Findings Of Fact At all times pertinent to the matters herein, the Respondent, Department of Insurance, was the state agency in Florida responsible for the regulation of the insurance profession and the licensing of insurance agents in this state. Petitioner, Dale J. Dyer, was licensed as a health insurance agent in this state but his license had been suspended by the Department as the result of a disciplinary action in November, 1991, and was, at the time of the alleged misconduct, in a suspended status. The suspension period for Petitioner's license expired in May, 1992 and he thereafter applied for reinstatement of his license. The Department denied his application for reinstatement in July, 1992 because on or about June 19, 1991, a check for $13,971.00, made payable to Transport Life Insurance Company by Thiel Liukens, as payment for a nursing home policy to be issued, was deposited by Paula Dyer, Petitioner's wife and herself a general agent for Transport, to an agency bank account controlled by Ms. Dyer and upon which Petitioner was an authorized signatory. This check was neither transmitted to the insurance company nor returned to Mr. Liukens, nor was the coverage for which it was issued ever initiated. Petitioner met Mr. Liukens in late 1990 when he tried to sell him a Medicare supplement policy. He was not the one who sold him the policy in issue in June, 1991, however, nor did he either solicit or receive a check from him. In fact, there is no evidence he knew he had taken out this policy or paid by check. He had nothing to do with this policy, check or payment. Petitioner's wife, Paula, owns and operates the Paula A. Dyer & Associates agency. At the time in issue, he claims, he had nothing to do with the agency. He claims he did not help run it, didn't supervise any of the employees, and was neither an officer nor director. However, he was, with his wife, a signatory on the firm's checking account and several other accounts as well. He has drawn funds from the company account, as well as the others, for personal or business expenses and to facilitate the conduct of business in his wife's absence. Mr. Dyer asserts that premium deposits from Dyer and Associates agents were not to be deposited to that account. He did not know if they were, however. In any case, he denies ever consciously disbursing funds belonging to any insurance company from that account. To his knowledge, he never disbursed or took any funds from the Liukens payment to Transport Life Insurance Company nor, during 1991, did he have any relationship with that company. This was verified by Mrs. Dyer. Paula A. Dyer & Associates had netting authority with Transport which authorized it to deposit checks made payable to Transport to the agency account and thereafter remit to Transport the net premium portion due the company, retaining the balance as commission. There was no limitation on how the agency portion was to be used. The agency's checking account to which the Liukens check was deposited was with the Barnett Bank. As was stated above, both Dyers were cosignatories on the agency account because, though Petitioner was neither an officer, stockholder, director, nor employee of the agency, he had loaned his wife the money to open it and she wanted him to be able to get money if she were not available. The agency books were kept by a bookkeeper. The policy in issue here was solicited by Pedro Rodrigues, an agency employee, who received the instant check as a premium payment. The check, dated July 2, 1992, was thereafter deposited in July, 1991 to the agency account. Of the total amount of this check, slightly over $7,000.00 was the agency commission which was available for unrestricted use, including the personal use of Ms. Dyer or the Petitioner. Clearly a check written in July, 1992 could not be deposited in July, 1991, a year before being written. Consequently, it is found that the check was dated in error by the drafter. This is not the only error in dates in this matter, however. Mr. Stewart's July 21, 1992 letter of denial to Petitioner reflects the Liukens check was written on or about June 19, 1991. This is clearly not so. Records of the Barnett Bank for the time in issue reflect an account in the name of Paula A. Dyer & Associates, Inc., (Account No. 1263515600), on which the authorized signatories were Paula A. Dyer or Dale J. Dyer. Another account, in the name of Senior Trust of Florida, Inc., (Account No. 1263288130), showed David B. Judy as President, Paula A. Dyer as Secretary/Treasurer, and Dale J. Dyer as shareholder. All were signatories on this account. A third account, (Account No. 1264759744) was a joint account of Dale J. Dyer and Paula A. Dyer. The Liukens check was deposited to the Paula A. Dyer & Associates account and, after endorsement by Mrs. Dyer, cleared. Thereafter, numerous checks were written on that account. During the period June 28, 1991 to July 28, 1991, 11 deposits, totalling almost $66,500.00 were made to it and at the end of the period, the account had a balance of slightly over $21,000.00. From July to August, 1991, 14 deposits to the account totalled in excess of $65,600.00 and the ending balance for the period was $15,561.07. From August 30 to September 30, 1991, ten deposits totalled $18,590.29 and the ending balance for the period was $2,206.97, Among the checks written on the company account during the period were: $10,000 to Paula A. Dyer, deposited to the joint personal account. $8,000 to Senior Trust. $700 to Dale J. Dyer. $12,000 by Dale Dyer to Senior Trust. $945 by Dale Dyer to Willis Kelsey. $2,000 by Dale Dyer to Princess Casino (resort). $1,475 by Paula Dyer to Paula Dyer and deposited to the joint personal account. $600 by Paula Dyer to Senior Trust $2,000 by Paula Dyer to the joint personal account. $1,600 by Paula Dyer to Paula Dyer and deposited to joint personal account. In August, 1991, Transport Life Insurance Company was contacted by an attorney for Mr. Liukens about the check he had written to it for an insurance policy. When the company responded it had no knowledge of the check and had received no funds on his behalf, it was sent a copy of the check endorsed by Ms. Dyer and negotiated by her. A company representative then contacted Ms. Dyer about the check she had received. She acknowledged she had deposited it to her agency account and submitted a check for $971.00 in partial restitution. None of the balance has ever been repaid by Ms. Dyer, the agency, or anyone else, and in September, 1991, Transport Life terminated its agency agreement with Paula A. Dyer & Associates, Inc. It also repaid Mr. Liukens in full. According to Transport Life's representative, Mr. Shellhase, the company has no indication Petitioner had anything to do with this transaction nor any information he conspired with anyone to defraud Transport or Mr. Liukens. By Final Order dated May 3, 1990, the Florida Insurance Commissioner took disciplinary action against Petitioner's license as an insurance agent in Florida for several violations of Section 626.11, Florida Statutes, and several other violations of Section 626.9541, Florida Statutes. The specific violations found were not established at the instant hearing.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore, recommended that Petitioner's application for reinstatement of his health license be approved. RECOMMENDED this 1st day of February, 1993, in Tallahassee, Florida. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 1st day of February, 1993. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 92-5094 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. FOR THE PETITIONER: Petitioner's counsel's proposed findings of fact were not specifically numbered. However, for the purposes of this Recommended Order they will be considered as numbered starting with the third paragraph on page 2 of the Proposed Recommended Order and continuing through the fifth paragraph on page 4. 1. & 2. Accepted and incorporated herein. 3. & 4. Accepted and incorporated herein. First sentence accepted and incorporated herein. Second sentence not proven. & 7. Accepted and incorporated herein. 8. - 10. Accepted and incorporated herein. Accepted and incorporated herein. Accepted. & 14. Accepted and incorporated herein. 15. & 16. Accepted and incorporated herein. However, evidence was introduced that during the period in question, Petitioner wrote checks totalling $14,945.00, a sum exceeding the amount represented by the Liukens check. FOR THE RESPONDENT: 1. - 5. Accepted and incorporated herein. 6. - 8. Accepted and incorporated herein. 9. - 11. Accepted and incorporated herein. (misnumbered 11 in PFOF). Accepted and incorporated herein. (misnumbered 12 in PFOF). Accepted and incorporated herein. (misnumbered 13 in PFOF). Accepted that the accounts were closed as indicated, but there is no evidence as to what was done with the funds therein. (misnumbered 14 in PFOF). Accepted and incorporated herein. COPIES FURNISHED: John L. Maloney, Esquire 5335 66th Street N., Suite 4 St. Petersburg, Florida 33709 James A. Bossart, Esquire Division of Legal Services Department of Insurance 612 Larson Building Tallahassee, Florida 32399-0300 Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Bill O'Neill General Counsel Department of Insurance The Capitol, PL-11 Tallahassee, Florida 32399-0300
The Issue Whether or not on or about February 17, 1969, the Respondent, Everett A. Harper, caused to be issued to Florida Pallet Corporation, by the Employers' Fire Insurance Company, a policy covering the business vehicles of Florida Pallet Corporation for which Harper received premiums from the insured on a monthly basis. Further, whether or not Harper failed to deliver or transmit the premiums to the insurer, resulting in the policy being cancelled flat for non- payment of premiums. Whether or not Harper failed to inform the insured of the cancellation of the policy, but nevertheless continued to receive the insured's premium payments monthly, without causing to be issued insurance coverage for Florida Pallet Corporation with another insurer. Finally, whether or not in July, 1969, a truck of the insured, Florida Pallet Corporation, was involved in an accident in which a claim was filed and in which Harper failed to advise the insured of the policy cancellation that had occurred a few months prior to the accident, and until February, 1970, continued receiving and accepting premiums. These acts are alleged to have been accepting premiums. Section 475.25(1)(a), Florida Statutes, as being acts which show the Respondent to be guilty of fraud, misrepresentation, concealment, dishonest dealing, trick, scheme or device and/or breach of trust in the business transaction. The acts also have allegedly constituted a violation of Section 475.25(1)(c), Florida Statutes, as being acts which show the Respondent to be guilty of failing to account for or deliver moneys which have come into his hands, which were not his, and which he was not entitled to retain, under the circumstances; thereby constituting conversion of those moneys. The Petitioner has an additional contention under Section 475.25(3), Florida Statutes, to the effect that the acts as alleged constitute a course of conduct in violation of the purpose and intent of the section immediately referenced.
Findings Of Fact The Respondent, Everett A. Harper, is a Registered Real Estate Broker, who presently holds a non-active certificate of registration, giving an address of P. O. Box 1238, Sanford, Florida 32771. This non-active certificate of registration is held with the Petitioner, Florida Real Estate Commission. From October 1, 1968, until April 29, 1970, which includes the time of the alleged acts of misconduct, the Respondent was the holds of a broker's certificate as a individual broker under the trade name "Harper-Gentry Real Estate," with office at 2465 South Park Avenue, Sanford, Florida 32771. In that same period the Respondent, Everett A. Harper, was the holder of a General Lines Insurance Agent's license held with the Treasurer's Office of the State of Florida. While operating the insurance business, in February, 1969, the Respondent entered into an agreement with the Florida Pallet Corporation to obtain insurance coverage for the motor vehicles which were owned by the corporation. The arrangement between Harper and the corporation was to have the corporation pay an initial installment to activate that policy and to make monthly premiums in the future. The initial payment was made and Harper contacted the Employers' Commercial Union Companies, specifically the Employers' Fire Insurance Company, for purposes of having those companies insure that Florida Pallet Corporation for its automobile liability, in addition to Workmen's Compensation and general liability. (These latter two categories were apparently at the request of the Florida Pallet Corporation, although no testimony by their former president was presented from the representative of the insurance company, who testified in the course of the hearing.) The facts further revealed that once the Orlando branch of the Employers' Commercial Union Companies had received the request for insurance, they declined coverage on the Workmen's Compensation and general liability portions of the request, but issued an automobile liability policy, subject to background checks on the prospective drivers' records and engineering reports. The automobile policy was issued to the Respondent's insurance agency. Within ten days to two weeks of the date of the issuance, the insurance company asked the Harper agency to return the automobile policy for cancellation because the background check had led the insurance company to decline the coverage. This request was honored by Everett A. Harper when he returned the policy with the indication "cancelled flat." This form of cancellation was allowed because no claim had been filed against the policy prior to the date of the cancellation. The effect of the cancellation of the automobile policy was to cancel the policy from the date of inception. It also meant that the insurance company, to wit, the Employers' Commercial Union Companies, was not entitled to collect any moneys as premium payments, nor was Everett A. Harper entitled to keep those premium payments which he had received up to that moment or future premium payments which he might have received under the policy which has been alluded to. Harper could have placed a request for coverage with other companies if he had so desired. In fact, he did not make such a placement and kept the initial payment of premiums and continued to receive premiums over a period of the year 1969. The Florida Pallet Corporation was not notified of the cancellation of the policy or of Harper's failure to place their request for policy with another company, or the fact that Harper continued to receive the premium payments, which amounted to $1,270.00 a year for the automobile coverage. In addition, Harper neglected to advise the Florida Pallet Corporation that they were not covered by any insurance plan for their automobile liability needs. Some six or eight months after the policy had been cancelled, one of the vehicles belonging to the Florida Pallet Corporation was in an accident, which necessitated protection under an insurance policy. Harper still failed to indicate the cancellation of the policy, the lack of placement of the coverage with a new company, and the fact that no coverage existed, when requested to protect the interests of the Florida Pallet Corporation. This request was made by the president of that corporation, Leo Voskan. Eventually, Voskan made an inquiry of the Employers' Commercial Union Companies in February, 1970, and was told that there was no coverage, in view of the fact that the policy had been cancelled at a time prior to any authorized claim being filed. The claim arising from the automobile accident in 1969, involving the vehicle of the Florida Pallet Corporation, was paid by Harper, at a date beyond the time of the inquiry mentioned of February, 1970. Under the facts as developed, Harper should have returned the premium payments to the Florida Pallet Corporation, indicating the fact of the lack of coverage by the Employers' Commercial Union Companies, or in the alternative, placed coverage with another insurance company. The failure to return those premium payments, or arrange for a policy with another company, and the failure to advise the Florida Pallet Corporation of their lack of coverage, show the Respondent, Everett A. Harper, to be guilty of fraud, misrepresentation, concealment, dishonest dealing, trick, scheme or device and/or breach of trust in a business transaction in violation of the provisions of Section 475.25(1)(a), Florida Statutes. It also shows that the Respondent, Everett A. Harper, is guilty of failing to account for or deliver moneys which have come into his hands, which were not his and which he was not entitled to retain, under the circumstances, of which he converted, in violation of Section 475.25(1)(c), Florida Statutes. Finally, these facts establish that the Respondent, Everett A. Harper, is guilty of a course of conduct or practice which shows that he is so dishonest and untruthful that the money, property, transactions and rights of investors or those with whom he may sustain a confidential relation, may not be safely entrusted to him; in violation of Section 475.25(3), Florida Statutes.
Recommendation Based upon a review of the facts as offered in this cause, it is, RECOMMENDED: That the non-active real estate broker's registration of the Respondent, Everett A. Harper, be REVOKED. DONE and ENTERED this 18th day of August, 1978, in Tallahassee, Florida. CHARLES C. ADAMS, Hearing Officer Division of Administrative Hearings 530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: John Huskins, Esquire Staff Attorney Florida Real Estate Commission Post Office Box 1900 Orlando, Florida 32802 Everett A. Harper Post Office Box 1238 Sanford, Florida 32771
Findings Of Fact At all times material herein, the Respondent was a licensed Health and Legal Expense Insurance agent in the State of Florida. By criminal indictment filed October 4, 1984, Respondent was charged with the crimes of conspiracy to commit fraud, use of the mails to defraud and the use of a fictitious name or address to defraud. After a jury trial, Respondent was convicted of the offenses of conspiracy to commit fraud, in violation of Title 18, USC, Section 1341, Title 29, USC, Section 501(c), all in violation of Title 18, USC, Section 371, as charged in Count One of the Indictment and mail fraud, all in violation of Title 18, USC, Sections 1341 and 1342, as charged in Counts Two through Five of the Indictment. The American Federation of State, County and Municipal Employees (AFSCME) was at all times material herein a labor union affiliated with the AFL- CIO, a labor organization as defined in Section 402 of Title 29, United States Code. Florida Public Employees Council 79 (Council 79) was at all times material herein a labor union affiliated with AFSCME and the AFL-CIO, a labor organization as defined in Section 402 of Title 29, United States Code. The scheme upon which the Respondent's conviction rests, was directed toward both AFSCME and Council 79. At all times herein, Respondent was employed by either AFSCME or Council 79. Upon Council 79 being chartered, Respondent became its Tallahassee Regional Director. The record does not reflect any persons as victims of the scheme upon which the Respondent's conviction rests other than AFSCME and Council 79. Respondent's participation in the schemes upon which his conviction rests was as follows: (a) at the directions of William Van Zandt, Assistant to Jerry Wurf, President of AFSCME, and Thomas J. Fitzpatrick, President of Council 79, Respondent enrolled David J. Michalski as an employee of Council 79 and met with David J. Michalski in November 1979 to set up an address where payments on expense account vouchers and salaries would be delivered, and assisted David J. Michalski in opening an account at the bank for this purpose, and; (b) contacted George Albert Cuneo, Jr., President and owner of Cuneo Advertising, Inc., and requested that Cuneo mail bills for printing a Council 79 newspaper directly to G.A.D., Inc. G.A.D., Inc. was a corporation used by defendants other than Respondent to funnel inflated bills for advertising and public relations for payment by AFSCME or Council 79. The record is clear that Respondent had no knowledge of the schemes, was following orders of his superiors, and received no money, property, or other consideration for his participation in the schemes. The only evidence in the record concerning the Respondent's participation in the mail fraud is that the Respondent did apparently mail some matters concerning David R. Michalski's expense vouchers. Whether he mailed anything concerning the "kick-back scheme" or the inflated bills for advertising and public relations is not clear from the record. Respondent had never been convicted of a crime before this conviction. Respondent was sentenced to three (3) years on Count One but served only eight (8) months. The sentences in Count Two through Five were suspended and Respondent was placed on probation. Respondent was placed on probation for six (6) months on Counts Two through Four which began immediately and was placed on three (3) years probation on Count Five which was to run consecutively with the sentence imposed in Count One. After serving the eight (8) months of his sentence, Respondent returned to Tallahassee and enrolled in, and completed, a course in insurance at Tallahassee Community College hoping to further expand his existing insurance license. The record is clear that Respondent's reputation for truth and veracity in the community is good despite his conviction, and the Respondent enjoys a good reputation as far as his integrity in dealing with others in concerned.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record and the candor and demeanor of the witnesses, it is, therefore, RECOMMENDED that Petitioner, Department of Insurance, enter a Final Order dismissing all counts of the Administrative Complaint filed herein. Respectfully submitted and entered this 31st day of March, 1987, 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 31st day of March, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-4404 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties in this case. Rulings on Proposed Findings of Fact Submitted by the Petitioner Adopted in Finding of Fact 1. Adopted in Finding of Fact 2. Adopted in Finding of Fact 3 as clarified. Adopted in Finding of Fact 5 with the exception of the phrase "with in excess of ten numbers" which is rejected as immaterial since there was no substantial competent evidence in the record to show that any individual member had been defrauded or that any conspiracy to defraud was directed at any individual member. Rulings on Proposed Findings of Fact Submitted by the Respondent 1. Adopted in Finding of Fact 3. 2-7. Rejected as immaterial and irrelevant. Adopted in Finding of Fact 9. Adopted in Finding of Fact 7. Adopted in Findings of Fact 9 and 11. Adopted in Findings of Fact 9 and 11. Adopted in Findings of Fact 9 and 11. Adopted in Finding of Fact 9. Adopted in Findings of Facts 9 and 11. Rejected as immaterial and irrelevant. Adopted in Finding of Fact 15. Rejected as immaterial and irrelevant. Adopted in Finding of Fact 13. 19.-20. Adopted in Finding of Fact 16. COPIES FURNISHED: Robert V. Ellias, Esquire Department of Insurance 413-B Larson Building Tallahassee, Florida 32399-0300 Ben R. Patterson, Esquire PATTERSON and TRAYNHAM 1215 Thomasville Road Post Office Box 4289 Tallahassee, Florida 32315 Honorable William Gunter State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 =================================================================
The Issue Whether the Respondent committed the violations alleged in the Administrative Complaint dated October 24, 2008, and, if so, the penalty that should be imposed.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made: The Department is the state agency responsible for licensing, regulating, and imposing discipline on insurance agents in Florida. See §§ 626.016(1); 626.601, Fla. Stat. Ms. Sykes was licensed as a 2-14 "life including variable annuity agent" and as a 2-20 general lines agent in January 1998. At the times pertinent to this proceeding, Ms. Sykes worked at an insurance agency owned by David J. Heiny ("Heiny Agency"). Deena Buell also worked for the Heiny Agency, and Ms. Sykes, Ms. Buell, and Mr. Heiny were the only three employees who were licensed as 2-20 general lines agents. The remaining two employees of Heiny Agency during the times pertinent to this proceeding held 4-40 licenses as customer service representatives. Certificate of Liability Insurance The Heiny Agency marketed the insurance products of the Allstate Insurance Company ("Allstate") and also the products of other insurance companies at the times material to this proceeding. In 2003, Mr. Heiny decided to expand his business to include workers' compensation insurance. In July 2003, he submitted an application to the Florida Workers' Compensation Joint Underwriting Association ("FWCJUA"), the insurer of last resort in Florida for workers' compensation insurance, for authority to submit applications to it for workers' compensation insurance. Mr. Heiny was notified by the FWCJUA in a letter dated July 29, 2003, that he was authorized to submit workers' compensation insurance applications to the FWCJUA until July 29, 2004. Mr. Heiny did not have authority to bind coverage for the FWCJUA, nor did he have authority to issue certificates of liability insurance showing workers' compensation insurance coverage through the FWCJUA. Under his agreement with the FWCJUA, Mr. Heiny was required to meet with and explain the workers' compensation insurance coverage to applicants and to sign all of the application forms. Mr. Heiny was unfamiliar with workers' compensation insurance, and he intended for Ms. Buell to handle all of the workers' compensation insurance business because she had experience at another agency with workers' compensation insurance. Mr. Heiny's office submitted one application for workers' compensation insurance, which was rejected, and he decided that the FWCJUA required too much paperwork. Mr. Heiny decided that he did not want to be involved with workers' compensation insurance, and he did not apply to renew his authorization to submit workers' compensation insurance applications to the FWCJUA. As a result, his authority to submit workers' compensation insurance applications to the FWCJUA expired on July 29, 2004. Mr. Heiny informed both Ms. Sykes and Ms. Buell that he did not intend to renew his authorization with the FWCJUA. Ms. Sykes is fluent in Spanish and was the only licensed agent at the Heiny Agency who spoke Spanish at the times pertinent to this proceeding. Because of her fluency in Spanish, Ms. Sykes worked with the Heiny Agency's Spanish- speaking customers, and most of her business consisted of referrals from these customers. One of Ms. Sykes' long-standing customers was Mayola Campos, who owned Form Construction, Inc. ("Form Construction"), with her husband, Fortino Campos, and Ms. Sykes handled the commercial insurance for Form Construction. Mrs. Campos came into the Heiny Agency's office regularly to pay premiums and to discuss with Ms. Sykes's the corporation's various insurance policies and changes in coverage. As a result, Ms. Sykes and Mrs. Campos were well-acquainted, and Ms. Sykes received a number of referrals from Mrs. Campos. Form Construction was a trim and roofing company working in the construction industry. According to Ms. Sykes, Mrs. Campos came to her in or around July 2004 seeking workers' compensation insurance. Ms. Sykes was not familiar with workers' compensation insurance because she had never sold that type of insurance, and it was not a product normally sold through the Heiny Agency. Nonetheless, she completed an application and submitted it to Ms. Buell for processing. At the time, Ms. Sykes was aware that Mr. Heiny did not intend to renew his authority to submit applications for workers' compensation insurance to the FWCJUA and that the authority would expire at the end of July 2004. Ms. Sykes cannot recall hearing anything further about Form Construction's July 2004 application for workers' compensation insurance. She was going through a particularly difficult divorce proceeding and was not working full-time at the agency. In addition, Ms. Buell was working from her home so she could care for her infant and young daughter, and Ms. Sykes and Ms. Buell were not in regular communication. Without confirming that the FWCJUA had issued workers' compensation insurance to Form Construction, Ms. Sykes signed a Certificate of Liability Insurance for Form Construction and sent it to that company. The certificate, dated October 12, 2004, reflected that, in addition to general liability and automobile insurance, Form Construction had workers' compensation insurance through the FWCJUA that was effective from October 16, 2004, to October 16, 2005. The certificate holder was identified on the certificate as Gold Construction. Ms. Sykes was aware of the purpose of a Certificate of Liability Insurance since she routinely prepared and signed them for insurance companies whose products were marketed by the Heiny Agency. A Certificate of Liability Insurance is used to establish that a person or company has liability, automobile, and/or workers' compensation insurance. Although some insurance companies allow insurance agents to issue certificates of liability insurance, only the FWCJUA issues certificates of liability insurance for the workers' compensation insurance coverage it provides. The only exception to this policy is when an agent requests authority to issue a certificate of liability insurance for a specific insured for a specific purpose. The agent must request this authority in writing and specify the purpose of the certificate; the FWCJUA must give approval in writing to the agent before the agent can issue the certificate. The agent must then send a copy of the certificate to the FWCJUA for its records. In the construction industry, a certificate of liability insurance is presented to a contractor to establish that a company working on a project as a subcontractor has workers' compensation insurance. If a general contractor hires a subcontractor that does not have workers' compensation insurance, the general contractor is responsible for providing workers' compensation insurance for the employees of the uninsured subcontractor who worked on the contractor's job. See § 440.10(a), (b), and (c), Florida Statutes. Form Construction presented the Certificate of Liability Insurance signed by Ms. Sykes to Gold Construction, which was, at the times pertinent to this proceeding, a qualified contractor business. Gold Construction hired general contractors, which, in turn, hired subcontractors to work on its projects. The subcontractors were paid by Gold Construction, and it required all subcontractors to present a certificate of liability insurance showing that they had general liability and workers' compensation insurance at the time the subcontractors were hired. Sometimes, the subcontractor would provide the certificate directly to Gold Construction, and sometimes Gold Construction would call the subcontractor's insurance agency and request that the certificate be sent to it, directly. The Certificate of Liability Insurance signed by Ms. Sykes was presented to Gold Construction as evidence that Form Construction had liability and workers' compensation insurance, and, in November 2004, Gold Construction hired Form Construction to do truss work on two construction projects. Gold Construction was subsequently audited by its workers' compensation insurance carrier, and the auditor determined that that Form Construction did not, in fact, have workers' compensation insurance and that the Certificate of Liability Insurance was bogus. Gold Construction was, therefore, assessed an additional $12,000.00 in workers' compensation insurance premium to add coverage for Form Construction's employees. The only records the FWCJUA has relating to Form Construction is an application for workers' compensation insurance for Fortino and Mayola Campos, d/b/a Form Construction, which was signed by Mr. Heiny and dated August 27, 2003; a date stamp on the application shows that it was received by the FWCJUA on September 17, 2003. In a letter dated October 16, 2003, the FWCJUA notified Mr. Heiny that the application for Form Construction was being returned with no coverage having been bound, and there is nothing in the records of the FWCJUA showing that it received another application for workers' compensation insurance for Form Construction or that it provided compensation insurance for Form Construction. Automobile insurance endorsement The Heiny Agency wrote commercial automobile insurance through Allstate. Ms. Sykes joined the agency in 1995, after having worked for another agency that marketed Allstate insurance products. Ms. Sykes was recommended by one of Allstate's district managers, and her familiarity with the Allstate computer system and her fluency in Spanish were considered by Mr. Heiny to be very important contributions to his agency. Form Construction had commercial automobile insurance coverage with Allstate, which was written through the Heiny Agency. Ms. Sykes was the only agent at the Heiny Agency that worked with Mrs. Campos on insurance matters. Mrs. Campos visited the Heiny Agency's office frequently to pay premiums and to discuss the various insurance policies issued to Form Construction. Mrs. Campos always spoke with Ms. Sykes when she came into the office because none of the other agents or employees of the agency spoke Spanish. Form Construction's commercial automobile insurance policy came up for renewal in April 2005. When Mrs. Campos came in to pay the renewal premium, she and Ms. Sykes discussed raising the policy's bodily injury liability limits from $25,000.00 per person and $50,000 per occurrence. Mrs. Campos told Ms. Sykes that she needed to speak to her husband before she could raise the liability limits. Ms. Sykes did not hear anything from Mrs. Campos until June 2005, when Mrs. Campos came into the office and requested that Ms. Sykes add another vehicle to Form Construction's commercial automobile insurance policy. Ms. Sykes again advised Mrs. Campos that she should consider raising the policy's bodily injury liability coverage limits to at least $250,000. Mrs. Campos asked Ms. Sykes how much such an increase in coverage would cost, and Ms. Sykes went into the Allstate computer system and partially prepared an endorsement to the automobile insurance policy showing the increased limits so she could get a quote for Mrs. Campos on the price. Ms. Sykes did not submit the endorsement at that time, and it remained pending in the Allstate computer system. On or about July 12, 2005, Mrs. Campos visited the Heiny Agency's office and reported to Ms. Sykes that Mr. Campos had been involved in an automobile accident while driving a vehicle owned by Form Construction and that he had hit a person on a bicycle. Ms. Sykes advised her that her commercial automobile bodily injury liability coverage limits were $25,000.00 per person and $50,000.00 per occurrence. Ms. Sykes also reminded Mrs. Campos that she had advised her several times to raise the Form Construction's bodily injury liability limits. Ms. Sykes immediately submitted the claim to the Allstate claims Department, where it was assigned to Thomas Burger. On July 15, 2005, Mrs. Campos contacted Ms. Sykes and told her to raise the bodily injury liability limits in Form Construction's automobile insurance policy to $500,000.00 per person and $500,000.00 per occurrence. Ms. Sykes went into the Allstate computer system and prepared and submitted the endorsement to Allstate. The endorsement submitted by Ms. Sykes on July 15, 2005, carried an effective date of July 10, 2005, two days prior to the date on which Mrs. Campos reported the claim relating to Mr. Campos's automobile accident. A copy of the endorsement was sent to Mrs. Campos on July 16, 2005, and Mrs. Campos visited the Heiny Agency's office several days later with a check for the additional premium attributable to the increase in bodily injury liability limits. The Allstate claims department was, at the times pertinent to this proceeding, separate from the department handling commercial automobile insurance policies. The information available to Mr. Burger at the time the Form Construction claim was submitted showed bodily injury liability limits of $25,000.00 per person and $50,000.00 per occurrence on the Form Construction policy. On July 29, 2005, Allstate tendered a check to the person injured by Mr. Campos for the policy limit of $25,000.00. This check was not cashed. Mr. Burger did not learn until October 2005 that a policy endorsement raising the bodily injury liability limits had been submitted July 15, 2005, with an effective date of July 10, 2005. According to Ms. Sykes, someone from Allstate contacted her in August 2005 to question her about the endorsement, and she explained that the retroactive increase in bodily injury liability limits was a mistake and that the policy limits were $25,000.00 per person and $50,000.00 per occurrence at the time of the accident on July 12, 2005. Mr. Burger interviewed Ms. Sykes and Mr. Heiny on January 13, 2006, regarding the endorsement, and Ms. Sykes told Mr. Burger that she could not recall why she would have back-dated the endorsement. Ms. Sykes told Mr. Burger of the problems she had experienced with endorsements to automobile insurance policies being lost in the Allstate computer system. On January 26, 2006, the attorney representing the person injured by Mr. Campos wrote Allstate demanding disclosure of the policy limits of Form Construction's automobile insurance policy. In a letter dated February 3, 2006, Allstate notified Mr. Heiny and Ms. Sykes that it might seek indemnification from the Heiny Agency because it attributed the back-dated increase in bodily injury liability limits to agent error. Shortly thereafter, Mr. Heiny asked if Allstate could change the limits back to the original $25,000.00 per person and $50,000.00 per occurrence as of the date of the accident, but Allstate had already determined that the increased limits were effective July 10, 2005, because of the effective date on the endorsement and because of Mrs. Campos's payment of the premium for the additional coverage. In a letter dated February 17, 2006, Mr. Burger advised the attorney representing the injured person of the increase in the bodily injury liability limits, and, on March 2, 2006, Allstate tendered a check to the injured person's attorney in the amount of $500,000.00. Ms. Sykes attributed the back-dating of the endorsement to a glitch in the Allstate computer system by which the endorsement she submitted July 15, 2005, was automatically back-dated to July 10, 2005. Ms. Sykes had complained to Mr. Heiny on numerous occasions about problems with endorsements disappearing from the system, which required her to resubmit the endorsements. Ms. Sykes was not, however, aware of any endorsements being automatically back-dated by the system except for the July 2005 endorsement to Form Construction's commercial automobile insurance policy. Under the Allstate computer system, there are only two ways in which an endorsement's effective date can be established. The usual procedure requires the agent to complete the endorsement and submit it into the system; the system then automatically records on the endorsement the date it was submitted and the effective date of the endorsement. The other alternative is for an authorized agent to manually back-date the effective date of an endorsement and then submit it into the system. Mr. Heiny tested the Allstate computer system repeatedly, trying to determine whether the system would automatically back-date an endorsement. None of the test endorsements prepared by Mr. Heiny was automatically back-dated, and Mr. Heiny is aware of no instance in which an endorsement was automatically back-dated except for the Form Construction endorsement at issue herein. Findings of ultimate fact Certificate of Liability Insurance The evidence presented by the Department is sufficient to establish with the requisite degree of certainty that, when she signed the Certificate of Liability Insurance on October 12, 2004, showing that Form Construction had workers' compensation insurance issued by the FWCJUA with effective dates of October 16, 2004, through October 15, 2005, Ms. Sykes knew that Form Construction did not have workers' compensation insurance placed by the Heiny Agency through the FWCJUA and knew that Gold Construction would rely on the Certificate of Liability Insurance as evidence that Form Construction had workers' compensation insurance. Ms. Sykes' action demonstrates her lack of fitness and trustworthiness to engage in the business of insurance, and Ms. Sykes caused injury to Gold Construction because, as a result of its reliance on the Certificate of Liability Insurance, it was required to pay additional premium to its workers' compensation insurance carrier. Ms. Sykes's testimony regarding the circumstances in which she signed the Certificate of Liability Insurance was replete with inconsistencies and improbabilities and was wholly insufficient to support her contention that, when she signed the Certificate of Liability Insurance, she had a good faith belief that Form Construction had workers' compensation insurance issued by the FWCJUA. Mr. Heiny told Ms. Sykes that he did not intend to renew his authorization to submit workers' compensation insurance applications to the FWCJUA after it expired in July 2004, and, because she was the only agent at the Heiny Agency that dealt with Mrs. Campos, Ms. Sykes would necessarily have known if Form Construction had been issued a workers' compensation insurance policy by the FWCJUA. It is reasonable to infer, therefore, that Ms. Sykes was aware on October 12, 2004, that Form Construction was not, and had never been, covered by workers' compensation insurance issued by the FWCJUA as a result of an application submitted by Mr. Heiny. Finally, Ms. Sykes' testimony that, before signing the Certificate of Liability Insurance, she reviewed the Form Construction file and saw a check and a Federal Express receipt showing that "it all went out to the FWCJUA"2 directly conflicts with her testimony that Form Construction's records were destroyed when the Heiny Agency's office flooded in September 2004.3 Although the evidence presented by the Department is sufficient to establish that Ms. Sykes demonstrated a complete lack of knowledge about workers' compensation insurance, she was not authorized to submit applications to the FWCJUA and did not engage in any transactions involving workers' compensation insurance except for signing the Certificate of Liability Insurance for Form Construction. This act is not sufficient to establish that Ms. Sykes engaged in transactions involving workers' compensation insurance. Automobile insurance endorsement The evidence presented by the Department is sufficient to establish with the requisite degree of certainty that Ms. Sykes' deliberately back-dated an endorsement to Form Construction's commercial automobile insurance policy increasing the bodily injury liability policy limits so that the increased limits were effective two days before Mr. Campos was involved in an accident while driving a vehicle owned by Form Construction. Ms. Sykes' action constitutes willful misrepresentation of the coverage limits actually in effect on the date of the accident, and it demonstrates Ms. Sykes' unfitness and untrustworthiness to engage in the business of insurance. Ms. Sykes' explanation that the endorsement was automatically back-dated by the Allstate computer system is rejected as not credible. The evidence presented by the Department is not sufficient to establish that Ms. Sykes lacked in any respect adequate knowledge of or technical competence in commercial automobile insurance. Finally, the evidence presented by the Department is sufficient to establish by the requisite degree of certainty that, because Ms. Sykes committed misconduct relating to the signing of the Certificate of Liability Insurance, she engaged in dishonest practices while engaging in the business of insurance when she back-dated the endorsement to the Form Construction commercial automobile insurance policy.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Financial Services enter a final order Finding Madeline Hernandez Sykes guilty of one count of having violated Sections 626.611(7) and 626.621(6), Florida Statutes; Finding Ms. Sykes guilty of one count of having violated Section 626.611(5), (7), and (9), Florida Statutes; and Suspending Ms. Sykes' license to engage in business as a general lines insurance agent for a period of 15 months. DONE AND ENTERED this 30th day of April, 2009, in Tallahassee, Leon County, Florida. PATRICIA M. HART Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 30th day of April, 2009.
The Issue Whether Respondent violated Sections 627.832(1)(i) and 627.848, Florida Statutes, and if so, what penalty should be imposed.
Findings Of Fact Respondent, Alliant Premium Finance Corporation, is a Florida licensed premium finance company domiciled in Florida. Alliant has been licensed to sell premium finance agreements to the general public in Florida since December 16, 1993. William J. Villari has been the president of Alliant since its licensure. In 1995, Petitioner, Department of Insurance, performed a routine regulatory examination of Alliant. During the examination, 15 Alliant files, which had refunds due to insureds within 30 days, were reviewed. Out of the 15 files, 12 were late, ranging from 87 to 329 days late. The Department sent Alliant the Department's 1995 Report of Examination, which gave notice to Alliant that between December 16, 1993, and June 30, 1995, Alliant had violated the insurance code by failing to make refunds within 30 days. Mr. Villari advised the Department by letter dated December 18, 1995, that he was taking steps to ensure that in the future refunds would be made on a timely basis. No disciplinary action was taken by the Department as a result of the 1995 examination. During January 1998, the Department performed another routine regulatory examination of Alliant. The findings of the examination are contained in the Report of Examination for the period from July 1, 1995, to September 30, 1997. As was noted in the report, 11 Alliant accounts were reviewed which had refunds due to insureds within 30 days, and 8 of the 11 accounts were refunded late. The lateness ranged from 5 to 67 days. The report was mailed to Alliant on February 17, 1998. The 1998 examination also revealed that between July 1, 1995, and September 30, 1997, Alliant had failed to maintain certificates of mailing showing that notices of intent to cancel insurance contracts were mailed to insureds ten days before cancellation. The evidence did not show that Alliant had failed to mail the cancellation notices, only that Alliant had failed to maintain certificates showing that the notices had been mailed. Respondent does not dispute that Alliant was late in making refunds as noted in the 1998 Examination Report or that Alliant did not maintain certificates of mailing for the cancellation notices. Alliant disagrees with the penalty proposed by the Department.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered, finding that Alliant Premium Finance Corporation violated Sections 627.832(1)(i) and 627.848(1), Florida Statutes, and imposing a penalty of $2,500 for the violation of Subsection 627.832(1)(i), Florida Statutes, and $250 for the violation of Section 627.848(1), Florida Statutes. DONE AND ENTERED this 24th day of May, 2000, in Tallahassee, Leon County, Florida. SUSAN B. KIRKLAND 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 24th day of May, 2000. COPIES FURNISHED: Christopher R. Hunt, Esquire Department of Insurance Division of Legal Services 612 Larson Building 200 E. Gaines Street Tallahassee, Florida 32399-0333 William J. Villari, President Alliant Premium Finance Corporation 303 Gardenia Street West Palm Beach, Florida 33401 Honorable Bill Nelson State Treasurer and Insurance Commissioner Department of Insurance The Capitol, Plaza Level 2 Tallahassee, Florida 32399-0300 Daniel Y. Sumner, General Counsel Department of Insurance The Capitol, Lower Level 26 Tallahassee, Florida 32399-0300
