The Issue Whether petitioner should take disciplinary action against respondent for the reasons alleged in the administrative complaint?
Findings Of Fact Daniel Bruce Caughey has been licensed by petitioner as an insurance agent at least since 1981. He began working for Caughey Insurance Agency, Inc. in 1971 as a file clerk. Once he was licensed, he worked as a salesman. In 1977, he assumed the executive vice-presidency of the agency, a position he still holds. Until the middle of March, 1983, respondent'- father, William Edward Caughey, managed the agency. He continues to own all 1,000 shares the corporation has issued, although he has not written a policy since he turned management of the agency over to the respondent and his brother Randy in 1983. In 1982 and thereafter until Jordan Roberts and Company, Inc. (JORO), a multi-line general agency, stopped underwriting automobile insurance, Caughey Insurance Agency, Inc. brokered automobile insurance through JORO. When an account current bookkeeping dispute arose between Caughey Insurance Agency, Inc. and JORO, William Edward Caughey retained an accounting firm, Sizemore. On Sizemore's advice, he rejected JORO's claim for more than $20,900. On October 21, 1983, a JORO representative told Daniel Bruce Caughey that JORO would no longer deal with Caughey Insurance Agency, Inc. unless he signed an "Individual Guarantee Agreement," personally guaranteeing the insurance agency's corporate indebtedness; and executed a promissory note in JORO's favor in the amount of $16,941. Respondent executed the documents. On December 3, 1986, JORO brought suit against the corporation and respondent personally. No. 86-21454 (Fla. 13th Cir.). On August 13, 1987, the court entered judgment against both defendants in the amount of $6,595.94. Jordan Roberts & Co. v. Cauqhey, No. 86-21454 (Fla. 13th Cir.; Aug. 13, 1987). Neither respondent nor the agency has paid the judgment. With the possible exception of filing the complaint that eventuated in the present proceedings, JORO has made no effort to collect. In Count I, JORO's complaint alleges the existence of a brokerage agreement between JORO and Caughey Insurance Agency, Inc., entered into "[o]n or about April 27, 1982"; execution and delivery of respondent's guarantee "[o]n or about October 21, 1983"; and the agency's indebtedness "for premiums on policies underwritten by [JORO] for the sum of $20,975.36." Petitioner's Exhibit No. 3. In Count II, the complaint also alleges execution and delivery of a promissory note "[o]n or about October 21, 1983," without, however, explicitly indicating its relationship (if any) with the guarantee executed the same date. Petitioner's Exhibit No. 3. The final judgment does not specify which count(s) JORO recovered on. Petitioner's Exhibit No. 4. Attached to the complaint are copies of the promissory note, executed by ?CAUGHEY INSURANCE AGENCY, INC., By: D B Caughey Vice President"; the guarantee, executed in the same way; and the brokerage agreement, executed on behalf of Caughey Insurance Agency by "William E. Caughey, President." Although the Individual Guarantee Agreement names respondent as guarantor in the opening paragraph, the corporation is shown as guarantor on the signature line. At hearing, both Daniel Bruce Caughey and William Edward Caughey testified that neither had withheld premiums owed JORO, and this testimony was not controverted.
Recommendation It is accordingly, RECOMMENDED: That petitioner dismiss the administrative complaint filed against respondent. DONE and ENTERED this 2nd day of April, 1990, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 2nd day of April, 1990. APPENDIX Petitioner's proposed findings of fact Nos. 1, 2, 4, 5, 6, 8 and 9 have been adopted, in substance, insofar as material. With respect to petitioner's proposed finding of fact No. 3, respondent became an officer after the brokerage agreement had been executed. With respect to petitioner's proposed finding of fact No. 7, the judgment could also be based on the promissory note. With respect to petitioner's proposed finding of fact No. 6, respondent did not sign as an individual guarantor. Respondent's proposed findings of fact Nos. 1 through 10 and 12 through 18 have been adopted, in substance, insofar as material. With respect to respondent's proposed finding of fact No. 11, evidence respondent himself adduced showed that the judgment had not been satisfied. COPIES FURNISHED: Robert V. Elias, Esquire 412 Larson Building Tallahassee, FL 32399-0300 Bruce A. McDonald, Esquire McDonald, Fleming & Moorehead 700 South Palafox Street Suite 3-C Pensacola, FL 32501 Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, FL 32399-0300 Don Dowdell, General Counsel Department of Insurance and Treasurer 131 Montgomery Building 2562 Executive Center Circle, East Tallahassee, FL 32399-0300
Findings Of Fact At all times pertinent hereto, respondent, Stephen Paul Platt, was licensed by respondent, Office of the Treasurer, Department of Insurance (Department), as a general lines insurance agent and surplus lines insurance agent. On or about March 15, 1994, the Department mailed to the respondent the necessary forms for filing the First Quarter 1994 surplus lines report and instructions to remit the taxes due pursuant to that report. Under existent law, such report was to be filed with the Department on or before April 30, 1994. Respondent did not file his quarterly report with the Department until June 3, 1994; however, respondent had incurred no tax liability for that quarter, and no taxes were due. At hearing, respondent acknowledged his obligation to file the quarterly reports in a timely fashion, but requested relief here based on the complicated pregnancy his wife experienced while carrying their fourth child, as well as the complications that occurred during and post delivery. According to respondent, whose testimony is credited, his fourth child was born April 21, 1994, and in the two weeks preceding the child's delivery, as well as the two or so weeks after the delivery, he was not in the office but, rather, was attendant to his wife and child during this difficult delivery. Given such circumstances, the nominal delay that occurred in filing the First Quarter 1994 surplus lines report, especially since no tax was due, should, except for a nominal fine, be excused.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department enter a final order which finds respondent guilty of having violated the provisions of Section 626.931(1), Florida Statutes, which imposes a fine of $50.00 against respondent for such violation, and which dismiss all other charges. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 28th day of February 1995. WILLIAM J. KENDRICK 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 28th day of February 1995. APPENDIX The Department's proposed findings of fact are addressed as follows: Adopted in paragraph 1. Adopted in paragraph 2. 3 & 4. Adopted in paragraph 3. COPIES FURNISHED: Michael K. McCormick, Esquire Lisa S. Santucci, Esquire Department of Insurance and Treasurer Division of Legal Services 612 Larson Building Tallahassee, Florida 32399-0333 Stephen Paul Platt 10640 NW 27th Street, #101 Miami, Florida 33172 Bill Nelson State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Dan Sumner Acting General Counsel Department of Insurance The Capitol, PL-11 Tallahassee, Florida 32399-0300
The Issue Whether the Department of Financial Services should issue Petitioner, Alejandro Javier Friguls (“Petitioner”), a license as a resident personal lines insurance agent.
Findings Of Fact On September 11, 2015, the Department received an application from Petitioner seeking a license as a resident personal lines insurance agent. A personal lines insurance agent is an insurance agent who transacts business related to property insurance and casualty insurance sold to individuals and families for noncommercial purposes. See § 626.015(5) and (15), Fla. Stat. The Department has jurisdiction over licensing procedures for personal lines agents in the State of Florida. See § 626.016(1), Fla. Stat. On November 23, 2015, pursuant to its statutory responsibility, the Department issued a Notice of Denial notifying Petitioner of its intent to deny his application.2/ The Department denied Petitioner’s application based on his criminal history record. On January 19, 2012, in Seminole County Circuit Court, Petitioner pled nolo contendere to one charge of possession of Oxycodone, a third-degree felony under section 893.13(6)(a), Florida Statutes. The court accepted Petitioner’s plea but withheld adjudication of guilt for the crime. (The Notice of Denial states that Petitioner was “adjudicated guilty” of the felony. The Department conceded at the final hearing that this allegation in the Notice of Denial was incorrect and that Petitioner’s adjudication of guilt was withheld.) The court placed Petitioner on probation for one year. The court notified Petitioner that if he violated the terms of his probation, the court could revoke his probation and adjudicate him guilty. Petitioner served his probation without incident. He completed his probation on January 18, 2013. After receiving Petitioner’s application on November 12, 2015, the Department completed a form entitled Effect of Criminal History Record Worksheet (“Worksheet”). On this Worksheet, the Department classified Petitioner’s crime as a third-degree felony. Thereafter, citing to section 626.207, Florida Statutes, the Department determined that Petitioner’s felony subjected him to a 7-year disqualifying period from applying for a license. The Worksheet also recorded that the Department calculated that Petitioner would not become eligible to apply for an insurance license until January 18, 2021.3/ Based on the competent substantial evidence received in the record, Petitioner proved, by a preponderance of the evidence, that the Department should not have denied his application as a personal lines insurance agent.
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 rescinding the Notice of Denial issued to Petitioner on November 23, 2015, and grant Petitioner’s application for licensure as a resident personal lines insurance agent. DONE AND ENTERED this 1st day of June, 2016, in Tallahassee, Leon County, Florida. S J. BRUCE CULPEPPER 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 1st day of June, 2016.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: At all times relevant hereto, respondent, Ralph Edward Carter, was licensed and eligible for licensure as a life and health insurance agent and general lines agent - property, casualty, surety and miscellaneous lines by petitioner, Department of Insurance and Treasurer (Department). When the events herein occurred, respondent was licensed as a property and casualty insurance agent for Bankers Insurance Company (BIC) and Underwriters Guarantee Insurance Company (UGIC). In March 1987 respondent purchased an insurance franchise and began operating an insurance firm under the corporate name of Mr. Auto of South St. Petersburg, Inc. Records on file with the Department of State reflect that effective June 25, 1988 the name of the corporation was changed to Reliable Insurance of South St. Petersburg, Inc. Since February 1989 the business has been located at 3135 18th Avenue, South, No. C- 3, St. Petersburg, Florida. The corporation was primarily engaged in doing business as a general lines insurance agency. Respondent has been licensed as an agent since 1968, and during his tenure as an agent, has worked in sales with several large insurance companies. In January 1988 Betty Andrews purchased from respondent liability and property damage coverage on her two automobiles, a 979 Ford station wagon and a 1980 Chrysler. The insurance was written through UGIC and was effective for the year beginning January 8, 1988. Shortly after May 16, 1988 Andrews received a notice from UGIC reflecting that she owed an additional $38.90 on her policy. For some undisclosed reason, Andrews did not pay the additional premium owed. On July 6, 1988 Andrews visited respondent's office for the purpose of adding comprehensive and collision coverage on her two automobiles. After respondent quoted a rate, she agreed to purchase the additional coverage, filled out an application, and gave respondent two checks totaling $166. These monies were deposited into respondent's business account. The balance was to be paid in three monthly payments of approximately $55 each month through a finance company. Respondent gave Andrews a document entitled "Receipt and Binder Certificate" reflecting she had comprehensive and collision coverage with "Bankers" effective from July 6, 1988 to January 6, 1989. "Bankers" was in fact Bankers Insurance Company. When Andrews did not receive a policy from BIC, she attempted to contact respondent on several occasions to ascertain its whereabouts. Andrews could not recall when or how many times she telephoned respondent's office but indicated she was never able to reach him. This was probably because respondent operated a one-man office with no clerical help and was frequently absent from his office. In late August 1988 Andrews received a notice from UGIC advising that UGIC intended to cancel her policy effective September 7, 1988 because she failed to pay the $38.90 premium still due. At about this same time Andrews' husband sold the station wagon and purchased a truck. Accordingly, Andrews needed to transfer her insurance to the new vehicle. She went to respondent's office in early September 1988 and asked him why she had never received the new policy. She also asked him to find out why her existing policy was being cancel led and requested him to transfer coverage from the station wagon to the new truck. In Andrews' presence, respondent made a telephone call to UGIC and learned that Andrews' husband had failed to disclose on the insurance application that he had received a traffic ticket. This in turn caused a $38.90 increase in the annual premium, and because that amount had not been paid, the policy was being cancelled. Respondent attempted to persuade UGIC to reinstate the policy but was unsuccessful. Dissatisfied, Andrews told respondent she intended to file a complaint with the Department of Insurance. Respondent then wrote her a check for $166 which represented a full refund of her monies. There is no evidence to establish that respondent intended to defraud Andrews or to evade the requirements of the insurance code. Despite the fact that Andrews did not receive a policy, she was covered until September 1988 by her original policy and respondent's errors and omissions policy. Through testimony by an underwriting manager for BIC, David R. Wardlow, it was established that respondent had entered into a correspondent agreement with an agent of BIC. Wardlow's review of BIC's records reflected that BIC had never received Andrews' application and premium nor was a policy written on her behalf. However, there was no evidence to establish how promptly respondent was required to remit a new application and premium to BIC or whether respondent violated BIC policy by retaining the application and monies for some sixty days until he learned that the existing policy had been cancel led. Respondent readily conceded that he never forwarded the application and premium monies to BIC. He explained his actions by pointing out that after Andrews left his office he decided to secure the coverage from UGIC rather than BIC in order to have the entire coverage with one company at a cheaper rate. When he later learned that UGIC intended to cancel Andrews' policy for nonpayment of premium, he thought he might be able to persuade UGIC to reinstate the policy but was unsuccessful. He offered no excuse except inadvertence as to why he had not promptly followed up on Andrews' application. Petitioner also presented the testimony of Johnnie Ruth Bell who purchased automobile insurance from respondent in October 1988. Although Bell's testimony was often vague and confusing, the following facts were established. On or about October 1, 1988 Bell went to respondent's office to purchase full insurance coverage on her 1987 Toyota Corolla. After discussing various options with respondent, Bell agreed to purchase a policy issued through Redmond-Adams, a Sarasota underwriter for UGIC. Bell gave respondent a check in the amount of $227 as a down payment and agreed to finance the balance through a finance company at a rate of $78 per month for eight months. These monies were deposited into respondent's bank account. Respondent issued a "Receipt and Binder Certificate" reflecting coverage with "Underwriter - Redmond Adams". Because Bell had financed the car with a local bank, it was necessary for respondent to furnish the bank with evidence of insurance. Through inadvertence, but not intentionally or willfully, respondent misplaced the application and never forwarded the application and premium to the insurance company nor did he notify the bank of Bell's insurance coverage. However, Bell was covered during this period of time by respondent's errors and omissions policy. After Bell did not receive a copy of her policy from Redmond-Adams, but received a number of telephone calls and notices from her bank, she met with respondent around December 2, 1988. Respondent accepted an additional $156 in cash from Bell and issued her a new binder effective that date which was identical to the first binder except for the date. It is unknown why the additional money was collected. He then tore up the first binder. When Bell had still not received her policy by April 1989, she filed a complaint with petitioner. After respondent learned that Bell had filed a complaint, he contacted her in May 1989 and refunded all of her monies. There was no evidence to establish how promptly respondent was required to submit applications and premiums to UGIC or how that company construed the term "in the regular course of business" in the context of agents remitting applications and premiums. Respondent blamed his problems on the fact that he is the sole employee of his office and, according to his estimate, services some 500 active clients per year and more than 1,500 accounts. He desires to continue in the insurance profession and points to the fact that, of the many insurance transactions handled by him over the last twenty-two years, the Andrews and Bell transactions are the only two that have spawned any significant problems. Moreover, he has never been disciplined by petitioner during his tenure as an agent. Respondent asks that any penalty be limited to a period of probation during which time he can have the opportunity to improve his management and bookkeeping skills. There was no evidence to establish whether respondent's conduct demonstrated a lack of fitness or trustworthiness to engage in the insurance profession. As to respondent's knowledge and technical competence to engage in the transactions authorized by his licenses, he conceded he lacks training in bookkeeping and management skills, both needed for a general lines agent, but denied that he lacks the necessary skills in the sales part of the business. This was not contradicted. Finally, respondent has taken curative steps to insure that applications are not misplaced and the customer receives the requested insurance.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that respondent be found guilty of violating sections 626.611(8) and 626.734 and that his general lines license be suspended for thirty days. All other charges should be dismissed with prejudice. DONE AND ORDERED this 13 day of March, 1990, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER 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 13 day of March, 1990. APPENDIX Petitioner: 1-4. Partially adopted in finding of fact 1. 5-7. Partially adopted in finding of fact 3. 8-11. Partially adopted in finding of fact 6. Note - Where a finding has been partially adopted, the remainder has been rejected as being irrelevant, unnecessary, cumulative, subordinate, not supported by the evidence, or a conclusion of law. Respondent: A Partially adopted in findings of fact 5 and 6. Rejected as being irrelevant. Partially adopted in finding of fact 3. Partially adopted in finding of fact 5. Partially adopted in finding of fact 6. Rejected since respondent did not move his office until February 1989. Partially adopted in finding of fact 4. Partially adopted in finding of fact 6. I. Partially adopted in findings of fact 3 and 8. Partially adopted in findings of' fact 7 and 8. Partially adopted in findings of fact 6 and 7. Partially adopted in finding of fact 10. Partially adopted in finding of fact l. Partially adopted in finding of fact 10. Partially adopted in finding of fact 1. Note - Where a finding has been partially used, the remainder has been rejected as being irrelevant, cumulative, unnecessary, subordinate, not supported by the evidence or a conclusion of law. COPIES FURNISHED: Honorable Tom Gallagher Insurance Commissioner Plaza Level, The Capital Tallahassee, FL 32399-0300 Willis F. Melvin, Jr., Esquire 412 Larson Building Tallahassee, FL 32399-0300 Richard J. DaFonte, Esquire O. Box 41750 St. Petersburg, FL 33743-1750 Donald A. Dowdell, Esquire General Counsel Department of Insurance The Capitol, Plaza Level Tallahassee, FL 32399-0300 =================================================================
The Issue The issues are whether Respondent is guilty of various violations of the Insurance Code and, if so, what penalty should be imposed.
Findings Of Fact At all relevant times, Respondent has been licensed as a Life & Variable Annuity Agent (2-14), Life, Health and Variable Annuity Agent (2-15), Life Agent (2-16), Life and Health Agent (2-18), General Lines, Property and Casualty Agent (2-20), and Health Agent (2-40). Respondent holds license number A164221. Petitioner has disciplined Respondent on two prior occasions. By Consent Order filed November 28, 2000, Petitioner imposed an administrative fine of $7500 against Respondent and placed her licenses on probation for two years. The Consent Order arose out of allegations that Respondent failed to place insurance coverage and failed to supervise adequately her employees. By Consent Order filed April 30, 2002, Petitioner imposed an administrative fine of $2000 against Respondent. The Consent Order does not describe the underlying allegations. At all relevant times, Respondent has been a director, officer, and sole owner of AIA. She has owned the corporation since 1993. At all relevant times, Respondent was the only signatory on the AIA bank accounts. Customarily, Respondent markets the insurance and then sends customers to one of the AIA customer service representatives. A high-volume agency with over 15,000 active clients, AIA, which employs 10 persons, has issued about 50,000 policies since November 2001. For most, if not all, of the relevant period, AIA employed Tony Decambre as the primary agent, and customer service representatives performed much of the work in processing insurance applications. Petitioner attempted to prove that Respondent was the primary agent. Rather than produce copies of forms by which Respondent may have designated herself as the primary agent, Petitioner offered only copies of prints of screens of data maintained by Petitioner. The Administrative Law Judge excluded from evidence these data compilations. Respondent testified that Mr. Decambre was the primary agent. Petitioner's investigator testified that Respondent was the primary agent, at least the last time that he had checked. The investigator's testimony failed to establish by clear and convincing evidence that Respondent was the primary agent. On December 28, 2001, Fernando Gomez visited AIA to pay for a workers' compensation insurance policy to be issued by Florida United Businesses Association/Workers Compensation (FUBA). Respondent met with Mr. Gomez, who required the presence of another employee to translate into and from Spanish. As the producer, Respondent signed the application. FUBA bound the coverage on December 31, 2001. Among the three persons present on December 28, only Respondent testified. The application bears the date "December 28, 2001," although this handwriting is lighter than the remainder of the handwriting on the application and could have been written at a date subsequent to the date on which the application was taken. Petitioner contends that Respondent took the application on November 6, 2001, or somehow tried to bind FUBA as of November 6, 2001. The sole evidentiary basis for this contention is Petitioner Exhibit 9, which purports to be a certificate of liability insurance, bearing a date of December 28, 2001, but showing effective dates for general liability and workers' compensation coverage for Mr. Gomez of November 6, 2001. The certificate holder is stated to be Universal Drywall & Plastering, and the producer is stated to be AIA. The workers' compensation insurer is stated to be FUBA. Petitioner Exhibit 9 was admitted solely to prove what Universal Drywall & Plastering sent to FUBA to confirm the existence of Mr. Gomez's workers' compensation coverage. The certificate is false because it confirms workers' compensation insurance as of a date that neither FUBA nor AIA contends is correct. However, the failure to obtain testimony from Mr. Gomez, the AIA employee who translated, or an employee of Universal Drywall & Plastering who could explain how he or she obtained a copy of the certificate precludes a determination that Respondent is in any way responsible for the production or transmission of this false certificate. The certificate suggests that the person responsible for its preparation may not have had Respondent's presumed level of familiarity with FUBA. The person preparing the false certificate used a policy number that is not of a type used by FUBA to identify the workers' compensation policies that it issues. The false certificate bears an expiration date of November 6, 2002. In fact, the actual coverage issued by FUBA ended on April 1, 2002, because all of its workers' compensation policies expire each year on April 1. It appears that Universal Drywall & Plastering presented the false certificate to FUBA on January 2, 2002, so, as of that date, Mr. Gomez had workers' compensation coverage from FUBA. The record also fails to disclose why Mr. Gomez might have desired an earlier effective date. The information might have facilitated a determination of who was responsible for the fraudulent preparation of the certificate. Petitioner has failed to prove the material allegations of Count I. On October 25, 2002, AIA issued an Evidence of Property Insurance to Meryl Levin, showing an effective date of October 25, 2002 for homeowners and flood insurance in the amount of $114,000. The document states that "United" would provide the homeowners insurance at $910 per year and flood insurance at $247 per year. On October 30, 2002, AIA received a check in the amount of $910 from Stephen J. Allocco, P.A., and AIA deposited that check into its noninterest-bearing bank account at Wachovia Bank. On November 8, 2002, United Property & Casualty Insurance Company (United) sent Mr. Levin a notice that he owed $810 for his insurance policy, which bore an effective date of November 8, 2002. The due date is "upon receipt." On January 14, 2003, United canceled the insurance because it never had received the $810. United received a check for $810 on February 26, 2003, but the accompanying package failed to contain a "no loss" statement, which would have assured United that the insured had not suffered a loss between the purported coverage date and the date of receipt of the premium check. Absent such an assurance, United routinely declines to provide coverage because it will not cover losses retroactively. United thus returned the check. Mr. Levin did not testify as to this transaction, nor did anyone from AIA except Respondent, who disclaimed any direct involvement with the matter. There is no evidence of any loss suffered by Mr. Levin, nor is there any evidence of any intentional wrongdoing by Respondent. The determination as to whether Respondent negligently failed to satisfy all applicable duties imposed on her is frustrated by Petitioner's failure to call an expert witness who could have explained office practices in insurance agencies and proved what is reasonable and unreasonable to expect of Respondent. The record does not establish that United sent a copy of its November 8 statement to AIA. Count II portrays a single case in which AIA failed to pay a premium to an insurer for over three months--nothing more. The determination of whether Respondent has demonstrated unfitness for this omission is impossible absent a basis for determining an appropriate minimum standard of agency office practice. Petitioner has failed to prove the material allegations of Count II. On October 9, 2002, Respondent sent a letter to Gerald Kirby bearing the letterhead of AIA stating that "we" have reviewed your homeowner needs and "determined the best possible rate for you." Showing homeowners coverage of $518,000, as well as associated coverages, the letter quotes a total policy premium of $3278. The letter warns that "this quotation is an estimate and is not legally binding." At the bottom of the letter is: "Thanks!!!Joanne." The record reveals no other persons employed at AIA named "Joanne" besides Respondent. On the same date, AIA produced an evidence of property insurance, which shows homeowners and flood insurance with the same effective date of October 11, 2002, in the respective amounts of $518,000 and $250,000, and bearing respective premiums of $3278 and $411 annually. On October 11, 2002, AIA received a check in the amount of $3278 from Capital Abstract & Title and deposited that check into its noninterest-bearing bank account at Wachovia. AIA was to use these funds to purchase homeowners insurance from United, with coverage of $518,000 and an effective date of November 11, 2002 (according to the parties' stipulation, which misstates the year as "2001"). However, the premium for $518,000 of coverage from United was $1890 at the time. The proper amount of premium due for $518,000 of coverage was mooted by the fact that AIA, like all of United's agents at the time, lacked authority to bind United to more than $300,000 coverage without specific approval from a United representative. Such approval required, among other things, documentation of the value of the insured property. AIA sent United a check for $1777, which United received on November 12, 2002. This check was the proper premium for $300,000 of coverage. At the same time, AIA sent paperwork for the issuance of coverage to $587,000, but failed to send the documentation that United required. Thus, United issued only $300,000 of coverage, and Mr. Kirby was due a refund of $1501, which is the difference between the premium that he paid and the cost of the insurance that he received. AIA paid Mr. Kirby $1501 on February 24, 2003. After AIA or a United marketing representative submitted the required documentation, United approved on February 19, 2003, the increase of coverage to $518,000. It is unclear who paid the additional premium--AIA or Mr. Kirby. For the same reasons discussed in Count II, Petitioner has failed to prove the material allegations of Count III. Although AIA's handling of the Kirby transaction was flawed, again, the acts and omissions are not so stark as to eliminate the necessity of expert testimony to establish the minimum standard, against which to measure Respondent's performance of her duties. Mr. Kirby appears to have suffered no loss, and there is no evidence of intentional wrongdoing. Even though, as to this transaction, Respondent clearly had some personal involvement, it is impossible to determine her degree of responsibility for the uneven handling of the insurance transaction and short delay in sending the refund to Mr. Kirby or even whether these two aspects of the transaction demonstrate unfitness to transact insurance business. The remaining counts involve refunds from Pro Premium Finance Company (Pro Premium) to AIA and refunds from AIA to its customers. Pro Premium provides financing to persons purchasing insurance. Several customers of AIA borrowed money from Pro Premium to pay for insurance they were buying through AIA. For various reasons--typically, the cancelation of coverage--Pro Premium refunded portions of the premium to AIA, which subsequently refunded the unearned portion of the commission to the customer. Every two weeks, Pro Premium sends AIA refunds and statements, which clearly identify the insured, date of cancelation, amount of refund, and amount due the insured. The time that elapsed from when AIA received the refunds from Pro Premium to when AIA sent the customers their share of the refunds ranged from two to twelve months. AIA received the refunds from Pro Premium between April 15, 2003, and February 15, 2004, and AIA sent its customers their shares of the refunds between April 5, 2004, and May 12, 2004. The customer refunds are concentrated in a relatively short period of time because AIA discovered all of the unrefunded monies during a self-audit that it conducted during this six-week period. AIA performed the self-audit due to an audit underway at Pro Premium. Except as noted below, Respondent was not personally involved in any of these refund transactions. At the time of all of the Pro Premium transactions described in this recommended order, the policy of AIA was for the customer service representative to write the client within one week of receiving the refund from Pro Premium and ask for directions whether to apply the refund to new or existing insurance or to pay it to the customer. The customer service representatives were supervised by the agency manager, not Respondent. It is unclear what AIA's policy was if the customer did not respond. When AIA paid refunds, its policy at the time was for the agency manager to prepare the refund check, which Respondent would sign. In May 2004, AIA changed its handling of refunds by directing all Pro Premium refunds directly to the bookkeeper, who expedites the preparation of the refund checks, which can now be signed by Respondent or one of two other employees. As to Count IV, on April 15, 2003, Pro Premium sent AIA a check in the amount of $1361.03, which AIA deposited on May 7, 2003, into its noninterest-bearing account at Wachovia. Part of these funds--$117.21--represented unearned commission, which was due the insured, Erikna Guzman. By letter sent within one week of obtaining the Pro Premium refund, AIA informed Ms. Guzman of the refund and asked her to instruct AIA as to whether to apply it to new insurance or send her a refund. Ms. Guzman did not respond. On May 10, 2004, AIA sent Ms. Guzman a check for $117.21. Twelve months elapsed from when AIA received the refund and when it sent Ms. Guzman the money due her. As to Count V, on May 31, 2003, Pro Premium sent AIA a check in the amount of $1538.36, which AIA deposited on June 10, 2003, into its noninterest-bearing account at Wachovia. Part of these funds--$43.83--represented unearned commission, which was due the insured, Shannon Campbell. By letter sent after obtaining the Pro Premium refund, AIA informed Ms. Campbell of the refund and asked her to instruct AIA as to whether to apply it to new insurance or send her a refund. Ms. Campbell did not respond. On April 17, 2004, AIA sent Ms. Campbell a check for $43.83. Ten and one-half months elapsed from when AIA received the refund and when it sent Ms. Campbell the money due her. As to Count VII, on an unspecified date, Pro Premium sent AIA a check in the amount of $720.38, which AIA deposited on July 8, 2003, into its noninterest-bearing account at Wachovia. Part of these funds--$347.35--represented unearned commission, which was due the insured, Marie Philippe. By letter sent within one week of obtaining the Pro Premium refund, AIA informed Ms. Philippe of the refund and asked her to instruct AIA as to whether to apply it to new insurance or send her a refund. Ms. Philippe did not respond. On April 5, 2004, AIA sent Ms. Philippe a check for $347.35. At least nine months elapsed from when AIA received the refund and when it sent Ms. Philippe the money due her. As to Count VIII, on June 30, 2003, Pro Premium sent AIA a check in the amount of $1729.80, which AIA deposited on July 8, 2003, into its noninterest-bearing account at Wachovia. Part of these funds--$380.40--represented unearned commission, which was due the insured, Fernando Garcia. By letter sent within one week of obtaining the Pro Premium refund, AIA informed Mr. Garcia of the refund and asked him to instruct AIA as to whether to apply it to new insurance or send her a refund. The first letter was returned by the postal service as undeliverable. Mr. Garcia had sold his house and moved. However, on April 7, 2004, AIA sent Mr. Garcia a check for $380.40. Nine months elapsed from when AIA received the refund and when it sent Mr. Garcia the money due him. As to Count IX, on August 31, 2003, Pro Premium sent AIA a check in the amount of $1552.84, which AIA deposited on September 9, 2003, into its noninterest-bearing account at Wachovia. Part of these funds--$102.07--represented unearned commission, which was due the insured, Girline Reid. By letter sent within one week of obtaining the Pro Premium refund, AIA informed Ms. Reid of the refund and asked her to instruct AIA as to whether to apply it to new insurance or send her a refund. Respondent testified that Ms. Reid instructed AIA to apply the refund to insurance issued to her husband, which AIA did. However, Respondent did not testify when AIA applied the refund to the account of Ms. Reid's husband. On May 7, 2004, AIA sent Ms. Reid a check for $102.07. Eight months elapsed from when AIA received the refund and when it sent Ms. Reid the money due her. As to Count X, on August 31, 2003, Pro Premium sent AIA a check in the amount of $1552.84, which AIA deposited on September 9, 2003, into its noninterest-bearing account at Wachovia. Part of these funds--$169.06--represented unearned commission, which was due the insured, Guillermo Diaz, who is a significant customer of AIA. Respondent spoke with him shortly after AIA received the refund, and he instructed her to apply the refund to other insurance issued to him. Again, Respondent did not testify when Mr. Diaz instructed her to apply the refund to other insurance, but, given his importance as a repeat customer, he probably spoke with her shortly after AIA received the refund. However, on April 17, 2004, AIA sent Mr. Diaz a check for $169.06, to which he may not have been entitled. Eight and one-half months elapsed from when AIA received the refund and when it sent Mr. Diaz the refund check. As to Count XI, on November 30, 2003, Pro Premium sent AIA a check in the amount of $4994.25, which AIA deposited on December 9, 2003, into its noninterest-bearing account at Wachovia. Part of these funds--$143.18--represented unearned commission, which was due the insured, Bernardo Archibald. By letter sent within one week of obtaining the Pro Premium refund, AIA informed Mr. Archibald of the refund and asked him to instruct AIA as to whether to apply it to new insurance or send her a refund. Respondent testified that Mr. Archibald directed AIA to keep the money to apply to insurance for which he owed additional premium because he had not yet obtained a four-point inspection (heating, wiring, roofing, and plumbing) of an older home, so as to be entitled to a reduced premium. However, Respondent did not testify when AIA received this direction from Mr. Archibald, although only five months elapsed from AIA's receipt of the refund from Pro Premium to its issuance, on May 7, 2004, of a check to Mr. Archibald for $143.18. As to Count XII, on an unspecified date, Pro Premium sent AIA a check in the amount of $3881.67, which AIA deposited on January 13, 2004, into its noninterest-bearing account at Wachovia. Part of these funds--$488.83--represented unearned commission, which was due the insured, Danette Piscopo. By letter sent within one week of obtaining the Pro Premium refund, AIA informed Ms. Piscopo of the refund and asked her to instruct AIA as to whether to apply it to new insurance or send her a refund. Respondent testified that AIA sent a refund check, but Ms. Piscopo never cashed it. However, Respondent did not testify when it sent the earlier check, although only about three months elapsed from AIA's receipt of the refund from Pro Premium to its issuance on April 15, 2004, of a check to Ms. Piscopo for $488.83. As to Count XIII, on December 31, 2003, Pro Premium sent AIA a check in the amount of $1988.58, which AIA deposited on January 13, 2004, into its noninterest-bearing account at Wachovia. Part of these funds--$294.60--represented unearned commission, which was due the insured, Allam Masief. Respondent testified that AIA mistakenly issued two policies to Mr. Masief for the same coverage from two insurers and mistakenly paid Pro Premium twice, even though Mr. Masief paid only one premium. Both policies were canceled. Mr. Masief asked AIA to reinstate one policy, but it was unable to do so. Respondent did not testify when these discussions with Mr. Masief took place, but only four and one-half months elapsed from AIA's receipt of the refund from Pro Premium and to its issuance, on May 12, 2004, of a check to Mr. Masief for $294.60. As to Count XIV, on January 31, 2004, Pro Premium sent AIA a check in the amount of $3260.03, which AIA deposited on February 10, 2004, into its noninterest-bearing account at Wachovia. Part of these funds--$886.74--represented unearned commission, which was due the insured, Geraldine DeStefanis. By letter sent within one week of obtaining the Pro Premium refund, AIA informed Ms. DeStefanis of the refund and asked her to instruct AIA as to whether to apply it to new insurance or send her a refund. Respondent testified that Ms. DeStefanis "probably" asked AIA to try to reinstate the canceled policy, but AIA was unable to do so. On May 7, 2004, AIA sent Ms. DeStefanis a check for $886.74. Three months elapsed from when AIA received the refund and when it sent Ms. DeStefanis the money due her. As to Count XV, on an unspecified date, Pro Premium sent AIA a check in the amount of $4750.53, which AIA deposited on March 9, 2004, into its noninterest-bearing account at Wachovia. Part of these funds--$343.38--represented unearned commission, which was due the insured, Leslie Ramrattan. By letter sent within one week of obtaining the Pro Premium refund, AIA informed Ms. Ramrattan of the refund and asked her to instruct AIA as to whether to apply it to new insurance or send her a refund. Respondent testified that Ms. Ramrattan asked AIA to try to reinstate the policy, but AIA was unable to do so. On May 7, 2004, AIA sent Ms. Ramrattan a check for $343.38. About two months elapsed from when AIA received the refund and when it sent Ms. Ramrattan the money due her. Petitioner has failed to prove the material allegations of Counts IV-V and VII-XV, with one exception each as to Counts VI, V, and VII. In general, there is no evidence of any intentional wrongdoing by anyone at AIA, nor is there evidence that Respondent should have known of the failure of her staff to promptly refund the monies due their insureds. In several of these transactions in which AIA held the customers' refunds for relatively long periods of time, the record demonstrates that this was in accordance with the customers' directions or otherwise justified. For the shorter periods-- five months or less--the record provides no basis for determining that Respondent should have known of this failure within this relatively short period of time. In several counts, AIA failed to meet its obligation, under Florida Administrative Code Rule 69O-196.010(2)(b), which is cited below, to refund or apply the unearned commissions within 15 days of receipt of the refund and statement from Pro Premium. These are Counts IV, V, VII, XIV, and XV. It is impossible to determine if AIA violated this rule in Count VIII, where the insured had moved; Counts IX-XI, where the insureds told AIA to apply the refunds to new or other insurance and presumably AIA did so, perhaps within the required 15 days; and Count XIII, where AIA appears to have paid for one policy out of its own funds and the insured may have received a windfall. As to Counts IV, V, VII, XIV, and XV, the question is whether Respondent is professionally responsible for the violations by AIA. These counts fall into two groups. In Counts IV, V, and VII, AIA wrongfully retained the refunds for long periods--12 months, 10 and one-half months, and at least nine months, respectively. In Counts XIV and XV, AIA wrongfully retained the refunds much shorter periods--less than three months and less than two months, respectively. Perhaps expert testimony could have established that Respondent should have detected, within a period of less than 90 days, the wrongfully retained funds, but, absent such testimony, an inference to this effect is impossible, especially when the standard is clear and convincing evidence. However, expert testimony is unnecessary to establish Respondent's professional responsibility for failing to detect this situation for 9-12 months. Given the long durations of time, the clarity of the Pro Premium's refund statements, the relatively small number of employees, Respondent's integral involvement in the daily operations of AIA as the only person authorized to sign checks, and the importance of restoring funds of customers to customers promptly, it is a reasonable inference that Respondent should have known that AIA staff had wrongfully failed to send these refunds to its customers for 9-12 months. Any suggestion by Respondent that the absence of a response from these customers justified retaining these moneys fails to account for the fact that AIA later sent the refund checks to the customers, even though they had still not contacted AIA, according to the record. Thus, for Counts IV, V, and VII, Petitioner has proved by clear and convincing evidence that Respondent has demonstrated her unfitness to transact insurance business.
Recommendation It is RECOMMENDED that the Department of Financial Services enter a final order dismissing Counts I-III and VIII-XV of the Administrative Complaint; finding Respondent guilty of three violations (Counts IV, V, and VII) of demonstrating unfitness to engage in the insurance business, in violation of Section 626.611(7), Florida Statutes; and suspending her insurance licenses for 30 days. DONE AND ENTERED this 15th day of November, 2006, in Tallahassee, Leon County, Florida. S ROBERT E. MEALE 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 15th day of November, 2006. COPIES FURNISHED: Honorable Tom Gallagher Chief Financial Officer Department of Financial Sevices The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Carlos G. Muñiz, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0307 Robert Alan Fox Department of Financial Services Division of Legal Services 612 Larson Building 200 East Gaines Street Tallahassee, Florida 32399-0333 Thompkins W. White White & Chang, P.A. 1650 Summit Lake Drive, Suite 1013 Tallahassee, Florida 32317
Findings Of Fact Charles Lee Armstrong, a/k/a Jack Armstrong, (hereinafter referred to as Petitioner or Armstrong) is licensed by the Florida Insurance Department as a general lines agent to represent Foremost Insurance Company and Fortune Insurance Company (Exhibit 1). Prior to 1976 Armstrong was an Aetna agent. From February 10, 1968 through February 10, 1977 Luigi Sesti carried homeowners policy with Aetna with Armstrong Agency. Armstrong's designation as an Aetna agent was terminated by Aetna termination notice (Exhibit 8) dated August 21, 1975 for low volume of business. The company practice is to terminate the agency relationship ninety days after notice of termination. Thereafter Respondent continued as a limited company agent for one year, during which he was authorized to renew Aetna policies. (Exhibit 7). After that one year extension, Respondent had no agency relationship with Aetna and, to renew an Aetna policy, he would have to have an Aetna agent process the renewal. Luigi Sesti had dealt with Armstrong as Sesti's Insurance agent since 1968 and had maintained an Aetna home-owner's policy which had last been renewed through Armstrong for the year ending February 10, 1977. Upon receipt of notice from Armstrong that his policy would expire February 10, 1977, Sesti sent Armstrong his check in the amount of $165 (Exhibit 3) for renewal of his policy. Although Armstrong was no longer authorized to renew Aetna policies, he deposited Sesti's check but thereafter failed to provide Sesti with insurance coverage on his house or contents. Armstrong advised Aetna that Sesti's policy had been replaced with an Eastern insurance policy, and Aetna failed to notify Sesti that the Aetna policy was not renewed. In August 1977 Sesti's home was burglarized. He lost a television set, radio, watch, spotlight and a ring, and Sesti contacted Armstrong to report the loss. Armstrong visited the home and suggested Sesti submit no formal claim because to do so would make it difficult for Sesti to renew his insurance. In his own explanation, Armstrong testified that he intended to pay Sesti for his loss but Sesti could never establish the value of the ring or establish a price for which he would settle. Armstrong offered Sesti $250 to settle the claim. During the discussions between Armstrong and Mrs. Sesti, Armstrong said he had authority to settle claims for Aetna up to $500 and that he was an attorney. Neither of these statements was true. When Armstrong was unable to agree on the amount of the claim, Mrs. Sesti contacted Aetna and learned that the policy on her her had expired 10 February 1977 and had not been renewed. Because no valid policy had been issued to Sesti, Aetna initially denied liability. When advised by Sesti that Aetna would not pay their claim, Armstrong returned the premium he had received from Sesti for the policy not renewed in one check for $155 dated 9/7/77 and in another check for $10 dated 11/23/77 (Exhibit 5) which Sesti received with a letter from the Insurance Commissioner's office dated November 29, 1978 (Exhibit 14). After further investigation by Aetna revealed the facts as noted above, Aetna issued a policy (Exhibit 15) which effectively renewed Sesti's homeowners policy for one year from February 10, 1977. They deducted the premium and the $100 deductible from the amount they paid Sesti for the loss sustained. Aetna's Regional Manager testified that Aetna paid for the loss because Sesti had been insured by them for several years and they felt a moral obligation for their former agent's failure to provide coverage and for their failure to notify Sesti he was no longer insured by Aetna. Aetna allowed Sesti approximately $450 for the loss of the ring and approximately $350 for the other things stolen. Roseland S. Wood had insured her mobile home with Foremost Insurance Company since 1953, and with Jack Armstrong as Agent since 1964. Policy No. 101-8498757 covered the period 11/3/74 to 11/3/75 (Exhibit 13). By check dated November 5, 1975 made payable to Armstrong (Exhibit 9) Wood forwarded the premium for renewal of this policy. Unbeknownst to Wood the policy was not renewed until July 28, 1976 by policy No. 8498643 (Exhibit 12). This is the policy that Armstrong forwarded to Foremost. Armstrong was in Europe on vacation when this policy was issued by the woman he had hired to keep his office open during his vacation and he professed no knowledge of why the policy was issued at this particular time. In October 1976 Wood wanted additional coverage and Armstrong came out to assist in providing the additional coverage. After discussing increasing personal property coverage, plus garage and contents and boats, Respondent advised Wood that the additional coverage would cost $326. Wood gave Respondent a check that day (Exhibit 10). Thereafter Armstrong issued policy No. 8498518 (Exhibit 11) for the period 10/28/76 to 10/28/77 but the personal property coverage was less than Wood had asked for and the garage and contents were not included. Neither Exhibit 11 nor the premium for this coverage was ever received by Foremost from Armstrong. They became aware of Exhibit 11 after Wood suffered a burglary in July 1977 and came to the Foremost office to file a claim. The costs of coverage on Exhibit 11 are not correct and had this policy been received by Foremost it would have been rejected by the computer due to inaccurate premium charges, the inclusion of boats on this policy and incorrect comprehensive liability coverage. By failing to renew Wood's coverage in November 1975, Respondent left Wood without coverage until Exhibit 12 was issued providing coverage from 7/28/76. This renewal was written by Armstrong Agency, who had authority from Foremost to write this renewal. As noted above, this policy was written while Armstrong was on vacation. The $145 premium paid by Wood for the renewal of the policy was not remitted to Foremost until after July 28, 1976. At the time of Wood's loss in July 1977 she was covered by this policy. When the existence of the above facts regarding the two policies and dates they were issued to Wood were uncovered, Armstrong refunded to Wood $181 of the $326 premium he collected, Foremost refunded the additional $145 of this premium to Wood, and Wood's claim was settled by Foremost to Wood's satisfaction. Foremost has a claim against Armstrong for this $145 Foremost refunded to Wood. Respondent acknowledged writing Exhibit 11 and assumed that it was mailed to Foremost. He does not remit payment to the company until he is billed. Foremost sends a monthly statement to each agent showing policy numbers received. The agent can readily check this list against the policies he has issued to ascertain if a policy was not received by the company. The company also maintains a policy register where policy numbers are recorded. A copy of this is sent to their agents to check against policies the agents have issued. Failure of the agencies to submit policies in sequential numbers will be picked up on the computer, but only after quite a few numbers have been skipped. There was insufficient volume from Armstrong's agency to trigger this information from the computer. With respect to Charge III, failure to keep office open and accessible to the public during office hours, an insurance investigator visited the office on some six occasions in December 1977 and February and March 1978. At these visits the office was open but neither Armstrong nor a secretary was present. A lady working in an office down the hall from Respondent's office came to the office when the inspector arrived and offered to contact Armstrong. Several telephone calls made to Armstrong's office during March 1978 resulted in the phone being answered by an answering service. Respondent has operated a one-man office for many years and has an answering service cover all calls while he is out of the office. He wears a radio pager and claims his answering service can always contact him. The lady who covers office visits for Respondent during his absence from the office has had several years experience working in a general insurance agency. She fills out applications for clients coming into the office, gives receipts for payments, signs Armstrong's name to applications and other documents; and has done so for 4 or 5 years. She is not on any type of regular salary or otherwise employed by Armstrong. Respondent has been a licensed insurance agent since 1961 and Respondent's testimony was unrebutted. This is the first complaint filed against him in his capacity as a licensed insurance agent.
Findings Of Fact The Respondent, Robert Charles Anderson, currently is eligible for licensure and is licensed in this state as a life and health (debit) agent, life, health and variable annuity contracts agent, general lines property, casualty, surety and miscellaneous agent, and health insurance agent. The Respondent moved to Florida from Michigan in September, 1983. In January, 1984, the Respondent and a partner bought Guaranteed Underwriters, Incorporated, a corporate general lines insurance agency doing business as Security Insurance Agency (Security) in New Port Richey, Florida. The Respondent's background was primarily in the life and health insurance business; his partner's background was primarily in property and casualty insurance. They planned to divide responsibilities for Security's operations along the lines of their respective areas of expertise. However, the partnership dissolved, leaving to the Respondent responsibility for all of the operations of the agency. After the dissolution of the partnership, the Respondent delegated to unlicensed employees most of the day-to-day responsibilities for the property and casualty and workmen's compensation side of the agency's business. The Respondent was personally involved primarily in the day-to-day operations of the health and life insurance side of the business, as well as in selected large commercial accounts. The conduct of Security's business, as described above, went smoothly (there were no charges of any license violations) until two disruptive factors entered into the picture. One was financial in nature; the other was personal. In 1986, Security bought an existing insurance agency (Sunland Insurance Agency) in Holiday, merged it into Security, and attempted to operate it as part of Security's overall business. In 1987, Security bought another, large agency (Village Insurance Agency) and also merged it into Security and attempted to operate it as part of Security's overall business. At this point, the Respondent essentially was attempting to operate three insurance agencies, something he never attempted before. With the purchase of Sunland and Village, in addition to Security, the Respondent incurred significant debt which had to be met for his business to just break even. By approximately 1988, the Respondent owed approximately $150,000 still outstanding on the purchase of Security, $100,000 borrowed to finance the purchase of Village, $43,000 to three different relatives and $3,500 to the NCNB bank on loans made in connection with the business. Payments on these debts, together with payroll, rent and other business expense left Security with a monthly operating budget of almost $12,000. At this expense level, the business was losing money. In calendar year 1989, the business lost between approximately $12,600 and (counting unpaid bills outstanding at the end of the year) $17,900. At the end of 1988, severe personal problems added to the Respondent's financial woes. In December, 1988, the Respondent's wife had to be hospitalized in Tampa for eight weeks for treatment for symptoms of mental illness. During this time, in addition to trying to supervise the operations of Security, the Respondent was required to travel back and forth to Tampa (about an hour drive by car, each way) to visit his wife and also make arrangements for the care of his eighteen month old son (either by himself or by a baby-sitter). As if the Respondent's personal problems were not enough, when his wife was discharged from the hospital (with a diagnosis of a chemical imbalance), she informed him that she wanted a divorce. She took up a separate residence in Tampa where she lived pending the dissolution of the marriage. As a result of the his personal problems, the Respondent delegated more and more responsibility to his unlicensed employees. He would go to the office only for an hour or two a day. Sometimes he was not able to get into the office at all. Judy Nelson (Count V). Judy Nelson, who is self-employed doing business as Pedals 'N' Presents, used Security for her insurance needs since 1986. In January, 1989, she applied through Security for renewal of a special multi-peril (SMP) insurance policy with American Professional Insurance for another year beginning January 21, 1989. On January 10, 1989, she gave Security her check for $485 as partial payment for the coverage. The $485 was deposited into Security's general operating account which Security used to pay the operating expenses of the business. Security never processed Nelson's application or secured the coverage. On or about March 10, 1989, Nelson received notice from American Professional that no application for renewal of coverage or premium had been received and that coverage was being cancelled. Nelson immediately contacted Security regarding the notification, and one of the Respondent's unlicensed employees acknowledged an error on Security's part but assured Nelson that Security would correct the situation and have Nelson's coverage reinstated. Security never got the policy reinstated, and the policy was cancelled on March 21, 1989. On or about April 8, 1989, Nelson's business was burglarized, and Nelson made a claim on her MPS policy. At this point, in handling the claim, the Respondent realized that the policy had been cancelled and that Nelson had no coverage. But, instead of telling her the facts, the Respondent paid the claim himself. Nelson thought the claim was paid under the terms of her SMP policy and still thought she had coverage. Later, Nelson had a question about a signature on her policy and telephoned the Professional American to get her question answered. Professional American told her that she had no coverage. At about the same time, Nelson was contacted by a Department investigator, who asked her not to contact the Respondent yet as he would make arrangements for a refund for her. On or about December 6, 1989, after the Department investigator cleared it, Nelson telephoned the Respondent and asked for a refund. This time, the Respondent acknowledged that Nelson had no coverage and agreed to a refund. The Respondent paid Nelson the refund at the end of December, 1989, or the beginning of January, 1990. Nelson still does business with Security. She has in force workmen's compensation insurance through Security. Fred J. Miller (Count VI). On or about February 24, 1989, Fred J. Miller came into the Security offices to get commercial automobile insurance for the vehicles he uses in his recycling business. He dealt with one of the Respondent's unlicensed employees. Several application and other papers for coverage with Progressive American Insurance Companies were prepared and were signed by Miller. Miller also made a partial payment for the coverage in cash in the amount of $296, for which the employee gave Miller a receipt. As he left the office, the Security employee assured him that he had coverage. A few days later, on or about February 28, 1989, Security contacted Miller and told him an additional $606 was needed to obtain the coverage for which he had applied. Miller returned to Security and gave the employee he was dealing with an additional $606 cash, for which he was given another receipt. It was not proven, and is not clear, whether the cash received from Miller was placed in the Security operating account. Security never submitted Miller's application for insurance. Contrary to Miller's understanding, Miller had no insurance on his vehicles. As of April 6, 1989, Miller had neither a policy (or copy of one) nor an insurance identification card. On or about April 6, 1989, Miller bought a new vehicle and had to contact Security to get an insurance policy number in order to have the vehicle registered in his name. The Security employee speaking to Miller discovered that Miller's undated application still was in the "pending matters" file and told Miller he could not get the policy number at that time. Miller said he had to have the policy number immediately. At that point, the employee brought the problem to the Respondent's attention. The Respondent had the employee tell Miller they would call right back. Security then dated Miller's application April 6, 1989, telephoned Progressive American to secure coverage effective April 6, 1989, and called Miller back with the policy number he needed. Security then processed Miller's application to secure the coverage for a year, through April 6, 1990. Miller has renewed the Progress American coverage through Security and still has his vehicles insured under the policy. Donald E. Wilkins (Count IV). Donald E. Wilkins, President of Apple Paradise Landscaping, Inc., used Security for his general liability and automobile insurance needs. He has no complaint about, and no issue is raised in this proceeding, as to Security's handling of those coverages. (The evidence is that the coverages Wilkins applied for were placed in the normal course of business.) On or about March 9, 1989, Wilkins decided he wanted a workmen's compensation insurance certificate. He went to Security's office, and one of the Respondent's unlicensed employees completed an application for the insurance and for premium financing. Wilkins gave her a $250 check "just for the certificate." The check was deposited into Security's general operating account which Security used to pay the operating expenses of the business. On March 9, 1989, Wilkins also specifically requested that Security furnish to Hawkins Construction of Tarpon Springs, Florida, a certificate of insurance. In response to the request, Security furnished to Hawkins Construction a certificate that Apple Paradise with the "S. Atlantic Council on Workers Compensation." A policy number appears on the certificate, and the certificate states that coverage was effective March 13, 1989, to expire on March 13, 1990. There is no evidence that the Respondent personally was involved in providing this certificate of insurance. The evidence did not prove whether Wilkins ever got any workmen's compensation insurance. The Department proved that Security never processed the premium financing application, and Wilkins testified that he never got a payment book or other request for payment from any premium financing company. But the representative of the National Council on Compensation Insurance gave no testimony on Wilkins or Apple Paradise. Wilkins himself did not appear to have any complaint against the Respondent or Security. Theoharis Tsioukanaras (Count III). Theoharis (Harry) Tsioukanaras owned and operated Harry's Painting and Enterprises, Inc. He had been doing business with the Respondent to meet his business and personal insurance needs since the Respondent first bought Security (and did business with the prior owner for a year before that). He had his business and personal automobile insurance, as well as his workmen's compensation insurance through Security. In the normal course of their business relationship, either Harry would telephone Security when he had insurance needs or Security would telephone Harry when it was time to renew insurance. Harry would then drop by the office to complete the necessary paperwork and pay the premium. When Harry did not have the necessary premium money when it was time to buy or renew insurance, the Respondent regularly loaned Harry premium money and Harry would pay the Respondent back later. Harry usually dealt with the Respondent's unlicensed employees, not with the Respondent directly. On or sometime after July 7, 1989, Harry telephoned Security for proof of insurance on a 1987 Subaru so that he could avoid having to pay for lender insurance on the vehicle at a bank where he was seeking to obtain financing. One of the Respondent's unlicensed employees gave Harry a purported insurance identification card for "Progressive American," listing a purported insurance policy number and purported policy effective dates of July 7, 1989, to January 7, 1990. The lending institution did not accept the card. In fact, no Progressive American policy had issued on the vehicle. At some point, Harry came by the Security office and told the Respondent that he (Harry) was due a $640 refund for automobile insurance renewal premium money on a policy that never issued. By the Respondent's own admission, he checked with his records and his unlicensed employees and confirmed that Harry was owed the money. On September 28, 1989, he gave Harry a check for $640. 1/ Despite the circumstances that resulted in the false Progressive American insurance identification card, in Harry's need to buy Allstate insurance on a vehicle he thought was insured through Security, and in Harry's need for a $640 refund from Security, Harry continues to do his insurance business with the Respondent and Security and also refers friends to the Respondent for insurance needs. John Stuiso (Count I). On or about June 7, 1989, John Stuiso, a self-employed building contractor, applied for both general liability and workmen's compensation insurance through Security. (Stuiso had been insured through Security for the preceding four years with no apparent problems.) Stuiso paid Security $3,250 as partial payment of the premiums on the policies and also applied for premium financing through Security. At least $3,000 was paid by check; the evidence is not clear how the other $250 was paid. The $3,000 check was deposited into Security's general operating account which Security used to pay the operating expenses of the business. It is not clear what happened to the other $250. It was understood between Stuiso and Security that Security would have the applications processed and would inform Stuiso if there was any problem with coverage. Not having heard anything to the contrary, Stuiso believed he had the general liability and workmen's compensation insurance for which he had applied. In fact, Security never processed either application for insurance or either application for premium financing. In late July or early August, 1989, Stuiso requested that Security furnish a certificate of insurance for him to provide to a customer, APCO Building Systems of Oldsmar, Florida. On August 4, 1989, Security issued to APCO a certificate that Stuiso had both general liability insurance with American Professional Insurance Company and workmen's compensation insurance with "South Atlantic Council on Work Comp." Purported policy numbers also appeared on the certificate. When Stuiso never received a payment book for his premium financing, he became concerned about his coverage and was about to approach the Department for assistance when he received a telephone call from a Department investigator who had been investigating the Respondent (unbeknownst to the Respondent.) The investigator told Stuiso that he had no coverage. Stuiso then approached the Respondent and asked for a refund. The Respondent checked his records and asked his unlicensed employees about Stuiso's claim that he had paid for and applied for insurance that never issued. He learned for the first time the facts about Stuiso and immediately wrote Stuiso two refund checks, one for $3,000 and one for $250. Due to the financial problems the Respondent was having, his $3,00 check was returned for insufficient funds. The Respondent tried to borrow the money to cover the $3,000 check from a friend who declined on advice of counsel. Stuiso then went to the police and had the Respondent charged with writing a worthless check. The Respondent was advised of this and turned himself in to the police. He was given a week to make good on the check. The Respondent was able to borrow the money from another friend and paid Stuiso in full. However, his encounter with the police brought home to him the depths to which he had sunk. He decided to commit suicide by monoxide poisoning but changed his mind before it was too late. He telephoned his wife in Tampa to report what he had just done, and she initiated steps to have him committed involuntarily for treatment for mental illness under Florida's Baker Act. He spent four days in the Community Hospital in New Port Richey, Florida, where he was diagnosed as having "adjustment reaction." He was released to the custody of his wife and spent the next week to ten days with her in Tampa. After the Respondent recovered, he decided to do whatever was necessary to save his business and pay off his debts. He laid off office staff and, to take up the slack, himself assumed the responsibilities he had been delegating to his unlicensed employees. He also decided, in light of the Harry's and Stuiso matters, to himself investigate to see if there were any other Security customers who did not have insurance coverage for which they had paid. He found Wanda Mae Riley (Custom Plumbing of Pasco, Inc.). Wanda Mae Riley (Count II). In about August, 1988, the Respondent himself called on Wanda Mae Riley of Custom Plumbing of Pasco County to advise her that the company's general liability and automobile insurance policies for its fleet of four trucks were up for annual renewal on August 24, 1988. The Respondent filled out applications for renewal of the policies and for premium financing and accepted Riley's check in the amount of $3,244 as down payment for the renewal policies. The $3,244 was deposited into Security's general operating account which Security used to pay the operating expenses of the business. The Respondent telephoned American Professional Insurance Company to bind the coverage. He or his office also issued proof of insurance identification cards for Custom Plumbing. But, for reasons he cannot explain (having no recollection), he never processed the applications and the binders expired when the applications were not processed and policies were not issued in the normal course of business. Having had a lapse of memory as to the matter and as to Security's responsibilities to Custom Plumbing, the Respondent did not know and never told Riley or Custom Plumbing that the insurance policies were not renewed and that Custom Plumbing did not have the coverage it thought it did. Later in 1988, Security also arranged for workmen's compensation insurance for Custom Plumbing. The evidence did not prove that there were problems in the way Security obtained this coverage for Custom Plumbing. In approximately April, 1989, Custom Plumbing requested that Security furnish a certificate of insurance for him to provide to the Barnett Bank of Hernando County. On April 21, 1989, Security issued to the bank a certificate that Custom Plumbing had automobile insurance with American Professional Insurance Company. The expired binder number (which perhaps was the same as the policy number of the prior year's policy) appeared on the certificate as the purported policy number. There is no evidence that the Respondent personally was involved in providing this certificate of insurance. When, in approximately late October or early November of 1989, the Respondent discovered that Security had not obtained the coverages for which Custom Plumbing had made down payments in August, 1988, he telephoned Riley to inform her 2/ and tell her that he would refund the down payments Custom Plumbing had made in August, 1988. When the refund was not made promptly, Riley went to a lawyer to have a promissory note drawn for the Respondent's signature. The promissory note reflected the $3,244 the Respondent owed to Custom Plumbing, payable $500 a month. On or about December 9, 1989, the Respondent signed the note, which was paid in full in accordance with the terms of the note. (As previously found in Finding 14, by this time the Respondent also had heard from Nelson.)
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Petitioner, the Department of Insurance and Treasurer, enter a final order: (1) finding the Respondent, Robert Charles Anderson, guilty of the charges contained in Counts I, II, III, V and VI of the Administrative Complaint, as set forth in the Conclusions of Law, above; and (2) suspending the Respondent's licenses and eligibility for licensure for six months. RECOMMENDED this 28th day of May, 1991, in Tallahassee, Florida. J. LAWRENCE JOHNSTON 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 28th day of May, 1991.
The Issue Whether Petitioner's application for licensure as a Resident General Lines Insurance Agent was properly denied by the Department of Financial Services.
Findings Of Fact Petitioner owns two insurance agencies, All Florida Insurance and Tax Services ("All Florida") and One Florida Insurance Agency, Inc. ("One Florida"). On or about January 5, 2010, Gardonal Marcellot ("Marcellot") filled out an application and interviewed with Petitioner for an insurance agent position. The same day, Petitioner offered Marcellot a job at All Florida as an insurance agent.1/ Marcellot accepted the job and provided Pierre a copy of his 2-20 General Lines Insurance Agent license and Social Security card. Pierre informed Marcellot that his start date for employment with All Florida would be January 15, 2010. Soon thereafter, there was a major earthquake in Haiti, and Petitioner informed Marcellot by email that she had to go out of the country to help her family and she was pushing back his start date with the company. Marcellot never reported to work or started his employment with All Florida after Pierre left the country.2/ On or about February 12, 2010, Petitioner applied for agency licensure with the Department for All Florida and named Christopher Jeremie as the Agent in Charge. Pierre also named Marcellot as the secretary and treasurer of All Florida on the application. Marcellot never held a corporate officer position at All Florida. While operating All Florida, Pierre engaged in all the activities that require an insurance agent license. She admitted during the hearing that she ran the office, met with customers by phone and in person, responded to fax and email insurance requests, provided insurance quotes for customers, completed forms for customers, input the insurance information in the computer to get quotes for customers to review, input the information online, and processed numerous insurance applications. On February 26, 2010, Petitioner filled out an application for a Change of Agent in Charge for All Florida and named Marcellot Agent in Charge without his permission. 3/ Pierre continued to utilize Marcellot's licensure information and name him Agent in Charge without his permission to obtain Agency appointments with companies4/ for at least five insurance applications. On May 22, 2010, Pierre next utilized Otto Latimer's ("Latimer") licensure information without his permission and changed the Agent in Charge for All Florida by naming Latimer to the position.5/ On June 22, 2010, Petitioner submitted an Application for Agency Licensure online to the Department on behalf of One Florida and also named Latimer as the Agent in Charge without his permission. Latimer never worked at or served as Agent in Charge for All Florida or One Florida. Latimer owns his own business, Service Ace Corporation, where he works full time. He has been licensed since 1983 as a General Lines Insurance agent. At some point, Latimer discovered that Pierre was having problems getting a 2-20 license agent. He offered to help her by allowing her to rent space at his agency location and for her to work under his license. He never gave her permission or allowed her to use his license or name him as Agent in Charge for appointments. Pierre utilized Latimer's licensure information without his permission for her insurance companies and named him Agent in Charge for both Universal Property and Casualty Insurance Company and Citizens Property Insurance Corporation ("Citizens") insurance appointments for a total of about 19 insurance applications. On August 11, 2010, Citizens terminated All Florida's Agent Appointment Agreement after determining that Pierre had committed forgery and larceny based on false personification because Pierre signed Marcellot's name to the agent appointment application and named him as agent of record. On December 13, 2010, Pierre filed an application with the Department for a Resident General Lines Agent license. On December 21, 2010, Petitioner signed and issued All Florida check number 1003 to Del Rio Discount Corporation, in the amount of $1,000.00. Pierre cut check number 1003 as the gross down payment on a premium finance agreement dated October 1, 2010, for the homeowner policy purchased by Bernard and Eleanor Woodside. The check was returned for insufficient funds. Del Rio Finance filed a complaint with the Department against Petitioner for Pierre issuing check 1003 on behalf of All Florida because the check bounced for insufficient funds. Wendi Cameron ("Cameron"), the Department's investigator in this matter, started investigating the complaint in January 2011. She went to Pierre's office location to see Latimer, whom she believed was the Agent in Charge based on the paperwork Pierre had falsely completed and filed. Latimer was not present and so Cameron spoke to Pierre, who told Cameron that Latimer was out of the office. On May 29, 2011, while Pierre's insufficient funds investigation was still pending, Cameron received another complaint about Pierre namely that Citizens Insurance Company had terminated Pierre's appointment after being advised by Marcellot that Pierre had used his identity without his knowledge and forged his name on applications. Cameron visited Petitioner's office three times during Petitioner's investigations and an Agent in Charge was never present. Pierre was managing the office on each visit. On the fourth visit to the office, it was closed with a note on the door. Cameron was never able to speak to an Agent in Charge and was always informed that one was not available each time she called or visited. The Department concluded its investigation of Pierre and denied her application for licensure based on the Department's sections 626.112(1)(a), (b)4, 626.112(9), 626.172(2), (3), 626.611(7), (8), 626.621(2),(3), and (6).
Recommendation Upon consideration of the foregoing Findings of Fact and Conclusions of Law reached, it is RECOMMENDED that the Department of Financial Services enter a final order denying Petitioner's application for licensure as a General Lines Insurance Agent in the State of Florida. DONE AND ENTERED this 26th day of March, 2012, in Tallahassee, Leon County, Florida. S JUNE C. McKINNEY 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 26th day of March, 2012.
The Issue Whether Respondent committed the violations alleged in the First Amended Administrative Complaint; and If so, what disciplinary action should be taken against him.
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following findings of fact are made: Respondent's Licensure Status Respondent is now, and has been at all times material to the instant case, a Florida-licensed life and health insurance agent. Counts I through VI At all times material to the instant case, Peter DeBello, Inc., d/b/a Emery Richardson Insurance (Corporation), a Florida corporation owned by Respondent's father, operated a general lines insurance agency (Emery Richardson Insurance) located in the state of Florida. The Corporation was formed to manage the assets of Emery Richardson, Inc., which assets Respondent's father had obtained through litigation. Respondent's father delegated to Respondent the authority to manage the affairs of the Corporation. The same day (in 1992) that the Corporation took possession of Emery Richardson, Inc.'s assets, it so notified the Department of Insurance (Department) by telephone. Shortly thereafter, Leo Joy, a Florida-licensed property and casualty insurance agent since 1961, was designated on a Department- provided form as the primary agent for Emery Richardson Insurance at its 240 Commercial Boulevard location in Lauderdale By The Sea, Florida, and the completed form was provided to the Department.3 At no time prior to the commencement of the instant administrative proceeding did Respondent himself personally notify the Department of the identity of Emery Richardson Insurance's primary agent. It was Mr. Joy who (in 1992) filled out the primary agent designation form and submitted it to the Department. Mr. Joy, however, did so on behalf of Respondent, who had verbally designated Mr. Joy as Emery Richardson Insurance's primary agent. Neither Respondent, Mr. Joy, nor any one else, has subsequently used the Department's primary agent designation form to advise the Department of Mr. Joy's continuing status as Emery Richardson Insurance's primary agent. In his capacity as president of the Corporation, Respondent, on behalf of the Corporation, in April of 1994, entered into an agreement (Agreement) with Ulico Casualty Company of Washington, D.C. (Ulico), which provided as follows: WHEREAS, the Applicant (Corporation), a licensed insurance agent and/or insurance broker, has heretofore obtained from the COMPANY (Ulico) or is desirous of obtaining from the COMPANY the placement of insurance for the Applicant's customers or principals, and WHEREAS, the COMPANY, using its facilities, has placed insurance for the Applicant or with whom Applicant has requested the placement of such insurance, NOW, THEREFORE, in consideration of the mutual promises herein contained, and for other good and valuable consideration, the receipt whereof is hereby acknowledged. It is mutually AGREED as follows: With reference to the placement of new insurance, Applicant shall submit to the COMPANY a separate application containing the name of each prospective insured, describing the risk to be considered for underwriting and binding. Applicant specifically understands and agrees that Applicant shall have no authority to authorize or write any insurance or bind any risk on behalf of the COMPANY without the prior written approval by a duly authorized representative of the COMPANY. With respect to any insurance heretofore placed with the COMPANY by the Applicant, and with respect to any insurance hereinafter placed by the Applicant, all premiums shall be payable to the COMPANY and such Applicant assumes and agrees to pay the COMPANY premiums on all the policies of insurance heretofore or hereinafter placed by Applicant with the COMPANY in accordance with the current statements rendered to the Applicant by the COMPANY, such payment to be made no later than 30 days after the month of issue of the insurance policy, or due date of any installment if issued on an installment basis, less any credits due to the Applicant for return premium, provided an appropriate credit memorandum therefor has previously been issued by the COMPANY to Applicant. In the absence of such credit memorandum, Applicant shall have no right of counterclaim or setoff with respect to any claimed credits due, but shall be required to establish entitlement to the same in a separate action. Applicant shall have the right, so long as Applicant is not indebted to the COMPANY, to deduct agreed upon commissions on each policy of insurance prior to remitting the remaining premium to the COMPANY. In the event that premiums on behalf of any insured party shall have been financed and refund of financed premiums are required from the COMPANY to the financing institution, Applicant shall forthwith refund and pay to the COMPANY all unearned commissions heretofore received with respect to such financed premiums. In the event that Applicant shall fail to make any payment to the COMPANY which is required to be made pursuant to this Agreement, within the time specified, the COMPANY shall have the right, at any time subsequent to the due date of payment, to cancel any policy on which the premium payments have not been remitted to the COMPANY, without prior notice to the Applicant, by sending notice of cancellation directly to the insured, except that Applicant shall continue to remain liable to the COMPANY for the payment of all premiums earned as of the date of cancellation which are collected by Applicant. Applicant represents that they are duly licensed as an insurance broker or agent for Casualty and Property Insurance as indicated in the States set forth below, and agrees that in the event that any license shall cease, terminate or be cancelled, that the Applicant will promptly notify the COMPANY accordingly. Applicant agrees, where required, to file at Applicant's expense, all necessary affidavits and collect all State or local premium taxes and to pay the same promptly to the respective taxing authorities on all insurance placed with the COMPANY, in accordance with the laws applicable in the State of licensing. No changes or modification of this Agreement shall be valid unless such change or modification is subscribed, in writing, by the COMPANY and Applicant. Ulico is one of approximately 47 insurance companies that Emery Richardson Insurance represents. In the past five years, Emery Richardson Insurance has received from clients in excess of seven or eight million dollars in premium payments, which it has deposited in its various checking accounts and then paid over to these insurance companies. Ulico is the only one of these 47 insurance companies to have experienced "problems" in receiving from Emery Richardson Insurance monies due. These "problems" are detailed below. On June 13, 1994, the Corporation opened a checking account (account no. 458-902279-9, hereinafter referred to as the "Account") with Savings of America at the bank's Hollywood, Florida, branch. The Peter Debello described on the signature card for the Account was Respondent's father. Respondent's father, however, through execution of a power of attorney, had authorized Respondent to act on his behalf in connection with the Account. On August 20, 1996, Respondent drafted and signed four checks drawn on the Account, which were made payable to Ulico: check no. 804, in the amount of $1,729.15, for "Teamsters #769, Policy #BOU 907"; check no. 805, in the amount of $1,071.65, for "Sheet Metal Appr. #32, Policy #CLU 668"; check no. 806, in the amount of $700.00, for "Sheet Metal #32, Policy #CLU 682"; and check no. 807, in the amount of $96.05, for "Painters L.U. 160, Policy #CLU 451." (These policies will hereinafter be referred to as the "Subject Policies.") On January 24, 1997, Respondent drafted and signed a check (check no. 882) drawn on the Account, in the amount of $7,500.00, which was also made payable to Ulico. Check nos. 804, 805, 806, 807,4 and 882 were sent to Ulico as payment for monies the Corporation owed Ulico (pursuant to the Agreement) for insurance coverage obtained from Ulico by the Corporation for its clients (as reflected in invoices Ulico sent the Corporation, which hereinafter will be referred to as the "Subject Invoices").5 At the time that he drafted and signed these checks and submitted them to Ulico, Respondent assumed that there were sufficient funds in the Account to cover the amounts of the checks. In drafting and signing these checks and submitting them to Ulico, Respondent did not make any statements or representations that he knew to be false or misleading. All five checks were returned by Savings of America unpaid, with the explanation, "insufficient funds," stamped on each check.6 (These checks will hereinafter be referred to as the "Dishonored Checks.") Ulico's premium collection manager, Gayle Shuler, spoke with Respondent, as well as with Mr. Joy, "many times" concerning the monies the Corporation owed Ulico. At no time did either Respondent or Mr. Joy indicate that they disputed the Subject Invoices7 (although Respondent and Mr. Joy did contest other invoices that they received from Ulico). Although aware that the Dishonored Checks had been returned due to insufficient funds8 and knowing that Ulico desired payment, Respondent failed to act promptly to remedy the situation. It was not until early 1998, after the commencement of the instant administrative proceeding, that Respondent, on behalf of the Corporation, took steps to address the matter. At that time, using Fidelity Express money orders purchased between February 26, 1998, and March 1, 1998, (which Respondent dated August 26, 1996), Respondent paid Ulico a portion ($1,867.70) of the total amount of the Dishonored Checks. The money orders were sent to Ulico by certified mail, along with a cover letter from Respondent. Respondent "backdated" the money orders to reflect "when [the monies owed Ulico] should have been" paid. He did so without any intent to mislead or deceive. There is no clear and convincing evidence that anyone other than Ulico was injured by Respondent's failure to timely pay over to Ulico the monies Emery Richardson Insurance had received from its clients for the Subject Policies (which monies belonged to Ulico). Respondent's failure to timely make such payments, it appears, was the product of isolated instances of carelessness, neglect and inattention on Respondent's part,9 which, when considered in light of the totality of circumstances, including his problem-free dealings with the other insurance companies Emery Richardson Insurance represents, were not so serious as to demonstrate a lack of fitness, trustworthiness or competency to engage in transactions authorized by his license. Count VII In August of 1986, Respondent visited Gary Faske, Esquire, at Mr. Faske's office in Dade County, Florida. The purpose of the visit was to have Mr. Faske complete the paperwork necessary to add Mr. Faske to his new employer's group major medical insurance policy with Union Bankers Insurance Company. After the paperwork was completed, Respondent left Mr. Faske's office with the completed paperwork, as well as a check from Mr. Faske's employer to cover the cost of adding Mr. Faske to the group policy.10 It is unclear what Respondent did with the paperwork and check after he left Mr. Faske's office. In October of that same year (1986), Mr. Faske took ill and had to be hospitalized on an emergency basis. He assumed that he was covered by his employer's group major medical insurance policy, but he subsequently learned that he was wrong and had to pay between $50,000.00 to $60,000.00 in medical bills. The evidence does not clearly and convincingly establish that Respondent (as opposed to Union Bankers Insurance Company or some other party) was responsible for Mr. Faske not having such coverage. Mr. Faske thereafter filed suit against Respondent and Union Bankers Insurance Company in Dade County Circuit Court. He settled his claim against the insurance company, but was unable to reach an agreement with Respondent. Respondent's case therefore went to trial, following which, on August 12, 1997, a Final Judgment11 was entered against Respondent in the amount of $40,271.00.12 Count VIII By filing an Address Correction Request, dated January 29, 1992, Respondent notified the Department that his new mailing address was 40 Hendricks Isle, Fort Lauderdale, Florida. The Department subsequently sent a letter, dated April 14, 1995, to Respondent at this 40 Hendricks Isle address. Respondent, however, "had just moved from that address," and the letter was returned to the Department stamped, "forward expired." In May of 1995, Respondent advised the Department in writing of his new mailing address. It is unclear whether such written notification was given more than, or within, 30 days from the date Respondent had moved to his new address.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department issue a final order: (1) finding Respondent guilty of the violations noted in the Conclusions of Law of this Recommended Order; (2) penalizing Respondent for having committed these violations by suspending his license for 18 months; and (3) dismissing the remaining allegations of misconduct advanced in the First Amended Administrative Complaint. DONE AND ENTERED this 12th day of February, 1999, in Tallahassee, Leon County, Florida. STUART M. LERNER 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 12th day of February, 1999.
