The Issue The issue in this case is whether Respondent committed the offenses alleged by the Department of Financial Services in the Administrative Complaint dated May 27, 2009, and, if so, what penalty should be imposed.
Findings Of Fact Petitioner, the Department of Financial Services ("Petitioner" or "the Department") has regulatory responsibility for Chapter 626, Florida Statutes (2009), the insurance licensing procedures law. Respondent, Eileen P. Suarez ("Respondent" or "Suarez"), is a licensed general lines agent transacting in property and casualty insurance, under license number E129078. She operated and was the agent in charge of the Suarez Insurance Agency, Inc. ("Agency"), in Hialeah, Florida. The Agency held a valid state license from 7/21/2006 to 7/27/2009. The Department filed a three-count Administrative Complaint against Respondent alleging that she violated various provisions of Chapter 626, Florida Statutes. COUNT I John Vila is the president of Vila Home Group, Inc., a trucking company that is in the business of hauling sand, soil, and gravel. In April 2005, he purchased a dump truck and, at the suggestion of the dealer, contacted Suarez for insurance. Suarez sold Vila two insurance policies, for the period April 29, 2005 to April 29, 2006, one with AequiCap Insurance Company ("AequiCap") and the other with the Underwriters at Lloyds, London ("Lloyds"). The AequiCap Policy was a commercial liability insurance policy. The Lloyds Policy was a commercial automobile physical damage insurance policy. In March 2006, Vila gave Suarez a check in the amount of $10,876.41, made payable to the Agency to renew the AequiCap and Lloyds policies, for the period April 29, 2006 to April 29, 2007. The AequiCap policy quote was approximately $5,350.00. The Lloyds policy quote was approximately $5,500.00. The check was deposited in the Agency's trust account, but the Lloyds policy was allowed to expire on April 29, 2006, and was not renewed until October 26, 2006, creating a six-month gap in commercial automobile physical damage insurance coverage for Vila. When it was renewed, the Lloyds Policy cost $5,712.03. Vila's AequiCap policy expired on April 29, 2006, and was not renewed because Suarez failed to pay MAI Risk Management, AequiCap's managing general agent. The funds were not returned to Vila. While the March 2006 quotes were pending, the registered driver of the truck, Andres Vila, was involved in an accident and was at fault for hitting a wire. Rather than risk an increase in the pending insurance quotes, Vila paid Bellsouth $2,390.36 in damages. COUNT II On or about October 26, 2006, Suarez provided Vila a Certificate of Liability showing that the truck was insured with AequiCap, under policy number TC012695, and with Lloyds, under policy number R641440/0251, for the period April 29, 2006 to April 29, 2007. Vila was not insured under AequiCap policy number TC012695 from April 29, 2006 to April 29, 2007. The Certificate of Liability was a false document that Suarez created on her computer, printed, and gave to Vila. COUNT III Shelly, Middlebrooks & O'Leary, Inc. ("Shelly Middlebrooks") is a licensed insurance agency, located in Jacksonville, that acts as a general agent for multiple insurance companies. Suarez collected insufficient funds to include the premiums that were intended to be forwarded to Shelley Middlebrooks for policies to insure the following trucking companies: All Nations Logistics, LLC (Policy Number 486865); Jose Veiga, d/b/a JJ Freightways (Policy Number 486885); Gary Castle/Diamond Mine (Policy Number 74APN338354); and Nics Oil, Inc. (Policy Number 74APN401617). For each of the four companies, she requested and received binders for insurance from Shelly Middlebrooks, followed by invoices for the premiums that were to have been paid within ten days of the date the invoices were received. In each instance, Suarez did not pay Shelly Middlebrooks, which cancelled the policies for non-payment of the premium. It also obtained a default judgment in the Circuit Court in and for Duval County, Florida, that requires Suarez to pay it the outstanding balances due for the four policies and a $25 insufficient funds check fee, for a total of $8,335.60, which she has been unable to pay. Instead of paying for insurance, Suarez used most of the funds she collected to pay for various other corporate expenses for the same trucking companies, including state and federal government filings for intrastate or interstate travel that were prerequisites to their becoming insurable. Suarez expected to collect the additional funds needed for insurance later, but the clients, the owners of the trucking companies, did not pay her. Suarez admits that she failed her clients in 2006, after her father's death in February 2006. She realized the Vila errors and tried to correct them in October. The Agency is now closed. Suarez's husband has been unemployed for over a year, and their home is in foreclosure. She is receiving social security disability payments and has insufficient funds to file for bankruptcy.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered by the Department of Financial Services: Finding Respondent guilty of violating Subsections 626.611(7), (8) and (10); Subsection 626.561(1); and Subsections 626.621(2) and (6), Florida Statutes, as charged in Count I of the Administrative Complaint; Finding Respondent guilty of violating Subsections 626.611(7) and (8); Subsection 626.621(6); and Subsection 626.9541 (1)(e)1., Florida Statutes, as charged in Count II of the Administrative Complaint; Finding Respondent guilty of violating Subsections 626.611(7), (8) and (10); Subsection 626.561(1); and Subsections 626.621(2) and (6), Florida Statutes, as charged in Count III of the Amended Complaint; Revoking Respondent's licenses and appointments issued or granted under or pursuant to the Florida Insurance Code; Ordering Respondent to make restitution to John Vila in the amount of $5,164.38; and Ordering Respondent to make restitution to Shelly Middlebrooks & O'Leary in the amount of $8,335.60. DONE AND ENTERED this 16th day of February, 2010, in Tallahassee, Leon County, Florida. S ELEANOR M. HUNTER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 16th day of February, 2010.
The Issue The issues are whether Respondent, by entering a plea of nolo contendere to a misdemeanor charge of conspiracy to commit workers' compensation fraud, demonstrated a lack of fitness and trustworthiness to sell insurance in violation of Section 626.611(7), Florida Statutes, and if so, what penalty should be imposed.
Findings Of Fact At all times relevant to this proceeding, Respondent was eligible for licensure and licensed in the following areas: (a) as a health insurance agent; (b) as a life insurance agent; (c) as a life and health insurance agent; (d) as a life, health, and variable annuity agent; (e) as a surplus lines insurance agent; and (f) as a general lines insurance agent. In June 1992, the insurance agency that Respondent worked for was purchased by another insurance agency. Ronald Palmerton was a client of the owner of Respondent's former employer. Mr. Palmerton held a workers' compensation policy issued by Liberty Mutual Insurance Company (Liberty Mutual). After the owner of Respondent's former employer left the new agency, Respondent handled Mr. Palmerton's requests for additional insurance with Liberty Mutual. Respondent was never paid a commission for any work performed on Mr. Palmerton's behalf. Even so, Respondent's testimony that Mr. Palmerton was not up front with information that he provided to Respondent and that Respondent never told Mr. Palmerton that he could avoid his workers' compensation experience modification if he started another company is not persuasive. In a Fourth Amended Information dated April 16, 2001, Respondent and Mr. Palmerton, were charged in the Circuit Court of the First Judicial District, in and for Escambia County, Florida, Case No. 99-2081 CF, with several felony and misdemeanor violations. Specifically, Respondent was charged as follows: (a) with racketeering, a first-degree felony in violation of Section 895.03, Florida Statutes; (b) with conspiracy to commit racketeering, a first-degree felony in violation of Sections 895.03(4) and 777.04(3), Florida Statutes; and (c) conspiracy to commit workers' compensation fraud, a misdemeanor in violation of Sections 440.37(4) and 777.04(3), Florida Statutes. The misdemeanor criminal charge was based on allegations that, beginning on April 4, 1993, Respondent and Mr. Palmerton did unlawfully and knowingly conspire to commit workers' compensation fraud by knowingly making false or misleading oral or written statements and representations and/or knowingly omitting or concealing material information required by Section 440.381, Florida Statutes. According to the Fourth Amended Information, the purpose of the conspiracy was to avoid or diminish the amount of payment of any workers' compensation premiums to be paid by Mr. Palmerton and/or his related companies to a carrier or self-insurance fund. The criminal trial was scheduled for April 16, 2001. On April 12, 2001, the State of Florida offered a plea agreement to Respondent. Respondent initially refused the offer but changed his mind after learning that Mr. Palmerton had agreed to plead guilty to felony charges for perjury and racketeering, with a sentence for 18 months' house arrest and 15 years of probation. Respondent understood that Mr. Palmerton would testify against Respondent if he elected to proceed to trial. On April 16, 2001, Respondent entered into a Plea Agreement in which he agreed to plead no contest to one count of conspiracy to commit workers' compensation fraud, a first-degree misdemeanor. The agreement included a provision for a sentence of one year of probation. Under the agreement, a sentence of nine months' incarceration in the Escambia County jail would be suspended pending Respondent's successful completion of all terms and conditions of probation. The agreement also provided that Respondent's probation would include the payment of any restitution ordered by the Court during a subsequent hearing. On April 16, 2001, the Court adjudicated Respondent guilty, withholding imposition of sentence and placing Respondent on one year of probation. The terms of Respondent's probation included, but are not limited to, the following: payment of a fine and court costs in the amount of $1,000; payment of the costs of prosecution in the amount of $5,000; and (c) payment of restitution as determined at a subsequent hearing. A few days after being adjudicated guilty, Respondent contacted Petitioner's staff to determine the effect of his nolo contendere plea to a misdemeanor offense on his licensure status. Petitioner's staff subsequently informed Respondent that a misdemeanor offense would not result in an automatic suspension of an insurance license. On April 11, 2002, the Court conducted a restitution hearing. During the hearing, the State of Florida and Respondent agreed and stipulated to the entry of a restitution order and judgment satisfactory to the victim, Liberty Mutual. On June 3, 2002, the Court entered a Restitution Order and Judgment against Respondent. The Order required Respondent to pay restitution in the amount of $225,000. Pursuant to the Order, Respondent and Mr. Palmerton are jointly and severally liable for payment of the restitution, with Respondent receiving credit toward the total obligation for $200,000 previously paid by Mr. Palmerton and $10,000 paid by Respondent on April 11, 2002. As such, the effective amount of the Restitution Order and Judgment was a $15,000 balance due from Respondent. In June 2002, Petitioner issued a renewal notice for Respondent's surplus lines insurance license. The notice requested the appointing insurance company or agency to certify that Respondent had not pled guilty, or nolo contendere to, or had not been found guilty of a felony since originally being appointed by the appointing entity. The notice did not inquire whether Respondent had pled guilty, or nolo contendere to, or found guilty of a misdemeanor. At the time of the formal hearing, Respondent and Mr. Palmerton were still jointly and severally obligated to pay $15,000 in unpaid restitution. Respondent had successfully completed his probation in all other respects. During the hearing, Petitioner denied any wrong doing in relation to the misdemeanor offense to which he pled no contest. Specifically, Respondent denied that he ever intended to assist Mr. Palmerton in any type of scheme to defraud or otherwise do harm to Liberty Mutual. Respondent's testimony in this regard in not persuasive. Respondent has been a licensed insurance agent for 32 years. Prior to the instant proceeding, Respondent's insurance licenses have not been the subject of a disciplinary proceeding or lawsuit. Liberty Mutual did not name Respondent as a party in its civil suit against Mr. Palmerton. Instead, Respondent cooperated with and testified on behalf of Liberty Mutual in that proceeding. Until Respondent committed the offense at issue here, his reputation in the insurance community indicates that he was an honest and trustworthy agent.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That Petitioner enter a final order imposing a six-month suspension of Respondent's insurance licenses. DONE AND ENTERED this 28th day of October, 2002, in Tallahassee, Leon County, Florida. SUZANNE F. HOOD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 28th day of October, 2002. COPIES FURNISHED: James A. Bossart, Esquire Department of Insurance Division of Legal Services 200 East Gaines Street, Room 612 Tallahassee, Florida 32399-0333 Thomas E. Wheeler, Jr., Esquire Post Office Box 12564 Pensacola, Florida 32573-2564 Honorable Tom Gallagher State Treasurer/Insurance Commissioner Department of Insurance The Capitol, Plaza Level 02 Tallahassee, Florida 32399-0300 Mark Casteel, General Counsel Department of Insurance The Capitol, Lower Level 26 Tallahassee, Florida 32399-0307
