Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the request of petitioners to participate in the distribution of mortgage broker guaranty funds pertaining to First Fidelity Financial Services, Inc. be granted, and that they be paid their pro-rata portion of the fund in accordance with Section 494.044, Florida Statutes. It is further RECOMMENDED that the request of intervenors in Case No. 85- 3305 to be included in the above group of claimants for fund distribution purposes be denied unless they furnish the Division evidence of compliance with Subsections 494.043(1); (4) and (5), Florida Statutes (1985), by June 18, 1986. DONE and ORDERED this 17th day of February, 1986, in Tallahassee; Florida. DONALD R. ALEXANDER, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 17th day of February, 1986.
The Issue Whether Respondent, a bail bondsman, committed the offenses alleged in the Amended Administrative Complaint and the penalties, if any, that should be imposed.
Findings Of Fact At all times pertinent to this proceeding, Respondent was licensed by Petitioner as a limited surety and as a professional bail bondsman. Prior to November 23, 1992, Gredys Tarazona entered into an agreement for Respondent to post a bond for James Johansen. In connection with that transaction, Ms. Tarazona delivered to Respondent the sum of $200 that was to serve as collateral security for the bond. They agreed that the sum of $200 would be returned to Ms. Tarazona once the conditions of the bond had been satisfied. On November 23, 1992, the conditions of this bond were satisfied and the liability on the underlying bond was terminated. Respondent failed to return the sum of $200 to Ms. Tarazona despite demands for her to do so. Prior to August 23, 1992, Julian Maldonado purchased a bail from Respondent. In connection with that transaction, Mr. Maldonado delivered to Respondent the sum of $200 that was to serve as collateral security for the bond. They agreed that the sum of $200 would be returned to Mr. Maldonado once the conditions of the bond had been satisfied. On August 23, 1992, the conditions of this bond were satisfied and the liability on the underlying bond was terminated. Respondent failed to return the sum of $200 to Mr. Maldonado despite demands for her to do so. Prior to April 1, 1993, Faye Finley entered into an agreement for Respondent to post a bond for Michael Finley. In connection with that transaction, Ms. Finley delivered to Respondent the sum of $200 that was to serve as collateral security for the bond. They agreed that the sum of $200 would be returned to Ms. Finley once the conditions of the bond had been satisfied. On April 1, 1993, the conditions of this bond were satisfied and the liability on the underlying bond was terminated. Respondent failed to return the sum of $200 to Ms. Finley despite demands for her to do so. Prior to November 8, 1992, Robert Post purchased a bail from Respondent. In connection with that transaction, Mr. Post delivered to Respondent the sum of $150 that was to serve as collateral security for the bond. They agreed that the sum of $150 would be returned to Mr. Post once the conditions of the bond had been satisfied. On November 8, 1992, the conditions of this bond were satisfied and the liability on the underlying bond was terminated. Respondent failed to return the sum of $150 to Mr. Post despite demands for her to do so. Prior to December 10, 1992, Jo Anne Adams entered into an agreement for Respondent to post a bond for Wilfred Byam. In connection with that transaction, Ms. Adams delivered to Respondent the sum of $200 that was to serve as collateral security for the bond. They agreed that the sum of $200 would be returned to Ms. Adams once the conditions of the bond had been satisfied. On December 10, 1992, the conditions of this bond were satisfied and the liability on the underlying bond was terminated. Respondent failed to return the sum of $200 to Ms. Adams despite demands for her to do so. Prior to December 22, 1992, Shannon Davidson purchased a bail bond from Respondent. In connection with that transaction, Mr. Davidson delivered to Respondent the sum of $250 that was to serve as collateral security for the bond. They agreed that the sum of $250 would be returned to Mr. Davidson once the conditions of the bond had been satisfied. On December 22, 1992, the conditions of this bond were satisfied and the liability on the underlying bond was terminated. Respondent failed to return the sum of $250 to Mr. Davidson despite demands for her to do so. Prior to July 23, 1993, Albert Perone entered into an agreement for Respondent to post a bond for Richard Falaro. In connection with that transaction, Mr. Perone delivered to Respondent the sum of $250 that was to serve as collateral security for the bond. They agreed that the sum of $250 would be returned to Mr. Perone once the conditions of the bond had been satisfied. On July 23, 1993, the conditions of this bond were satisfied and the liability on the underlying bond was terminated. Respondent failed to return the sum of $250 to Mr. Perone despite demands for her to do so. Respondent permitted her husband, Ken Jenkins, to participate in the transaction involving the bail bond purchased by Mr. Perone for Mr. Falaro. At the time she permitted him to engage in the conduct of her bail bondsman business as part of the Perone transaction, Respondent knew or should have known that her husband's license as a bail bondsman had been revoked and that he had entered a plea of guilty to a felony charge in a criminal proceeding. On or about April 27, 1993, Respondent received payments totaling $650 for placement of a bond from Angelene G. Goulos. No bond was posted by the Respondent. Respondent failed to return any part of the sum she had received from Ms. Goulos despite demands for her to do so. Prior to November 18, 1992, Ross Rankin purchased a bail bond from Respondent. In connection with that transaction, Mr. Rankin delivered to Respondent the sum of $250 that was to serve as collateral security for the bond. They agreed that the sum of $250 would be returned to Mr. Rankin once the conditions of the bond had been satisfied. On November 18, 1992, the conditions of this bond were satisfied and the liability on the underlying bond was terminated. Respondent failed to return the sum of $250 to Mr. Rankin despite demands for her to do so. Prior to May 18, 1993, Mary Pilcher entered into an agreement for Respondent to post a bond for Hassan Niksirat. In connection with that transaction, Ms. Pilcher delivered to Respondent the sum of $200 that was to serve as collateral security for the bond. They agreed that the sum of $200 would be returned to Ms. Pilcher once the conditions of the bond had been satisfied. On May 18, 1993, the conditions of this bond were satisfied and the liability on the underlying bond was terminated. Respondent failed to return the sum of $200 to Ms. Pilcher despite demands for her to do so. Prior to March 31, 1993, Tania Rodriguez, a/k/a, Tania Cuevas entered into an agreement for Respondent to post a bond for Edwin Cuevas. In connection with that transaction, Ms. Rodriguez delivered to Respondent the sum of $400 that was to serve as collateral security for the bond. They agreed that the sum of $400 would be returned to Ms. Rodriguez once the conditions of the bond had been satisfied. On March 31, 1993, the conditions of this bond were satisfied and the liability on the underlying bond was terminated. Respondent failed to return the sum of $400 to Ms. Rodriguez despite demands for her to do so. On May 4, 1993, and May 6, 1993, Respondent permitted her husband, Ken Jenkins, to conduct bail bond business in transactions with Mary Gandy, another bail bondsman. At the time she permitted him to engage in the conduct of her bail bondsman business in transactions with Ms. Gandy, Respondent knew or should have known that her husband's license as a bail bondsman had been revoked and that he had entered a plea of guilty to a felony charge in a criminal proceeding.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Petitioner enter a final order that adopts the findings of fact and conclusions of law contained herein. It is further recommended that Petitioner revoke Respondent's existing licensure and her eligibility for licensure under the Florida Insurance Code. DONE AND ENTERED this 7th day of June, 1996, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 7th day of June, 1996. COPIES FURNISHED: Bill Tharpe, Esquire Division of Legal Services 612 Larson Building Tallahassee, Florida 32399-0333 Dickson E. Kesler, Esquire Division of Agent and Agency Services 8070 N.W. 53rd Street, Suite 103 Miami, Florida 33166 Loudelle Davis Jenkins 1372 Northampton Terrace West Palm Beach, Florida 33414 Honorable Bill Nelson State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Dan Sumner, General Counsel Department of Insurance and Treasurer The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
The Issue The issue is whether Petitioners' applications for reimbursement from the Securities Guaranty Fund should be approved.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: These cases involve claims by Petitioners, Clyde and Patti Gallo (Case No. 98-3765) and Richard and Belinda Morin (Case No. 98-3766), for payment from the Securities Guaranty Fund (Fund) for monetary damages suffered as a result of violations of the Florida Securities and Investor Protection Act by William Anthony McClure (McClure). When the violations occurred, McClure was a registered associated person employed by Schneider Securities, Inc. (Schneider), a Colorado corporation registered as a securities dealer in the State of Florida. The Fund is administered by Respondent, Department of Banking and Finance (Department), which must approve all applications for payment from the fund. Undisputed Facts Regarding the Gallo's Claim McClure served as manager for Schneider's branch office in Gainesville, Florida. On February 26, 1993, the Gallos deposited the sum of $213,978.10 with Schneider to open an account for investment purposes. McClure executed a Letter of Authorization dated March 18, 1993, for the transfer of $30,000.00 from the Gallo's brokerage account without the Gallo's authority. This money was then transferred to Buddy Miller, who paid McClure $5,000.00 for the delivery of the money. McClure subsequently obtained ratification of the transfer of monies from the Gallo's account by representing to Mr. Gallo that the transaction was a "factoring arrangement" and that the investment of monies would be "secure." McClure made the foregoing representations at a time when he knew that Miller was insolvent, that he was paying him a kickback, and that the money had already been transferred from the Gallo's account. McClure did not disclose this information to the Gallos. The Gallos lost the entire $30,000.00 appropriated by McClure from their account with Schneider. In February 1995, the Gallos filed a five-count complaint with the Circuit Court of the Eighth Judicial Circuit against McClure and Schneider. They also served a treble damage notice to McClure under Section 772.11, Florida Statutes. McClure did not make restitution within 30 days from receipt of notice in order to avoid liability for treble damages. In April 1996, the Gallos received the sum of $40,000.00 from Schneider in a mediated settlement. This amount covered their loss of principal. On August 19, 1996, an Amended Final Judgment awarded the Gallos the sum of $30,000.00 in compensatory damages. This amount was then trebled to $90,000.00 pursuant to Section 772.11, Florida Statutes. The Amended Final Judgment subtracted the sum of $40,000.00 received from Schneider from the $90,000.00 in trebled damages for a total of $50,000.00 plus statutory interest of $9,999.00, or a total of $59,999.00 against McClure. On December 4, 1996, a Final Judgment awarded the Gallos the sum of $20,878.50 in attorney's fees and the sum of $1,312.06 in court costs against McClure. The parties agree that these amounts are not recoverable from the Fund. On July 11, 1998, the Gallos submitted a claim to the Department seeking to recover $10,000.00 of the treble damages they were awarded pursuant to Section 772.11, Florida Statutes. This claim was denied by the Department on July 28, 1998, on the ground that a claimant cannot recover treble damages from the Fund. Undisputed Facts Regarding the Morin Claim In January 1993, Richard and Belinda Morin deposited the sum of $231,862.59 with Schneider to open an account for investment purposes. McClure was the account executive for Schneider who handled the Morin's brokerage account. In mid-March 1993, McClure contacted Mr. Morin to suggest an investment that he represented as being "secure" and "short-term." McClure described the investment to Morin as a "factoring security" of an account receivable of a major manufacturing concern that was secured by the guaranteed payment of the invoice. The investment suggested by McClure to Morin was really an unsecured loan to a small outdoor furniture manufacturer in Central Florida known as Cypress Originals (Cypress). Cypress was then in severe financial distress which fact was not disclosed to Morin by McClure. On March 5, 1993, or prior to the above discussion, McClure had forged Morin's signature on a Letter of Authorization for the transfer of $25,000.00 from the Morin's brokerage account with Schneider and forwarded the money to Cypress. In June 1993, McClure appropriated an additional $20,000.00 from the Morin's brokerage account into his own personal account or to an account owned and controlled by him. The Morins lost the entire $45,000.00 appropriated from their account. In February 1995, the Morins filed a five-count complaint in the Circuit Court of the Eighth Judicial Circuit against McClure and Schneider. They also served a treble damage notice to McClure under Section 772.11, Florida Statutes. McClure did not make any restitution within thirty days after receipt of the notice in order to avoid liability for treble damages. In February 1997, the Morins received $45,000.00 from Schneider in a mediated settlement. This amount covered their loss of principal. On July 2, 1997, the Morins were awarded the sum of $45,000.00 in compensatory damages. This amount was trebled to $135,000.00 pursuant to Section 772.11, Florida Statutes. The Final Judgment awarded the Morins the sum of $90,000 ($135,000.00 in trebled damages less $45,000.00 received from Schneider), prejudgment interest of $48,397.20, court costs of $9,001.67, and attorney's fees of $32,410.00 against McClure. The parties agree that the court costs and attorney's fees are not recoverable from the Fund. On June 11, 1998, the Morins submitted a claim with the Department seeking to recover $10,000.00 of the prejudgment interest award. On July 28, 1998, the Department issued its proposed agency action denying the claim on the ground that prejudgment interest cannot be recovered from the Fund. The Department's Interpretation and Practice The Department interprets the term "actual or compensatory damages," as used in Section 517.141(1), Florida Statutes, to mean only the principal amount of the loss by the investor. The Department has never approved a claim against the Fund for any damages other than the actual loss of principal. Under the Department's interpretation of "actual or compensatory damages," prejudgment interest and trebled damages would be excluded from being recovered from the Fund.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Banking and Finance enter a Final Order denying the applications of Clyde and Patti Gallo and Richard and Belinda Morin for reimbursement from the Securities Guaranty Fund. DONE AND ENTERED this 22nd day of February, 1999, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER 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 22nd day of February, 1999. COPIES FURNISHED: Honorable Robert F. Milligan Comptroller, State of Florida The Capitol, Plaza Level Tallahassee, Florida 32399-0350 Steven D. Spivy, Esquire 230 Northeast 25th Avenue Suite 200 Ocala, Florida 34470-7075 Margaret S. Karniewicz, Esquire Department of Banking and Finance Suite 526, Fletcher Building Tallahassee, Florida 32399-0350 Harry L. Hooper, III, General Counsel Department of Banking and Finance Room 1302, The Capitol Tallahassee, Florida 32399-0350
The Issue The issue in the case is whether the allegations of the Administrative Complaints filed by the Petitioner against the Respondents are correct and if so, what penalty should be imposed.
Findings Of Fact The Petitioner is the state agency responsible for licensure and regulation of limited surety agents (bail bondsmen) operating in the State of Florida. The Respondents are individually licensed as limited surety agents in Florida and are officers and directors of "Big John Bail Bonds, Inc.," a bail bond agency. In November of 1999, Gustavo Porro contacted the Respondents regarding bail for Jessie James Bray, a friend of Mr. Porro's son. Mr. Porro did not know Mr. Bray. Based on the charges against Mr. Bray, four bonds were issued, two for $1,000 each and two for $250 each, for a total bond amount of $2,500. The $1,000 bonds were related to pending felony charges and the small bonds were related to pending misdemeanor charges. Mr. Porro signed a contingent promissory note indemnifying American Bankers Insurance Company for an amount up to $2,500 in the event of bond forfeiture. Bray did not appear in court on the scheduled date and the two $1,000 bonds were forfeited. For reasons unclear, the two $250 bonds were not forfeited. The contingent promissory note signed by Mr. Porro provided that no funds were due to be paid until the stated contingency occurred, stated as "upon forfeiture, estreature or breach of the surety bond." After Bray did not appear for court, the Respondents contacted Mr. Porro and told him that the bonds were forfeited and he was required to pay according to the promissory note. On April 15, 2000, Mr. Porro went to the office of Big John Bail Bonds and was told that he owed a total of $2,804, which he immediately paid. Mr. Porro was not offered and did not request an explanation as to how the total amount due was calculated. He received a receipt that appears to have been signed by Ms. Vath. After Mr. Porro paid the money, Ms. Vath remitted $2,000 to the court clerk for the two forfeited bonds. The Respondents retained the remaining $804. Bray was eventually apprehended and returned to custody. The Respondents were not involved in the apprehension. On July 11, 2000, the court refunded $1,994 to the Respondents. The refund included the $2,000 bond forfeitures minus a statutory processing fee of $3 for each of the two forfeited bonds. On August 9, 2000, 29 days after the court refunded the money to the Respondents, Mr. Porro received a check for $1,994 from the Respondents. Mr. Porro, apparently happy to get any of his money back, did not ask about the remaining funds and no explanation was offered. In November of 2000, Ms. Vath contacted Mr. Porro and informed him that a clerical error had occurred and that he was due to receive additional funds. On November 6, 2000, Mr. Porro met with Ms. Vath and received a check for $492. At the time, that Ms. Vath gave Mr. Porro the $492 check she explained that he had been overcharged through a clerical error, and that the additional amount being refunded was the overpayment minus expenses. She explained that the expenses included clerical and "investigation" expenses and the cost of publishing a notice in a newspaper. There was no documentation provided of the expenses charged to Mr. Porro. At the time the additional refund was made, there was no disclosure that the two $250 bonds were never forfeited. At the hearing, the Respondents offered testimony asserting that the charges were miscalculated due to "clerical" error and attempting to account for expenses charged to Mr. Porro. There was no reliable documentation supporting the testimony, which was contradictory and lacked credibility.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Insurance enter a Final Order requiring that the Respondents be required to refund $318 to Mr. Porro, which, combined with the previous payments of $1,994 and $492, will constitute refund of the total $2,804 paid by Mr. Porro to the Respondents. It is further recommended that the limited surety licenses of Matilda M. Vath and John L. Vath be suspended for a period of not less than three months or until Mr. Porro receives the remaining $318, whichever is later. DONE AND ENTERED this 22nd day of February, 2002, in Tallahassee, Leon County, Florida. 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 22nd day of February, 2002. COPIES FURNISHED: James A. Bossart, Esquire Department of Insurance Division of Legal Services 200 East Gaines Street, Room 612 Tallahassee, Florida 32399 Joseph R. Fritz, Esquire 4204 North Nebraska Avenue Tampa, Florida 33603 Mark Casteel, General Counsel Department of Insurance The Capitol, Lower Level 26 Tallahassee, Florida 32399-0307 Honorable Tom Gallagher State Treasurer/Insurance Commissioner Department of Insurance The Capitol, Plaza Level 02 Tallahassee, Florida 32399-0300
Findings Of Fact The Respondent, Russell Lynn Tull, became licensed in this state as a general lines agent on January 21, 1989. At the time of the events which gave rise to the Administrative Complaint, the Respondent was not licensed as an insurance agent. At all times pertinent to the Administrative Complaint, the Respondent was employed by Cecil Powell and Company of Jacksonville, Florida, in its surety bond department. Cecil Powell and Company was authorized to underwrite performance surety bonds on behalf of Transamerica Insurance Company. On or about September 20, 1988, Embry/Burney, Inc. (hereafter E/B) of Fernandina Beach, Florida, entered into a construction contract with C and W Systems of Jacksonville, (hereinafter C and W), pursuant to which C and W agreed to build certain improvements for E/B within a development located in Nassau County, Florida. The construction contract provided that E/B, as owner, would pay C and W, as contractor, the sum of $765,668 upon completion of the project, and further that C and W would provide a performance bond in the amount of the contract. On or about September 20, 1988 and pursuant to contract, E/B provided a check in the amount of $15,232 payable to C and W as full payment on the premium for the performance bond on the construction project. On or about October 20, 1988, E/B received a performance bond from C and W in the amount of $765,668 to ensure completion of the construction contract. The performance bond was received by W. H. Burney, Jr., in behalf of E/B. The performance bond listed William Whiddon, Paul Chauncey, and the Respondent as personal sureties on the performance bond. Whiddon and Chauncey were the principals in C and W Contracting. When W. H. Burney, Jr. received the personal surety bond he asked Chauncey and Whiddon where they had obtained it. Burney was told by Chauncey that it was obtained through Cecil Powell and Company. Chauncey also told Burney that the Respondent was a Vice-President with Cecil Powell and Company. (The preceding is a hearsay statement included in these findings to explain the state of mind of W. H. Burney, Jr. as stated below.) C and W gave the check provided by E/B for the performance bond to the Respondent who deposited the $15,232 to his personal account. C and W presented the personal surety bond to the local government to meet its requirements for participation. W. H. Burney, Jr. knew that the surety bond which he received was a personal surety bond from Whiddon, Chauncey, and the Respondent; however, Burney thought that their personal obligations had been re-insured by Transamerica based upon statements he received from Chauncey. W. H. Burney, Jr., never spoke to the Respondent in person. All of his conversations with the Respondent were by telephone. Burney testified that the Respondent told him that the re-insurance was through Transamerica Insurance Company; however, his testimony on this point was not deemed to be credible. (Not accepted as Finding of Fact.) 1/ Subsequently, W. H. Burney, Jr. received a letter on the stationery of Cecil Powell and Company, Petitioner's Exhibit No. 5, which reinforced Burney's misconception that Chauncey, Whiddon, and Tull had re-insured the project through Transamerica Premier Insurance Company. Neither Transamerica nor any other company wrote any insurance guarantying the performance of the contract by C and W. On or about April 13, 1988, C and W failed to complete the work as required by the contract, and the contract was declared in default. After the default on the contract, Joel E. Embry contacted the Respondent at Cecil Powell and Company and discussed with him the default, the need to activate the bond, and the need to hire a new contractor to complete the work. Embry suggested two contractors to the Respondent which the Respondent indicated were acceptable. Embry hired a contractor to complete the work, and provided a copy of the new contract to Cecil Powell and Company. When the new contractor submitted a bill for completion of a portion of the work, he submitted these bills to Cecil Powell. When the bills were not paid, Embry made arrangements to meet with the Respondent and with Fitzhugh Powell. Embry met with Fitzhugh Powell at Cecil Powell and Company to discuss the nonpayment of the bills. At that meeting, Embry presented Fitzhugh Powell a copy of the letter from Cecil Powell and Company referencing Transamerica's insurance of the project (Petitioner's Exhibit 5). Fitzhugh Powell investigated internally and determined that neither Cecil Powell and Company nor Transamerica had provided any surety on the contract. Fitzhugh Powell's investigation revealed that the Respondent had received the monies paid for the surety bond, and had, with Chauncey and Whiddon, become a personal surety upon the contract. It was the opinion of Fitzhugh Powell, a licensee with over 30 years of experience in the insurance business and principal officer of a major insurance agency, that the Respondent had not insured the contract by agreeing to act as personal surety on the contract. However, Powell discharged the Respondent for acting as personal surety on the C and W contract. When Tull, Whiddon, and Chauncey were unable to cover the losses on the contract, E/B suffered significant financial losses which resulted in a loss of business reputation.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is, RECOMMENDED: That the Department take no action against the Respondent's license. DONE and ENTERED this 14th day of December, 1992, in Tallahassee, Florida. STEPHEN F. DEAN 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 14th day of December, 1992.
The Issue The purpose of the public hearing was to review the application to consolidate New River Bank, Oakland Park, Florida, and 1st United Bank, Boca Raton, Florida, in accordance with Florida law.
Findings Of Fact 1st United Bancorp (Bancorp) is a Florida bank holding company which maintains its principal place of business at 980 North Federal Highway, Boca Raton, Florida. 1st United is a Florida chartered bank and is a wholly-owned subsidiary of Bancorp and operates full service banking facilities at seven locations in Palm Beach and Martin Counties. New River is a Florida chartered bank which maintains its executive offices at 2901 West Oakland Park Boulevard, Oakland Park, Florida, and operates two banking facilities in Broward County, Florida. The Department is the duly designated state agency vested with the responsibility of processing and approving or disapproving a plan of any financial entity to acquire the assets and assume the liabilities of another financial entity pursuant to Section 655.414, Florida Statutes. On July 13, 1993, Bancorp and New River entered into a Sale and Purchase Agreement which provides that Bancorp will cause 1st United to purchase substantially all of the assets and to assume substantially all of the liabilities of New River, after which New River will be liquidated and dissolved. The agreement noted above was duly adopted by majority vote of the respective Boards of Directors of Bancorp, 1st United and New River. In addition, the respective Boards of Directors of Bancorp, 1st United and New River duly adopted by majority vote a Plan of Acquisition of Assets and Assumption of Liabilities which summarized pertinent portions of the agreement and which includes all of the terms and conditions required by Section 655.414 (1), Florida Statutes. On September 7, 1993, 1st United and New River submitted an application to the Department seeking the Department's approval for the purchase of New River's assets and assumption of its liabilities as set forth in the agreement and as summarized by the plan. Submitted with the application were the requisite filing fee and all of the required documents including copies of the agreement, the plan and certified copies of the authorizing resolutions of the respective boards of directors. On September 17, 1993, the Department caused notice of the receipt of the application to be published in the Florida Administrative Weekly. This published notice met the requirements of Rule 3C-9.003(1), Florida Administrative Code. On September 7, 1993, Warren Orlando, in his capacity as president of 1st United, filed a petition for public hearing and notice of intention to appear on behalf of 1st United. On October 27, 1993, the Department referred the matter to the Division of Administrative Hearings for the purpose of conducting a public hearing pursuant to Section 120.60(5), Florida Statutes, and Rule 3C-9.004, Florida Administrative Code. Notice that a public hearing would be held on the application on December 13, 1993, was duly published in conformity with Rule 3C-9.005, Florida Administrative Code, in the Fort Lauderdale Sun-Sentinel, Palm Beach Post, and Stuart News, newspapers of general circulation in the communities in which 1st United and New River do business. The agreement provides that New River will receive a combination of cash and Bancorp common stock equal to the net asset value, as defined in the plan, of the assets and liabilities of New River being purchased or assumed. The agreement further provides that after the closing of the asset acquisition, New River shall cease operations and commence dissolution and liquidation proceedings. Substantially all of the Bancorp common stock and available cash received by New River from Bancorp will be distributed to New River shareholders, other than dissenting shareholders. New River stockholders will receive a pro rata portion of the Bancorp common stock and cash available for distribution. After the acquisition of the assets and assumption of liabilities as set forth in the agreement and as summarized in the plan, 1st United will have adequate capital structure in relation to its activities and its deposit liabilities. The acquisition of the assets and assumption of liabilities as set forth in the agreement and as summarized in the plan, if consummated, are not contrary to the public interest. The respective boards of directors of Bancorp and New River requested the opinion of Alex Sheshunoff & Co. Investment Banking with regard to the fairness to the respective shareholders of each corporation, from a financial point of view, of the terms and conditions of the agreement. Alex Sheshunoff & Co. Investment Banking is regularly engaged in and is an expert authority in the valuation of bank and bank holding company securities in connection with bank mergers and acquisitions. Thomas Mecredy is an expert in the valuation of bank and bank holding companies in connection with bank mergers and acquisitions. On December 8, 1993, Alex Sheshunoff & Co. Investment Banking through Thomas Mecredy issued its opinion to the respective Boards of Directors of Bancorp and New River that the terms and conditions of the agreement were fair and equitable to the shareholders of each corporation. Pursuant to the agreement, New River's Board of Directors duly adopted a plan of dissolution and complete liquidation for New River. The plan of dissolution provides that after the sale of assets and assumption of liabilities the Board of Directors will reserve a sufficient amount of Bancorp stock and cash for payment of liquidation expenses and payment of liabilities not assumed by 1st United, including contingent liabilities (general reserves). In addition to the general reserves, New River will create a special reserve (special reserve) in an amount which it considers sufficient to defend and satisfy certain potential claims which may be asserted against New River by shareholders of New River in conjunction with the organization and initial offering of common stock of New River. In determining the amounts necessary to establish the general reserves and special reserve, New River's board of directors consulted with the national law firm of Proskauer Rose Goetz and Mendelsohn with respect to both reserves and the Florida law firm of Shutts & Bowen with respect to the special reserve for advice concerning the potential liability on the part of New River in connection with both known claims and potential claims and the amounts, if any, for which New River could be held liable. Shareholder E.D. Hittson noted that the book value of the New River stock is approximately $11.00 per share versus the $4.50 per share value of the 1st United stock. In response, bank officials noted that 1st United has dividend and strong growth potential not available to New River. Shareholder James Weck questioned provisions being made to satisfy outstanding lawsuit liabilities, the future location of the facility, and the effect on New River employees. In response, bank officials stated that the potential lawsuit liability is included in the reserve amounts, that no decision has been made as to the future location of the banking facility but that the needs of the service area will be met, and that it is their intention to draw talent from the New River staff. Shareholder Amine Semaan questioned whether New River would be represented on the Board of Directors at 1st United, whether minority areas would be a priority for the future location of the facility, and whether another buyer would have paid $10.50 per share. In response, bank officials maintained that New River will have one member on the Board of Directors at 1st United, that the needs of the service area will be met, and that no other, more attractive, buyer is available. On January 11, 1994, MaryAnn Cassel, a shareholder who reportedly attended the public hearing on December 13, 1993, filed a motion for leave to become a party. Such motion alleged that the movant, a minority shareholder, will be forced to accept Bancorp common stock in exchange for her New River shares or be forced to accept appraisal rights in lieu of her shares. Further, movant claimed that the plan is not fair to all parties because the shares of New River have been undervalued. Having deemed such motion untimely, and having determined such request does not allege circumstances unknown to movant prior to the December 13, 1993 public hearing, it is denied. DONE AND ENTERED this 24th day of January, 1994, in Tallahassee, Leon County, Florida. Joyous D. Parrish Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 24th day of January, 1994. COPIES FURNISHED: Honorable Gerald Lewis Comptroller, State of Florida The Capitol, Plaza Level Tallahassee, Florida 32399-0350 William G. Reeves General Counsel Department of Banking and Finance Room 1302, The Capitol Tallahassee, Florida 32399-0350 Donald E. Thompson, II Proskauer Rose Goetz and Mendelsohn One Boca Place, Suite 340 2155 Glades Road Boca Raton, Florida 37431 Michael W. Ford Phillip T. Ridolfo, Jr. Mershon, Sawyer, Johnston, Dunwody & Cole Phillips Point East Tower 777 South Flagler Drive, Suite 900 West Palm Beach, Florida 33401 Jeffrey D. Jones Department of Banking and Finance Division of Banking The Capitol, Suite 1302 Tallahassee, Florida 32399-0350 David S. Zimble Zimble Formoso-Murias, P.A. 1401 Brickell Avenue, Suite 730 Miami, Florida 33131
Findings Of Fact Based upon the oral and documentary evidence adduced at the final hearing and the entire record in this proceeding, the following findings of fact are made. At all times pertinent hereto, Respondent has been licensed in the State of Florida as a limited surety agent (bail bondsman), a life and health agent and a general lines agent. Respondent has been licensed as an insurance agent for more than eleven years. He has been a licensed limited surety agent for more than ten years. Pursuant to Section 648.442(3), Florida Statutes, all collateral received by Respondent or others acting under his supervision or control in transactions under his surety agent license constituted trust funds received in a fiduciary capacity. At all times pertinent to this proceeding, Respondent has been doing business as Protective Insurance Center, Jenkins Bail Bonds. Until early February of 1991, Respondent's general agent was Banker's Insurance Company. However, in early February, Respondent's relationship with that company was terminated. Respondent's current general agent is American Bankers Insurance Company of Florida. Russell Faibish, Respondent's general agent with American Bankers since February of 1991, has expressed via affidavit that Respondent is in good standing with that company and the company has been satisfied with his performance to date. On January 25, 1991, Respondent, while acting in his capacity as a limited surety agent for Banker's Insurance Company, posted a surety bond, No. 339658, (the "Bond") in the amount of $752.00 to obtain the release of Kim Reinhold Whitford from custody in Clay County, Florida. In connection with the posting of the Bond, Respondent received from Earnest R. Justice (the "Indemnitor") a $75.00 premium payment and a $350.00 cash collateral payment. At the time the Indemnitor arranged with Respondent for the issuance of the bond, the Indemnitor was advised that his collateral would be returned within twenty one days of the receipt of written notice of the discharge of the bond. Respondent was provided with a notice from the Clerk of Court that Ms. Whitford was scheduled for a court appearance on April 3, 1991 for a "plea." Respondent never made any inquiry as to the results of that April 3, 1991 hearing. On April 3, 1991, the Bond was discharged and the obligation of the surety, Banker's Insurance Company, was released in writing by the County Court of Clay County, Florida. Respondent contends that he never received notification of the discharge of the Bond. While the Court document indicates that a notice of the discharge of the Bond was sent to Respondent at the time the requirements for the discharge were satisfied on or about April 3, 1991, no conclusive evidence was presented to establish that the notice of discharge was actually sent to or received by Respondent. Respondent denies ever receiving that document. After Ms. Whitford was released from jail, the Indemnitor contacted Respondent's office several times in April and May of 1991 trying to arrange the return of his collateral. Respondent denies receiving any messages from the Indemnitor. The failure to receive the messages may have been due to office staff turnover. In any event, the evidence was sufficient to establish that the Indemnitor attempted to arrange for the return of his collateral on numerous occasions without success. On August 9, 1991, the Petitioner filed the Administrative Complaint which is the basis for this proceeding against Respondent alleging that he failed to return the Indemnitor's collateral. Upon receipt of the Administrative Complaint, Respondent contacted the Clerk of Court, in Clay County, Florida to determine the status of the bond. On August 30, 1991, the Clerk of Court, Clay County, Florida, sent Respondent a certified copy of the bond discharge. Respondent claims that he first became aware of the discharge of the Bond and the Indemnitor's right to the return of the collateral when he received the August 30 certification from Clay County. Because an Administrative Complaint had already been filed, Respondent did not immediately refund the collateral for fear that such action could be construed as an attempt to influence a witness in the case. In order to avoid the appearance of attempting to influence a witness, Respondent waited until the day of the hearing to arrange to make a refund of the collateral available to the Indemnitor. On January 14, 1992, Respondent sent a Western Union Money Transfer, control no. 7395574746, payable to the Indemnitor in the amount of $350.00 as return of the collateral. Although the Indemnitor did not receive the return of his collateral until approximately eight to nine months after it was due, the collateral was ultimately returned and there is no other evidence in this case of any other financial loss to any member of the public. On average, Respondent has between 100 to 150 active bond cases per month. Most of those bonds are written in Palm Beach County, where Respondent's business is located. In this case, Respondent arranged for a "teletype bond" whereby the arrangements for the bond were made in Palm Beach County and notification of the posting of the bond and authorization for the release of the prisoner were transmitted via teletype to Clay County. Respondent contends that he reviews his active cases on a quarterly basis to confirm the status of the bonds. Nevertheless, it took almost six months for Respondent to determine that the requirements of the Bond in this case had been fully satisfied. No justifiable excuse was given for this delay. However, in mitigation, it does appear that the long distance nature of the transaction, the change in Respondent's general agent and office staff turnover all contributed to the delay in refunding the Indemnitor's collateral. Respondent has had three Administrative Complaints filed against him since 1985. The first Administrative Complaint was filed on June 26, 1985 and alleged that Respondent failed to provide required documentation of his assets to the Department. Pursuant to a Consent Order entered on August 6, 1985, Respondent was fined $200 and placed on probation for one year as a result of this charge. The most serious and pertinent prior administrative proceeding against Respondent was commenced by an Administrative Complaint dated November 17, 1987. That complaint alleged, among other things, that Respondent failed to return collateral to at least two clients. In April of 1989, the parties entered into a settlement stipulation regarding these charges pursuant to which Respondent was suspended for one year and fined $1,000.00. He was also required to make resitution to several individuals who had not been identified in the Administrative Complaint in that case. No explanation has been provided regarding the "restitution" required to be made to those individuals. The third case involved an Emergency Suspension Order entered on March 16, 1988. That Order was dissolved on September 20, 1988 when the underlying criminal charges were nolle prosequi. Respondent has had several IRS liens filed against him and there is currently a foreclosure action pending against his house. However, no specific information was provided regarding the status of those cases. Respondent contends that he is vigorously contesting all of those matters and he believes they will be favorably resolved. The evidence in this case suggests that Respondent is currently involved in disputes with some other customers regarding the return of collateral. The evidence did not establish the exact number or the facts surrounding those disputes. Respondent contends that all of those disputes are related to problems with or caused by his prior General Agent. No conclusions as to the merits of those complaints can be drawn from the evidence presented in this case. Gerald Michael Sandy, a licensed bondsman in the State of Florida and the current president of the Florida Surety Agents Association, testified on behalf of the Respondent in this matter. He indicated that on approximately 40% of the bonds that are executed, the Courts do not provide written notice of the discharge. However, Mr. Sandy conceded that even if written notification from a court is not received, the bail bondsman is primarily responsible for determining whether a bond has been discharged and a bail bondsman must immediately respond to the inquiries of an indemnitor regarding the return of collateral.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that a Final Order be entered suspending Respondent's licenses for three months, placing him on probation for two years and assessing an administrative fine in the amount of $500. RECOMMENDED this 9th day of March, 1992, at Tallahassee, Florida. J. STEPHEN MENTON 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 9th day of March, 1992. APPENDIX TO RECOMMENDED ORDER, CASE NO. 91-6302 Both parties have submitted Proposed Recommended Orders. The following constitutes my rulings on the proposed findings of fact submitted by the parties. The Petitioner's Proposed Findings of Fact Proposed Finding Paragraph Number in the Findings of Fact of Fact Number in the Recommended Order Where Accepted or Reason for Rejection. 1. Adopted in substance in Findings of Fact 1. 2. Adopted in substance in Findings of Fact 1. 3. Adopted in substance in Findings of Fact 2. 4. Adopted in substance in Findings of Fact 3. Findings of Fact 5. 7. Adopted in substance in Findings of Fact 5. 8. Adopted in substance in Findings of Fact 7. Rejected as unnecessary. Adopted in substance in Subordinate to Findings of Fact 13 and 14 and addressed in the Preliminary Statement. Subordinate to Findings of Fact 6 and 10. Adopted in substance in Findings of Fact 8. Subordinate to Findings of Fact 18. Subordinate to Findings of Fact 19. Subordinate to Findings of Fact 20. The Respondents's Proposed Findings of Fact Proposed Finding Paragraph Number in the Findings of Fact of Fact Number in the Recommended Order Where Accepted or Reason for Rejection. 1. Adopted in substance in Findings of Fact 5. 2. Adopted in substance in Findings of Fact 5. 3. Adopted in substance in Findings of Fact 7. 4. Adopted in substance in Findings of Fact 10. 5. Adopted in substance in Findings of Fact 11. 6. Adopted in substance in Findings of Fact 11. 7. Adopted in substance in Findings of Fact 12. 8. Adopted in substance in Findings of Fact 14. 9. Addressed in the Preliminary Statement. 10a. Adopted in substance in Findings of Fact 10. 10b. Adopted in substance in Findings of Fact 9. 10c. Adopted in substance in Findings of Fact 10. 10d. Adopted in substance in Findings of Fact 10. 10e. Adopted in substance in Findings of Fact 13. 10f. Adopted in substance in Findings of Fact 13. 10e.[sic] Adopted in substance in Findings of Fact 17. 10f.[sic] Adopted in substance in Findings of Fact 16. 10g. Rejected as unnecesdsary. 11a. Adopted in substance in Findings of Fact 21. 11b. Adopted in substance in Findings of Fact 21. 11c. Adopted in substance in Findings of Fact 21. 12. Adopted in substance in Findings of Fact 4. COPIES FURNISHED: David D. Hershel, Esquire Department of Insurance and Treasury Larson Building, Room 412 Tallahassee, Florida 32399-0300 Franklin Prince, Esquire Northbridge Centre, Suite 300-P 515 N. Flagler Drive West Palm Beach, Florida 33401 Tom Gallagher State Treasurer and Insurance Commissioner Department of Insurance and Treasurer The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Bill O'Neil Deputy General Counsel Department of Legal Affairs The Capitol, Plaza Level Tallahassee, Florida 32399-0300
The Issue Whether Respondent committed the offenses set forth in the Administrative Complaint and, if so, the penalty which should be imposed.
Findings Of Fact Respondent was at all times relevant hereto licensed by Petitioner in the State of Florida as a Limited Surety Agent (Bail Bondsman) and as a Life and Health Insurance Agent. On January 1, 1988, Daniel Del Sardo was arrested and incarcerated in Broward County, Florida, on charges of forgery, uttering a forged instrument, grand theft of the second degree, and possession of a stolen credit card. His bail was set in the amount of $3,100.00. On March 29, 1988, Sabastian Del Sardo (Complainant), the father of Daniel Del Sardo, and Respondent entered into an agreement for Accredited Surety & Casualty Company, Inc., for whom Respondent acted as agent and attorney in fact, to post the bail bond for Daniel Del Sardo. Complainant paid Respondent the sum of $350.00 as the premium for the bail bond and agreed to indemnify Accredited Surety & Casualty Company, Inc., the surety on the bond, in the event the surety suffered a loss on the bail bond. In addition, Complainant tendered to Respondent, as additional security, a check in the amount of $1,000.00 and the title to a 1979 Cadillac. Complainant told Respondent to hold the check until April 3, 1988, the date Complainant was scheduled to receive his social security check. On April 4, 1988, Complainant gave to Respondent the sum of $750.00 in cash in exchange for the $1,000.00 check that Respondent had been holding since March 29, 1988. The collateral security was accepted by Respondent as attorney in fact and in trust for Accredited Surety & Casualty Company, Inc. By the terms of the agreement executed by Complainant and Respondent, Complainant was entitled to a return of the collateral security within 21 days after the bail bond was discharged in writing by the court. On or about April 7, 1988, Complainant asked Respondent to take Daniel Del Sardo back into custody because Daniel had gotten back on drugs and had been stealing from Complainant and Complainant's wife. Respondent had sufficient justification to return Daniel Del Sardo to custody. While there was a verbal agreement between Complainant and Respondent that Respondent would return Daniel to custody, there was no agreement as to how, or whether, Respondent was to be compensated for doing so. Respondent incurred expenses in locating Daniel Del Sardo and in returning him to custody. Respondent and one of his employees spent over twenty hours looking for Daniel Del Sardo. When he was located, Daniel Del Sardo was high on drugs and did not go to jail peaceably. While he was in the process of taking Daniel Del Sardo back into custody, Respondent's clothing was damaged. Respondent's employee transported Daniel Del Sardo from Miami, Florida, to the Broward County, Florida, jail on April 10, 1988. On April 20, 1988, Daniel Del Sardo changed his plea from not guilty to guilty on the four counts and was sentenced to a total of four years in prison. The bond posted on behalf of Daniel Del Sardo was discharged on April 26, 1988. On April 28, 1988, Complainant asked Respondent to return the car title and the $750.00 security deposit he had given Respondent. Respondent refused to return the entire deposit and told Complainant that he was going to keep the sum of $525.00 to reimburse himself for expenses he had incurred in taking Daniel Del Sardo back into custody. Complainant did not agree that Respondent was entitled to reimbursement of expenses. Further, Complainant did not agree that $525.00 was a reasonable figure for the expenses Respondent had incurred. In response to Complainant's demand that his entire deposit be refunded, Respondent, on April 28, 1988, returned the car title and the sum of $225.00 to Complainant. Respondent kept the sum of $525.00 to reimburse himself for the expenses he incurred in returning Daniel to custody. In charging Complainant for the expenses he incurred in returning Daniel Del Sardo to custody and in deducting those expenses from the collateral security, Respondent was following a practice that has developed among those engaged in the bail bond business in Dade County, Florida. Complainant filed a complaint with Petitioner on the grounds that his entire deposit of $750.00 had not been returned, asserting that there had been no agreement that he would pay Respondent's expenses for taking Daniel back into custody. On or about June 20, 1988, one of Petitioner's investigators contacted Respondent about the complaint. On June 21, 1988, Respondent paid to Complainant the sum of $525.00, representing the balance of the security deposit he had earlier received from Complainant. On January 26, 1989, Petitioner filed an administrative complaint against Respondent based on his dealings with Sabastian Del Sardo. The administrative complaint charged Respondent with violating the following: Section 648.44(1)(g), Florida Statutes, Section 648.442(1), Florida Statutes, Section 648.442(4), Florida Statutes, Section 648.45(2)(e), Florida Statutes, Section 648.45(2)(f), Florida Statutes, and Section 648.45(2)(j), Florida Statutes. Respondent denied the allegations of the Administrative Complaint and timely requested a formal hearing. There was no evidence that Respondent has been previously disciplined by Petitioner.
Recommendation Based on the foregoing findings of fact and conclusions of law it is RECOMMENDED that Petitioner, Florida Department of Insurance, enter a final order which finds that Respondent, Gerald Carpenter, violated the provisions of Sections 648.422(1) and (4), Florida Statutes, and Section 648.45(2)(j), Florida Statutes. It is further RECOMMENDED that an administrative fine in the amount of $500.00 be levied against Respondent. DONE AND ENTERED this 6th day of October, 1989, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 6th day of October, 1989. APPENDIX TO RECOMMENDED ORDER, CASE NO. 89-2356 The following rulings are made on the proposed findings of fact submitted by Respondent: The proposed findings of paragraph 1 are rejected as being unnecessary to the results reached. Whether Respondent was justified in returning Daniel Del Sardo to custody is not in issue. The proposed findings of paragraph 2 are rejected as being speculation. The proposed findings of paragraph 3 are rejected as being subordinate to the findings made. The proposed findings of paragraph 4 are rejected as being conclusions of law. COPIES FURNISHED: Brian Norton, Esquire Office of Legal Services 412 Larson Building Tallahassee, Florida 32399-0300 Randolph Q. Ferguson 1644 Northwest 17th Avenue Miami, Florida 33125 Honorable Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Don Dowdell, General Counsel Department of Insurance and Treasurer The Capitol, Plaza Level Tallahassee, Florida 32399-0300
The Issue Should Respondent's license as a bail bond agent in the State of Florida be disciplined for the alleged violation of certain provisions of Chapter 648, Florida Statutes, as set forth in the Administrative Complaint and, if so, what penalty should be imposed?
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made: The Department is the agency of the State of Florida vested with the statutory authority to administer the disciplinary provisions of Chapter 648, Florida Statutes. Respondent, at all times relevant to this proceeding, was licensed as a bail bond agent in the State of Florida and subject to the provisions of Chapter 648, Florida Statutes. Respondent, at all times relevant to this proceeding, was employed by Alliance Bail Bonds (Alliance), which was owned by Linda Jones. There was a verbal employment agreement between Alliance and Respondent, which provided for, among other things, Respondent's salary. However, the verbal employment agreement did not require that Respondent write bail bonds exclusively for Alliance. At all times relevant to this proceeding, Alliance's office was located in Respondent's home in Titusville, Brevard County, Florida, which had a separate entrance and separate telephone for Alliance. Alliance's files, both active and inactive, were also housed in this office. On March 30, 2000, a person identifying himself as Johnny Lamb contacted Respondent by telephone concerning a bail bond for an individual known as Bernard J. Dougherty who was being held in the Brevard County, Florida, jail. The bond amount was $8,500.00. Since Dougherty was not a resident of the State of Florida, Respondent wanted Lamb to put up the full amount of the bond as collateral. However, Lamb advised Respondent that he did not have enough cash to put up the full amount of the bond. Therefore, Respondent and Lamb eventually agreed on $7,000.00 cash as collateral. Additionally, Respondent advised Lamb that the premium for writing the bail bond would be $850.00 (10 percent of the bond amount). Later that same day, Lamb came to Respondent's office to complete the paperwork and put up the necessary funds for the collateral and bond premium. Lamb paid Respondent the collateral and bond premium in cash (U.S. currency, 20's, 50's, and 100's). Respondent prepared a Collateral Receipt and Informational Notice (Collateral Receipt), which was signed by Lamb. The Collateral Receipt indicated that Lamb had deposited the $7,000.00 collateral with Respondent and had executed an Indemnity Agreement and Promissory Note. Lamb also executed a Bail Application. Respondent gave Lamb the white copy of the Collateral Receipt for his records. The goldenrod copy of the Collateral Receipt was also given to Lamb to be delivered to Dougherty at the jail. The yellow copy and pink copy of the Collateral Receipt were retained by Respondent for Alliance's record. Lamb also paid Respondent $850.00 in cash (U.S. Currency) for the bail bond premium for which Respondent gave Lamb a receipt (number 20454) indicating that Lamb had paid the bail bond premium in the amount of $850.00. After completing the bond transaction with Lamb, Respondent prepared a file in Dougherty's name, which included the copies of the Collateral Receipt, Promissory Note, Indemnity Agreement, Bail Application, and a copy of the receipt for the bail bond premium. After preparing the file, Respondent prepared two Powers of Attorney (Powers), one in the amount of $5,000.00 and one in the amount of $3,500.00, and proceeded to the Brevard County jail to interview Dougherty. Upon arriving at the Brevard County jail, Respondent was advised that in addition to the Brevard County charges, there was an outstanding warrant for Dougherty from Volusia County and a hold for a parole violation in the State of Pennsylvania. Lamb was not present at the Brevard County jail at this time. Therefore, Respondent advised Dougherty of the Volusia County warrant and the hold from Pennsylvania. Respondent further advised Dougherty that although he could post bond for the Brevard County charges, Dougherty would not be released because of the Volusia County warrant and the hold for parole violation in Pennsylvania. Dougherty advised Respondent that he did not want to post bond. Whereupon, Respondent attempted to contact Lamb using the telephone numbers furnished Respondent by Lamb but was unsuccessful in locating Lamb. On March 31, 2000, Respondent called the Brevard County jail and had Lamb paged. Upon being advised that Lamb was present in the Brevard County jail, Respondent asked that they instruct Lamb to call Respondent at his office. Lamb called Respondent at his office and was advised of the situation concerning Dougherty. Respondent also advised Lamb that he was on his way to the jail and would bring Lamb's money with him. Upon arriving at the Brevard County jail, Respondent explained the circumstances regarding the posting of bail for Dougherty and proceeded to return Lamb's money. Lamb did not have the copies of the Collateral Receipt with him that had been given to Lamb on March 30, 2000. Therefore, Respondent took his copy of the Collateral Receipt and documented the return of the $7,000.00 collateral and the $850.00 premium fee. Lamb signed the documentation on the Collateral Receipt showing the return of the $7,000.00 collateral and the $850.00 premium fee. Respondent then placed all of the documents, including the Collateral Receipt with the documentation showing the return of the $7,000.00 collateral and the $850.00 bond premium, in Dougherty's file with Dougherty's name highlighted in blue for filing. Afterwards, Respondent voided the Powers by writing "Void" across the front of the Powers and had them sent to Linda Jones by UPS. Subsequently, the Powers were forwarded by Linda Jones to Charles A. Parish, Agent for Continental Heritage Insurance Co., on whom the Powers were written. On March 31, 2000, Respondent returned the $7,000.00 collateral plus the $850.00 bond premium fee to Lamb, notwithstanding the testimony of Lamb to the contrary, which lacks credibility. Respondent did not at any time present any of the paperwork for posting Dougherty's bond, including the Powers, to the Brevard County jail personnel. Since Alliance's Brevard County files were being kept at Respondent's office in Titusville, Florida, Respondent did not forward Dougherty's file to Linda Jones. However, as a caution, Respondent advised Linda Jones by telephone of what had occurred in regards to Dougherty, notwithstanding Linda Jones' testimony to the contrary, which lacks credibility. Sometime in January 2001, Linda Jones came into Respondent's office in Titusville, Florida, and removed all of Alliance's Brevard County files, both active and inactive, that were in the possession of Respondent. The Alliance files removed by Linda Jones included Dougherty's inactive file with the documentation concerning the return of the $7,000.00 collateral and the $850.00 bail bond premium, notwithstanding Linda Jones' testimony to the contrary, which lacks credibility. By letter dated May 10, 2001, after talking to William Travis and Linda Jones, Lamb filed a complaint with the Department alleging that Respondent had failed to return the $7,000.00 collateral and this proceeding ensued.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a final order finding Respondent, Michael Scott Kelly, not guilty of violating Subsections 648.442(1) and (3); and 648.45(2)(d),(e),(g),(h), (j), and (n), and (3)(a),(c),(d), and (e), Florida Statutes, and dismissing the Administrative Complaint filed against Michael Scott Kelly. DONE AND ENTERED this 23rd day of April, 2002, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 23rd day of April, 2002. COPIES FURNISHED: Dickson E. Kesler, Esquire Department of Insurance Division of Legal Services 200 East Gaines Street 612 Larson Building Tallahassee, Florida 32399-0333 Honorable Tom Gallagher State Treasurer/Insurance Commissioner Department of Insurance The Capitol, Plaza Level 02 Tallahassee, Florida 32399-0300 Mark Casteel, General Counsel Department of Insurance The Capitol, Lower Level 26 Tallahassee, Florida 32399-0307 Steven G. Casanova, Esquire 100 Rialto Place, Suite 510 Melbourne, Florida 32935
The Issue The issue presented is whether Respondent is guilty of the allegations contained in the Administrative Complaint filed against him, and, if so, what disciplinary action should be taken, if any.
Findings Of Fact At all times material hereto, Respondent was licensed by the Department as a limited surety bail bond agent. He was employed by and authorized to write bail bond business for County Bonding Agency. When Respondent was hired by County Bonding Agency, the office procedures for receiving and accounting for all paperwork and money were explained to him by Deolinda E. Stolowilsky, the owner and operator, and Olympia Delgado, the office manager. Licensed employees were issued a certain number of bail bond powers of attorney on Monday of each week. Each agent was given a "pay sheet" listing the number of each power of attorney. When a power was used, the agent would write on the pay sheet next to that power the defendant's name, the amount of the bail bond, and the date the power was executed. On the following Monday each agent would turn in all files with executed bail bonds. All unused powers of attorney would be re-issued to the agent and any additional needed powers would be issued. The agent's compensation was computed based on the amount of bail bond business the agent had performed during the preceding reporting period. Each Monday when files with executed bail bonds were turned in to County Bonding Agency, all premiums received by the agent for those executed bonds were required to be turned in with the executed bonds. The office manager would make a notation on the outside of that defendant's file that the premium had been paid. Some of the agents working for County Bonding Agency routinely watched to make sure that the office manager made the proper notation on the file when they gave her money. County Bonding Agency did not give its agents receipts for the money received from them. Although County Bonding Agency had an informal policy that an agent receiving a large amount of money should turn that money in on the same day or the following day, there was no specificity for what would constitute a large amount of money. Further, there was no particular consequence for failure to accommodate the owner's preference that such be done. Much of County Bonding Agency's business was written in its office rather than at the jail. In other words, much of the money received by County Bonding Agency came from indemnitors coming to the office and paying the premium there. When that occurred, the agent sent to the jail to execute the bond received no premium money since the money had already been paid at the office. On June 20, 1998, Respondent went to County Bonding Agency. He turned in files and premiums and was issued powers to be used for future bonds. On June 23, Respondent went to County Bonding Agency and was issued new powers. Thereafter, office manager Delgado began telephoning Respondent and writing to him stating that he had failed to turn in the premium money for five defendants. She also filed a police report and contacted the Department alleging that Respondent had failed to turn in money that he had collected. On July 20, 1998, a courier delivered to County Bonding Agency from Respondent folders for six defendants. The folders did not contain any money. On July 22, Respondent went to County Bonding Agency to turn in his beeper, receipt book, and unused powers. The bond money for four defendants is at issue in this proceeding. Their folders were among the six delivered by courier to County Bonding Agency. At the final hearing, Delgado admitted that one of the six defendants was an office bond, and she could not remember one of the defendants. The four at issue are Alain Yara, Seon T. Carter, Demetrius Robertson, and Stanley Bailey. The Department's exhibits admitted in evidence at the final hearing include the paperwork for those four defendants. The paperwork for Yara includes a receipt for $300 and a collateral receipt. Both are signed by Respondent and dated June 21, 1998, two days before Respondent went to County Bonding Agency and was issued new powers. The paperwork for Carter contains a premium receipt for $550 (10 percent of the $5,500 bond) dated June 21, 1998, and signed by Respondent and a collateral receipt signed by "Curly" for what appears to be the same $5,500. The paperwork for both Robertson and Bailey contain premium receipts and collateral receipts dated June 24, 1998. All four receipts are signed "Curly." "Curly" is the nickname of Irwin Stolowilsky. At the final hearing, Delgado admitted signing Curly's name to receipts for bonds when the premium money was received by the office and the agent went to the jail only to obtain the remaining paperwork and write the bond. Delgado is not licensed by the Department and, therefore, she is not authorized to receive premiums for bail. Accordingly, when guarantors came to County Bonding Agency's office to pay premium money, she signed Curly's name, representing that a licensed person rather than an unlicensed person had in fact received the money.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered finding Respondent not guilty and dismissing the Administrative Complaint filed against him in this cause. DONE AND ENTERED this 11th day of October, 2000, in Tallahassee, Leon County, Florida. LINDA M. RIGOT 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 11th day of October, 2000. COPIES FURNISHED: Dickson E. Kesler, Esquire Department of Insurance Division of Legal Services 401 Northwest Second Avenue Suite N-321 Miami, Florida 33128 Miguel J. Alvarez 8501 Northwest 8th Street Apartment 311 Miami, Florida 33126 Honorable Bill Nelson State Treasurer and Insurance Commissioner Department of Insurance The Capitol, Plaza Level 02 Tallahassee, Florida 32399-0300 Daniel Y. Sumner, General Counsel Department of Insurance The Capitol, Lower Level 26 Tallahassee, Florida 32399-0307
