The Issue The issue is whether Respondent's license as an insurance agent should be disciplined.
Findings Of Fact Respondent has been a licensed insurance agent continuously since October 15, 1986. At all material times, Respondent has been designated as the primary agent for the Cash Register Auto Insurance agency located at 6251 U.S. Highway 19, Pinellas Park, Florida (Cash Register). Since April 10, 1998, Jennifer Lee Wilder has been a licensed customer representative, holding a 4-40 license. After graduating from high school in 1991, Ms. Wilder has attended a local junior college to prepare for a career in nursing. However, she has had to work fulltime to support herself while in school. Ms. Wilder began working at Cash Register in May 1995 and left in May 2000. At the time of the hearing, she was working fulltime five days a week at Cash Register as the office manager. Cash Register sells mostly nonstandard insurance. These insurers have lower underwriting standards to accommodate the needs of younger or high-risk drivers. Ann Benjamin was born on January 22, 1927. She worked as a licensed practical nurse for 15 years prior to her retirement. However, she continues to read medical journals. Ms. Benjamin took one year of nursing school after obtaining her high school diploma. She manages her own checking account and pays her bills. At the time of the hearing, she worked at a LaQuinta Inn. She and her husband needed insurance for their automobiles. Ms. Benjamin owned a 1991 Pontiac Grand Am, and her husband owned a 1989 Ford Econoline E-150 van. Ms. Benjamin telephoned three or four other agencies for quotes prior to calling Cash Register. A couple of days after speaking with a female employee at Cash Register, who quoted her a premium of $743, Ms. Benjamin visited the office to purchase the insurance. At no time during any of her transactions with Cash Register did Ms. Benjamin have any contact with Respondent. When she first went to Cash Register, on July 23, 1999, Ms. Benjamin completed an application for insurance, an agreement for services from Colonial Touring Association, Inc. (Colonial Touring), a financing contract with Equity Premium, Inc. (Equity Premium), and a form confirming coverage. She received copies of these forms to examine at the office and later at home. However, the transaction at the busy office took place quickly, taking about ten minutes. An important form in the marketing of insurance at Cash Register is the Three (3) Payment Options and Confirmation of Coverages. A Cash Register employee presents three options to the customer. The first option is the mandatory coverage of property damage liability and personal injury protection. Although other coverages exist on the form under the first option, they are optional, and Ms. Benjamin did not select them. The first option requires a cash payment of, in this case, $749. This figure is the quoted premium plus two motor vehicle reports totaling $6. The second option provides the same coverage as the first option, but requires, in this case, a cash down payment of $601 and three monthly payments of $57.72 for a total price of $774.16. The third option adds the Colonial Touring policy for an additional $50. The advantage of this option is the lowest down payment. In this case, Cash Register quoted $500 down and three monthly payments of $108.77 for a total of $826.31. There is no formula by which Cash Register calculates the higher downpayments that it requires to sell only the required coverage without the Colonial Touring policy. Ms. Benjamin chose the third option, which reduced her downpayment to $500 at the cost of adding $50 for the Colonial Touring coverage. Ms. Wilder completed the top section of the application for insurance from Accredited Surety & Casualty. This information contains Ms. Benjamin's name, home address, job address, and one-year coverage term. Someone else in the office completed the rest of the application. Under vehicles, the application listed only the Pontiac, although it showed Mr. and Ms. Benjamin as drivers. The application also showed under Vehicle #1 $181 for $10,000 of property damage liability and $101 for personal injury protection with a $2000 deductible. The total for Vehicle #1 was $743. The number "282" was written in across two rows under Vehicle #2. However, no combination of these numbers totals $743. On the second page of the application, Ms. Benjamin rejected uninsured motorist coverage and elected a $2000 deductible. At the bottom of the page, Ms. Wilder, as a "brokering agent," signed a statement binding coverage on that date. Under "Agent's Social Security Number," Ms. Wilder wrote in "A152865." Mr. Benjamin had given Cash Register a check in the amount of $500. On the check, he wrote that it was for "Liability Ford Pont." All checks written by customers in this case cleared their banks. Ms. Benjamin also signed a contract for automobile travel and accident benefits from Colonial Touring. The form provided $5000 in "amount of insurance" in return for a $50 payment. The travel benefits are largely insignificant, so the policy primarily provides limited accidental death and dismemberment coverage, but only if the insured is killed or suffers dismemberment by a private passenger automobile. The Equity Premium finance agreement shows a total premium of $743 with a down payment of $444, leaving an unpaid balance of $299. The finance agreement calls for three payments of $109.80, starting August 23, 1999. The finance agreement gives the borrower the right to pay off in advance the full amount due and obtain a refund of unearned finance charges, as computed by the Rule of 78, after deducting a flat fee of $20. Ms. Wilder signed on the line marked, "Agent's or Broker's Signature." Among the representations that she made in doing so was that she was an "authorized agent of the insurance company shown above." Ms. Benjamin testified that a female employee at Cash Register misinformed Ms. Benjamin that, if she returned with the full premium balance within 30 days, she would incur no finance charges. This would be an improbably long grace period, given that the term of the finance agreement was only 90 days. Ms. Benjamin testified that she told the female employee that she intended to return to pay off the balance in ten days, but the employee said that Ms. Benjamin should sign a finance agreement in case she was unable to pay the balance at that time. Most likely, someone told Ms. Benjamin that she could return and pay off the balance early to reduce her finance charge, but it is unlikely that anyone told her that 30 days were the same as cash on a 90-day obligation. The discrepancy between the $500 that Mr. Benjamin paid on July 23 and the $444 reflected as paid on the finance agreement is due to the $50 paid to Colonial Touring and $6 for two motor vehicle reports. On August 3, 1999, Ms. Benjamin cancelled the Colonial Touring policy. On the same date, Ms. Benjamin paid the balance of $269 due to Equity Premium on the finance agreement. This balance is derived by taking the original balance due of $299, reducing it by the $50 credit for the Colonial Touring policy cancellation, and increasing it by the $20 prepayment fee charged by Equity Premium. On September 13, 1999, Cash Register paid Equity Premium $319, which represents Ms. Benjamin's payment of $269 and the $50 credit for the refund on the Colonial Touring policy. Notwithstanding the delay in forwarding the funds to Equity Premium, Ms. Benjamin suffered no additional expenses. In fact, on August 2, 1999, Cash Register also credited Ms. Benjamin's account for the interest accrued under the finance agreement, the documentary stamp taxes, and a late charge. In October 1999, Mr. and Ms. Benjamin separated, and Ms. Benjamin did not want to continue carrying his Ford van on her insurance. When she made this request to Cash Register, the agency employees realized that they had failed to complete the paperwork properly on July 23. Although both vehicles were in fact covered, as reflected by separate declaration pages showing both vehicles, Cash Register had to add the Ford van on October 4, and then drop it one week later. Despite Cash Register's repeated requests, Accredited Casualty & Surety did not issue the refund of $131.04 until January 27, 2000. Because the policy had originally been financed, Accredited credited Equity Premium, which, on February 21, 2000, credited Cash Register $119.64--after reversing the earlier credit/write-off of $11.40 for documentary stamp taxes and a $10 late charge. Ms. Benjamin owed the documentary stamp taxes, but the late charge did not accrue until August 28, 1999--over three weeks after Ms. Benjamin had paid off the obligation. This late charge arose entirely due to Cash Register's failure to forward the funds to Equity Premium until September 13, 1999. Respondent Exhibit 26 is offered as evidence that Cash Register paid Ms. Benjamin $119.64 by check dated July 24, 2000. However, this exhibit is not a check and is inadequate documentation of the payment. It seems to be some sort of data printout of ledger information. Under the circumstances, including Cash Register's sloppy handling of money received and due in this account, Ms. Benjamin's testimony that she never received the refund is credited. Additionally, the refund should have been $10 more for the late fee that Cash Register's tardiness caused and greater by an undetermined amount for interest from the October 4, 1999, cancellation date to the claimed July 24, 2000, payment date (and actually to whatever date that Respondent or, if not he, Cash Register eventually pays this customer her money). Kelly Kuhnel Livingston, who earned her high school diploma in 1988, recently earned her associate of science degree in computer science from a local technical school. She graduated with an average of 3.4 grade points out of a maximum of 4. She reads technical computer literature. She manages her own checking account and pays her own bills. At the time of the transaction, she was an assistant branch manager at a local bank, where she worked from 1997-99; she is now employed part-time as a bartender. On September 29, 1998, Ms. Livingston visited Cash Register to purchase the minimum insurance on two vehicles that she owned. She had previously purchased insurance at Cash Register and had worked with Ms. Wilder. Her current insurance was expiring on the day that Ms. Livingston visited Cash Register. At no time during her transactions did Ms. Livingston have any contact with Respondent. Ms. Wilder presented Ms. Livingston with the Three (3) Payment Options and Confirmation of Coverages form. The first option was for a cash price of $806 for the mandatory coverage of personal injury protection and property damage liability. The second option was for the same coverage, but for a down payment of $363 and six monthly payments of $81.90 for a total of $854.40. The third option provided the mandatory coverage plus 12 months of $2000 coverage for accidental death and dismemberment from Colonial Touring for $20 and a driver's protection plan covering certain legal services for $80. The third option required a down payment of $171 and nine monthly payments of $91.57 for a total of $995.13. Ms. Livingston chose the third option. The Colonial Touring policy is the same one that Ms. Benjamin purchased, although the coverage is lower. The legal-services contract is from Peninsula State Legal Services Plan, Inc. (Peninsula), and is known as Sav-Cash Traffic Protectors. This contract provides that Peninsula, for one year, will "make available legal services at a reasonable cost to licensed drivers." Members are clearly entitled to a free consultation for driving under the influence, dissolution, and other general matters, but, due either to clever or poor draftsmanship, it is unclear whether the contract provides free legal services for traffic violations. In any event, Ms. Livingston signed the same type of paperwork that Ms. Benjamin did. The record does not establish that Ms. Wilder signed the insurance application of premium finance agreement. Ms. Livingston paid a downpayment of $171, of which $20 went to Colonial Touring. As reflected on the premium financing agreement with Equity Premium, Ms. Livingston was credited with a net downpayment of $151 against a automobile insurance premium of $806 and a legal-services payment due Peninsula of $80. With a finance charge of $86.33 and documentary stamp taxes of $2.80, her monthly payment was $91.57. Her total sales price was $975.13, which, with the $20 paid to Colonial Touring, was the total stated on the form that presented her with three options. The first payment was due October 29, 1998. According to the records of Equity Premium, which may be more favorable than Ms. Livingston's recollection, Ms. Livingston paid $91.57 in certified funds on October 28, 1998. This payment was timely, and she does not appear to have been assessed a late charge. On November 5, 1998, the insurer issued a notice of cancellation, effective November 28, 1998. It is unclear why the insurer did this because Ms. Livingston was current in her payments. In any event, by checks dated November 24, 1998, payable to Equity Premium, Ms. Livingston paid the November payment and the December payment. The checks were in the respective amounts of $101.57, which included an unearned $10 late fee, and $91.57. For some reason unknown to Ms. Livingston, the insurer cancelled her policy in late December 1998. According to the Equity Premium ledger, there would seem to have been a balance due Ms. Livingston, after a $44.26 credit for the Colonial Touring policy, of $22.79. However, it is unclear how this Colonial Touring credit, which is $24.26 greater than the original cost of the Colonial Touring product, arose, especially as Ms. Livingston did not finance this cost through Equity Premium. The only clear loss in this transaction is the $10 late fee that Ms. Livingston paid in November, even though her payment was not late. In January, Ms. Livingston returned to Cash Register and purchased new automobile insurance. Cash Register never refunded to her any money in connection with the transaction that is the subject of this case, but this transaction is difficult to reconstruct. It is possible that Ms. Livingston was not entitled to any credit besides the $10 late fee. It appears that Ms. Livingston did not pay for more than the three months' motor vehicle coverage that she received, plus, of course, the Colonial Touring and Peninsula services for which she never demanded a refund. If nothing else emerged from this record, it is a picture of a very busy office. It is inconceivable that Ms. Wilder signed the finance agreement or insurance application in the Benjamin case in an act that exceeded the authority that Respondent had delegated to her. If so, he should have testified to this effect. To the contrary, she appears only to have been doing her job in a very busy office and doing exactly what Respondent allowed her to do. By a Consent Order entered August 26, 1986, Petitioner placed Respondent's license on probation for six months due to a failure to disclose certain information on his application for licensure.
Recommendation It is RECOMMENDED that the Department of Insurance enter a final order finding Respondent guilty of one violation of Section 626.621(2), Florida Statutes, by reason of his failure to adequately supervise a customer representative, in violation of Section 626.592(2), Florida Statutes. It is further RECOMMENDED that the final order impose the penalty of a three-month suspension; provided, however, if Respondent personally pays the amounts found in this recommended order still to be due to Ms. Benjamin, including interest at the rate she was charged in the finance agreement through the date of payment, then the suspension be reduced to the later of the date on which Respondent makes the payment or 30 days after the effective date of the final order. DONE AND ENTERED this 18th day of September, 2001, in Tallahassee, Leon County, Florida. ROBERT E. MEALE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 18th day of September, 2001. COPIES FURNISHED: 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 David J. Busch Department of Insurance and Treasurer 200 East Gaines Street Tallahassee, Florida 32399-0333 Jed Berman Infantino and Berman Post Office Drawer 30 Winter Park, Florida 32790
Findings Of Fact The Respondent, Jeffrey Allan Azis, is licensed by the Florida Department of Insurance as a General Lines Agent and did business as the American Automobile Insurance Agency, Inc., 603 NW 10th Avenue, Gainesville, Florida, during the period of time delineated in the Amended Administrative Complaint. The Respondent transacted the sale of motor vehicle insurance and an automobile club membership to the persons identified in Counts I, II, IV and V of the Administrative Complaint. Each of the persons identified in Counts I, II, IV and V of the Amended Administrative Complaint was charged for membership in an automobile club by the Respondent or his employees. With respect to Counts I through VI of the Amended Administrative Complaint, the following findings are made: Count I James E. Rippy, Jr., purchased automobile insurance directly from the Respondent at the American Auto Insurance Agency, Inc., Gainesville, Florida, on or about June 10, 1979. He requested the minimum coverage necessary to insure his vehicle to obtain a license tag. (Vol. 1, T-35) Mr. Rippy did not request motor club coverage and was not aware of what a motor club covered. (Vol. 1, T- 32) Sometime after purchasing insurance from the Respondent, Mr. Rippy discovered that his coverage included membership in a motor club. (Vol. 1, T- 33-34) At the Respondent's office, Mr. Rippy and his wife Norma, signed documents which included a membership application in Nation Motor Club with a membership fee of $25.00 [Respondent Exhibit 2(1)] and an application for coverage which included the following disclosure statement also signed by Mr. Rippy in addition to the application form: I understand the Nation Motor Club (NMC) membership applied for this date 6/30/79, through the American Auto Insurance Agency, Inc. is a separate item, that pays in addition to my auto insurance policy. I understand the additional charge for this coverage is included with my down payment. Applicant (signed) Mr. Rippy was not pressured by the Respondent to sign these documents and could have taken additional time to read and ask questions if he had desired. (Vol. 1, T-49-50) write and do mathematics at a basic level. Count II On or about December 4, 1979, Deborah M. Zapp purchased automobile insurance from American Auto Insurance Agency, Inc. Gainesville, Florida, from an employee of the Respondent's identified as "Judy". (Vol. 1, T-17) Ms. Zapp was unclear regarding the coverage she requested from Judy, but was sure that she would not have purchased motor club membership since she regarded it as an "extra". (Vol. 1, T-18-20) While at the agency on December 4, 1979, Ms. Zapp was asked to sign various papers which she read before signing. (Vol. a, T-20) These included a membership application in Nation Motor Club (Respondent's Exhibit 1) and an application form which contained the following disclosure statement: I understand the Nation Motor Club membership applied for this date 12/4/79, though the American Auto Insurance Agency, Inc. is a separate item, that pays in addition to my auto insurance policy. I understand the additional charge for this coverage is included in my down payment. Applicant (signed) (Respondent's Exhibit 1) Ms. Zapp was not rushed while reading the documents presented to her for signing and could have taken as much time as she wanted to go over them. (Vol. 1, T-20) However, notwithstanding reading and signing the membership application and disclosure statement regarding the motor club, Ms. Zapp did not know she had purchased motor club coverage when she left the Respondent's office. (Vol. 1, T-21) Ms. Zapp is a graduate of Sante Fe Community College and attended a university for one year following her graduation. (Vol. 1, T-16) At the hearing on February 5, 1981, she appeared bright and fairly assertive. Count III In Count III, Petitioner alleges that the Respondent in the conduct of business under his license violated various provisions of the Insurance Code. The allegations of Count III requires an application of the facts found in Counts I and II to Sections 626.9521, 626.9541(11)(a), 626.9541(5)(a), 626.9541(15)(b), and 626.621(b), Florida Statutes. Count III is duplicated by Count VI and calls for legal conclusions which will be discussed in the conclusions of law section of this Recommended Order. Count IV The deposition of Charles D. Smith was admitted into evidence as Petitioner's Exhibit 10. Mr. Smith currently holds an insurance license and has a bachelor's degree. (Petitioner's Exhibit 10 at 4) Mr. Smith purchased automobile insurance from the American Auto Insurance Agency, Inc. on or about May 1, 1980 (Petitioner's Exhibit 10 at Appendix) Mr. Smith thought he was purchasing only Personal Injury Protection (PIP). (Petitioner's Exhibit 10 at 4) In order to get an auto tag, Mr. Smith requested the minimum coverage. (Petitioner's Exhibit 10 at 5) Like Mr. Rippy and Ms. Zapp, Mr. Smith signed an application for motor club membership and disclosure statement stating he understood he was purchasing motor club coverage at the time of his application for insurance. (Petitioner's Exhibit 10 at 7) Mr. Smith intended to purchase the minimum amount of insurance at the lowest price but did not require of either the Respondent or his employees whether motor club coverage was included in the price quoted. (Petitioner's Exhibit 10 at 8,9) Neither the Respondent nor his employees orally explained motor club coverage to Mr. Smith. At the bottom of Mr. Smith's insurance application the following disclosure statement was signed by him: I understand the interstate membership applied for this date 5/1/79, through the American Auto Insurance Agency, Inc. is a separate item that pays in addition to my auto insurance policy. I understand the additional charge for this coverage is included in my down payment. Applicant (signed) (Petitioner's Exhibit 10 at Appendix) Mr. Smith's decision to purchase from the Respondent was based solely on cost and not on any information provided by the Respondent or his employees. (Petitioner's Exhibit 10 at 13). Count V The deposition of Richard B. Divins was admitted into evidence as Petitioner's Exhibit 11. Mr. Divins' testimony parallels the other witnesses in that he also signed an application for motor club membership and a disclosure statement acknowledging the purchase and price. (Petitioner's Exhibit 11 at 11, 15, 16, 26) He purchased insurance and motor club coverage on July 13, 1979, from an employee of the Respondent at American Auto Insurance Agency, Inc., 603 NW 10th Avenue, Gainesville, Florida. (Petitioner's Exhibit 11 at 4,5) Mr. Divins thought he was purchasing only minimum liability insurance and was unaware that he had also purchased motor club coverage. (Petitioner's Exhibit 11 at 7,8) Mr. Divins is a senior in the School of Architecture at the University of Florida. (Petitioner's Exhibit 11 at 4. Count VI In Count VI, Petitioner alleges that the Respondent in the conduct of business under his license violated various provisions of the Insurance Code. Count VI requires an application of the facts found in Counts IV and V to Sections 626.9521, 626.9541 (11)(a), 626.9541(5)(a), 626.9541(15)(b) and 626.621(b), Florida Statutes. Count VI duplicates Count III and calls for legal conclusions and will therefore, be discussed in the legal conclusion section of this Recommended Order. Assuming that the witnesses who testified at the final hearing were representative of the Respondent's customers, his business was generally directed at persons who desired minimum automobile insurance coverage at the lowest possible price. (Vol. 1, T-17 and 31, Petitioner's Exhibit 11 at 7-8, Petitioner's Exhibit 10 at 8,9) An economic incentive existed to sell motor club memberships among agents whose customers desired minimum coverage due to the high commission rates associated with motor club policies. (Petitioner's Exhibit 9, Vol. 1, T-94-95, 97) Mr. Andrew Beverly was qualified as an expert witness on insurance matters and testified on behalf of the Respondent. (Vol. 1, T-29) Mr. Beverly owns the Florida Insurance School, serves as a consultant for several hundred insurance agencies and is a member of the Advisory Committee on Insurance Education of the Florida Insurance Department. (Vol. 1, T-78-79) A study by Mr. Beverly completed in 1979 for the Professional Insurance Agents Association of Florida demonstrated that insurance agents have been contacted by claimants or attorneys for claimants for failure to provide coverage or what is known in the industry as "errors and omissions." (Vol. 1, T-81-82) The Respondent is the first agent that Mr. Beverly has ever encountered who had difficulties arising from selling too much coverage. (Vol. 1, T-82-83) Mr. Beverly's conclusion concerning the value of motor club coverage and supplemental coverage generally is shared by Dr. Ronald T. Anderson, a colleague of Mr. Beverly's on the national faculty of the Society of Certified Insurance Counselors and an Insurance Commissioner of Colorado. (Vol. 1, T-83-85) In particular regard to this case, Mr. Beverly examined the application and disclosure statement signed by the witnesses for the Petitioner and responded to questions from counsel as follows: Q. Now, these documents -- if you would just take a look through those, you'll see in Respondent's Exhibits 3 and 4, I believe -- Respondent's Exhibit 1, for example, where in boldface type, the applicant for the insurance signs a statement regarding Motor Club. is that a common practice in the industry? A. It's a practice that is becoming extremely common with the careful and appropriate insurance agents to have a thorough documentation of each coverage, accepted or rejected by an injured. Q. And why is that? A. Partially because of the high incidents (sic) of Errors and Omissions insurance, claims coming in against insurance agents, and then partly so that the client himself will be completely aware of what it is that he's throwing away when he rejects a coverage so he'll know he hasn't bought that. Q. Does the type of procedure meet the standards of the industry in Florida for fire and casualty agents? A. It exceeds them. Q. Okay. What else, in your opinion, could Mr. Azis do in this type of situation other than have him sign the statements and advise him as he has testified to. A. Mr. Woods, there's nothing an insurance agent could possibly do, in my opinion, beyond explaining the coverage to the insured and then having him sign in his own handwriting. I can't believe that there is anything else that he could do. He's being as cautious as he possibly can. Q. You're not aware of any other practices or procedures that might even be better than this? A. I can't think of anything that you could do that could add to this great amount of documentation of the insurers election of what they purchased. Q. In your experience, is it common for people who have bought insurance to come back and question coverages? A. Yes, sir, it happens all the time. I have more than a hundred insurance agencies under contract at this hour, and I am constantly receiving long distance calls from agents: What do you do with this? What's the answer to it? Q. So, that's why they require the need for this documentation? A. Yes, sir. (Vol. 1, T-85-87) Mr. Beverly's testimony was not rebutted by the Petitioner and is accepted as credible. Although Respondent's license as a general lines agent in Florida expired as of August 30, 1980, he retains eligibility to become licensed for a period of two years from the date of licensure. Section 626.221(3)(f), Florida Statutes. (Petitioner's Exhibit 8)
Recommendation It is therefore RECOMMENDED that the Amended Administrative Complaint filed against the licensee, Jeffrey Allan Azis, be dismissed. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 3rd day of June, 1981. SHARYN L. SMITH Hearing Officer Division of Administrative Hearings Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of June, 1981. COPIES FURNISHED: Richard P. Harris, Esquire Department of Insurance 428-A Larson Building Tallahassee, Florida 32301 David Yon, Esquire Department of Insurance 428-A Larson Building Tallahassee, Florida 32301 Thomas F. Woods, Esquire 1030 East Lafayette Street Suite 112 Tallahassee, Florida 32301 =================================================================
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the July 20 rate filing of Colonial Penn Insurance Company in Case No. 82-148 be APPROVED. It is further RECOMMENDED that the November 12 rate filing of Colonial Penn Insurance Company in Case No. 82-1048 be APPROVED. DONE and ENTERED this 18th day of August, 1982, 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 18th day of August, 1982.
Findings Of Fact At all times pertinent to the allegations contained herein, the Petitioner, Department of Insurance, (Department), was the state agency responsible for the licensing and registration of insurance agents in Florida and for the regulation of the insurance industry in this state. At the same time, Respondent was licensed in Florida as a general lines agent, a life and health (debit) agent, a life and health agent, and as a dental health care services contract salesman. He was president, director and registered agent of, and was the only licensed insurance agent working at, Devor of Brandon, a general lines insurance agency located in Brandon, Florida. At the times in issue, Respondent employed Jay Schetina, not a licensed insurance agent in Florida, to work as a salesman at the Brandon office. Mr. Schetina worked directly under the supervision and control of the Respondent and was in charge of the Brandon office when Respondent, who worked four days a week at the other office he owned in Cape Coral, Florida was not there. On January 11, 1989, Nellie Wynperle Henry went to the Respondent's Brandon agency to buy automobile insurance. She dealt with Mr. Schetina who sold her a policy to be issued by Underwriters Guarantee Insurance Company for an annual premium of $1,288.00, and to be effective January 17, 1989. She gave Mr. Schetina a $429.00 down payment and ultimately was issued policy no. 12207947. The policy reflected Respondent as agent for the company. Though she was not told what it was and does not recall signing it, an application for an auto service contract, to be issued by Century Auto Service, was also prepared and bears what purports to be her signature. That application was prepared and submitted without her knowledge or permission. The fee for the policy was $40.00, of which the agency got to keep 90%. Since she was already a member of AAA and had their service coverage, Ms. Wynperle did not need the service club policy sold to her at Respondent's agency and, in fact, had told Mr. Schetina so. Though she was charged for the service policy, she never received a copy of it and did not know she had it. At the time she applied for the auto insurance, Ms. Wynperle also applied to finance the unpaid balance due over and above the down payment through Underwriter's Financial of Florida, Inc., a premium finance company. The premium finance agreement includes the amount of the unwanted service policy, and is also incorrect in that it reflects that the down payment tendered by Ms. Wynperle was only $389.00. Dorothy Lunsford purchased auto insurance from the Respondent's agency on January 18, 1989. The premium for her policy, also with Underwriters Guarantee, was $707.00 and she made a down payment, by check, of $217.00. She financed the balance but the application for financing showed a down payment of only $177.00. On the same day, an application form for an auto service policy was also submitted in Ms. Lunsford's name. The cost of this policy was $40.00. On January 31, 1989 Joanne Coleman applied for automobile insurance at Respondent's agency. She was to be insured by two companies' policies, one issued by United Guarantee and one by Hamilton Insurance Company. The total combined premium was $670.00. Both policies were issued and Respondent's agency was listed as agent on both. She paid for the policies with a check for $687.00. No explanation was given for the difference. At the same time she applied for the auto insurance, though she had had no discussion with the clerk with whom she dealt at the agency about it, an application for an auto service policy was also filled out in her name, carrying a premium of $20.00. She did not receive a service policy. She neither authorized or consented to the submittal of the service club application in her name. Ms. Coleman's memory of the events, however, was not clear, but it is clear that she did not want the service policy she was charged for. On February 9, 1989, Kathy Gall applied for auto insurance with the Respondent's agency. The annual premium was$733.00 and at the time, she gave the agent a check for the down payment in the amount of $240.00. She applied to finance the balance but when prepared at the agency, the application form reflected a down payment of only $220.00. This was in error. However, at that same visit, an application for an auto service policy was also filled out in Ms. Gall's name. The policy bore a premium of $20.00. At no time did Ms. Gall authorize that service policy nor, in fact, was it ever discussed with her and she did not know she was purchasing it. Finally, on February 6, 1989, Lucinda Romano applied with the Respondent's agency for an automobile insurance policy with Allegheny Mutual Casualty Company. At that time, she gave Devor a check for $61.80. Though at the time she went into the agency she did not intend to purchase an auto service contract because she was having financial problems and wanted only the most basic lawful coverage, and did not sign the application for it, she was charged for an auto service policy at a cost of $20.00. She thought she was purchasing only PIP coverage which cost $60.00. Ms. Romano subsequently requested a refund of the amount she paid for the auto service policy and the payment was refunded by check on May 19, 1989 from Jay Schetina. Sometime after the Devor agency was taken over by Sam Capitano/Action Insurance Agency, and the latter's employees were servicing the company's files, Ms. Brown-Parker, an employee of Action found the auto service policies, including those issued in the name of Ms. Romano, Ms. Gall, Ms. Coleman, and Ms. Wynperle,and Ms. Lunsford, which had not been transmitted to the policyholders. Both copies of the policy were in the file. Respondent is also the subject of a Consent Order issued on February 26, 1990, subsequent to the date of the matters in issue herein. The Settlement Stipulation For Consent Order, on which the Order is based, refers to the matters in issue here which relate to Respondent's allowing his non-licensed employees to use his license to practice insurance, and allowed the agency to operate, at least at times, without an active, full time agent in charge. At paragraph 10(c), the Stipulation provides, in part: ... If the Department has good cause to believe that, after the issuance of the Consent Order in this cause, unlicensed individuals are transacting insurance at any agency at which Respondent operates as a general lines agent ..., or that any agency at which Respondent operates ... is not at all times after issuance of the Consent Order in this cause under the active, full-time charge of a general lines agency, the Department shall initiate proceedings to suspend or revoke the licenses and eligibility for licensure and registrations of the Respondent based upon the original grounds as alleged in the Administrative Complaint referred to herein. The original charges referred to, supra, relate to Respondent's alleged authorization of unlicensed employees to transact insurance, and his alleged authorization of the agency to, at times, operate without an active, full-time agent in charge. It did not refer to the incidents alleged herein, to wit: theimproper charges for undesired auto club membership and the preparation of false premium finance applications.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that a Final Order be issued dismissing the allegations that Respondent, John W. Ganter, violated Section 626.611, Florida Statutes, but finding him guilty of violations of Section 626.621, 626.9521 and 626.9541(1)(k)1, Florida Statutes, as to Ms. Wynperle, Ms. Gall, Ms. Coleman, Ms. Romano, and Ms. Lunsford, and imposing a suspension of his licenses and eligibility for licensure for a period of one year. However, under the provisions of Section 626.691, it is further recommended that in lieu of the suspension, the Respondent be placed on probation for a period of two years under such terms and conditions as specified by the Department. DONE and ENTERED in Tallahassee, Florida this 10th day of October, 1991. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 10th day of October, 1991. APPENDIX TO RECOMMENDED ORDER The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. FOR THE PETITIONER: 1. - 5. Accepted and incorporated herein. 6. & 7. Accepted and incorporated herein. Accepted and incorporated herein. - 12. Accepted and incorporated herein. 13. - 16. Accepted and incorporated herein. 17. - 19. Accepted and incorporated herein. 20. - 22. Accepted and incorporated herein. 23. & 24. Accepted. 25. Not a Finding of Fact. FOR THE RESPONDENT: 1. & 2. Accepted and incorporated herein. Accepted expect for the representation that Petitioner presented no evidence as to Count II. The Stipulation of the parties clearly makes detailed reference to the allegations regarding Ms. Lunsford. Accepted as to Counts VI, VII & VIII. Rejected as to Count II. Accepted and incorporated herein. - 8. Accepted and incorporated herein. Rejected. - 14. Accepted and incorporated herein. Rejected. - 20. Accepted and incorporated herein. Rejected. & 23. Accepted and incorporated herein. Accepted. Accepted. Accepted. Rejected. - 34. Accepted as to the actual dealings of the Respondent. COPIES FURNISHED: David D. Hershel, Esquire Division of Legal Services 412 Larson Building Tallahassee, Florida 32399-0300 Orrin R. Beilly, Esquire The Citizens Building, Suite 705 105 S. Narcissus Avenue West Palm Beach, Florida 33401 Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Bill O'Neil General Counsel The Capitol, Plaza Level Tallahassee, Florida 32399-0300
The Issue The issues are whether Respondent is guilty of any violations of the Insurance Code, including Chapter 626, Florida Statutes, and, if so, what penalty should be imposed.
Findings Of Fact At all material times, Respondent has been licensed as a general lines insurance agent, holding license number A129688. At all material times, Respondent has been the sole owner and director of America Security Insurance Agency, Inc., formerly known as America Auto Security Insurance Agency, Inc. (America Security). On April 1, 2000, Dionne Jacques purchased a motor vehicle from Sawgrass Ford in Fort Lauderdale. She did not own a vehicle at the time and testified that she purchased a model that was selected for her by someone at the dealership. In closing on the purchase, Ms. Jacques dealt extensively with a dealer employee named Herbert McKenzie. Ms. Jacques financed the motor vehicle purchase with Ford Credit. In the course of completing the required paperwork at the dealership, Mr. McKenzie referred Ms. Jacques to American Security for motor vehicle insurance. Mr. McKenzie mentioned that he dealt with someone named "AJ" at the insurance agency. According to Ms. Jacques, Mr. McKenzie informed Ms. Jacques that one year's insurance would cost $468 or $468.99. Mr. McKenzie did not testify, but Respondent testified that he spoke with Ms. Jacques on the telephone and explained the relevant features of the policies that were available to her. Although it is unclear who quoted the premium to Ms. Jacques, Petitioner has failed to prove by clear and convincing evidence that Mr. McKenzie did so. Ms. Jacques agreed to purchase the insurance and produced a credit card for the amount due. The testimony of Ms. Jacques suggests that she allowed Mr. McKenzie to charge her credit card for the insurance premium. However, the more definitive testimony of Respondent, which is credited, is that he took her credit card information over the telephone and arranged for the card debit. In return, according to Ms. Jacques, Mr. McKenzie gave her a document that she believed would document her coverage until she received an insurance policy in the mail in about 30 days. It is impossible to determine on this record that Mr. McKenzie attempted to bind coverage on behalf of the insurer. At no time prior to the purchase of the insurance did Respondent, Mr. McKenzie, or anyone else disclose to Ms. Jacques that she was purchasing other ancillary products besides insurance. Likewise, no one informed her that she was financing part of the annual insurance premium. For unclear reasons, Respondent did not obtain insurance coverage for Ms. Jacques until May 2000. At that time, he took the $468 that she had charged and, without her knowledge, applied only $143 of this sum toward the policy premium. Without Ms. Jacques' knowledge, Respondent, or someone at his direction, signed Ms. Jacques' name to a premium finance agreement, evidencing an unpaid premium balance of $504. At the same time, also without Ms. Jacques' knowledge, Respondent used $300 of the initial $468 that Ms. Jacques paid to purchase ancillary coverage that she had not agreed to purchase. This ancillary coverage included towing, supplemental medical coverage, replacement rental car, and emergency cash. These coverages supplemented a $647 personal injury protection policy containing no personal liability or uninsured motorist coverage. At no time has American Security designated a primary agent. By Immediate Final Order entered March 12, 1991, the Florida Department of Insurance, now known as Petitioner, ordered Respondent to cease and desist from the unlicensed sale of insurance. However, Respondent has made substantial restitution to Ms. Jacques, who suffered no significant financial injury as a result of Respondent's misdealings.
Recommendation It is RECOMMENDED that the Department of Financial Services enter a final order suspending Respondent's license for one year. DONE AND ENTERED this 18th day of November, 2004, in Tallahassee, Leon County, Florida. S ROBERT E. MEALE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 18th day of November, 2004. COPIES FURNISHED: Honorable Tom Gallagher Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Pete Dunbar, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Gregg S. Marr Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399-0333 Charles P. Randall Charles P. Randall, P.A. Bank of America Tower, Suite 500 150 East Palmetto Park Road Boca Raton, Florida 33432-4832
The Issue Should discipline be imposed by Petitioner against Respondent's license as a life, health, and variable annuity agent (2-15), general lines agent (2-20), and a legal expense agent (2-56), held pursuant to Chapter 626, Florida Statutes (2003)?
Findings Of Fact Facts Established by the Answer Pursuant to Chapter 626, Florida Statutes, you, Brian Whitney McDaniel (Respondent), currently are licensed in this state as a life, health, and variable annuity (2-15), general lines (2-20) and legal expense (2-56) agent, and were so licensed at all times relevant to the dates and occurrences referenced herein. Respondent's license identification no. is A171563. Pursuant to Chapter 626, Florida Statutes, Petitioner has jurisdiction over your (Respondent's) license and appointments. At all times relevant to the dates and occurrences referenced herein Respondent, was employed with Cash Register. Respondent's Duties at Cash Register Respondent was employed at the Cash Register agency in Gainesville, Florida from March 1998 through September 2002. He began his employment as a limited customer service representative (4-40). Respondent became the designated primary agent at the location in June 2000, at which time he was licensed as a general lines agent (2-20). He continued in the capacity as a designated primary agent until his departure from the agency. As the primary agent at Cash Register, Respondent was expected to make sure that the customer service representatives employed at the agency were properly trained and the customers were taken care of in a manner that they were expecting as consumers. Respondent also took care of paper work such as payroll, keeping the lights on, and similar activities. In addition to his supervisory duties Respondent dealt with the public, to include selling insurance to members of the public. The principal form of insurance sold at Cash Register was automobile insurance. Cash Register also sold boat insurance, insurance for motorcycles, and ancillary products, such as towing and rental. Cash Register sold legal insurance underwritten by Southern Legal Services (Southern Legal). Other products sold were hospital indemnity and accidental death benefits policies. The products such as hospital indemnity and legal service plans, were insurance products that could be financed for the balance of the amount due following a down-payment. The towing and rental contracts were not insurance products and not subject to financing. Hypothetically, and the hypothetical pertains to the experiences that customers in this case would typically be exposed to when the customer came into the agency, the customer took a seat and Respondent began to collect necessary information. That information pertained to name, address, phone number, age, driving record, and vehicle information. Then the discussion would turn to the nature of the automobile insurance that the customer was interested in purchasing. That issue concerned whether the customer wanted only property damage liability, and personal injury protection (PIP), as required by the State of Florida to maintain their tag registration or desired greater coverage. Other offerings included bodily injury liability, uninsured motorists, comprehensive and collision. Comprehensive and collision was explained to the customer as being a necessary coverage where automobiles have been financed. The information that had been gathered would be entered into a computer program which Cash Register used. That program was known as "Quick Quote." The quotation method was designed to select the better price from among a number of insurance companies. This process that has been described concerning the quote would pertain equally when quotations were provided over the telephone. Cash Register is affiliated with LR3 Enterprises, Inc. (LR3), its parent company. The parent company insisted that its employees who sold automobile insurance at Cash Register agencies during the time in question follow a script in selling the insurance. This involved the offer of several options to purchase. The first option was to pay the full price of the insurance. The second option was a standard down-payment, which was a greater amount down than the third option. The second option with the greater down-payment carried a smaller monthly payment in the part financed and saved money for the customer over time compared to the remaining option. The third option was a lower down-payment with a larger monthly payment that included necessarily, among other mandatory alternatives, in accordance with the management policy from LR3, the purchase of a legal service plan in relation to traffic violations to include DUIs, accidents, and child support. The legal service plan that is at issue here is legal insurance underwritten by Southern Legal. The value of this required purchase was that if any of the legal services were needed, the insurance plan that was required under option three would help defray the cost for those legal services. Respondent emphasized that the employees within the Cash Register agency must follow the script concerning the three options, failing which the employee would be "fired on the spot." Respondent described how this requirement was the first thing he had been told when he was hired. Having considered this explanation concerning the three options, it leaves the impression that a customer might come to believe that the legal insurance plan was an integral part of the automobile insurance that the customer sought to purchase. This impression could be created notwithstanding the documents that might be produced beyond that point, where careful review might lead one to a different conclusion as to the necessity to purchase the ancillary product. It is a significant issue in that most customers who purchased automobile insurance wanted the lowest down-payment available when transacting business with Cash Register. In this connection, the majority of customers who were served by Cash Register were interested in obtaining "tag insurance," referring to the basic coverage necessary to comply with Florida law. Those are the customers who almost always wanted a low down-payment. Returning to the several options that were explained by Respondent, option two carried a 35 percent down-payment with no necessity to purchase an ancillary product in addition to the automobile insurance. By contrast the third option carried an 18 percent down-payment and the Cash Register agency through its employees, to include Respondent, would require that the customer buy a legal services plan to warrant the low down- payment. Alternatively, the 18 percent down-payment under option three would be available in the instance where a customer bought a motor club contract, towing and rental. In this setting, unlike the legal plan, the towing and rental contract could not be financed. More specifically, Respondent explained that when customers called for a quotation on automobile insurance, he routinely, that is taken to include those instances described in this case, would say to the customer, "There's three different ways of paying for this. You can pay for it all at once, paid in full, the cash price is this, or we have two different payment options. The standard down-payment option is more out of your pocket, but it keeps your monthly low and saves you money in the long run, and it is this. We also have a low down- payment, which is the other way around, it's less money out of your pocket, but your monthly payment goes up and it includes an additional coverage for legal fees for traffic violations, DUIs, accidents. If you need an attorney it helps to pay his fee and that price is this." The same script was followed with customers who came to the office, as opposed to calling on the telephone. Respondent described how the application involved with the purchase of auto insurance was printed and brought to the desk where the customer was located. The application was not the only document involved in the transaction. Among the papers with the insurance application, was a confirmation of coverages, a premium finance agreement, where applicable; and a disclosure form, and a new business receipt, where applicable. All these documents were printed through a computer program. The documents were presented to the customer so that the customer could read it. As Respondent explains, it was not necessary for the employee to read it because the employee was familiar with the information that is established by the documents. A pen would be used to direct attention to documents, the first document pointed out, the confirmation of coverages. An example of the discussion with the customer would be, "You are buying property damage liability with a $10,000.00 limit, personal injury protection with a $10,000.00 limit, with a $2,000.00 deductible. You are rejecting bodily injury liability. You are rejecting uninsured motorists. You are purchasing comprehensive and collision with a $500.00 deductible. You chose the low down-payment option so you are purchasing the legal protection plan which goes with the low down-payment option. Please sign both of these signatures and date it for me." The arrangement was one in which the low down-payment option necessarily committed the customer to purchasing a legal protection plan as Respondent describes the arrangement. The next document in the series was in relation to the automobile insurance application per se. By using a pen the Respondent would show the purchaser what they were obtaining in coverage and what they were not. Respondent would gain the signature from the customer. Next in series, depending on the nature of the option pursued by the customer, was the legal protection plan or motor club, if it was involved in the purchase; the finance agreement; and the disclosure form and receipt, as applicable. Copies of the documents that have been identified were provided to the customers. Other remarks concerning the legal protection plan, which Respondent would make to the customers, would be that it helps to pay legal fees such as, if you were given a ticket that is contested or an accident where the customer is being sued, or have issues concerning child support, the plan would help to pay for legal fees. Nothing in this explanation was designed to explain to the customer that the legal insurance was not part of the automobile insurance. Count I Beverly Akpo-Sani On November 27, 2001, Beverly Akpo-Sani went to the Cash Register in Gainesville and purchased automobile insurance. She was waited on by Respondent. Ms. Akpo-Sani intended only to purchase what the state required to maintain coverage for her 1988 Plymouth station wagon. She also discussed the requirement for an SR-22, which is a Florida financial responsibility form to provide proof of insurance. Respondent followed the script that has been set forth earlier in selling automobile insurance and legal insurance plan to Ms. Akpo-Sani, with the exception that additional discussion was held concerning the SR-22 Florida financial responsibility form. Respondent described to Ms. Akpo-Sani the three agency options for purchasing the automobile insurance. Her interest was to have a low down-payment. As a consequence, Respondent offered her option three. Ms. Akpo-Sani applied for automobile insurance from Direct General Insurance Company (Direct General Insurance). Petitioner's Exhibit numbered 1. Ms. Akpo-Sani also executed a document in relation to legal insurance, referred to as "Sav-Cash Traffic Protectors," for pre-paid traffic violation insurance. That insurance was underwritten by Southern Legal. A copy of the document supporting the purchase is Petitioner's Exhibit numbered 3. Ms. Akpo-Sani and Respondent signed the document. On its face it indicates that it was paid for through a premium finance agreement with Direct General Financial Services, Inc. (Direct General Financial), and an amount of $105.00 is stated. In pertinent part, the document related to the pre- paid traffic violation insurance stated: Cardholder acknowledges receipt of goods and/or services in the amount of the total shown hereon and agrees to perform the obligations set forth in the cardholder's agreement with the issuer. I hereby apply for participation in Southern Legal Services Plan, Inc. SL 210 Driver's Protection Legal Plan, and acknowledge coverage is conditioned by receipt and approval by the Company. I understand that legal services will be provided under the plan for certain legal proceedings and that I am responsible for all costs associated with any matter. I agree to abide by the provisions and rules of the plan. I agree and authorize that the premiums be paid as indicated above. I understand that my attorney-client relationship will be with the attorney providing legal services under the plan and not with Southern Legal Services Plan, Inc. I represent that to the best of my knowledge all of the information contained herein is correct and that no person to be insured under this policy is now involved in any litigation, court proceedings, or other matter which could result in legal action. Petitioner's Exhibit numbered 3, which is by way of an application, was to be mailed to Robinson Insurance Agency c/o CTA in Palm Coast, Florida. Other than the information which has been quoted from the application document, the exact nature of the coverage provided by the pre-paid traffic violation insurance has not been explained in this record. Although Ms. Akpo-Sani signed the document applying for the legal insurance as reflected in Petitioner's Exhibit numbered 3, she believed that she was purchasing automobile insurance and to the extent that the legal insurance was not part of the automobile insurance purchase she had no intent to buy it. Respondent did not explain adequately the legal insurance purchase. Instead Ms. Akpo-Sani was led to believe that it was part of the procedure necessary to get her automobile insurance policy. No oral explanation was made that the cost of the legal insurance was an additional charge. Ms. Akpo-Sani was provided additional documents that portrayed the legal insurance as a different cost item, mainly the Premium Finance Agreement with Direct General Financial. A copy of that finance agreement is Petitioner's Exhibit numbered 5, which was signed both by Ms. Akpo-Sani and Respondent. On its first page under the schedule of policies, it separately sets out that the auto coverage was for a premium of $688.00, with $124.10 down and the balance to be paid to Direct General Insurance on her behalf. The schedule of policies refers to the legal insurances as "LGL," totaling a $105.00 premium, with $18.90 down and $86.10 to be paid to Southern Legal on Ms. Akpo-Sani's behalf. But the document goes on to set out the total premium financed in the aggregate, without separately stating the amount related for Direct General Insurance and the Southern Legal, with installment payments in the aggregate of $73.68, to be made in connection with both purchases at an annual percentage rate of 27.29 percent. The second page in disclosing information about her purchases referred to the PIP, property damage liability, and bodily injury pertaining to an SR-22 requirement. It goes on to describe the legal services purchase separately on the second page. Ms. Akpo-Sani received a receipt, referred to as a New Business Receipt drawn on a form by Cash Register. That receipt is Petitioner's Exhibit numbered 4. It breaks out the cost items under a heading entitled "Vehicle(s)," wherein it sets out property damage liability, PIP, and bodily injury liability, all in the automobile insurance coverage category, as well as the driver's protection legal plan, which is not part of the automobile insurance. Nonetheless, it is depicted under the heading "Vehicle(s)." The document explains the amount tendered as an aggregate amount paid, which would be constituted of $124.10 for the automobile insurance and $18.90 for the legal plan, totaling $146.00 as depicted on the receipt. The document goes on to describe the "policy total" under the section in relation to the vehicle as being $796.00, which would include both the automobile insurance and the driver's protection legal plan. Other than the brief reference to the drivers protection legal plan depicted as part of the "Vehicle(s)," the balance of the receipt provides information concerning the automobile insurance side of the purchase. Another document provided to Ms. Akpo-Sani and signed by her on the occasion, was a document titled "Confirmation of Coverages." It is Respondent's Exhibit number 5. In relation to purchases made it sets out the property damage liability, and the PIP as required coverage, bodily injury liability as optional coverage, and the election of a driver's protection legal under ancillary products identified as optional. Although the document refers to the legal insurance as an optional opportunity, by the design of the form, given the manner in which this sale was made to Ms. Akpo-Sani, the impression created by Respondent would lead one to believe that it was not an option for her to decline the drivers protection legal. Instructions within the Confirmation of Coverages document explain the several parts. These parts are: auto insurance coverages required (1, 2), optional auto insurance coverages (3-6) and ancillary products (optional) (7-10), among them the driver's protection legal (10). The instructions state: Please READ the ten (10) sections above to be sure the coverages or benefits circled or checked are the coverages or benefits you want. The terms 'Full Coverage', 'Minimum Coverage', and 'State Required Coverage' are not specific enough to assure that you are buying the insurance coverages or benefits you want. The above confirmations are meant to protect you, your agent, and your insurance company from misunderstandings. If 'NO COVERAGE' or 'DECLINED' is marked in any section, you are not buying that sections coverages and benefits. COVERAGES AND BENEFITS ARE SUBJECT TO THE TERMS AND CONDITIONS CONTAINED IN THE INDIVIDUAL POLICIES OR PLANS. Please read the policy jacket or plan descriptions that re available to you for detailed definitions of the coverages and benefits. If you still have questions, ask your agent to explain in more detail. Items seven (7) through ten (10) are high commission items that allow the agency to make a reasonable profit and continue to offer you the most competitive rates available on your auto insurance. These are separate plans from your auto policy and are optional. I have read, confirm and consent to the coverages and benefits indicated on this form. The instructions identify ancillary products, to include the driver's protection legal, as separate from the auto policy but the sales pitch by Respondent related to option three did not treat the purchase in that manner. It made the purchase of the legal plan appear mandatory. Moreover the instructions themselves make it appear that the ancillary products are linked with the auto insurance in the interest of establishing competitive auto insurance rates. Ms. Akpo-Sani did not read the application for pre- paid traffic violation insurance which is Petitioner's Exhibit numbered 3 before signing it. Similarly Ms. Akpo-Sani did not notice the details within the Premium Finance Agreement. Petitioner's Exhibit numbered 5. Ms. Akpo-Sani did not read the Confirmation of Coverages document, Respondent's Exhibit numbered 5, before signing. Mr. Akpo-Sani was in a hurry and this explains why she did not take the time to carefully read the documents that have been described. Count II Samina C. Ashraf On July 20, 2001, Samina C. Ashraf purchased automobile insurance at Cash Register in Gainesville from Respondent. Respondent also sold Ms. Ashraf pre-paid traffic violation insurance underwritten by Southern Legal as part of the transaction. Petitioner's Exhibit numbered 19 is the deposition provided by Ms. Ashraf which forms the basis of her testimony for hearing purposes. Attached to that deposition are various exhibits. Exhibit "A" is the application for insurance with Direct General Insurance. Exhibit "B" is Confirmation of Coverages document. Exhibit "C" is a document referring to a travel protection plan, which cost $60.00 as a premium. Exhibit "C" is related to bail bond coverage, ambulance assistance, collision loss of use, theft loss of use, emergency travel loss of use, and personal effects loss from an auto rented as a result of loss under previously stated coverages. Exhibit "D" to the deposition is the application for pre-paid traffic violation insurance through Southern Legal. Exhibit "E" to the deposition is the Premium Finance Agreement with Direct General Financial, which sets out costs related to the basic automobile insurance, the legal insurance, and the travel protection plan, which is a type of motor club. The automobile and legal insurance was financed beyond the down-payment. The motor club premium was fully paid at the time the transaction commenced. In format the application with Direct General Insurance, the Confirmation of Coverages document, the pre-paid traffic violation insurance underwritten by Southern Legal, and the Premium Finance Agreement are the same as has been discussed concerning Ms. Akpo-Sani. Highlighting the Ashraf transaction, $105.00 was paid for the legal insurance, consisting of an $18.90 down-payment, with $86.10 to be financed with Direct General Financial. The Premium Finance Agreement with Direct General Financial included the automobile insurance and legal insurance, with a total amount to be financed of $873.15 at 25.71 annual percentage rate, $97.93 due on each payment financed. When Ms. Ashraf arrived at Cash Register she was interested in purchasing the minimum insurance necessary for her automobile. She had just purchased the auto and told Respondent that she needed to obtain insurance and return to the car lot where she had purchased the auto and show proof of insurance coverage. Ms. Ashraf was interested in a low down-payment for auto insurance. Respondent told her that she could pay the full amount of the insurance premium. Alternatively, Respondent explained what the down-payment amount would be and the continuing payment process beyond that point in time. In discussing towing and rental, Respondent told Ms. Ashraf the cost for that premium. Respondent explained the towing option (motor club) to Ms. Ashraf. Respondent did not tell Ms. Ashraf of other options available, to include the legal plan, as she recalls the transaction. Ms. Ashraf did sign the various documents involved in the transaction that have been described. The documents that have been identified were stacked one on top of the next. Respondent told Ms. Ashraf in relation to those documents, "Just sign here, here, here, here." Respondent did not discourage Ms. Ashraf from reading the documents but she did not read them. She was in a hurry. She had told Respondent that she was only interested in the automobile insurance that was necessary in association with the purchase of the car on that day. She erroneously assumed that Respondent was giving her what was needed and nothing more. Aside from the motor club, which Ms. Ashraf knowingly purchased, she did not realize that she had also purchased legal insurance through Southern Legal. Respondent had not separately explained that the legal insurance product was optional and that it was not part of the basic auto insurance policy or that there was an additional charge for the legal plan, notwithstanding any written explanation provided that would suggest otherwise. In relation to the Premium Finance Agreement, Respondent explained the portion dealing with the amount financed, the finance charge, the total payments, and the total sales price, but not the individual breakout of charges set out at the top of the document. Count III Kim Langford and Count IV Joana Samad Kim Langford and Joana Samad bought auto insurance from the Cash Register agency in Gainesville and the legal plan through Southern Legal, as alleged in the Amended Administrative Complaint. However, Respondent did not sell the legal plan to these customers. He was not immediately involved with either transaction and cannot be factually implicated under terms set forth in the Amended Administrative Complaint.1 Count V Albert B. Tomes On November 2, 2001, Albert B. Tomes bought auto insurance from Respondent at Cash Register in Gainesville. The company that he purchased the automobile insurance from was Direct General Insurance. The application for auto insurance is Respondent's Exhibit numbered 24. Respondent also sold Mr. Tomes pre-paid traffic violation insurance underwritten by Southern Legal. Petitioner's Exhibit numbered 13. The format of the application for the legal insurance is the same as with Ms. Akpo-Sani. The total cost of the legal insurance was $105.00. During the transaction, a Confirmation of Coverages document was executed. Respondent's Exhibit numbered 27. A Premium Finance Agreement was entered into following a down- payment in relation to the Direct General auto coverage insurance and the legal insurance through Southern Legal. Respondent's Exhibit numbered 25. The format of Confirmation of Coverages and the Premium Finance Agreement through Direct General Financial were the same as with the transaction involving Ms. Akpo-Sani. The documents that have been described were laid out in front of Mr. Tomes and he quickly signed his name and initials where necessary. As he explains it, he was told, "Initial here, initial here, initial here, sign this, sign this, and that's what I did." Mr. Tomes was there at the agency about 20 minutes. Mr. Tomes signed all documents that have been described in relation to the transaction. Mr. Tomes did not read the Premium Finance Agreement which he signed that set out the charges for the auto insurance and legal insurance. Mr. Tomes signed the Confirmation of Coverages document without reading it. Mr. Tomes paid a down-payment for the auto insurance of $107.50, with a premium to be financed in the amount of $358.00. He paid $31.50 as a down-payment for the legal insurance, with $73.50 to be financed. As reflected in the Premium Finance Agreement pertaining to the purchase of auto insurance, and legal insurance, the total amount financed was $325.40 at an annual percentage rate of 33.55 percent. The installment amount for each payment was $37.75. Mr. Tomes had called ahead before going to Cash Register. Information provided in the telephone call described a down-payment and monthly payments beyond that point. When Mr. Tomes arrived at Cash Register and spoke to Respondent, he was told by the Respondent that the automobile insurance could be paid for in cash or a down-payment could be made in monthly payments to follow. Mr. Tomes was told by Respondent that if more were paid down, then the monthly payments would be lower in cost. Although Mr. Tomes acknowledged signing the application for pre-paid traffic violation insurance, he does not recall seeing the document on November 2, 2001. He did not understand what he was buying as evidenced by the document. The product described in the document was not explained to him by Respondent. All that Mr. Tomes was interested in purchasing was automobile insurance sufficient to "be legal." He just wanted the basic automobile insurance coverage, and that is what he asked for. He understood this to mean PIP coverage. Although Mr. Tomes does not recall the application for legal insurance and its terms, Respondent and Mr. Tomes generally discussed the legal plan. Mr. Tomes told Respondent he did not want the legal plan. Respondent said to Mr. Tomes "You don't have to have the legal plan just take the standard down-payment option. I know that is a little harder on your checkbook today, but it keeps your monthly payment a lot lower and saves you money in the long run." This is taken to mean the option that required a larger down-payment and smaller monthly payments without having to purchase the additional product, the legal plan. Mr. Tomes told Respondent in reply "Well, I want the low down-payment option but I don't want the legal." Respondent said in turn that he couldn't do it that way. He stated that if Mr. Tomes took the 18 percent down-payment, he would also have to take the legal plan. Mr. Tomes was not happy with that arrangement where he was allowed a low down-payment conditioned upon the purchase of the legal plan but ultimately "did it." Count VI Raymond L. Washington On September 19, 2001, Raymond L. Washington purchased automobile insurance from Cash Register in Gainesville. Respondent was the employee for the agency involved in the transaction. The automobile insurance was purchased from Direct General Insurance. At the same time, Respondent sold Mr. Washington pre-paid traffic violation insurance from Southern Legal and a motor club contract from American Bankers Motor. A Premium Finance Agreement was entered into between Mr. Washington and Direct General Financial in relation to the automobile insurance and the legal insurance. A Confirmation of Coverages document was executed on this occasion. The format of all documents that have been described was the same as for the Akpo-Sani transaction. Mr. Washington signed all the documents. The automobile insurance application is Respondent's Exhibit numbered 28. The application for pre-paid traffic violation insurance is Petitioner's Exhibit numbered 15. The Premium Finance Agreement with Direct General Financial is Respondent's Exhibit numbered 29. The Confirmation of Coverages document is Respondent's Exhibit numbered 31. The Premium Finance Agreement sets out a down-payment of $93.10, with a balance to be paid of $418.90 pertaining to the automobile insurance. Mr. Washington, according to the Premium Finance Agreement, paid $18.90 down for the legal insurance, with $86.10 to be paid through installment payments. The Premium Finance Agreement sets out that $567.10 in the aggregate was financed for the auto insurance and for the legal insurance, at an annual percentage rate of 28.22 percent. The monthly payment was $64.30. The motor club was a $60.00 one time premium payment. On the date in question, Mr. Washington went to Cash Register with the intent to purchase basic insurance, what he refers to as "PIP." He told Respondent what he wanted to buy. Respondent offered towing and rental insurance. Mr. Washington was interested in that offering and purchased the towing and rental through the motor club contract. By contrast, Mr. Washington has no recollection of the discussion between the parties of the legal insurance through Southern Legal. He was told he needed to sign the document applying for the legal insurance and that he should have it. The legal insurance was not something he was interested in purchasing. Mr. Washington had called for a quotation of the price of auto insurance before arriving at Cash Register. Once there, he spent approximately one and one-half hours to finish his business. Respondent explained the several options for auto insurance, to include the cash purchase, a higher down-payment or a lower down-payment, with the purchase of an additional product. Mr. Washington wanted to make a lower down-payment. While at the agency Mr. Washington read some of the Premium Finance Agreement but not in all its details. He did not read the top of the document referring to the schedule of policies, with the types of coverage and the listing of the auto insurance, legal insurance and motor club. He did not read the upper right portion of the document pertaining to the companies being paid through the finance agreement. He read the part setting forth the monthly amount to be paid as an installment, which was $64.30. Mr. Washington did not read the application for legal insurance through Southern Legal before signing the document. Concerning the Confirmation of Coverages, Mr. Washington looked at that part of that document that told him to read all ten sections above. But he did not read item 10 which had a check-mark placed next to the driver's protection legal plan SL-210-A. Although Mr. Washington was at the agency for over an hour, he did not feel that he had time to read all the documents provided him. He was in a hurry to leave. Mr. Washington cannot remember the details of the discussion but he does recall that some questions that he asked Respondent concerning the transaction were not fully addressed. He has no recollection of any discussion of item 10 within the Confirmation of Coverages document associated with the driver's protection legal plan, and he did not realize that he had purchased the legal insurance. Respondent recalls his dealings with Mr. Washington and the offering of the three options to purchase auto insurance and that Mr. Washington chose the low down-payment option. Count VII Change of Address On August 1, 2003, Respondent became an agent for Allstate at West Newberry Road, Highway 26, Jonesville, Florida, without notifying Petitioner of this change in his business address. According to records maintained by the Petitioner, Respondent had not provided information concerning the change of address as late as March 3, 2004. Petitioner's Exhibit numbered 18. Respondent proceeded with the mistaken belief that once he was appointed as an agent for Allstate, that the insurer would notify Petitioner of that appointment and presumably include information on the address of his business.
Recommendation Upon consideration of the facts found and the conclusions of law reached, it is RECOMMENDED: That a Final Order be entered finding Respondent in violation of those provisions within Counts I, II, and V through VII, that have been concluded as violations, dismissing the others within those counts, dismissing Counts III and IV; suspending Respondent's licenses for one year, imposing a $100.00 administrative fine, placing Respondent on two years' probation and requiring attendance at such continuing education courses as deemed appropriate. DONE AND ENTERED this 1st day of July, 2004, in Tallahassee, Leon County, Florida. S CHARLES C. ADAMS 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 1st day of July, 2004.
The Issue The issue posed for decision herein is whether or not the Respondent's license and eligibility for licensure as an Ordinary Life, Disability and a General Lines agent should be revoked, suspended, or otherwise disciplined for reasons set forth hereinafter by the Administrative Complaint filed by the Petitioner on September 24, 1982. EXHIBITS The following exhibits were made part of the record: An Insurance Binder dated October 7, 1980, issued to Colon Aveiga by Center Insurance Agency, Inc., and signed by Jon Scott Robbins evidencing payment of $554 for an auto insurance policy issued by Dixie Insurance Company (Petitioner's Exhibit 53). An application for a Fireman's Fund auto insurance policy, dated October 10, 1980, signed by Colon Aveiga and Jon Scott Robbins evidencing payment of $514 (Petitioner's Exhibit 44). An Insurance Binder dated April 20, 1981, issued to Colon Aveiga and signed by Jon Scott Robbins evidencing payment of $767 credit for premiums paid and $299 for premiums due (Petitioner's Exhibit 56). A copy of a cancelled personal check (numbered 128) written by Colon Aveiga, dated April 20, 1981, made payable to Metro Insurance Agency in the amount of $299 for payment of premiums due (Petitioner's Exhibit 57). A Notice of Cancellation of a Fireman's Fund auto insurance policy dated March 25, 1981, and issued to Colon Aveiga for nonpayment of premiums due (Petitioner's Exhibit 52). An Amended Fireman's Fund Auto Insurance Policy dated February 6, 1981, issued to Colon Aveiga and showing a premium adjustment of $271 due (Petitioner's Exhibit 49). A Fireman's Fund Interoffice Memo dated March 23, 1981, written by Albert Sons, FJUA Underwriting Manager for Fireman's Fund Insurance Companies, discussing Colon Aveiga's insurance policy application (Petitioner's Exhibit 42). A Fireman's Fund FJUA Underwriters Request for Information from Metro Insurance Agency regarding Colon Aveiga, dated December 1, 1980 (Petitioner's Exhibit 46) A Fireman's Fund Underwriting memo dated January 14, 1981, requesting information about Colon Aveiga from Metro Insurance Agency and containing a new address for Colon Aveiga (Petitioner's Exhibit 47). A Florida Department of Highway Safety and Motor Vehicles' transcript of Gaston Aveiga's certified driving record, dated September 16, 1981 (Petitioner's Exhibit 43). An Insurance Binder dated October 2, 1980, issued to Marc Gavidia by Metro Insurance Agency and signed by Jon Scott Robbins, evidencing a payment of $140 for an auto insurance policy issued by Fireman's Fund (Petitioner's Exhibit 97). An Insurance Premium Finance Agreement dated October 23, 1980, issued to Marc Gavidia by the Metro Insurance Agency and signed by Jon Scott Robbins (Petitioner's Exhibit 98). A Florida Department of Highway Safety and Motor Vehicles' transcript of Marc Gavidia's certified driving record, dated September 16, 1981 (Petitioner's Exhibit 99). An application for a Fireman's Fund auto insurance policy, dated October 9, 1980, signed by Marc Gavidia and Jon Scott Robbins (Petitioner's Exhibit 101). A Policy Change Request for a Fireman's Fund auto insurance policy, dated February 10, 1981, issued by Metro Insurance Agency, signed by Jon Scott Robbins, concerning Marc Gavidia's policy and listing his address as 5361 S.E. 11th Street, Tallahassee, Florida (Petitioner's Exhibit 111). A Notice of Cancellation of Marc Gavidia's auto insurance policy, dated February 27, 1981, issued by Fireman's Fund and citing material misrepresentation as the grounds for the cancellation (Petitioner's Exhibit 112). A copy of a cancelled personal check (No. 1726) written by Juana Perez, dated March 12, 1981, made payable to Metro Insurance Agency in the amount of $299 for payment of premiums due (Petitioner's Exhibit 62). An Insurance Binder dated March 12, 1981, issued to Rogelio Perez by Metro Insurance Agency and signed by Jon Scott Robbins, evidencing auto insurance coverage by Utah Home Insurance Company (Petitioner's Exhibit 63). An Insurance Premium Finance Agreement dated March 12, 1981, issued to Rogelio Perez by Metro Insurance Agency, and signed by Jon Scott Robbins (Petitioner's Exhibit 78). An application for a Fireman's Fund auto insurance policy, dated March 12, 1981, signed by Rogelio Perez and Jon Scott Robbins (Petitioner's Exhibit 65). A Declarations Form for auto insurance coverage by Rogelio Perez by Fireman's Fund showing a premium due of $978 (Petitioner's Exhibit 75). A Declarations Form for auto insurance coverage by Rogelio Perez by Fireman's Fund showing a premium due of $881 (Petitioner's Exhibit 66). A receipt from Luby's Chevrolet of Miami, Florida, showing $1,084 received from Luis G. Capon (Petitioner's Exhibit 80). An Insurance Binder dated January 26, 1981, issued to Luis Capon by Metro Insurance Agency, signed by Jon Scott Robbins and evidencing auto insurance coverage provided by Utah Home Insurance Company (Petitioner's Exhibit 81). An application for a Fireman's Fund auto insurance policy dated January 28, 1981, signed by Jon Scott Robbins (Petitioner's Exhibit 84). A Policy Change Request for a Fireman's Fund auto insurance policy stating that Luis Capon's address had been changed to 2560 S.W. 34th Street, Gainesville, Florida, and signed by Jon Scott Robbins (Petitioner's Exhibit 86). A Florida Department of Highway Safety and Motor Vehicles' transcript of Luis Capon's certified driving record, dated September 12, 1981 (Petitioner's Exhibit 79). A cancelled policy advisal dated July 8, 1981, regarding Luis Capon's Fireman's Fund auto insurance policy (Petitioner's Exhibit 90). A letter from Albert M. Sons, dated September 22, 1981, in his capacity as FJUA Manager stating that an inspection by Fireman's Fund established that Luis Capon had not moved to Gainesville, Florida, and that in fact he lived in Miami and was therefore in a higher rating zone (Petitioner's Exhibit 89). An Interoffice Memo from the file of Fireman's Fund dated March 23, 1981, in reference to Luis Capon questioning certain inconsistencies in that individual's application for insurance (Petitioner's Exhibit 83). An application for a Fireman's Fund auto insurance policy, dated September 10, 1980, issued to Javier Alvarez, showing a signature of "Javier Alvarez" and signed by Jon Scott Robbins (Petitioner's Exhibits 3 and 4). A Declarations Form for auto insurance coverage of Javier Alvarez by Fireman's Fund showing a premium due of $737 (Petitioner's Exhibit 5). A Return to Sender letter from Fireman's Fund to Javier Alvarez bearing the address of 4902 S.W. 84th Street, Plantation, Florida (Petitioner's Exhibit 6). A Fireman's Fund FJUA Underwriters request for Javier Alvarez' correct address, issued to Metro Insurance Agency, dated November 14, 1980 (Petitioner's Exhibit 7). An Insurance Premium Finance Agreement allegedly signed by Javier Alvarez, issued by Metro Insurance Agency, and signed by Jon Scott Robbins (Petitioner's Exhibit 19). A letter from the National Insurance Finance Company to Javier Alvarez, 251 Crandon Boulevard, Miami, Florida, informing Alvarez of dates and terms of due payments (Petitioner's Exhibit 20). Deposition of A. M. Beverly, taken February 22, 1983 (Petitioner's Exhibit 1). FJUA Rating Manual (Petitioner's Exhibit 2). Fireman's Fund FJUA Rating Examination (Petitioner's Exhibit 3). The following witnesses testified on behalf of the Petitioner: Gaston Aveiga, Albert M. Sons, Peter Gavidia, Marc Gavidia, Juana Perez, Luis Capon, and Javier Alvarez. The Respondent testified on his own behalf. Based upon my observation of the witnesses and their demeanor while testifying, post-hearing memoranda, documentary evidence received, pre-hearing stipulations and the entire record compiled herein, I hereby make the following relevant:
Findings Of Fact The Respondent, Jon Scott Robbins, was, during times material herein, licensed as an Ordinary Life, Disability and General Lines agent. By its Administrative Complaint filed herein dated September 24, 1982, Petitioner, Department of Insurance, charged that the Respondent engaged in the following acts and/or conduct (in summary fashion) which amounts to conduct violative of Chapter 626, Florida Statutes, to wit: Respondent failed to account for or pay to the insurer, insured, or other persons entitled to premiums or other funds received belonging to insurers or others in transactions under his license in a fiduciary capacity, in violation of Section 626.561(1), Florida Statutes. Respondent diverted or appropriated such funds or portions thereof for his own use, in violation of Section 626.561(2), Florida Statutes. Respondent collected a sum as premium or charge for insurance in excess of or less than the premium or charge applicable to such insurance, in violation of Section 626.9541(15)(b), Florida Statutes. Respondent misappropriated, converted, or unlawfully withheld monies belonging to insurers, insureds, beneficiaries, or others received in the conduct of business under his license, in violation of Section 626.611(10), Florida Statutes. Respondent knowingly filed with a supervisor or other public official, or made, published, disseminated, circulated, delivered to any person, or placed before the public, or caused directly or indirectly to be filed with a supervisor, or other public official, or made, published, disseminated, circulated, delivered to any person, or placed before the public, any false material statement, in violation of Section 626.9541(d), Florida Statutes. Respondent knowingly made a false material statement, in violation of Section 626.9541(5)(a)2, Florida Statutes. Respondent knowingly made a false entry of material fact in a book, report, or statement of any person, or knowingly omitted to make a true entry of a material fact pertaining to the business of such person in a book, report, or statement of such person, in violation of Section 626.9541(5)(b), Florida Statutes. Respondent made false or fraudulent statements or representation on, or relative to, an application for an insurance policy for the purpose of obtaining a fee, commission, money, or other benefit from an insurer, agent, broker or individual, in violation of Section 626.9541(11)(a), Florida Statutes. Respondent knowingly made a false or fraudulent statement or representation in or with reference to an application or negotiation for insurance, in violation of Section 626.9541(11)(b), Florida Statutes. Respondent willfully violated a provision or provisions of the Insurance Code, in violation of Section 626.611(13), Florida Statutes. Respondent demonstrated a lack of fitness or trustworthiness to engage in the business of insurance, in violation of Section 626.611(7), Florida Statutes. Respondent engaged in fraudulent or dishonest practices, in violation of Section 626.611(9), Florida Statutes. Respondent engaged in unfair methods of competition or in unfair or deceptive acts as prohibited under Part VII of Chapter 626, Florida Statutes, in violation of Section 626.621(6), Florida Statutes. Respondent violated a provision of the Insurance Code, in violation of Section 626.611(10), Florida Statutes. Respondent has shown himself to be a source of injury or loss to the public, or detrimental to the public interest, in violation of Section 626.621(6), Florida Statutes. During times material herein, Respondent served as a General Lines agent and represented Fireman's Fund Insurance (Fireman's Fund). The complaint allegations, in summary fashion, may be grouped in two classifications; (1) that Respondent knowingly filed false statements of material facts concerning insureds in an attempt to attract more insureds by offering lower rates and (2) Respondent received premiums from insureds in excess of the actual premiums he submitted to Fireman's Fund and thereby unlawfully appropriated the excess monies to his own use. Albert Sons is the underwriting manager for the Florida Joint Underwriters Association (FJUA) in his capacity for Fireman's Fund and is a direct contact for Fireman's Fund with the Respondent. All FJUA premium rates are identical given the same variables such as age, type of vehicle, use and territory. Any variation of these factors changes the rate in a uniform manner and that change is uniform throughout the industry. As an example, Miami is a substantially higher rated territory than Gainesville (TR 31-32). An insured who cancels his insurance coverage is charged the amount of premium based on the amount of time that the coverage remained in effect plus a service charge exacted by the company for processing the application. Pursuant to negotiations for the purchase of auto insurance, Gaston Aveiga, speaking on behalf of his father Colon Aveiga, informed Respondent of his Florida driver's license number and date of birth. The same information was provided to the Respondent on behalf of Colon Aveiga. Gaston advised the Respondent that he would be the principal driver of the car to be insured. Colon Aveiga purchased an auto insurance policy from the Respondent on October 7, 1980 and was quoted a premium of $544. Colon received an insurance binder from Respondent reflecting his correct address: 1215 NE 110th Street, Miami, Florida (Petitioner's Exhibit No. 53). Approximately three days later, an application was made to Fireman's Fund on October 10, 1980, reflecting that Colon Aveiga's address is 1534 SW 34th Street, Gainesville, Florida. The Aveigas have never lived in Gainesville nor have they indicated any intention of moving to Gainesville (TR 15). The insurance application further provides that Colon Aveiga is the only driver of the car and that he had an international drivers license whereas the Aveigas only have Florida driver's licenses; they specifically informed the Respondent of the same and that Gaston would be the principal driver of the insured car. The application submitted to Fireman's Fund on behalf of the Aveigas reflects a total premium of $514 which is, of course, $30 less than the premium quoted and collected from Colon Aveiga. On October 2, 1980, Marc Gavidia, and his father, Peter, purchased an auto insurance policy from the Respondent, doing business as Metro Insurance Agency. 2/ Respondent provided the Gavidias an insurance binder containing their correct address: 10441 SW 50th Street, Miami, Florida and evidencing a payment of $140 towards the balance due (Petitioner's Exhibit No. 97). The insurance was purchased to insure Marc Gavidia's Dodge van of which he was the principal driver. Marc Gavidia purchased the auto insurance from Respondent because of the cheaper rate (TR pp. 41-45). On October 4, 1980, an auto insurance application was tendered to Fireman's Fund on behalf of Marc Gavidia reflecting that he was self-employed (Petitioner's Exhibit No. 101). Marc Gavidia did not list himself as self- employed on the application (TR 49). Marc Gavidia gave Respondent his Florida driver's license which reflected a birth date of February 7, 1960 whereas the application submitted by Respondent on behalf of Marc Gavidia reflects a birth date of February 14, 1950 with a different driver's license number (Petitioner's Exhibit No. 101). On February 14, 1981 Respondent sent a policy change request for Florida auto insurance stating that the insured, Marc Gavidia, transferred schools to Tallahassee and now lives at 5361 SE 11th Street, Tallahassee, Florida (petitioner's Exhibit No. 111). Marc Gavidia has never lived in Tallahassee nor has he communicated to the Respondent any intent of moving to Tallahassee. (TR pp. 49-50). Juana Perez and her husband, Rogelio Perez purchased auto insurance from the Respondent based on the low rate quoted by Respondent. Ms. Perez wrote a check in the amount of $275 payable to Metro Insurance and received an insurance binder (TR pp. 53-54). Ms. Perez gave David Einhorn (a salesman of a local automobile dealership who was representing Respondent) Mr. Perez's Florida driver's license and Mr. Einhorn made a copy of the license (TR p. 56). An application for insurance was submitted to Fireman's Fund on behalf of the Perezes and reflects a total premium of $893. The application states further that the applicant has an international drivers license whereas Mr. Perez has never had an international drivers license (TR p. 59). The application reflects further that Mr. Perez was unemployed whereas he was employed at the time of his application for insurance (TR pp. 59, 63 and 65). An insurance premium finance agreement dated December 30, 1981, entered into by Mr. Perez shows $978 as a total amount of premiums minus the $275 downpayment leaving $704.20 as the amount to be financed (Petitioner's Exhibit No. 78). This represents approximately eighty-five ($85.00) dollars more than the premium sent to Fireman's Fund. On January 28, 1981, Luis Capon, purchased auto insurance from the Respondent and an application was submitted to Fireman's Fund reflecting a total premium of $789. At that time, Luis Capon paid $1,084 in cash to the Metro Insurance Company (TR p. 68). The application submitted by Respondent reflected further that Luis Capon had an international drivers license No. 1581934 and was born on January 15, 1944. At the time Luis Capon made application with the Respondent for auto insurance, he provided his Florida Drivers license which reflected his correct address: 419 NW 15th Avenue, Miami, Florida and his birth date, November 28, 1956 (TR p. 71). A policy change request for Fireman's Fund issued to Luis Capon states that Capon changed his address to 2560 SW 34th Street, Gainesville, Florida. The policy change request form was signed by Respondent. Luis Capon has never lived in Gainesville nor has he evidenced to Respondent any intent of living in Gainesville. Further, Luis Capon has never received any refund from Respondent and in fact had to pay additional premiums (TR p. 73). The additional premium seems to have stemmed from additional violations as reflected by a DMV Driving Report. Javier Alvarez purchased an auto insurance policy from Respondent and was advised that the total cash premium for the policy was $830. Javier Alvarez paid $250 and financed the remaining $580 (Petitioner's Exhibit No. 19). An application submitted on behalf of Mr. Alvarez reflects a total premium of $730 which was submitted with the application. Mr. Alvarez has not received a refund of the difference in the amount quoted i.e. $830 and the amount $730 actually paid to Fireman's Fund by Respondent. When negotiating for the purchase of the auto insurance policy from the Respondent, Javier Alvarez gave the Respondent his Florida driver's license which contained his license number, birth date and address. The application submitted on behalf of Mr. Alvarez shows a Plantation, Florida address and reflects that Javier Alvarez has a Massachusetts driver's license and a birth date of August 16, 1940 whereas his correct birth date is February 22, 1961 and his address is 251 Crandon Boulevard, Apartment 342, Key Biscayne, Florida (TR p. 106). Mr. Alvarez has never had any address other than the Key Biscayne, Florida address and has never possessed a Massachusetts driver's license. On April 2, 1981, Respondent sent an endorsement request to Fireman's Fund advising that Javier Alvarez had transferred schools and was living in Gainesville, Florida (Petitioner's Exhibit No. 2). Javier Alvarez has never attended any school in Gainesville, Florida nor has he indicated to Respondent any intent to do so (TR p. 110). THE RESPONDENT'S POSITION The Respondent testified on his own behalf and has been licensed since 1978. Respondent was first employed as a managing agent and as an underwriter for several years with another agency. During that employment, Respondent did not have the guidance and/or the assistance of a tutor. Respondent acknowledged that there were indeed numerous errors in addresses but he attributes same to the fact that he was a new agent without proper checks and balances in his office at the time, and that he, more than anyone else, was the victim of such mistakes. Respondent points to the fact that he earns commissions based on the amount of premiums and that the lower premiums quoted result in lower commissions to him. Finally, Respondent points to the fact that other agencies such as the chief complaining party in this case, Fireman's Fund, had a greater error ratio than the Respondent in the conduct of its insurance agency and that these errors were the result of sloppy clerical work and language barriers more than any intentional act on Respondent's part. 3/
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Respondent's insurance license as referred to herein be suspended for a period of two (2) years. It is further RECOMMENDED that eighteen (18) months of the subject suspension be suspended during which time the Respondent's license shall be placed on probation. RECOMMENDED this 2nd day of September, 1983 in Tallahassee, Florida. JAMES E. BRADWELL, 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 2nd day of September, 1983
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, the posthearing memorandum and the entire record compiled herein, I hereby make the following relevant findings of fact: Respondent, Alfred Rifflard, Jr., during times material herein, was a licensed real estate broker-salesman and is the holder of license number 0338064. Respondent, Thomas L. Narog, during times material herein, was a licensed real estate salesman and is the holder of license number 0309097. On approximately May 24, 1982, Respondent Narog represented to John F. Wodalski that Respondent Rifflard, as an investor, was interested in purchasing certain real property owned by Wodalski. Based on discussions with seller Wodalski, Wodalski and Respondent Alfred Rifflard entered into a deposit receipt and contract for sale and purchase of the Wodalski property. The purchaser is listed on the deposit receipt contract as Alfred Rifflard and/or assigns." (Petitioner's Exhibit 3) The negotiations for the sale of the subject property were conducted at the bar of a country club where both Respondent Naroq and seller Wodalski were employed. Respondent Rifflard was aware that the subject property had been on the market for approximately eighteen months. Seller Wodalski expressed (to Respondent Narog) disenchantment that he was unable to move the property as he had planned to purchase other properties with the proceeds received from the sale of the subject property. Respondent Narog attempted to sell the Wodalski property to enable him (Wodalski) to purchase the other property. During the negotiations for the sale of the subject property, Respondent Wodalski tendered a copy of his business card to seller Wodalski. That business card reflected that Respondent Rifflard was a licensed real estate salesman. Following the execution of the deposit receipt contract by Respondent Rifflard, Respondent Rifflard showed the property to approximately three prospective purchasers in an effort to sell the property prior to the purported closing date. Federal Land Title Corporation of Ft. Lauderdale, Florida was commissioned to handle the closing of the property from seller Wodalski to Respondent Rifflard and/or his assigns. This is confirmed by a letter dated August 19, 1982 to seller Wodalski wherein loan processor Kathy Bradley advised the seller that she expected to expedite the closing of the Wodalski property. (Petitioner's Exhibit 4) Upon receiving the above-referred letter from Federal Land Title Corporation, seller Wodalski demanded a tender of the $1,000 earnest money deposit which is referred to in the deposit receipt contract executed by Respondent Rifflard. At that time, Respondent Narog was told that no monies could be disbursed to him prior to closing. Seller Wodalski called off the closing based on his claim that another broker advised him that it was illegal for an undisclosed licensed real estate salesman to purchase property in his name. Based on the testimony of Respondents Rifflard and Narog including the testimony of the Petitioner's investigator, Anthony Nicola, who investigated the subject complaint, it is specifically found herein that the Respondents disclosed the fact that Rifflard was a licensed real estate salesman at the time the deposit receipt contract was executed herein. In making this finding, consideration was given to seller Wodalski's testimony to the effect that he was busy 2/ at the time that he entered the deposit receipt contract and that it was indeed possible that Respondent Rifflard tendered a business card to him at the time he entered the subject contract. Paragraph two of the deposit receipt contract reveals that the method of payment includes a $1,000 deposit, in the form of a note, which would be returned to the buyer at closing. It is undisputed by the Respondents that no earnest money deposit note in the amount of $1,000 was given the buyer's attorney to be held in trust until the closing was completed. The Respondents acknowledged that it was an error on their part to fail to execute the earnest money deposit as Respondent Rifflard agreed in the subject deposit receipt contract. Further, Respondent Rifflard urges that his failure to execute a note was an oversight on his part.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is hereby RECOMMENDED: That the Respondents, Alfred Rifflard, Jr. and Thomas L. Narog, be privately reprimanded by the Petitioner, Division of Real Estate, based on their failure to place in deposit, to be held in trust, a $1,000 earnest money deposit in connection with the transaction surrounding the deposit receipt and contract for sale and purchase entered into by Alfred Rifflard, Jr., as purchaser of certain real property owned by John Wodalski. RECOMMENDED this 31st day of January, 1984, in Tallahassee, Florida. JAMES E. BRADWELL 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 31st day of January, 1984.
