The Issue Whether the Petitioner's application for licensure as a nonresident general lines insurance agent and a nonresident surplus lines insurance agent should be approved or denied.
Findings Of Fact On August 4, 2006, the Petitioner filed an application for licensure as a "09-20" nonresident general lines insurance agent and a "91-20" nonresident surplus lines insurance agent. By Notice of Denial dated December 11, 2006, the Respondent denied the Petitioner's application for licensure. The Notice of Denial, in material part, sets forth the factual basis for the denial as follows: You, Brian D. Boneck, at all times pertinent to the facts set below, were licensed in this state as a resident general lines insurance agent. You, Brian D. Boneck, at all times pertinent to the facts set forth below, were the owner of Brooke Agency Services of Bradenton, Florida. You, Brian D. Boneck, at all times pertinent to the facts set forth below, were the President and owner of Sierra Insurance Underwriters, Inc. On or about the last week of December, 2005, Christopher Waters of Port Charlotte, Florida, called the Brooke Agency in Bradenton, Florida, and spoke to you, Brian D. Boneck, regarding the renewal of a commercial general liability insurance policy for Waters Developers, LLC. On or about, January 4, 2006, Mr. Waters delivered a check to you in the amount of $809.30, payable to Sierra Underwriters. This check was to pay the down payment on the premium for renewal of Mr. Waters' general liability policy. Sometime in April 2006, Mr. Waters was notified by Mid-Continental [sic] Casualty Company that the policy was cancelled for non-payment of premium. You, Brian D. Boneck, failed to submit the money paid to you by Mr. Waters to the insurer, Mid-Continental [sic] Casualty Company, or to the insurer's general agent, Florida Homebuilders Insurance Agency, Inc. You, Brian D. Boneck, misappropriated the down payment made to you by Mr. Waters. To this date, you have not returned the money to Mr. Waters or paid the money to Mid- Continental [sic] Casualty Company, or to the Florida Homebuilders Insurance Agency, Inc. Your ownership of Brooke Agency Services of Bradenton, Florida, was through a franchise agreement with Brooke Franchise Corporation. Brook Insurance and Financial Services is a subsidiary corporation that manages business for Brooke Franchise Corporation. Pursuant to this relationship, you, Brian D. Boneck, were required to pay a share of the commissions received by Brooke Agency Service of Bradenton to Brooke Insurance and Financial Services and were required to provide information on insurance sales to Brooke Insurance and Financial Services. According to a sworn affidavit by Marian Ann Eupizi, who was formerly employed by you at Brooke Agency Services, you, Brian D. Boneck, also misappropriated premium payments made to you by other customers whose insurance was written by you or other agents of Brooke Agency Services of Bradenton, Florida, through the Florida Homebuilders Insurance Agency. You, Brian D. Boneck, did this by having customers write premium checks payable to your other company, Sierra Insurance Underwriters, Inc. By doing so, Brooke Insurance and Financial Services was unaware of your actions and you also misappropriated commissions owed to them. Also according to Ms. Eupizi, you, Brian D. Boneck, in mid- 2005, misappropriated a refund check issued for a policy on Callis Construction in the amount of approximately $1200. The Respondent offered no reliable evidence at the hearing to support the allegations which served as the factual basis for the denial. As to the allegation that Christopher Waters delivered the check to the Petitioner, the Respondent offered only the sworn affidavit of Mr. Waters and various attachments in support of the allegation. At the hearing, the Petitioner testified that he did not accept premium checks from customers and that the office staff accepted and processed premium checks. The Respondent offered no credible evidence to the contrary, and, for purposes of this Order, the Petitioner's testimony is credited. The Petitioner testified that the Waters account was one of 35 transferred to the corporate franchisor when the Petitioner sold the agency back to the Brooke Agency Services. Negotiations for the sale occurred over a period of time and concluded with a bill of sale executed in August 2006. Although the Petitioner's testimony regarding the chronology of the sale was poorly defined, there was no evidence that the Waters account was not included within those transferred. As to the allegation that the premium was misappropriated and not forwarded to Mid-Continent Casualty Insurance Company, the Respondent offered a copy of a sworn statement wherein a Mid-Continent Casualty representative alleged that the company's investigation indicated that the Waters premium was never forwarded through the Brook Agency to the Florida Homebuilders Insurance Agency, which initially issued and then ultimately cancelled the policy. Additionally, the Respondent offered a copy of an email to the Respondent's investigator from a representative of Florida Home Builders Insurance, Inc., wherein the representative restates information provided to the email writer from unidentified representatives of the Brooke Agency and AmGro Premium Finance Company (with whom the remaining premium due from Mr. Waters had been financed). The Respondent also offered banking records apparently provided in response to a subpoena that indicate the Waters check was deposited into the Sierra Insurance Underwriters Account, to whom the check was made payable. The Respondent offered no credible evidence that the deposit of the Waters check into the Sierra account was improper. As to the allegation that no money had been refunded to Mr. Waters as of the December 11, 2006, Notice of Denial, the Petitioner testified that the money was refunded by a check to Mr. Waters and had a check to Waters Developers from Sierra Underwriters, Inc., dated July 24, 2006, for $1,471 admitted into evidence. It is unclear why the refund amount exceeded the initial premium amount, but there is no evidence contrary to the Petitioner's testimony that the check was issued as a premium refund. As to the allegations related to the ownership structure of the Petitioner's agency, the Respondent offered no credible evidence regarding the interrelationship between the Brooke entities or how the Brooke entities operated with the Petitioner’s Sierra Underwriters, Inc. Regarding the allegations attributed to sworn affidavit of Marian Ann Eupizi, the Petitioner testified that Ms. Eupizi was a customer service representative who was not involved in the fiscal operation of the agency and whom he had fired for falsification of documents. There was no credible evidence contrary to the Petitioner's testimony, and it is credited. Ms. Eupizi’s affidavit has been disregarded in its entirety. There was no credible evidence to support the assertion in the affidavit that the Petitioner misappropriated premium payments from other customers, misappropriated commissions due to Brooke Insurance and Financial Services, or misappropriated a refund check to an entity identified as Callis Construction.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Financial Services enter a final order granting the application of Brian D. Boneck for licensure as a nonresident general lines insurance agent and a nonresident surplus lines insurance agent. DONE AND ENTERED this 18th day of September, 2007, in Tallahassee, Leon County, Florida. S WILLIAM F. QUATTLEBAUM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 18th day of September, 2007. COPIES FURNISHED: Brian D. Boneck 70 East Horizon Ridge Parkway, No. 140 Henderson, Nevada 89002 William Gautier Kitchen, Esquire Department of Financial Services Division of Legal Services 200 East Gaines Street Tallahassee, Florida 32399-0333 Honorable Alex Sink Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Daniel Sumner, General Counsel Department of Financial Services The Capitol Plaza Level 11 Tallahassee, Florida 32399-0307
The Issue Whether Respondent engaged in conduct proscribed by the Insurance Code as is particularly set forth in the Administrative Complaint filed December 7, 1993.
Findings Of Fact During times material, Respondent, Nelson Speer Benzing, was licensed with Petitioner, Department of Insurance and Treasurer, as a life insurance and as a life and health insurance agent. During times material, Respondent was an employee of U.S. Savings Trust Management (herein USSTM). During times material, Respondent was never appointed with Petitioner to represent Wisconsin National Life Insurance Company (herein Wisconsin). However, Respondent did attend a workshop sponsored by Wisconsin. At some time prior to March 5, 1992, Respondent met with George Cantonis, President of Mega Manufacturing, Inc. (herein Mega) in order to obtain Cantonis' permission to make a sales presentation to Mega's employees. Cantonis granted Respondent permission to make a sales presentation to Mega's employees. On March 5, 1992, Respondent made a sales presentation to Mega's employees. The purpose of said presentation was to enroll the employees of Mega in a "savings plan" offered by USSTM. The presentation lasted approximately 15- 30 minutes. Employees were told that the plan, as presented, incorporated an insurance savings plan which had a "liquid" component as well as a long term savings component. At no time during this sales presentation did Respondent explain to employees of Mega that he was a licensed life insurance agent. During the course of his presentation, Respondent described USSTM's product variously as an "insurance saving plan", as an "investment in insurance companies" and as a "retirement savings plan". At no time during the presentation did Respondent specifically state that he was selling life insurance. At the conclusion of the presentation, Respondent enrolled all interested employees in USSTM's plan. During the enrollment procedure, Respondent told the employees to complete portions of at least three documents which included a form entitled "Employee History", a Wisconsin's life insurance application, and an employee payroll deduction authorization. Cantonis enrolled through the above procedure and signed a blank Wisconsin National Life Insurance application. Subsequent to the group sales presentation, Respondent made a similar presentation to Tina Netherton, Mega's office manager, who was working in the office and answering the telephone. At the conclusion of the presentation to Netherton, she enrolled in the plan and also signed a blank Wisconsin National Life Insurance application pursuant to instructions from Respondent. Both Netherton and Cantonis believed that the "savings plan" consisted of both a short term "liquid cash element and a long term investment". Neither were aware that they had purchased life insurance. Both Netherton and Cantonis had, in their opinion, adequate life insurance at the time of Respondent's sales presentation, and would not have purchased additional life insurance if they had been told (by Respondent) that they were purchasing life insurance. Both Netherton and Cantonis executed beneficiary designations on their belief that such was needed so that disbursements, if any, could be made to their designee in the event of their death. Approximately three weeks after enrollment, Netherton and Cantonis received brochures from USSTM which acknowledged their enrollment and detailed the benefits of the "savings plan". The brochure advised that Netherton and Cantonis had enrolled in an insurance "savings plan" and failed to state that they had purchased life insurance. Cantonis and Netherton attempted to withdraw funds from the liquid portion of the plan and were unable to do so. Four to five months after their enrollment, Cantonis and Netherton received life insurance policies from Wisconsin. Pursuant to the insurance applications, Cantonis and Netherton were issued Wisconsin life insurance policy numbers L00566485 and L00566483, respectively. Cantonis and Netherton maintained their Wisconsin policies in order to realize some gain from their overall loss in dealing with Respondent and USSTM. At the time that Respondent made his presentation to Mega's employees and officials, he had never before made sales presentations in order to enroll employees in plans offered by USSTM. Respondent's general manager, Vincent Radcliff, was the agent of record of Wisconsin. The insurance application and policies issued to Cantonis and Netherton were signed by an agent other than Respondent. Respondent's supervisor, Vincent A. Radcliff, III, was disciplined by Petitioner and Respondent cooperated with the Petitioner in investigating the complaint allegations filed against his supervisor, Radcliff. Respondent was first licensed by Petitioner on November 15, 1989. Respondent has not been the subject of any prior disciplinary actions by Petitioner.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that: Petitioner enter a Final Order suspending Respondent's life and health insurance licenses for a period of three (3) months. It is further RECOMMENDED that Petitioner order that Respondent engage in continuing education respecting the manner and means of soliciting on behalf of insurance companies, and to the extent that he completes the required courses within an acceptable time frame, that the suspension be suspended pending the outcome of Respondent's satisfactory completion of such continuing education courses. 1/ RECOMMENDED this 1st day of July, 1994, in Tallahassee, Leon County, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 1st day of July, 1994.
The Issue Whether Respondent's licenses as a health insurance agent, a life and health insurance agent, and a life including variable annuity agent should be suspended or revoked based on the allegations set forth in the Department's Administrative Complaint.
Findings Of Fact Respondent Gary L. Koniz (Respondent) is currently licensed by the Department as a health insurance (2-40) agent, a life and health insurance (2-18) agent, and a life including variable annuity (2-14) agent. On August 17, 1988, Respondent plead guilty to operating a vehicle while under the influence of alcohol (DUI), a felony, in the County Court in and for Ulster County, New York, Case No. 88-57. Respondent was sentenced to five years' probation, license revocation, and payment of a fine. On or about September 30, 2000, Respondent submitted an application to the Department for licensure as health agent, a life and health agent, and a life including variable annuity agent, on which he was asked the following two questions: Have you ever been convicted, found guilty, or pleaded guilty or nolo contendere to a felony under the laws of any municipality, county, state, territory, or country, whether or not adjudication was withheld or a judgment of conviction was entered? Have you ever been convicted, found guilty, or pleaded guilty or nolo contendere to a crime punishable by imprisonment of one year or more under the laws of any municipality, county, state, territory, or country, whether or not adjudication was withheld or a judgment of conviction was entered? Respondent answered each of the aforementioned questions, "no." On the application dated September 30, 2000, Respondent signed and swore to the statement that read: Under penalty of perjury, I declare that I have read the foregoing application for licensure, related information and related attachments, and that the facts as stated in it are true. I understand that misrepresentation of any fact required to be disclosed through this application is a violation of the Florida Insurance and Administrative Code and may result in the denial of my application and/or the revocation of my insurance license. Respondent testified at hearing. Respondent made a court appearance at which he entered a plea as part of a plea bargain to a misdemeanor. He did not comply with one of the conditions and the matter was called back up before the court. At this second hearing, the court asked how he plead. Respondent indicated he had already plead. The court took this response as a plea to the DUI felony and imposed the aforementioned penalties. Respondent did not knowingly answer the questions on the application for licensure incorrectly.
Recommendation Based on the foregoing Findings of Facts and Conclusions of Law, it is RECOMMENDED that the Department of Insurance enter a final order finding Respondent Gary L. Koniz guilty of violating Sections 626.611 and 626.621, Florida Statutes, and suspending his licensure as a health insurance agent, a life and health insurance agent, and a life including variable annuity agent for a period of up to 18 months. DONE AND ENTERED this 23rd day of April, 2002, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 23rd day of April, 2002. COPIES FURNISHED: Gary L. Koniz 9480 Princeton Square Boulevard, South Apartment 815 Jacksonville, Florida 32256 Matthew A. Nowels, Esquire Department of Insurance 612 Larson Building 200 East Gaines Street Tallahassee, Florida 32399-0333 Honorable Tom Gallagher State Treasurer/Insurance Commissioner Department of Insurance The Capitol, Plaza Level 02 Tallahassee, Florida 32399-0300 Mark Casteel, General Counsel Department of Insurance The Capitol, Lower Level 26 Tallahassee, Florida 32399-0307
The Issue The issue is whether Respondent is guilty of transacting insurance business in violation of Sections 626.611 and 626.621, Florida Statutes, and, if so, what penalty should be imposed.
Findings Of Fact Respondent is licensed as a general lines insurance agent, holding license number A274461. He has been so licensed for over 20 years. The record discloses no previous discipline. Respondent bought L.N.V., Inc., d/b/a Federal Insurance (Federal Insurance), when he first became licensed in Florida. Respondent has retained ownership control of Federal Insurance since its purchase, except for a one-year period starting in June 2002, when Federal Insurance sold its assets to an unrelated party. However, after the party defaulted on its purchase obligations, Federal Insurance recovered the assets. Prior to June 2002, Respondent was, at all material times, the sole shareholder, the president, and a director of Federal Insurance. The acts and omissions alleged in Counts I, II, IV, and VII took place during this time period. After June 2003, Respondent's formal roles with Federal Insurance became less clear, although he continued to run the daily operations of the business and control the corporation. At minimum, though, Respondent was the Agency Owner from May 20, 2003, through November 7, 2003, and November 25, 2003, through December 29, 2003, according to the Agency Location Report, which is part of Petitioner Exhibit 2. The acts and omissions alleged in Counts V and VI took place, at least in part, during these time periods. Without doubt, regardless of his formal roles after June 2003, Respondent personally committed the acts and omissions that are the subject of Counts V and VI. Michael Smith is a licensed property and casualty insurance agent. He is also licensed to sell life and health insurance. He has held insurance licenses since 1983. Mr. Smith has been employed by Federal Insurance twice: from the late 1980s to the mid-1990s and 1999-2001. At all material times, Nicholas Polyviou, d/b/a Polyviou Corporation, was a self-employed manufacturer of office furniture. Mr. Polyviou did his insurance business at Federal Insurance where he dealt with Michael Smith. On October 13, 1999, Mr. Polyviou visited Michael Smith at Federal Insurance to purchase workers' compensation and liability insurance. Mr. Polyviou completed an application for workers' compensation insurance and delivered four Notices of Election to be Exempt, which had already been filled out and signed by Mr. Polyviou and the other three employees who were the subjects of the notices. The notices represented elections by qualified persons not to be covered by workers' compensation. To process the Notices of Election to Be Exempt and file them with the Division of Workers' Compensation, Federal Insurance charged Mr. Polyviou $75 per form, for a total of $300. The $75 fee per form consisted of a $50 fee charged by the Division of Workers' Compensation to file the notices and a $25 fee charged by Federal Insurance to process the notices and send them to the Division of Workers' Compensation. However, Federal Insurance never sent these notices to the Division of Workers' Compensation. Eventually, following an audit, Mr. Polyviou was assessed about $20,000 in unpaid workers' compensation premiums for these four individuals. Mr. Polyviou's injury was considerably less than $20,000 because the other three employees were ineligible to elect out of coverage in the first place. At all material times, David Wagner was self-employed in landscape maintenance. On August 21, 2000, Mr. Wagner visited Mr. Smith at Federal Insurance to purchase workers' compensation insurance. Mr. Wagner completed an application for workers' compensation insurance and delivered a Notice of Election to be Exempt, which had already been filled out and signed by Mr. Wagner. Respondent notarized the Notice of Election to be Exempt. To process the Notice of Election to Be Exempt and file them with the Division of Workers' Compensation, Federal Insurance charged Mr. Wagner $75. The $75 fee consisted of a $50 fee charged by the Division of Workers' Compensation to file the notice and a $25 fee charged by Federal Insurance to file the notice. However, Federal Insurance never filed the notice with the Division of Workers' Compensation. Eventually, an audit uncovered the absence of a filed notice, but the workers' compensation insurer and Petitioner were able to give effect to the notice, as of the date that it should have been filed, so that Mr. Wagner was not subject to any fines, fees, or penalties. Mr. Smith and other Federal Insurance employees described the office procedures at the time of the Polyviou and Wagner transactions. After completing the applications and notices and collecting the customers' checks, Mr. Smith typically placed the documents and checks in a basket where employees not performing other tasks would process the notices and payments, prepare checks for deposit, prepare money orders, and mail completed packages to the Division of Workers' Compensation. Because the Division of Workers' Compensation required the payment of filing fees by money order, not corporate check, Federal Insurance would not know if the Division of Workers' Compensation had received a package. On August 28, 2000--one week after the Wagner transaction--Evelyn Grenyer visited Mr. Smith at Federal Insurance to purchase renter's insurance. She informed Mr. Smith that all correspondence had to be mailed to a post office box, not her street address. Mr. Smith agreed to do so. Ms. Grenyer paid Federal Insurance a premium of $242.17. Over the next several days, Mr. Smith called Ms. Grenyer with questions about her residence, but he consistently assured her that she had insurance. In May 2001, Ms. Grenyer's home was robbed of property worth $2000. When she called Federal Insurance, she learned that she had not been insured because they had been unable to find her residence. Someone at Federal Insurance explained that they had sent mail to her residence, rather than, as instructed, her post office box, and the mail had been returned. Mr. Smith testified that Federal Insurance submitted the premium of $202.64 to the renter's insurance company. He thought that the difference may have been a charge to inspect the house. When the insurer required additional information, Federal Insurance attempted to contact Ms. Grenyer through her street address, rather than, as instructed, by her post office box. When she did not respond, the insurer canceled coverage, as of October 18, 2000, and refunded $149.53 of the premium to Federal Insurance, by check dated November 14, 2000. Federal Insurance deposited the check to its account. Only after Ms. Grenyer contacted Federal Insurance about the loss did it issue a check, in the same amount and dated May 10, 2001, to Ms. Grenyer. Obviously, no one at Federal Insurance visited the residence or tried calling Ms. Grenyer, whose phone number had not changed for five years and was in the records of Federal Insurance. Ms. Grenyer never recovered any insurance proceeds for the $2000 loss that she suffered. From 1995-1998, Federal Insurance employed Juan C. Montoya as an insurance agent. On January 22, 1998, Federal Insurance designated Mr. Montoya as the primary agent of Federal Insurance. In May 1998, Mr. Montoya's employment with Federal Insurance terminated. Federal Insurance failed to designate a new primary agent until July 9, 2001. For nearly three years, Federal Insurance operated without a designated primary agent. A few months after selling the insurance business, Respondent filed a notice with Petitioner, on September 25, 2002, identifying JEMS Services, 4207 Lake Avenue, West Palm Beach, as his new principal business address. When filing the notice, Respondent knew that he did not intend to transact insurance business at the JEMS Services address. In fact, Respondent used the JEMS Services address without the consent of the insurance agent conducting insurance business at that address. JEMS Services is an insurance agency owned by Janet Travieso-Otero, a friend of Respondent and his wife. Ms. Travieso-Otero never gave Respondent permission to use her address as his principal business address. Respondent has never been employed by JEMS Services, nor has he ever transacted business from this address, which has never been the principal business address of Respondent or any insurance business that he has owned or operated. Respondent accused Ms. Travieso-Otero of lying when she testified that she had never told Respondent that he could use her business as his principal place of business. To the contrary, Respondent is lying, and, even if he were not lying, Respondent intentionally provided Petitioner an incorrect business address. With Mr. Montoya and Ms. Travieso-Otero, Respondent has used friends and business associates, without their knowledge, to satisfy regulatory requirements. At all times during which Mr. Montoya was designated as the primary agent, including while he was employed by Federal Insurance, Respondent was the primary agent because Respondent, not Mr. Montoya, was responsible for the supervision of the insurance agents and their hiring and firing. The common thread in both situations is that Respondent, not someone on his behalf, has intentionally filed false information with Petitioner. Petitioner's expert witness, Wilford Ghioto, testified about Respondent's obligations. Mr. Ghioto, who has considerable relevant experience in the retail property-and- casualty insurance business, described the procedures that his office followed when processing and filing Notices of Election to be Exempt from workers' compensation insurance coverage. In particular, the insurance agent, but not the supervising agent, was responsible to ensure that the completed package was mailed to the proper location, and the supervising agent, if aware of any problems with an insurance agent, opened all of the insurance agent's mail to discover any problems. The supervising agent also ensured that the office routinely ran account receivable reports to find any money due an insured.
Recommendation It is RECOMMENDED that the Department of Financial Services enter a final order dismissing Counts I-IV, finding Respondent guilty of Counts V-VII, imposing an administrative fine of $1250, and suspending Respondent's license for six months. DONE AND ENTERED this 20th day of July, 2004, 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 20th day of July, 2004. COPIES FURNISHED: Gregg S. Marr David J. Busch Division of Legal Services Department of Financial Services 612 Larson Building 200 East Gaines Street Tallahassee, Florida 32399-0333 Orrin R. Beilly Law Office of Orrin R. Beilly Citizens Building, Suite 705 105 South Narcissus Avenue West Palm Beach, Florida 33401 Honorable Tom Gallagher Chief Financial Officer Department of Financial Services The Capital, Plaza Level 11 Tallahassee, Florida 32399-0300 Pete Dunbar, General Counsel Department of Financial Services The Capital, Plaza Level 11 Tallahassee, Florida 32399-0300
The Issue The issue in this proceeding is whether Petitioner, Daniel James Bradley's, application for licensure as a resident life including variable annuity and health insurance agent should be denied for the reasons stated in Respondent, Department of Financial Services', Notice of Denial dated April 26, 2004.
Findings Of Fact Respondent is the state agency responsible for the licensure of insurance agents in the State of Florida pursuant to the authority granted in Chapter 626, Florida Statutes (2004). On January 3, 2004, Mr. Bradley filed an on-line application with the Department seeking licensure as a resident life including variable annuity and health insurance agent. The on-line application form included the following question: Have you ever been convicted, found guilty, or pled guilty or nolo contendere (no contest) to a crime punishable by imprisonment of one (1) year or more under the laws of any municipality, county, state, territory or country, whether or not adjudication was withheld or a judgment of conviction was entered?. Mr. Bradley answered "No," which was a false answer. The Department conducted an internal investigation during the application process, and the criminal history check obtained by the Department revealed that in 1995 Mr. Bradley was charged with two counts of Obtaining Property for Worthless Check(s) (one check in an amount over $150 and one check in an amount less than $150). On May 31, 1995, in State of Florida v. Daniel J. Bradley, Case No. 94-2473F, in the Circuit Court in and for Sarasota County, Florida, Mr. Bradley appeared before Judge Robert B. Bennett and entered a plea of nolo contendere to the charge of Obtaining Property For a Worthless Check (over $150), which is a third degree felony in violation of Subsection 832.05(4)(a), Florida Statutes (1995). Judge Bennett withheld adjudication of guilt and imposed a fine and court cost in the amount of $250 that was paid by Mr. Bradley. Mr. Bradley testified that during the 1995 period, he was in the midst of a domestic dispute that was finalized in a dissolution of marriage, when he wrote two checks to Sears. He explained further that at the time the checks were written, sufficient funds were in the joint checking account at the bank, but his then-estranged wife withdrew all bank funds without his knowledge or consent resulting in the overdrafts. Explaining his "no" response to the criminal history question on his on-line licensure application form, Mr. Bradley asserted a lack of fully understanding the (intended) meaning of the term "punishable by imprisonment of one (1) year or more." Mr. Bradley testified that he "did not know, and had no reason to know, [or be concerned] that the worthless check charge to which he pled nolo contendere was punishable by imprisonment of one year or more," even though he knew the crime was a third- degree felony. Continuing, Mr. Bradley explained in detail his ongoing domestic entanglement then, as well as his financial obligations now. Mr. Bradley explained that he has undertaken the obligation to care for his parent(s) and his need for income to pay for his children's education. In effect, Mr. Bradley offered an "excusable neglect and a lack of knowledge" explanation for the "no" answer on his on-line licensure application form. Mr. Bradley earnestly insisted that it was not his "intent" to mislead, conceal, or lie about the criminal background question. He explained in detail that he "did not understand nor was he advised by his attorney, Susan Maulucci, or the Sarasota County Circuit Court that any offense that he had been accused or pled guilty to was punishable by a term of incarceration of one or more years." In conclusion, Mr. Bradley stated, "[I]f I had previous knowledge of such information I would never have answered incorrectly. If the question had addressed a felony charge punishable by one or more years, I would have certainly answered yes based on the assumption of a felony being the subject of the question not the period of punishment." It appears from his post-hearing submittal that he was under the impression that the term "felony" is missing from the question and that by the omission, he was somehow misled. The blame-shifting inference Mr. Bradley sought is that it was the omission by the Department to include the word "felony" in its application form that misled him. This suggestion is rejected. Mr. Bradley's explanation becomes even more suspect when one considers: his knowledge and experience as a military police officer; at the time he signed the plea document, it was clear that he was facing up to five years in prison for the crime(s) with which he was charged; when arrested on both misdemeanor and felony check charges, he spent the night in jail; and finally, he signed two bonds, one for the misdemeanor charge and a separate bond for the felony charge before he was released from jail. Mr. Bradley was individually and personally responsible for the accuracy of his answer. His misrepresentation of the truth by answering "no," if not intentional, supports the inference of a reckless or careless disregard as to the truth of the matter asserted. At the time he answered "no" on his application form, Mr. Bradley knew, without a doubt, that he had pled "no contest" to a felony worthless check charge in the Sarasota County Circuit Court in Florida. During his court appearance, he was identified and was personally informed by the presiding judge that he faced a felony charge, and he agreed to enter his plea of nolo contendere to that felony charge. On May 31, 1995, in open court, Mr. Bradley signed an "Acknowledgement and Waiver of Rights" form that contained in paragraph 1, the following statement: "I am pleading to the charge of worthless check (2 counts), and I understand the maximum penalty provided by law is five (5) years prison." (Emphasis added.) After the court accepted his plea, sentenced him, and imposed court costs, Mr. Bradley signed the court's acknowledgement reflecting the disposition of the proceeding. Only after completion of the foregone process was Mr. Bradley free to leave the courtroom.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Financial Services enter a final order dismissing the Petition herein filed by Petitioner, without prejudice, for Petitioner to reapply as provided in the Florida Administrative Code Rule 69B-211.042(4). DONE AND ENTERED this 31st day of August, 2004, in Tallahassee, Leon County, Florida. S FRED L. BUCKINE 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 31st day of August, 2004.
The Issue Whether the Petitioner's application for licensure as a resident customer representative insurance agent should be approved.
Findings Of Fact The Petitioner is an applicant seeking to be licensed as a resident customer representative insurance agent. The Respondent is the state agency charged with the responsibility of reviewing and issuing licenses governed by Chapter 626, Florida Statutes. On or about May 29, 2003, the Petitioner filed an internet application that required responses to questions regarding the Petitioner's fitness to be licensed. Among the screening questions listed on the application was the following inquiry: Have you ever been charged, convicted, found guilty, or pled guilty or nolo contendere (no contest) to a crime under the laws of any municipality, county, state, territory or country, whether or not adjudication was withheld or a judgment of conviction was entered? The options to the question noted above required the Petitioner to choose "Y" for affirmative or "N" for a negative response. The Petitioner selected "N." Thus, the Petitioner represented to the Respondent that she had not ever been charged, convicted, found guilty, or pled guilty to a crime. In fact, the Petitioner was charged with a crime and did enter a plea to a crime. On May 25, 1984, the Petitioner filed a Plea Agreement wherein she agreed to plead guilty to the offense of unlawful use of a communication facility. Judge Orrick in the United States District Court, Northern District of California, then accepted the plea and found the Petitioner guilty of a violation of 21 U.S.C. Section 843(b). The Petitioner was placed on probation for a period of three years. With regard to the instant case, the Petitioner admitted she failed to disclose the conviction. The Petitioner maintained her grandchildren distracted her when she was completing the form and checked the wrong response by mistake. The Petitioner did not review the error and advise the Department of the erroneous entry. Additionally, the Petitioner claimed that she did not realize the screening question related to activities in all jurisdictions and thought it meant only criminal conduct in the State of Florida. Again, the Petitioner did not seek any clarification as to the question's meaning prior to submitting an incorrect answer. Moreover, it is determined that the question is unambiguously stated to include jurisdictions beyond the State of Florida. The Petitioner believes that because she was able to successfully achieve citizenship after the criminal incident noted above she should similarly be favorably considered for the instant license. There is no evidence that supports a conclusion that the naturalization and immigration regulations for citizenship comport with the Florida laws regulating the licensure of insurance agents. Moreover, the Petitioner acknowledged that she disclosed the criminal history on her application for citizenship. The omission of pertinent facts regarding her criminal history was therefore not an issue in whether or not she should achieve citizen status.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Financial Services enter a Final Order denying the Petitioner's application for licensure. DONE AND ENTERED this 27th day of April 2004, in Tallahassee, Leon County, Florida. S ___________________________________ J. D. Parrish Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 27th day of April 2004. COPIES FURNISHED: Honorable Tom Gallagher Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Mark Casteel, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Ladasiah Jackson, Esquire Department of Financial Services 612 Larson Building 200 East Gaines Street Tallahassee, Florida 32399-0333 Nora Delgadillo 11432 Southwest 75th Terrace Miami, Florida 33173
The Issue Whether Petitioner was an employee of Respondent's at the time of the alleged unlawful employment practices described in the employment discrimination complaint Petitioner filed with the Florida Commission on Human Relations (FCHR).
Findings Of Fact Based on the evidence adduced at hearing, and the record as a whole, the following findings of fact are made to supplement and clarify the extensive factual stipulations set forth in the parties' Joint Prehearing Stipulation and their October 13, 2008, pleading2: Petitioner is a college graduate with a communications degree. She has held a Florida life, variable annuity, and health insurance agent (2-15) license issued by the Department of Financial Services since March 8, 2005. Respondent's home office is located in Omaha, Nebraska. At all times material to the instant case, Respondent had a divisional office located at 2240 Woolbright Road, Suite 400, Boynton Beach, Florida (Boynton Beach Office) staffed by a general manager (Michael Chojnacki), a district sales manager (Ronald Green), and two secretaries (Victoria Hughes and Carolyn Mickley). Mr. Chojnacki, Mr. Green, Ms. Hughes, and Ms. Mickley were salaried employees of Respondent's paid by check issued by the home office. They enjoyed employee benefits that included vacation time; sick leave; health, vision, and dental coverage; disability and life insurance; and a retirement plan. These benefits were described in an employee handbook that were given to each of Respondent's employees. Mr. Chojnacki was responsible for overseeing the day- to-day operations of the Boynton Beach Office, including insurance application review and processing and agent recruitment. In late March 2005, Petitioner contacted Mr. Chojnacki by telephone to inquire about the possibility of her becoming an insurance agent for Respondent. Thereafter, on April 1, 2005, Petitioner went to the Boynton Beach Office and met with Mr. Chojnacki. Mr. Chojnacki talked to Petitioner about what she needed to do to become an agent for Respondent and how agents were compensated. He explained that Respondent paid its agents on a commission-only basis, based on the amount of business they produced for Respondent. During her April 1, 2005, visit to the Boynton Beach Office, Petitioner executed a Statement of Qualifications-Agent Candidate form (referenced in the parties' Stipulations of Fact 9 and 10) with which Mr. Chojnacki had provided her. The form, which sought "[j]ust basic information" about the candidate, contained the following disclaimer and acknowledgement: This is a statement of qualifications to become contracted as an agent and is not an application of employment. * * * I understand that if contracted as an agent, this document, the agent's contract, the training materials I may receive, and any other manuals and documents, are not contracts of employments. Further, if contracted with the Mutual of Omaha Insurance Company as an independent contractor, I may terminate the agent’s contract with or without cause, at any time, as may Mutual of Omaha Insurance Company. Mr. Chojnacki subsequently e-mailed Petitioner and requested that she complete a career profile test (designed to measure how Petitioner "would do in the insurance and in the sales industry"). Petitioner scored a ten out of 19 on the test, sufficient to keep her candidacy for an agent position alive. Mr. Chojnacki thus sent the Statement of Qualifications-Agent Candidate form Petitioner had executed on April 1, 2005, to the home office for processing. A background check on Petitioner was then done. The background check revealed nothing in Petitioner's past that would disqualify her from becoming an agent for Respondent. After learning that the home office had cleared her, Mr. Chojnacki gave to Petitioner for her to study various booklets Respondent had developed for its agents to educate them about its product offerings. At the beginning of each booklet was the following statement: As an independent contractor, the ultimate decision regarding your participation in these programs is yours and yours alone. Neither Mutual of Omaha nor its representatives can dictate the time or place and manner by which you sell its products and acquire the knowledge and skills necessary to effectively sell its products. Therefore, the Career Development Program is voluntary. However, due to the complexity and sophistication of the companies' products, you must be able to demonstrate a mastery of the material contained in this program to be able to offer these products to prospective clients. This program has been developed to offer a structured methodology which has proven to be a highly effective way to master the knowledge and skills to sell our products. In addition, it is our judgment that this method provides an efficient approach to achieve the required mastery and, therefore, we recommend it. Discussion and follow-up from your manager does not change the voluntary nature of your participation, but only serves to assist you in mastering the material and enables the companies to fulfill [their] public obligation to ensure that all representatives are fully trained and knowledgeable. Each booklet Mr. Chojnacki provided to Petitioner had a unique identifying serial number and included a corresponding tear-out test answer sheet with the same unique identifying serial number to be used to answer questions concerning material covered in the booklet. After reading the booklets and answering the questions posed therein, Petitioner furnished Mr. Chojnacki with her completed test answer sheets (which she had torn from the booklets). Mr. Chojnacki then faxed these answer sheets to the home office to be graded. He subsequently received an e-mail from the home office advising him that Petitioner had received passing grades on all of the tests. After receiving this e-mail, Mr. Chojnacki met with Petitioner "to get her ready" to become an agent. During the meeting, he again discussed with Petitioner Respondent's commission-only, production-based compensation program for agents, including the opportunities available to agents to receive bonuses in addition to their base commissions. He further informed her that, as an agent, she would be an independent contractor who "gets paid off a 1099." On April 11, 2005, Petitioner received a copy of Respondent's Agency Sales Compliance Manual (Manual), which gave an overview of the legal requirements applicable to the activities of agents in the sale of Respondent's products. On page 9 of the Manual was the following discussion regarding "Continuing Education": Mutual of Omaha encourages the professional development of producers through training and participation in industry organizations that promote ethical sales practices, as well as through the continuing education required to maintain a license. It is the policy of Mutual of Omaha to provide producers with insurance-related training, including training that qualifies for continuing education. Mutual of Omaha provides continuing education courses and makes continuing education courses available through a variety of methods. These methods include self-study courses through vendors, industry designation courses such as CLU, CFP, ChFC, LUTC and specialized training provided by Mutual of Omaha. As an independent contractor, it is your responsibility to ensure that continuing education requirements are satisfied, whether through training provided by Mutual of Omaha or independently taken training. If a license lapses or is cancelled, commission payments may be stopped until such time as the license is reinstated or a new license is obtained. Questions regarding continuing education should be directed to your Manager or the Home Office at (402)351-4949. Page 27 of the Manual contained the following advisement: In order to help ensure ethical market conduct practices, integrity and fair competition on the part of its producers, producers are prohibited from engaging in solicitation, marketing and sales practices that are illegal, unethical or contrary to the requirements established by Mutual of Omaha Insurance Company and its affiliates. At no time did Mr. Chojnacki give Petitioner a copy of Respondent's employee handbook. On April 11, 2005, Petitioner signed a W-9 (Request for Taxpayer Identification Number and Certification) form, an Internal Revenue Service (IRS) tax form that Respondent's agents are routinely given to sign. Petitioner also executed on that date Respondent's Errors and Omissions Agent Insurance Program form (referenced in the parties' Stipulations of Fact 15 and 16). The following statement appeared immediately above the signature line on the form: All agents are reminded that they are independent contractors under contract with the Company. As such, they are personally responsible for any claims, demands or lawsuits made by third parties arising from allegations of breach of contract, negligence or other wrongdoing on the part of the agent. The undersigned affirms that the foregoing is true, correct, and complete, and has read the "Enrollment Form Instructions" and understands same. On April 12, 2005, Petitioner was formally appointed as an agent for Respondent and United World Life Insurance Company, an affiliate of Respondent's. Petitioner and Mr. Chojnacki (on behalf of Respondent) signed an Agent's Contract (referred to in the parties' Stipulations of Fact 11 through 13 and 27 as the "Agent Agreement"), which had an effective date of April 27, 2005. Ms. Mickley then submitted the contract to the home office for signature. This was the only Agent's Contract that Petitioner signed. At no time did she sign another contract. Section B. of the Agent's Contract was entitled, "General Provisions," and provided, in pertinent part, as follows: Appointment. The Company [Respondent] appoints the Agent [Petitioner] to personally solicit and procure applications for Products and provide such service as may be required. This appointment is not exclusive. * * * 5. License. The Agent is responsible for securing and keeping in effect any licenses and appointments required to represent the Company. The Agent agrees not to solicit for Products unless the proper license has been obtained. * * * Section C. of the Agent's Contract described the "Agent's [d]uties" as follows: The Agent shall, in accordance with applicable Company rules: Procure Applications. Solicit and procure applications for Products. Submit Applications. Immediately submit to the Company applications procured. Collect Moneys. Collect all Moneys as trust funds and immediately turn them over to the Company without deduction. All Moneys are the property of the Company. Service Clients. Render all service incidental to the development and conservation of the Company's business which may be deemed necessary by the Company. Obtain Bond and Insurance. If requested by the Company, obtain and maintain in force: a bond covering fidelity losses; and errors and omissions insurance. The amount and nature of both must be satisfactory to the Company. Protect Proprietary Materials. Agent shall: Use Proprietary Material for authorized business purposes only. Agent is only authorized to obtain and use Proprietary Material which is necessary to perform [his or her] duties; Hold in the strictest confidence all Proprietary Material received and shall not disclose any Proprietary Material to any third party or parties without the prior written consent of the Company; Use appropriate safeguards commonly available, such as anti-virus, firewalls and encryption, to prevent use or disclosure of Proprietary Material. This shall include compliance with all existing and enacted laws and regulations; Report any incidents involving Proprietary Material to Mutual of Omaha's Field Assistance Center within 24 hours of discovery. All details of the incident should be provided so that Company can assess the scope and impact and take additional action as necessary to safeguard the information. Return any Proprietary Material received from the Company to the Company immediately upon termination of this Contract. Adequately brief [his or her] staff, if any, on the conditions documented in this Section. Follow Company Practices. Adhere to and comply with all Company practices and procedures. Act Ethically. At all times act in an ethical, competent and professional manner, including without limitation, with respect to any compensation disclosure obligations it may have governing its relationships with Clients. Comply with Laws. Comply with applicable laws and regulations. "Office [p]rivileges" were addressed in Section E. of the Agent's Contract, which provided as follows: The Company may provide for the Agent's use office facilities, supplies, clerical support and other property or services. The Company may withdraw or charge for these privileges at any time. In Section F. of the "Agent's Contract" was the following discussion regarding "[c]compensation": Attachments. The compensation of the Agent for all acts performed hereunder or otherwise during the term of this Contract, and for expenses incurred or property acquired, is specified in the Attachments. No compensation shall be payable until the Project on which compensation is claimed is actually issued. Compensation Continuance. The Company is obligated to pay compensation due under this Contract only while: this Contract is in effect; and the Agent is performing the duties specified in the Section entitled AGENT'S DUTIES; provided, however, compensation indicated as "vested" or "deferred" in the Attachments shall not be withheld pursuant to this provision. Agent's Account. Compensation payable under this Contract shall be subject to an offset for any indebtedness of the Agent to the Company and shall not be due until such indebtedness is satisfied. Such indebtedness shall include, but not be limited to: Chargeback of any compensation paid or credited to the Agent under this or any other contract, if the Moneys on which such compensation was based are not collected or are refunded by the Company; Any amount paid by the Company which, in the Company's determination, resulted from any fraud, misrepresentation or other improper conduct on the part of the Agent; Any expenses incurred by the Company on behalf of the Agent; Any advances made by the Company to the Agent; and Any other amounts which the Agent owes the Company. The Agent, shall upon request by the Company, immediately repay in full any indebtedness. Any amount remaining unpaid shall be subject to collection by such legal means as are available to the Company. The Company shall have the right to withhold payment of any credit balance in the Agent's account for not more than 13 months after termination of this Contract to assure that funds are available to reimburse the Company for any indebtedness. Thereafter, any net credit balance shall become due and payable. "Termination" was discussed in Section H. of the Agent's Contract, which provided as follows: With Notice. The Company or the Agent shall have the right at any time to terminate this Contract, with or without cause, by written notice to the other party. Without Notice. This Contract shall be automatically terminated should the Agent fail to submit an application for a Product for a period of 180 days. Procedural Guidelines. The Company may from time to time adopt procedural guidelines applicable to agent contract terminations. Adoption of these guidelines and any failure to observe them shall neither grant any rights to the Agent, nor impose any duties upon the Company and shall not be deemed to limit the Company's rights as set forth in this Contract. Return of Material. Upon termination of this Contract, the Agent shall immediately return to the Company all: Proprietary Material, material identifying the Agent as a representative of the Company, and property owned by the Company. Forfeiture. If the Agent is notified in writing that the Agent has: Committed a fraudulent or illegal act in conjunction with any transaction under this Contract; or violated any provisions of the Section entitled LIMITATIONS or UNACCEPTABLE PRACTICES; then the Company shall not be obligated to pay any compensation otherwise payable while this Contract is effect, or after its termination. Section I. of the Agent's Contract contained "[m]iscellaneous" items, including the following: * * * 4. Determination of Issuance and Product Type. The determination to issue a Product and the type of Product to be issued shall be at the Company's sole discretion. * * * Award, Recognition and Incentive Programs. If eligible, the Agent may participate in award, recognition and incentive programs of the Company. The Agent agrees to abide by the rules of each program. The Company reserves the right to change, limit or cancel any program, rule or award at any time. In such event, the Agent may not be able to obtain certain awards. Beneficiary Designation. The Agent designates as beneficiary for payment of any benefits becoming due after the Agent's death the beneficiary specified on the signature page of this Contract or such other party or parties as the Agent may designate by written notice delivered to and acknowledged by the Company. Independent Contractor. The Agent is an independent contractor and not an employee. None of the terms of this Contract shall be construed as creating an employer-employee relationship and the Agent shall be free to exercise the Agent's own judgment as to the persons from whom the Agent will solicit and the time, place and manner and amount of such solicitation. "[T]he beneficiary specified on the signature page of [Petitioner's Agent] Contract" was her mother. Petitioner's Agent's Contract included an Interim Sales and Marketing Amendment, also effective April 27, 2005, signed by Petitioner and Mr. Chojnacki, which, on its first page, provided as follows: The Company and Agent agree to place Agent in an "Interim Sales and Marketing" status. The terms and conditions are as follows: PURPOSE The Company and Agent agree to the terms and conditions of this Amendment in order that both the Company and Agent may determine whether to continue their association under the terms of the Contract. EFFECTIVE DATE This Amendment shall become effective on the date the Contract becomes effective. TERMINATION This Amendment shall remain in effect a minimum of seven days. Thereafter, this Amendment shall automatically terminate upon: Cancellation of the Contract; Notice given from the Company to Agent; or, The acceptance of the Career Financing Plan Amendment (211) or (235). TERM If this Amendment has not been terminated in accordance with Section III of this Amendment within 90 days after the effective date of the Contract, the Contract, and all other Amendments, shall automatically terminate. MISCELLANEOUS While this Amendment is in effect, Agent is not eligible for any other compensation, except as specifically set forth in the Schedules which are a part of the Contract. The Agent's Contract and Interim Sales and Marketing Amendment that Petitioner executed are standard instruments used by Respondent in contracting with its agents. During the time that the Interim Sales and Marketing Amendment is in effect, an agent engages in "real job sampling" by observing a mentor make sales, and he or she may also make sales of his or her own. Petitioner was mentored initially (for the first seven to ten days) by Mr. Green and thereafter by Mr. Chojnacki. The Interim Sales and Marketing Amendment remained in effect until June 10, 2005, when Petitioner and Respondent executed a Career Financing Plan Amendment (as part of Petitioner's Agent's Contract). The Career Financing Plan is a three-year program devised by Respondent to help its new agents "build their business[es]." It provides for bonus payments "on top of the base commission that an agent gets," if monthly production requirements are met. An agent not wanting "to be tied to any of [these] production requirements" can decline to participate in the program. Other attachments, in addition to the Career Financing Plan Amendment, that were made a part of Petitioner's Agent's Contract, included an Agent Prospecting Amendment, a New Agent Computer Equipment Allowance Schedule, an Agent Production Bonus Schedule, and a 2005+ Deferred Compensation Schedule. The Agent Prospecting Amendment was signed by Petitioner and Mr. Chojnacki and had an effective date of June 10, 2005. It read, in pertinent part, as follows: SOURCES OF CREDIT In order to provide the Agent with prospect information, the Agent and Company agree that credits to acquire prospecting related materials and services may be accumulated in an Agent Prospecting Account. The Company may discontinue or modify the sources and amounts of credit provided by the Company upon notice to the Agent. Credits may be used only for prospecting activities authorized by the Company. Any credits which remain unused at the time the Contract or this Amendment are cancelled shall be forfeited by the Agent. NON-REFUNDABLE PARTICIPATION FEE The Agent authorizes the Company to deduct a non-refundable Participation Fee directly from compensation due the Agent in an amount and frequency as set forth in the Agent Prospecting Schedule. Company may deduct the Participation Fee up to 30 days following written notice by Agent to the Company to terminate this Agreement. The New Agent Computer Equipment Allowance Schedule provided for the receipt of, for a maximum of 12 months, "a [monthly] credit [of either $75 or $100] to help the Agent defray computer equipment and other start-up expenses incurred based on the Agent's performance." Under the schedule, if minimum monthly production requirements were not met, no credits would be received. The "purpose" of the Production Bonus was "to reward Agents based on their Manufactured Product production." The Agent Production Bonus Schedule set forth the applicable Production Bonus Rates for different levels of production over a threshold amount. The 2005+ Deferred Compensation Schedule implemented Respondent's Deferred Compensation program, pursuant to which Respondent made "contributions . . . dependent on the production that an agent ha[d] during a given calendar year." On October 19, 2005, Petitioner signed a Coventry Medicare Part D Plan Addendum form (referenced in the parties' Stipulation of Fact 31) and faxed the form to Respondent's "Sales Support" for processing. Among the form's provisions was the following: Independent Contractor. Nothing in this Addendum will be construed to create a relationship of employer-employee between Producer [Petitioner] and Coventry or Distributor [Respondent]. Producer will be free to, and is required to, exercise his/her independent judgment in performance of this Addendum and with respect to which Medicare Part D plans Producer will offer to Medicare Part D enrollees and potential enrollees based upon Producer's judgment as to the needs of such enrollee or potential enrollee. The termination of Petitioner's Agent's Contract (referenced in the parties' Stipulation of Fact 40) was accomplished by Petitioner's submitting the following letter, dated February 10, 2006, to Mr. Chojnacki: It is with deep regret that I resign as of February 10, 2006. I have to move on with my career. I want to sincerely thank you for all your help. Mr. Chojnacki responded by sending Petitioner the following letter, also dated February 10, 2006: This is to acknowledge receipt of your letter terminating your Mutual of Omaha Insurance Company Agent's Contract effective February 10, 2006. Your authorizations to represent Mutual of Omaha Insurance Company and its affiliated companies have also been cancelled effective February 10, 2006. The balances of your agent's statement may be affected by additional entries necessary to finalize pending business. You will continue to receive statements on a regular basis as in the past. As soon as the balances have stabilized, any net credit balance will be released in accordance with the provisions of Paragraph F3(c) of your contract. If your agent's statements presently reflect a debit balance or if a debit balance arises in the future, you are required to repay this amount immediately. Failure on your part to repay any debt balance will result in further action to collect debit balance. All client and prospect information, materials and supplies are the property of Mutual of Omaha Insurance Company. You are required by Paragraph H4 of your contract to return such material immediately. At no time during the period that her Agent's Contract was in effect (April 27, 2005, through February 10, 2006, hereinafter referred to as the "Contract Period") did Petitioner receive a salary or any of the employee benefits enjoyed by Mr. Chojnacki, Mr. Green, Ms. Hughes, and Ms. Mickley. Although she had Respondent-issued life and disability insurance policies, these policies were not given to her as an employee benefit. She had to pay for this coverage. On her application for the disability insurance policy she obtained from Respondent, in response to the question, "Are you Self-Employed, a Sole Proprietor, or a partner in a Partnership," she answered "yes." The only compensation Petitioner received from Respondent was in the form of commissions and other payments (including computer allowances) based solely on her production. The compensation checks she received from Respondent were prepared and signed at the Boynton Beach Office, not at Respondent's home office (where employee checks are cut). The amounts of these checks reflected deductions that were made by Respondent for items that Respondent had provided Petitioner or had paid for on her behalf, including postage, agent licenses, voicemail, errors and omissions insurance coverage, folders, business cards, and certain leads. The leads she paid for cost anywhere from ten to 25 dollars a lead. Petitioner did not have to pay for everything that she received from Respondent. Although it had a right to do so under Section E. of her Agent's Contract, Respondent did not charge Petitioner for the use of cubicle space and equipment at the Boynton Beach Office, nor for the company brochures and letterheads that were available to agents at the office. The 2005 and 2006 federal tax returns that Petitioner filed with the IRS were prepared by a Certified Public Accountant. For the 2005 tax year, on her IRS Form 1040, Petitioner reported $0 for "[w]ages, salaries, and tips" (line 7), and $7,220 in "[b]usiness income" (line 12), and she deducted from her "total income" $510 for "[o]ne-half of self- employment tax" (line 27) and $1,243 for "[s]elf-employed health insurance" (line 29). She included a Schedule C (Profit and Loss From Business-Sole Proprietorship) and a Schedule SE (Self- Employment Tax) with her IRS Form 1040. On her Schedule C, Petitioner identified her "[p]rincipal business or profession" as "[i]nsurance [a]gencies & [b]rokerages"; represented that her business address was the same as her home address (which was on her IRS Form 1040); and reported that her "[g]ross income" was $18,758 (line 7), and that she had "[c]ar and truck expenses" of $6,305 (line 9), an "[o]ffice expense" of $1,488 (line 18), and "[o]ther expenses" of $3,745 (line 27), for a total of $11,538 in business expenses (line 28). The "[o]ther expenses" she reported (on line 27) were broken down as follows: "Business Telephone"- $3,549; and license fees and dues- $196. The IRS Form 1099 that Petitioner received from Respondent for the 2005 tax year reflected that she had received $18,757.99 in "nonemployee compensation" (which matches the "rounded up" amount of "[g]ross income" Petitioner reported on the Schedule C she filed for that tax year). For the 2006 tax year, on her IRS Form 1040, Petitioner reported $0 for "[w]ages, salaries, and tips" (line 7), and "1099 MISC OTHER INCOME" of $1,615. No entry was made for "[b]usiness income" (line 12). Petitioner deducted $114 from her "total income" for "[o]ne-half of self-employment tax" (line 27). She included a Schedule SE with her IRS Form 1040. The IRS Form 1099 that Petitioner received from Respondent for the 2006 tax year reflected that she had received $1,615.43 in "nonemployee compensation" (which matches the "rounded down" amount of "1099 MISC OTHER INCOME" Petitioner reported on the IRS Form 1040 she filed for that tax year). During the Contract Period, Petitioner was not required to work out of the Boynton Beach Office or to adhere to any Respondent-imposed work schedule. Training sessions were held by Mr. Chojnacki (usually on Mondays) at the office, but attendance at these meetings was not mandatory. Agents had to be present at the office to enjoy what was referred to as "floor time," where the agent would receive incoming telephone phone calls made to the office from prospects, without having to pay for these leads. "Floor time" was a privilege that agents could turn down. Petitioner averaged approximately two to three days of "floor time" a month. As an essential part of the work she performed for Respondent, Petitioner made sales calls to prospects in the field. At Petitioner's request, Mr. Chojnacki accompanied her on approximately four sales calls during the beginning of the Contract Period. After a while, Petitioner "start[ed] going on sales calls by herself." During the Contract Period, she went on more than 40 or 50 such solo sales calls. At no time was Petitioner required to go on sales calls with Mr. Chojnacki or any other company representative, nor did she need the approval of any company representative before she could make a sales call. There were occasions, when Petitioner was out on a sales call alone, that she telephoned Mr. Chojnacki to ask him a question about a technical matter or to express her excitement about having made a sale. Petitioner, however, was never told she had to maintain telephonic contact with Mr. Chojnacki or any other company representative while on sales calls. Petitioner and the other agents were allowed to advertise Respondent's products, but any advertisement they used had to be approved by the company. Respondent had "pre-approved advertising material that[] [was] on [its] company [intranet] website." Petitioner did not have an exclusive arrangement with Respondent that prevented her from representing other insurers during the Contract Period. She was not, what is referred to in the insurance business as, a "captive agent." While associated with Respondent, Petitioner was also appointed to act as an agent on behalf of John Alden Life Insurance Company, Humana Health Insurance Company, and Humana Medical Plan, Inc. (companies that were separate and distinct from Respondent).
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the FCHR issue a final order dismissing Petitioner's Complaint because she was not an employee of Respondent's at the time of the alleged unlawful employment practices described in the Complaint. DONE AND ENTERED this 29th day of December, 2008, in Tallahassee, Leon County, Florida. S STUART M. LERNER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 29th day of December, 2008.
Findings Of Fact Respondent is a resident of the State of Illinois and is employed by Mutual Benefit Life Insurance Company as an associate, selling life and health insurance. He has been licensed by the State of Illinois as an insurance agent for 22 years and has engaged in the insurance business for that length of time. On or about February 26, 1988, the Florida Department of Insurance advised Respondent, by letter, that his application for taking the exam was denied for the following reasons: On or about January 11, 1982 you pleaded guilty to the offense of Forgery, a felony involving moral turpitude as contained in Count II of a Bill of Indictment for Case Number 81CF299. You failed to divulge the fact on your application for qualification as a nonresident agent that on or about April 28, 1982, your licensing authority in the State of Illinois was revoked; and that on or about December 14, 1982, the Director of Insurance's Order of April 28, 1982 revoking your licensing authority was rescinded and you were required to pay a civil penalty of One Thousand dollars ($1,000.00). The Department cited Section 626.785(1); 626.611(1), (2), (7) and (14); and Section 626.621(8), Florida Statutes, as authority for its action. In the latter part of 1977, Respondent sold to Dr. Hanshaw, of Quincy, Illinois, a $100,000.00 life insurance policy on each of Dr. Hanshaw's two children. The cash value of Dr. Hanshaw's existing life insurance was used to pay for the premiums on the children's policies. In 1979, the children's policies had lapsed due to Respondent's inability to get Dr. Hanshaw, owner of the policies, to execute a form reinstating the policies. Finally, after repeated attempts to obtain Dr. Hanshaw's signature on the reinstatement forms, and after a telephone conversation with Dr. Hanshaw, Respondent caused a person in Respondent's office to sign Dr. Hanshaw's name to the reinstatement forms in order to reinstate the insurance. Respondent then transmitted the forms to the home office and the policies were reinstated. Respondent's total compensation for the reinstatement was $30.68. Respondent felt he had the permission of Dr. Hanshaw to sign Dr. Hanshaw's signature to the forms. Approximately one year later, Dr. Hanshaw decided to surrender the policy on his life, and found the surrender value to be approximately $2,700.00 less than he felt it should be. The difference was due to the year's worth of premiums on the children's policies which had been deducted from the cash surrender value of Dr. Hanshaw's policy after the children's policies had been reinstated. Dr. Hanshaw promptly inquired of Respondent about the cash surrender value. At that time Respondent advised Dr. Hanshaw of the above reason for the lesser amount of the cash value. Respondent also reminded Dr. Hanshaw that he had caused Dr. Hanshaw's signature to be signed by a third party in order to prevent the children's policies from lapsing the previous year pursuant to Dr. Hanshaw's instructions. Dr. Hanshaw denied he had so instructed Respondent to reinstate the policies. Respondent then offered and Dr. Hanshaw accepted, a personal check from Respondent for the amount of the cash value loss allegedly experienced by Dr. Hanshaw. Some time thereafter, Dr. Hanshaw filed a Complaint with the Adams County Illinois State Attorney and on October 27, 1981, a Bill of Indictment was filed against Respondent. After plea negotiations, Respondent pleaded guilty to Count II of the Indictment (Forgery) and on March 22, 1982, the Court accepted Respondent's plea, dismissed all other Counts in the indictment, sentenced Respondent to two years probation and imposed a fine of $2,500.00, plus court costs. Part of the plea negotiation included the State Attorney's help in obtaining favorable treatment in any licensing procedure. On March 4, 1984, Respondent's Probation was successfully discharged. As a result of the aforesaid plea of guilty to forgery, a felony in the State of Illinois, the Illinois Department of Insurance issued an Order revoking Respondent's insurance license. However, the Order of Revocation did not take effect since Respondent timely sought a hearing on the allegations of the Order of Revocation. As a result of the hearing, Respondent's insurance license was not revoked. Instead, Respondent paid a civil penalty of $1,000.00, plus court reporter costs. Respondent testified that he was not aware of the consequences of his plea of guilty on other insurance licenses he might wish to obtain once he had discharged his debt to society. He has since discovered these effects, but after presentation of the above facts has been able to obtain other insurance licenses in other states. On or about September 24, 1987, Respondent filed an Application For Qualification as a Nonresident Life and Health Agent with the Department of Insurance. In that application, Respondent answered "No" to question 9 which asked if his license had ever been declined, suspended, placed on probation or administratively fined. However, on question 12, Respondent clearly states that he had been charged with and convicted of a felony, the location of that offense, that there was one charge of forgery, a $2,500.00 fine, two years probation, and that his Illinois license had been stayed. The negative response in question 9 forms the basis of Petitioner's reason for denial stated in paragraph 2(b) above. Respondent did not mislead, misrepresent or misstate anything to the Department of Insurance with his negative response to Question 9 of the Application. Respondent's license had clearly never been declined, suspended, placed on probation or revoked since the Illinois Order of Revocation never took effect. Nor did he mislead misrepresent or misstate anything to the Department with his negative response in reference to an administrative fine. He felt the fine he actually paid was not what question 9 was asking since he had paid a civil and not an administrative fine. He also thought that the license action was part and parcel of the criminal action. Nowhere in the application is "administrative fine" defined. Reasonable people can differ on the meaning of "administrative fine" especially where one state uses the term civil fine. These facts bear out the vagueness of the term's meaning. Before a person can misstate a fact there must be some agreement or mutual understanding as to what the fact is being stated for. There was clearly no such understanding in this case. The answer does not even come close to fraud since no intent to defraud the Department was demonstrated by the evidence. Additionally, his response to Question 12, together with the information he supplied along with the Application, was sufficient notice to the Department of the facts surrounding his Illinois license. The information supplied in Question 12 renders the response in Question 9 as immaterial. Therefore, the reasons given by the Department in Paragraph 2(b) above cannot stand as a basis for denying Respondent's licensure application. The reason given by the Department in paragraph 2(a) above involves the Respondent's forgery conviction. The forgery conviction does include an allegation of an intent to defraud. However, the facts of this case fails to demonstrate that moral turpitude was involved. This is especially true since this was a plea bargained case and the technical aspects of a crime do not bear the importance those aspects would if a trial had taken place or if Respondent had known the full effect such a plea would have on future licenses. Moreover, Respondent has rehabilitated himself. The Order rescinding the revocation of Respondent's license in Illinois specifically incorporates the Conclusion of Law made by the Hearing Officer, to-wit: "4. That, although convicted of the felony of forgery, the Licensee has demonstrated that he is sufficiently rehabilitated to warrant the public trust as required by Section 502(h) of the Illinois Insurance Code." Further, the testimony of Angelo P. Schiralli at the hearing attests to the honesty and trustworthiness of Respondent. Respondent is a person of honesty and trustworthiness and has had no problems with the law since 1979.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That Respondent's application be accepted and he be permitted to take the Life and Health Agent's exam. DONE and ENTERED this 18th day of November, 198, in Tallahassee, Florida. DIANE CLEAVINGER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 18th day of November, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-1625 The facts contained in paragraphs 1, 3, 4 and 10 of Petitioner's proposed findings of fact are subordinate. The facts contained in paragraphs 2, 5, 6, 7, 8 and 11 of Petitioner's proposed findings of fact are adopted in substance, in so far as material. The facts contained in paragraph 9 of Petitioner's proposed findings of fact are irrelevant. The facts contained in the first two paragraphs of Petitioner's proposed findings of fact numbered 12 are adopted. The first sentence of the third paragraph is adopted. The last sentence of the third paragraph was not shown by the evidence. The fourth paragraph is adopted as to the first sentence. The remainder of the fourth paragraph is rejected. The first sentence of the fifth paragraph is subordinate. The remainder of the fifth paragraph is rejected. The first sentence of paragraph 13 of Petitioner's proposed findings of fact is subordinate. Remainder of the paragraph is rejected. The facts contained in paragraphs 1, 2, 3, 4, 5, 6, 7, 8, 9, 11, 12, 13, 14 and 15 of Respondent's proposed findings of fact are adopted in substance, in so far as material. The facts contained in paragraph 10 of Respondent's proposed findings of fact are subordinate. COPIES FURNISHED: Robert C. Byerts, Esquire Department of Insurance Agency Regulation Section 413-B Larson Building Tallahassee, Florida 32399-0300 Donald H. Reed, Jr., Esquire First American Bank Building 2250 Glades Road Boca Raton, Florida 33431 Honorable William Gunter State Treasurer and Insurance Commissioner Department of Insurance and Treasurer The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Don Dowdell, Esquire General Counsel Department of Insurance and Treasurer The Capitol, Plaza Level Tallahassee, Florida 32399-0300 =================================================================
