Findings Of Fact The Petitioner timely applied on November 30, 1984 for home energy assistance under the Low-Income Home Energy Assistance Program as authorized by Title XXVI of the Omnibus Budget Reconciliation Act of 1981 (Public Law 97-35). Petitioners' only income was "unearned income" which was their monthly social security benefit payments which totalled $561.00. No monthly medicare premiums were deducted from Petitioners' monthly social security payments. The Respondent in calculating Petitioners' verified monthly income added a total of $29.20 back into Petitioners' total monthly income of $561.00 for an adjusted total verified monthly income of $590.20. On April 10, 1985 Respondent officially notified Petitioners that the monthly income of $590.20 exceeded the monthly income limit ($560.00) for their household. Respondent upon discovering that medicare premiums were not deducted from Petitioners' monthly social security payments readjusted Petitioners' total verified household income to $561.00. Petitioners agree that their verified monthly income during the month of application was $561.00. The monthly income limit for a household the size of Petitioners' as determined under Rule lOC-29.13, Florida Administrative Code is $560.00. Petitioners had no excludable income. Other than exceeding the monthly income limit of $560.00 for household the size of Petitioners', the Petitioners were eligible for assistance under the Low-Income Home Energy Assistance Program.
Recommendation Based upon the findings of facts and conclusions of law recited herein, it is RECOMMENDED that the Respondent enter Final Order denying the Petitioners' application for assistance under the Low-Income Home Energy Assistance Program. Respectfully submitted and entered this 19th of August, 1985, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE 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 19th day of August, 1985. COPIES FURNISHED: Harold Braynon, Esq. HRS District Ten Legal Counsel 201 West Broward Boulevard Fort Lauderdale, FL 33301-1885 Charles V. and Helen Tokarski 6804 N.W. 29th Street, Lot 1, Block 32 Margate, FL 33063 Susan Kirkland, Esq. Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32301 David Pingree Secretary 1323 Winewood Boulevard Tallahassee, FL 32301 ================================================================ =
Findings Of Fact Respondent corporation owns and operates The Ambrosia Home (the Home), a nursing home in Tampa, Florida. Ella Mae Smith, the sole stockholder and the chief executive officer of the corporation, worked as nursing home administrator for the Home from January 1, 1976, through April 21, 1976. Ms. Smith, who is a registered nurse, has been associated with the Home since 1962. On April 22, 1976, Willard Roth began as the Home's administrator, a job he kept through December 31, 1976. In January of 1976, respondent opened a 23 bed addition. Until Mr. Roth's arrival, Ms. Smith worked every day from seven in the morning till seven in the evening, except Saturdays and Sundays when she worked from seven in the morning till three in the afternoon. After Mr. Roth took over as nursing home administrator, Ms. Smith only worked eight hour days although she came back nights occasionally to look in on patients; she stopped going to get supplies for the Home herself and began sharing with Mr. Roth responsibilities for hiring and firing and for finances. For the first three quarters of 1976, respondent employed Judith Irene Roberson as a bookkeeper and secretary at the rate of three dollars an hour. Ms. Roberson is Ella Mae Smith's daughter. For the final thirteen weeks of 1976, Ms. Roberson worked as activities' director for respondent at the rate of three and a half dollars an hour. In both positions, Ms. Roberson worked overtime without pay. Because of this and because of her work for respondent in various capacities in 1970, 197, 1972, 1973, 1974 and 1975, she received a nine thousand dollar ($9,000.00) bonus in 1976. Ms. Roberson began working for respondent in July of 1970. In January of 1976, respondent received payments from petitioner for November and December of the preceding year. This money was used, in March of 1976, to open a savings account at First Federal of Tarpon Springs. In October of 1976, part of the money in the First Federal account was used to open a savings account at the Barnett Bank of Tampa. At no time during 1976, did the balance in the First Federal account fall below thirty-nine thousand, three hundred ninety-four dollars and seventy-six cents ($39,394.76). At no time during 1976, did the balance in the Barnett account fall below twelve thousand nine hundred sixty-four dollars and fifty-one cents ($12,964.51). The following year respondent used the money to pay back taxes, to pay bonuses and for other business purposes. On April 1, 1975, Ms. Smith acquired from respondent corporation the property on which the Home is located. During the year 1976, Ms. Smith leased the property back to the corporation at an annual rent of sixty-thousand dollars ($60,000.00). Rental payments under this agreement were subject to a four percent sales tax. At the close of 1976, there remained owing to Ms. Smith accrued bit unpaid rent. The corporations held a note from Ms. Smith during the year 1976, which she had given as partial payment for the property. In addition, Ms. Smith was indebted to the corporation for mortgage payments it had made on her behalf, aggregating thirty-five thousand six hundred ninety-seven dollars ($35,697.00). During the year 1976, Ms. Smith drove a 1975 Buick to and from work and used the car for other personal purposes. In addition to the personal use she made of the car, she used it to take resident of the Home on picnics, to entertain them in other ways, to transport them to a doctor's office and sometimes to take them to buy clothes. In operating the Home, she used the car for other errands: taking curtains to be cleaned and retrieving them; going shopping for fabric; and weekly trips to a Kwik-Chek store for housekeeping and other supplies. Fuel and maintenance expenses in the approximate amount of eleven hundred dollars ($1,100.00) were incurred in the operation of the automobile during 1976. No records were kept to reflect what fraction of the car's use was personal to Ms. Smith, however. Whenever Ms. Smith purchased supplies for the Home at the Kwik-Chek store, she paid with a check drawn on a Home account. In addition to housekeeping supplies, she sometimes bought Band-Aids and food on these trips. No records were kept to reflect just what was acquired on each trip. According to respondent's records, housekeeping supply expenses aggregated four thousand five hundred sixty-four dollars ($4,564.00) for 1976, and approximately forty- five hundred dollars ($4,500.00) for 1975. During 1976, six hundred dollars ($600.00) were reported stolen from petty cash in two accounts of which respondent had control. Respondent incurred certain legal and advertising expenses aggregating nine hundred fifty dollars ($950.00) in i976. Petitioner reimburses medicaid providers like respondent for a portion of certain expenses they incur in caring for eligible patients. In addition, petitioner's payments to medicaid providers include a return of approximately ten percent to medicaid providers on net assets devoted to the care of eligible patients. Respondent was slated to be audited by petitioner during 1977, in accordance with federal regulations prescribing such audits for each medicaid provider at lease once every three years. Petitioner performed its audit of respondent for the year 1976 earlier in 1977 than it would have otherwise, at the request "of HRS counsel because of a lawsuit that Ambrosia Home" (T48) brought against petitioner. Jesus A. Martinez, an auditor II in petitioner's employ, performed the audit of respondent, which was subsequently reviewed by Messrs. Roark and Conners, and possibly by Mr. Powell, all of whom are also employees of petitioner. As a result of the audit, petitioner proposes to disallow certain expenses claimed by respondent. These include sales tax on rent paid by respondent to Ms. Smith; portions of salaries respondent paid Ms. Smith and Ms. Roberson; petty cash reported stolen; checks to Kwik-Chek in excess of fifty dollars ($50.00), aggregating two thousand five hundred sixty-seven dollars and seventy-eight cents ($2567.78); and expenses related to the 1975 Buick, viz., interest on money borrowed to acquire it, an allowance for depreciation, insurance, taxes, licenses and operating expenses. Petitioner originally proposed to disallow certain professional fees, but indicated after the hearing that it would allow them. On advice that has since been rejected, respondent did not originally claim depreciation and operating expenses for the automobile. Similarly, respondent did not originally include the value of the automobile in computing the equity on which its return should be calculated, but took the contrary position in these proceedings. Petitioner proposes to disallow the value of the automobile and, as a result of the audit, to disallow certain other items respondent included in computing its equity capital. These include funds drawing interest in saving accounts far more than six months and Ms. Smith's obligations to respondent. On the other hand, petitioner included in equity capital the unpaid rent respondent owed Ms. Smith, even though respondent failed to include this item in its equity calculations. The foregoing findings of fact should be read in conjunction with the statement required by Stuckey's of Eastman, Georgia v. Department of Transportation, 340 So.2d 119 (Fla. 1st DCA 1976), which is attached as an appendix to the recommended order.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That petitioner allow the entire salary respondent paid Ms. Smith in 1976, as a reasonable cost. That petitioner allow the salary respondent paid Ms. Roberson in 1976, as a reasonable cost, less and except seven thousand three hundred seventy dollars ($7,370.00). That petitioner disallow and exclude all other disputed items. DONE and ENTERED this 16th day of October, 1978, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 APPENDIX Paragraph one of petitioner's proposed findings of fact has been adopted, in substance, insofar as relevant. Paragraph two of petitioner's proposed findings of fact has been adopted, in substance, insofar as relevant. Paragraphs three and four of petitioner's proposed findings of fact are consistent with the evidence adduced at the hearing but are not strictly relevant. Paragraph five of petitioner's proposed findings of fact has been adopted, in substance, insofar as relevant. Paragraphs six and seven of petitioner's proposed findings of fact are actually proposed conclusions of law. Paragraph one of respondent's proposed findings of fact has been adopted, in substance, insofar as relevant, except that the evidence did not establish when cost reports for the year 1976 were submitted. Paragraph two of respondent's proposed findings of fact has been adopted, in substance, insofar as relevant, except for the last clause thereof which was not established by the evidence. Paragraph three of respondent's proposed findings of fact has been adopted, in substance, insofar as relevant. Paragraphs four and five of respondent's proposed findings of fact are consistent with the evidence adduced at the hearing but are not strictly relevant. Paragraph six of respondent's proposed findings of fact has been adopted, in substance, insofar as relevant, except for the final sentence thereof, which is not supported by the evidence. Paragraphs seven and eight of respondent's proposed findings of fact have been adopted, in substance, insofar as relevant. Paragraphs nine and ten of respondent's proposed findings of fact are actually proposed conclusions of law. COPIES FURNISHED: Ellen Ostman, Esquire Department of HRS 4000 West Buffalo Avenue Tampa, Florida 33614 Allan M. Dabrow, Esquire Suite 1300 1845 Walnut Street Philadelphia, Pennsylvania 19103 Mr. David Ganley Supervisor of Nursing Home Receivables Department of HRS 1317 Winewood Boulevard Tallahassee, Florida 32301 Mr. Carl McBride Department of Accounting Department of HRS 1317 Winewood Boulevard Tallahassee, Florida 32301 The Ambrosia Home 1709 Tallaferro Road Tampa, Florida 33609 W. Kirk Brown, Esquire 313 Williams Street Suite 10 Post Office Box 4075 Tallahassee, Florida 32303
The Issue Whether Petitioner was properly denied home energy assistance.
Findings Of Fact Sometime during October or November, 1982, Petitioner obtained Respondent's application form for home energy assistance, at the Salvation Army office in Ocala, Florida, and subsequently mailed it to the Respondent's Ocala office. She received nothing further about her benefit from Respondent but did nothing about it until March, 1983, when she found out that people that she knew were getting their assistance. Since she had not received hers, she went to Respondent's office and inquired as to what happened. Petitioner was told by an unknown clerk at Respondent's office, who checked the records, that her application had not been received. An application for a different Pamela Perez, who possesses a different Social Security number and a different address had been received. By that time, however, the deadline for filing applications had expired and in fact, the program was being phased out. Petitioner is part of a family of four whose total monthly income would qualify it for benefits had the application been received on time. Respondent would not accept Petitioner's application when she came to their office in March, 1983, as the deadline established for accepting applications was December 27, 1982. Petitioner believes she submitted her application in a self-addressed envelope affixed to the form when she picked it up. No such envelope was affixed to the form by Respondent's personnel. Since Petitioner is not sure of this and Respondent denies furnishing the envelopes, I find that if the application was filed, it was in an envelope provided by Petitioner or someone else.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED: That the Department of Health and Rehabilitative Services deny Petitioner's application for low income energy assistance benefits. RECOMMENDED this 1st day of June, 1983, in Tallahassee, Florida. ARNOLD H. POLLOCK 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 1st day of June, 1983. COPIES FURNISHED: Pamela Perez 5114 Southeast. County Highway 25 Belleview, Florida 32620 James Sawyer, Esquire District Counsel Department of HRS 2002 Northwest. 13th Street Gainesville, Florida 32601 Honorable David Pingree Secretary, Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32301
The Issue The issues are whether the alleged actions of the respondents demonstrate a lack of fitness or trustworthiness to engage in the business of insurance within the meaning of Subsection 626.611(7), Florida Statutes (2004), and, if so, what penalty should be imposed. (All statutory references are to Florida Statutes (2004) unless otherwise stated.)
Findings Of Fact Petitioner is the state agency responsible for regulating insurance agents in Florida. The respondents, Crain and Carll, are licensed as Life and Health insurance agents pursuant to respective license numbers A056967 and A040734. The respondents have known each other for approximately 13 years. During that time, the two engaged in the business of selling health insurance. Mr. Carll was an independent contractor, but Mr. Crain was Mr. Carll's only boss. Mr. Crain wholly owns two Florida corporations that he operates as insurance agencies. The two corporations are identified in the record as International Life and Health Services of Manatee County, Inc. (Manatee), and International Life and Health Services of Sarasota County, Inc. (Sarasota). Mr. Crain owns two other Florida corporations. They are identified in the record as Independent Living Home Care Agency, Inc. (Home Care Agency), and Independent Living Home Care Membership Association, Inc. (Home Care). Home Care promises in a plan written by Mr. Crain to provide plan purchasers with access to discounted in-home care (the plan). Approximately 44 Florida residents purchased the plan in 2005 and 2006 from insurance agents, including Mr. Carll, who, as agents for Mr. Crain, Manatee, or Sarasota, previously sold health insurance to some of the plan purchasers. Mr. Crain is personally and fully liable for the acts of the selling insurance agents within the meaning of Section 626.839. Mr. Crain is a health insurance agent who is the president and sole shareholder of a health insurance agency. Mr. Crain directly supervised and controlled the insurance agents who sold the plan in Florida. Mr. Crain wrote the plan and trained the insurance agents in the content of the plan, sales techniques, how to exclude impaired customers, and how to determine whether a customer was an appropriate candidate to purchase a plan. Mr. Crain did not obtain a legal opinion concerning his final version of the plan. The plan satisfies the statutory definition of insurance. However, the plan is not health insurance that the legislature has expressed its intent to regulate.1 The plan promises Home Care will provide a purchaser of a membership with access to in-home care from a third-party provider, denominated as a "caregiver," at a cost substantially less than the market rate caregivers normally charge for such services (discounted home care services). The plan promises to refund 120 percent of the membership fee if Home Care were unable to provide access to discounted home care services. The plan excludes medical care from the definition of home care services. Home care services include companion and homemaker services; housekeeping and laundry services; transportation services for doctor visits, groceries, and visits with friends; meal preparation; assistance with dressing and undressing; organizing files and bills; not burdening loved ones; protecting assets and heir's inheritance; gaining respect; and preserving one's legacy while gaining respect and dignity. The plan offers memberships for four, six, and eight years. Only four and six-year memberships are pertinent to this proceeding. The respective cost for each four and six-year membership is $2,475 and $3,475. Home Care promises each member will have access to discounted home care services for respective benefit periods of 1.5 and 2.5 years. The cost of membership does not apply toward the cost of discounted home care services. Services are not available at the discounted rate for the first 90 days after the date a purchaser requests services (the elimination period).2 The elimination period is 180 days "for pre-existing conditions".3 An additional payment of $1,395 reduces the normal elimination period from 90 to 60 days, extends the membership period an additional two years, and extends the respective benefit periods by one year. The plan charges an additional 25 percent if a purchaser elects installment payments. The plan promises home care services at substantial discounts below the market rate. The discounted plan rates are $94 for 24 hours of service; $72 for eight hours of service; and $36 for four hours of service. Market rates in the community range from $204 to $480 for 24 hours of service and from $16 to $18 an hour for shorter periods.4 The 44 plans sold in Florida generated approximately $192,000 in membership fees for Home Care. Mr. Crain deposited the fees into a bank account he created for Home Care and for which Mr. Crain is the sole authorized signatory. Home Care paid commissions to insurance agents ranging from 50 and 60 percent of the sale proceeds. The allegations in this proceeding pertain to four of the 44 plan purchasers. Ms. Janet McClurkin purchased the plan in April 2005 in two installments totaling $2,112. Ms. Ruth Frakes purchased the plan in February 2005 in two installments totaling $4,870. Ms. Carin Clareus purchased the plan in February 2005 for one payment of $1,953. Ms. Eva Muller purchased the plan in March 2005 for one payment of $3,475.5 A finding of guilt requires proof of one or more of five essential allegations, the first of which alleges the four plan purchasers are elderly women who, at the time of purchase, were "disabled" and suffered from "diminished mental capacity." The four sales allegedly violated the plan prohibition against sales to anyone "not of sound mind or body." The four plan purchasers are clearly elderly women. At the time of the hearing, Ms. McClurkin was 94 years old.6 Ms. McClurkin is Canadian, has been widowed for approximately 35 years, has no children or nearby family, and lives alone. Her nephew had power of attorney at the time of the hearing. Ms. McClurkin suffered from hearing and memory loss. She had worn two hearing aids for about a year, was recovering from surgery for breast cancer two years earlier, and had functioned for over 15 years with two artificial hips. Ms. Frakes was 90 years old at the time of the hearing.7 Ms. Frakes had been widowed for approximately 26 years and had no children and no surviving relatives. Ms. Frakes wore a Life Alert alarm, had been wearing two hearing aids for approximately seven years, had been reading through a magnifying glass for approximately five years, was taking medication for high blood pressure, and suffered from arthritis. Ms. Clareus was 97 years old at the time of the hearing and resided in a community of about 200 senior citizens.8 She immigrated to the United States in 1928, had been widowed for approximately four years at the time of the hearing, and had no children and no nearby relatives. Ms. Clareus had been legally blind for approximately eight years but was able to read through an assistive device in her residence. Ms. Muller was approximately 85 years old at the time of the hearing. She immigrated from Germany and then became a U.S. citizen, all in a time frame not disclosed in the record. Ms. Muller had been divorced early in her life and lived alone in a mobile home community. She had no nearby relatives and experienced memory problems. Ms. Muller owns an automobile but does not drive. Friends drive for her. After purchasing the plan, Ms. Muller executed a power of attorney naming Ms. Ingrid Eglsaer as her general power of attorney. At the time of the hearing, the four witnesses demonstrated confusion and difficulty in recalling specific facts. However, their confusion and impaired memory at the hearing was not clear and convincing evidence that the witnesses were incompetent when they purchased the plan. The allegation of incompetence at the time of purchase may be supported by inference or surmise, but inference and surmise do not satisfy the requirement for clear and convincing evidence.9 Petitioner submitted no expert testimony concerning the mental capacity of a purchaser at the time of the purchase. Petitioner next alleges the respondents misrepresented that Home Care would provide home care services and home medical care without further charge. Each Administrative Complaint admits the alleged misrepresentation conflicts with the terms of the plan.10 The plan promises access to discounted home care services and states that the membership fee does not apply toward charges for discounted home care services.11 The evidence is less than clear and convincing that the respondents misrepresented the contents of the plan in a manner that led purchasers to believe they would receive home care services or home medical care without additional charge. Testimony of the four purchasers concerning verbal representations by insurance agents during sales transactions is confused, is not precise and explicit, and is less than clear and convincing. Each purchaser may have inferred that she was purchasing insurance for either home care services or home medical care without an additional charge. Some purchasers had previously purchased such insurance from the same insurance agent. Each sale included a consultation in which the insurance agent reviewed other insurance held by the purchaser. The plan included terms that sounded to elderly women like familiar insurance terms. For example, the plan requires the purchaser to apply for coverage and employs terms such as "Eligible Persons," "Effective Date," "Elimination Period," "Limitations and Exclusions," and "Benefit Discount Period." The plan extends the elimination period when "pre- existing conditions" exist, describes home care providers as "caregivers," and discusses "co-payments." The plan includes a disclosure form and a medical release form. The evidence is less than clear and convincing that the respondents made promises or representations, other than those in the plan, to induce a purchaser to infer that the plan entitled her to discounted home care or medical care at no additional charge. Rather, the terms of the plan were purposefully confusing and induced the four elderly women to draw the desired inference. Petitioner also alleges the respondents made false and worthless promises that defrauded the purchasers. However, it is unnecessary to resolve the allegations of fraud in this case.12 This case can be resolved if the evidence supports one of two remaining allegations. First, the respondents allegedly misrepresented the access to discounted caregiver services that a purchaser acquired upon payment of a membership fee. Second, the promises of access to discounted caregiver services that the respondents made to each of the four plan purchasers were false and worthless.13 The plan misrepresented the access to caregivers that a purchaser acquired upon payment of a membership fee. The plan provides, in relevant part: If a member joins the association they are guaranteed the homecare discounts provided for in the contractual agreement. Respondent Crain, Exhibit 1, at 4. The plan does not name or otherwise identify a caregiver responsible for supplying the discounted caregiver services "guaranteed" in the plan. In that regard, the plan is factually distinguishable from a home care plan that passed judicial scrutiny in an unrelated proceeding.14 Neither Mr. Crain nor Home Care possessed a legal right to require a caregiver to provide discounted services in accordance with the terms of the plan. Neither Mr. Crain nor Home Care possessed the practical ability to ensure that a caregiver would provide home care services at any price, much less the discounted prices promised in the plan.15 The absence of either a legally enforceable right or practical ability to ensure that a caregiver would provide the discounted home care services promised in the plan were material facts that Mr. Crain did not disclose to purchasers. The failure to disclose material facts was willful and misrepresented the access to discounted caregiver services that a purchaser acquired upon payment of a membership fee. Testimony from Mr. Crain concerning his practical ability to ensure delivery of discounted caregiver services was neither credible nor persuasive to the fact-finder. Mr. Crain discussed home care services with a number of caregivers. Based on those conversations, Mr. Crain developed a list of caregivers he said he could call in the future to request discounted caregiver services promised in the plan if and when one of the 44 purchasers requested services (the list).16 The list evolved between January 2005 and September 2006. Mr. Crain advertised for caregivers in local newspapers. The collective responses numbered between 100 and 200. Mr. Crain or a staff-member collected the contact information for each responder and questioned each responder concerning, among other things, their qualifications and experience. The final list identified 15 caregivers. Mr. Crain described the list of 15 in answers to questions from the fact-finder: [Q] Well, I want to make sure I understand clearly. So, you ran an ad. People called in, you took down their contact information, and did you run [abuse registry] screens on these people? [A] Yes, I did. [Q] Okay. You mentioned earlier 200 responded. Did all 200 make the list? [A] The list? . . . [Q] . . . The list I'm referring to is the list referred to in testimony of . . . [insurance] agents of yours that said you maintained a list of contract individuals . . . Did you maintain a list? [A] I had a list of potential caregivers from the original ad, yes. * * * [Q] So you ran two ads. You had some responses to the first ad, and overwhelming responses to the second ad, and when you talked to the person, what did [you] do . . . ? [A] They call in -- I briefly qualify them. * * * [Q] And what kind of information do you collect? [A] Name, address, phone number, work history, educational history ethical behavior . . . . [and abuse] screening . . . . [I]f the agency they work for currently or in the past could not fax me a copy of . . . screening . . . by AHCA [Agency for Health Care Administration], then I could then screen them myself. [Q] [H]ow many of these people did you actually either screen or get faxes of their screen? [A] About seven. [Q] Out of how many? [A] Altogether, I had spoken to no less than a hundred people. [Q] From both ads? [A] Correct. . . . [Q] How many of the seven did you screen yourself? [A] Three. . . . [Q] Okay. Now, you talked to a hundred. Did you compile a resource list? [A] Yes, I did. [Q] And how many . . . , of the hundred, made the resource list? [A] I had at least 15 potentially eligible people that could work for me, but I had seven that could go at any moment. Or not at any moment but that were available, already screened with experience and ready to go. Or around seven. Transcript (TR) at 581-585. Mr. Crain did not bond or insure any of the 15 potentially eligible caregivers. Mr. Crain explained the bonding procedure in the following testimony: [Q] [The plan] . . . talks about having people bonded, insured, and fully screened, correct? [A] Yes. [Q] Now, we've already talked about screening. How would you make arrangements to bond and insure someone? [A] If they were employed, to bond a person is a one-page form . . . [y]ou deliver to this insurance agency . . . down the road from my office . . . and putting a hundred dollars for every ten thousand dollars of bonding you want. . . . [Q] So, when in the process would you bond and insure someone? [A] The day or the day before they went out to the actual care. [Q] So actually, prior to having a request for services and actually arranging for somebody to go out, you wouldn't have gone through the trouble or expense of bonding or insuring, correct? [A] Correct. [Q] Who actually bears the expense of bonding and insuring? [A] The provider. [Q] You mean the worker? [A] Yeah. . . . TR at 585-586. The plan promised that access to discounted services included a guaranteed refund equal to 120 percent of membership if Home Care were unable to provide access to the discounted caregiver services promised in the plan. Mr. Crain wrote the refund language to state: 17. 120% money back guarantee. If [Home Care] cannot provide homemaker and companion services at the discounted rate as governed by this contract, the company shall pay the member all the fees paid plus an additional 20%. Due to severe, unprecedented, skyrocketing costs for caregivers, or an unforeseen increase in the demand for personnel, the company will make this refund. [Home Care] has a big responsibility to provide quality home care services to all of it's [sic] members. Even though management owners and outside professionals have thoroughly though [sic] out almost every variable in making this contract both beneficial to the customers and profitable for [Home Care], no one can predict the future. Therefore it is agreed by both parties that by entering into this contract that the legal remedy for [Home Care's] possible inability to provide the service at the discounted rate, is for [Home Care] to refund 120% of the member's fee after reviewing the case with legal counsel as provided for by [Home Care] regarding the unusual circumstances of the said member. Respondent Crain, Exhibit 1, at 7. The promise that access to discounted caregiver services includes a guaranteed refund of 120 percent of the membership fee is a false promise. The promise is not conditioned on any discernable legal standard or any other standard capable of objective measurement. Rather, the applicable standard is a subjective standard to be interpreted at the sole discretion of Mr. Crain. Mr. Crain willfully included the false refund promise in the plan. As Mr. Crain explained: The right to get a refund? After five days, they don't have a right to get a refund. [Q] Do you or have you, on behalf of the company, given refunds to persons beyond the five-day period? [A] Yes. [Q] Is that at your discretion? [A] Yes. [Q] Is there any particular policy or plan regarding when and how to give a refund and how much? [A] No. TR at 614. Mr. Crain is the sole arbiter of the entitlement to a refund and the amount of the refund to be paid. For example, Mr. Crain paid Ms. Muller 120 percent of her membership fee but paid only a prorated amount to Ms. Clareus.17 The promise to refund 120 percent of the membership fee is worthless. Mr. Crain willfully included the worthless promise in the plan. The refund obligation is owed solely by Home Care, and Home Care has not retained sufficient reserves to fund its contractual obligation.18 Mr. Crain withdrew virtually all of the $192,000 in membership fees to pay commissions, operating costs, and similar expenses. On June 19, 2006, Home Care had $946 in its bank account. The last refund obligation Home Care owes to the two unpaid purchasers in this proceeding will not expire until sometime in 2011. The corporate promise to refund 120 percent of the membership fee is worthless because it is an unfunded obligation to pay refunds from non-existent reserves. Mr. Carll did not exercise ordinary diligence, much less the reasonable skill and diligence required of an insurance agent, to examine the plan for misrepresentations and false promises. Mr. Carll willfully failed to independently examine the plan. As Mr. Carll explained during his testimony: Jim was constantly on the phone interviewing people, prospective caregivers, talking to -- even to home health care agencies that provide homemaker services, and it's my understanding that he had compiled a list of people who could be called in the event if someone requested for [sic] service. * * * [Q] When you had meetings with Mr. Crain, did you ask him questions? [A] Yes. [Q] What questions did you ask about the plan? [A] Oh, how does the elimination period work. You know, when do services begin? What do people have to do to get services? Questions of that nature. [Q] Anything else? [A] Just questions about, you know, well how to talk to these people and, you know, what to look for when you walk into a house. [Q] Did you ask Mr. Crain what ability he had to ensure that these third party contractors would provide their services for the fees he guaranteed in the plan? [A] Yes. [Q] Okay. What did you ask him? [A] I said, Well, how can we be sure that these people will get the services that they need when they ask for them? [Q] And? [A] He said that he had interviewed numerous people. He had a list of people that he could call . . . to provide [discounted services]. . . . [Q] Did you ask Mr. Crain what ability he had to . . . enforce that representation from them if, at some future time, he asked them to provide that service, and they said they no longer would? [A] I didn't ask him that question. [Q] So you didn't ask him if he had these people under legal contract for the term of the plan? [A] No. . . . I have a lot of faith in Jim Crain. TR at 358 and 422-424. Mr. Carll knew, or should have known, that the plan he sold included misrepresentations. Mr. Carll knew, or should have known, from the language of the plan that the refund promise is false. Each of the respondents is an insurance agent who enjoyed a fiduciary relationship which arose from previous sales of health insurance. Mr. Carll also enjoyed a fiduciary relationship that arose during the previously discussed consultative role he performed when he reviewed with plan purchasers their existing insurance. As Mr. Carll explained during his testimony: Well, a lot them, some of them were referrals, some of them were people we already knew. [Q] How did you know them? [A] That they had purchased insurance with us before. You know, a lot of them called the office. [Q] For what purpose did they call? [A] Well, they called the office looking for the agent that sold them insurance. TR at 360-361.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a final order finding the respondents guilty of violating Subsection 626.611(7), for the reasons stated herein, and suspending their licenses for 24 months from the date the proposed agency action becomes final. DONE AND ENTERED this 31st day of January, 2007, in Tallahassee, Leon County, Florida. S DANIEL MANRY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 31st day of January, 2007.
Findings Of Fact The Agency issued a Notice of Intent to Impose Fine stating the intent to impose an administrative fine in the sum of five thousand dollars ($5,000.00) against the Respondent, Diplomat Home Care, Inc. (hereinafter "Respondent"), a home health agency. The Notice of Intent to Impose Fine charged that Respondent failed to timely submit a quarterly report for the quarter ending June 30, 2009, violating Section 400.474(6)(f), Florida Statutes (2008). The cause was properly referred to the Division of Administrative Filed February 12, 2010 12:47 PM Division of Administrative Hearings. Hearings for proceedings according to law, See, Section 120.57(1), Florida Statutes (2009). By Orders dated December 21, 2009, the Division of Administrative Hearings determined that no material issue of fact remained in dispute and relinquished jurisdiction to the Agency for Health Care Administration, copies of which are attached hereto and incorporated herein (Comp. Ex. 2). The facts, as alleged and found, establish that Respondent failed to timely submit a quarterly report for the quarter ending June 30, 2009, violating Section 400.474(6)(f), Florida Statutes (2008). The fine imposed is five thousand dollars ($5,000.00).
Conclusions Having reviewed the Notice of Intent to Impose Fine dated September 17, 2009, attached hereto and incorporated herein (Ex. 1), and all other matters of record, the Agency for Health Care Administration (hereinafter "Agency") finds and concludes as follows:
Findings Of Fact On November 1, 1983, Petitioner submitted Household Application for Home Energy Assistance on which he listed as income VA benefits in the amount of $118 per month; unemployment compensation of $597.12 per month; and cash from his family of $300-$400 per month. Petitioner is a one-member household. He was involved in a motorcycle accident in May, 1983, and has been unable to return to his job at Martin Marietta since that time. He received benefits of $160 per week from Martin Marietta's insurer from date of his accident until January 6, 1984, when his benefits were reduced to $80 per week because of his possible entitlement to Social Security disability benefits. Payments were suspended on January 13, 1984, pending Petitioner's submission to the insurance carrier a statement of continuing total disability (Exhibit 1). Petitioner acknowledged on the witness stand that he receives VA disability compensation which is mailed to his bank monthly; however, he testified he has authorized the diversion of those funds to pay debts he owes, so that money is not available to him for daily living expenses. The maximum monthly income a one-member household can receive and be eligible for home energy assistance is $405 (Exhibit 3).
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: Petitioner timely submitted her application for home energy assistance and the respondent timely notified her that her application had been denied for the reason that her household income exceeded the limit for her household size. Petitioner Randolph resides with her fourteen year old daughter and receives Social Security income in the monthly amount of $522.00. For a household with two persons, the maximum monthly income consistent with eligibility for benefits under the Low-Income Home Energy Assistance Program is $474.00. Rule 10C-29.13(5)(a), Florida Administrative Code. Petitioner Randolph uses oxygen on a twenty-four hour daily basis, and needs to use air conditioning in her home due to a chronic pulmonary condition. This condition, as well as other physical ailments, results in substantial medical bills on a monthly basis.
Recommendation Based upon the findings of fact and conclusions of law recited above, it is RECOMMENDED that petitioner's application for benefits under the Low-Income Home Energy Assistance Program be DENIED. Respectfully submitted and entered this 21st day of June, 1982, in Tallahassee, Florida. DIANE D. TREMOR 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 21st day of June, 1982. COPIES FURNISHED: Mary F. Randolph 9310 Grandfield Road #A Thonotosassa, Florida 33592 Amelia Park, Esquire District VI Legal Counsel W. T. Edwards Facility 4000 West Buffalo Avenue Tampa, Florida 33614 David H. Pingree, Secretary Department of Health and Rehabilitative Services 1323 Winewood Blvd. Tallahassee, Florida 32301
