Findings Of Fact Petitioner is the state agency charged with licensing insurance agents of all types, regulating licensure status, and enforcing the practice standards of licensed agents within the powers granted by the Legislature in Chapter 626, Florida Statutes. At all times material to the disciplinary action, Respondent Mahle was licensed as an insurance agent in the following areas: Life and Health Insurance and Health Insurance. During the last quarter of the year 1988, New Concept Insurance, Inc. mailed brochures to residents of Naples, Florida, which stated that representatives of the company were willing to provide information about long- term care insurance, including nursing facility benefits, to interested parties. Those who wanted to learn more about the insurance were asked to return their name, address and telephone number to the company on an enclosed card. Eleanor Drown responded to the advertisement, and an appointment was arranged for Thomas DiBello and Respondent Mahle to meet with her regarding the insurance program. On November 10, 1988, Thomas DiBello and Respondent Mahle met with Ms. Drown and discussed the benefits of a long-term care policy with a nursing facility daily benefit of one hundred dollars ($100.00). After the discussion, Ms. Drown completed an application for the insurance and gave it to Respondent Mahle, along with a check for five thousand one hundred and eighty-three dollars and forty-nine cents ($5,183.49). During the insurance transaction on November 10, 1988, Ms. Drown was given a receipt which states: This receipt is given and accepted with the express understanding that the insurance you applied for will not be in force until the policy is issued and the first premium is paid in full. If your application cannot be approved, we will promptly refund your money. Application is made to the company checked (/) on this receipt. On another area of the receipt, it is clearly written, as follows: If Acknowledgement of Application does not reach you within 20 days, write to: Mutual Protective Insurance Company, 151 South 75th Street, Omaha, Nebraska 68124. The Respondent Mahle did not forward the application and the check completed by Ms. Drown to Mutual Protective Insurance Company. The check issued by Ms. Drown to Mutual Protective Insurance Company was deposited into the account of New Concept Insurance, Inc. A cashier's check for the same amount of money was issued by New Concept Insurance, Inc. to Ms. Drown on March 7, 1989. The letter from New Concept that was mailed with the check represented that the check was the refund of the money paid to Mutual Protective Insurance Company by Ms. Drown. Mitigation An application for long-term care insurance from a different insurance company was sent to Ms. Drown by Respondent Mahle on March 2, 1989. Although this course of conduct was not directly responsive to the duties owed by the Respondent to Mutual Protective Insurance Company or his customer, Ms. Drown, it does demonstrate a concern about the insurance needs requested by the customer. This conduct also reveals that there was no intention to convert the funds received to the Respondent's own use, and it explains some of the delay in the return of the premium funds to the customer. The Respondent has been an insurance agent for twenty years. This was the only complaint against the Respondent the Hearing Officer was made aware of during the proceedings. The allegations in the Complaint involve a single insurance transaction.
Recommendation Accordingly, it is RECOMMENDED: That the Respondent be found guilty of one violation of Section 626.561(1), Florida Statutes, and one violation of Section 626.611(7), Florida Statutes, during a single insurance transaction. That the Respondent pay an administrative penalty of $500.00 for the two violations of the Insurance Code within thirty days of the imposition of the penalty. That the Respondent be placed upon six month's probation. During this probation period, he should file a report with the Department demonstrating the manner in which he intends to keep accurate business records which assure him, the insurance company, and the customer that he is continuously accounting for premium funds and promptly carrying out his fiduciary responsibilities. That the Respondent's requests for licensure dated October 10, 1989 and May 18, 1990, be granted. DONE and ENTERED this 12th day of September, 1990, in Tallahassee, Leon County, Florida. VERONICA E. DONNELLY 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 12th day of September, 1990. APPENDIX TO RECOMMENDED ORDER IN CASE No. 89-6040 The Petitioner's proposed findings of fact are addressed as follows: Accepted. See HO #2. Accepted. See HO #2. Accepted. Accepted. See HO #5. Accepted. See HO #5. Accepted. See HO #5. Accepted. See HO #5. Rejected. Conclusion of Law. Rejected. See HO #6. Accepted. See HO #7. Accepted. See HO #7. Accepted. See HO #7. Accept that Ms. Drown's funds remained in the insurance agency's financial accounts for four months. Reject that the interest bearing ability of these funds is relevant in any manner to this case. Respondent's proposed findings of fact are addressed as follows: Accepted. See HO #3 and #4. Accepted. See HO #5. Accepted. See HO #5. Accepted. See HO #5. Accepted. Rejected. This testimony was rejected by the hearing officer as self serving. It was not found to be credible. Rejected for the same reasons given immediately above. Accepted, but not particularly probative. Rejected. Contrary to the testimony of Ms. Drown which was believed by the hearing officer. Accepted. Rejected. Contrary to the testimony of Ms. Drown which was believed by the hearing officer. Accept that an application for Penn Treaty Insurance was sent to Ms. Drown on this date. Accepted. Rejected. Contrary to the testimony of Ms. Drown which was believed by the hearing officer. Rejected. Self serving. Not believed or found to be credible by the hearing officer. Accepted. See HO #9. COPIES FURNISHED: C. Christopher Anderson III, Esquire Department of Insurance Division of Legal Services 412 Larson Building Tallahassee, Florida 32399-0300 Mark P. Smith, Esquire GOLDBERG, GOLDSTEIN & BUCKLEY, P.A. 1515 Broadway Post Office Box 2366 Fort Myers, Florida 33902-2366 Honorable Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Don Dowdell, Esquire Department of Insurance The Capitol, Plaza Level Tallahassee, Florida 32399-0300 =================================================================
The Issue Whether Respondent committed the violations alleged in the Administrative Complaint and, if so, what penalties should be imposed.
Findings Of Fact Based upon the evidence adduced at hearing and the record as a whole, the following findings of fact are made: Respondent's Licensure and Work History Respondent is now, and has been at all times material to the instant case, licensed by Petitioner as a general lines (property and casualty) insurance agent. At no time material to the instant case has he been licensed as a surplus lines agent. In the 30 plus years that he has been in the insurance business, no licensing agency has taken any disciplinary action against him. From January of 1997 until July of 1997 (which includes the entire period during which the events described in the Administrative Complaint took place), Respondent worked as an insurance agent for Braishfield of Florida, Inc. (Braishfield), an insurance agency/brokerage firm. (In July of 1997, he started his own insurance agency/brokerage firm, Bandel and Associates, which he still operates.) The Saxony Condominium Association The Saxony Condominium Association (Association) consists of the owners of the 672 units (located in 14 buildings) in the "Saxony" section of the Kings Point condominium development in Delray Beach. The development is approximately seven to ten miles from the Atlantic Ocean. For the past six years, Elinor Lichten has been the president of the Association. The Association's Insurance Committee In August of 1992, before Ms. Lichten became president of the Association, Hurricane Andrew made landfall in the South Florida area and caused extensive property damage. In the years that followed, the premiums that the Association paid for insurance increased dramatically. In February of 1996, in an effort to contain these escalating insurance costs, the Association formed an insurance committee. Ms. Lichten named Dan Miller to serve as the chairman of the committee. Mr. Miller appointed the remaining members on the committee. Ed Greenbaum was among those Mr. Miller appointed to the committee. Ms. Lichten was not a voting member of the committee, although she did attend some (but not all) of the committee's meetings. The Association's Fireman's Fund Policies At the time the insurance committee was formed, the Association was insured by Fireman's Fund. It obtained this insurance coverage through Sedgwick James of Florida, Inc. (Sedgwick). The insurance agent who represented Sedgwick in its dealings with the Association was J. Simione. In October of 1996, the Association received a notice that the Fireman's Fund policies would not be renewed. Upon receiving the notice, Ms. Lichten telephoned Mr. Simione, who advised her that he was "negotiating to reinstate that policy and that in all probability it would be reinstated." Mr. Simione subsequently contacted Ms. Lichten and advised her that the negotiations had been successful. The Fireman's Fund policies were thereafter renewed. The renewed policies had an effective date of December 1, 1996, and an expiration date of December 1, 1997. The Association agreed to the renewal notwithstanding the renewed policies' high premiums and deductibles. Members of the insurance committee, who had met with Mr. Simione "between three to five times" prior to the renewal of the policies, had advised the committee members that there were no better options available and that they should "be absolutely delighted [to] have the coverage [they] had since insurance companies were not renewing policies." When they asked Mr. Simione to "find [a] layered program [for the Association, like those other condominium associations in the area had] where the [risk] is divided so that the premiums are reduced," Mr. Simione told them that it "wasn't possible," explaining that "all of the layering programs [they] had referred to had since fallen apart." The Insurance Committee's Discussions with Respondent Following the renewal of the Fireman's Fund policies, members of insurance committee, at the direction Mr. Miller, "start[ed] to interview" other insurance agents "to see whether or not Mr. Simione's comment to [them concerning the unavailability of a layered program for the Association] had any validity." Respondent was the second agent to be "interview[ed]." He was initially contacted by Ed Greenbaum, who told him that the insurance committee "was very upset by the current coverage package they had" and wanted to see if "there was something better." Respondent spoke subsequently with both Mr. Greenbaum and Mr. Miller. Following this conversation, he sent Mr. Greenbaum the following letter, dated February 23, 1997: It was pleasure talking to you and Dan Miller and I appreciate your candor. Based on the information you provided on the phone, it appears the premiums and deductibles that are currently in force are excessive. My comment is based on what is available in the marketplace today. It appears that the earliest I can sit down and discuss this with the board is in May. My recommendation is that we move our meeting up to March or April. This will enable us to obtain the best possible terms and conditions as we will have ample time prior to the beginning of the hurricane season. The association has nothing to lose and potentially a lot to gain. My evaluation requires a minimum amount of time. After our meeting and a review of the current program and losses, I will be in a position to confirm in writing what improvements can be made. I look forward to hearing from you. Respondent provided the "marketing person" at Braishfield with the information he had been provided by Mr. Greenbaum and Mr. Miller concerning the Association's insurance needs and loss history. The "marketing person" thereupon canvassed the market to determine if there were any alternatives to the Fireman's Fund policies. Such canvassing revealed that there did exist an alternative to the Fireman's Fund policies, in the form of a layered program in which three of the participating insurers were not "authorized insurers," as that term is used in Florida's "Surplus Lines Law." The "marketing person" prepared the following "Statement of Diligent Effort" for Respondent's signature as the "producing agent": Pursuant to [sic] Section 626.914(4), Florida Statutes, requires producing agents to document that a diligent effort has been made to place a risk with at least three (3) authorized insurers prior to contacting a surplus lines agent to export the risk in the surplus lines market. The following form, prescribed by the Department, must be completed IN FULL for each risk. Name of person contacted and telephone number are MANDATORY. COUNTY OF RISK: Palm Beach County NAME OF INSURED: Saxony A-N Condominium Association TYPE OF COVERAGE: Property AUTHORIZED INSURER #1 NAME- Hartford Insurance TELEPHONE NUMBER- 800-824-1732 PERSON CONTACTED- Ben Wilson DATE OF CONTACT- March 21, 1997 REASON FOR DECLINATION- Type of Risk/Property Location AUTHORIZED INSURER #2 NAME- General Accident Ins. TELEPHONE NUMBER- 407-660-1985 PERSON CONTACTED- Bob Rayser DATE OF CONTACT- March 21, 1997 REASON FOR DECLINATION- Type of Risk/Property Location AUTHORIZED INSURER #2 NAME- RISCORP TELEPHONE NUMBER- 800-226-7472 PERSON CONTACTED- Bryan Flowers DATE OF CONTACT- March 21, 1997 REASON FOR DECLINATION- Risk does not qualify for program Respondent signed this "Statement of Diligent Effort" on the line provided for the "[s]ignature of [p]roducing [a]gent." He did so in good faith based upon the representations made to him by the "marketing person." In April of 1997, Respondent met with members of the insurance committee and Ms. Lichten at Mr. Miller's residence to discuss the possibility of the Association obtaining, through Braishfield, the layered program of insurance described above to replace the Fireman's Fund policies that were then in effect. Respondent, on behalf of Braishfield, made a "conceptual" proposal at the meeting. After the meeting, Respondent sent the following letter, dated April 16, 1997, to Dan Miller: It was a pleasure meeting with you and the committee and again I want to apologize for arriving late. Per our discussions, we will provide our final proposal after receiving written confirmation regarding the three year loss history for property and liability. Our proposal will be effective June 1, however we will use whatever date is acceptable to the committee. We anticipate, it will take us approximately two weeks from the time we go into the marketplace until everything is finalized. It appears, there is minimal exposure for equipment, such as heating, cooling and electrical systems. Consequently, we will not include machinery and equipment breakdown in our final proposal. I strongly recommend that you obtain an updated appraisal on your buildings as it is extremely important that your replacement cost reflect today's cost. This will eliminate any potential coinsurance or under insurance problem in the event of a loss. I look forward to working with you and the committee and being appointed as your broker to assist you in all your insurance needs. In May of 1997, Respondent, on behalf of Braishfield, presented a detailed formal written proposal (Braishfield's Written Proposal) to the Association. Braishfield's Written Proposal contained an "Executive Summary" which read as follows: Executive Summary Per our conceptual proposal and correspondence of April 16, we are pleased to present our final program including terms and conditions. Our proposal is based on information provided by the Insurance Committee on policies that are currently in force. Our comparison of coverages incorporates this information. The differences are what we believe to be the key or salient features of each program. The bottom line is, we are offering a substantial premium savings, significantly lower deductibles with comparable coverage. Our recommendation is to appoint Braishfield of Florida as your broker to place all coverage in effect as soon as possible. The "final program" referenced in the "Executive Summary" was a layered program. The "[p]articipating [c]arriers" in the program and their "Best's Ratings" were listed as follows in Braishfield's Written Proposal: PARTICIPATING CARRIERS Property Insurance Carriers Best's Rating Lexington Insurance A++15 General Star Insurance A++7 Royal Surplus Lines A-7 General Liability/Crime New Hampshire Insurance A++15 Directors & Officers Liability Chubb Insurance Group A++15 Umbrella Liability Great American Insurance A+11 The three "carriers" providing "property insurance" coverage were not "authorized insurers," within the meaning of the "Surplus Lines Law." The "[b]enefits of the Braishfield [p]roposed [p]rogram [o]ver [c]urrent [p]rogram" were described in Braishfield's Written Proposal as follows: A Premium Savings of $42,529 Annually.* No Coinsurance Penalty. A 2% Deductible per building as respect to the perils of wind and hail. A $5,000,000 limit for Excess Liability A $5,000 AOP Deductible * Our premium savings is based on the following: Company Coverage Premiums Fireman's Fund Package $144,071 Fireman's Fund Umbrella $2,168 TOTAL $146,239 $ 12,966 (Agent's Fee) TOTAL $159,205 Proposal Cancellation Date June 1, 1997 Pro Rata Return Premium- $79,761 Short Rate Return Premium- $71,801 NOTE: A $1,000,000 Umbrella would produce a further savings of $3,395 Braishfield's Written Proposal also contained a "Program Comparison," which provided as follows: Coverage Current Proposed Program Program $20,454,000 Blanket As Per Limit on Schedule Real and Personal Property Coinsurance Yes No Demolition $250,000 Cost Law & $5,000,000 $500,000 Ordinance Deductible -Wind 3% of $20,454,00 2% Per Building -AOP $10,000 $5,000 Valuation Replacement Cost Re- Placement Cost Unnamed Yes See Note Storm Deductible Umbrella $1,000,00 $5,000,000 Limit NOTE: Our comparison does not include unnamed storm wind coverage. This will be discussed during the presentation. Respondent met with the committee members and Ms. Lichten for about eight hours on or about May 6, 1997. At the meeting, he explained Braishfield's Written Proposal in detail and answered questions. On or about May 9, 1997, Respondent sent the following letter to Mr. Miller for the insurance committee's consideration: The benefits to the association under Braishfield's proposal are: A $5,000 AOP deductible Significantly lower premium No co-insurance penalty A superior wind deductible in the event of a catastrophe such a hurricane. The elimination of any rate increase in 1997 even if this is a bad year for the insurance industry. Outstanding insurance service will include a renewal strategy meeting 120 days prior to expiration. This meeting will disclose options, market conditions and pricing projections. This will allow the committee to act proactively instead of reactively in the best interest of the association. -$5,000,000 Umbrella. One other point to consider involves the payment of premium. If you cancel the Fireman's Fund Package policy on June 1, the earned premium is estimated to be $72,035. If you include a short rate penalty this increases to $79,239. Including the May installment the association has paid $96,165. The difference or the return premium due the association is $24,130 which should be refunded within 60 days. Since you have paid more premium than is earned no payment should be made for June. This enables the association to apply June's payment of $12,015 toward the down payment under Braishfield's program of $26,557.16. The net amount the association has to come up with is $14,542.16. I trust this will be helpful to the committee. It has not been shown that that Respondent at any time knowingly provided the Association (through its officers and representatives) with any false or misleading information or that he knowingly, with the intent to deceive, hid any information from the Association. He disclosed, among other things, that Braishfield's proposed layered program, unlike the Fireman's Fund policies, included "unauthorized insurers" and explained the differences between "unauthorized" and "authorized" insurers. In explaining these differences, he talked about the Florida Insurance Guaranty Act, which protects those insured by "authorized insurers" in the event of insurer insolvency, but does not offer similar protection to those insured by "unauthorized insurers." Respondent also advised that the mid- term cancellation of the Fireman's Fund policies would result in a "short rate" penalty and, in addition, he discussed how Braishfield's proposed layered program would be financed and the interest rates that would be charged. The Association's Acceptance of Braishfield's Written Proposal The insurance committee brought Braishfield's Written Proposal before the Association's board of directors, which voted 15 to 14 in favor of accepting the proposal and replacing the Fireman's Fund policies with the layered program proposed by Braishfield. Post-Acceptance Activities After learning of the results of the vote, Respondent sent the following letter, dated May 27, 1997, to Mr. Miller: I was delighted to hear that the board has made their decision in favor of Braishfield. If we are looking at a May 31, 1997, effective date it is essential that the following matters be addressed immediately: The original finance agreement signed in the appropriate places indicated by "x." A check in the amount of $26,557.67 should be made payable to Braishfield of Florida for the down payment. Both the finance agreement and the check must be available to be picked up by me prior to May 31, 1997. A broker of record letter naming Braishfield on the Director's and Officer's liability policy must be executed and signed. The specific policy number should be included in the caption. A sample letter was included in our final proposal. We will be sending you a completed statement of values form which will require signature of a board or insurance committee member. I have taken the liberty of drafting a letter advising the agent to cancel all coverages effective May 31, 1997. Included is a request to confirm the return premium due the association as well as any unearned fee that will be returned. This letter should be written on Saxony letterhead and signed by you or the President of the association. In accordance with Respondent's suggestion, Ms. Lichten sent the following letter, dated May 28, 1997, to Mr. Simione: Re: Fireman's Commercial Insurance Pkg. Policy #S15MZX80662013 Fireman's Umbrella Insurance Policy #XSC 00074217738 Dear Mr. Simione: Effective May 31, 1997, please cancel above captioned policies. The Saxony Board of Directors at a Special Meeting held on May 27, 1997 voted to appoint a new agent. Please acknowledge the above cancellation in writing and also confirm the return premium due under each policy, including any penalty. Confirmation of any unearned brokerage fee should also be included. All calculations should be based on a May 31, 1997 cancellation date. Thank you for your cooperation and consideration you have given Saxony over the past few years. The following day, May 29, 1997, Ms. Lichten sent the following letter, with the described enclosures, to Respondent: Enclosed herewith please find the following: Duly signed Finance Agreement for our Insurance as agreed upon. Check #001 payable to Braishfield of Florida date May 28, 1997 drawn on Sun Trust in the amount of $26,557.67, which represents our down payment. Please send us [a] letter acknowledging receipt of the above together with [a] letter indicating that we will indeed have insurance as we agreed to commencing May 31, 1997. Looking forward to working with you. That same day, May 29, 1997, Respondent sent Ms. Lichten "copies of binders confirming coverage effective May 31, 1997 as per [Braishfield's] May 6th proposal." On June 5, 1997, Ms. Lichten sent Mr. Simione a signed (by Ms. Lichten) and dated (May 29, 1997) "Cancellation Request/Policy Release" form formally requesting cancellation of the Fireman's Fund policies, effective May 31, 1997. On or about June 20, 1997, Ms. Lichten was sent a Certificate of Insurance "certify[ing] that the policies listed [which had been described in Braishfield's Written Proposal] ha[d] been issued to the [Association] for the policy period indicated [May 31, 1997, to May 31, 1998]." On or about June 30, 1997, the appraiser that the Association had hired (Allied Appraisal Service) completed the "updated appraisal on [the Association's] buildings" that Respondent had recommended. Respondent reviewed the appraisal report and prepared a written analysis of the report, which he subsequently discussed with the members of the insurance committee and Ms. Lichten. In his written analysis, Respondent stated, among other things, the following: This proposal analyzes the appraisal made by Allied Appraisal Service on June 30, covering the building and surrounding improvements at Saxony "E," Delray Beach, Florida 33446. The purpose is two fold. To ascertain if the values being reported to the insurance companies reflect as closely as possible the exposure at risk. This includes the impact on coverages such as limits and deductibles. The other area is the premium which includes various options. The property coverage is underwritten in a layered program using three companies. The total limit of coverage is $20,454,000, which is subject to a sublimit per building of $1,461,000. Based on the updated appraisal, the 100% replacement cost on buildings and improvements is $24,561,978 which breaks down to $1,754,427 per building. These amounts were arrived at by eliminating and or reducing those items that were not the responsibility of the association. Other adjustments were made regarding contingencies and contractor's profit which should be discussed. The breakdown is provided on Exhibit I attached. The difference or the amount of increase required to comply with the appraisal is $4,107,978. The change in values increases the wind deductible from $29,220 to $35,088 per building. On or about July 18, 1997, Respondent (who, by this time, had left the employ of Braishfield and had started his own insurance agency/brokerage firm) sent Ms. Lichten a letter, which read as follows: Per our meeting with the insurance committee on Wednesday, July 16, it was recommended the building values be amended based on the property appraisal made by Allied Appraisal Service[] on June 30, 1997. The 100% replacement value including improvements is $24,561,978. The total amount of insurance in force is $20,454,000. The net result is a[n] increase of $4,107,978. Also included in the appraisal is the cost to change certain items revised by current building codes. This is known as law or ordinance coverage. We recommend an increase in the limit by $850,000 to $1,350,000 to cover the additional exposure. Both of the above increases place the property insurance in compliance with the appraisal. The underwriter has agreed to provide blanket coverage using 90% coinsurance. The blanket amount excluding law or ordinance coverage is $22,105,760. This is an improvement over the existing program as the blanket amount would apply to any one loss and the basis for determining the premium would be significantly less. Using an effective date of July 31, the additional premium including taxes and fees is $8,446.20. In addition to the improvement in coverage and key deductibles, our program provides a net savings in excess of $34,000 a year over the Fireman's Fund policy. The changes that Respondent had recommended based upon the "updated Appraisal" were "bound," as Respondent advised Ms. Lichten by the following letter dated August 12, 1997: This will confirm that effective July 31, the following changes have been bound: The total insurable value increased to $22,105,780. The Law or Ordinance coverage increased to $1,350,000. Coverage is on a blanket basis. The coinsurance clause has been amended to 90%. The 2% wind deductible per building is increased to $31,580. All of these changes were based on the property appraisal made by Allied Appraisal Service on June 30, with some exceptions, such as Misc. & Contingencies and Overhead/Profits. It was agreed by the insurance committee not to include these items. Attached is our invoice amount of $8,446.20 representing the additional premium due hereunder. Please make your check payable to Braishfield of Florida and send it to me. In October of 1997, Respondent submitted a renewal proposal to the Association. The proposal was accepted and renewed coverage was bound, effective December 1, 1997, for a period of three years.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department issue a final order dismissing the Administrative Complaint issued against Respondent. DONE AND ENTERED this 7th day of July, 2000, in Tallahassee, Leon County, Florida. STUART M. LERNER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 7th day of July, 2000.
Findings Of Fact Respondent holds a property and casualty insurance license, life and health insurance license, and life insurance license for the State of Florida. She has held her property and casualty license for about 20 years. In 1976, she was employed as an agent for the Orlando office of Commonwealth insurance agency, which she purchased in 1977 or 1978. She continues to own the Commonwealth agency, which is the agency involved in this case. Respondent has never previously been disciplined. In 1979 or 1980, Respondent was appointed to the board of directors of the Local Independent Agents Association, Central Florida chapter. She has continuously served on the board of directors of the organization ever since. She served as president of the association until September, 1991, when her term expired. During her tenure as president, the local association won the Walter H. Bennett award as the best local association in the country. Since May, 1986, Commonwealth had carried the insurance for the owner of the subject premises, which is a 12,000 square foot commercial block building located at 923 West Church Street in Orlando. In July, 1987, the insurer refused to renew the policy on the grounds of the age of the building. Ruth Blint of Commonwealth assured the owner that she would place the insurance with another insurer. Mrs. Blint is a longtime employee of the agency and is in charge of commercial accounts of this type. Mrs. Blint was a dependable, competent employee on whom Respondent reasonably relied. Mrs. Blint contacted Dana Roehrig and Associates Inc. (Dana Roehrig), which is an insurance wholesaler. Commonwealth had done considerable business with Dana Roehrig in the past. Dealing with a number of property and casualty agents, Dana Roehrig secures insurers for the business solicited by the agents. Dana Roehrig itself is not an insurance agent. In this case, Dana Roehrig served as the issuing agent and agreed to issue the policy on behalf of American Empire Surplus Lines. The annual premium would be $5027, excluding taxes and fees. This premium was for the above- described premises, as well as another building located next door. The policy was issued effective July 21, 1987. It shows that the producing agency is Commonwealth and the producer is Dana Roehrig. The policy was countersigned on August 12, 1987, by a representative of the insurer. On July 21, 1987, the insured gave Mrs. Blint a check in the amount of $1000 payable to Commonwealth. This represented a downpayment on the premium for the American Empire policy. The check was deposited in Commonwealth's checking account and evidently forwarded to Dana Roehrig. On July 31, 1987, Dana Roehrig issued its monthly statement to Commonwealth. The statement, which involves only the subject policy, reflects a balance due of $3700.86. The gross premium is $5027. The commission amount of $502.70 is shown beside the gross commission. Below the gross premium is a $25 policy fee, $151.56 in state tax, and a deduction entered July 31, 1987, for $1000, which represents the premium downpayment. When the commission is deducted from the other entries, the balance is, as indicated, $3700.86. The bottom of the statement reads: "Payment is due in our office by August 14, 1987." No further payments were made by the insured or Commonwealth in August. The August 31, 1987, statement is identical to the July statement except that the bottom reads: "Payment is due in our office by September 14, 1987." On September 2, 1987, the insured gave Commonwealth a check for $2885.16. This payment appears to have been in connection with the insured's decision to delete the coverage on the adjoining building, which is not otherwise related to this case. An endorsement to the policy reflects that, in consideration of a returned premium of $1126 and sales tax of $33.78, all coverages are deleted for the adjoining building. The September 30 statement shows the $3700.86 balance brought forward from the preceding statement and deductions for the returned premium and sales tax totalling $1159.78. After reducing the credit to adjust for the unearned commission of $112.60 (which was part of the original commission of $502.70 for which Commonwealth had already received credit), the net deduction arising from the deleted coverage was $1047.18. Thus, the remaining balance for the subject property was $2653.68. In addition to showing the net sum due of $944.59 on an unrelated policy, the September 30 statement contained the usual notation that payment was due by the 12th of the following month. However, the statement contained a new line showing the aging of the receivable and showing, incorrectly, that $3700.86 was due for more than 90 days. As noted above, the remaining balance was $2653.68, which was first invoiced 90 days previously. Because it has not been paid the remaining balance on the subject policy, Dana Roehrig issued a notice of cancellation sometime during the period of October 16-19, 1987. The notice, which was sent to the insured and Commonwealth, advised that the policy "is hereby cancelled" effective 12:01 a.m. October 29, 1987. It was the policy of Dana Roehrig to send such notices about ten days in advance with two or three days added for mailing. One purpose of the notice is to allow the insured and agency to make the payment before the deadline and avoid cancellation of the policy. However, the policy of Dana Roehrig is not to reinstate policies if payments are received after the effective date of cancellation. Upon receiving the notice of cancellation, the insured immediately contacted Mrs. Blint. She assured him not to be concerned and that all would be taken care of. She told him that the property was still insured. The insured reasonably relied upon this information. The next time that the insured became involved was when the building's ceiling collapsed in June, 1988. He called Mrs. Blint to report the loss. After an adjuster investigated the claim, the insured heard nothing for months. He tried to reach Respondent, but she did not return his calls. Only after hiring an attorney did the insured learn that the cancellation in October, 1987, had taken effect and the property was uninsured. Notwithstanding the cancellation of the policy, the October 31 statement was identical to the September 30 statement except that payment was due by November 12, rather than October 12, and the aging information had been deleted. By check dated November 12, 1987, Commonwealth remitted to Dana Roehrig $3598.27, which was the total amount due on the October 30 statement. Dana Roehrig deposited the check and it cleared. The November 30 statement reflected zero balances due on the subject policy, as well as on the unrelated policy. However, the last entry shows the name of the subject insured and a credit to Commonwealth of $2717 plus sales tax of $81.51 minus a commission readjustment of $271.70 for a net credit of $2526.81. The record does not explain why the net credit does not equal $2653.68, which was the net amount due. It would appear that Dana Roehrig retained the difference of $125.87 plus the downpayment of $1000 for a total of $1125.87. It is possible that this amount is intended to represent the earned premium. Endorsement #1 on the policy states that the minimum earned premium, in the event of cancellation, was $1257. By check dated December 23, 1987, Dana Roehrig issued Commonwealth a check in the amount of $2526.81. The December 31 statement reflected the payment and showed a zero balance due. The record is otherwise silent as to what transpired following the issuance of the notice of cancellation. Neither Mrs. Blint nor Dana Roehrig representatives from Orlando testified. The only direct evidence pertaining to the period between December 31, 1987, and the claim the following summer is a memorandum from a Dana Roehrig representative to Mrs. Blint dated March 24, 1988. The memorandum references the insured and states in its entirety: Per our conversation of today, attached please find the copy of the cancellation notice & also a copy of the cancellation endorsement on the above captioned, which was cancelled effective 10/29/87. If you should have any questions, please call. Regardless of the ambiguity created by the monthly statements, which were not well coordinated with the cancellation procedure, Mrs. Blint was aware in late March, 1988, that there was a problem with the policy. She should have advised the insured, who presumably could have procured other insurance. Regardless whether the June, 1988, claim would have been covered, the ensuing litigation would not have involved coverage questions arising out of the cancellation of the policy if Mrs. Blint had communicated the problem to the insured when she received the March memorandum. Following the discovery that the policy had in fact been cancelled, the insured demanded that Respondent return the previously paid premiums. Based on advice of counsel, Respondent refused to do so until a representative of Petitioner demanded that she return the premiums. At that time, she obtained a cashiers check payable to the insured, dated June 1, 1990, and in the amount of $2526.81. Although this equals the check that Dana Roehrig returned to Commonwealth in December, 1987, the insured actually paid Commonwealth $1000 down and $2885.16 for a total of $3885.16. This discrepancy appears not to have been noticed as neither Petitioner nor the insured has evidently made further demands upon Respondent for return of premiums paid. The insured ultimately commenced a legal action against Commonwealth, Dana Roehrig, and American Empire. At the time of the hearing, the litigation remains pending.
Recommendation Based on the foregoing, it is hereby recommended that the Department of Insurance and Treasurer enter a final order finding Respondent guilty of violating Sections 626.561(1) and, thus, 626.621(2), Florida Statutes, and, pursuant to Sections 626.681(1) and 626.691, Florida Statutes, imposing an administrative fine of $1002.70, and placing her insurance licenses on probation for a period of one year from the date of the final order. If Respondent fails to pay the entire fine within 30 days of the date of the final order, the final order should provide, pursuant to Section 626.681(3), Florida Statutes, that the probation is automatically replaced by a one-year suspension. RECOMMENDED this 5th day of February, 1992, in Tallahassee, Florida. ROBERT E. MEALE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 5th day of February, 1992. COPIES FURNISHED: Hon. Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, FL 32399-0300 Bill O'Neil, General Counsel Department of Insurance The Capitol, Plaza Level Tallahassee, FL 32399-0300 James A. Bossart Division of Legal Affairs Department of Insurance 412 Larson Building Tallahassee, FL 32399-0300 Thomas F. Woods Gatlin, Woods, et al. 1709-D Mahan Drive Tallahassee, FL 32308
Findings Of Fact At all times pertinent to this proceeding Respondent, HOWARD P. HAUSER, was eligible for licensure and licensed in this state by the Florida Department of Insurance as a Life and Health Insurance Agent; General Lines Insurance Agent - Property, Casualty, Surety, and Miscellaneous Lines; and Legal Expense Insurance Agent. At all times pertinent hereto, Respondent was the registered agent and an officer or director of Hauser and Associates Insurance Agency, Incorporated of 7770 Davie Road Extension, Hollywood, Florida. Beginning on or about January 1, 1986, and continuing through August 31, 1987, Respondent represented to one of his clients that he had obtained insurance coverage for that client's three restaurants. This representation of coverage was false. Respondent received from the client insurance premium payments of $56,550.00, more or less, for the insurance of the client's three restaurants. These funds were obtained by Respondent under false pretenses. Respondent provided the mortgagee of one of the restaurants owned by his client with a document purporting to be a certificate of insurance on that restaurant from Scotsdale Insurance Company insuring the restaurant for the period December 11, 1985, to December 11, 1986. Respondent further provided the mortgagee with a declaration sheet stating that Protective Insurance Company would insure the restaurant from January 1, 1987, to January 1, 1990. Respondent falsified these declaration sheets. Respondent's client suffered no loss, other than the loss of his premium dollars, because of Respondent's misrepresentations as to coverage. Respondent was charged with one count of Grand Theft of the Second Degree, a second degree felony, based on the dealings with his client. Respondent entered a plea of nolo contendere to the charge of Grand Theft of the Second Degree. The Circuit Court, in and for Broward County, Florida, placed Respondent on probation for a period of three years and withheld adjudication of guilt. As a condition of the Order of Probation, the court required that Respondent make restitution to his client in the amount of $56,550.00 and further required that $15,000.00 be paid toward restitution on October 24, 1988, the date Respondent entered his plea of nolo contendere and the date the court entered the Order of Probation. Respondent made a restitution payment of $15,000.00 on October 24, 1988. Respondent has been licensed by Petitioner since April 1972. Although Petitioner has received other complaints about Respondent, no formal action has been previously taken against him. Respondent has been a good citizen, except for this misconduct, and a good family man. Respondent regrets his misconduct. Respondent timely requested a formal hearing after the Administrative Complaint was served upon him.
Recommendation Based on the foregoing findings of fact and conclusions of law it is RECOMMENDED that the Department of Insurance enter a final order which revokes all licenses issued by the Department of Insurance to Respondent, Howard Paul Hauser. DONE and ENTERED this 21st of July, 1989, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON 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 21st day of July, 1989. APPENDIX The proposed findings addressed as follows: of fact submitted on behalf of Petitioner are 1. Addressed in paragraph 1. 2. Addressed in paragraph 2. 3. Addressed in paragraph 6. 4. Addressed in paragraph 3. 5. Addressed in paragraph 4. 6. Addressed in paragraphs 3-4. The proposed findings of fact submitted on behalf of Respondent are addressed as follows: Addressed in paragraph 9. Addressed in paragraph 6. Addressed in paragraph 6. Rejected as being unnecessary to the conclusions reached. Addressed in paragraph 7. Addressed in paragraph 5. Addressed in part in paragraph 7. Rejected in part as being speculative. Rejected as being a conclusion of law and not a finding of fact. COPIES FURNISHED: Robert G. Gough, Esquire, (at the hearing) and Charles Christopher Anderson, Esquire, (on the proposed recommended order) Office of Legal Services 412 Larson Building Tallahassee, Florida 32399-0300 Gary D. Weiner, Esquire, Glendale Federal Building Suite 209 901 Southeast 17th Street Fort Lauderdale, Florida 33316 Honorable Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, FL 32399-0300 Don Dowdell, General Counsel Department of Insurance and Treasurer The Capitol, Plaza Level Tallahassee, FL 32399-0300
The Issue The issue is whether the Respondent, James Edward Hickerson, violated the provisions of Chapters 624, 626 and 627, Florida Statutes, by commission or omission of acts as alleged specifically in the Administrative Complaint. The entry of this order was ; delayed by late filing of the transcript and post hearing briefs, the filing time of which was extended by order dated May 19, 1983. Petitioner submitted post hearing proposed findings of fact in the form of a proposed recommended order. To the extent the proposed findings of fact have not been included in the factual findings in this order, they are specifically rejected as being irrelevant, not being based upon the most credible evidence, or not being a finding of fact.
Findings Of Fact General Findings At all times relative to the Administrative Complaint, the Respondent, James Edward Hickerson, was President of the Hickerson Insurance Agency, Inc., located in Winter Haven, Florida, and held licenses as a surplus lines-property casualty and surety surplus lines, ordinary-combination life (including disability insurance) , general lines-property, casualty, surety and miscellaneous, and disability insurance agent issued by the Insurance Commissioner. The Respondent sold Hickerson Insurance Agency, Inc. , to James Hurst, Jr., as of March 1, 1982. Pursuant to their contract for sale, the Respondent remained liable for all business written prior to March 1, 1982, and the conduct of the business affairs of said agency prior to that date. Count I On January 29, 1982, Patricia Ann Haller applied for a bond as a notary at Hickerson Insurance Agency, Inc.(hereinafter, the Hickerson Agency). Haller paid the Hickerson Agency a total of $61 for a notary seal and as premium on said bond. When Haller did not receive the bond and seal, she called the Hickerson Agency and was advised by a secretary that her application had been lost. She received a letter presumably forwarding a new application but which did not contain an enclosed application. When Haller again called the Hickerson Agency, she was advised to come to the agency and sign a new application. Haller went to the agency and signed a second application in February 1982. When she did not receive the bond and seal, after March 1, 1982, she recontacted the agency and at that time spoke with James Hurst, Jr., the new owner. A search of the office records by James Hurst, Jr. and the office staff revealed no record of the Haller transaction with the Hickerson Agency. The company to which application was made for the bond had no record of receiving the application for Haller's bond. Haller advised James Hurst, Jr., that she no longer wanted the bond. Haller never received the bond or a refund of the money she paid to the Hickerson Agency. Under the contract for purchase of the Hickerson Agency, the Respondent received all premiums and was responsible for all money collected on transactions prior to March 1, 1982. The Respondent was responsible for providing Haller's bond and her premiums. Counts II, III, IV, V and VI The Hickerson Agency billed Southern Mortgage Company of Florida, Inc., in the amount of $86 on December 14, 1981, for the renewal of fire insurance in behalf of Pearly Mae Williams. (See Petitioner's Exhibit 12.) The Hickerson Agency billed United Companies Financial Corporation in the amount of $193 on or before February 17, 1982, for the renewal of homeowner's insurance in behalf of Annie N. Bonney. (See Petitioner's Exhibit 15.) The Hickerson Agency billed United Companies Life Insurance Company in the amount of $9 on February 8, 1982, for homeowner's insurance in behalf of Charles or Della M. Byrd. (See Petitioner'S Exhibit 18.) The Hickerson Agency received a check in the amount of $85 from United Companies, Inc., on December 23, 1981, for the payment of fire insurance for Pearly M. Williams. (See Petitioner's Exhibit 13.) United Companies Financial Corporation paid the Hickerson Agency $193 on January 25, 1982, for fire insurance in behalf of Annie M. Bonney. (See Petitioner's Exhibit 16.) United Companies Financial Corporation paid the Hickerson Agency $9 on February 17, 1982, for fire insurance in behalf of Charles Edward Byrd. (See Petitioner's Exhibit 19.) Under the contract agreement between the Hickerson Agency and Independent Fire Insurance Company, the premiums on insurance placed with Independent Fire Insurance Company were due the 15th of the month following the effective date of the insurance coverage. (See Petitioner's Exhibit 11.) The insurance for Pearly Mae Williams was renewed on January 31, 1982. (See Petitioner's Exhibit 9.) The premium was due and owing and to be paid by the Hickerson Agency on February 15, 1982. Independent Fire Insurance Company renewed the fire insurance for Annie N. Bonney on February 17, 1982. (See Petitioner's Exhibit 14.) The premium was due and owing and to be paid by the Hickerson Agency on March 15, 1982. Independent Fire Insurance Company renewed the insurance of Charles or Della M. Byrd on February 22, 1982. (See Petitioner's Exhibit 17.) The premium was due and owing and to be paid by the Hickerson Agency on March 15, 1982. (See Petitioner's Exhibit 17.) Independent Fire Insurance Company renewed the insurance of Curtis Smith on January 26, 1982, and, pursuant to the Hickerson Agency's agreement with said company, the premium for this insurance was to be paid by the Hickerson Agency on February 15, 1952. (See Petitioner's Exhibit 20.) Independent Fire Insurance Company renewed the insurance of Edna T. Tipper on December 14, 1951, and, pursuant to the Hickerson Agency's agreement with said company, the premium for this insurance was due from the Hickerson Agency on January 15, 1952. (See Petitioner's Exhibit 21.) Regarding the insurance of Curtis Smith, there is no evidence that the Hickerson Agency received payment from the insured or the insured's mortgagee. Concerning Edna T. Tipper, there is no evidence that the Hickerson Agency received payment for said insurance from the insured or the insured's mortgagee. A statement of account similar to Petitioner's Exhibit numbered 22, the statement for February 1952, was provided to the Hickerson Agency each month. As of February 25, 1952, premiums were owed for the insurance in effect on Pearly Mae Williams, Edna T. Tipper, Curtis Smith, Charles Byrd and Annie N. Bonney by the Hickerson Agency. (See Petitioner's Exhibit 22.) On July 14, 1952, Independent Fire Insurance Company advised the Respondent at his home address by certified mail that his account with the company was in arrears in the amount of $531.30 and made demand for payment no later than August 3, 1952. (See Petitioner's Exhibit 22.) On July 19, 1952, the Respondent tendered payment to Independent Fire Insurance Company with his check numbered 2343 in the amount of $531.30. (See Petitioner's Exhibit 24.) A letter from Independent Fire Insurance Company reflects that said company has been paid the premiums due on Williams, Tipper, Smith, Byrd and Bonney. (See Petitioner's Exhibit 25.) The Respondent received payments from Williams (Count II), Bonney (Count III) and Byrd (Count IV) with which he was to pay the premiums due on insurance for them. The Respondent did not pay the premiums for these insureds when due, although he had received the money with which to do so. Count VII Jackie Ricks Colson first insured her 1979 Toyota with the Hickerson Agency in March 1979. In March 1980, she renewed the insurance on her car and added her husband's 1978 Pontiac Transam to the policy. In March 1981, having received notice that her automobile insurance required renewal, Mrs. Colson paid $260 as a down payment to the Hickerson Agency and executed a finance agreement to finance the remainder of the premium with Capital Premium Plan. By financing the premium, Capital Premium Plan paid the Hickerson Agency the premium, and Mrs. Colson made payments as required under the financing agreement to Capital Premium Plan. Mrs. Colson made the payments as required from March 1981 through December 31, 1981, at which time she had paid off all but $3.60 of the borrowed amount, which Capital Premium Plan charged off. Although requested many times to provide a copy of the policy by Mr. and Mrs. Colson, the Hickerson Agency did not do so. As a result thereof, the bank financing Mr. Colson's Transam insured that car and charged Mr. Colson for the insurance. The Colsons have never received a policy of insurance on their cars from the Hickerson Agency. The records of the Hickerson Agency do not reflect that any insurance was in effect between March 17, 1981, and September 1981 on the Toyota and November 1981 on the Transam. The Colsons' Toyota was insured on September 28, 1981, for a period of one year with Dixie Insurance Company for a premium charge of $495. (See Petitioner's Exhibit 28.) Their Pontiac Transam was added to said policy by endorsement effective November 27, 1981. (See Petitioner's Exhibit 29.) On September 30, 1981, Mrs. Colson was involved in an auto accident in the Toyota, which suffered major damage. Mrs. Colson was unable to get her car from the garage until December 1981, because the insurance company would not pay for the repairs. Mr. Colson also had difficulty with delay in payment for insured damages when the top of the Transam was damaged. The Respondent accepted a premium from Mrs. Colson but did not provide automobile insurance as requested between March 17, 1981, and September 28, 1981, on the Toyota and November 27, 1981, on the Transam. The Respondent did not provide the Colsons with copies of their policies after repeated requests. Count VIII The records of Capital Premium Plan (Petitioner's Exhibit 33) reflect the Respondent owed Capital Premium Plan $1,306.01 as the result of cancelled policies which required the Respondent to return unearned premium amounts to Capital Premium Plan. A statement for these accounts was presented in June 1982. The record reflects that in late 1982 the Respondent paid $356.01 of the money originally owed. At the date of hearing, the Respondent owed Capital Premium Plan $950 in unearned premiums. The Respondent raised no valid defense to the claim by Capital Premium Plan. Count IX Pursuant to his agreement with Underwriters Insurance Company, the Respondent was required to pay said company premiums for policies sold issued by the company. (See Petitioner's Exhibit 34.) As of September 1981, the Respondent's accounts with Underwriters Insurance Company were not current. The company's representative called upon the Respondent and made demand for the money owed by the Respondent to the company. The Respondent gave the company's representative a check in full payment of the amount then due. This check was dishonored by the bank upon its presentation due to insufficient funds. As a result thereof, Underwriters Insurance Company cancelled its underwriting agreement with the Respondent. The Respondent owed Underwriters Insurance Company approximately $6,000 as of the date of the hearing. The Respondent asserted no reasonable defense to the company's claims. Count X On February 16, 1979, automobile and health insurance was purchased for Grecian Pool Service by Frank Weller, the company's president. Neither Grecian nor Weller received a copy of the insurance policies from the Hickerson Agency. One of Grecian's vehicles was involved in an accident. Michigan Mutual, the insurer of the other vehicle, attempted to collect $228 for damages it had paid but which were the responsibility of Grecian's insurer. Michigan Mutual contacted the Hickerson Agency many times in an effort to obtain payment from Grecian's insurer but was unsuccessful. Michigan Mutual contacted the Department of Insurance, and an agent of the Department contacted the Respondent, who stated that a check had been sent to Michigan Mutual. The Department's agent contacted Michigan Mutual, which denied receipt of the check. The Department's agent then asked the Respondent to provide the Department with a copy of the front and back of the cancelled check. In response, an employee of the Hickerson Agency advised the Department's agent that it had no information concerning the accident and requested the Department to provide more information in order that it could respond to the Department's request. The Respondent failed to provide a timely response to Michigan Mutual of claim information as requested. The Respondent failed to provide the Department with records and information upon request. The Respondent failed to provide the insured with a copy of the insurance policy. Count XI and XIII W. F. Jones and James Earl Jones, who are brothers, both tendered premiums to the Hickerson Agency for the purchase of insurance on tractor- trailer trucks which they respectively owned. The daughter of W. F. Jones paid the Hickerson Agency $2,678 in September 1981 for insurance on two trucks owned by W. F. Jones. This payment was made in four checks each for $669.50 to be negotiated one each week for four weeks commencing on September 2, 1981. (See Petitioner's Exhibit 52.) On September 4, 1981, Shelley, Middlebrooks and O'Leary (hereinafter, SMO), general agent for Carolina Casualty, issued a binder on insurance for W. F. Jones. The quoted down payment for this policy was $2,678, and the premium on the ten-day binder issued by SMO was $928. The Hickerson Agency remitted to SMO the amount of $557.95. This was $267.25 less than the required binder premium. SMO immediately notified the Hickerson Agency that additional money was due. When the money was not forthcoming, SMO sent the Hickerson Agency a 14-day notice of cancellation. This extended the coverage of the binder until October 6, 1981. The Hickerson Agency did not forward any additional amount, and the insurance was cancelled on October 6, 1981. The amount received from the Hickerson Agency was less than the earned premium for the coverage from September 4, 1981, until October 6, 1981. In November 1981, the Hickerson Agency sent SMO a check for $257.25, the amount left owing on the earned premium. In February 1982, after many requests by W. F. Jones and his wife for the insurance policy and inquiries from them to the Hickerson Agency about their monthly payments, Jones received notice from the company financing his trucks that the trucks were not insured by the Hickerson Agency as he had thought. W. F. Jones checked with the Hickerson Agency, which was unable to produce a policy of insurance or other evidence of insurance. W. F. Jones demanded his money back, and the Respondent wrote Jones a check for the money that Jones had paid. When Mrs. W. F. Jones took the Respondent's check for deposit, her bank advised her after checking with Respondent's bank that there were insufficient funds in Respondent's account to cover the check. Because W. F. Jones had left on a trip, Mrs. Jones took the check to the Hickerson Agency and requested insurance. On February 5, 1982, Huffman and Associates bound coverage on W. F. Jones's two trucks with Canal Insurance Company. Huffman and Associates received $2,345 with a balance of $6,097, which was financed through a premium finance company. The Canal Insurance Company policy number for W. F. Jones was AC29 67 99. No evidence was presented that the two trucks belonging to W. F. Jones were insured between October 6, 1981, and February 5, 1982, although the Hickerson Agency had received payment for the down payment in the amount of $2,678. James Earl Jones applied for insurance on his truck with the Hickerson Agency on or about July 29, 1981. Mrs. James Earl Jones wrote three checks to the Hickerson Agency on said date to be negotiated as indicated: July 29, 1981- -$500 for immediate negotiation; $474--hold until August 5, 1981; $474--hold until August 19, 1981. The balance of the premium was financed with Capital Premium Plan with a monthly payment of $305.45. Monthly payments were made by James Earl Jones to the Respondent or to Capital Premium Plan until April 5, 1982. At that time, Capital Premium Plan cancelled the insurance due to late payments by the insured. When notified of the cancellation of the insurance by Capital Premium Plan, Mrs. James Earl Jones contacted Canal Insurance Company in care of New South Underwriters, which was listed as the insurer by Capital Premium Plan. Mrs. Jones was advised by New South Underwriters that they had no record of insurance on the Jones's truck with Canal Insurance Company. Mrs. James Earl Jones called the Hickerson Agency and asked for the policy number on the truck. The Respondent called Mrs. Jones and gave the policy number for the insurance on the truck as AC29 67 99, the policy number of W. F. Jones. (See paragraph 38 above.) When Mrs. James Earl Jones rechecked, she found that the policy was that of W. F. Jones, whereupon she called James Earl Jones, who went directly to the Hickerson Agency and spoke with the Respondent. James Earl Jones demanded of the Respondent some proof of insurance. The Respondent gave him a copy of the first page of W. F. Jones's policy. When James Earl Jones pointed out the error and demanded proof of his insured status, the Respondent wrote him a check for $2,990.50, a refund of the down payment and payments which James Earl Jones had made to Capital Premium Plan through that date. The records of Canal Insurance Company do not reflect insurance issued to James Earl Jones between July 1981 and March 1982. James Earl Jones was insured by Canal Insurance Company in April 1982 through an agency in Tampa not related in any way to the transaction with the Respondent. The records of Capital Premium Plan reflect that money was borrowed for insurance to be placed with Canal Insurance Company through New South Underwriters. Capital Premium Plan made money available to the Respondent for the premiums as indicated. The Hickerson Agency did not have records or produce records indicating that James Earl Jones was insured by the Hickerson Agency between July 1981 and March 1982, when the Respondent refunded Jones's premiums. Count XII In September 1981, Hugh Shaw of Ridge Printing purchased workmen's compensation insurance from the Respondent and paid for said insurance with two checks, each for $426.50. Shaw was contacted in May 1982 by officials of the Department of Commerce and advised that he had no workmen's compensation insurance. Shaw referred the officials to the Respondent. Shaw never received a policy of insurance from the Respondent for insurance purchased in September 1981. A search of the records of Mr. Hurst's agency revealed no insurance placed by the agency for Shaw. No evidence was introduced by the Respondent that Shaw was insured against workmen's compensation loss. No evidence was received that any portion of the premiums paid by Shaw were returned to him. Count IV (In addition to this count, many of the other counts in this Administrative Complaint allege that records related to various insureds were not present at the Hickerson Agency, and that the Respondent failed to maintain records as required by law. The findings made relative to this count are applicable to similar allegations contained throughout the Administrative Complaint and constitute the findings of fact relative to those allegations.) The Respondent sold his insurance agency to James Hurst, Jr., effective March 1, 1982. Testimony was received that some of the records alleged to have been missing later were present prior to that date. Evidence was received that many records were not present at the agency after that date. No evidence was received that the Respondent was responsible for removal of the records. Pursuant to their contract, James Hurst, Jr., was responsible for the office after March 1, 1982, and the Respondent is not vicariously liable for missing records after that date. No evidence was presented as to any specific record at issue in these charges that was discovered to be missing prior to March 1, 1982. Count XV On October 2, 1981, Harold Scott purchased insurance on a camper from the Respondent. On that date, Scott gave the Respondent a check for $123 and signed a premium financing agreement for the balance of $287. Scott never received a copy of the insurance policy. No evidence was introduced by the Respondent that Scott was insured. In September 1982, the Respondent paid to Scott the down payment and other money that Scott. had paid on his insurance. Count XVI On April 7, 1981, Joseph Simmons purchased workmen's compensation coverage and a bond from the Respondent. Simmons paid $798 as a down payment and executed a premium financing agreement with Sesco Premium Plan. Simmons never received a copy of the policy or a payment book. Sesco Premium Plan never financed an insurance policy for Joseph Simmons of Winter Haven, Florida. (See Petitioner's Exhibit 64.) No evidence was introduced by the Respondent that Simmons was insured against workmen's compensation claims after April 7, 1981. The Respondent accepted a premium for insurance from Simmons and did not provide the requested coverage.
Recommendation While violations of Section 626.621, Florida Statutes, permit the Department discretion in disciplining a licensee, violations by the Respondent of Section 626.611, Florida Statutes, as found above, mandate that the Department must discipline him. Considering the number and the severity of the violations, it is recommended that the Department of Insurance and Treasurer revoke each and every license held by the Respondent, James Edward Hickerson. DONE and RECOMMENDED this 17th day of June, 1983, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 17th day of June, 1983. COPIES FURNISHED: Curtis A. Billingsley, Esquire Department of Insurance Larson Building Tallahassee, Florida 32301 Douglas H. Smith, Esquire Post Office Box 1145 Lake Alfred, Florida 33850 Marvin B. Wood, Esquire 2600 Industrial Park Drive Lakeland, Florida 33801 Tom Pobjecky State Attorney's Office Post Office Box 1309 Bartow, Florida 33838 The Honorable William Gunter State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32301 =================================================================
Findings Of Fact At all times material to this case, and at the time of the hearing, Gary Lee Baker ("Respondent") was licensed in Florida as a life and variable annuity agent, health and variable annuity agent, life agent, life and health agent, general lines agent, and health agent. The Respondent was a stockholder and officer in the "Murdock Insurance Agency, Inc.". Pete and Debi Valencia are the owners of the "Growing Concern," a floral shop. In 1991, the Growing Concern had obtained workers compensation (WC) coverage through Allstate Insurance. According to the Allstate policy, the coverage was effective from July 18, 1991 to July 18, 1992. The premium for the policy was $1,235.00. As of November, 1991, Mr. Valencia believed that Allstate Insurance was going to terminate his WC insurance coverage. The belief apparently was based on local gossip. There is no evidence that, absent payment of premium, Allstate intended to cancel the Valencia's WC insurance coverage prior to the expiration date set forth in the policy. Mr. Valencia contacted the Respondent, who was a business acquaintance of Mrs. Valencia, to discuss WC coverage. At the time of the initial meeting, Mr. Valencia offered to place all his insurance business with the Respondent if the Respondent could obtain satisfactory WC insurance rates for the Valencia's business. Mr. Valencia provided a copy of the then-current Allstate policy to the Respondent. Based on information provided by Mr. Valencia, the Respondent completed portions of a WC insurance application on behalf of Growing Concern on November 21, 1991. The application was to be submitted to the National Council of Compensation Insurance (NCCI) Atlantic Division upon receipt of additional information from Mr. Valencia and upon the lapse of the Allstate coverage. Among the information required by the NCCI was a copy of a Growing Concern quarterly tax filing (Form 941) from Mr. Valencia. The form is used by NCCI to verify the Growing Concern payroll, the basis of calculation of the WC premium. Pursuant to this meeting, Mrs. Valencia provided a check dated November 21, 1991, numbered 3737, for $360.00 as an initial payment on the WC premium. The Respondent deposited the check into his trust account and awaited receipt of the additional documentation. By January, 1992, the Respondent had not received the additional information. He contacted Mr. Valencia to obtain the copy of Form 941 and to obtain an additional premium payment of $121.00. On several occasions during January and February, 1992, the Respondent and his assistant attempted to contact Mr. Valencia to obtain the premium payment and information. Neither the information nor the payment was forthcoming. On March 8, 1992, Mrs. Valencia submitted a check numbered 3948 for $121.00 as payment of the additional premium. However, the Valencia's still failed to submit a signed copy of the Growing Concern's most recent Form 941. Although the Respondent assumed that the application would be rejected for the failure to include all the required information, the Respondent submitted the application on March 31, 1992 (without the required Form 941) to NCCI. A check on the account of Murdock Insurance Agency dated March 31, 1992, numbered 144, for $962.00 accompanied the application as payment of the premium due at that time. Although he had yet to collect such an amount from the Valencias, he believed their relationship was such that he could "front" the premium payment on their behalf. By letter dated April 24, 1992, NCCI informed the Respondent that the application would not be processed without the form which would permit verification of the payroll. On May 20, 1992, Mr. Valencia provided a signed copy of the Form 941 to the Respondent. By letter dated May 26, 1992, NCCI informed the Respondent that an additional premium payment of $423.00 was required. The total premium for the Growing Concern WC policy was $1,385.00 The Respondent contacted Mr. Valencia and requested the additional premium payment. Mr. Valencia directed the Respondent to void the transaction and to return the premium paid by the Growing Concern. The premium was returned by NCCI to the Respondent. Immediately upon receipt of the premium, the Respondent refunded $481.00, the amount paid by the Growing Concern, to Mr. Valencia on June 4, 1992. At all times, Mr. Valencia's premium funds were maintained in the Respondent's trust account until such time as they were submitted to NCCI. At no time did Mr. Valencia inform the Respondent that the Growing Concern's Allstate WC coverage had lapsed.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Department of Insurance enter a Final Order dismissing the administrative complaint filed against Gary Lee Baker. DONE and RECOMMENDED this 4th day of January, 1994, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 4th day of January, 1994. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-4569 The following constitute rulings on proposed findings of facts submitted by the parties. Petitioner The Petitioner's proposed findings of fact are accepted as modified and incorporated in the Recommended Order, except as follows: Rejected, contrary to the greater weight of the evidence which establishes that the delay in submission of the application was based on the insured's failure to provide the requested information. The premium was refunded to the insured on June 4, 1992, (not January 4, 1992) immediately upon the receipt by the Respondent. Rejected, immaterial. The Allstate policy lapsed through no act by the Respondent, who was never informed of such lapse. Respondent The Respondent's proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 9. Rejected, hearsay uncorroborated by other competent evidence. COPIES FURNISHED: Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Bill O'Neil, General Counsel Office of State Treasurer The Capitol, PL-11 Tallahassee, Florida 32399-0300 Joseph D. Mandt, Esquire Division of Legal Services 612 Larson Building Tallahassee, Florida 32399-0333 Carl Joseph Coleman, Esquire Smith, Geraghty & Coleman Post Office Drawer 8 Fort Myers, Florida 33901
Findings Of Fact The Respondent, Robert Charles Anderson, currently is eligible for licensure and is licensed in this state as a life and health (debit) agent, life, health and variable annuity contracts agent, general lines property, casualty, surety and miscellaneous agent, and health insurance agent. The Respondent moved to Florida from Michigan in September, 1983. In January, 1984, the Respondent and a partner bought Guaranteed Underwriters, Incorporated, a corporate general lines insurance agency doing business as Security Insurance Agency (Security) in New Port Richey, Florida. The Respondent's background was primarily in the life and health insurance business; his partner's background was primarily in property and casualty insurance. They planned to divide responsibilities for Security's operations along the lines of their respective areas of expertise. However, the partnership dissolved, leaving to the Respondent responsibility for all of the operations of the agency. After the dissolution of the partnership, the Respondent delegated to unlicensed employees most of the day-to-day responsibilities for the property and casualty and workmen's compensation side of the agency's business. The Respondent was personally involved primarily in the day-to-day operations of the health and life insurance side of the business, as well as in selected large commercial accounts. The conduct of Security's business, as described above, went smoothly (there were no charges of any license violations) until two disruptive factors entered into the picture. One was financial in nature; the other was personal. In 1986, Security bought an existing insurance agency (Sunland Insurance Agency) in Holiday, merged it into Security, and attempted to operate it as part of Security's overall business. In 1987, Security bought another, large agency (Village Insurance Agency) and also merged it into Security and attempted to operate it as part of Security's overall business. At this point, the Respondent essentially was attempting to operate three insurance agencies, something he never attempted before. With the purchase of Sunland and Village, in addition to Security, the Respondent incurred significant debt which had to be met for his business to just break even. By approximately 1988, the Respondent owed approximately $150,000 still outstanding on the purchase of Security, $100,000 borrowed to finance the purchase of Village, $43,000 to three different relatives and $3,500 to the NCNB bank on loans made in connection with the business. Payments on these debts, together with payroll, rent and other business expense left Security with a monthly operating budget of almost $12,000. At this expense level, the business was losing money. In calendar year 1989, the business lost between approximately $12,600 and (counting unpaid bills outstanding at the end of the year) $17,900. At the end of 1988, severe personal problems added to the Respondent's financial woes. In December, 1988, the Respondent's wife had to be hospitalized in Tampa for eight weeks for treatment for symptoms of mental illness. During this time, in addition to trying to supervise the operations of Security, the Respondent was required to travel back and forth to Tampa (about an hour drive by car, each way) to visit his wife and also make arrangements for the care of his eighteen month old son (either by himself or by a baby-sitter). As if the Respondent's personal problems were not enough, when his wife was discharged from the hospital (with a diagnosis of a chemical imbalance), she informed him that she wanted a divorce. She took up a separate residence in Tampa where she lived pending the dissolution of the marriage. As a result of the his personal problems, the Respondent delegated more and more responsibility to his unlicensed employees. He would go to the office only for an hour or two a day. Sometimes he was not able to get into the office at all. Judy Nelson (Count V). Judy Nelson, who is self-employed doing business as Pedals 'N' Presents, used Security for her insurance needs since 1986. In January, 1989, she applied through Security for renewal of a special multi-peril (SMP) insurance policy with American Professional Insurance for another year beginning January 21, 1989. On January 10, 1989, she gave Security her check for $485 as partial payment for the coverage. The $485 was deposited into Security's general operating account which Security used to pay the operating expenses of the business. Security never processed Nelson's application or secured the coverage. On or about March 10, 1989, Nelson received notice from American Professional that no application for renewal of coverage or premium had been received and that coverage was being cancelled. Nelson immediately contacted Security regarding the notification, and one of the Respondent's unlicensed employees acknowledged an error on Security's part but assured Nelson that Security would correct the situation and have Nelson's coverage reinstated. Security never got the policy reinstated, and the policy was cancelled on March 21, 1989. On or about April 8, 1989, Nelson's business was burglarized, and Nelson made a claim on her MPS policy. At this point, in handling the claim, the Respondent realized that the policy had been cancelled and that Nelson had no coverage. But, instead of telling her the facts, the Respondent paid the claim himself. Nelson thought the claim was paid under the terms of her SMP policy and still thought she had coverage. Later, Nelson had a question about a signature on her policy and telephoned the Professional American to get her question answered. Professional American told her that she had no coverage. At about the same time, Nelson was contacted by a Department investigator, who asked her not to contact the Respondent yet as he would make arrangements for a refund for her. On or about December 6, 1989, after the Department investigator cleared it, Nelson telephoned the Respondent and asked for a refund. This time, the Respondent acknowledged that Nelson had no coverage and agreed to a refund. The Respondent paid Nelson the refund at the end of December, 1989, or the beginning of January, 1990. Nelson still does business with Security. She has in force workmen's compensation insurance through Security. Fred J. Miller (Count VI). On or about February 24, 1989, Fred J. Miller came into the Security offices to get commercial automobile insurance for the vehicles he uses in his recycling business. He dealt with one of the Respondent's unlicensed employees. Several application and other papers for coverage with Progressive American Insurance Companies were prepared and were signed by Miller. Miller also made a partial payment for the coverage in cash in the amount of $296, for which the employee gave Miller a receipt. As he left the office, the Security employee assured him that he had coverage. A few days later, on or about February 28, 1989, Security contacted Miller and told him an additional $606 was needed to obtain the coverage for which he had applied. Miller returned to Security and gave the employee he was dealing with an additional $606 cash, for which he was given another receipt. It was not proven, and is not clear, whether the cash received from Miller was placed in the Security operating account. Security never submitted Miller's application for insurance. Contrary to Miller's understanding, Miller had no insurance on his vehicles. As of April 6, 1989, Miller had neither a policy (or copy of one) nor an insurance identification card. On or about April 6, 1989, Miller bought a new vehicle and had to contact Security to get an insurance policy number in order to have the vehicle registered in his name. The Security employee speaking to Miller discovered that Miller's undated application still was in the "pending matters" file and told Miller he could not get the policy number at that time. Miller said he had to have the policy number immediately. At that point, the employee brought the problem to the Respondent's attention. The Respondent had the employee tell Miller they would call right back. Security then dated Miller's application April 6, 1989, telephoned Progressive American to secure coverage effective April 6, 1989, and called Miller back with the policy number he needed. Security then processed Miller's application to secure the coverage for a year, through April 6, 1990. Miller has renewed the Progress American coverage through Security and still has his vehicles insured under the policy. Donald E. Wilkins (Count IV). Donald E. Wilkins, President of Apple Paradise Landscaping, Inc., used Security for his general liability and automobile insurance needs. He has no complaint about, and no issue is raised in this proceeding, as to Security's handling of those coverages. (The evidence is that the coverages Wilkins applied for were placed in the normal course of business.) On or about March 9, 1989, Wilkins decided he wanted a workmen's compensation insurance certificate. He went to Security's office, and one of the Respondent's unlicensed employees completed an application for the insurance and for premium financing. Wilkins gave her a $250 check "just for the certificate." The check was deposited into Security's general operating account which Security used to pay the operating expenses of the business. On March 9, 1989, Wilkins also specifically requested that Security furnish to Hawkins Construction of Tarpon Springs, Florida, a certificate of insurance. In response to the request, Security furnished to Hawkins Construction a certificate that Apple Paradise with the "S. Atlantic Council on Workers Compensation." A policy number appears on the certificate, and the certificate states that coverage was effective March 13, 1989, to expire on March 13, 1990. There is no evidence that the Respondent personally was involved in providing this certificate of insurance. The evidence did not prove whether Wilkins ever got any workmen's compensation insurance. The Department proved that Security never processed the premium financing application, and Wilkins testified that he never got a payment book or other request for payment from any premium financing company. But the representative of the National Council on Compensation Insurance gave no testimony on Wilkins or Apple Paradise. Wilkins himself did not appear to have any complaint against the Respondent or Security. Theoharis Tsioukanaras (Count III). Theoharis (Harry) Tsioukanaras owned and operated Harry's Painting and Enterprises, Inc. He had been doing business with the Respondent to meet his business and personal insurance needs since the Respondent first bought Security (and did business with the prior owner for a year before that). He had his business and personal automobile insurance, as well as his workmen's compensation insurance through Security. In the normal course of their business relationship, either Harry would telephone Security when he had insurance needs or Security would telephone Harry when it was time to renew insurance. Harry would then drop by the office to complete the necessary paperwork and pay the premium. When Harry did not have the necessary premium money when it was time to buy or renew insurance, the Respondent regularly loaned Harry premium money and Harry would pay the Respondent back later. Harry usually dealt with the Respondent's unlicensed employees, not with the Respondent directly. On or sometime after July 7, 1989, Harry telephoned Security for proof of insurance on a 1987 Subaru so that he could avoid having to pay for lender insurance on the vehicle at a bank where he was seeking to obtain financing. One of the Respondent's unlicensed employees gave Harry a purported insurance identification card for "Progressive American," listing a purported insurance policy number and purported policy effective dates of July 7, 1989, to January 7, 1990. The lending institution did not accept the card. In fact, no Progressive American policy had issued on the vehicle. At some point, Harry came by the Security office and told the Respondent that he (Harry) was due a $640 refund for automobile insurance renewal premium money on a policy that never issued. By the Respondent's own admission, he checked with his records and his unlicensed employees and confirmed that Harry was owed the money. On September 28, 1989, he gave Harry a check for $640. 1/ Despite the circumstances that resulted in the false Progressive American insurance identification card, in Harry's need to buy Allstate insurance on a vehicle he thought was insured through Security, and in Harry's need for a $640 refund from Security, Harry continues to do his insurance business with the Respondent and Security and also refers friends to the Respondent for insurance needs. John Stuiso (Count I). On or about June 7, 1989, John Stuiso, a self-employed building contractor, applied for both general liability and workmen's compensation insurance through Security. (Stuiso had been insured through Security for the preceding four years with no apparent problems.) Stuiso paid Security $3,250 as partial payment of the premiums on the policies and also applied for premium financing through Security. At least $3,000 was paid by check; the evidence is not clear how the other $250 was paid. The $3,000 check was deposited into Security's general operating account which Security used to pay the operating expenses of the business. It is not clear what happened to the other $250. It was understood between Stuiso and Security that Security would have the applications processed and would inform Stuiso if there was any problem with coverage. Not having heard anything to the contrary, Stuiso believed he had the general liability and workmen's compensation insurance for which he had applied. In fact, Security never processed either application for insurance or either application for premium financing. In late July or early August, 1989, Stuiso requested that Security furnish a certificate of insurance for him to provide to a customer, APCO Building Systems of Oldsmar, Florida. On August 4, 1989, Security issued to APCO a certificate that Stuiso had both general liability insurance with American Professional Insurance Company and workmen's compensation insurance with "South Atlantic Council on Work Comp." Purported policy numbers also appeared on the certificate. When Stuiso never received a payment book for his premium financing, he became concerned about his coverage and was about to approach the Department for assistance when he received a telephone call from a Department investigator who had been investigating the Respondent (unbeknownst to the Respondent.) The investigator told Stuiso that he had no coverage. Stuiso then approached the Respondent and asked for a refund. The Respondent checked his records and asked his unlicensed employees about Stuiso's claim that he had paid for and applied for insurance that never issued. He learned for the first time the facts about Stuiso and immediately wrote Stuiso two refund checks, one for $3,000 and one for $250. Due to the financial problems the Respondent was having, his $3,00 check was returned for insufficient funds. The Respondent tried to borrow the money to cover the $3,000 check from a friend who declined on advice of counsel. Stuiso then went to the police and had the Respondent charged with writing a worthless check. The Respondent was advised of this and turned himself in to the police. He was given a week to make good on the check. The Respondent was able to borrow the money from another friend and paid Stuiso in full. However, his encounter with the police brought home to him the depths to which he had sunk. He decided to commit suicide by monoxide poisoning but changed his mind before it was too late. He telephoned his wife in Tampa to report what he had just done, and she initiated steps to have him committed involuntarily for treatment for mental illness under Florida's Baker Act. He spent four days in the Community Hospital in New Port Richey, Florida, where he was diagnosed as having "adjustment reaction." He was released to the custody of his wife and spent the next week to ten days with her in Tampa. After the Respondent recovered, he decided to do whatever was necessary to save his business and pay off his debts. He laid off office staff and, to take up the slack, himself assumed the responsibilities he had been delegating to his unlicensed employees. He also decided, in light of the Harry's and Stuiso matters, to himself investigate to see if there were any other Security customers who did not have insurance coverage for which they had paid. He found Wanda Mae Riley (Custom Plumbing of Pasco, Inc.). Wanda Mae Riley (Count II). In about August, 1988, the Respondent himself called on Wanda Mae Riley of Custom Plumbing of Pasco County to advise her that the company's general liability and automobile insurance policies for its fleet of four trucks were up for annual renewal on August 24, 1988. The Respondent filled out applications for renewal of the policies and for premium financing and accepted Riley's check in the amount of $3,244 as down payment for the renewal policies. The $3,244 was deposited into Security's general operating account which Security used to pay the operating expenses of the business. The Respondent telephoned American Professional Insurance Company to bind the coverage. He or his office also issued proof of insurance identification cards for Custom Plumbing. But, for reasons he cannot explain (having no recollection), he never processed the applications and the binders expired when the applications were not processed and policies were not issued in the normal course of business. Having had a lapse of memory as to the matter and as to Security's responsibilities to Custom Plumbing, the Respondent did not know and never told Riley or Custom Plumbing that the insurance policies were not renewed and that Custom Plumbing did not have the coverage it thought it did. Later in 1988, Security also arranged for workmen's compensation insurance for Custom Plumbing. The evidence did not prove that there were problems in the way Security obtained this coverage for Custom Plumbing. In approximately April, 1989, Custom Plumbing requested that Security furnish a certificate of insurance for him to provide to the Barnett Bank of Hernando County. On April 21, 1989, Security issued to the bank a certificate that Custom Plumbing had automobile insurance with American Professional Insurance Company. The expired binder number (which perhaps was the same as the policy number of the prior year's policy) appeared on the certificate as the purported policy number. There is no evidence that the Respondent personally was involved in providing this certificate of insurance. When, in approximately late October or early November of 1989, the Respondent discovered that Security had not obtained the coverages for which Custom Plumbing had made down payments in August, 1988, he telephoned Riley to inform her 2/ and tell her that he would refund the down payments Custom Plumbing had made in August, 1988. When the refund was not made promptly, Riley went to a lawyer to have a promissory note drawn for the Respondent's signature. The promissory note reflected the $3,244 the Respondent owed to Custom Plumbing, payable $500 a month. On or about December 9, 1989, the Respondent signed the note, which was paid in full in accordance with the terms of the note. (As previously found in Finding 14, by this time the Respondent also had heard from Nelson.)
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Petitioner, the Department of Insurance and Treasurer, enter a final order: (1) finding the Respondent, Robert Charles Anderson, guilty of the charges contained in Counts I, II, III, V and VI of the Administrative Complaint, as set forth in the Conclusions of Law, above; and (2) suspending the Respondent's licenses and eligibility for licensure for six months. RECOMMENDED this 28th day of May, 1991, in Tallahassee, Florida. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 28th day of May, 1991.
Findings Of Fact The Respondent is, and at all times material to the allegations in the Administrative Complaint, was a licensed ordinary life insurance salesman in the State of Florida. He first became licensed in 1977, and went to work initially for Occidental Life Insurance Company in Orlando, Florida. After approximately three to four weeks with Occidental Life, he went to work for Lincoln National Life and was transferred to St. Petersburg, where he worked for about three or four months selling health insurance and some life insurance as a rider to the health insurance policies. After leaving Lincoln National Life, he left the insurance business and went to work for a sign company. He worked for no further insurance companies before he joined Coordinated Planning Associates (hereinafter referred to as COPA). He went to work for COPA in April of 1979. In July, 1980, Mr. Wheeler was terminated by COPA and he then became employed by United Companies Life, his present employer. In June or July of 1979, Mr. Wheeler contacted James and Ruby Clinton about purchasing insurance from him. He met with them in their home to discuss his product. At that time, Mr. and Mrs. Clinton had four policies in effect. (See Petitioner's Exhibits 8, 9, 10, and 11.) One policy covered Mr. Clinton and had a rider for his wife, and the other three policies were on each of their three children. When there was an initial contact made by Mr. Wheeler with the Clintons, Mr. Clinton informed Mr. Wheeler that they had more insurance than they could afford. Prior to purchasing insurance from Mr. Wheeler, the Clintons showed Mr. Wheeler their policies, and he went through the policies and explained to the Clintons that he could obtain the same or better coverage from his company for less premium. He also informed them that they could obtain coverage for the children by paying a set premium per year per child per thousand dollars of coverage. After the Clintons purchased their policy from Mr. Wheeler, Mrs. Clinton actually requested insurance on the children, and Mr. Wheeler came by their home once again to pick up the $4.00 payment or deposit for the additional coverage for the children. At the time that Mr. Wheeler sold the new insurance policy to Mr. and Mrs. Clinton, no replacement form was prepared or shown to the Clintons. The Clintons were not knowledgeable in insurance matters and relied upon Mr. Wheeler's representations as to the comparative coverages of his company's policy and their existing policies. The coverage under the policy sold by Mr. Wheeler to the Clintons was not the same or better coverage than those which existed under the policies which were replaced. The policies replaced were whole life policies and covered the entire family. The program being sold by Mr. Wheeler was a retirement savings plan with a term insurance rider and was intended to only supplement and not replace existing coverage. Mr. Wheeler was aware that the Clintons intended to cancel their existing policies and replace them with the policy which he was selling. Mr. Wheeler testified regarding the Clintons on direct examination as follows: Q. Did they mention anything about re- placing their insurance? A. No. They insinuated that yes, they were going to drop it because they needed the money. The original reason we were there was because they needed money, and that's why we were there. And if they could get a good deal on their insurance, or if they could buy a good program and they could turn the other in and get money for it, that's what they were interested in. In fact, Mr. Wheeler's wife actually picked up the existing policies and took care of mailing them to the company after their cancellation. In October of 1979, Mr. Wheeler met with Gary and Darlene Davis of Orlando, Florida, for the purpose of attempting to sell life insurance to them. At the time that they were approached by Mr. Wheeler, Mr. and Mrs. Davis had three life insurance policies issued by Prudential Life Insurance Company in effect. Mr. Wheeler was made aware of these three policies. During the course of the sales presentation, the Respondent went through the existing policies and compared some of the benefits with those of the ITT policy he was attempting to sell. He represented to the Davises that the ITT policy would provide them with better coverage for the entire family for less premium than they were paying for the existing policies. Mr. Wheeler was informed by the Davises that they intended to cancel their existing policies when they purchased the ITT coverage. When Mr. Wheeler met with Mrs. Davis, she showed him the insurance policies on her and her husband. The policy on Mr. Davis had a rider for the children and Mrs. Davis's policy contained an IRA. Mr. Wheeler represented to Mrs. Davis that the COPA program would give her family these same benefits plus a cancer policy for less money. He explained to Mrs. Davis that he could charge a lower premium because he was not an insurance man per se and that because of this his company did not have to pay high commissions like Prudential. He also explained that he worked more with helping people with their finances than with selling insurance and was salaried. In fact, Mr. Wheeler was an insurance salesman working on commissions. The COPA program did not contain an IRA and the cheaper insurance was a term rider not whole life. The basic COPA program which Mr. Wheeler sold to the Davises also did not contain coverage for the Davis children. The true reason the premium was lower was because of the different coverage and different type of insurance. The ITT policy sold to the Davises in fact did not provide the same coverage as that of the policies which were cancelled by the Davises at the time of purchasing the ITT policy. The ITT policy specifically did not provide coverage for the Davis' children, and as a result of this lack of coverage, Mr. and Mrs. Davis were unable to recover any insurance proceeds after their daughter's death during the coverage period of the ITT policy. The ITT policy was a retirement plan designed to supplement existing life insurance and was not intended as a complete life insurance program for a family. Mrs. Davis understood the ITS policy to contain an IRA as part of the policy. The evidence was unclear as to whether Mr. Wheeler actually represented that it contained an IRA or whether he represented that there was a tax benefit within the retirement savings program which the Davises interpreted to mean an IRA. It was clear, however, that Mr. and Mrs. Davis were not knowledgeable in matters of insurance and relied upon the expertise and representations of Mr. Wheeler in cancelling their existing policies and replacing them with the ITT policy. No replacement form comparing the coverage of the existing policies and the ITT policy was prepared or presented to the Davises at the time that they purchased the ITT policy. Mr. Wheeler admitted that he filled out the applications on behalf of the Davises and the Clintons. Question No. Nine on the application forms for ITT of both the Clintons and the Davises asked whether the proposed policies were being issued in a replacement situation. This question on both applications was answered "No" by Mr. Wheeler. Question No. One of the agent's report reads: "Will insurance on any proposed insured now applied for replace or change any life insurance or annuity?" This question was answered "No" on the agent's report for both the Davises and the Clintons. The signature block of the agent's report reflected that they were prepared by Mr. Richard Wheeler. The Respondent admitted that he customarily intentionally avoided information from prospects which might reveal to him the fact that insurance was being replaced and did so in this instance. When Mr. Wheeler began with COPA, he received two weeks' training. The training was designed to teach the "canned" presentation which COPA salesmen were required to use. This presentation was prepared by the more experienced and more knowledgeable officers and managers of COPA. This same presentation was utilized by Mr. Wheeler in the sales presentation to the Clintons and Davises. There was no training regarding replacement of other insurance. Sometime in 1980, after the sales to the Clintons and Davises, Mr. Wheeler was informed by another COPA employee, Greg Gustin, as to particular representations within the canned presentation Mr. Gustin considered to be false. Sometime after this, Mr. Wheeler discussed this with Mr. Larry Taylor of COPA and an official of ITT Life Insurance Company. When Mr. Wheeler tried to change the presentation to eliminate the misrepresentations, he was fired. This occurred July 17, 1980. Mr. Wheeler claimed ignorance of the misleading nature of the canned presentation prior to his discussions with Mr. Gustin. However, Mr. Wheeler admitted that he had intentionally avoided getting information from customers which indicated they were going to cancel their existing policies. The sales presentation also stated "Let me assure you I am not here to sell you anything. Mr. Wheeler's only purpose for visiting these people was to sell them insurance. Mr. Wheeler sold approximately 250 policies while with COPA and has continued to sell life insurance since leaving COPA in July, 1980. The two complaints which are the subject of this administrative proceeding were the only two complaints made against Mr. Wheeler. Since going to work for United Companies Life, Mr. Wheeler has been trained in using replacement forms and now uses those forms whenever his policy replaces existing insurance.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED: 1. That the Department of Insurance enter a final order suspending Respondent's license for a period of 30 days. This case is more appropriately a case for a civil fine or probation. However, a violation of Florida Statute Section 626.611 involves a mandatory suspension. There are strong mitigating factors which justify that the mandatory suspension be of short duration. At the tinge the sales were made to Mr. and Mrs. Clinton and Mrs. and Mrs. Davis, the Respondent was relatively new in the insurance business. Upon being employed by COPA, he was given a prepared sales presentation to memorize and use in each sales contact. This presentation was prepared by the officers and managers of COPA who were more experienced and more knowledgeable than Mr. Wheeler about insurance matters. Mr. Wheeler later tried to change the presentation and was fired as a result. These incidents occurred in 1979 and since that time Mr. Wheeler has continued to work as a licensed insurance salesman with no complaints or evidence of violations of the Florida Statutes or Rules of the Department of Insurance. The circumstances giving rise to the violations and the fact that the Respondent was advised by more experienced and knowledgeable individuals clearly bear upon the appropriateness of the particular penalty assigned. See, Drew v. Insurance Commissioner and Treasurer, 330 So.2d 794 (Fla. 1st DCA 1976). RECOMMENDED this 11 day of April, 1983, in Tallahassee, Florida. MARVIN E. CHAVIS Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 12th day of April, 1983. COPIES FURNISHED: David A. Yon, Esquire Legal Division Department of Insurance 413-B Larson Building Tallahassee, Florida 32301 Paul H. Bowen, Esquire Swann & Haddock, P.A. Post Office Box 7838 Orlando, Florida 32854 Honorable William Gunter State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32301
Findings Of Fact On November 13, 1992, Hale Intermodal Transport Co., a motor carrier, requested that the Department of Insurance review the decision of Hale's workers' compensation insurance carrier, Liberty Mutual Insurance Co., to include the payroll of Hale's Florida owner/operators in calculating the workers' compensation insurance premium due from Hale to Liberty Mutual. On May 17, 1993, the Department stated it was removing itself from the dispute and recommended that the dispute be "addressed through the appeals process." Accordingly, Hale sought a review by the Board of Governors of the Florida Workers' Compensation Insurance Plan (hereinafter referred to as "Board of Governors"). On July 23, 1993, the Board of Governors, by a vote of three in favor, one against, and one abstention, decided that Hale's Florida owner/operators should be considered independent contractors and that their payroll should not be considered by Liberty Mutual in determining the workers' compensation insurance premium owed to Liberty Mutual by Hale. Thereafter, as provided in Section 627.291(2), F.S., Liberty Mutual requested that the Department review the Board of Governors' decision. On August 30, 1993, Liberty Mutual sought a formal hearing pursuant to Section 120.57(1) F.S. The dispute was initially referred to the Division of Administrative Hearings (DOAH) by the Department of Insurance which requested that DOAH conduct a formal hearing pursuant to Section 627.291, F.S. In its referral letter, the agency noted that Liberty Mutual had not waived its right to a Section 120.57(1) F.S. proceeding. By a Recommended Order of Dismissal entered January 11, 1994, Hearing Officer Larry J. Sartin concluded that DOAH did not have jurisdiction over the matter because the Department of Insurance had not taken any "agency action" in the case. Apparently, no final order was ever entered in response to the January 11, 1994 recommendation of dismissal. Rather, The Florida Department of Insurance's internal hearing officer reviewed the case and, on June 13, 1995, issued a "Report, Findings Conclusions and Recommendations of the Hearing Examiner." In his report, the agency's internal informal hearing officer concluded that as an insurer, Liberty Mutual did not have standing under Section 627.291 F.S. to appeal the Board of Governors' decision regarding whether Hale's Florida drivers were "employees" or "independent contractors." The agency's hearing officer's ruling was based upon his interpretation of the legislative intent of Section 627.291(2) F.S., which interpretation was made without the hearing officer having the benefit of legislative history. On February 22, 1996, the agency issued its "Order Affirming the Report, Finding, Conclusions and Recommendation of the Hearing Examiner." Appended to that order was an election of rights statement form which set forth Liberty Mutual's options should it wish to appeal the Department's order which constituted the agency's "proposed agency action" as that term is used in Chapter 120 F.S. and which, in effect, affirmed the agency's internal hearing officer's report/order. Liberty Mutual elected to have the matter referred to DOAH for a Section 120.57(1) F.S. proceeding upon the disputed issues of material fact. The dispute was then referred to DOAH and became the instant DOAH Case No. 96- 1586. Following Hale Intermodal Transport Co.'s intervention herein, the case was set for formal hearing. Eventually, the parties filed a Joint Prehearing Stipulation. That Joint Prehearing Stipulation specified that there were only two disputed facts raised by Liberty Mutual's petition in the instant case, and that these two disputed facts had since been resolved among the parties, to the effect that: Liberty Mutual was and is not a "member" of NCCI. Liberty Mutual was and is a member of the assigned risk pool and was a member of the Board of Governors' panel to which the issue of Hale's independent contractor drivers was first present. (sic) Liberty Mutual's representative on the Board of Governors' panel abstained and did not vote in the decision. The Joint Prehearing Stipulation also specified that none of the parties would call witnesses or offer exhibits at formal hearing before DOAH. The parties further stipulated that the only issue remaining was whether or not Petitioner Liberty Mutual had "standing" pursuant to Section 627.291(2) F.S. to request a review of the Board of Governors' decision. Respondent Department of Insurance then moved to dismiss itself as a party, claiming that it was not a real party in interest and that under Section 627.291 F.S., it must act as arbitrator/judge and therefore should not be required to appear as an adversarial Respondent in the instant Section 120.57(1) F.S. proceeding before DOAH. Oral argument was required on the pending motion. During that hearing, the undersigned requested that the parties explain how DOAH could have jurisdiction of a cause with no disputed issues of material fact. The undersigned further suggested that the issue of "standing" is only a part of the larger issue of "jurisdiction" which is a mixed question of law and fact; that perhaps there was a flaw in the agency's determination in its proposed final agency action to the effect that only Hale (the employer) had standing to request a due process hearing whereas Liberty Mutual (the insurer) did not have standing to request a due process hearing for the purpose of determining the employer and insurance carrier's respective rights under Section 627.291(2) F.S. and, therefore, perhaps Liberty Mutual's petition could be interpreted to be seeking a hearing on the merits to consider the parties' respective rights on the rating issue; and that in a Section 120.57(1) F.S. proceeding the agency must always be a litigant when the agency proposes any final agency action, i.e. in this instance, the implementation by a final order of the whole of its internal hearing officer's recommended order. Subsequent to oral argument, the scheduled Section 120.57(1) F.S. formal hearing was cancelled so that the parties could supplement the record by filing additional documents, copies of any statutes and rules they wished to be considered, any motion to dismiss upon allegations the joint prehearing stipulation had eliminated all disputed issues of material fact, any motion to amend the petition herein, and any memoranda addressing jurisdiction and the scope of formal hearing pursuant to Section 120.57(1) F.S. The undersigned has reviewed all filings and the record and is fully advised in the premises, including but not limited to Liberty Mutual's failure to amend its petition and Hale's renewed motion to dismiss. It clearly appears that the parties have stipulated that the issue of "standing" in this instant case is purely a legal issue and that there remain no disputed issues of material fact.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Insurance enter a Final Order dismissing the petition herein. DONE AND ENTERED this 19th day of August, 1996, in Tallahassee, Florida. ELLA JANE P. DAVIS, 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 August, 1996. COPIES FURNISHED: Brian D. Solomon, Esquire Glenda L. Thornton, Esquire Post Office Box 1454 Tallahassee, Florida 32301 John Swyers, Esquire DEPARTMENT OF INSURANCE 200 East Gaines Street Tallahassee, Florida 32399-0333 Edward J. Kiley, Esquire GROVE, JASKIEWICZ & COBERT, P.A. 1730 "M" Street, Northwest Suite 400 Washington, D.C. 20036-4579 Bill Nelson, State Treasurer and Insurance Commissioner DEPARTMENT OF INSURANCE The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Dan Sumner, Esquire DEPARTMENT OF INSURANCE The Capitol, PL-11 Tallahassee, Florida 32399-0300
The Issue The issue in this case is whether the license of James Joseph Sines (Respondent) should be disciplined by the Department of Insurance and Treasurer (Petitioner) based upon actions he is alleged to have taken during July 1987, involving an insured, Eunice Chappell, which would constitute an unlawful misappropriation and conversion of her funds, as more particularly set forth in the Administrative Complaint issued herein on, or about June 22, 1989.
Findings Of Fact At all times material hereto, Respondent has been licensed, and eligible for licensure, in the State of Florida as a life and health debit agent, life and health agent, general lines agent limited to industrial fire insurance, and health insurance agent. From August 1, 1986, through August 28, 1987, Respondent was employed by Union National Life Insurance Company as a life and health debit agent. All funds received by Respondent under his licenses representing premiums, returned premiums, and other funds belonging to insured persons or insurers were trust funds received in a fiduciary capacity. It was Respondent's usual practice to cash checks for his debit policyholders when he visited them to collect their premiums, as many of his policyholders did not have checking or savings accounts, and thus, had some difficulty cashing checks. He did this as a service to policyholders, and as a way of making sure that insurance premiums were paid up to date, since when he cashed a check for a policyholder, he would deduct the amount of any outstanding overdue premiums, and return the balance of the check proceeds to the policyholder. The value of checks which Respondent cashed for policyholders ranged from $1 to $900, with the average check being around $300. Eunice Chappell was a policyholder with Union National Life Insurance Company at all times material hereto. Respondent visited her in her home on a regular basis, usually weekly, to collect the premiums on her debit policies, and to assist with the filing of any claims on her policies. In fact, he assisted her with the filing of a claim under policies with Union National for income replacement and convalescent benefits for a period of hospitalization from June 24, 1987, to July 3, 1987. On or about July 30, 1987, Respondent received Check Number 352955, dated July 28, 1987, issued by Union National Life Insurance Company and made payable to Eunice Chappell, in the amount of $729, representing benefits due her under policies with Union National for her period of hospital confinement in late June and early July 1987. Shortly after receiving this check, Respondent visited Chappell at her home. Since she was a number of weeks behind on her premiums, she asked him to cash this check for her, and to pay her overdue premiums out of the proceeds. However, Respondent did not have sufficient cash on hand. Therefore, he had her endorse the check, and took it to his bank to cash after he also endorsed the check and placed his account number under his endorsement. Due to her frail physical condition, Respondent had to help Chappell sign her name to the back of this check by placing his hand over hers and guiding it as she made her signature. The only person present during this visit in Chappell's home, other than Respondent and Chappell, was Michael Pierazek, a co-worker and fellow agent for Union National. When Respondent presented this check at his bank, it could not be cashed since he did not have sufficient funds in his account to cover it. Therefore, he returned to Chappell's house, accompanied by Pierazek, and told her he was unable to cash the check for her. However, she insisted that Respondent assist her in any way possible in cashing the check because of her severely limited physical abilities. He told her that the only thing he knew to do would be to return to the bank and deposit the check in his personal account, wait for the funds to clear in a few days, and then return with the proceeds. Chappell agreed to this procedure. It is strictly against the policy of Union National for agents to deposit into their own personal account any policyholder's check received in the course of their business. Respondent was aware of this policy, but sought no exemption from this policy. He did deposit Chappell's check in his account on or about August 3, 1987. On August 14, 1987, Eunice Chappell's daughter, Ethel Small, called the district manager for Union National, Donald R. Sanders, to inquire about the status of her mother's insurance claim check. She indicated to Sanders that her mother had never received the check for $729, dated July 28, 1987. From the evidence received, as well as the demeanor of the witnesses who testified, it is found that Small was simply unaware of her mother's arrangement with Respondent, and the fact that Check Number 352955 had been presented to Chappell by Respondent and subsequently deposited into his personal account with the knowledge and agreement of Chappell. Small was not present during this transaction. An affidavit executed by Chappell on August 21, 1987, states that she received no proceeds from Check Number 352955, which is correct. It does not state that she never was presented with said check. A second check was issued by Union National to Eunice Chappell dated August 19, 1987, which was delivered to her by Sanders and the Respondent on August 21, 1987. This second check was numbered 355819. Ethel Small endorsed this second check on behalf of her mother, under a purported power of attorney. However, the document which she claims gave her Eunice Chappell's power of attorney was signed by a notary public on August 6, 1987, at the place provided on the document for the signature of the person giving the power of attorney, and recites that Ethel Small, rather than Eunice Chappell, was known to, and appeared before said notary public acknowledging "the within power of attorney to be her (Ethel Small's) act and deed." Nowhere on this purported power of attorney does Eunice Chappell's signature or mark appear, nor is there any evidence that she even appeared before the notary public who signed this document. Between August 3, 1987, when he deposited Chappell's first check into his personal account, until August 14, 1987, when Ethel Small contacted the district manager of Union National, Respondent was waiting for this check to clear, and therefore, did not give Chappell any proceeds from this check. While it is not clear from the evidence presented exactly when this first check did clear, and funds became available in Respondent's personal account, it was established that Respondent did not give Chappell any proceeds from this first check. He had been instructed by his district manager, Sanders, not to contact Chappell in any way after August 14, except in his presence. Respondent complied with this directive, and awaited the issuance of a second check to accompany Sanders to Chappell's house to deliver this check. Respondent was terminated by Union National as a result of this transaction, and an amount equal to the proceeds from the first check was deducted by Union National from his personal savings account with the company, the balance of which he received at termination, in order to reimburse Union National for the issuance of the second check. There is no evidence that Respondent used the proceeds of the first Chappell check for his own benefit, or that Union National expended funds beyond what they were obligated to pay to Chappell on her claim as a result of Respondent's actions in this transaction. He did violate company policy by depositing Chappell's first check in his personal account, but this was done with her full knowledge and consent, and was, in fact, done at her request. At the time of hearing, Eunice Chappell was deceased, and therefore, the findings set forth herein concerning her arrangement with the Respondent are based upon the demeanor and credibility of witnesses who testified and who were present on July 30, 1987, when Respondent and Chappell met, as well as the demeanor of the one witness who disputes Respondent's account of this transaction, Ethel Small. It is specifically found that Small's testimony lacks credibility because it was conflicting and implausible, and because she had a personal motive to have a second check issued. She testified she was always present with her mother in the home and never left her side during the times in question, but then offered conflicting, vague and uncertain testimony about when she moved into her mother's house, times she had to leave her mother to go to the store, do laundry and cash checks, and about leaving her mother with her sister. She admitted that on two occasions each week she would take a taxi cab to the store and back, and this would take an hour or so, plus the time necessary to wait for the cab. Her testimony that she never left her mother's house when her husband periodically came to visit her from Deland is not credible. Small had a motive for wanting a second check to be issued by Union National after she found out that her mother had a private arrangement with Respondent concerning the first check. Under the purported power of attorney which she had executed only a few days after her mother gave the first check to Respondent, she endorsed and cashed the second check for $729. Ethel Small filed a complaint with the Petitioner concerning this matter in May or June 1988. No evidence was presented in support of the Respondent's affirmative defense of laches, and it was not shown that Petitioner's actions between receipt of this complaint and the filing of the Administrative Complaint in this matter was dilatory or prejudicial to Respondent.
Recommendation Based upon the foregoing, it is recommended that Petitioner enter a Final Order dismissing all charges against Respondent contained in the Administrative Complaint filed in this matter. DONE AND ENTERED this 18th of December, 1989 in Tallahassee, Florida. DONALD D. CONN Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 Filed with the Clerk of the Division of Administrative Hearings this 18th day of December, 1989. APPENDIX (DOAH CASE NO. 89-3999) Rulings on the Petitioner's Proposed Findings of Fact: Adopted in Finding 1. Adopted in Finding 2. Adopted in Finding 5. Rejected in Finding 14. Adopted in Findings 5, 6. Rejected as irrelevant and immaterial. Adopted in Finding 9. 8-9. Adopted and Rejected in part in Findings 9, 10. Rejected in Findings 6-10. Rejected in Findings 6, 14. Adopted in part in Finding 11, but otherwise rejected in Finding 14 and as not based on competent substantial evidence. Adopted and Rejected in part in Finding 10. Adopted in Finding 12. Adopted in Finding 15. Rulings on the Respondents Proposed Findings of Fact: Adopted in Findings 6 - 10, 14. Rejected in Finding 15. COPIES FURNISHED: John C. Jordan, Esquire 412 Larson Building Tallahassee, FL 32399-0300 Terry M. Brocklehurst, Esquire Countryside Place, Suite 110 2605 Enterprise Road East Clearwater, FL 34619 Don Dowdell, Esquire General Counsel Department of Insurance The Capitol, Plaza Level Tallahassee, FL 32399-0300 Hon. Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, FL 32399-0300
