Recommendation Based on the foregoing Findings Of Fact and Conclusions Of Law, it is recommended that the Respondent, the Department of Administration, enter a final order denying coverage for the orthodontia recommended for Sandra Walsh. RECOMMENDED this 18th day of March, 1988, in Tallahassee, Florida. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 18th day of March, 1988.
The Issue Whether Petitioner was an employee of Respondent's at the time of the alleged unlawful employment practices described in the employment discrimination complaint Petitioner filed with the Florida Commission on Human Relations (FCHR).
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' Joint Prehearing Stipulation and their October 13, 2008, pleading2: Petitioner is a college graduate with a communications degree. She has held a Florida life, variable annuity, and health insurance agent (2-15) license issued by the Department of Financial Services since March 8, 2005. Respondent's home office is located in Omaha, Nebraska. At all times material to the instant case, Respondent had a divisional office located at 2240 Woolbright Road, Suite 400, Boynton Beach, Florida (Boynton Beach Office) staffed by a general manager (Michael Chojnacki), a district sales manager (Ronald Green), and two secretaries (Victoria Hughes and Carolyn Mickley). Mr. Chojnacki, Mr. Green, Ms. Hughes, and Ms. Mickley were salaried employees of Respondent's paid by check issued by the home office. They enjoyed employee benefits that included vacation time; sick leave; health, vision, and dental coverage; disability and life insurance; and a retirement plan. These benefits were described in an employee handbook that were given to each of Respondent's employees. Mr. Chojnacki was responsible for overseeing the day- to-day operations of the Boynton Beach Office, including insurance application review and processing and agent recruitment. In late March 2005, Petitioner contacted Mr. Chojnacki by telephone to inquire about the possibility of her becoming an insurance agent for Respondent. Thereafter, on April 1, 2005, Petitioner went to the Boynton Beach Office and met with Mr. Chojnacki. Mr. Chojnacki talked to Petitioner about what she needed to do to become an agent for Respondent and how agents were compensated. He explained that Respondent paid its agents on a commission-only basis, based on the amount of business they produced for Respondent. During her April 1, 2005, visit to the Boynton Beach Office, Petitioner executed a Statement of Qualifications-Agent Candidate form (referenced in the parties' Stipulations of Fact 9 and 10) with which Mr. Chojnacki had provided her. The form, which sought "[j]ust basic information" about the candidate, contained the following disclaimer and acknowledgement: This is a statement of qualifications to become contracted as an agent and is not an application of employment. * * * I understand that if contracted as an agent, this document, the agent's contract, the training materials I may receive, and any other manuals and documents, are not contracts of employments. Further, if contracted with the Mutual of Omaha Insurance Company as an independent contractor, I may terminate the agent’s contract with or without cause, at any time, as may Mutual of Omaha Insurance Company. Mr. Chojnacki subsequently e-mailed Petitioner and requested that she complete a career profile test (designed to measure how Petitioner "would do in the insurance and in the sales industry"). Petitioner scored a ten out of 19 on the test, sufficient to keep her candidacy for an agent position alive. Mr. Chojnacki thus sent the Statement of Qualifications-Agent Candidate form Petitioner had executed on April 1, 2005, to the home office for processing. A background check on Petitioner was then done. The background check revealed nothing in Petitioner's past that would disqualify her from becoming an agent for Respondent. After learning that the home office had cleared her, Mr. Chojnacki gave to Petitioner for her to study various booklets Respondent had developed for its agents to educate them about its product offerings. At the beginning of each booklet was the following statement: As an independent contractor, the ultimate decision regarding your participation in these programs is yours and yours alone. Neither Mutual of Omaha nor its representatives can dictate the time or place and manner by which you sell its products and acquire the knowledge and skills necessary to effectively sell its products. Therefore, the Career Development Program is voluntary. However, due to the complexity and sophistication of the companies' products, you must be able to demonstrate a mastery of the material contained in this program to be able to offer these products to prospective clients. This program has been developed to offer a structured methodology which has proven to be a highly effective way to master the knowledge and skills to sell our products. In addition, it is our judgment that this method provides an efficient approach to achieve the required mastery and, therefore, we recommend it. Discussion and follow-up from your manager does not change the voluntary nature of your participation, but only serves to assist you in mastering the material and enables the companies to fulfill [their] public obligation to ensure that all representatives are fully trained and knowledgeable. Each booklet Mr. Chojnacki provided to Petitioner had a unique identifying serial number and included a corresponding tear-out test answer sheet with the same unique identifying serial number to be used to answer questions concerning material covered in the booklet. After reading the booklets and answering the questions posed therein, Petitioner furnished Mr. Chojnacki with her completed test answer sheets (which she had torn from the booklets). Mr. Chojnacki then faxed these answer sheets to the home office to be graded. He subsequently received an e-mail from the home office advising him that Petitioner had received passing grades on all of the tests. After receiving this e-mail, Mr. Chojnacki met with Petitioner "to get her ready" to become an agent. During the meeting, he again discussed with Petitioner Respondent's commission-only, production-based compensation program for agents, including the opportunities available to agents to receive bonuses in addition to their base commissions. He further informed her that, as an agent, she would be an independent contractor who "gets paid off a 1099." On April 11, 2005, Petitioner received a copy of Respondent's Agency Sales Compliance Manual (Manual), which gave an overview of the legal requirements applicable to the activities of agents in the sale of Respondent's products. On page 9 of the Manual was the following discussion regarding "Continuing Education": Mutual of Omaha encourages the professional development of producers through training and participation in industry organizations that promote ethical sales practices, as well as through the continuing education required to maintain a license. It is the policy of Mutual of Omaha to provide producers with insurance-related training, including training that qualifies for continuing education. Mutual of Omaha provides continuing education courses and makes continuing education courses available through a variety of methods. These methods include self-study courses through vendors, industry designation courses such as CLU, CFP, ChFC, LUTC and specialized training provided by Mutual of Omaha. As an independent contractor, it is your responsibility to ensure that continuing education requirements are satisfied, whether through training provided by Mutual of Omaha or independently taken training. If a license lapses or is cancelled, commission payments may be stopped until such time as the license is reinstated or a new license is obtained. Questions regarding continuing education should be directed to your Manager or the Home Office at (402)351-4949. Page 27 of the Manual contained the following advisement: In order to help ensure ethical market conduct practices, integrity and fair competition on the part of its producers, producers are prohibited from engaging in solicitation, marketing and sales practices that are illegal, unethical or contrary to the requirements established by Mutual of Omaha Insurance Company and its affiliates. At no time did Mr. Chojnacki give Petitioner a copy of Respondent's employee handbook. On April 11, 2005, Petitioner signed a W-9 (Request for Taxpayer Identification Number and Certification) form, an Internal Revenue Service (IRS) tax form that Respondent's agents are routinely given to sign. Petitioner also executed on that date Respondent's Errors and Omissions Agent Insurance Program form (referenced in the parties' Stipulations of Fact 15 and 16). The following statement appeared immediately above the signature line on the form: All agents are reminded that they are independent contractors under contract with the Company. As such, they are personally responsible for any claims, demands or lawsuits made by third parties arising from allegations of breach of contract, negligence or other wrongdoing on the part of the agent. The undersigned affirms that the foregoing is true, correct, and complete, and has read the "Enrollment Form Instructions" and understands same. On April 12, 2005, Petitioner was formally appointed as an agent for Respondent and United World Life Insurance Company, an affiliate of Respondent's. Petitioner and Mr. Chojnacki (on behalf of Respondent) signed an Agent's Contract (referred to in the parties' Stipulations of Fact 11 through 13 and 27 as the "Agent Agreement"), which had an effective date of April 27, 2005. Ms. Mickley then submitted the contract to the home office for signature. This was the only Agent's Contract that Petitioner signed. At no time did she sign another contract. Section B. of the Agent's Contract was entitled, "General Provisions," and provided, in pertinent part, as follows: Appointment. The Company [Respondent] appoints the Agent [Petitioner] to personally solicit and procure applications for Products and provide such service as may be required. This appointment is not exclusive. * * * 5. License. The Agent is responsible for securing and keeping in effect any licenses and appointments required to represent the Company. The Agent agrees not to solicit for Products unless the proper license has been obtained. * * * Section C. of the Agent's Contract described the "Agent's [d]uties" as follows: The Agent shall, in accordance with applicable Company rules: Procure Applications. Solicit and procure applications for Products. Submit Applications. Immediately submit to the Company applications procured. Collect Moneys. Collect all Moneys as trust funds and immediately turn them over to the Company without deduction. All Moneys are the property of the Company. Service Clients. Render all service incidental to the development and conservation of the Company's business which may be deemed necessary by the Company. Obtain Bond and Insurance. If requested by the Company, obtain and maintain in force: a bond covering fidelity losses; and errors and omissions insurance. The amount and nature of both must be satisfactory to the Company. Protect Proprietary Materials. Agent shall: Use Proprietary Material for authorized business purposes only. Agent is only authorized to obtain and use Proprietary Material which is necessary to perform [his or her] duties; Hold in the strictest confidence all Proprietary Material received and shall not disclose any Proprietary Material to any third party or parties without the prior written consent of the Company; Use appropriate safeguards commonly available, such as anti-virus, firewalls and encryption, to prevent use or disclosure of Proprietary Material. This shall include compliance with all existing and enacted laws and regulations; Report any incidents involving Proprietary Material to Mutual of Omaha's Field Assistance Center within 24 hours of discovery. All details of the incident should be provided so that Company can assess the scope and impact and take additional action as necessary to safeguard the information. Return any Proprietary Material received from the Company to the Company immediately upon termination of this Contract. Adequately brief [his or her] staff, if any, on the conditions documented in this Section. Follow Company Practices. Adhere to and comply with all Company practices and procedures. Act Ethically. At all times act in an ethical, competent and professional manner, including without limitation, with respect to any compensation disclosure obligations it may have governing its relationships with Clients. Comply with Laws. Comply with applicable laws and regulations. "Office [p]rivileges" were addressed in Section E. of the Agent's Contract, which provided as follows: The Company may provide for the Agent's use office facilities, supplies, clerical support and other property or services. The Company may withdraw or charge for these privileges at any time. In Section F. of the "Agent's Contract" was the following discussion regarding "[c]compensation": Attachments. The compensation of the Agent for all acts performed hereunder or otherwise during the term of this Contract, and for expenses incurred or property acquired, is specified in the Attachments. No compensation shall be payable until the Project on which compensation is claimed is actually issued. Compensation Continuance. The Company is obligated to pay compensation due under this Contract only while: this Contract is in effect; and the Agent is performing the duties specified in the Section entitled AGENT'S DUTIES; provided, however, compensation indicated as "vested" or "deferred" in the Attachments shall not be withheld pursuant to this provision. Agent's Account. Compensation payable under this Contract shall be subject to an offset for any indebtedness of the Agent to the Company and shall not be due until such indebtedness is satisfied. Such indebtedness shall include, but not be limited to: Chargeback of any compensation paid or credited to the Agent under this or any other contract, if the Moneys on which such compensation was based are not collected or are refunded by the Company; Any amount paid by the Company which, in the Company's determination, resulted from any fraud, misrepresentation or other improper conduct on the part of the Agent; Any expenses incurred by the Company on behalf of the Agent; Any advances made by the Company to the Agent; and Any other amounts which the Agent owes the Company. The Agent, shall upon request by the Company, immediately repay in full any indebtedness. Any amount remaining unpaid shall be subject to collection by such legal means as are available to the Company. The Company shall have the right to withhold payment of any credit balance in the Agent's account for not more than 13 months after termination of this Contract to assure that funds are available to reimburse the Company for any indebtedness. Thereafter, any net credit balance shall become due and payable. "Termination" was discussed in Section H. of the Agent's Contract, which provided as follows: With Notice. The Company or the Agent shall have the right at any time to terminate this Contract, with or without cause, by written notice to the other party. Without Notice. This Contract shall be automatically terminated should the Agent fail to submit an application for a Product for a period of 180 days. Procedural Guidelines. The Company may from time to time adopt procedural guidelines applicable to agent contract terminations. Adoption of these guidelines and any failure to observe them shall neither grant any rights to the Agent, nor impose any duties upon the Company and shall not be deemed to limit the Company's rights as set forth in this Contract. Return of Material. Upon termination of this Contract, the Agent shall immediately return to the Company all: Proprietary Material, material identifying the Agent as a representative of the Company, and property owned by the Company. Forfeiture. If the Agent is notified in writing that the Agent has: Committed a fraudulent or illegal act in conjunction with any transaction under this Contract; or violated any provisions of the Section entitled LIMITATIONS or UNACCEPTABLE PRACTICES; then the Company shall not be obligated to pay any compensation otherwise payable while this Contract is effect, or after its termination. Section I. of the Agent's Contract contained "[m]iscellaneous" items, including the following: * * * 4. Determination of Issuance and Product Type. The determination to issue a Product and the type of Product to be issued shall be at the Company's sole discretion. * * * Award, Recognition and Incentive Programs. If eligible, the Agent may participate in award, recognition and incentive programs of the Company. The Agent agrees to abide by the rules of each program. The Company reserves the right to change, limit or cancel any program, rule or award at any time. In such event, the Agent may not be able to obtain certain awards. Beneficiary Designation. The Agent designates as beneficiary for payment of any benefits becoming due after the Agent's death the beneficiary specified on the signature page of this Contract or such other party or parties as the Agent may designate by written notice delivered to and acknowledged by the Company. Independent Contractor. The Agent is an independent contractor and not an employee. None of the terms of this Contract shall be construed as creating an employer-employee relationship and the Agent shall be free to exercise the Agent's own judgment as to the persons from whom the Agent will solicit and the time, place and manner and amount of such solicitation. "[T]he beneficiary specified on the signature page of [Petitioner's Agent] Contract" was her mother. Petitioner's Agent's Contract included an Interim Sales and Marketing Amendment, also effective April 27, 2005, signed by Petitioner and Mr. Chojnacki, which, on its first page, provided as follows: The Company and Agent agree to place Agent in an "Interim Sales and Marketing" status. The terms and conditions are as follows: PURPOSE The Company and Agent agree to the terms and conditions of this Amendment in order that both the Company and Agent may determine whether to continue their association under the terms of the Contract. EFFECTIVE DATE This Amendment shall become effective on the date the Contract becomes effective. TERMINATION This Amendment shall remain in effect a minimum of seven days. Thereafter, this Amendment shall automatically terminate upon: Cancellation of the Contract; Notice given from the Company to Agent; or, The acceptance of the Career Financing Plan Amendment (211) or (235). TERM If this Amendment has not been terminated in accordance with Section III of this Amendment within 90 days after the effective date of the Contract, the Contract, and all other Amendments, shall automatically terminate. MISCELLANEOUS While this Amendment is in effect, Agent is not eligible for any other compensation, except as specifically set forth in the Schedules which are a part of the Contract. The Agent's Contract and Interim Sales and Marketing Amendment that Petitioner executed are standard instruments used by Respondent in contracting with its agents. During the time that the Interim Sales and Marketing Amendment is in effect, an agent engages in "real job sampling" by observing a mentor make sales, and he or she may also make sales of his or her own. Petitioner was mentored initially (for the first seven to ten days) by Mr. Green and thereafter by Mr. Chojnacki. The Interim Sales and Marketing Amendment remained in effect until June 10, 2005, when Petitioner and Respondent executed a Career Financing Plan Amendment (as part of Petitioner's Agent's Contract). The Career Financing Plan is a three-year program devised by Respondent to help its new agents "build their business[es]." It provides for bonus payments "on top of the base commission that an agent gets," if monthly production requirements are met. An agent not wanting "to be tied to any of [these] production requirements" can decline to participate in the program. Other attachments, in addition to the Career Financing Plan Amendment, that were made a part of Petitioner's Agent's Contract, included an Agent Prospecting Amendment, a New Agent Computer Equipment Allowance Schedule, an Agent Production Bonus Schedule, and a 2005+ Deferred Compensation Schedule. The Agent Prospecting Amendment was signed by Petitioner and Mr. Chojnacki and had an effective date of June 10, 2005. It read, in pertinent part, as follows: SOURCES OF CREDIT In order to provide the Agent with prospect information, the Agent and Company agree that credits to acquire prospecting related materials and services may be accumulated in an Agent Prospecting Account. The Company may discontinue or modify the sources and amounts of credit provided by the Company upon notice to the Agent. Credits may be used only for prospecting activities authorized by the Company. Any credits which remain unused at the time the Contract or this Amendment are cancelled shall be forfeited by the Agent. NON-REFUNDABLE PARTICIPATION FEE The Agent authorizes the Company to deduct a non-refundable Participation Fee directly from compensation due the Agent in an amount and frequency as set forth in the Agent Prospecting Schedule. Company may deduct the Participation Fee up to 30 days following written notice by Agent to the Company to terminate this Agreement. The New Agent Computer Equipment Allowance Schedule provided for the receipt of, for a maximum of 12 months, "a [monthly] credit [of either $75 or $100] to help the Agent defray computer equipment and other start-up expenses incurred based on the Agent's performance." Under the schedule, if minimum monthly production requirements were not met, no credits would be received. The "purpose" of the Production Bonus was "to reward Agents based on their Manufactured Product production." The Agent Production Bonus Schedule set forth the applicable Production Bonus Rates for different levels of production over a threshold amount. The 2005+ Deferred Compensation Schedule implemented Respondent's Deferred Compensation program, pursuant to which Respondent made "contributions . . . dependent on the production that an agent ha[d] during a given calendar year." On October 19, 2005, Petitioner signed a Coventry Medicare Part D Plan Addendum form (referenced in the parties' Stipulation of Fact 31) and faxed the form to Respondent's "Sales Support" for processing. Among the form's provisions was the following: Independent Contractor. Nothing in this Addendum will be construed to create a relationship of employer-employee between Producer [Petitioner] and Coventry or Distributor [Respondent]. Producer will be free to, and is required to, exercise his/her independent judgment in performance of this Addendum and with respect to which Medicare Part D plans Producer will offer to Medicare Part D enrollees and potential enrollees based upon Producer's judgment as to the needs of such enrollee or potential enrollee. The termination of Petitioner's Agent's Contract (referenced in the parties' Stipulation of Fact 40) was accomplished by Petitioner's submitting the following letter, dated February 10, 2006, to Mr. Chojnacki: It is with deep regret that I resign as of February 10, 2006. I have to move on with my career. I want to sincerely thank you for all your help. Mr. Chojnacki responded by sending Petitioner the following letter, also dated February 10, 2006: This is to acknowledge receipt of your letter terminating your Mutual of Omaha Insurance Company Agent's Contract effective February 10, 2006. Your authorizations to represent Mutual of Omaha Insurance Company and its affiliated companies have also been cancelled effective February 10, 2006. The balances of your agent's statement may be affected by additional entries necessary to finalize pending business. You will continue to receive statements on a regular basis as in the past. As soon as the balances have stabilized, any net credit balance will be released in accordance with the provisions of Paragraph F3(c) of your contract. If your agent's statements presently reflect a debit balance or if a debit balance arises in the future, you are required to repay this amount immediately. Failure on your part to repay any debt balance will result in further action to collect debit balance. All client and prospect information, materials and supplies are the property of Mutual of Omaha Insurance Company. You are required by Paragraph H4 of your contract to return such material immediately. At no time during the period that her Agent's Contract was in effect (April 27, 2005, through February 10, 2006, hereinafter referred to as the "Contract Period") did Petitioner receive a salary or any of the employee benefits enjoyed by Mr. Chojnacki, Mr. Green, Ms. Hughes, and Ms. Mickley. Although she had Respondent-issued life and disability insurance policies, these policies were not given to her as an employee benefit. She had to pay for this coverage. On her application for the disability insurance policy she obtained from Respondent, in response to the question, "Are you Self-Employed, a Sole Proprietor, or a partner in a Partnership," she answered "yes." The only compensation Petitioner received from Respondent was in the form of commissions and other payments (including computer allowances) based solely on her production. The compensation checks she received from Respondent were prepared and signed at the Boynton Beach Office, not at Respondent's home office (where employee checks are cut). The amounts of these checks reflected deductions that were made by Respondent for items that Respondent had provided Petitioner or had paid for on her behalf, including postage, agent licenses, voicemail, errors and omissions insurance coverage, folders, business cards, and certain leads. The leads she paid for cost anywhere from ten to 25 dollars a lead. Petitioner did not have to pay for everything that she received from Respondent. Although it had a right to do so under Section E. of her Agent's Contract, Respondent did not charge Petitioner for the use of cubicle space and equipment at the Boynton Beach Office, nor for the company brochures and letterheads that were available to agents at the office. The 2005 and 2006 federal tax returns that Petitioner filed with the IRS were prepared by a Certified Public Accountant. For the 2005 tax year, on her IRS Form 1040, Petitioner reported $0 for "[w]ages, salaries, and tips" (line 7), and $7,220 in "[b]usiness income" (line 12), and she deducted from her "total income" $510 for "[o]ne-half of self- employment tax" (line 27) and $1,243 for "[s]elf-employed health insurance" (line 29). She included a Schedule C (Profit and Loss From Business-Sole Proprietorship) and a Schedule SE (Self- Employment Tax) with her IRS Form 1040. On her Schedule C, Petitioner identified her "[p]rincipal business or profession" as "[i]nsurance [a]gencies & [b]rokerages"; represented that her business address was the same as her home address (which was on her IRS Form 1040); and reported that her "[g]ross income" was $18,758 (line 7), and that she had "[c]ar and truck expenses" of $6,305 (line 9), an "[o]ffice expense" of $1,488 (line 18), and "[o]ther expenses" of $3,745 (line 27), for a total of $11,538 in business expenses (line 28). The "[o]ther expenses" she reported (on line 27) were broken down as follows: "Business Telephone"- $3,549; and license fees and dues- $196. The IRS Form 1099 that Petitioner received from Respondent for the 2005 tax year reflected that she had received $18,757.99 in "nonemployee compensation" (which matches the "rounded up" amount of "[g]ross income" Petitioner reported on the Schedule C she filed for that tax year). For the 2006 tax year, on her IRS Form 1040, Petitioner reported $0 for "[w]ages, salaries, and tips" (line 7), and "1099 MISC OTHER INCOME" of $1,615. No entry was made for "[b]usiness income" (line 12). Petitioner deducted $114 from her "total income" for "[o]ne-half of self-employment tax" (line 27). She included a Schedule SE with her IRS Form 1040. The IRS Form 1099 that Petitioner received from Respondent for the 2006 tax year reflected that she had received $1,615.43 in "nonemployee compensation" (which matches the "rounded down" amount of "1099 MISC OTHER INCOME" Petitioner reported on the IRS Form 1040 she filed for that tax year). During the Contract Period, Petitioner was not required to work out of the Boynton Beach Office or to adhere to any Respondent-imposed work schedule. Training sessions were held by Mr. Chojnacki (usually on Mondays) at the office, but attendance at these meetings was not mandatory. Agents had to be present at the office to enjoy what was referred to as "floor time," where the agent would receive incoming telephone phone calls made to the office from prospects, without having to pay for these leads. "Floor time" was a privilege that agents could turn down. Petitioner averaged approximately two to three days of "floor time" a month. As an essential part of the work she performed for Respondent, Petitioner made sales calls to prospects in the field. At Petitioner's request, Mr. Chojnacki accompanied her on approximately four sales calls during the beginning of the Contract Period. After a while, Petitioner "start[ed] going on sales calls by herself." During the Contract Period, she went on more than 40 or 50 such solo sales calls. At no time was Petitioner required to go on sales calls with Mr. Chojnacki or any other company representative, nor did she need the approval of any company representative before she could make a sales call. There were occasions, when Petitioner was out on a sales call alone, that she telephoned Mr. Chojnacki to ask him a question about a technical matter or to express her excitement about having made a sale. Petitioner, however, was never told she had to maintain telephonic contact with Mr. Chojnacki or any other company representative while on sales calls. Petitioner and the other agents were allowed to advertise Respondent's products, but any advertisement they used had to be approved by the company. Respondent had "pre-approved advertising material that[] [was] on [its] company [intranet] website." Petitioner did not have an exclusive arrangement with Respondent that prevented her from representing other insurers during the Contract Period. She was not, what is referred to in the insurance business as, a "captive agent." While associated with Respondent, Petitioner was also appointed to act as an agent on behalf of John Alden Life Insurance Company, Humana Health Insurance Company, and Humana Medical Plan, Inc. (companies that were separate and distinct from Respondent).
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the FCHR issue a final order dismissing Petitioner's Complaint because she was not an employee of Respondent's at the time of the alleged unlawful employment practices described in the Complaint. DONE AND ENTERED this 29th day of December, 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 29th day of December, 2008.
The Issue Should discipline be imposed by Petitioner against Respondent's licenses as a life agent (2-16), life and health agent (2-18), and health agent (2-40), held pursuant to Chapter 626, Florida Statutes (2004)?
Findings Of Fact Respondent in accordance with Chapter 626, Florida Statutes (2005), currently holds licenses as a life agent (2- 16), life and health agent (2-18), and a health agent (2-40). On June 24, 2003, in an Administrative Complaint brought by Petitioner against Respondent, also under Case No. 64776-03-AG, accusations were made concerning violations of Chapter 626, Florida Statutes (2003). On October 4, 2004, the parties resolved the earlier case through a settlement stipulation for Consent Order. On October 20, 2004, the Consent Order was entered. In pertinent part the Consent Order stated: The Settlement Stipulation for Consent Order dated October 11, 2004, is hereby approved and fully incorporated herein by reference; * * * (c) Respondent agrees that he has a continuing obligation for claims, which may not have arisen or otherwise be known to the parties at the time of the execution of the Settlement Stipulation for Consent Order and this Consent Order Respondent shall be responsible for satisfying claims that were covered under the Plans sold by Respondent, up to the amount covered by such Plan, less any applicable deductibles or co-payments. Respondent may attempt to negotiate with the providers for compromised amounts, but any such compromise must result in the release of the consumer from any responsibility for the amounts that would have been covered under the terms of such Plan, less any applicable deductibles or co-payments; * * * (f) Within ninety (90) days following the issuance of this Consent Order, the Respondent shall complete the Section 626.2815(3)(a), Florida Statutes, continuing education requirement relative to unauthorized entities; * * * Within thirty (30) days of the issuance of this Consent Order, Respondent agrees to pay to the Department, a fine, in the amount of ONE THOUSAND AND 00/100 ($1,000.00) DOLLARS. Within ninety (90) days following the issuance of this Consent Order, Respondent shall satisfy any unpaid claims for persons insured under the Local 16 Plans he sold, including claims which may not have arisen or otherwise be known to the parties at the time of the execution of the Settlement Stipulation for Consent Order and this Consent Order. Respondent shall only be responsible, however, for satisfying claims that were covered under the Plans sold by Respondent, up to the amount covered by such Plan, less any applicable deductibles or co- payments. Respondent may attempt to negotiate with the providers for compromised amounts, but any such compromise must result in the release of the consumer from any responsibility for the amounts that would have been covered under the terms of such Plan, less any applicable deductibles or co- payments; Within one hundred (100) days following issuance of this Consent Order, the Respondent shall provide proof to the Department that the full amount of claims or losses under all contracts or health plans solicited or sold by Respondent on behalf of Local 16 have been paid or satisfied. Failure of the Respondent to comply with this paragraph shall constitute a material breach of this Consent Order, unless otherwise advised in writing by the Department; Respondent in the future shall comply with all the terms and conditions of this Consent Order; and, shall strictly adhere to all provisions of the Florida Insurance Code, Rules of the Department, and all other laws of the State of Florida. The Respondent shall give the Department full and immediate access to all books and records relating to the Respondent's insurance business, upon request; If, in the future, the Department has good cause to believe that the Respondent has violated any of the terms and conditions of this Consent Order, the Department may initiate an action to suspend or revoke the Respondent's license(s) or appointments, or it may seek to enforce the Consent Order in Circuit Court, or take any other action permitted by law; Respondent paid the $1,000.00 administrative fine required by the Consent Order, but the payment was 20 days late. Respondent completed the continuing education on unauthorized entities. He completed the course on June 3, 2005, beyond the deadline called for in the Consent Order by a number of months. Respondent took the course at Florida Community College in Jacksonville, Florida, an institution that he was familiar with. He took the course to be completed on June 3, 2005, because it was the earliest course available at that school. Respondent was unfamiliar with other schools who may have offered the course at a time that would meet the due date set forth in the Consent Order. Consistent with the expectations in the Consent Order, Petitioner's employees have reviewed their files to determine whether Respondent has satisfied unpaid insurance claims in relation to the insurance plan for Local 16. Those employees involved in that review are Kerry Edgill, a legal assistant in the Legal Division in charge of complaint settlements and Pamela White who works with the Division of Consumer Services as a senior management analyst. Neither employee found any evidence that Respondent had satisfied the unpaid insurance claims as called for in the Consent Order. In correspondence from Respondent to Petitioner's counsel in this case, dated December 6, 2004, there is no indication that the unpaid insurance claims have been satisfied. Respondent in his testimony explained the extent to which he had attempted to determine who had outstanding unpaid insurance claims. Respondent went to the location where Local 16 union members were employed. His contact with union members had to be outside the building proper. He spoke to several members at that time. This contact took place on June 1, 2005. Respondent identified the persons contacted as James, Luther, Gregory, and Michael. Michael's last name may have been Williams, as Respondent recalls. Of the persons Respondent spoke with on June 1, 2005, none of them had an unpaid insurance claim which needed to be satisfied. Respondent provided correspondence to a person or persons whose name(s) was or were not disclosed in the testimony. The June 6, 2005, correspondence was addressed to the Amalgamated Transit Union, in reference to insurance claims for Local 16. Respondent's Exhibit Numbered 17 is a copy of that correspondence. In the body of the correspondence it stated: June 6, 2005 Amalgamated Transit Union Local 1197 P.O. Box 43285 Jacksonville, FL 32203 Re: Claims for Local 16 To union members and trustees, This letter is to follow up me meeting members at the station on June 1, 2005 to discuss any issues or concerns that you may be or have had relating to the unpaid claims with Local 16 National Health Fund. Although, I feel I am not responsible for the issue I would gladly help assist with resolving any problems or concerns that you may have. Should any members have any correspondents that need immediate attention please forward them to me at: David Bright, P.O. Box 441963, Jacksonville, FL 32222. Should you need to speak to me I can be reached at 904-207-0141. Thanks for your cooperation in this long due matter! In relation to what Respondent refers to as accounts for Local 16 which he was servicing, that refers to insurance coverage, it involved a couple of hundred insureds. Respondent in his testimony acknowledged that union members had insurance claims that were unpaid.
Recommendation Upon consideration of the facts found and the conclusions of law reached, it is RECOMMENDED: That a final order be entered finding Respondent in violation of Sections 626.611(7) and (13), and 626.621(2) and (3), Florida Statutes (2004), finding no violation of Section 626.611(9), Florida Statutes (2004), or 626.9521, Florida Statutes (2004), and suspending Respondent's respective licenses as a life agent (2-16), life and health agent (2-18), and health agent (2-40), for a period of six (6) months. DONE AND ENTERED this 7th day of October, 2005, 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 October, 2005.
The Issue Whether Petitioner, a health care provider, filed a timely, valid petition with Respondent to challenge Intervenors’ disallowance of payment for certain dates of service to a workers’ compensation claimant.
Findings Of Fact At the times relevant to this proceeding, Intervenors had accepted that the claimant had suffered a compensable injury under the Florida workers’ compensation laws and had paid benefits to and on behalf of claimant. The date of the compensable injury was July 8, 1994. On September 30, 2004, Mr. Spangler, as counsel for the carrier, prepared the Notice that was received by Petitioner on October 4, 2004. The Notice provided, in part, as follows: The purpose of this letter is to inform you of the findings from the Carrier’s utilization review investigation. Based upon the opinions of Carrier Medical Consultants, the Carrier has concluded that there has been overutilization and/or misutilization since the treatment has been excessive and not medically necessary. Additionally, it appears that some bills may not have been timely submitted to the Carrier. . . . Accordingly, the Carrier has decided that specific dates of service will be disallowed and they are as follows: 04/26/04, 06/01/04, 07/12/04 Based upon its utilization review investigation, the Carrier also believes that the treatment rendered on the following dates [sic] was also excessive, and neither reasonable nor medically necessary. Nevertheless, the Carrier has agreed to reimburse for these specific dates [sic] of service which are as follows: 08/17/04 As the health care provider, you have certain rights and responsibilities under Florida Statutes and Florida Administrative Code. This office sent you a very detailed letter that explained the requirements and procedures under the utilization review provisions of Section 440.13(7), Florida Statutes. Please note the under Section 440.13(7)(a), Florida Statutes, “Any health care provider . . . who elects to contest the disallowance . . . of payment by a carrier under 440.13 subsection (6) must, within 30 days after receipt of notice of disallowance petition the agency to resolve the dispute.” The 30 days begin to run from the date this letter is received. Additionally, please find enclosed the Explanation of Benefits regarding these dates of service. Please reference our previous correspondence forwarded to you or contact the undersigned if you have any questions concerning this matter. Enclosed with the carrier’s letter of September 30, 2004, was the Explanation, which consisted of two pages. The carrier’s Notice was a “disallowance of payment” within the meaning of Section 440.13(7), Florida Statutes, and a “reimbursement decision” within the meaning of Florida Administrative Code Rule 59A-31.002. Petitioner mailed a letter to Respondent dated October 25, 2004, that was received by Respondent’s mailroom and delivered to Ms. Reynolds on November 1, 2004. Ms. Reynolds testified that the envelope for the letter reflected that it was mailed on October 29, 2004, in Miami. The two-page letter, which has been redacted to protect the privacy of the claimant, stated the following: I am a Board Certified physician in the field of psychiatry. I have been the treating physician, under the worker’s compensation law, for the above noted patient for many years. I undertook [her/his] treatment on September 19, 2000, at the request of the carrier, following retirement of [her/his] original treating physician. At the that time [she/he] was already adjudicated permanent total disability and it [sic] was already determined to be suffering from severe depression, on various medications and needing continued follow-up care. I was advised by the patient’s attorney that the carrier was trying to close the case including closing the medical. The patient however is in need of continued medical care and has no viable alternative source therefore. I then received various communications from the insurance carrier’s attorney pointing out their rational [sic] for disallowance of medically necessary services. In my field the doctor-patient relationship is of course particularly important and it would be most detrimental to the patient and, at least at this point, I declined to follow a course of curtailing needed services. I then received the enclosed communication disallowing payment for 4 [sic] recent visits per the enclosure. The letter advises to challenge the same it is necessary to “petition” the agency within 30 days of notification. My office was unable to determine to whom I was supposed to respond and in what form. I accordingly incredibly was required to seek the assistance of an attorney to simply try to top [sic] track down whom I was supposed to contact and in what manner. The attorney advises me that after his personal efforts for in excess of two hours, multiple calls including office of employee assistance, AHCA itself several times, Division of Worker’s Compensation and several faxed letters that he was provided the above address. I am further advised that there is no form for this petition, but a responding letter will serve as the petition. Before my addressing the 4 [sic] bills I would suggest it imperative that you need to address a requirement that the carrier in any disallowing communication be required to advise as to whom is to be contacted if objection is made and that a letter will suffice. Given the diagnosis of the patient, Major Depressive Disorder, Recurrent, Severe, With Psychotic Features, it is the accepted guidelines of treatment based on research and practice to combine the use of individual psychotherapy and psychotropic medication for maximum results. This patient’s care has been minimized to 6 visits a year and I don’t see how she can be treated with less frequency and time than that. The minimum time that can be given with this frequency of visits is at least 45-60 minutes to obtain results. An alternative would be twice a month visits of 25 minutes, which will be more costly. If any additional information is needed to expedite my petition please advise. It is undisputed that three forms completed and signed by Petitioner were enclosed with the letter of October 25, 2004. Each form was captioned “Workmen [sic] Compensation Report” (the Report forms) and were, respectively, for the dates of service April 26, 2004; June 1, 2004; and July 12, 2004, that are at issue in this proceeding (the dates of service).3 The three Report forms were the only enclosures with the letter of October 25 received by Ms. Reynolds on November 1, 2004. Ms. Febus typed and mailed the letter of October 25. Ms. Febus testified that in addition to the three Report forms, she also included with the October 25 letter a “Health Insurance Claim Form” for each date of service, the Notice, and the two- page Explanation. The original of each of the Health Insurance Claim Forms was mailed to the carrier and constituted a billing for the services rendered to the claimant by Petitioner on each respective date of service. Petitioner introduced as part of its composite exhibit a copy of his file copy of each Health Insurance Claim Form. Each of the Health Insurance Claim Forms introduced by Petitioner (the three forms Ms. Febus testified she enclosed with the October 25 correspondence) reflects that Petitioner signed the form on December 22, 2004 (block 31 of each form), and that the claimant signed a release of medical information on December 22, 2004 (block 12 on each form). These three Health Insurance Claim Forms were the only billings that Petitioner alleged was enclosed with the October 25 correspondence. Ms. Febus’ testimony was based on her memory. She did not note on the letter the list of enclosures (other than a reference to the Notice) and she did not keep a file copy of her complete submission package. The mailing of the October 25 correspondence was by regular mail, not certified mail. A notation on the bottom of Petitioner’s letter reflects that a copy was mailed to the carrier’s adjuster, to Mr. Spangler, and to Mr. Keyfetz. Each of these mailings was by regular mail. There was no evidence as to what enclosures were included with any of these mailings and there was no indication on the letter whether the copies included the enclosures. On November 1, 2004, after her review of the October 25 correspondence, Ms. Reynolds telephoned Petitioner’s office and talked to Ms. Febus. Ms. Reynolds believed the correspondence constituted an inquiry, not a petition to resolve a disputed disallowance. Ms. Reynolds and Ms. Febus discussed the applicable statute and rule and they discussed the required contents of a petition to resolve a disputed disallowance. Ms. Reynolds and Ms. Febus did not discuss the enclosure that had been received with the October 25 correspondence. On November 1, 2004, Ms. Reynolds followed up her conversation with Ms. Febus by sending her an e-mail. Ms. Reynolds’ e-mail provided, in part, the following: This is a continuation of our telephone conversation of today regarding the 10-25-04 letter from Dr. Merayo. Attached are 2 documents which may assist to orient you to 2 sections of the Florida WC Law which may impact the issues which are spoken to in the letter. Please feel free to call me for further discussion regarding Florida’s WC Law and the medical issues that you may have questions [sic]. The 2 sections of the law that I immediately wish to draw your attention to are: ss. 440.13 and subsection 7(a) and ss. 440.192 F.S. The second section deals with the CLAIMANT’S benefits under Fla. WC Law ... these issues, when impacted, are decided by a Judge of Compensation Claims, following the submission of a proper request by the CLAIMANT. THE FIRST SECTION, ss. 440.13(7), F.S., addresses the way a dispute is submitted to this Agency (using the address below). Should you have further questions, do not hesitate to contact me. Ms. Reynolds attached to her e-mail copies of Sections 440.192 and 440.13(7), Florida Statutes, and Florida Administrative Code Rule 59A-31.002. Section 440.192, Florida Statutes, pertains to disputes between a claimant and a carrier that are resolved by a Judge of Compensation Claims. Those provisions are not relevant to the issues in this proceeding. Section 440.13(7), Florida Statutes, pertains to reimbursement disputes between a provider and a carrier and provides in relevant part, as follows: UTILIZATION AND REIMBURSEMENT DISPUTES.- Any health care provider, carrier, or employer who elects to contest the disallowance or adjustment of payment by a carrier under subsection (6) must, within 30 days after receipt of notice of disallowance or adjustment of payment, petition the agency to resolve the dispute. The petitioner must serve a copy of the petition on the carrier and on all affected parties by certified mail. The petition must be accompanied by all documents and records that support the allegations contained in the petition. Failure of a petitioner to submit such documentation to the agency results in dismissal of the petition. The carrier must submit to the agency within 10 days after receipt of the petition all documentation substantiating the carrier's disallowance or adjustment. Failure of the carrier to timely submit the requested documentation to the agency within 10 days constitutes a waiver of all objections to the petition. Within 60 days after receipt of all documentation, the agency must provide to the petitioner, the carrier, and the affected parties a written determination of whether the carrier properly adjusted or disallowed payment. The agency must be guided by standards and policies set forth in this chapter, including all applicable reimbursement schedules, practice parameters, and protocols of treatment, in rendering its determination. If the agency finds an improper disallowance or improper adjustment of payment by an insurer, the insurer shall reimburse the health care provider, facility, insurer, or employer within 30 days, subject to the penalties provided in this subsection. The agency shall adopt rules to carry out this subsection. The rules may include provisions for consolidating petitions filed by a petitioner and expanding the timetable for rendering a determination upon a consolidated petition. ... Florida Administrative Code Rule 59A-31.002, provides as follows: In those instances when a provider does not agree with a carrier’s reconsidered reimbursement decision, the Agency will, upon request, provide for a settlement of such reimbursement dispute through a review process conducted by the Agency’s Bureau of Managed Care. The provider, the carrier or the employer may request a resolution to a reimbursement dispute from the Agency. A valid Request for Resolution of Disputed Reimbursement must: Be in writing and specify the specific service(s) and policy being disputed. Include copies of the following: All bills submitted or resubmitted that are related to the services in question and their attachments. All applicable Explanations of Medical Benefits. All correspondence between the carrier and provider which is relevant to the disputed reimbursement. Any notation of phone calls regarding authorization. Any pertinent or required health care records or reports or carrier medical opinions. The Agency’s response to a valid disputed reimbursement request will: Be within 60 days of receipt. Establish the proper reimbursement amount, including over and under payments. Identify the basis for the decision. Be sent to the provider, carrier and employer. Be in writing. Provide for reconsiderations through physicians and peer review before an appeal [sic] pursuant to Section 120.57, Florida Statutes. Requests for Resolution of Disputed Reimbursement will be returned as not valid when: The required documentation is not included with the request. The date of the request for a reconsideration exceeds the time requirements as specified in this section. . . . The next communication between Petitioner and Respondent was in the form of a letter dated December 22, 2004, from Mr. Keyfetz on behalf of Petitioner to Respondent. After referencing the reimbursement dispute, the letter provided as follows: I am in receipt of copy of responsive petition by Dr. Merayo dated October 25, 2004, in connection with the above matter. Dr. Merayo advises he has received no response thereto let alone the required response within 10 days receipt by the carrier. It is provided: Failure of the carrier to timely submit the requested documentation to the agency within 10 days constitutes a waiver of all objections to the petition. We await your written determination, which is now due regarding the carrier disallowance of these amounts. The letter from Mr. Keyfetz dated December 22, 2004, prompted a letter from Mr. Spangler on behalf of the carrier dated December 30, 2004. After receiving a copy of Mr. Spangler’s letter, Mr. Keyfetz wrote a second letter to Respondent on January 5, 2005, that attempts to refute Mr. Spangler’s letter and again demands a written determination of the disputed reimbursements. On January 26, 2005, Ms. Reynolds responded to Petitioner with copies to Mr. Keyfetz and Mr. Spangler. This is to acknowledge not only your letter of October 25, 2004, but also the correspondence recently received from [Mr. Keyfetz and Mr. Spangler]. At issue is the acknowledgment of correspondence sent by you to this office dated October 25, 2004, received by this office on November 1, 2004. This correspondence was a two-page letter with reference to a disallowance of payment for treatment rendered to the claimant: [name redacted]. Attachments to this letter were 3 progress reports dated: 08-12-04, 06-01- 04, and 04-26-04, from the Merayo Medical Arts Group and signed with your apparent signature. The progress reports show [claimant’s] Date of Accident (D/A) as 07- 08-1984. On November 1, 2004, in response to this correspondence, I telephoned your office and spoke with Vinette, who identified herself as a representative of your office staff. It was during this telephone conversation, I clarified the definition of a disallowance, denial and a payment made at a different amount from that which was billed. Each of these circumstances has specific procedures, which must be met in order to address a disagreement concerning the carrier’s action. I followed this conversation with an e- mail sent, at Vinette’s direction to ... I have attached a copy of this e-mail and the attachments contained in this e-mail to this letter. I have had no follow-up communication from your office following this action. No file was established in this office. This correspondence was handled as an inquiry. However, subsequent to this action, on December 27 [, 2004] and on January 10, 2005, letters were received from [Mr. Keyfetz] regarding your original October 25, 2004, correspondence. [Mr. Spangler], the carrier’s representative, sent a letter dated December 30, 2004. This is to inform you that this office cannot address the issues brought forward except to clarify to you sections of Chapter 440, which may be of import to your quest for assistance.[4] * * * You failed to comply with these requirements as a contested disallowance or adjustment of payment by the carrier. I have dismissed this correspondence as an invalid submission of a reimbursement dispute.[5]
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a final order dismissing the October 25 correspondence as an invalid petition. DONE AND ENTERED this 29th day of September, 2005, in Tallahassee, Leon County, Florida. S CLAUDE B. ARRINGTON 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 September, 2005.
Findings Of Fact Charles Lee Armstrong, a/k/a Jack Armstrong, (hereinafter referred to as Petitioner or Armstrong) is licensed by the Florida Insurance Department as a general lines agent to represent Foremost Insurance Company and Fortune Insurance Company (Exhibit 1). Prior to 1976 Armstrong was an Aetna agent. From February 10, 1968 through February 10, 1977 Luigi Sesti carried homeowners policy with Aetna with Armstrong Agency. Armstrong's designation as an Aetna agent was terminated by Aetna termination notice (Exhibit 8) dated August 21, 1975 for low volume of business. The company practice is to terminate the agency relationship ninety days after notice of termination. Thereafter Respondent continued as a limited company agent for one year, during which he was authorized to renew Aetna policies. (Exhibit 7). After that one year extension, Respondent had no agency relationship with Aetna and, to renew an Aetna policy, he would have to have an Aetna agent process the renewal. Luigi Sesti had dealt with Armstrong as Sesti's Insurance agent since 1968 and had maintained an Aetna home-owner's policy which had last been renewed through Armstrong for the year ending February 10, 1977. Upon receipt of notice from Armstrong that his policy would expire February 10, 1977, Sesti sent Armstrong his check in the amount of $165 (Exhibit 3) for renewal of his policy. Although Armstrong was no longer authorized to renew Aetna policies, he deposited Sesti's check but thereafter failed to provide Sesti with insurance coverage on his house or contents. Armstrong advised Aetna that Sesti's policy had been replaced with an Eastern insurance policy, and Aetna failed to notify Sesti that the Aetna policy was not renewed. In August 1977 Sesti's home was burglarized. He lost a television set, radio, watch, spotlight and a ring, and Sesti contacted Armstrong to report the loss. Armstrong visited the home and suggested Sesti submit no formal claim because to do so would make it difficult for Sesti to renew his insurance. In his own explanation, Armstrong testified that he intended to pay Sesti for his loss but Sesti could never establish the value of the ring or establish a price for which he would settle. Armstrong offered Sesti $250 to settle the claim. During the discussions between Armstrong and Mrs. Sesti, Armstrong said he had authority to settle claims for Aetna up to $500 and that he was an attorney. Neither of these statements was true. When Armstrong was unable to agree on the amount of the claim, Mrs. Sesti contacted Aetna and learned that the policy on her her had expired 10 February 1977 and had not been renewed. Because no valid policy had been issued to Sesti, Aetna initially denied liability. When advised by Sesti that Aetna would not pay their claim, Armstrong returned the premium he had received from Sesti for the policy not renewed in one check for $155 dated 9/7/77 and in another check for $10 dated 11/23/77 (Exhibit 5) which Sesti received with a letter from the Insurance Commissioner's office dated November 29, 1978 (Exhibit 14). After further investigation by Aetna revealed the facts as noted above, Aetna issued a policy (Exhibit 15) which effectively renewed Sesti's homeowners policy for one year from February 10, 1977. They deducted the premium and the $100 deductible from the amount they paid Sesti for the loss sustained. Aetna's Regional Manager testified that Aetna paid for the loss because Sesti had been insured by them for several years and they felt a moral obligation for their former agent's failure to provide coverage and for their failure to notify Sesti he was no longer insured by Aetna. Aetna allowed Sesti approximately $450 for the loss of the ring and approximately $350 for the other things stolen. Roseland S. Wood had insured her mobile home with Foremost Insurance Company since 1953, and with Jack Armstrong as Agent since 1964. Policy No. 101-8498757 covered the period 11/3/74 to 11/3/75 (Exhibit 13). By check dated November 5, 1975 made payable to Armstrong (Exhibit 9) Wood forwarded the premium for renewal of this policy. Unbeknownst to Wood the policy was not renewed until July 28, 1976 by policy No. 8498643 (Exhibit 12). This is the policy that Armstrong forwarded to Foremost. Armstrong was in Europe on vacation when this policy was issued by the woman he had hired to keep his office open during his vacation and he professed no knowledge of why the policy was issued at this particular time. In October 1976 Wood wanted additional coverage and Armstrong came out to assist in providing the additional coverage. After discussing increasing personal property coverage, plus garage and contents and boats, Respondent advised Wood that the additional coverage would cost $326. Wood gave Respondent a check that day (Exhibit 10). Thereafter Armstrong issued policy No. 8498518 (Exhibit 11) for the period 10/28/76 to 10/28/77 but the personal property coverage was less than Wood had asked for and the garage and contents were not included. Neither Exhibit 11 nor the premium for this coverage was ever received by Foremost from Armstrong. They became aware of Exhibit 11 after Wood suffered a burglary in July 1977 and came to the Foremost office to file a claim. The costs of coverage on Exhibit 11 are not correct and had this policy been received by Foremost it would have been rejected by the computer due to inaccurate premium charges, the inclusion of boats on this policy and incorrect comprehensive liability coverage. By failing to renew Wood's coverage in November 1975, Respondent left Wood without coverage until Exhibit 12 was issued providing coverage from 7/28/76. This renewal was written by Armstrong Agency, who had authority from Foremost to write this renewal. As noted above, this policy was written while Armstrong was on vacation. The $145 premium paid by Wood for the renewal of the policy was not remitted to Foremost until after July 28, 1976. At the time of Wood's loss in July 1977 she was covered by this policy. When the existence of the above facts regarding the two policies and dates they were issued to Wood were uncovered, Armstrong refunded to Wood $181 of the $326 premium he collected, Foremost refunded the additional $145 of this premium to Wood, and Wood's claim was settled by Foremost to Wood's satisfaction. Foremost has a claim against Armstrong for this $145 Foremost refunded to Wood. Respondent acknowledged writing Exhibit 11 and assumed that it was mailed to Foremost. He does not remit payment to the company until he is billed. Foremost sends a monthly statement to each agent showing policy numbers received. The agent can readily check this list against the policies he has issued to ascertain if a policy was not received by the company. The company also maintains a policy register where policy numbers are recorded. A copy of this is sent to their agents to check against policies the agents have issued. Failure of the agencies to submit policies in sequential numbers will be picked up on the computer, but only after quite a few numbers have been skipped. There was insufficient volume from Armstrong's agency to trigger this information from the computer. With respect to Charge III, failure to keep office open and accessible to the public during office hours, an insurance investigator visited the office on some six occasions in December 1977 and February and March 1978. At these visits the office was open but neither Armstrong nor a secretary was present. A lady working in an office down the hall from Respondent's office came to the office when the inspector arrived and offered to contact Armstrong. Several telephone calls made to Armstrong's office during March 1978 resulted in the phone being answered by an answering service. Respondent has operated a one-man office for many years and has an answering service cover all calls while he is out of the office. He wears a radio pager and claims his answering service can always contact him. The lady who covers office visits for Respondent during his absence from the office has had several years experience working in a general insurance agency. She fills out applications for clients coming into the office, gives receipts for payments, signs Armstrong's name to applications and other documents; and has done so for 4 or 5 years. She is not on any type of regular salary or otherwise employed by Armstrong. Respondent has been a licensed insurance agent since 1961 and Respondent's testimony was unrebutted. This is the first complaint filed against him in his capacity as a licensed insurance agent.
The Issue Whether Respondent violated the following statutory provisions: Sections 626.561(1), 626.611(5), 626.611(7), 626.611(8), 626.611(9), 626.611(10), 626.611(13), 626.621(2), 626.621(4), 626.621(6), 626.9521, and 626.9541(1)(o)1., Florida Statutes, and if so what discipline should be imposed.
Findings Of Fact Respondent, Gus Jones, Jr., is currently and was at all times relevant to this proceeding a licensed insurance agent in this state doing business under the name of A. Maples Insurance Agency. In August, 1990, Jesus Escalera, who had a roofing business, came to Respondent to obtain workers' compensation insurance. Mr. Escalera's insurance was placed through the National Counsel on Compensation Insurance (NCCI) which is a pool for assigned risk insurance. Mr. Escalera's policy was with Aetna with coverage effective through October 26, 1991. On August 16, 1991, Mr. Escalera came to Respondent to renew his workers' compensation insurance. Mr. Escalera gave Respondent $409.00, which represented a down payment of one-half the premium for one year's coverage. The remainder of the premium was to be financed with Financial Industries, Inc. Aetna had withdrawn from the original risk insurance pool, therefore it was necessary to submit a new application to NCCI for placement of insurance for Mr. Escalera. Respondent sent the application to NCCI in October, 1991. Mr. Escalera's insurance was placed with United States Fidelity and Guaranty Company (USF&G) on November 13, 1991. Respondent kept a supply of blank drafts from Financial Industries, Inc. at his office. Respondent sent a Financial Industries, Inc.'s draft to NCCI for Mr. Escalera's insurance with USF&G. Financial Industries stopped payment on the draft because they had decided to discontinue financing workers' compensation insurance. Respondent attempted to finance Mr. Escalera's insurance through Premium Assignment Company (Premium). Respondent sent a premium draft to NCCI, but Premium stopped payment on the draft for Respondent's failure to send a transmittal to Premium. Mr. Escalera had called Respondent three or four times asking for his payment book so that he could make the installment payments for the insurance. Respondent advised Mr. Escalera that the payment book was in the mail. USF&G performed an audit on Mr. Escalera's payroll and determined that Mr. Escalera owed $13,724.00 for earned premiums. In January, 1992, Respondent contacted Mr. Escalera and advised him that USF&G intended to cancel the insurance effective February 16, 1992. On February 3, 1992, Mr. Escalera went to see Respondent. Respondent explained that he could not get financing for Mr. Escalera and requested Mr. Escalera to pay the balance of the premium of $817.00. Mr. Escalera paid $409.00 to Respondent and received a receipt for that amount. Respondent sent USF&G a check for $817.00. The policy was reinstated with coverage effective December 13, 1991. USF&G gave notice dated March 13, 1992 that Mr. Escalera's policy would be terminated April 13, 1992 for non-payment. By letter dated April 16, 1992, USF&G returned Respondent his check due to the second cancellation. By letters dated June 2, 1992, USF&G advised Respondent that Mr. Escalera owed a earned premium of $13,724.00. The policy was terminated effective April 13, 1993, because Mr. Escalera had failed to pay the earned premium. In April or May, 1992, Respondent placed the retuned check from USF&G in his trust account. Respondent did not advise Mr. Escalera that the premium had been returned. According to Mr. Escalera, he did not know at the time of the hearing who had the money. On February 6, 1993, Respondent called David Peters, a representative of USF&G and asked Mr. Peters what to do with the $817. Respondent let the money remain in the trust account and awaited further instruction from Mr. Peters. After Respondent received the administrative complaint, he called USF&G and spoke with Marilyn Bailey who was now handling the account on behalf of USF&G. Based on his conversation with Ms. Bailey, Respondent sent USF&G a cashier's check for $817 dated May 18, 1993.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Insurance and Treasurer issue a Final Order finding Respondent guilty of a violation of Sections 626.561(1) and 626.621(2) and that Respondent be assessed an administrative fine of $500 and be placed on probation for a period of one year subject to such terms and restrictions as the Department may apply. DONE AND ENTERED this 19th day of October, 1993, 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 19th day of October, 1993.
