The Issue Whether the Department of Agriculture and Consumer Services' (the Department) decision to award the contract contemplated in RFP No. DM-06/07-30 is contrary to the Department's governing statutes, the Department's rules and policies or the proposal specifications.
Findings Of Fact The first ten findings of fact below were stipulated to by the parties. RFP No. DM-06/07-30 was initially posted on October 30, 2006. No notice of protest or formal written protest was filed with Respondent relative to the terms, conditions or specifications contained in the RFP within the time limits set forth in Subsection 120.57(3)(b), Florida Statutes. Response awards were posted by the Department on February 5, 2007. Two responses were received for the distribution of food in Pasco County under The Emergency Food Assistance Program (TEFAP); one from Petitioner and one from Suncoast. Respondents to the RFP were awarded five points for providing proof of insurance for the value of TEFAP food in their food storage facilities at the time of their respective response submissions. Petitioner’s response was initially ranked higher than Suncoast’s response. Suncoast timely filed its Formal Written Protest on February 15, 2007, alleging that Petitioner was erroneously awarded five (5) points for having proof of insurance for the value of TEFAP food in Petitioner’s storage facility at the time of Petitioner’s response submission. Petitioner did not have insurance on the value of TEFAP food in Petitioner’s storage facility at the time of its response submission. Respondent deducted the previously awarded five points causing Petitioner’s score to drop below that of Suncoast. Petitioner has timely filed its Protest and bond or other security. The RFP addressed a proposal under TEFAP for the receipt, storage, delivery, and distribution of USDA donated commodities for the program. The geographic area of the RFP relevant to this proceeding is Pasco County. The Agency employed six evaluators to review various parts of the bids submitted. At page 53 of its RFP response, Petitioner indicated that it does carry insurance for the value of TEFAP foods in its own storage facility. This statement was a mistake; Petitioner did not have TEFAP foods in a storage facility at the time of the bid. Rather, Petitioner meant to indicate that it would insure the foods during the term of the contract. Terms of the RFP The RFP is a 72-page document which includes 13 Attachments. The RFP contains terms and conditions, as well as definitions to be considered by all bidders. At page 7, paragraph 34 of the RFP, the following language appears: During the Contract term, the Contractor at its sole expense shall provide commercial insurance of such a type and with such terms and limits as may be reasonably associated with the Contract. Providing and maintaining adequate insurance is a material obligation of the Contractor. Upon request, the Contractor shall provide certificate of insurance. The limits of coverage under each policy maintained by the Contractor shall not be interpreted as limiting the Contractor's ability and obligations under the Contract. All insurance policies shall be through insurers authorized or eligible to write policies in Florida. The "Contract term" is apparently not defined in the RFP, per se, but the following definition appears in the Special Terms, Conditions and Specifications at page 12: Contract Period The anticipated contract period will be from October 1, 2007 through September 20, 2008. Paragraph 13 at page 14 of the RFP states: [Bidder must] [p]rovide insurance on the content of the organization's warehouse or storage facility. Insurance must be in sufficient amount equal to the maximum value of USDA commodities in storage at any one time at the organizations['] owned or contracted storage facility. Paragraph 5 on page 17 addresses food storage. The relevant portions of that paragraph state: b. Any locally negotiated warehouse contracts for storage must provide adequate insurance coverage equal to the maximum value of TEFAP food which would be stored at any one time by the commercial warehouse. Proof of insurance must be submitted to the Bureau annually with the TEFAP contract renewal. * * * d. Contractor must submit a copy of any locally negotiated warehouse contract to the Bureau within 60 days of the effective date of the contract. Insurance coverage for commodities is addressed once again in the Special Provisions section beginning at page 22 of the RFP, which provides in pertinent part: Responsibilities - The Contractor accepts full responsibility inclusive of its sub-distributing sites for compliance with all provisions of this contract, including liability for any TEFAP food lost through negligence, underutilization, etc. or for any reimbursement received for any fraudulently or inadequately documented costs. Contractor will insure the contents of the warehouse storing USDA commodities as well as the physical structure itself and provide proof of insurance to the Bureau annually with the contract renewal. Contractor shall comply with all applicable State and local fire safety, food storage/ handling requirements and health codes. * * * J. Insurance - Storage facility: The contractor shall maintain insurance coverage in an amount equal to the maximum value of TEFAP commodities which would be stored in its own warehouse or storage facility at any one time. Insurance Coverage In its response to the RFP, Petitioner understood the above provisions concerning insurance to contemplate coverage during the term of the contract. Its submitted responses were intended to show that it would obtain all necessary insurance coverage for the TEFAB foods during the term of the contract. Section 5 of the RFP, beginning at page 52, addresses the applicant's storage and distribution capabilities. In its response, Petitioner identified a warehouse that it currently owns. At page 53, the RFP then asks whether the applicant carries insurance for the value of TEFAP foods in its storage facility. The question also asks the amount of coverage in existence and asks for proof of insurance. In response to that question, Petitioner asserted the existence of coverage at the time of the response when in fact it had none. Petitioner did not intentionally falsify the response; rather, it believed at that time that insurance coverage was in place at its storage facility. Petitioner had previously managed TEFAP foods and had always maintained insurance as required. It believed the prior insurance policy was still in place. As it turned out, its insurance agency had recently gone out of business, and Petitioner did not have the coverage it believed to exist. Nonetheless, its response to the RFP was in error. Nothing in the RFP required a respondent to have insurance in place. A respondent was given additional credit if it had insurance, but no points were removed for not having existing insurance. The additional credit was based on the Department's belief that having insurance coverage in place was an indication of fiscal responsibility. When the Department ascertained that Petitioner did not actually have current insurance coverage, it undertook a re- evaluation of the bids. Petitioner's initial scores were reduced five points by each reviewer. In the initial review Petitioner had outscored Suncoast 107.5 to 107.1 in the average score category. Upon re-evaluation, Suncoast's score remained unchanged but Petitioner's score dropped to 102.5, thus finishing second to Suncoast. Petitioner had responded to the question at page 53 only in part. While it stated that insurance was in place, Petitioner did not fill in the amount of coverage. Rather, Petitioner attached a copy of the Declarations Page from its last known policy. It is difficult to ascertain how that was responsive to the question concerning insurance coverage.
Recommendation Upon consideration of the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered dismissing Petitioner's Formal Written Protest. DONE AND ENTERED this 8th day of May, 2007, in Tallahassee, Leon County, Florida. S R. BRUCE MCKIBBEN 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 8th day of May, 2007.
Findings Of Fact At all times material hereto, Respondent, Ralph Steven Carmona, was licensed as an insurance agent by Petitioner, Department of Insurance. On October 25, 1989, Respondent was eligible for licensure and licensed as a Life and Health Insurance Agent. From April 7, 1967 to April l, 1989, Respondent was licensed as a General Lines - Property, Casualty, Surety and Miscellaneous Lines Insurance Agent and is currently eligible for such licensure. From January 21, 1985 through April 1, 1987, Respondent was licensed as a Surplus Lines - Property, Casualty, Surety and Miscellaneous Lines Insurance Agent and remained eligible for such licensure until March 31, 1989. Respondent also served as an officer and director of the Greater Miami Insurance Agency, Inc., an incorporated general lines and life and health insurance agency in Miami. At the time of the incident at issue, Respondent, also, was associated with and conducted insurance transactions in the name of Greater Miami Insurance Agency. In August of 1987, Dr. Lucien Armand, a medical general surgeon, approached Respondent about the possibility of obtaining medical malpractice insurance. Dr. Armand was in the process of establishing his practice with Lawnwood Regional Medical Center in Fort Pierce, Florida. As a condition for employment at Lawnwood Regional Medical Center, Dr. Armand was required to obtain medical malpractice insurance from an insurer authorized to do the business of insurance in Florida. At Dr. Armand's request, Respondent made several inquiries about the possibility of insuring Dr. Armand. Since Dr. Armand had suffered at least four medical malpractice insurance claims from the period of 1982 through 1986, obtaining coverage for him was difficult. However, Respondent gathered several quotations from various medical malpractice insurance companies including the Florida Medical Malpractice Joint Underwriting Association (FMMJUA) which quoted a premium of between $75,000 to $80,000, annually. Dr. Armand rejected each of the plans offered by Respondent as too expensive and requested Respondent to continue his search for a less expensive coverage. Sometime prior to the time he was approached by Dr. Armand, Respondent had been contacted by a company with an address in the Bahamas, International Med Trust Fund (IMTF). Respondent called IMTF and requested additional information concerning their offerings and financial status. In response to his request, Respondent received a letter from a G.L.J. Wilson written on the letterhead of Paramount Insurance Broker & Agents Limited. Respondent represented that Mr. Wilson was the broker and agent for IMTF. The letter was dated February 2, 1987 and, as quoted from the letter, made the following apparent representations pertinent to IMTF: * * * International Ned Trust Fund has been doing business in the State of Florida for over three years. The Fund has retained the services of Melsar Ltd, Inc., a Florida Corporation that are Financial and General Consultants to the Insurance Industry whose job it is to advise us on strategy and regulations of the Insurance Agency. We have not been authorized to write business in the state of Florida simply because up until now authorization was not required. We are however, advised that the office of The Insurance commissioner does not object to our writing business in Florida so long as we state our intent to defend all claims and actions within the state. This we have done. We do have the services of a Florida Lawyer whose job it is to co-ordinate the legal defence of the fund, should action from a claim commence. * * * Respondent also received a letter from Gulf Union Bank (Bahamas) Ltd. dated February 4, 1987 which stated that the "dollar value" of IMTF was in the moderate seven figure bracket. To verify the allegations in Mr. Wilson's letter, Respondent called Petitioner and spoke with someone whom Respondent believed to be a representative of Petitioner. Respondent understood the alleged spokesperson to say that the Petitioner had no jurisdiction over IMTF and from that assumed that IMTF was not required to be licensed by Petitioner before doing business in Florida. Feeling assured that IMTF need not be licensed from his understanding of the alleged representation by Petitioner, that IMTF had adequate financial resources from the representation made by Gulf Union Bank and that IMTF had previously transacted business in Florida from Mr. Wilson's letter, Respondent ended his inquiries about the status of IMTF to conduct insurance business in Florida. Respondent prepared to offer policies for IMTF. Respondent solicited for IMTF under his General Lines - Property, Casualty, Surety and Miscellaneous Lines agent's license. Although medical malpractice insurance can be written under the license, existent law requires that the insurer, itself, must be authorized by Petitioner and an agent must hold an appointment with the insurer which is registered with Petitioner. As of August 20, 1987, IMTF was also not an authorized insurer. Further, Respondent was not authorized to solicit insurance in Florida on behalf of International Med Trust Fund. When Dr. Armand rejected coverage by the FMMJUA, Respondent gave Dr. Armand an application for IMTF and quoted him a premium of $24,500, a substantial decrease from the $75,000 to $80,000 premium quoted by the FMMJUA. Respondent also shared with Dr. Armand the information he had received concerning IMTF. Dr. Armand paid the deposit of $7,500 by tendering $5,000 in cash and financing the remainder with Respondent. Dr. Armand was then given a one month binder from Greater Miami Insurance Agency for coverage by IMTF dated August 20, 1989. Later, Respondent received the Certificate of Insurance from IMTF dated November 3, 1987 for the indemnity period of August 20, 1987 through August 20, 1988. Respondent copied the certificate and forwarded it to Dr. Armand. Dr. Armand's policy was the first and only policy which Respondent has written for IMTF. However, Respondent's reliance on the representations he obtained about the status of IMTF and his failure to have adequate knowledge about the insurers for which he was authorized to solicit under his general lines license clearly demonstrate a lack of reasonable knowledge about the transactions for which he was licensed. Between October 28, 1987 and March 7, 1988, Dr. Armand paid four premium installments totaling $6,674.00 to Greater Miami Insurance Agency in addition to the deposit. The funds were deposited, in trust, in the corporate account of Greater Miami Insurance Agency. In the regular course of business, the monies, minus Respondent's commission and approximately $1,500, were forwarded to IMTF. Sometime in early 1988, the hospital questioned the validity of the IMTF policy and contacted Petitioner. Petitioner responded with a letter dated April 6, 1988 stating that IMTF was not approved or authorized to write any kind of coverage in Florida. Dr. Armand was informed by the hospital about Petitioner's letter and its contents and that he must obtain substitute insurance to remain on staff there. Dr. Armand then informed Respondent about the letter from Petitioner. Respondent offered to return Dr. Armand's money, but Dr. Armand, having confidence that Petitioner's letter was in error, requested Respondent to clarify the matter with the hospital. During the months of April and May, 1988, Dr. Armand repeatedly tried to contact Respondent concerning the status of Respondent's efforts to clarify the matter. Failing to reach him by telephone, Dr. Armand wrote Respondent on June 11, 1988 and requested a refund of the amount of premium paid to IMTF. Then, on June 15, 1988, Dr. Armand again wrote to Respondent requesting assurance that IMTF would indemnify Dr. Armand for claims arising from acts occurring during the period of time which Dr. Armand thought he was covered by IMTF. Dr. Armand made this request although he had requested that the premium be refunded to him. The proof was unclear as to whether the funds were, or were not, refunded to Dr. Armand and no competent, substantial evidence was presented to show whether IMTF would, or would not, honor a claim against Dr. Armand. Respondent attempted to satisfy Dr. Armand's requests. He telephoned IMTF and requested it to submit its Bahamian license certificate to the hospital. He, also, sought substitute coverage for Dr. Armand by again contacting the FMMJUA and secured a one month binder with FMMJUA. The proof is unclear as to what funds Respondent used as the deposit for the binder. However, the premium quoted for the coverage by the FMMJUA, in this instance, was $125,000 which Dr. Armand rejected. Although alternate insurance was available to Dr. Armand, he terminated his staff privileges at Lawnwood Regional Medical Center. The reasons for his departure from Lawnwood are unclear. Dr. Armand currently practices in Broward County, Florida. Respondent still holds some of the remaining premium funds in trust, and a balance on the premium is owing IMTF. The amount of these funds, in addition to the amount of commission paid to Respondent, were not proven by competent, substantial evidence. The instant claim represents the first and only complaint filed with Petitioner against Respondent since Respondent was first licensed by Petitioner in 1967.
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 finds that Respondent committed the multiple violations of the Florida Insurance Code as set forth in the Conclusions of Law portion of this Recommended Order, imposes a an administrative fine of five hundred dollars ($500) on Respondent and places Respondent on probation for a period of three (3) months. DONE AND ENTERED this 10th day of January, 1990, in Tallahassee, Leon County, Florida. JANE C. HAYMAN Hearing Officer The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 904/488-9675 Filed with the Clerk of the Division of Administrative Hearings this 10th day of January, 1990.
Findings Of Fact Essential Background. The Respondent, Larry Wayne Lindsay, is and has been at all times pertinent to this case, eligible for licensure as a general lines agent and as a life and health agent. Effective between December 31, 1987, and January 1, 1988 (the written agreement is dated December 24, 1987), Lindsay's Friendly Auto Insurance of Polk County, Inc., formerly Friendly Auto Insurance Agency of Lake Wales, Inc. (Friendly of Lake Wales), and Friendly Auto Insurance of Winter Haven, Inc. (Friendly of Winter Haven), sold their assets, including the leasehold on the Friendly of Winter Haven business location, to Central Florida Insurance Agency of Winter Haven, Inc. (Central), for $500. The Respondent, Larry Wayne Lindsay (Lindsay), signed the agreement on behalf of the sellers. Kimberly Strayer, then Lindsay's fiance, now his wife, is the sole legal owner, officer and director of Central. Effective between December 31, 1987, and January 1, 1988 (the written agreement is dated January 27, 1988), Friendly Auto Insurance of Haines City, Inc. (Friendly of Haines City), sold its assets, including the leasehold on its business location, to Ridge Insurance Agency, Inc. (Ridge), for $200. Lindsay signed the agreement on behalf of the seller. Kimberly Strayer is the sole legal owner, officer and director of Ridge. When it was formed in approximately April of 1984, Lindsay and Ruth Kent were the initial directors of Friendly of Winter Haven. The two of them remained the directors and officers of the corporation through at least January of 1987, according to the corporation's annual reports. At some point before December 31, 1987, Kent transferred all of her interest in the corporation to Lindsay, who became the sole owner, officer and director of the corporation. But the evidence was not clear when Kent transferred her interest to Lindsay or what Lindsay's ownership interest in the corporation was up to the time of the transfer. Lindsay was the full-time agent in charge of Friendly of Winter Haven in March of 1983, according to Department of Insurance records, but the evidence was not clear how long he remained full-time agent in charge. At some point, he was replaced by Thomas Shaw. The evidence was not at all clear who were the owners, directors or officers of Friendly of Lake Wales at any point in time before Lindsay, acting on its behalf, transferred its assets to Central. Robert Seese was its nominal full-time agent in charge starting approximately in July, 1986, until approximately September, 1988, according to the evidence, but he was not actually in charge of the office, had little to do with the business and spent little time at the business. He essentially allowed Friendly of Lake Wales to use his name, license and facsimile stamp. Lindsay also submitted some applications for insurance from the Lake Wales office in the fall of 1987. The evidence was not at all clear when Seese's nominal role as the full-time agent in charge was terminated or who was the full-time agent in charge when Seese was not. When it was formed in approximately September of 1983, Lindsay and Ruth Kent were the initial directors of Friendly of Haines City. The two of them remained the directors and officers of the corporation through at least January of 1987, according to the corporation's annual reports. At some point before December 31, 1987, Kent transferred all of her interest in the corporation to Lindsay, who became the sole owner, officer and director of the corporation. But the evidence was not clear when Kent transferred her interest to Lindsay or what Lindsay's ownership interest in the corporation was up to the time of the transfer. When it was formed in approximately September of 1984, Lindsay and Ruth Kent were the initial directors of Friendly Auto Insurance Agency of Bartow, Inc., (Friendly of Bartow). The two of them remained the directors and officers of the corporation through at least January of 1987, according to the corporation's annual reports. In May, 1987, Lindsay was the full-time agent in charge of Friendly of Bartow, according to Department of Insurance records in evidence. At some point in time, Lindsay transferred all of his interest in the corporation to Kent. But the evidence was not clear when Lindsay ceased acting as full-time agent in charge of Friendly of Bartow, when Lindsay transferred his interest to Kent or what Lindsay's ownership interest in the corporation was up to the time of the transfer. When Central began doing business at the former Friendly of Winter Haven location in January, 1988, Seese transferred his license there and began to pose as its full-time agent in charge. In fact, Seese was not in charge of Central's business, had very little to do with the business and spent practically no time at Central's office. Essentially, all he did was allow Central to use his name, license and facsimile stamp. Lindsay often was at Central giving advice to Strayer and, as a practical matter, acting in the role of the full-time agent in charge of Central. Ridge began doing business at the former Friendly of Haines City location in January, 1988, without having notified the Department of Insurance of the identity of its full-time agent in charge. Strayer testified that Ridge had no full-time agent in charge but conceded that she knew it was illegal to operate without one. In fact, Lindsay spent much of his time at Ridge and essentially ran the office, acting as if he were the full-time agent in charge. Business with the FJUA is produced by agents who are licensed by the FJUA to produce business at a certain location and assigned to a particular insurance company. When they began doing business, neither Ridge nor Central had a relationship with FJUA. Lindsay had been an FJUA producer assigned to State Farm Mutual Insurance Company (State Farm) and licensed to produce business at Friendly of Bartow. Although the evidence is not clear when Lindsay stopped producing FJUA business at Friendly of Bartow, he officially was terminated as a producer at that location on or about April 21, 1988. Seese had been an FJUA producer at Friendly of Lake Wales assigned to State Farm from July, 1987, officially until approximately February 9, 1988. Thomas Shaw, who was the full-time agent in charge of Friendly of Winter Haven, had been an FJUA producer assigned to State Farm at that location--the same location Central later assumed. There is no evidence when or if Shaw officially was terminated as a producer at the Friendly of Winter Haven location. Lindsay knew, and should have known, that Ridge had not yet been licensed by the FJUA to produce FJUA business at its location or that it had been assigned to State Farm. When Ridge began doing business, applications for FJUA insurance coverage first were transmitted to Central to be submitted by Central, over Seese's facsimile stamp, to State Farm. Transactions Alleged Under Counts I Through VIII. On or about January 14, 1988, Ridge took from David Doolin of Davenport, Florida, an application and $70 as a down payment for coverage under the FJUA and bound the coverage. (Count I.) On or about January 20, 1988, Ridge took from Rachel McKenny of Haines City, Florida, an application and $56 as down payment for six months of personal injury protection (PIP) coverage with United States Underwriters (USU) and bound the coverage. When coverage under USU became unavailable, Ridge advanced McKenny $12 to pay for the down payment on a year of coverage under the FJUA. (Count II.) On or about January 12, 1988, Ridge took from Richard Truett of Haines City, an application and $109 as down payment for a year of coverage under the FJUA and bound the coverage. (Count III.) On or about January 13, 1988, Ridge took from Bruce Tish, Jr., an application and $150 as down payment for and with Dairyland Insurance Company and bound the coverage. When Dairyland insurance became unavailable, Ridge advanced Tish $16 for the down payment on a year of coverage with the FJUA. (Count IV.) On or about January 15, 1988, Ridge took from Germaine Collier of Winter Haven an application and $56 as down payment for six months of PIP coverage with USU and bound the coverage. When USU coverage became unavailable, Ridge advanced Collier $2 for the down payment for a year of coverage under the FJUA. (Count V.) On or about January 15, 1988, Ridge took from Callie Robinson, Jr., of Haines City an application and $56 as down payment for six months of PIP coverage with USU and bound the coverage. When the USU coverage became unavailable, Ridge advanced Robinson $2 for the down payment for a year of coverage under the FJUA. (Count VI.) On or about January 15, 1988, Ridge took from James Belcher, through his wife Peggy, an application and $56 as down payment for six months of PIP coverage with USU and bound the coverage. When the USU coverage became unavailable, Ridge advanced Belcher $12 for the down payment for a year of coverage under the FJUA. (Count VII.) On or about January 15, 1988, Ridge took from Gerald Dempsey of Winter Haven an application and $60 as down payment for six months of PIP coverage with USU and bound the coverage. When the USU coverage became unavailable, Ridge submitted the application for a year of coverage under the FJUA (the down payment for which was only $58.) (Count VIII.) It was not proven, as alleged, that Ridge did not secure the necessary money order for the down payment for the FJUA coverage referred to in Counts I through VIII until on or after March 24, 1988, or that Ridge did not submit the applications referred to in Counts I through VIII until on or about April 12, 1988. To the contrary, it never was made clear from the Department's evidence whether the FJUA applications referred to in Counts I through VIII (Petitioner's Exhibits 18 through 25, in evidence) were among the applications received by State Farm for the first time on or about April 12 and 19, 1988, or whether they were among the applications previously submitted to State Farm but returned by State Farm for various reasons. Lindsay's evidence, which is more persuasive, suggests that Ridge transmitted the applications to Central for processing, money orders for the down payments were obtained and Central sent the applications to State Farm within approximately a week from when they were taken by Ridge. According to Lindsay's version of the events that transpired, State Farm rejected the applications once because Seese's facsimile stamp had been used on the applications. (The applications themselves would support Lindsay's version in this respect. Seese's name is signed over a part of the application that appears to have been "whited-out.") State Farm returned the applications and the money orders. Central then repurchased money orders, had Seese sign the applications and re-submitted the applications. For a second time, State Farm rejected and returned the money orders, this time because the effective date of the coverage was before Seese became licensed by the FJUA and assigned to State Farm as agent at the Central location. The applications also support Lindsay's version in this respect because the effective date of the coverage is changed to start coverage one month later, after Seese's February 9, 1988, appointment date. Central re-purchased money orders again, dated March 24, 1988, and submitted the applications for at least the third time on or about April 12, 1988. All of these applicants received coverage as of the revised effective date. Transactions Alleged Under Counts IX And X. On or about March 11, 1988, Ridge, through Lindsay, took from Charles and Erna Bluschke an application and Erna's $236 check for the down payment for a year of FJUA coverage on their 1984 Thunderbird. (Count IX.) Ridge gave the Bluschkes a Florida Automobile Insurance Identification Card indicating that State Farm was the carrier and that the coverage was bound effective March 11, 1988. When the Bluschkes received no paperwork from State Farm or the FJUA within approximately a month, Mr. Bluschke returned to Ridge and talked to Lindsay. Lindsay told him that the paperwork had not come through but should be in "any day." Approximately another month went by without any paperwork, and Bluschke again went to speak to Lindsay. Bluschke was concerned because State Farm had cancelled him previously, and he wanted to know how he could be sure he had coverage. Lindsay responded, "Don't worry, you're covered." In fact, as Lindsay knew, the Bluschkes' application had not been submitted to State Farm. By the time the Bluschkes had applied, Ridge and Central were in the midst of dealing with problems they were having getting older applications accepted by State Farm and had put the Bluschkes' application aside until the older problems were resolved. They also were attempting to be assigned to an FJUA carrier other than State Farm. Indeed, on or about April 12, 1988, certainly by the time of Bluschke's second inquiry, and perhaps even by the time of his first inquiry, Lindsay had submitted an application as Ridge's general lines agent to be licensed to produce for the FJUA and to be assigned to Allstate instead of State Farm. The representations Lindsay made to Bluschke on the first and second inquiries were knowing misrepresentations made for the purpose of concealing from the Bluschkes the actual status of Ridge's relationship to the FJUA and State Farm. After his second inquiry, Bluschke demanded and received a full refund of his $236 down payment. On or about February 12, 1988, Paris and Helen Dalton of Hamilton, Florida, went to Ridge to purchase insurance for a 1979 Pontiac and a 1977 Dodge Van. (Count X.) They completed an FJUA application and paid $409 down. They were given a Florida Automobile Insurance Identification Card indicating that State Farm was the carrier and that coverage was bound effective February 12, 1988. For the same reasons that Ridge did not submit the Bluschke application, Ridge never submitted the Dalton application to State Farm. In March, 1988, after 30 days had passed, Helen Dalton returned to Ridge because the Daltons had not yet received a payment book from State Farm. "Wanda," who worked at Ridge, assured the Daltons that the policy and payment book would come in the mail and that it sometimes took as much as 90 days. Later in March, 1988, the Daltons' bank asked for proof of insurance on their vehicles. Helen Dalton went to Ridge and got from "Wanda" a copy of the binder, signed by Lindsay. "Wanda" told Dalton that Ridge would call the bank. Ridge never called the bank, as the bank informed the Daltons in June, 1988. Helen Dalton again returned to Ridge, and this time a different person working at Ridge told her that "it's hard to get through to State Farm." Helen Dalton called State Farm directly and was told that State Farm never had received the application and that Ridge and Lindsay were not authorized to write FJUA insurance through State Farm. Dalton returned to Ridge and confronted Lindsay directly with this information. Lindsay offered to "re-write" the policy, but Dalton demanded her money back. Lindsay sent Dalton to Central in Winter Haven to have Strayer refund the money, saying he had no authority to write a refund check, and the Daltons finally got their refund on or about June 27, 1988. Transactions Alleged In Count XI. At least from on or before July 1, 1985, continuously until after December 31, 1986, Friendly of Winter Haven, Friendly of Bartow, Friendly of Haines City, and Friendly of Lake Wales arranged customers' premium financing through Time Premium, Inc., of Boca Raton, Florida. As part of each premium finance transaction, the agency submitted to Time Premium, Inc., an agency check representing the down payment received from the customer and an executed premium finance contract. The agencies also collected monthly payments from insureds and forwarded agency checks to Time Premium on behalf of these insureds. From August, 1985, through July, 1986, these corporate agencies wrote approximately $13,000 in checks payable to Time Premium drawn on the agencies' business accounts. Lindsay personally signed in excess of seven thousand dollars worth of these checks. These checks were returned due to insufficient funds. On December 10, 1986, these four corporate agencies, through Lindsay and Ruth Kent as the directors, executed a promissory note in favor of Time Premium, Inc., in the amount of $13,076.34 to satisfy the outstanding indebtedness on the returned checks. The promissory note required repayment at the rate of $500 per month. As of July 1, 1988, only $2,000 had been repaid.
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 finding the Respondent, Larry Wayne Lindsay, guilty of some, but not all, of the violations alleged in the Administrative Complaint in this case, as reflected in this Recommended Order, and suspending, for a period of one year, his general lines, health and life insurance agent licenses and his eligibility to hold those licenses. RECOMMENDED this 22nd of November, 1989, 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 22nd day of November, 1989.
The Issue The issues in this case are whether Respondent, Timothy Michael Crowley, committed the offenses alleged in an Administrative Complaint issued by Petitioner, the Department of Financial Services, on September 14, 2006, and, if so, what penalty should be imposed.
Findings Of Fact The Parties. Petitioner, the Department of Financial Services (hereinafter referred to as the "Department"), is the agency of the State of Florida charged with the responsibility for, among other things, the investigation and prosecution of complaints against individuals licensed to conduct insurance business in Florida. Ch. 626, Fla. Stat. Respondent Timothy Michael Crowley was, at the times relevant, licensed in Florida as a life and health (2-18) agent, and a general lines, property and casualty agent. Mr. Crowley’s license number is A058537. Mr. Crowley, who is 61 years of age, has been an insurance agent for approximately 30 years. At the times relevant to this matter, Mr. Crowley was employed by Insurance Center of South Florida (hereinafter referred to as “Insurance Center”). Insurance Center is located in Coral Springs, Florida. At all relevant times, Mr. Crowley transacted commercial lines of insurance for Insurance Center. Count I; Xiaoqu Ma and Q-Nails. The Department has abandoned the charges of Count I, involving Xiaoqu Ma and Q-Nails, in Department’s Proposed Recommended Order. The evidence concerning Count I failed to prove the factual allegations necessary to support the charges of Count I. Count II; Charles Rosenthal and Cer-Tax, Inc. On or about December 15, 2004, a letter and three forms were faxed from Mr. Crowley on Insurance Center letterhead to Cer-Tax, Inc. (hereinafter referred to as “Cer-Tax”), an accounting business owned and operated by Charles Rosenthal. Insurance Center had been providing office general liability insurance coverage to Cer-Tax for several years. Mr. Crowley’s letter was sent to Cer-Tax because it was time for Cer-Tax to renew its insurance. Mr. Crowley stated, in part, the following in his letter, which was dated December 10, 2004, to Cer-Tax: We are pleased to offer the following quote for the renewal of your expiring office general liability policy. North Point Insurance Company $300,000 General Liability Policy Aggregate $300,000 General Liability Per Occurance [sic] $100,000 Damage to Rented Property of Others This policy is for premises liability only. Total annual premium $582.00 This quote is based on the imformation [sic] provided, subject to loss history verification, a satisfactory inspection and compliance with all recommendations. In order to bind the coverage we will need a check in the amount of $582.00 and the enclosed forms signed. You can fax the forms back to me and then please mail the originals with your signature. Please be sure to read the attached notice of terrorism insurance coverage. This notice is required by Federal Law and must be signed at the time of binding. Please feel free to call in the event you should have any questions regarding your coverages or the renewal process. The three forms attached to the December 10, 2004, letter for Mr. Rosenthal’s signature included: a “Notice-Offer of Terrorism Coverage and Disclosure of Premium” form; an “Applicant Information Section”; and a document titled “Nation Safe Drivers Enrollment Application” (hereinafter referred to as the “Nation’s Application”). While Mr. Crowley’s letter clearly indicates that all three forms, including the Nation’s Application, had to be signed on behalf of Cer-Tax and a total payment of $582.00 had to be made “[i]n order to bind the coverages,” described in the letter as “general liability” coverages, the Nation’s Application had nothing to do with the office general liability coverage Cer-Tax desired and Mr. Rosenthal thought he was renewing. In fact, the Nation’s Application was for an ancillary insurance coverage or product that provided accidental death benefits and membership in a motor club. Insurance Center had begun selling the Nation Safe Drivers product after Mr. Crowley became employed by Insurance Center. In addition to having no direct relationship to the office general liability coverage Cer-Tax desired and Mr. Rosenthal was told by Mr. Crowley in his December 10, 2004, letter Insurance Center was renewing, there was a separate charge for the Nation Safe Drivers product. The charge was $100.00 and it was included in the $582.00 charge Mr. Crowley told Cer-Tax was the total annual premium for Cer-Tax’s renewal of its office general liability policy. The actual cost of the office general liability insurance policy was $482.00, a fact which was not explained by Mr. Crowley to Mr. Rosenthal. Even if Mr. Rosenthal had paid more attention to the documents he was told to sign, it is unlikely that Mr. Rosenthal or any other reasonable person would have concluded that he was paying for anything other than the renewal of Cer-Tax’s office general liability insurance policy. Nor should Mr. Rosenthal, given Mr. Crowley’s explanation, have reasonably concluded that the Nation Safe Drivers product was a policy separate from the one he thought he was purchasing. As instructed in the December 10, 2004, letter from Mr. Crowley, on or about December 16, 2004, Mr. Rosenthal signed the three documents where they had been marked with an “x” in a circle. Mr. Rosenthal also included his birth date on the Nation’s Application. The forms and a check for $582.00 payable to Insurance Center were returned to Insurance Center. Insurance Center, while informing Mr. Rosenthal and Cer-Tax that it was selling Cer-Tax an insurance product from North Pointe Insurance Company, actually sold two separate products: an office general liability policy from North Pointe Insurance Company; and a Nation Safe Drivers product providing accidental death benefits and membership in a motor club. The latter product was not one which Cer-Tax was aware it was purchasing or one that it desired. While Mr. Rosenthal is an educated accountant, authorized to represent clients before the Internal Revenue Service, he is not an insurance agent. Mr. Rosenthal, given the representations in Mr. Crowley’s December 10, 2004, letter, acted reasonably in following Mr. Crowley’s instructions and in not inquiring further about the Nation’s Application. Count III; Selma Schevers and Realty Unlimited, Inc. On or about December 10, 2004, a document and three forms were faxed by Mr. Crowley to Realty Unlimited, Inc. (hereinafter referred to as “Realty Unlimited”), and Selma Schevers, the owner of Realty Unlimited. Mr. Crowley stated, in part, the following in the document: Insurance Company: National Insurance Company---Rated A+ by A.M. Best Co. Business Personal Property Business property - $25,000.00 per location #1 & #2, Location #3 $40,000 special form including theft valued on a replacement cost basis. $500 deductible Theft sublimt [sic] $25,000 Including wind/hail 2% deductible or $1,000 whichever is greater Any other peril deductible - $1,000 Business income $100,000 per location payable 1/3 over 90 days Commercial General Liability Coverage General Aggregate: $2,000,000 Per Occurrence: Products and Completed $1,000,000 Operations: $Excluded Personal Injury: $1,000,000 Advertising Injury: $Excluded Fire Damage Leagal [sic] Liability: $100,000 Medical Payments: $5,000 Deductible $500 per claim – Occurrence Basis Professional Liabilty General Aggregate: None Included in General Liability Total Annual Premium $5190.00 . . . . Please sign the two applications, terrorism form, and the Nations enrollment form. Please fax back to me with your check and be sure to mail the original signatures to me. Also please sign this form and return the original to me to authorize me to sign your name to the premium finance agreement. X I will bind your coverages as soon as I receive your check and the faxed signed forms. I will then send you a certificate of insurance showing all the coverages are in effect. Please call should you have any questions about your coverages or what needs to be signed. One of the forms sent to Ms. Schevers was a Nation’s Application identical to the one sent to Cer-Tax. While Ms. Schevers could not remember seeing the Nation’s Application, she did identify her date of birth written on the application as being in her handwriting. While Mr. Crowley’s letter, unlike the one sent to Cer-Tax, identifies the Nation’s Application, his letter only describes the insurance Realty Unlimited was interested in purchasing, which was business general liability insurance, and fails to explain what the Nation’s Application is for. Mr. Crowley indicates in the document that he will “bind your coverages as soon as I receive your check and the faxed signed forms,” which included the Nation’s Application. Mr. Crowley also suggested in the document that the “Total Annual Premium” of $5,190.00 was for the business general liability insurance. He failed to inform Realty Unlimited that the $5,190.00 premium included an additional charge of $200.00 for Nation Safe Drivers coverage, coverage which had not been requested by Realty Unlimited and was unwanted coverage. While Ms. Schevers, on behalf of Realty Unlimited, signed some of the forms sent to her by Mr. Crowley, she did not sign the Nation’s Application. She returned the signed forms on or about December 10, 2004, with a down payment of $1,480.00, which Mr. Crowley had indicated was acceptable. The down payment from Realty Unlimited was divided by the Insurance Center, with $1,280.00 being applied toward the business general liability insurance desired by Realty Unlimited and $200.00 applied in full payment for Nation Safe Drivers coverage despite the fact that Ms. Schevers had not signed the Nation’s Application. Insurance Center, while informing Ms. Schevers and Realty Unlimited that it was selling Realty Unlimited an insurance product from National Insurance Company, actually sold two separate products: a business general liability insurance policy from National Insurance Company; and a Nation Safe Drivers product providing accidental death benefits and membership in a motor club. The latter product was not one which Realty Unlimited was aware it was purchasing, one that it desired, or one for which Ms. Schevers even signed an application. Nor was it one, assuming Ms. Schevers saw the Nation’s Application, Ms. Schevers should have realized was not part of the insurance product she wished to purchase. Counts IV and V. The Department has abandoned the charges of Counts IV and V at hearing and in Department’s Proposed Recommended Order. No evidence concerning Counts IV and V was presented at hearing to support the charges of these Counts. Aggravating/Mitigating Factors; Prior Disciplinary Action Against Mr. Crowley. In addition to this disciplinary matter, an Administrative Complaint (hereinafter referred to as the “1997 Administrative Complaint”) was issued against Mr. Crowley on or about April 2, 1997. The charges of the 1997 Administrative Complaint, which included allegations of wrong-doing similar to those at issue in this case, were resolved by a Consent Order issued pursuant to a Settlement Stipulation for Consent Order. Among other things, the Consent Order ordered that Mr. Crowley cease and desist from using any methods or practices in the business of insurance which would constitute the act or practice of “sliding.” Aggravating/Mitigating Factors; Reimbursement of Premiums. The premiums paid by Cer-Tax and Realty Unlimited have been refunded by Mr. Crowley and Insurance Center.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Department finding that Timothy Michael Crowley violated the provisions of Chapter 626, Florida Statutes, described, supra; dismissing all other charges; and suspending his license and appointment for a period of twelve months. DONE AND ENTERED this 27th day of November, 2007, in Tallahassee, Leon County, Florida. S LARRY J. SARTIN 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 27th day of November, 2007. COPIES FURNISHED: Robert Alan Fox, Senior Attorney Division of Legal Services Department of Financial Services 612 Larson Building 200 East Gaines Street Tallahassee, Florida 32399-0333 Jed Berman, Esquire Infantino and Berman Post Office Drawer 30 Winter Park, Florida 32790-0030 Honorable Alex Sink Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Daniel Sumner, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0307
The Issue At issue is whether Petitioner was within the scope of his employment, and therefore not personally liable for damages sustained by the state-owned vehicle driven by him at the time of a traffic accident.
Findings Of Fact On or about March 8, 2000, Petitioner had an automobile accident, while driving his state-owned vehicle. Petitioner received administrative discipline from FDLE, his employer, for his role in the accident. Specifically, Petitioner received a written reprimand for safety violations committed by him in the operation of the state-owned vehicle. Additionally, Petitioner was ordered to reimburse FDLE for the repair of damage sustained by the automobile. At the time, FDLE had no administrative rule, which gave notice to Petitioner or required him to pay for the vehicle’s damage. Instead, FDLE exclusively relied upon the opinion of Risk in determining that the accident took place while Petitioner was "on a personal mission" of his own and was, therefore, not within the scope of his employment. At all times material to this case, Petitioner was a special agent of FDLE, assigned to the agency's Live Oak, Florida, office. As part of his employment by FDLE, Petitioner was assigned a state-owned vehicle to operate. Petitioner resides with his family in Madison, Florida. On the date of the traffic crash, Petitioner was working on an ongoing criminal investigation in conjunction with the Hamilton County Sheriff’s Office (HCSO) in Jasper, Florida. On the morning of March 8, 2000, Petitioner drove his state vehicle directly to HCSO from his residence. In the afternoon of March 8, 2000, Petitioner received a call at HCSO originating from his wife which notified him that his father had been taken to the Madison County hospital due to a heart attack. Petitioner then informed his wife of his intent to drive the state vehicle back to their personal residence, so that he could retrieve his personal vehicle for the trip to Madison County Hospital. Following the conversation with his wife, Petitioner left HCSO in the state vehicle and shortly thereafter became involved in the automobile accident. Petitioner informed HCSO Investigator David Ehlert, after the latter had arrived at the accident scene, that he was in the course of driving the state vehicle to his personal residence, so that he could retrieve his personal vehicle for the trip to the Madison County Hospital. Just prior to the accident, Petitioner activated his vehicle’s emergency lights and siren for which he later received a reprimand for breach of safety conditions attendant to driving his "Class C" vehicle. The automobile accident caused damage to the state vehicle estimated at approximately $8,325.00. When Petitioner’s state vehicle is not in use it is routinely parked at his personal residence, as authorized by FDLE policy. Petitioner has been authorized to use this "Class C" vehicle for state business purposes only, which includes "incidental use" in "limited situations." Petitioner and other FDLE agents, who have been issued "Class C" vehicles are routinely subject to service calls on a 24-hour basis, requiring that they respond directly from their personal residences. Additionally, these same agents serve routinely as "duty agents" after their regularly scheduled work hours. On the date of the accident, Petitioner drove along State Road 6, which is the most direct travel route between his personal residence and HCSO. Further, on this date, Petitioner neither "departed from his usual route" nor employed the vehicle for "incidental use." Instead, on March 8, 2000, Petitioner was operating the vehicle while "on duty" and was paid by FDLE for performing this task within his regularly scheduled work hours. Petitioner's intent to retrieve his personal vehicle before going to the Madison County Hospital was based on his father’s past history of heart-related hospitalization and the likelihood that the patient would be transferred to a larger hospital in either Tallahassee or Jacksonville. Such a journey would have required Petitioner to use his personal vehicle. Petitioner’s personal residence is located approximately one-fourth mile from the intersection of U.S. 90 and State Road 6. This very short distance would have permitted Petitioner to retrieve his personal vehicle in a matter of moments. Additionally, it was the same route traveled by Petitioner that morning. Conversely within the same time frame, Special Agent Don Ugliano, a fellow employee, had an automobile accident involving his rear-ending of another automobile with his "Class C" vehicle but RISK paid that claim. Shortly after Petitioner's accident, personnel of RISK sent Petitioner a RISK agency publication, which purported to explain the parameters of when RISK will and will not insure a state employee who has been involved in an automobile accident. Prior to this time, neither Petitioner nor any of his FDLE supervisors had seen the publication or had been advised by RISK of its coverage policies. The publication was sent to FDLE and Petitioner. It was RISK’s first issue of the publication. RISK’s publication specifically provides that state insurance coverage is in effect "for an employee whose regular work time requires him to work away from the office (in the 'field')" such as "when commuting to and from work." At all times material, Petitioner was operating the vehicle while "on duty" and "within the scope of his employment." The candid and direct testimony of Petitioner's supervisor and author of the directive requiring reimbursement for damages to the state vehicle, establishes that the demanded reimbursement was apart from the reprimand language included in the document and added by FDLE based exclusively upon RISK’s position. A new rule, addressing situations such as Petitioner’s, was in the course of development by FDLE on the same date as the accident. However, that rule was technically "unadopted" at the time of the accident. Prior to the accident, attempts by FDLE personnel, inclusive of Petitioner, were made to secure a private insurance "rider" coverage for those incidents, which RISK might not insure. The answer received in response to these inquiries was that no private carrier would agree to submit itself to the arbitrary and capricious coverage determinations of RISK.
Recommendation Based upon the foregoing analysis, findings of fact and conclusions of law, FDLE has no basis in fact or in law to demand reimbursement from Petitioner. It is recommended that FDLE enter a final order finding Petitioner to have been in the course of employment at the time of the traffic accident in question and rescinding FDLE attempts to seek reimbursement from Petitioner for damage to the state-owned vehicle. DONE AND ENTERED this 27th day of March, 2001, in Tallahassee, Leon County, Florida. ___________________________________ DON W. DAVIS 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 27th day of March, 2001. COPIES FURNISHED: D. David Sessions, Esquire Department of Law Enforcement Post Office Box 1489 Tallahassee, Florida 32302 Thomas A. Klein, Esquire Florida Police Benevolent Association, Inc. Post Office Box 11239 Tallahassee, Florida 32302 Michael Ramage, General Counsel Department of Law Enforcement Post Office Box 1489 Tallahassee, Florida 32302 James T. Moore, Commissioner Department of Law Enforcement Post Office Box 1489 Tallahassee, Florida 32302
The Issue The issue for disposition in this proceeding is whether Petitioner, Florida Insurance Management Group, Inc. (FIMG), is entitled to authorization from Respondent (Agency) to act as a service company in the State of Florida. Ancillary issues are whether the Agency is estopped from asserting new grounds for denial in an Amended Notice of Intent to Deny and whether the Agency participated in the proceeding for an improper purpose pursuant to Section 120.595(1), Florida Statutes (Supp. 1996), so as to entitle FIMG to an award of attorney’s fees and costs.
Findings Of Fact Petitioner, FIMG, is a Florida corporation, incorporated in the State of Florida on March 29, 1994. FIMG is a wholly owned subsidiary of Interstate Insurance Services Group, Inc. (IISG), a Delaware corporation registered to do business in Florida. Allen Brooks, president of FIMG, is the principal owner of IISG. Bruce Gilbert, Terry Borgland, Mike Francine, and Lou Gutierrez are also owners. FIMG is licensed by the Florida Department of Insurance as a managing general agency. Under that license it is authorized to represent licensed insurance companies by handling various administrative aspects of their insurance programs. In this capacity, FIMG represents Claredon National Insurance Company and offers to the general public policies of workers’ compensation insurance under the Claredon name and under one of Claredon’s subsidiaries, Farmer’s Specialty Insurance Company. On May 13, 1996, FIMG submitted to the Agency its application for authorization to act as a workers’ compensation service company. A service company regulated by the Agency performs essentially the same functions for a self-insured employer that it performs for an insurance company as a managing general agency. The functions are regulated by separate state agencies. Allen Brooks resides in Lake Wales, Florida, and is president of other companies that are subsidiaries of IISG that are corporations operating as third party administrators or providing other insurance-related services in states other than Florida. Brooks filed the application for FIMG to operate as a service company after he was approached by Citrus World, a large juice-processor in Lake Wales, regarding submitting a proposal to work as a service company for that employer’s self-insured workers’ compensation company. FIMG’s application to the Agency reveals on its face the connection between FIMG and its parent, IISG. It also reveals that the directors and officers of IISG have also been officers of Associated Risk Management Services, Inc. (ARMS), an Oklahoma corporation which was registered to do business in Florida on February 12, 1990. The physical location of the three corporations, FIMG, IISG, and ARMS is 250 East Park Avenue, Lake Wales, Florida. Prior to August 22, 1994, ARMS was a service company, authorized by the Agency to serve as a third party administrator (service company) for the Florida Transportation Insurance Self- Insurance Trust Fund. In 1993, ARMS applied for its annual re- certification. The Agency denied that application and in 1994 initiated proceedings to revoke the service company authorization. When ARMS petitioned for administrative formal hearings, the Agency referred the two cases to the Division of Administrative Hearings (DOAH) where they were consolidated as DOAH Cases 93-5537 and 94-2565. These cases never proceeded to hearing. Instead, in a letter dated July 8, 1994, ARMS notified the Agency of its intent to “immediately and unconditionally surrender its authorization to act as a service company in Florida.” After DOAH relinquished jurisdiction, the Agency entered its Final Order dismissing the ARMS’ proceeding as moot. Neither DOAH nor the Agency issued an order finding any violations by ARMS, and the Agency never revoked ARMS service company authorization, as the authorization was voluntarily surrendered. When the Agency received the FIMG service company application, it did not request any additional information from FIMG in order to process the application. The Agency’s standard procedure in reviewing service company applications is to accept at face value the information provided by the applicant and the information received through background investigation reports submitted as required by the Agency. The Agency does not conduct its own investigation. On May 16 1996, the Agency received background investigation reports from Equifax, the company selected by FIMG from a list of approved companies provided by the Agency. The Equifax reports on Allen Brooks, Terry Borgland, Bruce Gilbert, and Deana Smith, officers of FIMG, reflect that each was previously employed by ARMS, and that “...[ARMS] underwent new structuring with a change in management, and the name was changed to Interstate Insurance Group, Inc. [sic], subject’s present employer as shown above.” (Petitioner’s Exhibit 2) The Agency stopped processing FIMG’s application, and on June 26, 1996, issued its Notice of Intent to Deny FIMG’s application. The notice alleged that FIMG failed to meet the criteria of Rule 38F-5.040(3)(a), Florida Administrative Code, for the following reasons: That the persons in ownership, control, and management of Florida Insurance Management Group, Inc. are the same as they were for the Association Risk Management Service Company (ARMS). The recertification of this prior company was up for revocation due to the violation of Rule 38F-5.040(3)(a) and (c), F.A.C. On July 8, 1994, ARMS notified the Division that it intended to immediately and unconditionally relinquish its authorization to act as a service company in the State of Florida and to no [sic] seek further recertification as a service company in the State of Florida, because it was not economically viable. This application is for a subsidiary of the reorganized ARMS now known as Interstate Insurance Services Group, Inc. (Joint Exhibit 2) On July 16, 1996, pursuant to a procedure established by the Agency, FIMG submitted its request for reconsideration of the intent to deny. The request included corporate documents for IISG and FIMG. It also included a letter from Allen Brooks stating that ownership and control of ARMS was not the same as FIMG, even though many of the management personnel formerly associated with ARMS were now employees of the applicant. The letter stated that ARMS is owned 100 percent by Colette C. Rumfelt and is not related to FIMG, nor was FIMG a “reorganized ARMS.” Ms. Rumfelt has no ownership interests in FIMG or IISG. The letter also clarified that, while ARMS operated as a third party administrator for group self insurance funds, FIMG’s operations would be limited to servicing individual self-insurers in Florida. The Agency still did not conduct any investigation into FIMG’s application or request for reconsideration. Instead, on September 11, 1996, the Agency denied FIMG’s request for reconsideration for the same reasons given in the notice of intent to deny, stating that “. . .the same group of people will be in control of the new service company, and for this reason we cannot approve this application.” (Joint Exhibit 4) On October 28, 1996, after the reconsideration was denied and after FIMG petitioned for a formal administrative hearing, Deana Smith wrote to Equifax and asked to have corrected the erroneous statements about FIMG or its parent company being a “reorganized” ARMS. In response, Equifax issued its “Corrected Report,” stating this under sections addressing ARMS’ former employment of Allen Brooks, Terry Borgland, Bruce Gilbert, and Deana Smith: Association Risk Management Service company is a service company to employee benefits trusts and is doing business in Florida and North Carolina. This company also holds interest in telecommunication companies. Subject [each of the four individuals] continues as an officer with the company but his active employment was for the dates shown. The company has four employees. (Petitioner’s Exhibit 4) Equifax made its changes based on the information it received from Deana Smith, but it would not have issued the revised report if it had not concluded that its original report was incorrect. Equifax’s practice in obtaining information for its reports is to interview the subjects of the reports. If the subject requests a copy of the report, someone from Equifax will read it over the telephone before sending a copy. The Equifax field representative thinks she read the original report to Deana Smith before sending her a copy. In the course of its investigation of the four officers, Equifax found no adverse information concerning their business or personal activities. On April 23, 1997, the Agency issued an Amended Notice of Intent to Deny FIMG’s service company application, adding as reason for denial the allegation that FIMG materially misrepresented that it had employees when in fact it did not, thus it did not meet the requirements of Rule 38F- 5.040(3)(b),(c), and (d), Florida Administrative Code. This amended notice is based on FIMG’s response to the Agency’s interrogatories stating that “FIMG has no employees; it relies on and uses the employees of its parent corporation, Interstate Insurance Services Group, Inc. (IISG).” FIMG has employees in the areas of claims adjusting and loss control, as represented in its application to the Agency. The non-officer personnel whose résume’s are included in the application have positions with FIMG and are performing services for FIMG pursuant to its managing general agent’s license. They are on the payroll of IISG, the parent corporation, a common business practice. In addition to the non-officer personnel, the officers of FIMG, whom the Agency concedes are employees of FIMG, are amply qualified to satisfy the requirements of the rule with regard to underwriting, claims management, and safety and loss control. Since FIMG is not yet approved as a service company it appropriately has no service contract with a self-insurer. FIMG has employees available through its parent corporation sufficient to meet the needs of a self insurer when such contract or contracts are secured. As confirmed in the Equifax report, IISG has an estimated one hundred employees. The Agency’s denial of FIMG’s application is based solely on the grounds alleged in its amended notice. As it stipulated, it did not retry in this proceeding any of the allegations or alleged violations at issue in the prior administrative proceeding related to ARMS. There is no evidence in this proceeding as to what those alleged violations were, other than Allen Brooks’ understanding that they had something to do with the fact that ARMS’ owner, Ms. Rumfelt, was related to the chairman of the Florida Transportation and Industry Self- Insurer’s Fund’s sponsoring association. In this proceeding, FIMG presented affirmative competent evidence that it is not a restructured or reorganized ARMS and that in spite of the co-location of the corporate offices in Florida and much the same officers, they do not share the same ownership and control. In its contention that ARMS agreed to never again seek certification as a services company, the Agency relies on two documents: a July 8, 1994, letter from ARMS counsel to Assistant Attorney General, Paul Martin; and the Agency’s Final Order in DOAH Cases 93-5537 and 94-2565. The July 8, 1994, letter states, in full: Dear Paul: The unjustified action of the state in pursuing revocation of the authorizations of the Florida Transportation and Industry Self- Insurers Fund and ARMS has made it economically unfeasible for the Fund to be successful or for ARMS to continue to act as service company. Accordingly, at the last meeting of the Fund’s Trustees, ARMS notified the Trustees that ARMS intended to immediately withdraw as the service company for the Fund, but would continue to work with the Fund to assure an orderly transition or closure of the Fund, in accordance with the provisions of Rule 38F-5.041(2). Because continued operation as a service company in Florida is no longer justifiable from a business standpoint, ARMS intends to unconditionally surrender its authorization to act as a service company in Florida immediately upon concluding or being relieved of its obligations to the Fund, or at such earlier time as the state may sanction. ARMS does not intend or desire to be “recertified” as a service company in Florida. The surrender of ARMS’ authorization to act as a service company will give the state all of the relief it is seeking in the pending administrative actions, and so those actions will be rendered moot. Thus, we should stipulate to a dismissal of the pending actions in order to finally resolve these cases and move on to other matters. I stand ready to draft the necessary papers upon receipt of word from you as to the form of stipulation. Sincerely, Paul R. Ezatoff (Petitioner’s Exhibit 18) The Final Order entered August 22, 1996, provides, in pertinent part: On July 8, 1994, ARMS notified the DIVISION that it intended to immediately and unconditionally relinquish its authorization to act as a service company in the State of Florida and to not seek further recertification as a service company in the State of Florida, because it was not economically viable. On July 25, 1994, the DIVISION and ARMS entered into a Joint Motion to Cancel hearing and Relinquish Jurisdiction on the basis that the administrative actions which are the subject matter of DOAH Case Nos. 93- 5537 and 94-2565 is moot. On August 4, 1994, Hearing Officer Robert Meale entered an order relinquishing jurisdiction to the DIVISION and closing the DOAH case files for these cases.
Recommendation It is hereby RECOMMENDED: that the Department of Labor and Employment Security enter its Final Order approving Florida Insurance Management Group, Inc., as a service company and denying attorney’s fees and costs. DONE AND ENTERED this 31st day of July, 1997, in Tallahassee, Leon County, Florida. MARY CLARK Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 31st day of July, 1997.
The Issue Whether the Petitioner's application for licensure as a nonresident general lines insurance agent and a nonresident surplus lines insurance agent should be approved or denied.
Findings Of Fact On August 4, 2006, the Petitioner filed an application for licensure as a "09-20" nonresident general lines insurance agent and a "91-20" nonresident surplus lines insurance agent. By Notice of Denial dated December 11, 2006, the Respondent denied the Petitioner's application for licensure. The Notice of Denial, in material part, sets forth the factual basis for the denial as follows: You, Brian D. Boneck, at all times pertinent to the facts set below, were licensed in this state as a resident general lines insurance agent. You, Brian D. Boneck, at all times pertinent to the facts set forth below, were the owner of Brooke Agency Services of Bradenton, Florida. You, Brian D. Boneck, at all times pertinent to the facts set forth below, were the President and owner of Sierra Insurance Underwriters, Inc. On or about the last week of December, 2005, Christopher Waters of Port Charlotte, Florida, called the Brooke Agency in Bradenton, Florida, and spoke to you, Brian D. Boneck, regarding the renewal of a commercial general liability insurance policy for Waters Developers, LLC. On or about, January 4, 2006, Mr. Waters delivered a check to you in the amount of $809.30, payable to Sierra Underwriters. This check was to pay the down payment on the premium for renewal of Mr. Waters' general liability policy. Sometime in April 2006, Mr. Waters was notified by Mid-Continental [sic] Casualty Company that the policy was cancelled for non-payment of premium. You, Brian D. Boneck, failed to submit the money paid to you by Mr. Waters to the insurer, Mid-Continental [sic] Casualty Company, or to the insurer's general agent, Florida Homebuilders Insurance Agency, Inc. You, Brian D. Boneck, misappropriated the down payment made to you by Mr. Waters. To this date, you have not returned the money to Mr. Waters or paid the money to Mid- Continental [sic] Casualty Company, or to the Florida Homebuilders Insurance Agency, Inc. Your ownership of Brooke Agency Services of Bradenton, Florida, was through a franchise agreement with Brooke Franchise Corporation. Brook Insurance and Financial Services is a subsidiary corporation that manages business for Brooke Franchise Corporation. Pursuant to this relationship, you, Brian D. Boneck, were required to pay a share of the commissions received by Brooke Agency Service of Bradenton to Brooke Insurance and Financial Services and were required to provide information on insurance sales to Brooke Insurance and Financial Services. According to a sworn affidavit by Marian Ann Eupizi, who was formerly employed by you at Brooke Agency Services, you, Brian D. Boneck, also misappropriated premium payments made to you by other customers whose insurance was written by you or other agents of Brooke Agency Services of Bradenton, Florida, through the Florida Homebuilders Insurance Agency. You, Brian D. Boneck, did this by having customers write premium checks payable to your other company, Sierra Insurance Underwriters, Inc. By doing so, Brooke Insurance and Financial Services was unaware of your actions and you also misappropriated commissions owed to them. Also according to Ms. Eupizi, you, Brian D. Boneck, in mid- 2005, misappropriated a refund check issued for a policy on Callis Construction in the amount of approximately $1200. The Respondent offered no reliable evidence at the hearing to support the allegations which served as the factual basis for the denial. As to the allegation that Christopher Waters delivered the check to the Petitioner, the Respondent offered only the sworn affidavit of Mr. Waters and various attachments in support of the allegation. At the hearing, the Petitioner testified that he did not accept premium checks from customers and that the office staff accepted and processed premium checks. The Respondent offered no credible evidence to the contrary, and, for purposes of this Order, the Petitioner's testimony is credited. The Petitioner testified that the Waters account was one of 35 transferred to the corporate franchisor when the Petitioner sold the agency back to the Brooke Agency Services. Negotiations for the sale occurred over a period of time and concluded with a bill of sale executed in August 2006. Although the Petitioner's testimony regarding the chronology of the sale was poorly defined, there was no evidence that the Waters account was not included within those transferred. As to the allegation that the premium was misappropriated and not forwarded to Mid-Continent Casualty Insurance Company, the Respondent offered a copy of a sworn statement wherein a Mid-Continent Casualty representative alleged that the company's investigation indicated that the Waters premium was never forwarded through the Brook Agency to the Florida Homebuilders Insurance Agency, which initially issued and then ultimately cancelled the policy. Additionally, the Respondent offered a copy of an email to the Respondent's investigator from a representative of Florida Home Builders Insurance, Inc., wherein the representative restates information provided to the email writer from unidentified representatives of the Brooke Agency and AmGro Premium Finance Company (with whom the remaining premium due from Mr. Waters had been financed). The Respondent also offered banking records apparently provided in response to a subpoena that indicate the Waters check was deposited into the Sierra Insurance Underwriters Account, to whom the check was made payable. The Respondent offered no credible evidence that the deposit of the Waters check into the Sierra account was improper. As to the allegation that no money had been refunded to Mr. Waters as of the December 11, 2006, Notice of Denial, the Petitioner testified that the money was refunded by a check to Mr. Waters and had a check to Waters Developers from Sierra Underwriters, Inc., dated July 24, 2006, for $1,471 admitted into evidence. It is unclear why the refund amount exceeded the initial premium amount, but there is no evidence contrary to the Petitioner's testimony that the check was issued as a premium refund. As to the allegations related to the ownership structure of the Petitioner's agency, the Respondent offered no credible evidence regarding the interrelationship between the Brooke entities or how the Brooke entities operated with the Petitioner’s Sierra Underwriters, Inc. Regarding the allegations attributed to sworn affidavit of Marian Ann Eupizi, the Petitioner testified that Ms. Eupizi was a customer service representative who was not involved in the fiscal operation of the agency and whom he had fired for falsification of documents. There was no credible evidence contrary to the Petitioner's testimony, and it is credited. Ms. Eupizi’s affidavit has been disregarded in its entirety. There was no credible evidence to support the assertion in the affidavit that the Petitioner misappropriated premium payments from other customers, misappropriated commissions due to Brooke Insurance and Financial Services, or misappropriated a refund check to an entity identified as Callis Construction.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Financial Services enter a final order granting the application of Brian D. Boneck for licensure as a nonresident general lines insurance agent and a nonresident surplus lines insurance agent. DONE AND ENTERED this 18th day of September, 2007, in Tallahassee, Leon County, Florida. S WILLIAM F. QUATTLEBAUM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 18th day of September, 2007. COPIES FURNISHED: Brian D. Boneck 70 East Horizon Ridge Parkway, No. 140 Henderson, Nevada 89002 William Gautier Kitchen, Esquire Department of Financial Services Division of Legal Services 200 East Gaines Street Tallahassee, Florida 32399-0333 Honorable Alex Sink Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Daniel Sumner, General Counsel Department of Financial Services The Capitol Plaza Level 11 Tallahassee, Florida 32399-0307
The Issue Whether or not Petitioner's application for examination as a general lines agent should be approved.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, documentary evidence received, and the entire record compiled herein, I hereby make the following relevant factual findings: On or about September 2, 1989, Petitioner, Kimberly L. Strayer, formerly known as Kimberly Lindsay, filed an application for examination as a general lines agent with Respondent, Department of Insurance. Since January 1988, Petitioner has been the sole owner and president of Central Florida Insurance Agency (Central). On or about December 28, 1989, Respondent informed Petitioner, by letter, that her application for examination as a general lines agent was denied for the following reasons: Petitioner operated Central Florida Insurance Agency without a licensed general lines agent in the full-time active charge of that agency from January 1, 1988 through August 31, 1988. During January 1988 Petitioner accepted applications and down payments from the following insureds: Robert Smallwood, Annelle Jones, Mickey Lawson, Donald Johnson, Thomas Jones, Manning O'Callahan and Christopher Stevens. Petitioner issued a binder and an automobile identification card for each insured indicating that coverage was bound with State Farm Mutual Insurance Company, as servicing carrier for the Florida Joint Underwriting Association (FJUA). At the time Petitioner had no authority to accept either applications or premiums on behalf of State Farm. Petitioner failed to forward such applications and premiums to the insurer until April 12, 1988. During January 1988, Petitioner accepted an application and premium payment of $274.00 from Tammy Clay. Petitioner issued a binder indicating that coverage was bound with State Farm and Union American Insurance Companies. Petitioner failed to forward either the application or the premium payment to any insurer. Petitioner issued a fictitious policy number to Ms. Clay and after nearly four months, submitted a money order to State Farm payable to Tammy Clay, on or about May 1989. At the hearing, Petitioner admitted that she did not have a licensed general lines agent in full-time active charge of her agency; that she accepted applications and premium payments from the above-named insureds for auto insurance to be bound with State Farm Mutual Insurance Company and that she accepted an application for premium payment for automobile insurance from Tammy Clay in the amount of $274.00 for coverage to be bound by State Farm Mutual Insurance Company. Petitioner was first employed in the insurance sales industry during the summer of 1987. At the time, she was only seventeen years old and had completed the eleventh grade. Petitioner's first employment in the insurance industry was with Friendly Auto Insurance (Friendly) which had several offices throughout Polk County, Florida. Friendly was owned by Petitioner's now husband, Larry Lindsay when she was hired. Petitioner formed Central during late 1987 and began operating Central on or about January 1, 1988. Petitioner received her supervision and training while employed with Friendly, primarily through on the job experiences. During late 1987, Petitioner's husband encountered problems with one of his business partners which resulted in strained relations. The resultant strained relations prompted Petitioner to organize Central. Central purchased several of Friendly's agencies of which her now husband had an interest, with Petitioner paying a nominal amount for the "book of business" that Friendly had generated. When Central commenced operations during January of 1988, Bob Seese was the licensed insurance agent who was authorized under the rules of the FJUA to accept applications and bind coverage through one of the FJUA servicing carriers, State Farm. Friendly and its successor, Central, generated a substantial volume of so-called high risk auto insurance business for drivers who could not obtain insurance through the regular market. Bob Seese had been associated with and served as the licensed agent for the Friendly agency in Lakes Wales which Central purchased in January 1988. At the time Petitioner commenced operating Central, she hired Bob Seese as the licensed general lines agent. She considered that Central was authorized to accept applications and continue to bind FJUA insurance coverage through State Farm. Petitioner forwarded all of the FJUA insurance applications which were bound by Bob Seese to State Farm within a period ranging from one week to approximately one month. State Farm refused to accept the applications submitted by Petitioner based on its contention that initially, Bob Seese was not authorized to bind coverage through Central, as he had not transferred his license to Central and Seese could only operate out of the Friendly agency of Lake Wales. 1/ Bob Seese was formally authorized by State Farm to conduct business through Central during February 1988. As a result of that authorization, all of the above-named insureds obtained insurance and none of the insureds suffered any monetary loss as a result of Seese's belated authorization. All of the premium payments that Petitioner received were, in time, forwarded to the respective carriers. Petitioner properly gave new insureds binder numbers which were serially dispensed in the order that premium payments were received. During January 1988, Petitioner accepted an application and premium payment for auto insurance from Tammy Clay for coverage to be bound by State Farm. Petitioner submitted Clay's application and premium payment to State Farm and it was returned on one occasion based on the fact that a facsimile stamp was used by the purported licensed agent (Seese). Petitioner resubmitted it and State Farm again returned it based on State Farm's contention that Seese was not authorized to conduct business through Central. Petitioner has now completed the required formal educational courses to demonstrate her eligibility to sit for the general lines agent's examination. Petitioner is now knowledgeable about insurance matters and is aware of the proper procedures for operating as a general lines agent. When Petitioner formed Central, she had less than one year's experience in the insurance business and was ineligible to sit for the general lines agent exam as she was not of majority age.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that: Respondent enter a Final Order granting Petitioner's application for examination as a general lines insurance agent. DONE and ENTERED this 31st day of October, 1990, in Tallahassee, Leon County, Florida. JAMES E. BRADWELL 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 31st day of October, 1990.
