from the immediate geographical community wherein Mr. Peavy resides and practices, Mr. Mercer's testimony is found to be credible in all respects. The agency offered no expert testimony/evidence to refute Mr. Mercer's opinion. Mr. Peavy was held in the highest esteem by business, professional, and community service colleagues at the time the federal charges arose, plea was entered, and conviction adjudged. At that time, Mr. Peavy attempted to resign as a member of the Flagler County Chamber of Commerce; his colleagues, knowledgable of the federal charges, refused to accept his resignation. Many prominent community leaders knowledgeable of the nature of the federal charges also wrote to Judge Melton extolling Mr. Peavy's virtues and urging that he be placed on probation. Mr. Peavy has lived in Bunnell, Florida, since 1939, except for a short period of military service. During the whole of that time, he has been a community leader and volunteer, serving at various times on the City Commission, the County School Board, the County Chamber of Commerce, and as a Governor- appointed member of the County Housing Authority. He is active in church and in service and charity organizations, particularly as a fund raiser for the Cystic Fibrosis Foundation, the March of Dimes, and the Humane Society. Mr. Peavy's current reputation in his community is one of trust, confidence, fair dealing, and a respect for the rights of others. Upon the direct testimony of Captain C. B. Eisenbach, a retired captain of the Flagler County Sheriff's Department, and Mrs. Etta Peterson, Flagler County Supervisor of Elections, each rendered by deposition, and upon the hearsay evidence which may legitimately be characterized as "explaining or supplementing" direct evidence pursuant to Section 120.58(1) F.S., it is found that Mr. Peavy has consistently maintained and currently maintains an exemplary reputation in the community for honesty, trustworthiness, and good moral character, as well as a reputation for truth and veracity. In making the foregoing finding of fact, the undersigned has considered the somewhat vague understanding Ms. Peterson expressed with regard to the nature of Mr. Peavy's very stale federal crime/conviction but does not find that her vagueness on that legal concept detracts from the credibility or significance of her testimony concerning Mr. Peavy's current reputation and good character.
Recommendation Upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Insurance enter a Final Order dismissing the administrative complaint in Case No. 90-3698 and granting Peavy a license to as a general lines agent for Bankers and Shippers Insurance in Case No. 90-6615. DONE and ENTERED this 4th day of February, 1991 at Tallahassee, Florida. ELLA JANE P. DAVIS, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 4th day of February, 1991. APPENDIX TO RECOMMENDED ORDER The following constitute specific rulings pursuant to Section 120.59(2) F.S. upon the parties' respective proposed findings of fact (PFOF): Department of Insurance PFOF: 1, 2, 3, and 4 are all accepted. Peavy's PFOF: 1-5, 7-10, and 12 are accepted and adopted with minor modifications to better express the record as a whole and to eliminate legal conclusions. 6, and 11 are rejected as subordinate or unnecessary to the facts as found; admissible and reliable hearsay has been assessed within the RO. COPIES FURNISHED: Albert J. Datz, Esquire Datz, Jacobson and Lembcke Suite 2902 Independent Square Jacksonville, Florida 32202 W. Douglas Hall, Esquire R. Vincent Russo, Esquire Cynthia S. Tunnicliff, Esquire Carlton, Fields, Ward, Emmanuel, Smith & Cutler, P.A. Post Office Drawer 190 Tallahassee, Florida 32302 John C. Jordan, Esquire Division of Legal Services 412 Larson Building Tallahassee, Florida 32399-0300 Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, FL 32399-0300
Findings Of Fact Respondent is a resident of the State of Illinois and is employed by Mutual Benefit Life Insurance Company as an associate, selling life and health insurance. He has been licensed by the State of Illinois as an insurance agent for 22 years and has engaged in the insurance business for that length of time. On or about February 26, 1988, the Florida Department of Insurance advised Respondent, by letter, that his application for taking the exam was denied for the following reasons: On or about January 11, 1982 you pleaded guilty to the offense of Forgery, a felony involving moral turpitude as contained in Count II of a Bill of Indictment for Case Number 81CF299. You failed to divulge the fact on your application for qualification as a nonresident agent that on or about April 28, 1982, your licensing authority in the State of Illinois was revoked; and that on or about December 14, 1982, the Director of Insurance's Order of April 28, 1982 revoking your licensing authority was rescinded and you were required to pay a civil penalty of One Thousand dollars ($1,000.00). The Department cited Section 626.785(1); 626.611(1), (2), (7) and (14); and Section 626.621(8), Florida Statutes, as authority for its action. In the latter part of 1977, Respondent sold to Dr. Hanshaw, of Quincy, Illinois, a $100,000.00 life insurance policy on each of Dr. Hanshaw's two children. The cash value of Dr. Hanshaw's existing life insurance was used to pay for the premiums on the children's policies. In 1979, the children's policies had lapsed due to Respondent's inability to get Dr. Hanshaw, owner of the policies, to execute a form reinstating the policies. Finally, after repeated attempts to obtain Dr. Hanshaw's signature on the reinstatement forms, and after a telephone conversation with Dr. Hanshaw, Respondent caused a person in Respondent's office to sign Dr. Hanshaw's name to the reinstatement forms in order to reinstate the insurance. Respondent then transmitted the forms to the home office and the policies were reinstated. Respondent's total compensation for the reinstatement was $30.68. Respondent felt he had the permission of Dr. Hanshaw to sign Dr. Hanshaw's signature to the forms. Approximately one year later, Dr. Hanshaw decided to surrender the policy on his life, and found the surrender value to be approximately $2,700.00 less than he felt it should be. The difference was due to the year's worth of premiums on the children's policies which had been deducted from the cash surrender value of Dr. Hanshaw's policy after the children's policies had been reinstated. Dr. Hanshaw promptly inquired of Respondent about the cash surrender value. At that time Respondent advised Dr. Hanshaw of the above reason for the lesser amount of the cash value. Respondent also reminded Dr. Hanshaw that he had caused Dr. Hanshaw's signature to be signed by a third party in order to prevent the children's policies from lapsing the previous year pursuant to Dr. Hanshaw's instructions. Dr. Hanshaw denied he had so instructed Respondent to reinstate the policies. Respondent then offered and Dr. Hanshaw accepted, a personal check from Respondent for the amount of the cash value loss allegedly experienced by Dr. Hanshaw. Some time thereafter, Dr. Hanshaw filed a Complaint with the Adams County Illinois State Attorney and on October 27, 1981, a Bill of Indictment was filed against Respondent. After plea negotiations, Respondent pleaded guilty to Count II of the Indictment (Forgery) and on March 22, 1982, the Court accepted Respondent's plea, dismissed all other Counts in the indictment, sentenced Respondent to two years probation and imposed a fine of $2,500.00, plus court costs. Part of the plea negotiation included the State Attorney's help in obtaining favorable treatment in any licensing procedure. On March 4, 1984, Respondent's Probation was successfully discharged. As a result of the aforesaid plea of guilty to forgery, a felony in the State of Illinois, the Illinois Department of Insurance issued an Order revoking Respondent's insurance license. However, the Order of Revocation did not take effect since Respondent timely sought a hearing on the allegations of the Order of Revocation. As a result of the hearing, Respondent's insurance license was not revoked. Instead, Respondent paid a civil penalty of $1,000.00, plus court reporter costs. Respondent testified that he was not aware of the consequences of his plea of guilty on other insurance licenses he might wish to obtain once he had discharged his debt to society. He has since discovered these effects, but after presentation of the above facts has been able to obtain other insurance licenses in other states. On or about September 24, 1987, Respondent filed an Application For Qualification as a Nonresident Life and Health Agent with the Department of Insurance. In that application, Respondent answered "No" to question 9 which asked if his license had ever been declined, suspended, placed on probation or administratively fined. However, on question 12, Respondent clearly states that he had been charged with and convicted of a felony, the location of that offense, that there was one charge of forgery, a $2,500.00 fine, two years probation, and that his Illinois license had been stayed. The negative response in question 9 forms the basis of Petitioner's reason for denial stated in paragraph 2(b) above. Respondent did not mislead, misrepresent or misstate anything to the Department of Insurance with his negative response to Question 9 of the Application. Respondent's license had clearly never been declined, suspended, placed on probation or revoked since the Illinois Order of Revocation never took effect. Nor did he mislead misrepresent or misstate anything to the Department with his negative response in reference to an administrative fine. He felt the fine he actually paid was not what question 9 was asking since he had paid a civil and not an administrative fine. He also thought that the license action was part and parcel of the criminal action. Nowhere in the application is "administrative fine" defined. Reasonable people can differ on the meaning of "administrative fine" especially where one state uses the term civil fine. These facts bear out the vagueness of the term's meaning. Before a person can misstate a fact there must be some agreement or mutual understanding as to what the fact is being stated for. There was clearly no such understanding in this case. The answer does not even come close to fraud since no intent to defraud the Department was demonstrated by the evidence. Additionally, his response to Question 12, together with the information he supplied along with the Application, was sufficient notice to the Department of the facts surrounding his Illinois license. The information supplied in Question 12 renders the response in Question 9 as immaterial. Therefore, the reasons given by the Department in Paragraph 2(b) above cannot stand as a basis for denying Respondent's licensure application. The reason given by the Department in paragraph 2(a) above involves the Respondent's forgery conviction. The forgery conviction does include an allegation of an intent to defraud. However, the facts of this case fails to demonstrate that moral turpitude was involved. This is especially true since this was a plea bargained case and the technical aspects of a crime do not bear the importance those aspects would if a trial had taken place or if Respondent had known the full effect such a plea would have on future licenses. Moreover, Respondent has rehabilitated himself. The Order rescinding the revocation of Respondent's license in Illinois specifically incorporates the Conclusion of Law made by the Hearing Officer, to-wit: "4. That, although convicted of the felony of forgery, the Licensee has demonstrated that he is sufficiently rehabilitated to warrant the public trust as required by Section 502(h) of the Illinois Insurance Code." Further, the testimony of Angelo P. Schiralli at the hearing attests to the honesty and trustworthiness of Respondent. Respondent is a person of honesty and trustworthiness and has had no problems with the law since 1979.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That Respondent's application be accepted and he be permitted to take the Life and Health Agent's exam. DONE and ENTERED this 18th day of November, 198, in Tallahassee, Florida. DIANE CLEAVINGER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 18th day of November, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-1625 The facts contained in paragraphs 1, 3, 4 and 10 of Petitioner's proposed findings of fact are subordinate. The facts contained in paragraphs 2, 5, 6, 7, 8 and 11 of Petitioner's proposed findings of fact are adopted in substance, in so far as material. The facts contained in paragraph 9 of Petitioner's proposed findings of fact are irrelevant. The facts contained in the first two paragraphs of Petitioner's proposed findings of fact numbered 12 are adopted. The first sentence of the third paragraph is adopted. The last sentence of the third paragraph was not shown by the evidence. The fourth paragraph is adopted as to the first sentence. The remainder of the fourth paragraph is rejected. The first sentence of the fifth paragraph is subordinate. The remainder of the fifth paragraph is rejected. The first sentence of paragraph 13 of Petitioner's proposed findings of fact is subordinate. Remainder of the paragraph is rejected. The facts contained in paragraphs 1, 2, 3, 4, 5, 6, 7, 8, 9, 11, 12, 13, 14 and 15 of Respondent's proposed findings of fact are adopted in substance, in so far as material. The facts contained in paragraph 10 of Respondent's proposed findings of fact are subordinate. COPIES FURNISHED: Robert C. Byerts, Esquire Department of Insurance Agency Regulation Section 413-B Larson Building Tallahassee, Florida 32399-0300 Donald H. Reed, Jr., Esquire First American Bank Building 2250 Glades Road Boca Raton, Florida 33431 Honorable William Gunter State Treasurer and Insurance Commissioner Department of Insurance and Treasurer The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Don Dowdell, Esquire General Counsel Department of Insurance and Treasurer The Capitol, Plaza Level Tallahassee, Florida 32399-0300 =================================================================
The Issue Whether Petitioner's application for licensure as a life, variable annuity, and health insurance agent should be granted.
Findings Of Fact In 1995 and part of 1996 Petitioner was licensed by the Department as a life and health insurance agent in Quincy, Florida. Around July 5, 1995, J.B. Price, M.D., a long-time friend and customer of Petitioner, filed a civil complaint against Petitioner for an unrefunded premium of $7,200 that was paid by Dr. Price to Petitioner for a life insurance policy. The life insurance policy was for a whole life policy and was intended to replace a term policy on Dr. Price. The insurance company rejected Dr. Price's application and the whole life policy was never issued. A final judgment was entered against Petitioner in the amount of the refund due on the failed policy. Within about a month from the entry of the final judgment, Petitioner borrowed sufficient funds and paid the amount of the judgment to Dr. Price. However, Petitioner did not obtain a formal satisfaction of judgment from Dr. Price at the time he paid the judgment. Petitioner had also paid the premiums and kept in force the premiums on the insurance Dr. Price had hoped to replace with the rejected insurance policy. Petitioner's license was suspended by the Department when it filed an Emergency Suspension Order dated May 21, 1996. The Emergency Suspension Order charged that Petitioner failed to refund a $7,200 premium to J.B. Price, M.D., a former customer in violation of Sections 626.561, 626.611(4), 626.611(7), 626.611(9), 626.611(10), 626.611(13), 626.621(2), and 626.621(6), Florida Statutes. Simultaneously with the Emergency Suspension Order, Petitioner filed an Administrative Complaint against Petitioner based on the same facts as the suspension order. Petitioner did not respond to the Administrative Complaint. Consequently, on July 7, 1996, Petitioner's license was revoked by the Department. After Petitioner's license was revoked, Petitioner continued to engage in business for which a license is required under the insurance code. On August 1996, Petitioner prepared and signed, as broker, an application for insurance on Minnie and Henry Sudduth. The Suddaths were friends of Petitioner. However, Petitioner accepted and submitted the application even though he knew his license had been revoked. Moreover, after revocation, during 1996-1999, Respondent had several convictions for passing worthless checks. One such incident occurred while Petitioner was on probation for an earlier sentence for passing worthless checks. Petitioner's bank ordinarily covered Petitioner's overdrafts. However, in these instances, the bank declined to cover the overdrafts. On June 1, 2000, Petitioner filed an application for licensure with the Department. The Department discovered that a judgment had been entered in the Price suit and advised Petitioner that no satisfaction of judgment had been recorded. Petitioner immediately obtained a satisfaction of judgment from Dr. Price and recorded it. All of these incidents demonstrate Petitioner is not qualified to engage in the business of insurance. Therefore, Petitioner's application for licensure should be denied.
Recommendation Based upon the foregoing findings of fact and Conclusions of Law, it is RECOMMENDED that A final order be entered denying Respondent's application for a license as a life, variable annuity, and health insurance agent. DONE AND ENTERED this 26th day of July, 2001, in Tallahassee, Leon County, Florida. DIANE CLEAVINGER 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 26th day of July, 2001. COPIES FURNISHED: Frederick Benjamin Hodges, Jr. 3600 Thomas Drive Suite 109-D Panama City Beach, Florida 32408 Richard J. Santurri, Esquire Department of Insurance Division of Legal Services 200 East Gaines Street Tallahassee, Florida 32399-0333 Honorable Tom Gallagher State Treasurer/Insurance Commissioner Department of Insurance The Capitol, Plaza Level 02 Tallahassee, Florida 32399-0300 Mark Casteel, General Counsel Department of Insurance The Capitol, Lower Level 26 Tallahassee, Florida 32399-0307
Findings Of Fact Petitioner is the state agency in Florida responsible for the regulation and licensing of general lines insurance agents. Its responsibility includes the duty to sanction those licensed under the insurance code for violations of the code. At all times relevant, Respondent was a licensed general lines insurance agent and possessed license #265736194 issued by the Petitioner on December 21, 1990. Respondent's license is presently active. On June 5, 1992, an order of liquidation, injunction and notice of automatic stay was entered in Case No. 92-1766, Circuit Court, Leon County, Florida, In Re: The Receivership of First Miami Insurance Company, a Florida corporation. On December 14, 1992, Salma Zacur, the operations manager for the receiver for First Miami Insurance Company, mailed a letter to Respondent. On June 7, 1993, a summary order directing immediate delivery of funds was entered in Case No. 92-1766, Circuit Court, Leon County, Florida, In Re: The Receivership of First Miami Insurance Company, a Florida corporation. On June 8, 1994, an order on receiver's motion for entry of final judgment was entered in Case No. 92-1766, Circuit Court, Leon County, Florida, In Re: The Receivership of First Miami Insurance Company, a Florida corporation. Petitioner failed to produce evidence of the contents of the December 14, 1992 letter which was non-hearsay and, therefore, failed to establish the relevance of the court orders of June 7, 1993 and June 8, 1994 in this matter. The Petitioner failed to present clear and convincing evidence that Respondent violated Section 631.155, or Chapter 626, Florida Statutes.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department enter a final order dismissing the Administrative Complaint filed against Respondent. DONE and ENTERED this 23rd day of August, 1995, in Tallahassee, Florida. DANIEL M. KILBRIDE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 23rd day of August, 1995. APPENDIX The following constitutes my specific rulings, in accordance with Section 120.57(1)(b)9., Florida Statutes. Proposed findings of fact submitted by Petitioner. Accepted in substance: paragraphs 1, 2, 3, 4, 5, 7 (in part), 12 (in part). Rejected as not proven by clear and convincing evidence: paragraphs 6, 7 (in part), 8, 9, 10, 11, 12 (in part) 13. Proposed findings of fact submitted by Respondent. Accepted in substance: paragraphs 1, 2, 3, 4, 5, 6, and 7. COPIES FURNISHED: Bill Nelson State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Dan Sumner Acting General Counsel Department of Insurance The Capitol, PL-11 Tallahassee, Florida 32399-0300 Michael K. McCormick, Esquire Division of Legal Services 612 Larson Building Tallahassee, Florida 32399-0300 Jed Berman, Esquire Infantino and Berman O. Drawer 30 Winter Park, Florida 32790
The Issue Whether Petitioner should be licensed as a title agent by the Department of Financial Services?
Findings Of Fact The Parties Ms. Shirley Auxais, the Petitioner, was born on November 20, 1971, in Brooklyn, New York. She is presently a resident of Coral Springs, Florida. Formerly married, Ms. Auxais' married name was Shirley A. Seraphin. The Department of Financial Services, the Respondent, was created by the Florida Legislature in the 2002 Session. Section 20.121, Florida Statutes. It is responsible for taking action on the license application submitted by Ms. Auxais and has been substituted as the Respondent in this proceeding for the Department of Insurance, the agency that issued the notice of denial. See B., 1Note to Section 120.121, Florida Statutes (2002), p. 400. Unemployment Compensation Fraud On February 17, 1998, the State Attorney of the Seventeenth Judicial Circuit filed an information against Ms. Auxais for unemployment compensation fraud, a felony. See Section 443.071(1), Florida Statutes. At the time of the filing, Ms. Auxais' name was Shirley A. Seraphin. The information charged the following: Shirley A. Seraphin from on or about the 13th day of August, A.D., 1995 up to and including the 16th day of September A.D., 1995, . . ., did . . . make a false statement or representation on her Pay Order Card(s), Florida Department of Labor Form UCB60 and/or UCB61, knowing said statement or representation to be false, or knowingly failed to disclose a material fact to obtain or increase benefits or other payments for her or any other person, in that the said Shirley A. Seraphin did knowingly state on her pay order cards that she was unemployed and not earning wages during the aforesaid period, when in fact and truth she was employed . . ., and earning wages which she willfully failed to report, and the said false statement was made or material fact not disclosed with the intent to obtain or increase benefits pursuant to the Florida Unemployment Compensation Law Respondent's Exhibit 3. Ms. Auxais, in the Circuit Court of the 17th Judicial Circuit, in and for Broward County (the "Court") entered a plea of "No Contest" to the charges. On June 18, 1998, Ms. Auxais upon the motion of the State, was ordered by the Court to pay restitution to the Division of Unemployment Compensation "in the total sum of Eight hundred twenty-five and 00/100 ($825)." Respondent's Exhibit 5. On June 18, 1998, an Order of Probation was rendered by the Court in Ms. Auxais' case pursuant to a plea of nolo contendere to Unemployment Compensation Fraud as reflected on the face of the order. Adjudication of guilt was withheld and Ms. Auxais was placed on "18 months mail in probation." Respondent's Exhibit 6. Slightly more than four months later, an order was entered by the Court that terminated Ms. Seraphin's probation. Application for Licensure as a Title Agent On May 13, 2002, Ms. Auxais submitted an application for a new license as a title agent to the Department of Insurance's Bureau of Agent and Agency Licensing. The license applied for, according to the application is "04-10-Resident Title Agent." Respondent's Exhibit 2, p. 7. The application poses a number of screening questions. Two are immediately adjacent to each other in the order that follows: In the past 12 months, have you been arrested, indicted, or had an information filed against you or been otherwise charged with a crime by any law enforcement authority anywhere in the United States or its possessions or any other country. Have you ever been charged, convicted, found guilty or pled guilty or nolo contendere (no contest) to a crime under the laws of any municipality, county, state, territory, or country, whether or not adjudication was withheld or a judgment of conviction was entered. Respondent's Exhibit 2, p. 8. The answer shown on the application to both questions is "N" which stands for "no." Six months later, on November 14, 2002, the Notice of Denial was issued. The factual basis for the denial consists of two interrelated facts. First, Ms. Auxais responded "no" to the question of whether she had ever pled no contest to a crime. Second, Ms. Auxais had pled no contest to Unemployment Compensation Fraud, a felony, in the Circuit Court in and for Broward County. Explanations In the interim between the submission of the application and the denial, Ms. Auxais, in a letter to a Regulatory Consultant at the Department of Insurance, offered "explanations . . . in regard to the cases filed against [her] . . .". Respondent's Exhibit 9, page 25. The first explanation concerns a criminal charge of "larceny by credit card." The charge is not related to the Department's basis for denial. Nonetheless, the explanation sheds light on Ms. Auxais' credibility. It has value to this case, moreover, because Ms. Auxais chose in her testimony at hearing to explain further her written explanation. She did so as she attempted, at the same time, to explain away the false answer on her application with regard to the nolo contendere plea for Unemployment Compensation Fraud, the second explanation in her letter in November of 2002 to the Department of Insurance. The explanation to the unrelated charge (the first explanation offered in the letter to the Department of Insurance) follows: Arrest Date: 3/13/95. Charge: Larceny Credit Card I went shopping with an ex-associate. I was not aware of the fact that she had obtained a credit card and attempted to use it unlawfully. When security began to question the nature of the card she fled the scene and I was held, arrested and charged for Larceny Credit Card. I explained the nature of the incident to the defense attorney appointed to me who suggested I plead no-contest. The courts ruled adjudication withheld. (Respondent's Exhibit 9). With regard to a question about whether her ex-associate had ever been charged with some type of theft crime for the incident, Ms. Auxais testified, "No she was never found. I can't find her to this day." (Tr. 44, 45). The second explanation relates to the felony of Unemployment Compensation Fraud: Arrest Date: 4/29/98 Charge: Fraud/Unemployment I worked for a group of physicians one of whom split from the group. At that time the other physicians felt threatened since I worked directly for the physician who decided to leave and I got fired. During this time I filed for unemployment. While I was on unemployment and receiving benefits the physician gave me a gift (so I thought) in the sum of $400.00. I was not aware that her accountant documented the $400.00 as employment. Some months later after she re-opened her new practice and I resumed working for her I among other employees received a letter from the unemployment office notifying us of unemployment fraud and they demanded repayment of the monies I received in the amount of $800.00. When I explained the situation to the physician she agreed to repay unemployment. I set up a payment plan with unemployment however the physician's accountant did not keep up with the payment which caused me to get arrested for unemployment fraud. (Id.) At hearing, in the midst of elaborating on these two explanations, Ms. Auxais offered an explanation for how it happened that her application had been submitted with the false answer of "no" to the screening question of whether she had ever pled "no contest" to a crime when, in fact, she had pled nolo contendere or no contest to crimes twice. Her explanation in this regard was: I personally did not fill out the application for the title insurance thing on line. My supervisor did it for me[.] [A]t the time that the application was filled out for me on line[,] I was in title insurance training in Tampa . . . But you just don't go around telling everybody that yes I was charged with unemployment compensation fraud after you thought everything was done. I guess the person who filled out the application for me was not aware that I was charged with a felony, so when the question was asked, had I ever been charged with a felony, they checked no. When it came back, I had already signed the last page of that prior to leaving, because you can actually print out the application. The application was sent out with that. (Tr. 30). Before transmitting it to the Department of Insurance, Ms. Auxais did not read the filled-out application. She testified she did not have the opportunity to so "[b]ecause [she] was in the midst of trying to go out of town and [she] was in the midst of trying to get [the] application out for a deadline . . .". (Tr. 64). There are at least two problems with this explanation. Both relate to the declaration that appears above the signature line in the application: Under penalties of perjury, I declare that I have read the foregoing application for licensure and that the facts stated in it are true. Respondent's Exhibit 2, p. 000011 of Respondent's Exhibits. If Ms. Auxais is to be believed, she had not, in fact, read the application with answers before signing it so that her attestation by way of her signature was false. The other problem occurs with her reading of the application after it had been signed, filled out, sent in and discovered by the Department of Insurance to be false. On this point, Ms. Auxais had yet another explanation. This explanation has as its basis Ms. Auxais' reading of the two screening questions quoted in paragraph 10, above. The first of the two has a time frame with regard to the question it asks about criminal arrests or charges. "In the past 12 months," is the predicate to the question. The second question, has no such time limitation. It asks whether the applicant has "ever" pled nolo contendere or no contest to a crime. When confronted by a Department of Insurance employee, "a Mr. Thomas" with the false answer to the second question, Ms. Auxais testified, "I . . . explained to him that even after going back and re-reading everything I would have still said no because the prior question asked within the past 12 months." (Tr. 60, 61). In other words, Ms. Auxais construed the second question to be limited by the time frame of the first so that contrary to its plain inquiry as to whether she had "ever" pled nolo contendere or no contest to a crime, it really asked whether she had so pled within the previous 12 months. Ms. Auxais is a college graduate. She plans to continue her education post-graduate by attending law school and regards employment as a licensed title insurance agent as a stepping stone to a career in law.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is recommended that a final order be entered denying Petitioner's application for licensure as a title insurance agent. DONE AND ORDERED this 28th day of April, 2003, in Tallahassee, Leon County, Florida. DAVID M. MALONEY 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 28th day of April, 2003. COPIES FURNISHED: Shirley Auxais 9022 West Atlantic Boulevard, No. 227 Coral Springs, Florida 33065 Ladasiah Jackson, Esquire Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399-0333 Honorable Tom Gallagher Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Mark Casteel, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
The Issue The Department of Insurance (Agency) has charged Respondent with various violations of Chapter 626, Florida Statutes, related to her fitness for continued licensure as an insurance agent. Specifically, the Administrative Complaint dated May 22, 1998, alleges that on July 31, 1997, Respondent pled nolo contendere to presenting a false statement of insurance coverage and grand theft, had adjudication withheld, and was sentenced to probation, restitution, and community service. The Administrative Complaint also alleges that on September 12, 1997, Respondent pled guilty to presenting a false statement of insurance coverage and grand theft and failed to notify the Department of Insurance of her plea. The Administrative Complaint alleges that Respondent thereby lacks qualifications for licensure, has demonstrated a lack of fitness or trustworthiness to engage in the business of insurance and has violated other laws and rules regarding adjudication of guilt or pleas of guilt or nolo contendere. The issues in this proceeding are whether those violations occurred and if so, what discipline is appropriate.
Findings Of Fact As stipulated, Christine Lee Springer is currently licensed in Florida as a life and health agent, a general lines agent, and a health agent. The Department of Insurance has jurisdiction over her insurance license and appointments. On July 31, 1997, Christine Lee Springer pled nolo contendere to two felonies: presenting a false statement of insurance coverage and grand theft in the third degree. She was sentenced to three years' probation, restitution, and community service. Adjudication was withheld. Petitioner presented no evidence regarding Ms. Springer's failure to notify the agency of her plea and no evidence of any plea on September 12, 1997, as alleged in Count II, paragraph 7, of the Administrative Complaint. Nor did the agency present any evidence regarding the underlying offenses.
Recommendation Based on the foregoing, it is RECOMMENDED: That the Department of Insurance enter its final order finding that Christine Lee Springer violated Sections 626.611 (14) and 626.621(8), Florida Statutes, and suspending her license for two years. DONE AND ENTERED this 20th day of April, 2000, in Tallahassee, Leon County, Florida. MARY CLARK 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 20th day of April, 2000. COPIES FURNISHED: Patrick F. Creehan, Esquire Department of Insurance Division of Legal Services 612 Larson Building 200 East Gaines Street Tallahassee, Florida 32399-0333 Jed Berman, Esquire Infantino & Berman Post Office Drawer 30 Winter Park, Florida 32790-0030 Honorable Bill Nelson State Treasurer and Insurance Commissioner The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Daniel Y. Sumner, General Counsel State Treasurer and Insurance Commissioner The Capitol, Plaza Level 26 Tallahassee, Florida 32399-0300
The Issue Whether Respondent committed the offenses described in the administrative complaint? If so, what punishment should he receive?
Findings Of Fact Based on the record evidence the Hearing Officer makes the following Findings of Fact: Respondent is now, and has been for approximately the past 20 years, licensed by Petitioner as a general lines insurance agent. On July 3, 1986, Petitioner received a complaint concerning Respondent from Elsa Garcia. Garcia reported that she had purchased automobile insurance through Dixie Insurance Brokers and had been given a temporary insurance binder bearing the signature of a "Paul J. Lovelace" reflecting that her coverage was to be effective March 11, 1985. According to Garcia, however, she had subsequently discovered, after having been involved in an automobile accident on March 23, 1985, that her insurance coverage had not taken effect until after the accident. Garcia's complaint was assigned to one of Petitioner's employees, Burton Powell, to review and investigate. As part of his investigation, Powell contacted Alan D. Kruger, Garcia's attorney. Kruger supplied Powell with Garcia's affidavit and other pertinent documents, including a copy of Garcia's automobile insurance application and the temporary insurance binder she had been given by Dixie Insurance Brokers. The application reflects that Garcia was seeking coverage for the period from April 2, 1985, to October 2, 1985. The binder, on the other hand, indicates that it was to be effective for one month commencing, not April 2, 1985, but March 11, 1985. Someone other than Respondent signed his name to both the application and the binder. 1/ On various occasions prior to December 18, 1987, Respondent was the general lines insurance agent of record for Dixie Insurance Brokers. 2/ On these occasions he never personally signed any insurance applications, nor did he otherwise play any role in the operation and control of the agency. By his own admission, he simply allowed the agency to use his license, without any restrictions imposed by him, in exchange for monetary consideration. In so doing, he willfully engaged in a scheme designed to circumvent the licensing requirements of the Florida Insurance Code.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that Petitioner enter a final order (1) dismissing Count I of the administrative complaint; (2) finding Respondent guilty of Count II of the administrative complaint; and (3) revoking Respondent's general lines insurance agent license for his having engaged in the conduct specified in Count II of the administrative complaint. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 2nd day of November, 1989. STUART M. LERNER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 2nd day of November, 1989.
