Findings Of Fact On September 8, 1987, the Department of Insurance received a letter dated September 1, 1987, from Joseph F. Kinman, Jr., which stated: Another insurance agent (Daniel Bruce Caughey) from Pensacola, Florida and his incorporated agency (Caughey Insurance Agency, Inc.) are refusing to forward premium payments on to Jordan Roberts & Company, Inc. despite a final judgment for such amounts here in Hillsborough County Circuit Court. Enclosed is a copy of the Final Judgment entered August 13, 1987, as well as a copy of the Complaint. We represent Jordan Roberts & Company, as well as Poe & Associates, Inc. here in Tampa, Florida. In approximately August of 1982, Daniel Bruce Caughey and Caughey Insurance Agency, Inc. entered into a brokerage agreement with Jordan Roberts & Company, Inc. wherein Mr. Caughey and the Agency were to collect premiums on behalf of Jordan Roberts & Company, Inc. and in turn, Mr. Caughey and the Agency were to receive commissions. Mr. Caughey signed an Individual Guarantee Agreement on October 21, 1983, guaranteeing that Brokerage Agreement with Caughey Insurance Agency, Inc. Mr. Caughey and the Agency failed to forward the insurance premiums collected on behalf of Jordan Roberts & Company, Inc. despite repeated demands and inquiries. Finally, a lawsuit was filed against Mr. Caughey and the Agency in the Circuit Court of the Thirteenth Judicial Circuit of the State of Florida, in and for Hillsborough County in December of 1986. Final judgment for Jordan Roberts & Company, Inc. against Mr. Caughey and the Agency was entered on August 13, 1987, for an amount of $6,595.94. Mr. Caughey and his Agency have unlawfully withheld monies belonging to an insurer, Jordan Roberts & Company, Inc. and, accordingly, appear to be in violation of Florida Statutes 626 et seq. Jordan Roberts & Company, Inc. has a judgment for unpaid insurance premiums against Mr. Caughey and the Agency, however, Mr. Caughey and the Agency refuse or fail to pay over to Jordan Roberts & Company, Inc. premium funds rightfully belonging to Jordan Roberts & Company, Inc. Accordingly, we would respectfully request that your office conduct an investigation of Mr. Caughey and the Caughey Insurance Agency, Inc. Enclosed with this letter were copies of the complaint and final judgment in the circuit court case, Case No. 86-21454. As found in the main administrative case, Case No. 89-2651: In Count 1, JORO's complaint [in Case No. 86-21454] alleges the existence of a brokerage agreement between JORO and Caughey Insurance Agency, Inc., entered into "[o]n or about April 27, 1982"; execution and delivery of respondent's guarantee "[o]n or about October 21, 1983"; and the agency's indebtedness "for premiums on policies underwritten by [JORO] for the sum of $20,975.36." Petitioner's Exhibit No. 3. In Count II, the complaint also alleges execution and delivery of a promissory note "[o]n or about October 21, 1983," without, however, explicitly indicating its relationship (if any) with the guarantee executed the same date. Petitioner's Exhibit No. 3. The final judgment does not specify which count(s) JORO recovered on. Petitioner's Exhibit No. 4. Attached to the complaint are copies of the promissory note, executed by "CAUGHEY INSURANCE AGENCY, INC., By: D B Caughey Vice President"; the guarantee, executed in the same way; and the brokerage agreement, executed on behalf of Caughey Insurance Agency by "William C. Caughey, President." Although the Individual Guarantee Agreement names respondent as guarantor in the opening paragraph, the corporation is shown as guarantor on the signature line. The complaint does not allege and the judgment does not recite that respondent personally failed to remit premiums but says he is responsible as an officer of the agency. Without any further investigation, as far as the record shows, the Department of Insurance filed a complaint amended on April 24, 1989, to allege, inter alia, that "[o]n or about August 19, 1982 Caughey Insurance Agency, Inc. entered into a brokerage agreement with Jordan Roberts and Company, Inc. . . . requir[ing] Caughey Insurance Agency, Inc. to remit premiums, unearned commissions and additional premiums to Jordan Roberts and Company, Inc."; and that respondent "personally guaranteed the [agency's] obligation under this agreement in" writing, but "failed to remit five thousand five dollars and forty-four cents due under th[e] agreement" for which sum Jordan Roberts and Company, Inc. obtained judgment. After a formal administrative hearing, a recommended order was entered on April 2, 1990, recommending dismissal of the administrative complaint, because "ambiguities in the court papers do not clearly and convincingly rule out the possibility that the court's judgment rests on the dishonored promissory note . . . [rather than] a breach of respondent's [here petitioner's] fiduciary responsibilities." In its final order, the Department dismissed the administrative complaint; Daniel Bruce Caughey was the prevailing party in that case. The parties have stipulated that "Daniel B. Caughey qualifies as a small business party as defined in Section 57.111(3)(d), Florida Statutes." The parties also stipulated that the "total value of the reasonable attorney's fees and costs at issue is $2,830."
The Issue Whether Respondent's insurance license should be suspended or revoked or otherwise disciplined because Respondent violated the Florida Insurance Code.
Findings Of Fact The Department is the agency with jurisdiction over licensing insurance agents pursuant to Chapter 626, Florida Statutes. Respondent applied for a license with the Department as a non-resident life, health, and variable annuity agent by submitting an application which he signed on July 4, 1999. He was awarded nonresident insurance License No. D008927 on July 12, 1999. Question seven on the July 4, 1999, application for licensure, inquired, "Has anyone ever obtained a judgement, or is there currently pending, any type of civil action against you individually or against any entity in which you are or were an officer, director, partner, or owner based upon allegations of fraud, misrepresentation or conversion or which in any way involved the subject of insurance?" Respondent checked a box which indicated a negative answer. Because the application submitted by Respondent appeared to be correct, Respondent was issued the aforementioned license. On July 4, 1999, when Respondent answered question seven, a judgment by default had been entered against Respondent by the Circuit Court of Maryland for Montgomery County, in a case styled Paley, Rothman, Goldstein, Rosenberg & Cooper, Chartered, v. Daniel D. Manoff. The judgment was in the amount of $7,590.36 and was filed with the Clerk on July 6, 1994. The complaint which resulted in the judgment alleged that Respondent had failed to pay for legal services received. This complaint involved the breach of a contract. Therefore, Respondent's answer to question seven was correct, insofar as the unrevealed judgment is concerned, because the judgment did not involve a matter "based upon allegations of fraud, misrepresentation or conversion or which in any way involved the subject of insurance." A complaint was filed against Petitioner on May 18, 1998, in the Circuit Court of Maryland for Montgomery County, styled First Financial Group, et al., v. Daniel Manoff, et al., v. The Guardian Life Insurance Company of America, et al. Respondent was a defendant in that case. The suit which was the subject of the complaint was unresolved on July 4, 1999, when Respondent answered question seven. The complaint in the First Financial Group case alleged that Respondent committed fraud. Because of this, Respondent incorrectly answered question seven. When Respondent signed the application for an insurance license on July 4, 1999, he was aware, or was provided ample opportunity to be aware, that a truthful application was expected by the Department. This is because immediately above the signature line are the words, "Final Statement," and below those words are explicit warnings as to the hazards of signing the application when the person providing the imprimatur has not provided correct information. The warnings include one which informs that signing a false statement is a second degree misdemeanor and another that states that the signature is made under penalties of perjury. In addition to the foregoing, the "Final Statement" contains an oath which avers that, ". . . I have not withheld any information on myself that would in any way affect my qualifications." The information sought by question seven is material to the decision as to whether the Department considered Respondent to be qualified to hold an insurance license. Had the information requested been timely supplied, Respondent would not have been awarded a license absent further inquiry into his experiences with the legal system in Montgomery County, Maryland. Respondent worked for Agency 10 of the Berkshire Life Insurance Company in Rockville, Maryland, at the time he submitted the application for licensure which is the subject of this proceeding. The person charged with carrying out administrative duties at that agency was Kathy Cody. Among other duties, she was responsible for obtaining licenses and appointments for agents and managers in the Rockville field office. When processing applications, Ms. Cody, and sometimes another administrator in the office, typically would solicit information from the agent, broker or manager requiring a license and would prepare an application. She did this for many people for many states. Respondent was licensed in a number of states and Ms. Cody assisted Respondent in obtaining some of those licenses. She does not specifically remember the application at issue. It was Ms. Cody's practice to submit completed application forms to the home office in Pittsfield, Massachusetts. If the paperwork was in order, the home office would send the applications to the appropriate state licensing agency. Ms. Cody, or in any event, someone in the office other than Respondent, sent his Florida application to the home office. Respondent did not complete the entire application. He did, however, sign the application which meant that he swore to the accuracy of its contents. Sue Carter processes license applications for the Department. She has engaged in this work since 1984. According to Ms. Carter, if an application is received which reveals an unsatisfied judgment, then further inquiry is made. According to Ms. Carter, it is the policy of the Department to refuse to license someone with a pending complaint alleging fraud. Therefore, she stated, if Respondent's application had revealed the existence of the First Financial Group complaint, the Department would not have issued a license to Respondent.
Recommendation Based upon the Findings of Fact and Conclusions of Law, it is RECOMMENDED: That a final order be entered which finds that Respondent violated on one occasion, Section 626.611(1), (2) and (7), and Section 626.211(1), Florida Statutes, and which requires Respondent to surrender his non-resident life, health, and variable annuity insurance agent license. DONE AND ENTERED this 8th day of April, 2002, in Tallahassee, Leon County, Florida. HARRY L. HOOPER 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 April, 2002. COPIES FURNISHED: Daniel Dwight Manoff Post Office Box 267 Poolesville, Maryland 20837 Richard J. Santurri, Esquire Department of Insurance Division of Legal Services 200 East Gaines Street Tallahassee, Florida 32399-0333 Honorable Tom Gallagher State Treasurer/Insurance Commissioner Department of Insurance The Capitol, Plaza Level 02 Tallahassee, Florida 32399-0300 Mark Casteel, General Counsel Department of Insurance The Capitol, Plaza Level 26 Tallahassee, Florida 32399-0307
The Issue Whether the Respondent's rejection of the Petitioner's Application for Licensure dated August 8, 1986, was proper?
Findings Of Fact The Petitioner was issued a license dated July 1, 1985 (hereinafter referred to as the "License"), to operate a home health agency in Franklin County, Florida. On the face of the License it was indicated that the "Expiration Date" of the License was June 30, 1986. By letter dated April 2, 1986, the Respondent notified the Petitioner that its License would expire on June 30, 1986. The Petitioner was also informed that if an application for renewal of the License was not filed on or before May 2, 1986, the Petitioner would be subject to an administrative fine. An application to be used to renew the License was also sent with the letter. In April or May of 1986, the Petitioner filed for Chapter 11 bankruptcy. On May 8, 1986, the United States District Court for the Northern District of Florida, Tallahassee Division, entered an order pursuant to 11 U.S.C. s. 362, which, among other things, stayed the commencement or continuation of any legal proceedings against the Petitioner. The Petitioner began discussions with Charles Hecht, Jim Palmer and a group called the Well Springs group about the possibility of selling the Petitioner. The Well Springs group was represented by John Branch and Ann Morgan. On June 16, 1986, Marilyn Nevado of the Respondent's Jacksonville Office of Licensure and Certification called the Petitioner's office. Ms. Nevado talked with Denise Putnal, the secretary and bookkeeper of the Petitioner. Ms. Nevado called to remind the Petitioner that its License was going to expire on June 30, 1986, and to ask why no application to renew the License had been filed. Ms. Putnal explained to Ms. Nevado that the Petitioner was involved in a bankruptcy proceeding. Virginia Schorger, the Administrator of the Petitioner, asked Ms. Putnal to call the Respondent on June 16, 1987, and find out what the Petitioner should do about its License. Ms. Putnal called the Respondent's Jacksonville office. She spoke with a woman, whose name she could not recall, and was told by the woman that she would have someone who could answer Ms. Putnal's questions call Ms. Putnal. Later that day, Arthur Harberts called the Petitioner and spoke with Ms. Putnal. According to a memorandum from Mrs. Putnal dated July 23, 1986, Ms. Putnal told Mr. Harberts the following: I explained in detail to the man that our agency had filed bankruptcy and was in the process of being sold to either of two bidders with this decision being made by the Federal Bankruptcy Court. Mr. Harberts told Ms. Putnal the following: He told me that FCVNA [the Petitioner] should not renew the license in that name. He said to have the agency write a letter to Mr. John Adams' office detailing all of what I had explained to him via telephone. With this letter he requested the agency send a copy of our current license. He also explained that the new owner would have to obtain a license in the new agency name. . . . Mr. Harberts had been told that the sale of the Petitioner was to take place before June 30, 1986. Ms. Putnal reported her conversation with Mr. Harberts to Ms. Schorger and made a copy of the License. The Petitioner did not send a letter with a copy of the License to the Respondent as suggested by Mr. Harberts. As of July 1, 1986, no application to renew the License was filed by the Petitioner. On June 30, 1986, the Petitioner's License expired by operation of law. On July 17, 1986, a sale of the Petitioner to the Well Springs group was approved by the bankruptcy court. On July 23, 1986, Ms. Schorger was informed by Ms. Morgan that she had been told that the License had expired. Upon learning that the License had expired, Ms. Schorger sent a letter dated July 23, 1986 to Amy Jones, Director of the Office of Licensure and Certification of the Respondent. In part, Ms. Schorger indicated the following in her letter: Early in June our Secretary/Bookkeeper called your office to inform you of our bankruptcy with reorganization plans and to ask about renewing the license. She was told that as soon as the court decided who the new owner would be to send a copy of the present license and the name of the new owner. Ms. Schorger also had Ms. Putnal write a memorandum memorializing her telephone conversation of June 16, 1986, with Mr. Harberts. Ms. Putnal completed the memorandum on July 23, 1986. A copy of this memorandum was sent with the July 23, 1986 letter. A check for $500.00 was also included with the July 23, 1986, letter. After July 23, 1986, Ms. Schorger had several telephone conversations with Ms. Jones. In a letter dated August 5, 1986, Ms. Jones recommended that the "new owner" of the Petitioner apply for a new license as an "uncertified" home health agency. This action was suggested so that the Petitioner could continue to operate. Ms. Jones told the Petitioner that the Petitioner would not, however, be entitled to bill Medicaid/Medicare and, therefore, it was also recommended that the new owner apply for a certificate of need. Once the certificate of need was approved, it was recommended that an application be filed for a license as a "certified" home health agency. In the interim, Ms. Jones recommended that the Petitioner contact other certified home health agencies "in an effort to see if you can solicit their assistance in serving the Medicaid/Medicare clients in your area." On or about August 8, 1986, Ms. Schorger filed an Application for Licensure as a home health agency. Under Section I.D. of the application Ms. Schorger indicated that the application was for a license as a "certified agency" and not a "non-certified agency" as Mr. Jones had suggested. The check for $500.00 previously sent to the Respondent on July 23, 1986 and subsequently returned to the Petitioner was also included with the application. By letter dated September 2, 1966, the Respondent informed the Petitioner that the Application for Licensure submitted on August 8, 1986, for a license as a certified agency was denied. The Petitioner was aware that its License would expire on June 30, 1986. The evidence failed to prove that the Petitioner was told that the expiration date of the Petitioner's License would be extended or waived, that failure to file an application for renewal of the License would be excused or that the date for filing an application for renewal would be extended. The Petitioner did not hold a certificate of need for a home health agency at the time its Application for Licensure was filed on August 8, 1986.
The Issue The issues in this case are those framed by the order to show cause brought by the Petitioner against the Respondents. The case number before the Department of Insurance is DOI 92-L-273DSS. The Respondents are charged with numerous violations of Chapters 624 and 626, Florida Statutes. Petitioner seeks to impose discipline against the insurance license held by James K. Mitchell, to order Respondents to cease and desist allegedly illegal business activities in Florida, and to impose licensure requirements upon the Respondents' insurance agency activities performed in Florida.
Findings Of Fact Under the Administrative Procedures Act, a Hearing Officer's Findings of Fact in a Recommended Order are entitled to great weight and may not be rejected or modified if supported by competent substantial evidence from which the findings could reasonably be inferred. Heifetz v. Dept. of Business Regulation, 475 So.2d 1277 (Fla. 1st DCA 1985). Further in Gruman v. State, 379 So.2d 1313 (Fla. 2nd DCA 1980), the court states: The findings of a trier of fact are entitled to as much weight and respect as the verdict of a jury. Hamilton v. Title Insurance Agency of Tampa Inc. 338 So.2d 569 (Fla. 2d DCA 1976). They may not be ignored or overturned unless review of the entire record reveals a total lack of substantial evidence to support them. Chakford v. Strum, 87 So.2d 419 (Fla. 1956). Florida's Administrative Procedure Act expressly adopted those principles. s. 120.57(1)(b)(9), Fla. Stat. Also, the agency may not reweigh the evidence, even if conflicting, where there is competent evidence in the record to support the findings of the Hearing Officer. AT&T Communications v. Marks, 515 So.2d 741 (Fla. 1987). The Hearing Officer in this cause after review of 32 volumes of transcript and 2 boxes of exhibits made 96 Findings of Fact. After a review of the complete record, including exceptions filed by each party, and applying the legal standard recited above, find that these Findings of Fact are based on competent substantial evidence and are therefore adopted in full in this Final Order. MODIFICATIONS TO CONCLUSIONS OF LAW I have reviewed the Conclusions of Law prepared by the Hearing Officer. The Conclusions of Law of the Hearing Officer may be rejected and modified by the agency responsible for the enforcement of the law. Public Employees Relations Commission v. Dade County Police Benevolent Association, 467 So.2d 987 (Fla. 1985); Maynard v. Florida Unemployment Appeals Commission, 609 So.2d 143 (Fla. 4th DCA 1992); Harloff v. City of Sarasota, 575 So.2d 1324 (Fla. 2nd DCA 1991); Siess v. Department of Health and Rehabilitative Services, 468 So.2d 478 (Fla. 2d DCA 1985); Alles v. Department of Professional Regulation, 423 So.2d 624 (Fla. 5th DCA 1982). The Department of Insurance is the state agency responsible for the interpretation, implementation and enforcement of the Florida Insurance Code, and as such I have relied upon its expertise and experience with respect to the proper interpretation of the Insurance Code to reject Conclusion of Law numbers 117, 118, 119, 122, and 125 and have made the following substituted Conclusions of Law as well as those contained in subheading II herein: James Mitchell & Company is not a "life agent" as defined in Section 626.779, F.S., nor is it a "life insurer" as defined at Section 626.780, F.S.. Further, James Mitchell & Company is not an "insurer" as defined in Section 624.03, F.S.. Rather, James Mitchell & Company is an "insurance agency" as defined in Section 626.094, F.S.. An insurance agency is the entity whereby insurance agents join to pursue their business interests. See s. 626.094, F.S. An insurance agency could not function without licensed agents. Insurance agencies may not operate lawfully except through licensed agents or solicitors. In general, the statutory scheme in Florida does not mandate the licensure of an insurance agency. There are specific exceptions to this general rule and when one of the triggering events occurs, an insurance agency is required to obtain a license. See ss. 626.112 and 626.172, F.S. Where a license has been determined to be necessary, the agency's license may, for future violations, become subject to disciplinary action including revocation. However, in most cases an insurance agency does not hold a license that can be revoked. The Legislature was aware of this when it drafted s. 626.988, F.S. Thus, the specific limitation in s. 626.988(2), F.S., was directed to agents and solicitors. The scope of s. 626.988, F.S., necessarily and reasonably encompasses the regulation of agents, solicitors, insurance companies, and insurance agencies in order for the Department to effectively implement the purposes of the enabling legislation. Section 626.988, F.S., specifically mentions 'agents' and 'solicitors'. However, section 626.988, F.S., regulates the relationship between financial institutions and the agents and solicitors. This prohibited relationship encompasses more than solicitors and agents, because it focuses on financial institutions' entry into insurance activities. As stated in Glendale Fed. S & L. Ass'n v. Fla. Dept. of Ins., 587 So.2d 534 (Fla. 1st DCA 1991) rev. denied, 599 So.2d 656 (Fla. 1992), the legislature was guarding against the dangers of financial institutions becoming involved in the business of insurance: the prevention of coercion, unfair trade practices, and undue concentration of resources. Limiting the scope to agents and solicitors ignores the nature and definition of insurance agencies. James Mitchell & Company is associated with Barnett Banks, Inc. with respect to the sale of life insurance products, as prohibited in s. 626.988(2), F.S., as alleged in Count II. James Mitchell & Company is associated with Barnett Banks, Inc. with respect to the sale of life insurance products, as prohibited in s. 626.988(2), F.S., as alleged in Count III. James Mitchell & Company is associated with Barnett Banks, Inc. with respect to the sale of life insurance products, as prohibited in s. 626.988(2), F.S., as alleged in Count IV.
Recommendation Based upon a consideration of the fact found and the conclusions of law reached, it is, RECOMMENDED: That a final order be entered which dismisses Counts I, II, IV, V, VII, and X as to James Mitchell & Company, and that finds James Mitchell & Company in violation of Counts III, VI, and VIII; that finds James K. Mitchell in violation of Count IX, and dismisses Counts VII and X as to James K. Mitchell; that revokes the nonresident life insurance agent's license issued to James K. Mitchell by the Department of Insurance; that orders James Mitchell & Company and James K. Mitchell in his capacity as officer and director of James Mitchell & Company to cease and desist the prohibited practices that have been described in the recommended order; and that requires James Mitchell & Company as an insurance agency operating in Florida to obtain an insurance agency license before it continues to do business in Florida. DONE and ENTERED this 30th day of August, 1994, in Tallahassee, Florida. CHARLES C. ADAMS, 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 30th day of August, 1994. APPENDIX The following discussion is given concerning the proposed findings of fact by the parties: Petitioner's Facts: Paragraphs 1 and 2 constitute legal argument. Paragraphs 3 and 4 are subordinate to facts found. Paragraphs 5 and 6 are not necessary to the resolution of the dispute. Paragraphs 7 and 8 are subordinate to facts found. Paragraphs 9 through 11 are not necessary to the resolution of the dispute. Paragraphs 12 through 14 are subordinate to facts found. Paragraph 15 constitutes legal argument. Paragraph 16 is not necessary to the resolution of the dispute. Paragraph 17 is not relevant. Paragraphs 18 through 21 are subordinate to facts found with the exception that the last sentence to Paragraph 21 constitutes legal argument. Paragraph 22 is not relevant. Paragraphs 23 through the first sentence of Paragraph 30 are subordinate to facts found. The remaining sentences to Paragraph 30 constitutes legal argument. Paragraphs 31 and 32 constitute legal argument. Paragraphs 33 through 37 are subordinate to facts found. Paragraph 38 is not necessary to the resolution of the dispute. Paragraphs 39 through the first sentence in 44 are subordinate to facts found. The second sentence in Paragraph 44 constitutes legal argument. Paragraphs 46 through 49 constitutes legal argument. Paragraphs 50 through 55 are subordinate to facts found. Paragraphs 56 and 57 constitute legal argument. Paragraphs 58 through the first sentence in Paragraph 61 are subordinate to facts found. The latter sentence constitutes legal argument. Paragraph 62 is subordinate to facts found. Paragraphs 63 through 65 constitutes legal argument. Paragraphs 66 through 72 are subordinate to facts found to the extent that they are consistent with the order to show cause fact allegations. Otherwise, they have not been utilized. Paragraph 73 is not relevant. Paragraph 74 is subordinate to facts found. Paragraph 75 in the first sentence is subordinate to facts found. The second sentence is not necessary to the resolution of the dispute. Paragraph 76 is not necessary to the resolution of the dispute. Paragraphs 77 and 78 constitute legal argument. Paragraphs 79 and 80 are not relevant in that there has been no allegation of violation of any substantive guidelines in the order to show cause which would be necessary if the Department of Insurance intended to prosecute the Respondents for such violation. Paragraphs 81 through 92 constitutes legal argument. Paragraphs 93 through 102 are subordinate to facts found. Paragraph 103 is not necessary to the resolution of the dispute. Paragraphs 104 through 107 are subordinate to facts found. Paragraph 108 constitutes legal argument. Paragraph 109 is subordinate to facts found. Paragraphs 110 and 111 constitute legal argument. Paragraphs 112 through 115 are not necessary to the resolution of the dispute. Paragraph 116 is subordinate to facts found. Paragraphs 117 and 118 constitute legal argument. Paragraph 119 is subordinate to facts found. Paragraphs 120 through 124 are not necessary to the resolution of the dispute. Paragraphs 125 and 126 are subordinate to facts found. Paragraphs 127 through 130 are not necessary to the resolution of the dispute. Paragraph 131 is subordinate to facts found. Paragraphs 132 through 135 constitute legal argument. Paragraph 136 is subordinate to facts found. Paragraphs 137 through 139 are not necessary to the resolution of the dispute. Paragraphs 140 through 150 are subordinate to facts found. Paragraphs 151 through 154 are rejected in the suggestion that there was competent proof showing the truth of the complaints. Respondents' Facts: Paragraphs 1 through 3 are not necessary to the resolution of the dispute. Paragraphs 4 through 6 are subordinate to facts found with the exception that customers were informed of the ceiling on interest rate return on annuities. Paragraph 7 is subordinate to facts found with the exception that the last sentence constitutes legal argument. Paragraph 8 is subordinate to facts found with the exception of the language in the last phrase to sentence 4 which is not necessary to the resolution of the dispute and the remaining portion of Paragraph 8 which constitutes legal argument. The first two sentences to Paragraph 9 are not necessary to the resolution of the dispute. The remaining sentences to Paragraph 9 are subordinate to facts found with the exception that the proposed facts do not overcome the fact finding in the recommended order related to the opportunity which Barnett has pursuant to the services agreement to influence James Mitchell & Company's hiring practices. Paragraphs 10 and 11 are subordinate to facts found with the exception of the last sentence in Paragraph 11 constitutes legal argument. Paragraphs 12 through 14 are subordinate to facts found with the exception that the fiduciary responsibility of Barnett Banks Trust Company, N.A. is limited in its liability for its acts. The sentence dealing with responsibilities of Barnett Banks Trust Company, N.A. in the absence of the participation of the James Mitchell & Company service centers is not relevant nor is the discussion of the usual fee for providing trust services in retail trust. Paragraph 15 is not necessary to the resolution of the dispute. Paragraph 16 is subordinate to facts found with the exception that the discussion of Barnett practices unassociated with this case and trust arrangements unaffiliated with the present case and the discussion of the life of retail trusts and other Barnett transactions are not relevant. Paragraph 17 is not necessary to the resolution of the dispute with the exception of the reference to 40,000 customer participants. Neither is Paragraph 18 necessary to the resolution of the dispute in that the Department of Insurance failed to prove that any Florida complaints were true. Paragraphs 19 through 24 are rejected in any suggestion by the proposed facts that the Department of Insurance has granted approval to the program between James Mitchell & Company and the Barnett entities or failed to properly inform the Respondents concerning alleged violations. Finally, the order to show cause does not call upon the Respondents to defend against alleged violations of substantiative guidelines. Paragraphs 25 through 39 as they discuss the guidelines have no significance in that the Department of Insurance has not affirmatively pled a violation of substantive guidelines and the Respondents may not defend by reference to the other factual circumstances in the enforcement history of the Department of Insurance on the theory that the Department of Insurance has been inconsistent in its regulatory function because the facts in the other cases are not sufficiently similar to the present facts. Paragraph 40 in its suggestion that the Department of Insurance has not maintained a proper subject matter index and provided proper access to statements of precedent and policy is rejected. Paragraph 41 constitutes legal argument. Paragraph 42 is subordinate to facts found. Paragraphs 43 through 46 constitute legal argument. Paragraph 47 is contrary to facts found. Paragraphs 48 through 50 constitutes legal argument. Paragraph 51 is subordinate to facts found with the exception of the reference to complaints in other states or by the Office of the Comptroller which is not relevant. Paragraph 52 constitutes legal argument. Paragraph 53 is subordinate to facts found with the exception that the last sentence constitutes legal argument as does Paragraph 54. Paragraph 55 is subordinate to facts found with the exception that the last sentence is contrary to facts found in that the service agreement contemplates that Barnett Banks, Inc. shall be consulted with respect to the propriety and legality of all promotional materials. This would include advertisement of insurance products by James Mitchell & Company. Paragraphs 56 and 57 are subordinate to facts found. Paragraphs 58 and 59 constitute legal argument. COPIES FURNISHED: William R. Scherer, Esquire James F. Carroll, Esquire Kimberly Kisslan, Esquire Albert L. Frevola, Jr., Esquire Conrad, Scherer, James & Jenne Eighth Floor 633 South Federal Highway Fort Lauderdale, FL 33301 Bruce Culpepper, Esquire Pennington, Haben, Wilkinson, Culpepper, Dunlap, Dunbar, Richmond & French, P.A. 306 North Monroe Street Tallahassee, FL 32399-0333 Dennis Silverman, Esquire Nancy J. Aliff, Esquire Robert Prentiss, Esquire Department of Insurance 612 Larson Building 200 East Gaines Street Tallahassee, FL 32399-0333 Tom Gallagher, Commissioner Department of Insurance and Treasurer The Capitol, Plaza Level Tallahassee, FL 32399-0300
Findings Of Fact Respondent has worked in the insurance business some eleven years, including a five year stint with the Metropolitan Life Insurance Company in New York and two years with Gulf Life Insurance Company. Although respondent remained an ordinary agent for Independent Life Insurance Company until January of 1978, he and a partner, William Andrew Carrigan, contracted, in October of 1977, with Gordon Burnham, one of PIC's managing general agents, to act as general agents for the sale of life, health and disability insurance on a franchise group basis. On behalf of PIC, they sought out employers willing to let them offer insurance to their employees and to arrange for payment of premiums by payroll deduction. Under the arrangement with PIC, respondent's partnership, Carrie & Associates, was permitted to borrow, subject to a weekly maximum, the lesser of $250.00 or "fifty percent of [the] annualized commission," p. 21, Lee Logan's deposition, whenever respondent or his partner sold an insurance policy and submitted the appropriate papers to PIC. The indebtedness respondent and his partner incurred in receiving the advance was to be gradually reduced, as premiums on the policy were paid to PIC. In the event a policy was cancelled before the advance was repaid, PIC was authorized to look to other policies sold by the same agents for repayment. Respondent and his partner regularly asked for advances and ordinarily received them within a week of forwarding a new policy application to PIC. Ordinarily, the first month's premium was required to accompany an application for a new policy. When, however, a new policy was sold to an employee of an employer who already deducted PIC premiums from employees' paychecks, there was no requirement that the first month's premium accompany the papers respondent or his partner furnished PIC. In the event PIC received no premium within 30 days, PIC was authorized to look to other policies sold by the partnership for repayment of the advance. By February of 1978, Carrie & Associates had sold insurance policies to employees of, among other businesses, Tower Coiffures in Lakeland and Seminole Bakery in Sanford. Business was slow that February, so respondent decided to write applications for insurance policies for nonexistent people, in order to improve his cash flow. He wrote an application for life insurance for a fictitious Peter Paulson, whom he described as a 34 year old Texan, 5 feet 9 inches tall, weighing 149 pounds, and whom he falsely reported to be an employee of Seminole Bakery. He wrote an application for life and health insurance for a fictitious Bob Webb, falsely reporting him as an employee of Seminole Bakery, and on Rohnda (sic) Webb, Bob's imaginary wife. In connection with the Webb application, respondent signed his partner's name in a blank on a form entitled "Signature of Soliciting Agent," only apprising his partner afterwards. Respondent wrote applications for insurance for fictitious persons named Brian Williams, Christine Williams, Robert Jackson, Muriel Carter and Kim Stone, whom he falsely reported to be employees of Seminole Bakery, as well as for Kim's fictitious spouse, Ronald Stone. He wrote applications for life and health insurance for a fictitious Virginia Birch and for a fictitious Janice D. Boynton, falsely reporting them as employees of Tower Coiffures. In each instance, respondent forwarded the falsified papers to PIC and, in each instance, PIC advanced money on the strength of the papers. At the time of the hearing, respondent (who is no longer licensed as an agent with PIC) and his partner owed PIC $5,342.31, representing unrepaid commission advances on lapsed or fictitious policies, together with accrued interest. At the time of the hearing, proceeds from policies still in force applied against this indebtedness at the rate of $60.48 per month. Charles William "Bill" Honaker employed respondent as an insurance agent, at the time of the hearing. Mr. Honaker began in the insurance business in 1953. Since that time he has seen "bogus" policies many times, yet he has never heard of a state license revocation for a one-time bogus business problem.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That petitioner revoke respondent's license as an insurance agent. DONE and ENTERED this 27th day of July, 1979, in Tallahassee, Florida. ROBERT T. BENTON, II 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 27th day of July, 1979. COPIES FURNISHED: Patrick F. Maroney, Esquire 428-A Larson Building Tallahassee, Florida 32301 James W. Markel, Esquire and Leslie King O'Neal, Esquire Post Office Drawer 1991 Orlando, Florida 33802
