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 Respondent violated the following sections of the Florida Statutes: 626.041(2), 626.561(1), 626.592(1), 626.611(4), (5), (7)-(10), (13), 626.21(2), (6), (12), 626.9521, 626.9541(1)(a)1, (b), (e)1., (k)1., (o)1., (z)3, 627.739(2), and 627.843. If so, what penalty should be imposed.
Findings Of Fact Respondent, Joanne Marie Shepherd (Shepherd), is currently and was at all times pertinent to this proceedings licensed in Florida as an authorized joint underwriter, association representative, life agent, life and health agent, general lines-property casualty, surety and miscellaneous lines agent, health insurance agent, independent adjuster, and dental health care service contract salesman. At all times relevant to this proceeding, Shepherd was the president, secretary, and treasurer of Coral Springs Auto Tag and Insurance Agency, Inc. (Coral Springs Agency). Coral Springs Agency is an insurance agency incorporated and existing pursuant to the laws of the state of Florida. At all times relevant to this proceeding Shepherd would be present at the Coral Springs Agency office during approximately 90 percent of the operating hours of the business. In early 1992, Shepherd organized an automobile club, Quality Motoring Association (QMA). At all times relevant to this proceeding, Shepherd was the vice president, secretary, treasurer, director, and resident agent of QMA. QMA provides one or more of the following services: coverage for automobile towing and road service, rental reimbursement, emergency travel expense, and theft reward. Shepherd's employees were paid a commission for each QMA contract which they sold. Contracts for QMA services were on a printed form and contained the following language: THIS CONTRACT IS NOT AN INSURANCE POLICY AND DOES NOT COMPLY WITH THE FINANCIAL RESPONSI- BILITY OR NO-FAULT LAWS OF ANY STATE OR TERRITORY. Jo Ann Jones and Kelly Conley were employed by Coral Springs Agency beginning in 1987 and 1991, respectively. They worked under the direct control and supervision of Shepherd. On February 26, 1993, Ms. Jones received a limited customer representative license for automobile insurance. She received her 220 license in December, 1994. During 1993, Ms. Conley spent approximately 60 to 70 percent of her work time performing tag and title work for Coral Springs Agency. In addition, her other duties included filing, answering the telephone, assisting in preparing correspondence concerning late payments and intentions to cancel, and selling QMA services. Her duties did include giving quotes for renewals and specific coverage requests, taking applications and receiving premium payments; however the evidence did not establish that Ms. Conley spent more than ten percent of her time performing these duties. She received her 220 license in October, 1994. On October 26, 1994, Shepherd originally filed the name of the primary agent for Coral Springs Agency as Kelly Gorton. This filing was amended on December 15, 1994, to change the name of the primary agent to Jo Connors. The records of the Department do not show that Shepherd filed the name of the primary agent for Coral Springs Agency for 1990 through 1993. Shepherd did not file the name of the primary agency for Coral Springs Agency for 1990, 1991, 1992 and 1993. In 1992, Andrew Coombs came to Coral Springs Agency to procure an automobile insurance policy. Shepherd explained the coverages to him. Mr. Coombs was issued a policy for PIP and property damage. Based on Respondent's Exhibit No. 8, Mr. Coombs was also issued comprehensive and collision coverage with Executive Insurance Company for a policy period of July 5, 1992 through July 5, 1993. The declaration sheet for the Executive Insurance Company policy showed that Mr. Coombs had a conviction for DUI/DWI on 6-11-90. In 1992, Mr. Coombs signed a contract with QMA for towing and rental services. However, Mr. Coombs was under the impression that the rental and towing services were included as part of his insurance policy. The contract which he signed did not indicate the fee amount for the contract. In June, 1993, Mr. Coombs called and discussed with Jo Ann Jones his need for a policy renewal and received a written quote from her on June 17, 1993, which stated: As per your request, please see the following renewal quote. 25,000 property damage, basic PIP w/a 2000 ded. Comp and coll. w/a 500 ded each. Your annual premium is 1278. w/a down payment of 302.62 and 6 months payments of 170.56. If you have any questions please call me. Thank you. The following Saturday, Mr. Coombs went to the Coral Springs Agency and gave Ms. Jones $200 in cash and a check for $1,078. He received a receipt from Ms. Jones for that amount showing that it was for "ins. paid in full." Mr. Coombs was in a hurry on that day and he executed a power of attorney appointing Coral Springs Auto Tag and Insurance Agency as his attorney-in-fact and authorizing the Coral Springs Agency to sign and execute applications for automobile insurance. The power of attorney did not authorize Coral Springs Agency to execute a contract with QMA for Mr. Coombs. Jo Ann Jones witnessed the execution of the power of attorney and dated it 7-3-93. The power of attorney was used on July 3, 1993 to execute a contract with QMA for towing and rental services. The charge for these automobile club services was $100 and was so indicated on the contract. Mr. Coombs did not know that the power of attorney would be used to purchase towing and rental services with QMA. The power of attorney was used also to execute Mr. Coombs' application for an insurance policy with Progressive. The application showed that the total premium with Progressive was $1,178. The policy with Progressive was for property damage, PIP, comprehensive and collision. In completing the application, it was the understanding of the Coral Springs Agency that the latest conviction that Mr. Coombs had was the DUI in June, 1990. However, Mr. Coombs had confused the date of the occurrence of the violation with the date of conviction and had not revealed that in October, 1990, his license had been revoked because of the DUI violation. When Progressive learned of the revocation, it notified Mr. Coombs that an additional $98 premium would be due. As a result of the notification from Progressive, Mr. Coombs learned that Progressive had received $1,178 instead of the $1,278 which he had given Coral Springs Agency and that he had been charged $100 for QMA's towing and rental services. Surprised and upset by this revelation, Mr. Coombs contacted the Department of Insurance and made a complaint. On July 24, 1993, Wayne LeBlanc went to the Coral Springs Agency to purchase automobile insurance. His current policy was with Allstate and he told Ms. Conley that he wanted similar coverage. The Allstate policy included towing and rental coverage for approximately eight dollars. Ms. Conley gave Mr. LeBlanc a quote. Ms. Conley filled out Mr. LeBlanc's application for insurance with Progressive and a contract with QMA for rental and towing services. She placed "X's" on the documents indicating where Mr. LeBlanc should sign and he signed the documents. Mr. LeBlanc did not know that he was purchasing towing and rental services from an automobile club. Ms. Conley did not explain the QMA contract to Mr. LeBlanc. The Progressive application showed that the total premium for the insurance was $512. The QMA contract showed the amount of the fee for QMA services as $100. Mr. LeBlanc gave Ms. Conley a check for $228. Ms. Conley applied $128 for payment of the insurance coverage and $100 for the QMA coverage. A short time later, Mr. LeBlanc received a statement from Progressive indicating that his insurance premium had increased from $512 to $702 because he had failed to show proof of insurance for the six months prior to the purchase of the Progressive policy. Mr. LeBlanc cancelled his policy with Progressive. He received a check from QMA dated January 19, 1994 for $100 as a refund on his QMA coverage. In August, 1993, Eric Henry called Coral Springs Agency for a quote for automobile insurance for his 1984 Nissan. He wanted the minimum coverage which was legally required. Mr. Henry was given a quote of between $480 and $490. He, along with his father, went to Coral Springs Agency to purchase the insurance. Mr. Henry signed a Progressive insurance application. The Progressive application showed a total premium of $410 in two different locations on the contract as well as a breakdown of the premium by coverage. Additionally the application showed a $103 down payment with the remainder of the premium to be paid in installments. Mr. Henry signed a contract with QMA. The contract showed a fee of $80 as well as the benefits he was receiving under the contract. Ms. Jones did not explain the QMA contract to Mr. Henry. He did not know that he was purchasing towing and rental services from an automobile club. He did not ask for the automobile club services and did not want them. He had never had towing and rental coverage before. Mr. Henry gave Ms. Jones $183, of which $103 was applied to the insurance premium and $80 to QMA for towing and rental services. Mr. Henry was given a receipt by Ms. Jones that described the money as "DP on ins." Mr. Henry learned that he had purchased QMA coverage from a representative from the Department. He contacted the Coral Springs Agency and requested a refund for the QMA coverage because he did not want and had not asked for the QMA services. QMA refunded his money. Mr. Henry has continued to do business with Coral Springs Agency. On Saturday, August 21, 1993, JoAnne Strader called Coral Springs Agency for a quote for insurance on her automobile. Shepherd gave her a quote by telephone for coverage by Fortune Insurance Company. Ms. Strader wanted the minimum coverage required by law and nothing else. Coral Springs closed at one that afternoon so Ms. Strader hurried to the agency to purchase the insurance. When she arrived at the agency, Ms. Conley pulled up the quote from the computer. Ms. Strader signed the application for the Fortune Insurance, a contract with QMA for towing and rental services, and an agreement for financing the insurance premiums. The application stated that the total insurance premium was $207. The QMA contract showed that the fee for the QMA services was $55 for six months. Ms. Jones did not explain the QMA contract. The financing agreement showed that the total premium was $207 with $102 being applied as the down payment. Ms. Strader gave Ms. Conley a check for $157 of which $102 was applied as a down payment for the insurance coverage and $55 for QMA services. The finance agreement provided that Ms. Strader would make three payments of $42.95 beginning on September 21, 1993. Ms. Strader was given a copy of the finance agreement on August 21, 1993. Ms. Strader later called Coral Springs Agency and advised Ms. Conley that she had misplaced her insurance documents. Ms. Conley sent Ms. Strader a duplicate set, including a copy of the finance agreement, in October, 1993. Ms. Strader was unaware at the time she purchased the insurance that she had also purchased automobile club services from QMA. She learned for the first time that she had purchased such services when a representative from the Department contacted her in January, 1994 and told her. In February, 1994, Ms. Strader made a claim to QMA for reimbursement of towing expenses. She received a check dated February 18, 1994 from QMA. On November 9, 1993, Daniel Link went to the Coral Springs Agency to purchase minimum automobile insurance coverage for his two vehicles. He was given a written quote by Jo Ann Jones. Mr. Link asked Ms. Jones to prepare the application and stated that he would come back later in the day to sign the application. When he returned to the agency the application was prepared and he signed it. The application showed that the total insurance premium was $1023 with a breakdown by vehicle of the costs for the coverages. Mr. Link gave Coral Springs Agency a check for $356, which he thought would be applied to the insurance premium; however only $256 was applied toward the insurance premium. Mr. Link signed an agreement to finance the outstanding premium balance. The finance agreement showed that the total premium was $1023 with a down payment of $256 with the remainder to be paid in eight payments. His testimony was not clear whether he received a copy of the finance agreement on the day that he signed the agreement. Mr. Link did not want to purchase towing and rental coverage. When he came into the agency to sign the application, he also signed a contract with QMA for automobile club services which showed a fee of $100. The blanks in the contract had been filled out by someone at Coral Springs Agency, and he signed where an "X" was placed. Ms. Jones did not explain the QMA contract to Mr. Link. He did not know that he had purchased such services. Of the amount which Mr. Link paid the Coral Springs Agency, $100 went to pay for QMA coverage. In November, 1993, Andrew Prisco and his father went to the Coral Springs Agency to purchase insurance for a 1985 Nissan. Mr. Prisco's father had transferred the title to the car to Mr. Prisco. The vehicle has previously been insured through the Coral Springs Agency. Mr. Prisco's father handled the transaction for Mr. Prisco and discussed the coverage with Ms. Jones. Mr. Prisco signed an application for Progressive Insurance. Jo Ann Jones had filled out a portion of the application. The application showed that the total premium was $410. Mr. Prisco gave the Coral Springs Agency a check for $490, thinking it was for insurance premiums. Mr. Prisco did not want towing and rental services, but he signed a contract with QMA. Ms. Jones filled out the QMA agreement and put an "X" where Mr. Prisco was supposed to sign. Mr. Prisco signed where Ms. Jones indicated; however he was unaware that he was purchasing automobile club services. Ms. Jones did not explain the QMA contract to Mr. Prisco. The QMA contract showed that the fee for the services was $80. Of the $490 which he paid Coral Springs Agency, $80 was for QMA. Mr. Prisco learned from a Department representative that he had purchased QMA services. Mr. Prisco and his father requested a refund from QMA. QMA refunded the fee paid by Mr. Prisco. Mr. Prisco has continued to do business with Coral Springs Agency. Shepherd has been a licensed insurance agent in Florida since 1982. Other than the instant proceeding, Shepherd has never had a disciplinary action taken against her insurance agent license.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered dismissing Counts III, VI, and VII of the Administrative Complaint; finding that Joanne Shepherd violated Section 626.592(1), Florida Statutes; finding that Shepherd violated Sections 626.9541(1)(x)3., 626.611(5), (7), and (9), Sections 626.621(2)(6), and 626.9521, Florida Statutes, as set forth in Counts II, IV, V, VIII and IX of the Administrative Complaint; and suspending Joanne Shepherd's license for two years. DONE AND ENTERED this 16th day of October, 1995, in Tallahassee, Leon County, Florida. SUSAN B. KIRKLAND 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 16th day of October, 1995. APPENDIX TO RECOMMENDED ORDER, CASE NO. 94-4167 To comply with the requirements of Section 120.59(2), Florida Statutes (1993), the following rulings are made on the parties' proposed findings of fact: Petitioner's Proposed Findings of Fact. Paragraphs 1-4: Accepted in substance. Paragraph 5: Rejected as constituting a conclusion of law. Paragraphs 6-7: Accepted in substance. Paragraph 8: The first sentence is accepted in substance. The remainder is rejected as subordinate to the facts found. Paragraph 9: Accepted in substance that Ms. Jones was employed as an employee of Coral Springs Agency during the time period relevant to this proceeding. Paragraph 10: Rejected as not supported by the evidence. Ms. Jones was a limited customer representative. Paragraphs 11-19: Accepted in substance. Paragraph 20: Accepted in substance that Progressive asked for an additional $98 but denied that the reason for the additional premium was because Shepherd failed to send Progressive $1,278. The reason of the increase was because Coomb's license had been either suspended or revoked in 1990. Paragraph 21: Accepted in substance. Paragraph 22: The first sentence is accepted in substance to the extent that Ms. Conley took an application from Mr. Leblanc but not that she solicited or procured the application. The last sentence is rejected as not supported by clear and convincing evidence. Paragraph 23: Accepted in substance. Paragraph 24: The first sentence is rejected as to soliciting. The remainder is accepted in substance. Paragraphs 25-32: Accepted in substance. Paragraph 33: The first sentence is accepted in substance that Ms. Conley took an application from Ms. Strader for automobile insurance with Fortune but rejected that she solicited or procured the application. The last sentence is accepted in substance. Paragraph 34: Accepted in substance. Paragraph 35: The first sentence is accepted in substance except as to soliciting. The remainder is accepted in substance. Paragraph 36: The first sentence is accepted in substance. The remainder is rejected as not supported by clear and convincing evidence. Paragraphs 37-39: Accepted in substance. Paragraph 40: Rejected as not supported by the evidence. Paragraphs 41-42: Accepted in substance. Paragraph 43: The first sentence is accepted in substance. The remainder is rejected as not supported by clear and convincing evidence. Paragraphs 44-49: Accepted in substance. Respondent's Proposed Findings of Fact. Paragraph 1: Accepted in substance except as to Mr. Coombs. He did not sign the application. Paragraph 2: Accepted in substance. Paragraph 3: Rejected as not supported by the evidence. Paragraph 4: Accepted in substance. Paragraphs 5-6: Accepted in substance. Paragraph 7: Rejected as not supported by the evidence. Paragraph 8: Rejected as constituting a conclusion of law. Paragraph 9: Rejected as irrelevant. Paragraph 10: Accepted in substance. Paragraphs 11-12: Accepted in substance. Paragraphs 13-17: Rejected as not supported by the evidence. Paragraph 18: Accepted in substance. COPIES FURNISHED: Allen R. Moayad, Esquire Department of Insurance Division of Legal Services 200 East Gaines Street Tallahassee, Florida 32399-0333 Thomas F. Woods, Esquire Gatlin, Woods, Carlson and Cowdery 1709-D Mahan Drive Tallahassee, Florida 32308 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
The Issue Should discipline be imposed by Petitioner against Respondent’s insurance license held pursuant to Chapter 626, Florida Statutes? Although Respondent was unlicensed at the time of the specific insurance transactions enumerated in the Administrative Complaint, she since has become licensed. It is the existing license of Respondent that Petitioner seeks to discipline in this action.
Findings Of Fact The Parties Petitioner was created in accordance with Section 20.13, Florida Statutes. Petitioner has been conferred general power by the Legislature to regulate the insurance industry in Florida, in accordance with Section 624.307, Florida Statutes, and Chapter 626, Florida Statutes, grants Petitioner the authority to license and discipline insurance agents doing business in Florida. At times relevant to the inquiry, Respondent was not licensed by Petitioner to transact insurance. (Pet. Ex. 2) Respondent was employed by Beck-De Pratter, Inc., a Florida Corporation, doing business as William Dye Insurance, Inc./Brentwood (hereinafter referred to as the “Agency”) from 1996 until 2004. Count I: Aaron Curtis On August 16, 2000, Aaron Curtis came into the Agency to re-new the insurance on his vehicle. Respondent took down the information necessary for Curtis to re-new his insurance. The company that had insured Curtis' vehicle was no longer writing coverage in Florida, and the Agency placed Curtis' coverage without significant alternation with another carrier. John Beck signed this application as agent. Count II: Stacy Collier On October 7, 2002, Collier came into the Agency to re-new his automobile insurance. Respondent took down the information necessary for Collier to re-new the insurance. The company that had insured Collier's vehicle was no longer writing coverage in Florida, and the Agency placed Collier's coverage without significant alternation with another carrier. John Beck signed this application as agent. Count III: Ruby Hubbard On October 11, 2002, Ruby Hubbard came into the Agency to re-new his automobile insurance. Respondent took down the information necessary for Hubbard to re-new the insurance. The company that had insured Hubbard's vehicle was no longer writing coverage in Florida, and the Agency placed Hubbard's coverage without significant alternation with another carrier. John Beck signed this application as agent. Count IV: Mary Kennedy On March 6, 2002, Mary Kennedy came into the Agency to re-new his automobile insurance. Respondent took down the information necessary for Hubbard to re-new the insurance. The company that had insured Kennedy's vehicle was no longer writing coverage in Florida, and the Agency placed Kennedy's coverage without significant alternation with another carrier. John Beck signed the related vehicle inspection report. Count V: Charles Howard On September 10, 2001, Charles Howard came into the Agency to re-new his automobile insurance. Respondent took down the information necessary for Hubbard to re-new the insurance. The company that had insured Kennedy's vehicle was no longer writing coverage in Florida, and the Agency placed Kennedy's coverage without significant alternation with another carrier. John Beck signed the related vehicle inspection report. Count VI: Not appointed as Customer Representative Petitioner’s official records reveal that Respondent was not appointed as customer representative by any insurance agency at the time the preceding transactions occurred. Respondent’s employer, John Beck, testified that he never appointed Respondent as a customer representative. Count VII: John Kennedy On March 2, 2001, John Kennedy came into the Agency to re-new his automobile insurance. Respondent took down the information necessary for Hubbard to re-new the insurance. The company that had insured Kennedy's vehicle was no longer writing coverage in Florida, and the Agency placed Kennedy's coverage without significant alternation with another carrier. John Beck signed this application as agent.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That a final order be entered dismissing the allegations contained in the administrative complaint against Respondent, Sharon G. Taylor. DONE AND ENTERED this 2nd day of November, 2004, in Tallahassee, Leon County, Florida. S __ STEPHEN F. DEAN 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 2nd day of November, 2004. COPIES FURNISHED: Greg S. Marr, Esquire Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399-0333 Jed Berman, Esquire Infantino and Berman Post Office Box 30 Winter Park, Florida 32790 Pete Dunbar, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Tom Gallagher, Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
The Issue Whether Respondent committed the violations alleged in the Administrative Complaint issued against her and, if so, what penalty should be imposed.
Findings Of Fact Based on the evidence adduced at hearing, and the record as a whole, the following findings of fact are made: Licensure Respondent has held a Florida 2-20 general lines (property and casualty) insurance agent license since July 24, 1998, and a Florida 2-15 life (including variable annuity and health) insurance agent license since August 17, 2005. Facts Common to Counts I through V and VIII At all times material to Counts I through V and VIII of the Administrative Complaint, Respondent was employed by O. J. Insurance (O. J.), a Miami insurance agency she had previously owned for approximately 15 years before having sold it in January 2003. Respondent went to work for O. J.'s new owners in or around June 2003. She remained an employee of the agency for approximately two years. During this two-year period, Respondent was the only licensed insurance agent at the agency. The agency's two other employees (one of whom was Respondent's sister, Sonia Pupo) held Florida 4-40 customer representative licenses. Respondent and the agency's two customer representatives were all salaried employees. None of them received a commission. The agency itself, however, received commissions from the insurance companies whose policies it sold. Respondent's performance as an employee of the agency was evaluated on an annual basis. Among the factors considered in the evaluation process was Respondent's productivity (that is, the number of insurance policies she sold). After her first year as an employee of the agency, Respondent received a salary increase based upon the annual evaluation she had received. Facts Relating to Count I On or about December 30, 2003, Blanca Duron went to O. J., where she purchased automobile insurance from United Automobile Insurance Company (United) through Respondent. Respondent filled out the insurance application for Ms. Duron. On the application, Respondent put down that Ms. Duron's address was 5205 Southwest 140th Place, Miami, Florida, knowing that this was not Ms. Duron's correct address. Ms. Duron actually resided on Southwest 7th Street in Miami. At no time did she ever tell Respondent that she lived at 5205 Southwest 140th Place, Miami, Florida. 5205 Southwest 140th Place, Miami, Florida, was in a "territory" having lower insurance rates than the "territory" in which Ms. Duron actually lived. Respondent's purpose in falsifying Ms. Duron's address on the application was to enable Ms. Duron to pay a lower premium than United would have charged had her correct address been entered on the application. Facts Relating to Count II On or about December 6, 2004, Brisaida Castillo went to O. J., where she purchased automobile insurance from United through Respondent. Respondent filled out the insurance application for Ms. Castillo. Respondent put down on the application that Ms. Castillo's address was 5205 Southwest 140th Place, Miami, Florida, knowing that this was not Ms. Castillo's correct address. Ms. Castillo actually resided on Northwest 22nd Court in Miami. At no time did she ever tell Respondent that she lived at 5205 Southwest 140th Place, Miami, Florida. 5205 Southwest 140th Place, Miami, Florida, was in a "territory" having lower insurance rates than the "territory" in which Ms. Castillo actually lived. Respondent's purpose in falsifying Ms. Castillo's address on the application was to enable Ms. Castillo to pay a lower premium than United would have charged had her correct address been entered on the application. Facts Relating to Count III On or about December 10, 2004, Ricardo Fernandez went to O. J., where he purchased automobile insurance from United through Respondent. Respondent filled out the insurance application for Mr. Fernandez. Respondent put down on the application that Mr. Fernandez's address was 5205 Southwest 140th Place, Miami, Florida, knowing that this was not Mr. Fernandez's correct address. Mr. Fernandez actually resided on Essex Avenue in Hialeah, Florida. At no time did he ever tell Respondent that he lived at 5205 Southwest 140th Place, Miami, Florida. 5205 Southwest 140th Place, Miami, Florida, was in a "territory" having lower insurance rates than the "territory" in which Mr. Fernandez actually lived. Respondent's purpose in falsifying Mr. Fernandez's address on the application was to enable Mr. Fernandez to pay a lower premium than United would have charged had his correct address been entered on the application. Facts Relating to Count IV On or about February 1, 2005, Pedro Cruz, Sr., went to O. J., where he purchased automobile insurance from United. It is unclear from the record whether it was Respondent or her sister, Ms. Pupo, who filled out Mr. Cruz, Sr.'s insurance application.4 The application indicated that Mr. Cruz, Sr.'s address was 5205 Southwest 140th Place, Miami, Florida. This was not his correct address. He actually resided on Northwest 18th Street in Miami. At no time did he ever tell Respondent that he lived at 5205 Southwest 140th Place, Miami, Florida. 5205 Southwest 140th Place, Miami, Florida, was in a "territory" having lower insurance rates than the "territory" in which Mr. Cruz, Sr., actually lived. Consequently, Mr. Cruz, Sr., paid a lower premium than United would have charged had his correct address been entered on the application. Facts Relating to Count V On or about December 6, 2004, Pedro Cruz, Jr., went to O. J., where he purchased automobile insurance from United through Respondent. Respondent filled out the insurance application for Mr. Cruz, Jr. Respondent put down on the application that Mr. Cruz, Jr.'s address was 5521 Southwest 163rd Court, Miami, Florida.5 Mr. Cruz, Jr., actually resided on Northwest 18th Street in Miami. At no time did he ever tell Respondent that he lived at 5521 Southwest 163rd Court, Miami, Florida.6 Facts Relating to Count VIII On or about February 3, 2005, Eulogio Martinez went to O. J., where he purchased automobile insurance from United through Respondent. Respondent filled out the insurance application for Mr. Martinez. Respondent put down on the application that Mr. Martinez's address was 5205 Southwest 142nd Place, Miami, Florida. Mr. Martinez actually resided on Northwest 5th Street in Miami. At no time did he ever tell Respondent that he lived at 5205 Southwest 142nd Place, Miami, Florida.7 Facts Relating to Count XI Since September 2005, O.D.C. Insurance Services, Inc. (O.D.C.) has operated an insurance agency (selling Allstate insurance products) at 13860 Southwest 56th Street in Miami, Florida, for which it has not obtained a license. During this period of time, Respondent has been owner, sole officer (president), and registered agent of O.D.C. and responsible for the day-to-day operations of O.D.C.'s Allstate insurance agency. At all times material to Count XI of the Administrative Complaint, Respondent was unaware of the requirement that insurance agencies, such as O.D.C.'s, be licensed.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department issue a Final Order finding Respondent guilty of the violations alleged in Counts I through III of the Administrative Complaint, revoking her licenses for having committed these violations, and dismissing the remaining counts of the Administrative Complaint. DONE AND ENTERED this 24th day of July, 2008, in Tallahassee, Leon County, Florida. S 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 24th day of July, 2008.
The Issue Should discipline be imposed by Petitioner against Respondent's insurance agent licenses, life including variable annuity (2-14), and general lines (2-20), pursuant to Chapters 624 and 626, Florida Statutes (2004)?
Findings Of Fact Stipulated Facts Respondent is licensed by Petitioner as a life including variable annuity (2-14) and a general lines (2-20) insurance agent and has been issued license D029506. During the time referenced in the Administrative Complaint, Respondent was licensed as a customer representative (4-40) and a life including variable annuity (2-14) agent. The Department has jurisdiction over Respondent's insurance licenses and appointments. At all times relevant to the dates and occurrences referenced in the Administrative Complaint, Respondent was employed or affiliated with Direct General Insurance Agency, Inc., a Tennessee corporation, doing business in Florida as Florida No-Fault Insurance Agency (Cash Register). Additional Facts: At times relevant to the case Respondent held his life including variable annuity license (2-14) under an appointment with Direct Life Insurance Company. At times relevant to the case Respondent had a customer representative license (4-40) under appointment with Direct General Insurance Agency, Inc. At present Respondent continues to hold the life including variable annuity license (2-14) under an appointment with Direct General Life Insurance Company. At present he has a general lines license property and casualty license (2-20) under appointments with Direct General Insurance Company and American Bankers Insurance Company of Florida. On February 8, 2005, Brandi Dean called Cash Register to receive a quote for the purchase of basic automobile insurance coverage. She was provided a quote at that time. On February 8, 2005, Brandi Dean, went to the Cash Register to purchase basic automobile insurance coverage. She had done business with the insurance agency before. Her policy with Direct General Insurance Company was Policy No. FLCR162714439, as reflected in Petitioner's Exhibit numbered 15, with a scan cover sheet entitled "Renewal Auto." On February 8, 2005, Ms. Dean purchased automobile insurance coverage that would be effective from February 10, 2005 through February 10, 2006. She was charged $316 for property damage liability (PD) and $216 for basic injury protection (PIP) for a total of $532, with a $25 policy fee. The application information within the exhibit reflects the customer's name, signature, and initials in various places. On February 8, 2005, Ms. Dean was provided another form referred to as an Explanation of Policies, Coverages and Cost Breakdown (including non-insurance products). Petitioner's Exhibit numbered 16. She signed that document. It reflected the auto policy coverage information. It also set forth under a category referred to as optional policies, the purchase of Lloyd's Accident Medical Protection Plan for $110. Petitioner's Exhibit numbered 17 is additional information concerning the Accident Medical Protection Plan application by the customer signed by her. It details a $110 annual premium for individual coverage of $1,000 medical expense, and 125/day-365 day hospital coverage. Within that same exhibit there is a form signed by the customer titled 100% certain underwriters @ Lloyd's/London (DB/33) Accident Medical Protection Plan. This reflects $110 cost, $125 daily coverage and the total annual benefit of $45,625. Petitioner's Exhibit numbered 18 is a scan cover sheet entitled Renewal Finance with Premium Finance Agreement Information in association with Direct General Financial Services, Inc., in which the customer Ms. Dean paid $69.63 down, financed $599.82, with a total price of $748.61 when considering the annual percentage rate for financing. This document in totality was initialed and signed by Ms. Dean. Ms. Dean was provided a receipt for her cash down-payment on the purchase. Petitioner's Exhibit numbered 14. Petitioner's Exhibit numbered 19 is an Insurance Premium Financing Disclosure Form signed by the customer, reflecting the cost of the automobile insurance and the hospital indemnity plan, the amount of total cost and includes the policy fee for the automobile insurance, document stamp tax, the down payment, and the total amount financed $599.82. Ms. Dean was left with the impression that she had only purchased automobile insurance. She believed that the monthly payments for the financing were only in relation to automobile insurance. Ms. Dean does not recall having the accidental medical protection plan explained to her as to its terms. She does not recall anyone explaining that it was an optional plan unassociated with automobile insurance. She told the agent that she dealt with that she was only interested in purchasing the state-required automobile insurance coverage. Had she realized that she was purchasing optional accident medical protection, not part of the automobile insurance purchase, she would have declined the optional policy. Ms. Dean does recall that the agent she dealt with made some brief explanation about the documents involved in the transaction but not every page was explained. Ms. Dean recalls explanations about the automobile policy but nothing about optional coverage. Ms. Dean glanced over the documents but did not read every word included in the documents. Ms. Dean does not recall whom she dealt with on February 8, 2005. Otherwise, the record does not reflect the person who sold the automobile insurance and accidental medical protection plan to her at that time. At times relevant, Denise Daley Turnbull worked at Cash Register. She was a customer representative license (4- 40), appointed by Direct General Insurance Agency, Inc. On March 24, 2005, William L. Green, Jr., came to Cash Register to purchase automobile insurance. He dealt with Ms. Turnbull. He made a $170.02 down payment for his purchases, as reflected in Petitioner's Exhibit numbered 4, which is a receipt provided to Mr. Green. A scan cover sheet related to an auto policy purchased, together with the application information for the automobile insurance purchased through Direct General Insurance Company is found within Petitioner's Exhibit numbered Mr. Green purchased automobile insurance for property damage liability (PD) in the amount of $590 and basic personal injury protection (PIP) for $370, with a $25 policy fee, totaling $985. He signed and initialed parts of the forms in association with the automobile insurance. Ms. Turnbull also signed forms in association with the automobile insurance. Petitioner's Exhibit numbered 6 is an explanation of policies, coverages and cost breakdown (including non-insurance products) reflecting the overall purchases by Mr. Green. He signed that form. It relates the automobile insurance purchase. It also relates the purchase of an American Bankers Travel Protection Plan for $60, a Lloyd's Accidental Medical Protection Plan for $110 and life insurance of $98. With fees and other costs the total purchase was $1270.99. Of relevance here, Petitioner's Exhibit numbered 9 is a scan cover sheet in relation to the life policy signed by Ms. Turnbull. It also includes application information to Direct Life Insurance Company with certain questions reflected that were initialed by the purchaser. Mr. Green signed the application. Respondent also signed the application, as well as printing his name and insurance license number on the form. Petitioner's Exhibit numbered 10 is a scan cover sheet for a New Finance with Direct General Financial Services, Inc., which reflects a $162.03 down-payment, $1105.17 in amount financed, with a $129 finance charge. The total sales price for all purchases was $1396.20, to include the life insurance with Direct Life Insurance Company. Mr. Green signed the premium finance agreement. Petitioner's Exhibit numbered 11 is a copy of the Insurance Premium Finance Disclosure Form signed by Mr. Green. Ms. Turnbull has no recollection of the Respondent's participation in the sale of the life insurance policy to Mr. Green. She does recall that Respondent was in the insurance agency office when the life insurance was purchased. She recognizes Respondent's signature in association with the life insurance application and purchase. Mr. Green had no intention of purchasing life insurance when he went to Cash Register on March 24, 2005. He recalls dealing with Ms. Turnbull. No one else sat with Mr. Green and explained policy information to him. Specifically, Respondent did not sit with Mr. Green and offer explanations about the policy. Mr. Green did not see Respondent sit with Ms. Turnbull and Respondent remained silent while she sold the life policy. Had Mr. Green realized that he was purchasing life insurance he would have declined the opportunity.
Recommendation Upon consideration of the facts found and the conclusions of law reached, it is RECOMMENDED: That Petitioner enter a final order finding a violation under Count I as set forth in the conclusions of law, dismissing Count II and suspending Respondent's license for six months for the violation. DONE AND ENTERED this 7th day of May, 2007, in Tallahassee, Leon County, Florida. S CHARLES C. ADAMS 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 7th day of May, 2007. COPIES FURNISHED: William Gautier Kitchen, Esquire Gregg Marr, Esquire Department of Financial Services Division of Legal Services 200 East Gaines Street Tallahassee, Florida 32399-0333 L. Michael Billmeier, Jr., Esquire Galloway, Brennan and Billmeier, P.A. 240 East Fifth Avenue Tallahassee, Florida 32303 Michael L. Rothschild, Esquire Larry S. Davis, P.A. 1926 Harrison Street Hollywood, Florida 33020 Honorable Alex Sink Chief Financial Officer Department of Financial Services The Capitol, Level 11 Tallahassee, Florida 32399-0300 Daniel Sumner, General Counsel Department of Financial Services The Capitol, Level 11 Tallahassee, Florida 32399-0307
The Issue Whether Respondent committed the violations alleged in the Amended Administrative Complaint issued against him, as modified at hearing, and, if so, what penalty should be imposed.
Findings Of Fact Based on the evidence adduced at hearing, and the record as a whole, the following findings of fact are made to supplement and clarify the extensive factual stipulations set forth in the parties' Statement of Facts Admitted3: Respondent has been employed by Direct General Insurance Agency, Inc. (Direct General) for the past five years. He is the manager of a Direct General office located at 7558 West Commercial Boulevard, Lauderhill, Florida. This has been Respondent's principal business address since September 2005. Prior to September 2005, Respondent was the manager of a Direct General office located at 8300 West Oakland Park Boulevard, Sunrise, Florida. Respondent did not notify Petitioner of this September 2005 change of his principal business address within 60 days of the change. He assumed, erroneously it turns out, that Direct General's "licensing department" would inform Petitioner of the change. At all times material to the instant case, Respondent, as a licensed agent acting on behalf of Direct General, sold automobile insurance, along with three ancillary or "add-on" products. The three "add-on" products Respondent sold were an accident medical protection plan, a travel protection plan, and a term life insurance policy (hereinafter referred to collectively as the "Add-Ons"). From September 2003 to May 2006, Respondent sold these Add-Ons to approximately 1300 customers, including Ms. Roberts- Hall, Mr. Bentivegna, and Mr. Moore. For his efforts on behalf of Direct General, Respondent was paid an hourly wage, plus a commission for each of the Add- Ons he sold. He did not receive a commission for any automobile insurance policy sales he made. Direct General had sales goals with respect to Add-Ons that it expected its agents to meet. How well an agent did in meeting these goals was an "important factor" in the job performance evaluation the agent received annually from his supervisor (as Respondent was aware). An agent's failure to meet a particular goal, however, did not inevitably lead to the "fir[ing]" of the agent. Nonetheless, it was obviously in the agent's best interest to sell as many Add-Ons as possible. Respondent's supervisor was Sara Silot, a Direct General District Manager. In addition to an annual job performance evaluation, Ms. Silot provided Respondent, as well as her other subordinates, with regular feedback during the course of the year regarding their Add-On sales numbers. Each of the customers (Ms. Roberts-Hall, Mr. Bentivegna, and Mr. Moore, hereinafter referred to collectively as the "Complaining Customers") referenced in Counts I through VII and XV through XVIII of the Amended Administrative Complaint (hereinafter referred to collectively as the "remaining sliding counts") purchased the policies referenced in these counts in person at Respondent's office, where they were given paperwork to review and to then initial, sign, and/or date in numerous places in order to consummate the transaction. This paperwork consisted of, depending on the transaction, as few as 14, and as many as 20, pages of various documents (hereinafter referred to collectively as the "Transactional Paperwork"). The Transactional Paperwork clearly and conspicuously informed the reader, consistent with what Petitioner orally explained at the time of purchase to each of the Complaining Customers, that the Add-Ons being purchased were optional policies that were separate and distinct from the automobile insurance policy also being purchased and that these Add-Ons carried charges in addition to the automobile insurance policy premium. In providing his oral explanation to the Complaining Customers, Respondent circled (with a writing utensil) language in the Transactional Paperwork that conveyed this information about the Add-Ons. His purpose in doing so was to bring this language to the attention of the Complaining Customers. In view of the contents of the Transactional Paperwork, including the portions highlighted by Respondent, and what Respondent told the Complaining Customers concerning the Add-Ons, it was reasonable for Respondent to believe that the Complaining Customers were informed about the Add-On products they were being sold and were (by executing the paperwork) consenting to purchase them. The Transactional Paperwork included, among other things, a one-page Accident Medical Protection Plan form; a one- page Accident Medical Protection Plan Application form; a one- page American Bankers Insurance Company Optional Travel Protection Plan form; a one-page Statement of Policy Cost and Benefit Information-One Year Term Life Insurance Policy form; a one-page Explanation of Policies, Coverages and Cost Breakdown form; a multi-page Premium Finance Agreement; and a one-page Insurance Premium Financing Disclosure form. Among the information contained on the top half of the Accident Medical Protection Plan form was the cost of the plan. The bottom half of the form read as follows: THIS IS A LIMITED POLICY. READ IT CAREFULLY. I the undersigned understand and acknowledge that: This Policy does not provide Liability Coverage for Bodily Injury and Property Damage, nor does it meet any Financial Responsibility Law. I am electing to purchase an optional coverage that is not required by the State of Florida. My agent has provided me with an outline of coverage and a copy of this acknowledgment. If I decide to select another option or cancel this policy, I must notify the company or my agent in writing. I agree that if my down payment or full payment check is returned for any reason, coverage will be null and void from the date of inception. Insured's Signature Date I HEREBY REJECT THIS VALUABLE COVERAGE: Insured's Signature Date The Accident Medical Protection Plan Application form indicated what the annual premium was for each of the three categories of coverage offered: individual, husband and wife, and family. The top half of the American Bankers Insurance Company Optional Travel Protection Plan form summarized the benefits available under the plan. The bottom half of the form read as follows: Please Read Your Policy Carefully for a Full Explanation of Benefits Purchasing the Optional Travel Protection Plan is not a condition of purchasing your automobile liability policy. I hereby acknowledge I am purchasing an Optional Travel Protection Plan, and that I have received a copy of this acknowledgement. ___ ____ Insured's Signature Date I HEREBY REJECT THIS VALUABLE COVERAGE: Insured's Signature ____ Date The Statement of Policy Cost and Benefit Information- One Year Term Life Insurance Policy form noted the amount of the "Annual Premium for this policy" and that the "Annual Premium included a $10.00 policy fee that [was] fully earned." On the Explanation of Policies, Coverages and Cost Breakdown form, the Add-Ons were listed under the heading of "optional Policies" and the cost of each Add-On was separately stated. The first page of the Premium Finance Agreement also contained an itemization of the cost of each Add-On, as did the Insurance Premium Financing Disclosure form. On this latter form, the Add-Ons were included in a section entitled "Optional insurance coverage." The form also advised, in its prefatory paragraph, that: Florida law requires the owner of a motor vehicle to maintain Personal Injury Protection and Property Damage liability insurance. Under certain circumstances as provided in Chapter 324, Florida Statutes, additional liability insurance may be required for Bodily Injury liability. Also, additional insurance is usually required by a lienholder of a financed vehicle. Florida law does not require other insurance. The direct or indirect premium financing of auto club membership and other non-insurance products is prohibited by state law. Each of the Complaining Customers was capable of reading the above-described documents and understanding that purchasing the Add-Ons was optional, not mandatory, and involved an additional cost.4 Respondent gave each of them as much time as they wanted to read these documents, and he did not refuse to answer any of their questions. Ms. Roberts-Hall rejected the travel protection plan, and signed and dated the American Bankers Insurance Company Optional Travel Protection Plan form so indicating, in 2004, 2005, and 2006. Mr. Bentivegna rejected the term life insurance policy, as documented by his signature next to the word "Rejected," which was written in by hand at the bottom of the Statement of Policy Cost and Benefit Information-One Year Term Life Insurance Policy form. As noted above, unlike Mr. Bentivegna, Ms. Roberts- Hall and Mr. Moore each signed up for a term life insurance policy. On Mr. Moore's Application for Life Insurance, his three children, Melissa Moore, Kenneth Moore, Jr., and Timothy Brown-Moore, were named as "Beneficiar[ies]." While Kenneth Moore, Jr., and Timothy Brown-Moore were listed as "Members of Applicant's Household" on Mr. Moore's application for automobile insurance, Melissa Moore (who, at the time, was away at college) was not. Elsewhere on Mr. Moore's Application for Life Insurance, in the "Insurability Data" section, the question, "Have you during the past two (2) years had, or been told you have, or been treated for . . . a) Heart trouble or high blood pressure?" was answered, incorrectly, in the negative. Mr. Moore placed his initials next to this answer. Several days after her May 2004 purchases, Ms. Roberts-Hall telephoned Respondent and told him that she was having second thoughts about her accident medical protection plan purchase. Respondent suggested that she come to his office and speak with him in person, which she did. During this follow-up visit, Respondent went over with her the benefits of the plan, after which she told him that she was going to keep the coverage. Ms. Roberts-Hall took no action to cancel either of the Add-Ons (the accident medical protection plan and term life insurance policy) she had purchased in May 2004. In fact, she renewed these coverages in May 2005 and again in May 2006 (along with her automobile insurance policy). Prior to these renewals, in February 2005, when contacted by one of Petitioner's investigators who was conducting an investigation of possible "sliding" by Respondent, Ms. Roberts-Hall had expressed her displeasure that Respondent had "given her these additional products." Mr. Bentivegna and Mr. Moore were also contacted by Petitioner's investigative staff to discuss the Add-On purchases they had made from Respondent. Mr. Moore was contacted approximately ten months after his May 2004 purchases. The three Add-Ons he had purchased were still in effect at the time, but he took no action to cancel any of these policies. He did not renew them, however; nor did he do any other business with Respondent following his May 2004 purchases. Petitioner's policy is have its investigators "make it very clear from the beginning," when interviewing aggrieved consumers, that no promises are being made that these consumers will be "getting their money back" if they cooperate in the investigation. It does not appear that there was any deviation from this policy in Petitioner's investigation of Respondent. The investigation of Respondent led to the charges against him that are the subject of the instant case.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that Petitioner issue a Final Order finding Respondent guilty of committing the violation of Section 626.551, Florida Statutes, alleged in Count X of the Amended Administrative Complaint, fining him $250.00 for such violation, and dismissing the remaining counts of the Amended Administrative Complaint. DONE AND ENTERED this 29th day of March, 2007, in Tallahassee, Leon County, Florida. S 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 29th day of March, 2007.
The Issue Whether Respondent has violated Section 627.8405, Florida Statutes.
Findings Of Fact Respondent, Capital National Financial Corporation (Capital), is transacting the business of insurance premium financing pursuant to a certificate of authority issued by the Petitioner, Florida Department of Insurance (Department). The Department is responsible for regulating the premium finance business affairs of Capital. On August 30, 1994, the Department issued a Notice of Intent to Non- renew Capital's certificate of authority to transact premium financing in Florida pursuant to Section 627.829, Florida Statutes. As authority for issuing the Notice of Intent to Non-renew, the Department cited two grounds. First, the Department alleged that Capital was illegally financing the purchase of automobile club memberships in conjunction with an insurance transaction, a violation of Section 627.8405, Florida Statutes. Second, the Department alleged that Capital was utilizing a form in conjunction with the premium financing transaction without the requisite Departmental approval, a violation of Section 627.838, Florida Statutes. The parties have stipulated that the only issue to be determined is whether there was a violation of Section 627.8405. Capital finances insurance premiums and has agreed to collect installment payments for automobile club memberships which the insurance agent sells to the customer when the customer is buying automobile insurance. The customer makes a down payment on the automobile club membership. Capital does not advance the remainder of the membership cost to the insurance agent. The customer executes a billing service disclosure form. The billing service disclosure form contains the following language: In conjunction with your insurance, you have purchased through your insurance agent the supplemental service disclosed above. The amount which you are charged for this supplemental service, after deduction of any down payment which you have paid, will be divided equally into monthly installments payable to Capital National Financial Corporation due at the same time, and in addition to, your monthly installment payable to Capital National for the financing of the purchase of your insurance. Capital National is acting as a collection agent for your insurance agent and is not charging any interest or other fee for collecting and processing the amount due for your purchase of this supplemental service. The monthly installment you will pay for the supplemental service will be added to the payment amount for your insurance and this aggregate amount will be reflected on your payment coupon. However, your insurance can not be cancelled by reason of your failure to pay the amount of the monthly installment attributable to the purchase of the supplemental service. The billing service disclosure form used by Capital is executed by the customer on the same day the premium finance agreement is executed. The billing disclosure form is a separate document from the premium finance agreement.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered finding that Capital National Financial Corporation did not violate Section 627.8405, Florida Statutes. DONE AND ENTERED this 8th day of January, 1996, in Tallahassee, Leon County, Florida. SUSAN B. KIRKLAND 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 8th day of January, 1996. APPENDIX TO RECOMMENDED ORDER, CASE NO. 95-1944 To comply with the requirements of Section 120.59(2), Florida Statutes, the following rulings are made on the parties' proposed findings of fact: Petitioner's Proposed Findings of Fact. Paragraphs 1-4: Accepted in substance. Paragraphs 5-19: Rejected as unnecessary. Paragraph 20: Rejected as not supported by the record. Capital disputes that they are "financing" the automobile club fees. Paragraphs 21-23: Accepted in substance. Paragraphs 24-29: Rejected as unnecessary. Respondent's Proposed Findings of Fact. Paragraphs 1-4: Accepted in substance. Paragraphs 5-6: Rejected as unnecessary. Paragraphs 7-11: Accepted in substance. Paragraphs 12-13: Rejected as unnecessary. COPIES FURNISHED: Alan J. Leifer, Esquire Department of Insurance/Legal Services East Gaines Street Tallahassee, Florida 32399-0333 Alberto R. Cardenas, Esquire Matias R. Dorta, Esquire Tew & Garcia-Pedrosa South Biscayne Boulevard Miami, Florida 33131-4336 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
The Issue The issues are whether the sale of ancillary products to two purchasers of automobile insurance involved sliding, as that term is defined in Subsection 626.9541(1)(z), Florida Statutes (2005)1; whether the alleged acts violated Subsections 626.611(7) and (9), 626.621(6), and 626.9521(1), which respectively prohibit a lack of fitness or trustworthiness to engage in the business of insurance, fraudulent or dishonest practices, and unfair trade practices; and, if so, what penalty should be imposed against Respondent's insurance license.
Findings Of Fact Petitioner is the state agency responsible for regulating insurance and insurance-related activities in Florida pursuant to Chapters 626 and 627. Respondent is licensed as a life, including variable annuity, general lines insurance agent pursuant to license number A085250. From October 22, 2003, through September 2, 2005, Respondent was employed as an insurance agent by Direct General Insurance Agency, Inc. (Direct). Direct is a Tennessee corporation doing business in Florida as Cash Register Insurance (Cash Register). Cash Register employed Respondent in an office located at 6325 North Orange Blossom Trail, Orlando, Florida, which conducts business as Friendly Auto Insurance Company (Friendly). Friendly-Cash Register paid Respondent a salary and commissions. Friendly-Cash Register paid commissions on the sale of ancillary products such as travel protection, accident medical protection, and term life insurance. Commissions comprised 18 percent of the compensation paid to Respondent. The two transactions at issue in this proceeding occurred on July 11 and August 29, 2005. In each transaction, Respondent sold automobile insurance and three ancillary products to Ms. Heather Dickinson and Ms. Carmen Phillips, respectively. Ms. Dickinson subsequently married and testified at the hearing as Ms. Heather Mason. When Ms. Mason and Ms. Phillips entered the Friendly- Cash Register office, each consumer requested the minimum automobile insurance coverage needed to be "legal and on the road." Neither customer left the office understanding she had purchased ancillary products. Ms. Mason purchased automobile insurance for a 1995 Jeep Cherokee 4x4 at an annual premium of $1,175.00. Friendly-Cash Register charged Ms. Mason a total sales price (total price) of $1,609.24. Ms. Mason agreed to pay $194.00 as a down payment and the balance in 12 installments of $117.94 at an annual percentage rate of 25.27 percent. Ms. Mason purchased three ancillary products at a total cost of $278.00. Ms. Mason paid $60.00 for travel protection, $110.00 for accident medical protection, and $98.00 for term life insurance. A finance charge of $151.69 and a charge of $4.55 for Florida documentary stamp taxes comprised other charges that are not at issue in this proceeding. Ms. Phillips purchased automobile insurance for a 1992 Chevrolet Blazer 4x4 at an annual premium of $779.00. Friendly-Cash Register charged Ms. Phillips a total price of $1,271.64. Ms. Phillips agreed to pay $129.00 as a down payment and the balance in 10 installments of $114.26 at an annual percentage rate of 25.06 percent. Ms. Phillips purchased three ancillary products at a total cost of $368.00. Ms. Phillips paid $60.00 for travel protection, $200.00 for accident medical protection, and $108.00 for term life insurance. A finance charge of $120.79 and a documentary stamp charge of $3.85 comprised other charges that are not at issue. Both Ms. Mason and Ms. Phillips signed Friendly-Cash Register forms which disclose that the ancillary products they purchased are optional and entail additional costs. Each customer signed a package of documents numbering approximately 19 pages.2 Page 1 of each package discloses the annual price for automobile insurance. The optional ancillary products and separate charges are disclosed in several additional pages. The package of documents that Ms. Mason signed discloses the annual cost for travel protection on pages 000006 and 000014 through 000016 (hereinafter pages 6, 14, 15, etc.). Pages 8, 9, and 14 through 16 disclose the cost of the accident medical protection. Pages 10 and 12 through 16 each disclose the cost for term life insurance. Pages 7, 9, 14, and 15 expressly provide that the ancillary products are optional. Page 16, the Premium Finance Agreement, separates the charges for mandatory automobile insurance from the optional ancillary products and the other charges. Ms. Mason signed or initialed pages 3 through 11, pages 14 through 17, and page 19. The package that Ms. Phillips signed includes disclosures similar to those in the package signed by Ms. Mason. Ms. Phillips signed or initialed relevant pages in the same manner as Ms. Mason. Ms. Mason and Ms. Phillips had adequate time to review the documents they signed or initialed, but neither customer read the documents. Each consumer is a literate adult with no disability or infirmity that would impede her capacity to understand the transaction. The factual disputes are whether Respondent orally explained the ancillary products that the two customers purchased, and, if so, whether the oral explanation was adequate. For reasons discussed in the Conclusions of Law, Respondent is not required to prove she did explain the ancillary products and that the explanation was adequate. Rather, Petitioner must prove Respondent did not explain the ancillary products or that the explanation was inadequate. Respondent does not recall the specific transactions at issue in this proceeding because she sold as many as 10 insurance policies each day at Friendly-Cash Register for almost two years. However, Respondent does recall that she followed the identical procedure with each customer and that the procedure she followed was carefully scripted by Friendly-Cash Register as a condition of employment. Respondent orally explained each disputed transaction in this proceeding in a manner that was adequate for each consumer to understand the transaction. Respondent orally explained that the ancillary products were optional. Respondent circled the optional items in the documents and explained that each ancillary product entailed an additional cost. The sixth document that Respondent reviewed with each customer is the "Explanation of Policies, Coverages, and Cost Breakdown." That page appears as page 14 in the exhibits, but page 14 is not organized in the exhibits in the same order that Respondent presented it to customers. Respondent orally explained pages pertaining to specific ancillary products after Respondent explained the page entitled "Explanation of Policies, Coverages, and Cost Breakdown." The procedure scripted by Friendly-Cash Register required Respondent to first interview Ms. Mason and Ms. Phillips to gather information needed for input into a computer which printed the 19-page forms utilized by Friendly- Cash Register. The interview included questions regarding life insurance beneficiaries and questions pertaining to the medical condition of each customer. After interviewing Ms. Mason and Ms. Phillips, Respondent entered the information into a computer and printed the 19-page packages. Respondent placed each package in front of the respective customer and discussed each page. Respondent circled the word "optional" when it appeared on a page, obtained the signature or initials of each customer, turned the page over, and proceeded to the next page. The trier of fact finds the testimony of Respondent to be credible and persuasive. As Respondent explained: Q. Did you tell the customers that this quote included those ancillary products? A. Yes. I informed . . . them that they had been quoted with the optional policies. * * * Q. How is page 14 labeled at the top? A. It says "Explanation of Policies, Coverages, and Cost Breakdown." . . . I would circle the items that are circled on here, and then I would present it to the insured. And I would say, you're purchasing the mandatory personal injury protection, bodily injury, [or] there's no property damage, there's no bodily injury. You also have the optional policies for the travel protection plan, accidental medical plan, life insurance, these are the costs, sign here. Q. [A]re you pointing at your circles? A. Yes. I point to each circle and I kind of run my finger down the cost to draw attention to it. Q. You point to the cost? A. Yes. * * * Q. Okay. What do you go over next? A. The next page is the second page of the travel protection plan. Q. This is page 7 of Exhibit 2? A. Correct. Q. How is that labeled at the top? A. "Optional Travel Protection Plan." It says, "American Bankers Insurance Company." I'd point out that there's bail bond coverage, collision of loss of use [sic], personal effects loss from auto rented. Q. Do you make those circles that we see on that page? . . . . A. Yes. I circle them when they're sitting there and then I hand it--hand the paper to them, and I would say, "This is optional coverage, please sign here." * * * Q. Okay. After she signed that, what did you go over with her next? A. Next one would be the accidental medical protection plan. Q. Page 8 of Exhibit 2? A. Yes. Q. Okay. . . . [A]fter she signed that page, what did you do? A. Page 9. Q. Page 9 of Exhibit 2? A. Your cost is $110. The annual benefit is $45,625. . . . Please sign here. Q. Did you make those circles on a piece of paper? A. Yes. Before I handed it to her, I circled the items that are circled on it and drew the line. * * * Q. [A]fter she signed this page, what would you do next? A. Okay. The next page is page 10, which is the life insurance policy. Q. This is page 10 of Exhibit 2? A. Yes. Q. Okay. How would you explain this page to a customer? A. This 10,000 [sic] term policy. The premium is $108. It's not replacing any other previous life insurance policy. Q. Did you make those circles? A. Yes, I did. . . . * * * Q. This is page 13 of Exhibit 2? A. Yes. It's a statement of policy cost and benefit information that I would just run my finger down and just say, "These are your benefits and the cost, please sign here." Transcript (TR) at 251-270. Petitioner proposed in its PRO a finding that Respondent did not orally explain the ancillary products to the two consumers. However, Ms. Mason and Ms. Phillips did not remember what Respondent said to them. Testimony that a witness does not remember what Respondent said is less than clear and convincing evidence that Respondent did not explain the ancillary products adequately. The testimony of Ms. Mason during cross examination is illustrative. Q. Would you say that what you were really paying attention to when you conducted this transaction was how much it was going to cost you? A. Yeah. Yes. Q. Cause you . . . you talked [on direct] about your recollection about these things. And it was interesting that some things you were able to say you don't recall, but [counsel for Petitioner] was able to get you to commit to certain things that you absolutely said would not have happened. Such as, you know that if . . . the word "optional" had been used that you would not have accepted the product, correct? A. If it would have cost more, then I would not have accepted it. Q. Okay. But you don't specifically recall what was discussed in the course of your meeting with Ms. Fitzgerald, correct? A. No. Q. And you acknowledged that at least when confronted with some of the paperwork, things like a beneficiary on the $10,000 benefit for the life insurance policy, that was certainly discussed with you, right? A. I--yes, I guess. I don't--like I said, I feel so stupid because I don't--I know I said my brother's name and he's down for a beneficiary, but I don't remember why I would have--I don't understand why I did that. . . . * * * Q. You thought that the questions that were being asked to you about the life insurance policy--you thought that they were actually part of car insurance? A. I don't remember being asked questions about life insurance. Q. Do you remember being given a series of questions asking you about your health and about treatment-- A. Yes. * * * Q. So when . . . I ask you the question about whether or not you were told what your lump sum was going to be and you say, "I don't remember," that doesn't mean you weren't told? A. Correct. Q. It just means you don't remember? A. Correct. * * * Q. Turn to page 14. . . . Do you recall what explanation was given about this particular page? A. No. * * * Q. If you turn to page 15, please. . . . Fair to say that you don't recall what was said about this page? A. Yes. TR at 156-170. The oral explanation that Respondent provided to Ms. Mason and Ms. Phillips did not include a statement that each customer could have saved 17.27 and 28.94 percent of the total price, respectively, by declining the ancillary products. Nor did the oral explanation include a suggestion that either customer use the money to buy automobile insurance with a smaller deductible or more complete insurance.3 The omissions discussed in the preceding paragraph are not alleged in the Administrative Complaint as grounds for the statutory violations charged in the Complaint (the un-alleged omissions). Rather, the Complaint limits the alleged grounds to a failure to "inform" Ms. Mason and Ms. Phillips that the ancillary products were: . . . separate from and not a part of the automobile insurance she had requested, was not required by law or a lien holder, was optional, or that there was an additional charge for this product. . . . Administrative Complaint, paragraphs 7, 11, 15, 32, 36, 41, and 45. The un-alleged omissions did not involve the exercise of discretion by Respondent and were not willful. While it is clear that Respondent was the office manager, it is less than clear and convincing that Respondent was in charge of scripting the oral explanation for Friendly-Cash Register.4 Rather, Friendly-Cash Register required the omissions as a condition of Respondent's employment. As Respondent explained in her testimony: Q. . . . I don't see where [this script] asks the consumer if they actually want the optional policies. . . . So how would you know to quote the ancillary products if they had not asked for it yet? A. We were required to offer them to everybody. Q. And the method that Direct General instructed you to use was to just . . . include them in the quote; is that correct? A. State that they were optional, yes, and include them in the quote. * * * A. I would have preferred not to quote with them on the policy-- Q. Why? A. . . . I just preferred it that way, you know. . . . I didn't like it. Q. Do you feel like the way Direct General had you quote these consumers . . . may have led consumers possibly buying policies without full informed consent? A. No. TR at 280 and 295. On September 2, 2005, Respondent voluntarily left the employment of Friendly-Cash Register. Respondent is now employed by Car Insurance.com. Petitioner argues in paragraph 47 of its PRO that the Friendly-Cash Register forms are "vague or ambiguous and make it difficult to decipher (document-deficiency)." The Administrative Complaint does not allege document-deficiency as a ground for the charged violations. The alleged grounds are limited, in paragraphs 7, 11, 15, 32, 36, 41, and 45, to the "failure to inform" the consumers that they were purchasing ancillary products. Moreover, Petitioner acknowledges in paragraph 43 of its PRO that the "optional nature of the ancillary products is evident" from a review of the documents. If it were found that an allegation of document- deficiency is implied in the Administrative Complaint, the trier of fact finds that the ancillary products purchased by Ms. Mason and Ms. Phillips were not mis-labeled or illusory. They provided benefits to each purchaser. Travel protection primarily provided daily rental reimbursement of $25.00 up to 10 days during repairs for collision damage and up to five days during travel interruption. The accident medical protection plan provided medical expense reimbursement up to $1,000.00 and daily hospital coverage of $125.00 up to 365 days. The term life insurance provided a death benefit of $10,000.00. Even if the relevant forms were found to be deficient, any deficiency is rendered moot because each consumer testified that she did not read or rely on the content of the Friendly-Cash Register forms.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a final order finding Respondent not guilty of the allegations in the Administrative Complaint. DONE AND ENTERED this 18th day of January, 2008, in Tallahassee, Leon County, Florida. S DANIEL MANRY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 18th day of January, 2008.
