The Issue Whether the Respondent's licenses as an insurance agent should be disciplined for violations alleged in an Administrative Complaint of February 12, 1993?
Findings Of Fact At all times relevant to this proceeding, the Respondent, Samuel Bannister Love, was licensed in the State of Florida by the Department of Insurance and Treasurer (hereinafter referred to as the "Department"), as a life and health insurance agent and as a general lines insurance agent. On April 7, 1993, Florida Life Insurance Agency, Inc. (hereinafter referred to as "Florida Life"), was organized as a corporation in the State of Florida. From the time of Florida Life's formation until at least 1992, Mr. Love was an officer and director of Florida Life. Mr. Love was also an authorized signatory on the premium bank account of Florida Life. On August 15, 1994, Florida Life entered into an agency agreement (hereinafter referred to as the "Agency Agreement"), with Service Insurance Company (hereinafter referred to as "Service Insurance"). Pursuant to the Agency Agreement, Florida Life agreed to act as agent for Service Insurance and to receive and accept proposals for insurance on behalf of Service Insurance. For acting as agent, Florida Life was to receive a commission. Among other things, the Agent Agreement provided: TRUST AGREEMENT The Agent has full power and authority to collect, receive and receipt for premiums on insurance tendered by the Agent [Florida Life] to and accepted by the Company [Service Insurance]. All moneys paid by the policyholders to the Agent, or to anyone representing him shall be held by and chargeable to the Agent as a fiduciary trust for and on behalf of the Company, and shall be paid over to the Company as herein provided. Accounts of money due the Company on the business placed by Agent with the Company shall be rendered by the Company monthly; the balance therein shown to be due to the Company shall be paid not later than 45 days after the end of the month for which the account is rendered. Accounts of money due the Agent on the business shall be payable monthly and shall be paid by the Company not later than 45 days after the end of the month in which the amount became due. Mr. Love signed the Agency Agreement as an officer of Florida Life. Mr. Love registered with the Department as agent for Service Insurance for the period April 1, 1987 to December 30, 1988. Mr. Love was the only officer or director of Florida Life to register with the Department as agent for Service Insurance. In December, 1988, due to failure of Florida Life to remit premiums due to Service Life pursuant to the Agency Agreement, even after demand therefore, Service Life terminated the Agency Agreement. The total amount of premiums owed by Florida Life to Service Life after termination of the Agency Agreement was $84,088.15. Service Life and Florida Life eventually agreed that Service Life would be paid $47,000.00 as a settlement of Service Life's claims against Florida Life for unpaid premiums due under the Agency Agreement. Florida Life subsequently paid $22,000.00 of the $47,000.00 settlement to Service Life and a promissory note (hereinafter referred to as the "Note") for the $25,000.00 balance was entered into by Florida Life. Mr. Love did not personally sign the Note. In July, 1991, the Department entered an Administrative Complaint against Mr. Love as a result of the dispute between Service Life and Florida Life. This dispute was resolved by a Settlement Stipulation for Consent Order entered into by the Department and Mr. Love on January 14, 1991 (hereinafter referred to as the "Settlement"). Pursuant to the Settlement, Mr. Love was to pay an administrative fine and he was placed on probation subject to the following condition: That as a condition of probation Respondent shall use good faith and best efforts to facilitate payment by Florida Life Insurance Agency, Inc., to the Service Insurance Co. of Bradenton, Florida the sum of $25,000.00 together with interest at the rate of 9 percent per annum in accordance with the terms of the promissory note by Florida Life Insurance Agency, Inc., in favor of Service Insurance Company dated November 20, 1991 (copy attached). A copy of the Note was attached to the Settlement. The Settlement Agreement further provided: Violation of the conditions of probation as set forth in this Settlement Stipulation for Consent Order, or failure to pay on the debt owed to Service Insurance Company pursuant to the terms of the previously mentioned promissory note, shall result in immediate agency action seeking revocation of Respondent's licenses, which may result in revocation or other censure commensurate with the violation. . . . Pursuant to the conditions of Mr. Love's probation, he specifically agreed in paragraph (e) of the Settlement that his licenses with the Department could be revoked if he failed to adhere to the condition of paragraph (d) (to use his best efforts to see that Florida Life paid the Note) of the Settlement or if he failed to pay the debt owed to Service Insurance. Paragraph (e) of the Settlement and the Consent Order provided, however, the following: Notwithstanding anything to the contrary contained herein, the Respondent reserves and does not waive the right to assert all of his defenses to the violations alleged in the Administrative Complaint filed herein. The Settlement also provided: 7. By execution of this Settlement Stipulation for Consent Order and by the entry of the subsequent Consent Order in this case, the Department and the Respondent intend to and do resolve all issues which pertain to this matter in Case No. 91-L- 324JB, excpt as otherwise stated herein. Pursuant to the Settlement, a Consent Order was entered by the Department on February 6, 1991. The Consent Order specifically states that the Settlement "is hereby approved and fully incorporated herein by reference." In paragraphs (d) and (e) of the Consent Order the conditions of Mr. Love's probation set out in findings of fact 13, 14 and 16 are specifically included. The Note provided that the principal of the Note was to be paid on November 11, 1992. Florida Life failed to make this agreed payment. Demand for payment on the Note was made to Mr. Love. Mr. Love has not made any payment on the Note. As of the date of the final hearing, the premiums due to Service Insurance as represented in the Note have not been paid by Florida Life, Mr. Love or any other person. Florida Life has ceased operating and apparently does not have funds to pay the Note. In this proceeding, the Department has entered an Administrative Complaint containing two counts. Count I alleges several violations of Chapter 626, Florida Statutes, based essentially on the events which led up to the Settlement. Count II alleges that Mr. Love has violated the terms of the Settlement and Consent Order. Pursuant to the Settlement, as quoted in finding of fact 17, the Department and Mr. Love expressly agreed that the Settlement was intended to resolve all issues related to this matter. Based upon the language of the Settlement quoted in findings of fact 14 and 16, however, it appears that the parties may have intended that the Department would be required to prove the underlying facts of this matter in order to take further action against Mr. Love. The Department apparently agrees with the later interpretation in light of the fact that the Department, through Count I of the instant Administrative Complaint, has alleged that Mr. Love has committed the violations which the parties had attempted to resolve by the Settlement and the Consent Order. No objection to Count I has been raised by Mr. Love. Therefore, Count I will be considered and the Settlement and Consent Order will be interpreted to require proof of the violations alleged in Count I in order to discipline Mr. Love's licenses. Based upon the foregoing findings of fact, the Department has proved that Florida Life failed to keep premiums of Service Insurance in a separate account, and that Florida Life failed to pay Service Insurance those premiums. The Department also proved that Mr. Love, who registered on behalf of Florida Life with the Department as agent for Service Insurance, failed to keep premiums of Service Insurance in a separate account and failed to pay Service Insurance those premiums. Based upon the foregoing findings of fact, the Department has also proved that Florida Life demonstrated a lack of fitness or trustworthiness to engage in the business of insurance. The evidence failed to prove that Florida Life's actions were fraudulent or were the result of dishonest practices. The evidence proved that Florida Life misappropriated, converted or withheld unlawfully moneys belonging to Service Insurance. Although Mr. Love attempted to prove that he was not involved in the running of Florida Life, his legal authority and position with Florida Life does not absolve him from responsibility. Mr. Love was an officer and director of Florida Life and he had authority over the premiums account of Florida Life. Most importantly, Mr. Love, and only Mr. Love, held himself out as the insurance agent on behalf of Service Insurance. Mr. Love is now retired and does not intend to become active in the insurance business. Mr. Love has had no other charges brought against his insurance licenses, except those arising out of the Agency Agreement, during the more than twenty years that Mr. Love has held insurance licenses.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Office of the Treasurer and Department of Insurance enter a Final Order finding that Samuel Bannister Love has violated Sections 626.561(1), 626.611(7), 626.611(10), 626.611(13), 626.621(2) and 626.621(4), Florida Statutes. It is further RECOMMENDED that the allegation of Count I of the Administrative Complaint that Mr. Love violated Section 626.611(9), Florida Statutes, be DISMISSED. It is further RECOMMENDED that the Final Order find that Mr. Love violated the terms and conditions of his probation as agreed in the Settlement in violation of Section 626.611(13), Florida Statutes. It is further RECOMMENDED that the allegation of Count II of the Administrative Complaint that Mr. Love violated Section 626.611(7), Florida Statutes, be DISMISSED. It is further RECOMMENDED that Mr. Love's insurance licenses be suspended for a period of three years or until the Note is paid, which ever occurs first. Should the Note not be paid in full within the period of the suspension of Mr. Love's licenses, Mr. Love's insurance licenses should be revoked after the period of the suspension. DONE AND ENTERED this 3rd day of November, 1993, in Tallahassee, Florida. LARRY J. SARTIN 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 3rd day of November, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-1473 The parties have submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted. The Department's Proposed Findings of Fact Accepted in 1. Accepted in 2-3. Accepted in 4-5. Accepted in 7. Accepted in 3. Accepted in 8 and hereby accepted. Accepted in 8. Accepted in 9. Hereby accepted. Accepted in 10. Accepted in 11 and hereby accepted. Accepted in 12-15 and 18. Accepted in 19. Accepted in 20-21. Accepted in 21. Accepted in 20 and hereby accepted. Accepted in 24. See 25-26. Mr. Love's Proposed Findings of Fact 1-2, First Page: Argument or not supported by the weight of the evidence. Second and Third Pages: Not relevant or not supported by the weight of the evidence. Argument, not relevant or not supported by the weight of the evidence. See 28. COPIES FURNISHED: James A. Bossart, Esquire Division of Legal Services Department of Insurance and Treasurer 612 Larson Building Tallahassee, Florida 32399-0333 Samuel Bannister Love 10835 South East Sunset Harbor Road Summerfield, Florida 34491 Tom Gallagher, Commissioner Department of Insurance and Treasurer The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Bill O'Neil, Esquire Department of Insurance and Treasurer The Capitol, PL-11 Tallahassee, Florida 32399-0300
Conclusions THIS CAUSE came on for consideration and final agency action. On April 10, 2001, an Administrative Complaint was issued by the Department of Insurance alleging that Respondent Matilda M. Vath failed to timely remit cash collateral and misappropriated, converted or wrongfully withheld fiduciary funds. Respondent timely filed a request for a proceeding pursuant to section 120.57(1), Florida Statutes. For purposes of the Section 120.57, Florida Statutes, hearing this matter was consolidated with the related case in the matter of John L. Vath in case no. 40065-01-AG. Pursuant to notice, the consolidated matter was heard before William F. Quattlebaum, Administrative Law Judge, Division of Administrative Hearings, on November 30, 2001. After consideration of the record and argument presented at the hearing, the Administrative Law Judge issued his consolidated Recommended Order on February 22, 2002. (Attached as Exhibit A). The Administrative Law Judge recommended that a Final Order be entered suspending for three (3) months the licenses and eligibility for licensure of Matilda M. Vath as a limited surety agent, and requiring the refunding of $318.00 to Augustavo Porro. On March 8, 2001, the Respondent timely filed exceptions to the Recommended Order. The Respondent's exceptions are addressed below. RULINGS ON REPONDENT'S EXCEPTIONS Respondent's factual exceptions, which were filed in consolidation with the matter of John L. Vath in case no. 40065-01-AG, were made in an eight paragraph Exceptions to Findings of Fact. Respondent's exceptions do not specifically identify a single specific paragraph or finding of fact in the Recommended Order. For the purpose of this ruling on Respondent's exceptions each paragraph of Respondents’ Exceptions to Findings of Fact is treated as a separate exception. 1. Respondent's first exception is that the record does not support a finding that any willful act was done in violation of the laws of the State of Florida. This exception is not made to any specific finding of fact in the Recommended Order. Respondent's exception is made without support of the record.. It is legally insufficient to merely state that the findings of fact are not supported by the record or were not supported by competent substantial evidence. Hoover v. Agency for Health Care Administration, 676 So.2d 1380 (Fla. 3 DCA 1996). For the purpose of ruling on Respondent's exception it is presumed that the Respondent's exception relates to paragraph 28 of the Recommended Order, which finds as follows: 28. In this case, either the Respondents acted in an untrustworthy and dishonest manner in willful violation of the statutes and rules relevant to this incident or the facts establish a lack of reasonable adequate knowledge and technical competence on their part. There is competent substantial evidence in the record to support this finding of fact. Although the two forfeited bonds totaled only $2,000, the Petitioners took from Mr. Porro money far in excess of that amount. The Petitioners took from Mr. Porro $500 for the two $250 bonds even though those bonds had not been forfeited. The Petitioners’ also took from Mr. Porro an additional $304 for costs and expenses that had not been incurred and which the Petitioners have subsequently not been able to substantiate. Moreover, Petitioners’ defense that the violations were attributable to errors by the Petitioners’ office staff not timely remitting the money owed to Mr. Porro, would, if believed, not excuse the Respondent's from the conclusion that they willfully acted in an untrustworthy and dishonest manner or that the facts establish a lack of reasonable adequate knowledge and technical competence on their part. As evidence of their willful disregard for the responsibilities imposed upon them by the insurance code to faithfully handle monies entrusted to them, the Respondent's admitted that neither corporate officer of the agency exercised direct supervisory control over the office staff they had charged with the responsibility of remitting the money due to their customers, including Mr. Porro. (See Hearing Transcript, page 85, line 25, through page 86, line 17; and page 102, lines 10 through 24). The agency’s authority to reject or modify findings of fact is limited by the provisions in section 120.57(1)(I), Florida Statutes, which provides that “the agency may not reject or modify the findings of fact unless the agency first determines from a review of the entire record, and states with particularity in the order, that the findings of fact were not based upon competent substantial evidence or that the proceedings on which the findings were based did not comply with essential requirements of law.” Because there is competent substantial evidence in the record to support the ALJ's finding of fact, the Department would have to improperly reject the Administrative Law Judge’s findings of fact to permit the adoption of Respondent's exception. Adoption of Respondent's exception would also require that the Department reweigh the evidence. The Department cannot reweigh the evidence. The weight given to the evidence is the province of the Administrative Law Judge and cannot be disturbed by the agency unless the finding is not supported by competent substantial evidence. Brogan v. Carter, (Fla. 1st DCA 1996). Accordingly, Respondent's exception is rejected. 2. Respondent's second exception is that “the record does not support a finding that the customers owed $318.00.” Paragraph 2, Respondent’s Exceptions to Findings of Fact. The Recommended order does not make a finding that any customers owed $318.00. For the purpose of this ruling on Respondent's second exception, it is presumed that the Respondent's exception relates to the Administrative Law Judge’s conclusion that the Respondents Mildred M. Vath and John L Vath owe Mr. Porro $318.00. There is competent substantial evidence in the record to support this finding of fact. Respondents John and Matilda Vath initially took $2,804 from Mr. Porro. (Hearing Transcript, page 22, lines 2 through 11). Respondents made a partial return of the money to Mr. Porro in two payments in the amount of $1,994 and $492. (Hearing Transcript, page 24, line 13 through page 27, line 12). Consistent with the Administrative Law Judge’s finding of fact that money retained by the Respondents for improperly documented expenses are due to Mr. Porro, which finding cannot be reweighed here, the outstanding amount owed by the Respondent's to Mr. Porro is $318. To grant the Respondent's exception, the Department would have to improperly reject findings of fact that are based on competent substantial evidence and reweigh the evidence. Accordingly, Respondent’s second exception is rejected. 3. Respondent's third exception is that the only evidence recording the expenses was the testimony of the Respondents. This exception is not made to any specific finding of fact in the Recommended Order. For the purpose of ruling on this exception it is presumed that Respondent's exception pertains to the finding of fact in paragraph 33 of the Recommended Order that the “improperly documented” expenses are due to Mr. Porro. This exception is an attempt to reargue the facts of the case and requires that the Department improperly reweigh the evidence and reject findings of fact made by the Administrative Law Judge. To reach his conclusion in paragraph 33, the Administrative Law Judge necessarily rejected the testimony of the Respondents on this issue. Because the Respondent's arguments would require that the Department improperly reweigh the evidence, this exception is rejected. 4. Respondent's fourth exception is that there is no evidence showing which of the Respondents was in direct control of the office staff. Respondents then proceed to argue it was the office staff that was responsible for the violations. There is no finding of fact in the Recommended Order that one of the Respondents was in direct control of the office staff. Moreover, as discussed above in the ruling on Respondent's first exception, the lack of control by the Respondents over their office staff, if believed, would not exculpate the Respondents but would aggravate the violations found herein. Accordingly, Respondent's fourth exception is rejected. 5. Respondent's fifth exception is that there is no evidence of willfulness for any of the alleged violations. This is a repeat of the Respondent's first exception. Having already rejected that exception, Respondent's fifth exception is also rejected. 6. Respondent's sixth exception contends that there is insufficient evidence to show a willful deprivation of money. This is another repeat of the Respondent's first and fifth exceptions. Having already rejected those exceptions, Respondent's fifth exception is also rejected. 7. Respondent's seventh exception is that the record does not support a finding that the indemnitor paid the entire bail bond. Respondent's then proceed to argue that the indemnitor failed to pay $89.00 of the premium. Respondent's exception is not directed to any particular finding of fact in the recommended order. It is also not clear to which specific finding of fact this exception could be attributed. There is no specific finding of fact made in the Recommended Order that the indemnitor “paid the entire premium.” Nor do the Respondents argue or explain the relevance of this factual argument to any factual finding in the Recommended Order. Accordingly, Respondent’s seventh exception is rejected. 8. Respondent's eighth exception reads as follows: “The evidence fails to show a substantial woeful [sic] violation of the Insurance Code, or the laws of the State of Florida, or the Law Administrative Code [sic].” For the purpose of ruling on this exception it is presumed that it was Respondent's intent to refer to the finding of willful violations of the Insurance Code in paragraph 28 of the Recommended Order. This is a restatement of the Respondent's first, fifth, and sixth, exceptions. Having already rejected those exceptions, Respondent's eighth exception is also rejected for improperly requiring that the Department reweigh the evidence. Upon careful consideration of the record, the submissions of the parties, and being otherwise fully advised in the premises, it is ORDERED: 1. The Findings of Fact of the Administrative Law Judge are adopted in full as the Department's Findings of Fact. 2. The Conclusions of Law of the Administrative Law Judge adopted in full as the Department's Conclusions of Law. 3. That the Administrative Law Judge 's recommendation that a Final Order be entered suspending for three (3) months the licenses and eligibility for licensure of Matilda M. Vath as an insurance agent, and requiring the refunding of $318.00 to Augustavo Porro, is approved and accepted as being the appropriate disposition. ACCORDINGLY, Matilda M. Vath’s limited surety agent license is suspended for a period of three (3) months. The suspension shall be effective from the date of entry of this Final Order. Matilda M. Vath is hereby also ordered to remit $318.00 to Augustavo Porro, which sum constitutes the outstanding amount of cash collateral that Matilda M. Vath and John L. Vath, who is the respondent in the related case no. 40065-01-AG, owe to Mr. Porro. Pursuant to Section 648.50, Florida Statutes, the suspension of Respondent's licenses and eligibility for licensure is applicable to all licenses and eligibility held by Respondent under the Florida Insurance Code. Pursuant to Sections 648.49(3) and 648.50(3), Florida Statutes, the Respondent shall not engage in or attempt or profess to engage in any transaction or business for which a license or appointment is required under the Insurance Code or directly or indirectly own, control or be employed in any manner by a bail bond agent or agency during the period of suspension. Pursuant to Section 648.49(1), Florida Statutes, Respondent's licensure shall not be reinstated except upon request for such reinstatement, and the Respondent shall not engage in the transaction of insurance until his licensure is reinstated. The Department shall not grant reinstatement if it finds that the circumstance or circumstances for which Respondent's licenses were suspended still exist or are likely to recur.
The Issue At issue is whether Respondent’s license as insurance agent should be revoked for providing false answers under oath to questions regarding his criminal history on his application for licensure.
Findings Of Fact On March 28, 2000, Respondent executed under oath an application for licensure. Included on the application were the following questions: Have you ever been convicted, found guilty, or pleaded 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 a judgment of conviction has been entered? Have you ever been convicted, found guilty, or pleaded guilty or nolo contendere (no contest) to a felony under the laws of any municipality, county, state, territory, or country, whether or not a judgment of conviction has been entered? As to both of these questions, Respondent answered-- falsely--"No." Respondent was subsequently licensed as an insurance agent. Had he accurately answered these questions, his application for licensure would have been denied. By way of defense, Respondent contends that he was misled by comments made by the trial judge who sentenced him. Respondent testified that at the time he executed his application, he believed, based upon what the judge had said at sentencing, that the charges to which Respondent had pleaded no contest did not constitute a felony and did not carry a sentence of greater than one year in prison. A transcript of Respondent's sentencing would provide a verbatim record of what the judge said, and would afford the fact finder an opportunity to form an opinion as to whether Respondent could have reasonably believed that he could appropriately answer "no" to the above-quoted questions. All criminal sentencing hearings in Florida are, as a matter of course, attended by a court reporter. However, Respondent did not introduce a transcript of his sentencing into evidence in this hearing, nor did he provide an explanation as to why a transcript could not be made available. Neither did Respondent offer any testimony other than his own in support of his claim that he had been misled by the sentencing judge as to the nature of the charges to which he plead and/or the maximum sentence permitted under the law. Respondent's own memory as to the details of his crime and punishment was very poor. Thus, there is no factual basis upon which it can be concluded that Respondent's failure to accurately respond to questions regarding his criminal history may be attributed to the failure of the judge who sentenced him to clearly communicate, rather than Respondent's own negligence in responding to the questions concerning his criminal background. It is noted on the face of the application that it is the applicant's burden to provide accurate information, and the failure to do so will result in a denial of licensure. Even if the evidence established that Respondent's misstatements were made in good faith, the outcome of this proceeding would be the same. As noted above, under Florida law, a "yes" answer to either of the above-noted questions would have required the state to deny Respondent's application for licensure.
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 revoking Respondent's license and eligibility for licensure. DONE AND ENTERED this 7th day of April, 2003, in Tallahassee, Leon County, Florida. FLORENCE SNYDER RIVAS 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 7th day of April, 2003. COPIES FURNISHED: R. Terry Butler, Esquire Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399-0333 James E. Loper 4105 North University Drive Number J-206 Sunrise, Florida 33351 James E. Loper 18217 Northwest 61st Place Miami, Florida 33015 Honorable Tom Gallagher Treasurer and 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
