The Issue The issue for determination in this proceeding is whether Respondent, Dal Don Produce, Inc. (Dal Don), owes Petitioner $5,956 for watermelons for the reasons stated in the Producer Complaint filed with the Department of Agriculture and Consumer Services (Department) on December 26, 2003.
Findings Of Fact Pursuant to an agreement between Petitioner and Dal Don, Petitioner delivered seven loads of watermelons to Dal Don between November 11 and 24, 2003. The watermelons weighed approximately 291,016 pounds. Dal Don agreed to pay Petitioner $21,956.60 for the watermelons. Dal Don paid Petitioner only $16,000. Dal Don owes Petitioner $5,956.60. Dal Don did not provide Petitioner with an accounting or explanation for the unpaid amount. Fidelity & Deposit Company of Maryland (Fidelity) is the surety for Dal Don and provided bond for Dal Don pursuant to Surety Bond Number 08374953 (the bond). The conditions and provisions of the bond are to assure proper accounting and payment to producers, including Petitioner. In the absence of payment from Dal Don, responsibility for payment evolves to Fidelity.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a final order adopting the findings and conclusions in this Recommended Order and requiring Respondents to pay Petitioner the sum of $5,956.60. DONE AND ENTERED this 3rd day of November, 2004, 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 3rd day of November, 2004. COPIES FURNISHED: Brenda D. Hyatt, Bureau Chief Department of Agriculture and Consumer Services Bureau of License and Bond 407 South Calhoun Street, Mayo Building Tallahassee, Florida 32399-0800 Bobby Williams Bobby Williams Farms 5005 Placid View Drive Lake Placid, Florida 33582 C. Catherine Bloebaum Dal Don Produce, Inc. Post Office Box 120036 Clermont, Florida 34712-0036 Kathy Alves Fidelity & Deposit Company of Maryland Post Office Box 87 Baltimore, Maryland 21203 Honorable Charles H. Bronson Commissioner of Agriculture Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810 Richard D. Tritschler, General Counsel Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810
Findings Of Fact The Respondent, Adriana Winkelmann, d/b/a Adriana's Bail Bonds, Tampa, currently is licensed and eligible for licensure in this State as a Limited Surety Agent. On or about October 31, 1986, William L. Counts and his wife, Madie Counts, a/k/a Madie G. Clark, went to see the Respondent about getting Mr. Counts' first cousin, Clayton D. Counts, bailed out of jail. Cousin Clayton was charged with second degree murder, and bail was set on the second degree murder charge at $5000. Clayton Counts also had been charged with eight other counts involving sexual battery on a child and sexual activity with a child under his custodial authority. On October 2, 1986, Clayton Counts had posted $14,000 of bonds that had been set on the eight charges and had been released from jail. Adriana's Bail Bonds, acting as bail bondsman and as attorney-in-fact for the surety company, Accredited Surety And Casualty Company, Inc. (Accredited or the surety), was the surety on the $14,000 of bonds, and Scott Erickson, a friend of Clayton Counts, indemnified Accredited and put up collateral to secure the indemnification agreement. All but $150 of the premium on the $14,000 of bonds had been paid to Adriana's Bail Bonds; Clayton Counts' wife promised to pay the additional $150 at a later date. When Clayton Counts was re-arrested and charged with second degree murder and just an additional $5000 bond was set on the new charge, Erickson became fearful that Clayton Counts might skip the bonds, jeopardizing Erickson's collateral. He told the Respondent that he wanted to be taken off the bonds. At about this same time, on or about October 31, 1986, Mr. and Mrs. William L. Counts came in to Adriana's Bail Bonds, at Clayton Counts' request, to see about bailing out Clayton for the second time. Mr. and Mrs. Counts agreed with the Respondent to indemnify the surety on the total amount of all of the bonds, $19,000. They agreed to pay the $150 balance of the premium on the bonds put up on or about October 2, 1986, on the first set of charges, plus a $500 premium on the bond put up on or about October 31, 1986, on the second degree murder charge. The indemnity agreement was to indemnify the surety company for the entire $19,000 amount of the bonds in the event of a forfeiture, plus "all claim, demand, liability, cost, charge, counsel fee, expense, suit order, judgment, or adjudication" sustained or incurred by the surety company. As collateral to secure their indemnity agreement, Mr. and Mrs. Counts put up their mobile home, to which they gave the Respondent a power of attorney dated October 31, 1986, and an $8,000 mortgage on a lot worth approximately $8000. They also gave Adriana's Bail Bonds a $19,000 promissory note as collateral. On October 31, 1986, an employee of Adriana's Bail Bonds gave Mr. Counts a collateral receipt, signed by Mr. Counts and the employee, for the $19,000 promissory note, the indemnity agreement, the mortgage on the lot and the mobile home. The original was given to Mr. Counts and Adriana's Bail Bonds kept a copy. There was no evidence that the collateral receipt, or any other statement or affidavit, for this or any other collateral (other than Erickson's original collateral on the $14,000 of bonds on the first set of charges) ever was filed anywhere. Mr. Counts paid $500 by check dated November 14, 1986, for the premium on the $5000 second degree murder bond. In December 1986, Clayton Counts left the state and missed a court appearance on December 19, 1986. The $19,000 of bonds was estreated. In about January 1987, Mrs. Counts went to see the Respondent about substituting some other collateral for the mobile home. She was concerned about where she and her husband would live if the bonds were estreated and forfeited and the mobile home had to be sold to perform the indemnity agreement. She wanted to be able to move the mobile home somewhere else even in that event. After some discussion, it was agreed that the Respondent would accept $6000 cash as substitute collateral in place of the mobile home. Mrs. Counts promised to pay the $6000 in installments of approximately $500 a month. The Respondent repeatedly was able to have the court delay forfeiture of the bonds because she was able to demonstrate that she was trying to locate and return the defendant to the court. In her efforts, the Respondent incurred expenses for hiring private investigators, for a six- day trip to Missouri, for long distance telephone charges, for attorneys' fees for getting postponements of the forfeiture of the bonds and for other miscellaneous expenses. The Respondent collected portions of the promised cash collateral substitution in the following installments, some of which were picked up at the Counts' home by the Respondent: April 21, 1987 $2,000 July 17, 1987 $ 300 August 10, 1987 $ 500 August 20, 1987 $ 800 January 6, 1988 $ 500 On each occasion, the Respondent gave Mrs. Counts a collateral receipt signed by the Respondent and by Mrs. Counts. Each receipt noted the amount received, the balance due on the cash collateral substitution promise, and the $150 balance on the premium on the October 2, 1986 bonds on the first set of charges. Again, there was no evidence that any of these collateral receipts were "filed" anywhere. On January 6, 1988, Mrs. Counts asked the Respondent for a summary of the amounts of collateral paid to that date. The Respondent wrote on a piece of paper, incorrectly dated January 6, 1987, that $4100 had been received to date. Mrs. Counts also was confused what the money would be used for. The Respondent answered her question, saying that the money, together with the lot, would go towards indemnifying the surety for the $19,000 amount of the bonds if they were forfeited and, under the indemnity agreement, could be used to indemnity Adriana's Bail Bonds for expenses caused by the estreature. The Respondent listed these items on a piece of paper, too: Attorney fees to continue case 4 times over one year. Long distance calls for one year. Gas, stamps, & miscellaneous. One trip to Missouri, gas, motel, meals. Investigators services in Missouri and Florida. Later in January 1988, Clayton Counts was arrested and returned to Florida. The bonds, however, were not discharged at that time. Later in 1988, the Respondent made demand on Mrs. and Mrs. Counts for payment of an additional $2,150. This was supposed to represent $2000 due on the cash collateral substitution promise, plus the $150 balance on the premium on the October 2, 1986 bonds on the first set of charges. In fact, only $1900 was due and owning on the cash collateral substitution agreement. In March and April 1988, the Respondent collected from Mrs. Counts two additional $350 installments of the cash collateral substitution promise. Only one receipt was given for both installments, once again signed by both the Respondent and Mrs. Counts, reducing the balance to $1200, plus the $150 premium owing. In June and July 1988, Mrs. Counts was hospitalized. On June 13, 1988, the Respondent went to the hospital to have Mrs. Counts sign a receipt for the return of the original collateral for the $19,000 of bonds--i.e., the $19,000 promissory note and indemnity agreement, the mortgage on the lot and the mobile home. The Respondent did not return the cash collateral. On July 14, 1988, the court entered an order releasing the surety and Adriana's Bail Bonds from the bonds. The Respondent did not return the cash collateral because Mrs. Counts died in July 1988, and the Respondent was unsure to whom the money should be paid.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Respondent be found guilty of the violations set forth in the Conclusions of Law portion of this Recommended Order and that her license and eligibility for licensure be suspended for a period of thirty (30) days, that she be required to pay an administrative fine in the amount of $250, and that she be placed on probation for nine months after expiration of the suspension period, conditioned on : (1) successful completion of either a basic certification course or a correspondence course approved by the Bail Bond Regulatory Board; and (2) payment of the cash collateral to the rightful owner, or in the alternative, if the Respondent is in doubt as to the rightful owner, into a court registry in conjunction with an interpleader action, within 30 days of entry of final order. DONE and ENTERED this 24th day of February, 1989, in Tallahassee, Leon County, Florida. J. LAWRENCE JOHNSTON Hearing Office 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 24th day of February, 1989. APPENDIX TO RECOMMENDED ORDER CASE NO. 88-2588 To comply with Section 120.59(2), Florida statutes (1987), the following rulings are made on the Petitioner'S proposed findings of fact: 1-9. Accepted and, along with other facts, incorporated. 10. Rejected in part and accepted in part. The note was a receipt of sorts, but it was not the only receipt. The incorrect date on the "receipt" was January 6, 1987; the actual date the "receipt" was given was January 6, 1988. 11.-16. Accepted and incorporated. COPIES FURNISHED: S. Marc Herskovitz, Esquire Office of Legal Services Department of Insurance 412 Larson Building Tallahassee, Florida 32399-0300 Don Dowdell General Counsel Department of Insurance and Treasurer The Capitol, Plaza Level Tallahassee, FL 32399-0300 James N. Casesa, Esquire 3845 Fifth Avenue North St. Petersburg, Florida 33713 The Honorable Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32999-0300
The Issue Should Respondent's license as a bail bond agent in the State of Florida be disciplined for the alleged violation of certain provisions of Chapter 648, Florida Statutes, as set forth in the Administrative Complaint and, if so, what penalty should be imposed?
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made: The Department is the agency of the State of Florida vested with the statutory authority to administer the disciplinary provisions of Chapter 648, Florida Statutes. Respondent, at all times relevant to this proceeding, was licensed as a bail bond agent in the State of Florida and subject to the provisions of Chapter 648, Florida Statutes. Respondent, at all times relevant to this proceeding, was employed by Alliance Bail Bonds (Alliance), which was owned by Linda Jones. There was a verbal employment agreement between Alliance and Respondent, which provided for, among other things, Respondent's salary. However, the verbal employment agreement did not require that Respondent write bail bonds exclusively for Alliance. At all times relevant to this proceeding, Alliance's office was located in Respondent's home in Titusville, Brevard County, Florida, which had a separate entrance and separate telephone for Alliance. Alliance's files, both active and inactive, were also housed in this office. On March 30, 2000, a person identifying himself as Johnny Lamb contacted Respondent by telephone concerning a bail bond for an individual known as Bernard J. Dougherty who was being held in the Brevard County, Florida, jail. The bond amount was $8,500.00. Since Dougherty was not a resident of the State of Florida, Respondent wanted Lamb to put up the full amount of the bond as collateral. However, Lamb advised Respondent that he did not have enough cash to put up the full amount of the bond. Therefore, Respondent and Lamb eventually agreed on $7,000.00 cash as collateral. Additionally, Respondent advised Lamb that the premium for writing the bail bond would be $850.00 (10 percent of the bond amount). Later that same day, Lamb came to Respondent's office to complete the paperwork and put up the necessary funds for the collateral and bond premium. Lamb paid Respondent the collateral and bond premium in cash (U.S. currency, 20's, 50's, and 100's). Respondent prepared a Collateral Receipt and Informational Notice (Collateral Receipt), which was signed by Lamb. The Collateral Receipt indicated that Lamb had deposited the $7,000.00 collateral with Respondent and had executed an Indemnity Agreement and Promissory Note. Lamb also executed a Bail Application. Respondent gave Lamb the white copy of the Collateral Receipt for his records. The goldenrod copy of the Collateral Receipt was also given to Lamb to be delivered to Dougherty at the jail. The yellow copy and pink copy of the Collateral Receipt were retained by Respondent for Alliance's record. Lamb also paid Respondent $850.00 in cash (U.S. Currency) for the bail bond premium for which Respondent gave Lamb a receipt (number 20454) indicating that Lamb had paid the bail bond premium in the amount of $850.00. After completing the bond transaction with Lamb, Respondent prepared a file in Dougherty's name, which included the copies of the Collateral Receipt, Promissory Note, Indemnity Agreement, Bail Application, and a copy of the receipt for the bail bond premium. After preparing the file, Respondent prepared two Powers of Attorney (Powers), one in the amount of $5,000.00 and one in the amount of $3,500.00, and proceeded to the Brevard County jail to interview Dougherty. Upon arriving at the Brevard County jail, Respondent was advised that in addition to the Brevard County charges, there was an outstanding warrant for Dougherty from Volusia County and a hold for a parole violation in the State of Pennsylvania. Lamb was not present at the Brevard County jail at this time. Therefore, Respondent advised Dougherty of the Volusia County warrant and the hold from Pennsylvania. Respondent further advised Dougherty that although he could post bond for the Brevard County charges, Dougherty would not be released because of the Volusia County warrant and the hold for parole violation in Pennsylvania. Dougherty advised Respondent that he did not want to post bond. Whereupon, Respondent attempted to contact Lamb using the telephone numbers furnished Respondent by Lamb but was unsuccessful in locating Lamb. On March 31, 2000, Respondent called the Brevard County jail and had Lamb paged. Upon being advised that Lamb was present in the Brevard County jail, Respondent asked that they instruct Lamb to call Respondent at his office. Lamb called Respondent at his office and was advised of the situation concerning Dougherty. Respondent also advised Lamb that he was on his way to the jail and would bring Lamb's money with him. Upon arriving at the Brevard County jail, Respondent explained the circumstances regarding the posting of bail for Dougherty and proceeded to return Lamb's money. Lamb did not have the copies of the Collateral Receipt with him that had been given to Lamb on March 30, 2000. Therefore, Respondent took his copy of the Collateral Receipt and documented the return of the $7,000.00 collateral and the $850.00 premium fee. Lamb signed the documentation on the Collateral Receipt showing the return of the $7,000.00 collateral and the $850.00 premium fee. Respondent then placed all of the documents, including the Collateral Receipt with the documentation showing the return of the $7,000.00 collateral and the $850.00 bond premium, in Dougherty's file with Dougherty's name highlighted in blue for filing. Afterwards, Respondent voided the Powers by writing "Void" across the front of the Powers and had them sent to Linda Jones by UPS. Subsequently, the Powers were forwarded by Linda Jones to Charles A. Parish, Agent for Continental Heritage Insurance Co., on whom the Powers were written. On March 31, 2000, Respondent returned the $7,000.00 collateral plus the $850.00 bond premium fee to Lamb, notwithstanding the testimony of Lamb to the contrary, which lacks credibility. Respondent did not at any time present any of the paperwork for posting Dougherty's bond, including the Powers, to the Brevard County jail personnel. Since Alliance's Brevard County files were being kept at Respondent's office in Titusville, Florida, Respondent did not forward Dougherty's file to Linda Jones. However, as a caution, Respondent advised Linda Jones by telephone of what had occurred in regards to Dougherty, notwithstanding Linda Jones' testimony to the contrary, which lacks credibility. Sometime in January 2001, Linda Jones came into Respondent's office in Titusville, Florida, and removed all of Alliance's Brevard County files, both active and inactive, that were in the possession of Respondent. The Alliance files removed by Linda Jones included Dougherty's inactive file with the documentation concerning the return of the $7,000.00 collateral and the $850.00 bail bond premium, notwithstanding Linda Jones' testimony to the contrary, which lacks credibility. By letter dated May 10, 2001, after talking to William Travis and Linda Jones, Lamb filed a complaint with the Department alleging that Respondent had failed to return the $7,000.00 collateral and this proceeding ensued.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a final order finding Respondent, Michael Scott Kelly, not guilty of violating Subsections 648.442(1) and (3); and 648.45(2)(d),(e),(g),(h), (j), and (n), and (3)(a),(c),(d), and (e), Florida Statutes, and dismissing the Administrative Complaint filed against Michael Scott Kelly. DONE AND ENTERED this 23rd day of April, 2002, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE 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 23rd day of April, 2002. COPIES FURNISHED: Dickson E. Kesler, Esquire Department of Insurance Division of Legal Services 200 East Gaines Street 612 Larson Building Tallahassee, Florida 32399-0333 Honorable Tom Gallagher State Treasurer/Insurance Commissioner Department of Insurance The Capitol, Plaza Level 02 Tallahassee, Florida 32399-0300 Mark Casteel, General Counsel Department of Insurance The Capitol, Lower Level 26 Tallahassee, Florida 32399-0307 Steven G. Casanova, Esquire 100 Rialto Place, Suite 510 Melbourne, Florida 32935
The Issue This is a bid protest proceeding in which the Petitioner challenges the Department's notice of intent to award the contract under RFP-DOT-94/95-8006 to the Intervenor Martin Petroleum Corp. Petitioner, who is the fifth-ranked bidder, contends that all four of the higher ranked bidders submitted non- responsive bids, that its own bid was responsive, and that it should be awarded the subject contract.
Findings Of Fact Findings stipulated to by all parties 4/ The Department solicited proposals for renovation and operation of service stations on Florida's Turnpike through RFP- DOT-94/95-8006, which was issued September 21, 1994. The award recipient, known as the Operator, would have to furnish, prior to contracting, a $1,000,000 performance bond for operation of the seven stations on the Turnpike. No performance bond was required at the time the proposals were due. The RFP required all proposers to submit letters of commitment from surety companies with their proposals, however. The RFP stated: J. FINANCIAL ABILITY To assess the Proposer's financial ability to perform the requirements set forth in this Request for Proposals and the resulting Service Station Lease and Operating Agreement, the Department has determined that it will require a Proposal Guaranty, a Performance Bond, and a Letter of Credit. * * * Considerations The successful Proposer will be required to provide, prior to execution of a contract, a satisfactory Performance and Payment Bond in the amount of $1,000,000 on the form provided in Section VII of this RFP or other form acceptable to the Department. The bond shall be maintained in effect throughout the life of the Contract and shall ensure full compliance with all the terms and conditions of the Contract except construction/ renovation and signage activities. The Performance and Payment Bond is not to be mailed with the proposal, but will be required prior to execution of the final Contract. The cost of this bond shall be borne by the Proposer. The Surety on any Performance and Payment Bond shall hold a certificate of authority authorizing it to write surety bonds in the State of Florida and shall be licensed to do business in the State of Florida. The Surety Bond shall be signed by the Surety and Surety's Florida resident agent. Requirements The proposer must provide a letter of commitment from a Surety who meets the surety qualification requirements set forth above. Such letter must state that the Surety will issue on behalf of the Proposer a Performance and Payment Bond in the amount of $1,000,000 covering all obligations under the Contract except construction/renovation related activities. The only contingency permitted in the commitment letter is the award of the Contract to the Proposer. The bond requirements were set out in the Lease and Operating Agreement, which stated, in pertinent part: [T]he Operator has provided, prior to execution of this Agreement, a Performance and Payment Bond in the amount of $1,000,000 to the Department which must be maintained in effect throughout the life of the Agreement to ensure full comp- liance with all the terms and conditions of the Agreement except construction/renovation and signage activities. This bonding requirement may be fulfilled through use of sequential bonds provided (1) the duration of any given bond shall not be less than one year, (2) the bond amount shall be $1,000,000 for any given bond duration, and (3) at least sixty (60) days prior to the expiration of any given bond, the Operator must present the Department a new bond effective upon expiration of the bond then in effect. Under the RFP the proposals were to be rated in four major categories: management experience and staffing, fuel pricing and services, service station operations, and market development plan. The four scores would than be added and the proposers would be ranked from the highest to the lowest score. The surety commitment letters, among other requirements, were not "scored" items, but were reviewed for compliance with the RFP. Any deemed to be materially deficient would render the proposal nonresponsive and result in its disqualification. Seven proposals were opened on December 20, 1994. The proposals were evaluated by three employees of the Department who had experience and knowledge in the program area and who were appointed by the District Secretary. Woodrow L. Lawson, the Director of Contractual Services for the Department's Turnpike Division, performed the responsiveness review. Martin's surety commitment letter was from Poe & Brown Insurance of Daytona Beach, Florida, was dated December 9, 1994, was signed by Donald P. Bramlage, Attorney-in-Fact & Resident Agent and stated: North American Specialty Insurance Company has executed the bid bond for the operation, renovation and maintenance of service stations located on Florida's Turnpike. Should the contract be awarded to Martin Petroleum Corporation, North American Specialty stands ready to execute an annual $1 million performance and payment bond for this contract. Should you need any additional information whatsoever, please advise. Chambliss' surety commitment letter was from Poe & Brown Insurance of Daytona Beach, Florida, was dated December 16, 1994, was signed by Donald P. Bramlage, Attorney-in-Fact & Resident Agent and stated: North American Specialty Insurance Company has executed the bid bond for Operation, Renovation and Maintenance of Service Stations located on Florida's Turnpikes. Should the contract be awarded to Joe A. Chambliss, Inc., North American Specialty Insurance Company stands ready to execute an annual $1 million Performance and Payment bond for this contract. Should you need anything additional whatsoever, please advise. Mobil's surety commitment letter was from Chubb Group of Insurance Companies of New York, New York, was dated November 16, 1994, was signed by Betty Calderon of Federal Insurance Company, as attorney-in-fact, and stated: Please be advised that should Mobil Oil Corp- oration be awarded a contract, we will secure from the Federal Insurance Company a Performance and Payment Bond in the amount of said contract. If you have questions, please feel free to call. The surety commitment letter submitted by Amoco Oil Company was from Seaboard Surety Company of Chicago, Illinois, was dated December 16, 1994, was signed by Patricia Thurmond, as agent for Seaboard Security Company, and stated: It is our understanding that Amoco is submitting a proposal for the above-referenced project. Please be advised that we currently have Amoco placed with St. Paul/Seaboard for their surety bond needs. Our ability to secure final performance and payment bonds is subject to a favorable review of the bond forms and mutually acceptable contract terms. This commitment shall remain in full force and effect for a period of sixty (60) days unless extended in writing by the undersigned. Knight's surety commitment letter was from ACSTAR Insurance Company of New Britain, Connecticut, was dated December 16, 1994, was signed by William J. Dykas as Attorney-in-fact, and stated: In the event that Knight Energy Turnpike Services, Inc. should be awarded the contract for the operation, renovation and maintenance of seven Florida Turnpike locations, Project No. RFP-DOT-94/95-8006, ACSTAR Insurance Company as Surety, will furnish a Payment and Performance Bond in the amount of $1,000,000.00 for all obligations except construction/renovation and signage. Woodrow Lawson reviewed the surety commitment letters as part of his responsiveness review of the proposals. He found no defect in the surety commitment letters of Martin, Chambliss, Mobil, Amoco, or Knight. Martin had the highest-rated proposal, followed by Chambliss, Mobil, Amoco, Knight, and Sunshine Oil Company. A proposal from Orestes Flores was disqualified for being nonresponsive. The Department decided to award the contract to Martin, and posted notice of that decision on January 20, 1995. Findings based on evidence at hearing The Department had two principal purposes for requiring the surety commitment letters: (a) to help ensure that the intended award recipient would be able to acquire a performance and payment bond and thus be able to execute the contract and (b) to help the Department weed out proposers that could not perform, the assumption being that companies with inadequate resources would not be able to secure a commitment. The criteria listed in the Requirements section on page 28 of Joint Exhibit 2 were the only criteria used by the Department to evaluate compliance with Section IV, Paragraph J.2 of the RFP. After Lawson had completed his own responsiveness review, he solicited comments from the three evaluators regarding the responsiveness of the proposals. None of the evaluators expressed any concern about the responsiveness of the surety commitment letters submitted by Martin, Chambliss, Mobile or Knight. Lawson did conclude that the letter submitted by Amoco was irregular for containing additional contingencies beyond what the RFP permitted, but he considered the irregularity to be minor, and waived it, thus treating Amoco's proposal as responsive.Courier 5/ In the RFP the Department expressly reserved the right to waive minor irregularities in the proposals. Knight's proposal was prepared and submitted by Mr. Dave Blech, President of Knight Energy Turnpike Services, Inc. Upon receipt of the RFP, Mr. Blech sent the document to his insurance agent and requested that the agent obtain a bond to satisfy the requirements of the RFP. Relevant amendments, including the amended contractual language, were also provided to Knight's insurance agent. Mr. Blech interpreted the J.2 bond criteria of the RFP to require a surety commitment letter that would cover all obligations of the contract, except construction, renovation, and signage, for the entire eight and a half or nine year period of the contract. This opinion was shared by Knight's insurance agent, and Knight received similar opinions concerning the term and the amount of the bond from other bonding companies which were contacted by Knight during the preparation of its proposal. The Department's interpretation of the J.2 bond criteria was to the effect that a commitment to a one year period was sufficient. In view of the bond requirements set out in the Lease and Operating Agreement, the Department's interpretation was reasonable, if not required.
Recommendation On the basis of all of the foregoing, it is RECOMMENDED that the Department of Transportation issue a Final Order in this case concluding that the bid submitted by the Intervenor Martin Petroleum Corp. was responsive in all material regards and dismissing the Petitioner's Formal Protest. DONE AND ENTERED this 10th day of April 1995 in Tallahassee, Leon County, Florida. MICHAEL M. PARRISH 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 10th day of April, 1995.
The Issue Does Petitioner, Department of Financial Services (DFS), have authority to determine if Respondent, Alberto Luis Sotero (Mr. Sotero) and Respondent, FalconTrust Group, Inc. (FalconTrust), wrongfully took or witheld premium funds owed an insurance company while a civil action between the insurance company and Mr. Sotero and FalconTrust pends in Circuit Court presenting the same issues? Should the insurance agent license of Mr. Sotero be disciplined for alleged violations of Sections 626.561(1), 626.611(7), 626.611(10), 626.611(13), and 626.621(4), Florida Statutes (2007)?1. Should the insurance agency license of FalconTrust be disciplined for alleged violations of Section 626.561(1), 626.6215(5)(a), 626.6215(5)(d). 626.6215(5)(f), and 626.6215(5)(k), Florida Statutes?
Findings Of Fact Based on the testimony and other evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made: Mr. Sotero is licensed by DFS as an insurance agent in Florida and has been at all times material to this matter. He holds license number A249545. FalconTrust is licensed by DFS as an insurance agency in this state and has been at all times material to this matter. It holds license number L014424. Mr. Sotero is an officer and director of FalconTrust and held these positions at all times material to this proceeding. Mr. Sotero also controlled and directed all actions of FalconTrust described in these Findings of Fact. Zurich American Insurance Company is a commercial property and casualty insurance company. FalconTrust Commercial Risk Specialists, Inc., and Zurich-American Insurance Group entered into an "Agency-Company Agreement" (Agency Agreement) that was effective January 1, 1999. The Agency Agreement bound the following Zurich entities, referred to collectively as Zurich: Zurich Insurance Company, U.S. Branch; Zurich American Insurance Company of Illinois; American Guarantee and Liability Insurance Company; American Zurich Insurance Company; and Steadfast Insurance Company. The Agreement specified that FalconTrust was an "independent Agent and not an employee of the Company [Zurich.]". . .. The Agency Agreement also stated: All premiums collected by you [Falcontrust] are our [Zurich's] property and are held by you as trust funds. You have no interest in such premiums and shall make no deduction therefrom before paying same to us [Zurich] except for the commission if any authorized by us in writing to be deducted by you and you shall not under any circumstances make personal use of such funds either in paying expense or otherwise. If the laws or regulations of the above state listed in your address require you to handle premiums in a fiduciary capacity or as trust funds you agree that all premiums of any kind received by or paid to you shall be segregated held apart by you in a premium trust fund account opened by you with a bank insured at all times by the Federal Deposit Insurance Corporation and chargeable to you in a fiduciary capacity as trustee for our benefit and on our behalf and you shall pay such premiums as provided in this agreement. (emphasis supplied. The Agency Agreement commits Zurich to pay FalconTrust commissions "on terms to be negotiated . . . ." It requires FalconTrust to pay "any sub agent or sub producer fees or commissions required." The Agency Agreement also provides: Suspension or termination of this Agreement does not relieve you of the duty to account for and pay us all premiums for which you are responsible in accordance with Section 2 and return commissions for which you are responsible in accordance with Section 3 [the Commission section.] The Agency Agreement was for Mr. Sotero and Falcontrust to submit insurance applications for the Zurich companies to underwrite property and casualty insurance, primarily for long- haul trucking. The Agency Agreement and all the parties contemplated that Mr. Sotero and FalconTrust would deduct agreed-upon commissions from premiums and remit the remaining funds to Zurich. On September 14, 2000, Zurich and Mr. Sotero amended the Agency Agreement to change the due date for premium payments and to replace FalconTrust Group, Inc. (FalconTrust) for FalconTrust Commercial Risk Specialists, Inc., and to replace Zurich-American Insurance Group and Zurich Insurance Company, U.S. Branch, with Zurich U.S. Mr. Sotero and Zurich's authorized agent, Account Executive Sue Marcello, negotiated the terms of the commission agreement as contemplated in the Agency Agreement. Mr. Sotero confirmed the terms in a July 20, 1999, letter to Ms. Marcello. The parties agreed on a two-part commission. One part was to be paid from the premiums upon collection of the premiums. The second part, contingent upon the program continuing for five years, was to be paid by Zurich to Mr. Sotero and FalconTrust. The total commission was 20 percent. FalconTrust and Mr. Sotero were authorized to deduct 13 percent of the commission from premiums before forwarding them to Zurich. The remaining seven percent Zurich was to pay to Mr. Sotero and FalconTrust at the end of the program or after the fifth year anniversary date. The letter spelled out clearly that Zurich would hold the money constituting the seven percent and was entitled to all investment income earned on the money. The passage describing the arrangement reads as follows: Our total commission is 20 percent however Zurich will hold and retain the first 7 percent commission where they are entitle [sic] to earn investment income. I understand that FalconTrust will not benefit from this compounded investment income. However you mentioned you would increase our initial commission that is set at 13 percent currently from time to time depending on FalconTrust reaching their goals, but it will never exceed a total commission of 20 percent. It is to our understanding that the difference will be paid at the end of the program or after the fifth year anniversary date being 12/31/2005, but not earlier than five years. I do understand that if Zurich and/or FalconTrust cancels the program on or before the fourth year being 12/31/2004 that we are not entitle [sic] to our remaining commission that you will be holding. If the program is cancelled after 12/31/2004 by FalconTrust and/or Zurich it is understood that all commission being held will be considered earned. (emphasis added.) Until the program ended, the parties conducted themselves under the Agency Agreement as described in the letter. At some point the parties agreed to decrease the percentage retained by Zurich to five percent and increase the percentage initially paid to and kept by FalconTrust to 15 percent. During the course of the relationship FalconTrust produced approximately $146,000,000 in premiums for Zurich. At all times relevant to this matter, all premium payments, except for the portion deducted by sub-agents and producers before forwarding the payments to Mr. Sotero and FalconTrust were deposited into a trust account. The various sub-agents of FalconTrust collected premiums and forwarded them to FalconTrust, after deducting their commissions, which were a subpart of the FalconTrust 13 percent commission. FalconTrust in turn forwarded the remaining premium funds after deducting the portion of its 13 percent left after the sub-agent deduction. This was consistent with the Agency Agreement and accepted as proper by Zurich at all times. All parties realized that the held-back seven percent, later five percent, was money that Zurich would owe and pay if the conditions for payment were met. The parties conducted themselves in keeping with that understanding. Mr. Sotero and FalconTrust described the practice this way in their Third Amended Complaint in a court proceeding about this dispute: "In accordance with the Commission Agreement, Zurich held the contingency/holdback commission and received investment income thereon." (Emphasis supplied.) In 2006 Zurich decided to end the program. In a letter dated December 8, 2006, Tim Anders, Vice President of Zurich, notified Mr. Sotero that Zurich was terminating the Agency-Company Agreement of January 1, 1999. The letter was specific. It said Zurich was providing "notification of termination of that certain Agency-Company Agreement between Zurich American Insurance Company, Zurich American Insurance Co. of Illinois, American Guarantee and Liability Insurance Co., American Zurich Insurance Company, Steadfast Insurance Company . . . and FalconTrust Grup, Inc. . . ., dated January 1, 1999, . . .." Mr. Sotero wrote asking Zurich to reconsider or at least extend the termination date past the March 15, 2007, date provided in the letter. Zurich agreed to extend the termination date to April 30, 2007. At the time of termination FalconTrust had fulfilled all of the requirements under the Agency-Agreement for receipt of the held-back portion of the commissions. Mr. Sotero asked Zurich to pay the held-back commission amounts. He calculated the amount to exceed $7,000,000. Zurich did not pay the held- back commission amounts. As the program was winding down and the termination date approached, FalconTrust continued to receive premiums. As the Agency Agreement and negotiated commission structure provided, FalconTrust deducted its initial commission from the premium payments. But, reacting to Zurich's failure to begin paying the held back commission amounts, Mr. Sotero engaged in "self help." He deducted at least $6,000,000 from the premium payments from customers, received and deposited in the trust account. He took the money as payment from Zurich of earned and held back commissions.3 Nothing in the Agency Agreement or negotiated commission agreement authorized this action. In March of 2007, Mr. Sotero and FalconTrust also brought suit against Zurich in the Circuit Court for the Eleventh Judicial Circuit, Miami, Florida. The issues in that proceeding include whether Mr. Sotero and FalconTrust wrongfully took premiums and how much Zurich owes them for commissions. As of the final hearing, that cause (Case Number 07-6199-CA-01) remained pending before the court and set for jury trial in August 2010. There is no evidence of a final disposition. But the court has entered a partial Summary Judgment determining that FalconTrust wrongfully took premium funds for the commissions that it maintained Zurich owed. The court's Order concludes that the issue is not whether Zurich owed money to FalconTrust, but whether FalconTrust was entitled to take the funds when it did. Like the undersigned, the court determines that it was not. Between December 8, 2006, the date of the cancelation letter, and April 30, 2007, the program termination date, Mr. Sotero and FalconTrust did not remit to Zurich any of the approximately $6,000,000 in premium payments received. Despite not receiving premiums, Zurich did not cancel or refuse to issue the policies for which the premiums taken by Mr. Sotero and FalconTrust were payment. The policies remained in effect.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Financial Services suspend the license of Adalberto L. Sotero for nine months and suspend the license of FalconTrust Group, Inc. for nine months. DONE AND ENTERED this 15th day of October, 2010, in Tallahassee, Leon County, Florida. S JOHN D. C. NEWTON, II Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 15th day of October, 2010.
The Issue At issue is whether petitioner's request for a bond waiver under the provisions of Section 559.927(10)(b)5, Florida Statutes, should be approved.
Findings Of Fact Petitioner, Consolidated Cruises and Tours, Inc., is a "seller of travel," as that term is defined by Section 559.927(1)(a), Florida Statutes, and was formed in April 1993 by Steven Wolf, its president, to carry on the travel business he had previously operated through Consolidated Cruises, Inc., since October 1987. Effective October 1, 1988, Chapter 88-363, Laws of Florida, codified at Section 559.927, Florida Statutes (1989), required sellers of travel to register with the Department, and to post an annual performance bond. Failure to register with the Department or to conduct business as a seller of travel without the required bond was a violation of law, and subjected the person or business to civil and criminal penalties. Consolidated Cruises, Inc., the business through which Mr. Wolf was operating at the time, did not register with the Department as a seller of travel until November 1, 1991. Effective October 1, 1993, Chapter 93-107, Section 1, Laws of Florida, amended Section 559.927, Florida Statutes, to provide that: The department may waive the bond requirement in this subsection if the seller of travel has had 5 or more consecutive years of experience as a seller of travel in Florida. . . . On or about May 25, 1994, petitioner filed an application for registration as a seller of travel with respondent, Department of Agriculture and Consumer Affairs (Department), and requested a waiver of the annual performance bond requirement. Pertinent to this case, the request for waiver described the history of Consolidated Cruises, Inc., and Consolidated Cruises and Tours, Inc., as follows: Consolidated Cruises Inc. was established on 10/1/87 as a company that promoted cruises. The sales for the company was minimal for the first 2 years. The principal stock holder was Steven Wolf (100 percent). In March of 1990 Consolidated Cruises added 3 new major stock holders to the company and split the company stock as follows: Steven Wolf - 25 percent Miriam Wolf - 25 percent Yoav Tavory - 25 percent Judy Tavory - 25 percent In April of 1993 Consolidated Cruises ceased to function since the major stock holders had a disagreement as to the dissolution of the company. In the interim, to keep the company going a new corporation was formed by Steven Wolf & Miriam Wolf called, "CONSOLIDATED CRUISES & TOURS INC. For all practical purposes, the company continued to work the same as before but under the auspices of a new company name. In all the years that we have been providing our services, we have never had ONE complaint. On the basis of our past performance, we request that you waive the requested security bond of $10,000. Our previous registration number for CONSOLIDATED CRUISES INC. are as follows: certificate of registration No: 11347 certificate No. 00283 By letter of June 16, 1994, the Department denied petitioner's request for bond waiver. Such denial was premised on the Department's interpretation of Section 559.927, Florida Statutes, as allowing a waiver of the bond requirement only when the "seller of travel has had 5 or more consecutive years of experience as a seller of travel in Florida" that was lawfully obtained, i.e., that such experience occurred while the person or business was duly registered with the Department as required by law.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be rendered denying petitioner's request for a performance bond waiver. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 18th day of January 1995. WILLIAM J. KENDRICK Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 18th day of January 1995. APPENDIX Respondent's proposed findings of fact are addressed as follows: Addressed in paragraph 4. Addressed in paragraph 4, otherwise not relevant. See, paragraph 9. 3-5. Addressed in paragraph 6, otherwise unnecessary detail. 6. Addressed in paragraph 3, otherwise unnecessary detail. 7 & 8. Addressed in paragraph 5. 9. Addressed in paragraphs 4 and 5. 10 & 11. Addressed in paragraph 6. 12. Rejected as not relevant since the Department did not specify such reason as a basis for denial in its letter of June 16, 1994, did not seek to amend its reasons for denial prior to hearing, and did not raise such issue until after petitioner had presented its case-in-chief. See paragraph 9. COPIES FURNISHED: Steven Wolf, President Consolidated Cruises and Tours, Inc. 8181 Northwest 8th Manor Plantation, Florida 33324 Jay S. Levenstein, Esquire Department of Agriculture and Consumer Services Room 515 Mayo Building Tallahassee, Florida 32399-0800 The Honorable Bob Crawford Commissioner of Agriculture The Capitol, PL - 10 Tallahassee, Florida 32399-0810 Richard Tritschler General Counsel Department of Agriculture The Capitol, PL - 10 Tallahassee, Florida 32399-0810
Findings Of Fact The Respondent was licensed as a General Lines Insurance Agent at all times material hereto. He generally wrote insurance for the various insurance companies he represented through General Agents such as Frank MacNeill and Son, Inc. and Amalex, Inc. The Respondent operated his insurance agency under the corporate name Pennington Insurance Agency, Inc. The Respondent was owner and President of Pennington Insurance Agency, Inc. and exercised supervision and control over its employees, and in particular the employee Earnest L. Middleton. All funds collected from insured pertinent to this proceeding were premium payments and represented trust funds held by the Respondent in a fiduciary capacity on behalf of his General Agent or the insurance companies whose policy contracts generated the premiums. From August through December, 1981, the Respondent engaged in negotiations with representatives of Amalex, Inc. and specifically, Mr. Walter Gibson, President of Amalex, Inc. and Mr. Larry Durham of Durham and Company Insurance Agency. These negotiations ultimately led, in November of 1981, to the Respondent becoming an employee-agent of Amalex, Inc. The Respondent was to be paid a salary which was to be an advance upon commissions earned at the rate of 75% on new policies and 60% on "renewals." This commission-salary arrangement was entered into pursuant to an oral agreement between the Respondent and Walter Gibson of Amalex. There was never any written contract between the Respondent and Amalex, Inc. delineating the employment arrangement or the compensation which Respondent was to be provided by Amalex, Inc. in return for his "brokering" business for Amalex, Inc. There was never any written contract concerning the method of forwarding of premium payments to Amalex, Inc. This oral agreement was modified at the behest of Amalex, Inc. on or about March 19, 1982, so as to reduce the compensation of the Respondent. The Respondent's new compensation under the modified arrangement provided for a 60% draw against commissions for new business and a 50% draw against commissions on renewal business. The Respondent received payments from Amalex, Inc., totaling $5,980 as advances on commissions for times pertinent to the allegations in the Complaints. The regular course of business practice established by Amalex, Inc. with the Respondent, required the Respondent to forward premium collections within 45 days of receiving a statement or bill from Amalex, Inc. During the period August, 1981, until December, 1981, numerous discussions and negotiations were had between the Respondent and Mr. Gibson in an effort to work out the details of the employment terms between Respondent and Amalex, Inc. Additionally, these negotiations hinged somewhat upon a proposed merger of Durham and Company and Amalex, Inc., which never occurred. In any event, the Respondent held the good faith belief that during the period of time from August, 1981, through December, 1981, until their business relationship got successfully started, that he had been authorized by Mr. Gibson to retain all premiums on commercial lines policies written by his office. In his testimony, Mr. Gibson disagreed with the Respondent's version of their arrangement concerning business insurance premiums. There was clearly a disagreement between Gibson and Respondent as to what the terms of the Respondent's compensation were to be. In fact, the Respondent received notice no later than March 19, 1982, in a letter from Gibson to the Respondent, that indeed there was a dispute as to his compensation arrangement and the manner in which he was to remit premium payments to Amalex, Inc. In a letter to Mr. Gibson of May 27, 1982, the Respondent reveals his recollection of the oral agreement and states it to be his belief that he was authorized to retain commercial account premiums only from September 1, 1981, through December, 1981. The letter reveals, by its content, that he was aware that Amalex, Inc. opposed his retention of commercial policy premiums, at least after December, 1981 (Respondent's Exhibit 5, in evidence). The Respondent was clearly not permitted by Amalex to retain all premiums collected on commercial policies sold by him during the entire period of their business relationship. Indeed, many of the commercial accounts were, in fact, paid when collected, in whole or in part, by the Respondent during the business relationship with Amalex which extended through most of 1982. One account, the American Legion Policy Account, eventually was paid in full by Respondent to Amalex. The Respondent's testimony and that of his former employee, Ernest Middleton, is at odds with that of Mr. Gibson, the president of Amalex and the Respondent's own testimony, in different portions of the record, is to some extent, inconsistent. At one point the Respondent indicated that he was authorized to retain all commercial premiums for coverage of his office operating expenses. At another point, both he and Middleton testified there was an allowance of $1,200 a week from Amalex for expenses to run the office. At still another point, by way of an exhibit (Petitioner's Exhibit No. 13 in evidence), the Respondent appeared to be of the belief that the expense allowance from Amalex was to be $400 per week for operating his office. In any event, by his letter of May 27, 1982, to Amalex and Mr. Gibson, the Respondent clearly reveals it to be his belief that the authorization to retain all commercial account premiums did not extend beyond December, 1981, which arrangement is more logical since it was, in the Respondent's own words, an arrangement to cover expenses until the business "got rolling." Thus the Respondent knew no later than May 27, 1982, by his own admission, that he was expected, after December, 1981, to forward all premium payments, both on personal lines and commercial lines policies to Amalex or the policies would be cancelled. This letter, the letter of March 19, 1982, from Mr. Gibson to the Respondent, portions of the Respondent's testimony, as well as the testimony of Mr. Gibson and his employee Mary Stratton, taken together, belies the Respondent's assertion that he could retain the commercial premiums to cover his own office expenses without accounting for them and forwarding them to Amalex. Such was clearly not the case after December 31, 1981, at the very latest. The Respondent additionally had agency contracts with Frank MacNeill and Son, Inc., a General Agent, for which concern the Respondent wrote insurance policies. These contracts required him to forward premium collections within 30 days of receipt of them from the insured. On or about March 20, 1984, the Respondent sold to Ollie Rodgers an automobile insurance policy and collected $211 from Mr. Rodgers as a down payment and also received $428 from National Premium Budget Plan for financing the balance of the premium payment over time. Count 1 of the Administrative Complaint involves solely the Ollie Rodgers policy. That policy was brokered through Frank MacNeill and Son, Inc. This only count concerning the MacNeill business arrangement with the Respondent does not charge a general failure to remit premiums to MacNeill in violation of the agency agreements and Chapter 626, Florida Statutes. Thus, although evidence is of record concerning the Ollie Rodgers incident and several thousand dollars in disputed other premium amounts MacNeill maintains the Respondent owes it, the charge in the Administrative Complaint concerning MacNeilles and the Respondent's business arrangement, and the question concerning the withholding of premiums due MacNeill, only concerns the Ollie Rodgers' policy and account. The alleged failure of the Respondent to remit several thousand dollars in premiums owed to Frank MacNeill contained in the testimony of Petitioner's witnesses at hearing, specifically Joe McCurdy, the secretary- treasurer of Frank MacNeill and Son, Inc., is not the subject matter of any charge or allegation in the Administrative Complaint. Mr. McCurdy testified that the Respondent had ultimately paid all monies due Frank MacNeill except for $734.23 in court costs and attorneys fees. He was the only witness testifying concerning the Frank MacNeill business arrangement and none of his testimony linked the premiums paid by Ollie Rodgers to the Respondent with any delinquent premium amount actually owed Frank MacNeill and Son, Inc. There was no testimony tying the account balance which Pennington ultimately paid MacNeill, after litigation ensued, with the Ollie Rodgers account and premium amount paid to the Respondent by Rodgers. There is no specific proof that the Ollie Rodgers account itself was unpaid by the Respondent. From March 4, 1982, to November 9, 1982, the Respondent received premium payments from one Irving Herman in the amount of $7,161 on a commercial insurance premium account. The Respondent forwarded some of these funds to Amalex, Inc., but an outstanding balance of $2,353 remains which has not been paid by the Respondent to Amalex. The Respondent has asserted that he could lawfully retain this balance because it was a commercial account and he was authorized to keep all premiums for commercial insurance to pay his office expenses. For the reasons found above, the Respondent was not authorized to retain any commercial premium funds in his own account and in his own business after December, 1981, as he admits himself in his letter of May 27, 1982, to Gibson of Amalex, Inc. The Respondent was required to forward all the premium payments attributable to the Herman policy, and in this instance, he forwarded only some of them, without accounting to Amalex as to why he retained the balance of the Herman premiums. The Respondent also collected $799 in premium payments from Irving Herman on an individual insurance policy. The Respondent forwarded most of this premium to Amalex, Inc. but retained $95 of it. The business practice of Amalex was to send a monthly statement to the Respondent detailing amounts payable on new business. When a policy was sent to the Respondent for coverage he had written, an invoice was included. Additionally, Amalex and its president, Mr. Gibson, sent numerous letters to the Respondent requesting payment of the large amount of past due accounts. The premium amounts paid by Mr. Herman for his individual policy and his commercial policy to Respondent was received on behalf of his General Agent, Amalex, a substantial amount of which he failed to remit. Since the above amounts were not remitted to Amalex, Inc. by the Respondent, it can only be inferred that he used the unremitted funds for his own purposes. On September 23, 1982, or thereafter, the Respondent collected premium payments from Joseph S. Middleton on behalf of his company, Florida Lamps, Inc., in the amount of $1,467. The Respondent remitted a portion of this to Amalex, but retained $917.55. This premium, for insurance for that business, was collected for insurance written well after the Respondent was on notice from Amalex that he was not authorized to retain premiums collected on commercial lines or business insurance, as found above. A monthly statement, invoice, as well as numerous letters were directed from Amalex to the Respondent requesting payment of this past due amount, to no avail. Thus, the above- referenced balance of the premiums related to the Florida Lamps, Inc. insurance policy and account were retained by the Respondent for his and his agency's own benefit and use rather than remitted to Amalex, the entity entitled to them. The Respondent failed to properly account to Amalex regarding the use of or the whereabouts of these funds. On or about October 20, 1982, the Respondent received from Eric Gunderson, on behalf of Eric's Garage, $182, which represented the premium down payment on a garage liability policy, a type of commercial-lines insurance. About the same time, the Respondent also received $438 as the remaining balance., on the premium on this policy from the Capitol Premium Plan, Inc., a premium financing company. This premium payment was received by the Respondent well after notice by Amalex, his General Agent, that it was not acceptable for the Respondent to retain commercial account premiums on policies written for companies for whom Amalex was General Agent. None of this premium payment was ever forwarded to Amalex, even after repeated demands for it. Rather, the premium funds were retained by the Respondent and used for other purposes. On March 3, 1982, the Respondent sold to Citiweld Welding Supply, a package business policy including workers' compensation coverage issued by the Insurance Company of North America through Amalex, Inc., as its General Agent. The Respondent collected a total of $2,162.62 in premium payments from Citiweld. He collected those payments in six monthly installments following a down payment of $500. The Respondent made monthly payments of $163 to Amalex, Inc., and then later monthly payments of $153. The Respondent collected a total of $2,162.62 which was $80.62 in excess of the actual premium due on the policy. This policy was not financed by a financing agreement, which might be characterized by an additional financing fee, thus the Respondent collected $80.62 in excess of the amount of premium due on the policy. The Respondent ultimately remitted to Amalex a total of $1,275. Thus, $807 is still due and owing to Amalex by the Respondent. The Respondent, according to his own former employee, Earnest Middleton, was collecting an additional $20 a month service charge on the Citiweld account. There is no evidence that he was authorized to collect the additional $20 per month service charge, and no portion of that service charge was ever forwarded to Amalex. It was retained by the Respondent. The fact that the Respondent was making periodic monthly payments to Amalex during this period, without the existence of a financing agreement with the insured, corroborates the position of Amalex, established by Mr. Gibson and Ms. Stratton, that there was no authority to withhold commercial account premium payments at this time, and that premiums due Amalex from the Respondent were to be paid pursuant to monthly statements or billings sent to the Respondent. Ms. Stratton's and Mr. Gibson's testimony in this regard is corroborated by the letter of March 19, 1982, to the Respondent from Gibson (in evidence), wherein he was informed that such commercial insurance business and related premiums should be billed and paid for on a monthly basis. On or about August 31, 1981, Respondent sold a package workman's compensation policy to B & L Groceries, Inc. to be issued through Amalex, Inc., who represented the insurance company for whom the policy was written. The Respondent received approximately $3,350 from B & L Groceries, which represented the premium on the above policies. The premium payments were not forwarded in the regular course of business to Amalex, the General Agent. On or about December 17, 1981, the Respondent sold to B & L Seafood Restaurant, Inc., a package commercial insurance policy and endorsement also issued through Amalex. The Respondent collected $2,112 premium on that policy. That premium was not forwarded in the regular course of business to Amalex. On September 1, 1981, the Respondent sold to Parker's Septic Tank Company, a general liability and business automobile insurance policy, also issued through the General Agent, Amalex, Inc. He collected from that business approximately $2,542 as premium payment on the insurance policies. The automobile policy was cancelled thereafter, such that a total net premium of $1,056 remained due and owing to Amalex, which the Respondent failed to forward in the regular course of business. These policies sold to B & L Groceries, B & L Seafood Restaurant and Parker's Septic Tank Company, were sold during the time when the Respondent believed that he was authorized by Amalex, Inc., and its president, Mr. Gibson, to retain premiums on all such commercial or business insurance policies to cover his office expenses, and thus it cannot be found that he willfully retained and misappropriated those premiums, although Amalex's entitlement to those premiums was later the subject of a civil action between the Respondent and Amalex, Inc., such that Amalex did demand payment of those premiums, which the Respondent failed to do. On or about March 4, 1982, the Respondent sold to The Cypress Gallery a package business insurance policy and endorsement issued through Amalex, Inc. The Respondent collected at least $883 from The Cypress Gallery, representing the earned premium on that policy which was cancelled on July 22, 1982. He failed to forward the earned premium in the regular course of business to Amalex, the General Agent. On March 16, 1982, Respondent sold to Eurohouse Custom Builders, Inc., fire, general liability, automobile and builder's risk policies together with several endorsements issued through Amalex, Inc. He collected premium payments on those policies in the earned amount of $1,197, although the policies were later cancelled after that amount of premium was earned by the insurance company and Amalex. He failed to forward the $1,197 earned premium to Amalex in the regular course of business. On July 9, 1982, the Respondent sold to Byron Hood, a package commercial insurance policy and automobile policies issued through Amalex, Inc., on which the Respondent collected a total premium amount of $1,430 from IMAC, a premium finance company. The Respondent failed to forward this premium amount in the regular course of business to Amalex, Inc. On May 14, 1982, the Respondent sold to Jeanes Swap Shop, a package commercial insurance policy with an endorsement which was issued through Amalex, Inc., and upon which the Respondent collected and received a $314 premium. The Respondent forwarded most of the premium to Amalex, but failed to forward $39 of it. On or about March 31, 1982, the Respondent sold to Lawns Unlimited a commercial policy issued through Amalex, Inc. The Respondent collected and received from Lawns Unlimited $816, which represented the premium payment for that policy. This premium payment was never forwarded to Amalex in its entirety and an earned premium of $242 is still due Amalex as General Agent. On or about July 2, 1982, the Respondent sold to Robert Lewis a package commercial insurance policy issued through Amalex. The Respondent received $500 from Lewis as a premium payment for that policy. The Respondent failed to forward $150 of that premium to Amalex. On or about April 1, 1982, the Respondent sold to Joe Strickland a homeowners and boat insurance policy issued through Amalex, Inc. He collected a premium from Mr. Strickland in the amount of $353 which he failed to forward in the regular course of business to Amalex, the General Agent. This was a personal homeowners and marine insurance policy issued to Mr. Strickland, and the $353 premium could not possibly have been the subject of any misunderstanding concerning Respondent's retention of it for coverage of office expenses. On April 30, 1982, the Respondent sold to "Pop-a Top Lounge" a general liability and fire insurance policy issued through Amalex, Inc. The Respondent collected a premium of $647 on that policy and failed to forward it in the regular course of business to Amalex, the party entitled to it as General Agent. Near the end of 1982, the Respondent sold to Arnold Construction Company various endorsements on its existing business insurance coverage so as to add coverage for additional motor vehicles. That policy and the endorsements were issued through Amalex, Inc. The Respondent collected from Arnold Construction Company a premium payment in the amount of $1,302 and failed to forward it in the regular course of business to Amalex, the General Agent. Numerous requests were made of the Respondent by Amalex, Inc. for the payment of the delinquent premiums the Respondent owed it on all outstanding accounts beginning in March, 1982. In October, 1982, Amalex began requiring cash remissions with applications for insurance written by the Respondent. The Respondent has failed to pay the outstanding account balances representing premium trust fund payments due to Amalex, Inc., such that in excess of $18,000 in outstanding premium payments have not been remitted to that firm. It is true that two of the amounts billed and depicted on Exhibit No. 12 as constituting that approximate $18,000 outstanding premium payment amount, represent $1,368 and $174 for business written in November and December of 1981, during which time the Respondent was under the genuine belief that he had an agreement with Amalex, Inc., to retain in his office all business insurance premium payments. Even though that is the case, and the B & L Groceries, B & L Seafood and Parker Septic Tank Co. premiums are attributable to this time period, the fact remains that the greater portion of the disputed approximate $18,000 amount remains outstanding and has never been paid by the Respondent to Amalex, Inc., the entity entitled to the funds. The amounts collected and not remitted by the Respondent on the insurance accounts delineated above constitute trust funds held in a fiduciary capacity by the Respondent on behalf of the General Agent, Amalex, Inc., who is General Agent for the insurance companies for whom the Respondent wrote the policies.1 The Respondent thus misappropriated these trust funds by failing to remit them in a timely fashion to the General Agent, Amalex, Inc., in the regular course of business. Although the Respondent clearly failed to properly account for and deliver the subject funds, there is no evidence to show that the Respondent was guilty of faulty record keeping in his own agency. In fact, Petitioner did not adduce any competent, substantial evidence to indicate what manner of record keeping the Respondent engaged in, good, bad or indifferent.
Recommendation Having considered the foregoing Findings of Fact and Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses and the pleadings and arguments of the parties, it is, therefore RECOMMENDED: That the Respondent, John Wayne Pennington's General Lines Insurance Agent's license be suspended for a period of two years, in accordance with Section 626.641, Florida Statutes. DONE and RECOMMENDED this 3rd day of March, 1986 in Tallahassee, Florida. P. MICHAEL RUFF, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of March, 1986.
