The Issue This matter arose on Petitioner's Amended Administrative Complaint which charges Respondent with aiding an unlicensed person to evade Florida contracting licensing law and with conspiracy in using his general contractor's license to further such unlawful purpose. The parties submitted proposed findings of fact which have been incorporated herein to the extent they are relevant and consistent with the evidence.
Findings Of Fact Respondent is a registered general contractor, having been issued license number RG 0013006. On January 6, 1978, Respondent obtained Dixie County building permit No. 335 for the construction of Evans Square Shopping Center located in Cross City, Florida. After purchasing the raw land and securing the building permit, Respondent was unable to borrow the funds needed for construction of the shopping center, and thereafter sold his interest in the project to Allied American Properties of Florida, Inc. (Allied). On May 15, 1978, Respondent entered into a contract with Allied to construct the Evans Square Shopping Center. On May 22, 1978, Respondent entered into a con- tract with Raymond H. Moody, individually, and Florida Gulf Coast Construction Co., Inc., acting by and through its President, Raymond H. Moody, who were to perform the actual construction of the Evans Square Shopping Center. At the time of contracting, Moody and Florida Gulf Coast Construction Co., Inc., were unlicensed to perform the type of construction outlined in the contract. Florida Gulf Coast Construction Co., Inc., eventually obtained proper licensure but did so subsequent to the period at issue here. In the contract agreement with Florida Gulf Coast Construction Co., Inc., and Moody, Respondent agreed that he would assist in obtaining necessary permits and local government services required for the construction of the Evans Square Shopping Center. Subsequent to the signing of the May 22, 1978, contract, Respondent learned from Moody that neither he nor Florida Gulf Coast Construction Co., Inc., was properly licensed to perform the type of construction for which they had contracted. Respondent took no immediate action based on this information. Moody and/or Florida Gulf Coast Construction Co., Inc., continued to perform construction activities with the use of Respondent's building permit and contractor's license. Respondent received in excess of $50,000.00 with regard to the May 22, 1978, contract which included payment for the building permit he had previously obtained. He did not, however, receive reimbursement for the several hundred thousand dollars he had invested in this project before the sale to Allied.
Recommendation From the foregoing, it if RECOMMENDED that Petitioner enter a Final Order finding Respondent guilty as charged in the Amended Administrative Complaint and suspending his general contractor's license for a period of one year. DONE and ENTERED this 30th day of December, 1982, in Tallahassee, Florida. R. T. CARPENTER, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 30th day of December, 1982.
Findings Of Fact At all times material to this action, the Petitioner, Randall Petersen, was a duly-authorized life and health insurance agent. The Petitioner was employed by Gulf Life Insurance Company. Petitioner was one of Gulf Life's most productive agents during the time of his employment with the company. Petitioner resigned form his employment in 1989. Count I of the Administrative Complaint charged Petitioner with violating Section 626.561(1), Florida Statutes, by failing to properly handle money given him by Helen Hinson and her husband; violating Section 626.611(5), Florida Statutes, by willfully misrepresenting an insurance policy or annuity to the Hinsons; violating Section 626.611(7), Florida Statutes, by demonstrating a lack of fitness or trustworthiness to engage in the business of insurance; violating Section 626.611(8), Florida Statutes, by demonstrating a lack of reasonably adequate knowledge and technical competence to engage in the transaction he concluded with the Hinsons; violating Section 626.611(9), Florida Statutes, by committing fraud or dealing dishonestly regarding the Hinsons; violating Section 626.611(10), Florida Statutes, by misappropriating, converting or unlawfully withholding the Hinsons' monies; violating Section 626.611(13), Florida Statutes, by willfully violating a rule or order of the Department; violating Section 626.621(2), Florida Statutes, by violating any statutory provision related to the business of insurance; and violating Section 626.621(5), Florida Statutes, by committing an act of twisting, as defined in Section 626.9541(1)(6), Florida Statutes, in regards to Petitioner's dealings with the Hinsons. All of these alleged violations arose from one transaction involving Helen Hinson and her husband. Prior to 1986, Mr. and Mrs. Hinson had insurance coverage with Gulf Life. The Hinson's had purchased their earlier insurance coverage prior to Petitioner's employment with Gulf Life. Petitioner took over the Hinsons' account after he joined Gulf Life. The Hinsons also had an IRA with New England Life Insurance. In an effort to consolidate their insurance needs with one company, the Hinsons closed their IRA with New England Life. The Hinsons received two (2) checks from New England Life Insurance for their IRA. They wanted to do something with the money which would be beneficial to them, estate, investment and tax-wise. Their idea was to create something similar to an IRA. Mr. Petersen arranged a visit and consultation with Tom Saita, the Gulf Life Home Office Representative and the company's expert in the area of investment insurance planning. This area of insurance planning can be a very complicated area for lay persons and general agents, like Petitioner, not familiar with tax and planning strategies. A specialist like Mr. Saita is often required. Mr. Saita was to assist Mr. Petersen in going over the Hinson's insurance needs. Various insurance plans were discussed and Mr. Saita recommended a Universal Life Policy for the Hinsons. Mr. Saita made the sales presentation, along with Mr. Petersen and received a 16% sales commission. Mr. Saita testified that he was very comfortable with the Hinsons' understanding of the sales presentation. The Hinsons decided to go ahead with Mr. Saita's recommendations. An Application for Universal Life was taken and a required medical examination was obtained. The policies were issued and the premiums paid. Part of the premiums were paid with the two IRA checks from New England Life. Approximately two (2) years later, Mr. Petersen was contacted by Mrs. Hinson regarding information on their IRA. Mr. Petersen advised Mrs. Hinson that she did not have an IRA, but rather, had Universal Life Insurance. Mrs. Hinson testified that she thought they had purchased an IRA. She also knew that they had Universal Life. She thought the transaction they had completed two years earlier was a roll-over of their IRA into another IRA. Mrs. Hinson acknowledged that she either did not understand the sales presentation, or the agents (Petersen and Saita) did not understand what they wanted. The evidence established that the Hinsons' transaction and subsequent dissatisfaction was the result of miscommunication and misunderstandings between the Petitioner, Saita and the Hinsons. The transaction did not involve any misrepresentations on Petitioner's part. Neither did the Petitioner willfully try to cheat the Hinsons or mishandle their money. Both Mr. Petersen and Mr. Saita tried to resolve the problems the Hinsons were having. Eventually, Gulf Life refunded all of the cash value that was paid into the Universal Life Policy. Based on the foregoing, the Department has failed to sustain its burden of proof with regard to the allegations of Count I of the Administrative Complaint. Petitioner properly called in an expert in the area of investment insurance planning. The expert primarily handled the details of the Hinsons' insurance plan. As indicated earlier, the evidence demonstrated that the parties simply had a misunderstanding. Such a misunderstanding falls short of establishing any of the charges alleged in Count I of the Administrative Complaint. Therefore, Count I of the Administrative Complaint should be dismissed. Count II of the Administrative Complaint charged Petitioner with violating Section 626.561(1), Florida Statutes, by failing to properly handle money given him by Halen and Mary Stroud; violating Section 626.611(5), Florida Statutes, by willfully misrepresenting an insurance policy to the Strouds; violating Section 626.611(7), Florida Statutes, by demonstrating a lack of fitness or trustworthiness to engage in the business of insurance; violating Section 626.611(8), Florida Statutes, by demonstrating a lack of reasonably adequate knowledge and technical competence to engage in the transaction he concluded with the Strouds; violating Section 626.611(9), Florida Statutes, by committing fraud or dealing dishonestly regarding the Strouds; violating Section 626.611(10), Florida Statutes, by misappropriating, converting or unlawfully withholding the Strouds' monies; violating Section 626.611(13), Florida Statutes, by willfully violating a rule or order of the Department; violating Section 626.621(2), Florida Statutes, by violating any statutory provision related to the business of insurance; and violating Section 626.621(5), Florida Statutes, by committing an act of twisting, as defined in Section 626.9541(1)(6), Florida Statutes, in regards to Petitioner's dealings with the Strouds. All of these alleged violations arose from one transaction involving Halen Stroud and Mary Stroud. Halen Stroud is the father of Mary Stroud. Both Halen and Mary Stroud are sight-impaired individuals. Halen Stroud is an elderly gentleman. Mary Stroud appeared to be easily confused. Halen and Mary Stroud had existing insurance with Gulf Life. Mr. Petersen collected premiums from them on a monthly basis. An agent from Independent Life told Mr. Stroud that "he had money available in his Gulf Life policies and that he could put that money into Independent Life policies". Although it is uncertain what terminology this Independent Life agent used, it appears he was referring to the cash value of the Gulf Life life insurance policies the Strouds already had. Sometime around 1986 or 1987 and after being prompted by his earlier conversation with the Independent Life agent, Mr. Stroud contacted Petitioner regarding consolidation of his existing insurance, as well as purchasing additional insurance. Mr. Petersen explained that the Strouds could take out loans on the existing cash value of their Gulf Life policies and then purchase additional insurance with the loan proceeds. When the new policies were issued, the old ones could then be cancelled. Both the Strouds dispute that Mr. Petersen explained that the transaction involved a "lien" against the Strouds' policies. Neither Stroud indicated in their testimony whether "loans" of the cash surrender values had been discussed. The better evidence indicates that such loans were discussed since Mr. Stroud and his daughter signed a policy and loan application. When Mr. Stroud received notice of the loans and liens from Gulf Life, he did not know if he wanted to follow through on the transaction and wanted to think about it further. Mr. Petersen and his sales manager, Edward Agerton, met with the Strouds to re-explain the transaction. Mr. Stroud told Mr. Agerton that he did not sign any loan forms or buy any additional insurance. However, the signatures on the policy and loan applications were the Strouds' signatures. Mr. Stroud wanted to think about the transaction some more because he wasn't sure he wanted the policy. His concern centered on the new policies' expense and the lien. Approximately two (2) months later, Mr. Petersen delivered the policies to Mr. Stroud so that he could examine them. Mr. Stroud called Mr. Petersen and said he had decided he did not want the new coverage. Eventually, the entire transaction was rescinded by Gulf Life and the Strouds returned to the status quo. The evidence is unclear on exactly what Mr. Petersen explained to the Strouds about the consolidation of their insurance and the increase in the amount of their insurance. In this case, it does not appear that there was any misrepresentation by Mr. Petersen, but that either the Strouds did not understand the transaction or that a portion of the transaction was not explained to them by Mr. Petersen. The evidence supports the fact that Mr. Stroud and his daughter signed both the policy applications and policy loan forms and that this transaction was the standard method by which an insured can use the cash value in old policies to purchase more insurance. It appears from the evidence that Mr. Stroud had second thoughts and changed his mind regarding the transaction. None of these actions constitute a violation of Chapter 626, Florida Statutes, or constitute clear and convincing evidence of any of the alleged violations contained in the Administrative Complaint. Therefore, Count II of the Administrative Complaint should be dismissed. Count IV of the Administrative Complaint charged Petitioner with violating Section 626.561(1), Florida Statutes, by failing to properly handle money given him by Reba Hammontree or on behalf of Reba Hammontree; violating Section 626.611(5), Florida Statutes, by willfully misrepresenting a replacement health insurance policy that was purchased by Reba Hammontree; violating Section 626.611(7), Florida Statutes, by demonstrating a lack of fitness or trustworthiness to engage in the business of insurance; violating Section 626.611(8), Florida Statutes, by demonstrating a lack of reasonably adequate knowledge and technical competence to engage in the transaction involving Reba Hammontree; violating Section 626.611(9), Florida Statutes, by committing fraud or dealing dishonestly regarding Reba Hammontree; violating Section 626.611(10), Florida Statutes, by misappropriating, converting or unlawfully withholding the money given him either by Reba Hammontree or on behalf of Reba Hammontree; violating Section 626.611(13), Florida Statutes, by willfully violating a rule or order of the Department; violating Section 626.621(2), Florida Statutes, by violating any statutory provision related to the business of insurance; and violating Section 626.621(5), Florida Statutes, by committing an act of twisting, as defined in Section 626.9541(1)(6), Florida Statutes, in regards to Petitioner's dealings with Reba Hammontree. All of these alleged violations arose from one transaction involving Reba Hammontree and her father. In 1986, Reba Hammontree and her father, Steven Flores, maintained two policies of health insurance with Gulf Life. Mr. Flores paid the premiums for Reba Hammontree. Mr. Petersen collected these premiums from Mr. Flores on a monthly basis. At some point in time, the existing major medical coverage on Ms. Hammontree lapsed from non-payment of the premiums. This lapse was not shown to be due to any actions on Petitioner's part. Later, Mr. Petersen was advised by Mr. Flores that his daughter wanted to talk to him about purchasing health insurance coverage. Mr. Petersen left the policy with Mr. Flores so that Ms. Hammontree could examine it. He also left an application for such insurance. Mr. Petersen later picked up the application. The application had been completed and was signed with the name "Reba Hammontree". The signature turned out not to be the signature of Reba Hammontree. In fact, the appearance of the signature on the application was not even close to the appearance of Reba Hammontree's signature. However, the signature on the application was not shown to be the handwriting of the Petitioner, and it remains a mystery as to whose hand signed the name "Reba Hammontree". It did not appear from the evidence that either Mr. Petersen or Gulf Life had any way of knowing that the signature on the application was not Ms. Hammontree's signature. Based on the signed application, the policies were issued by Gulf Life. Premiums were paid for over one (1) year on the replacement policy by Ms. Hammontree's father. After that year, Ms. Hammontree's business was transferred out of Mr. Petersen's account. In submitting the application to Gulf Life, Respondent signed the application in the space titled "Witness (Agent)." Petitioner also signed a portion of the application titled "Agent's Report." The Agent's Report included the following boilerplate representation: I do warrant that I have personally seen the Proposed Insured on the date this application was signed and that I have properly asked the questions, recorded the answers, witnessed the signature, and where required by state law, delivered an outline of coverage. ... Clearly, Petitioner did not see Ms. Hammontree on the date the application was signed or witness the signing of the application. At best, the Department established that Petitioner did not follow the underwriting procedures of Gulf Life by allowing a customer to sign an application outside his presence. The evidence did not show that permitting a customer to sign an application in such a manner is indicative of a lack of knowledge, skill, or trustworthiness on the part of an agent. Likewise, given the fact that the application was left with Ms. Hammontree's father and that it was completed prior to Mr. Petersen's return to pick up the application from the policy payor, Ms. Hammontree's father, the evidence did not show that the Petitioner's failure to witness Ms. Hammontree's signature would have been material to Gulf Life in issuing the policy. Therefore it cannot be said that the Petitioner's misrepresentation in signing such boilerplate language that such events occurred was a misrepresentation of a material fact. Moreover, the fact that the referenced statement in the Agent's Report is boilerplate language, it may be inferred that the specifics of such language are quickly forgotten and Petitioner did not sign the Agent's Report intending to make the representations contained in it. Petitioner's actions only demonstrate a concern for the convenience of his customers. Given these facts and absent clear statutory authority, such violation of a private company's underwriting policies does not constitute a violation of any of the provisions of Chapter 626, Florida Statutes. Ms. Hammontree claims that Mr. Petersen took out policies on her without her authority. She denied signing the policy application. She also denied authorizing anyone else to sign her name to the application. She disavows any knowledge of the new coverage. Although Ms. Hammontree denies any knowledge of the replacement insurance coverage, the facts demonstrate otherwise. She denied holding any conversation with Mr. Petersen prior to 1987. However, she wrote a letter, dated March 3, 1989, to the Insurance Commissioner and referenced a meeting with Mr. Petersen in 1986. The referenced 1986 meeting regarded updating her insurance. In the letter, she referenced the new coverage. She also filed a claim on the new coverage and received a check from Gulf Life. Based upon the foregoing, the Department has failed to present clear and convincing evidence that Petitioner violated any provisions of Chapter 626, Florida Statutes. Therefore, Count IV of the Administrative Complaint should be dismissed. Count V of the Administrative Complaint charged Petitioner with violating Section 626.561(1), Florida Statutes, by failing to properly handle money given him by Gary Ard; violating Section 626.611(5), Florida Statutes, by willfully misrepresenting an insurance policy to Mr. Ard; violating Section 626.611(7), Florida Statutes, by demonstrating a lack of fitness or trustworthiness to engage in the business of insurance; violating Section 626.611(8), Florida Statutes, by demonstrating a lack of reasonably adequate knowledge and technical competence to engage in the transaction he concluded with Mr. Ard; violating Section 626.611(9), Florida Statutes, by committing fraud or dealing dishonestly regarding Mr. Ard; violating Section 626.611(10), Florida Statutes, by misappropriating, converting or unlawfully withholding Mr. Ard's money; violating Section 626.611(13), Florida Statutes, by willfully violating a rule or order of the Department; violating Section 626.621(2), Florida Statutes, by violating any statutory provision related to the business of insurance; and violating Section 626.621(5), Florida Statutes, by committing an act of twisting, as defined in Section 626.9541(1)(6), Florida Statutes, with regard to Petitioner's dealings with Mr. Ard. All of these alleged violations arose from one transaction involving Mr. Ard. Mr. Ard is a self-made businessman. He owns and operates his own paint and body shop business. The evidence showed that Mr. Ard does not read well and does not handle the details regarding his insurance coverage. Such details were left to Mr. Ard's wife, now x-wife. Mr. Ard is very talkative and does not listen very well. It can be inferred that Mr. Petersen had some difficulty in communicating with Mr. Ard. Mr. Petersen was the Gulf Life Insurance agent for Mr. Ard. Mr. Ard had existing insurance coverage with Gulf Life. Mr. Ard requested Mr. Petersen to review his existing life policy regarding an increase in coverage. Mr. Ard needed additional life insurance to use as collateral for a bank loan on his paint and body shop business and to replace a Provident Life insurance policy. A medical examination was arranged for Mr. Ard, and it was determined that he had high blood pressure. The policy was issued with a rated premium. A policy amendment was issued for $200,000.00. Mr. Petersen delivered the amendment to Mr. Ard's wife. He returned approximately four (4) days later and picked up the signed amendment. The signature on the amendment said "Gary Ard". However, the signature was not Mr. Ard's. The signature's appearance was very close to the appearance of Mr. Ard's true signature. Again, as with Ms. Hammontree, the fake signature was not shown to be Petitioner's handwriting. To say the least, Mr. Ard's testimony was very confusing and difficult to follow. He identified the $50,000.00 policy. He testified that the signature on the application looked like his, but he did not know for sure. He denied the signature on the policy amendment. He further stated that he was not familiar with the $200,000.00 additional coverage and did not authorize anyone to sign his name to the amendment. He then states that he signed the policy application, without the amendment, but goes on to say that he could not remember signing the application. Mr. Ard's confusion very likely is due to the fact that he left the details of such transactions to his wife, who is now Mr. Ard's ex-wife. Moreover, Mr. Ard's testimony, when compared to other evidence submitted to the Department in its investigation, substantially conflicts in material respects. Given Mr. Ard's nature and his very confusing and conflicting testimony, it is impossible to make any material findings regarding the allegations contained in Count V of the Administrative Complaint. Therefore, the Department has failed to establish clear and convincing evidence with regard to the allegations contained in Count V of the Administrative Complaint, which Count should be dismissed. Count VI of the Administrative Complaint charged the Petitioner with violating Section 626.561(1), Florida Statutes, by failing to properly handle money given him by Aubrey Johnson; violating Section 626.611(5), Florida Statutes, by willfully misrepresenting an insurance policy or annuity to Mr. Johnson; violating Section 626.611(7), Florida Statutes, by demonstrating a lack of fitness or trustworthiness to engage in the business of insurance; violating Section 626.611(8), Florida Statutes, by demonstrating a lack of reasonably adequate knowledge and technical competence to engage in the transaction he concluded with Mr. Johnson; violating Section 626.611(9), Florida Statutes, by committing fraud or dealing dishonestly regarding Mr. Johnson; violating Section 626.611(10), Florida Statutes, by misappropriating, converting or unlawfully withholding Mr. Johnson's money; violating Section 626.611(13), Florida Statutes, by willfully violating a rule or order of the Department; violating Section 626.621(2), Florida Statutes, by violating any statutory provision related to the business of insurance; and violating Section 626.621(5), Florida Statutes, by committing an act of twisting, as defined in Section 626.9541(1)(6), Florida Statutes, with regard to Petitioner's dealings with Mr. Johnson. All of these alleged violations arose from one transaction involving Mr. Johnson. Mr. Petersen was contacted by Mr. Johnson to review his life insurance and annuity coverage because he had $40,000.00 to invest. Mr. Petersen advised Mr. Johnson that he would arrange a meeting with Tom Saita, the Gulf Life Home Office Representative. A meeting was held with Mr. Johnson, his secretary, Mr. Petersen and Tom Saita. Mr. Saita made the sales presentation and discussed a universal life contract on Mr. Johnson. Mr. Saita testified that he was comfortable with Mr. Johnson's understanding of the sales presentation. A universal life policy was sold and issued by Gulf Life. Mr. Johnson testified that he had several meetings with Mr. Peterson and met twice with Mr. Saita, before he made his decision to invest with Gulf Life. His bookkeeper was also present during one (1) of the meetings with Mr. Saita. Mr. Johnson testified that he was told by Mr. Petersen that he could invest his money with Gulf Life and be able to withdraw the full amount at anytime, without a penalty. 1/ Mr. Petersen denied that he made this statement and testified that he told Mr. Johnson that the money could be withdrawn, within thirty (30) days, without a penalty. The thirty-day grace period for withdrawal was a true representation by Mr. Petersen. The evidence does not clearly and convincingly demonstrate that the Respondent willfully misrepresented this transaction to Mr. Johnson. Given the representations testified to by the Respondent and Mr. Johnson and the multiple meetings between the Respondent, Mr. Johnson and Mr. Saita, the more probable interpretation of the evidence is that Mr. Johnson misunderstood what Mr. Petersen said about the thirty-day grace period. Additionally, the facts and circumstances involved in Petitioner's transaction with Mr. Johnson were similar to the facts involved in Petitioner's dealings with the Hinsons. The same factual conclusions are reached in Petitioner's transaction with Mr. Johnson. Therefore, the Department has failed to sustain its burden of proof, as to the allegations contained in Count VI of the Administrative Complaint and Count VI of the Administrative Complaint should be dismissed. Count VII of the Administrative Complaint charged the Respondent with violating Section 626.561(1), Florida Statutes, by failing to properly handle money given him by Ms. Tugwell on behalf of her daughter, Janet Iturriaga; violating Section 626.611(5), Florida Statutes, by willfully misrepresenting an insurance policy to Ms. Tugwell; violating Section 626.611(7), Florida Statutes, by demonstrating a lack of fitness or trustworthiness to engage in the business of insurance; violating Section 626.611(8), Florida Statutes, by demonstrating a lack of reasonably adequate knowledge and technical competence to engage in the transaction he concluded with Ms. Tugwell; violating Section 626.611(9), Florida Statutes, by committing fraud or dealing dishonestly regarding Ms. Tugwell; violating Section 626.611(10), Florida Statutes, by misappropriating, converting or unlawfully withholding Ms. Tugwell's money; violating Section 626.611(13), Florida Statutes, by willfully violating a rule or order of the Department; violating Section 626.621(2), Florida Statutes, by violating any statutory provision related to the business of insurance; and violating Section 626.621(5), Florida Statutes, by committing an act of twisting, as defined in Section 626.9541(1)(6), Florida Statutes, with regard to Petitioner's dealings with Ms. Tugwell. All of these alleged violations arose from one transaction involving Ms. Tugwell. Ms. Tugwell manages the Hilburn Apartments and manages the financial affairs of her daughter, Janet Iturriaga. Ms. Iturriaga is slightly mentally retarded and has a heart condition. In 1987, Ms. Tugwell was shopping for health insurance for the apartment employees and her daughter. She contacted Gulf Life. Ms. Tugwell had existing health insurance coverage on her daughter with Prudential and was paying $471.00 per month in premiums. Mr. Petersen was given the lead on Ms. Tugwell's inquiry and went to see Ms. Tugwell. He explained the available health plans and left an outline of the various types of coverage with Mrs. Tugwell. Mrs. Tugwell called a few days later. Mr. Petersen again visited Mrs. Tugwell at the Hilburn Apartments and upon arrival, saw the daughter, Janet, sitting at the front desk. Mr. Petersen completed the policy applications, with information given to him by Mrs. Tugwell. Some of the information on Ms. Iturriaga's health was incorrect. Ms. Tugwell claims that she told Mr. Petersen the correct information. She states that she told Mr. Petersen that her daughter would be high risk. Mr. Petersen claims that he faithfully recorded the information given to him by Ms. Tugwell. She further states that she did not receive the original policies, despite the fact that she paid the premiums for three (3) years. Mrs. Tugwell took the application, left the room, and returned with the application signed "Janet I Tugwell". Mr. Petersen did not actually see the daughter sign the applications. The signature was not Ms. Iturriage's. However, he had no reason to believe that Ms. Iturriaga did not, in fact, sign the application for insurance. Again, Petitioner signed the Agent's Report portion of the application. The same findings are made in reference to that Agent's Report as were discussed in Ms. Hammontree's case. The policies were thereafter issued by Gulf Life and delivered to Mrs. Tugwell. As with Ms. Hammontree, the appearance of the signature on the application did not resemble Ms. Iturriaga's real signature. Likewise, the signature on the application was not shown to be in Petitioner's handwriting. Ms. Tugwell cancelled her daughter's health insurance with Prudential. She paid the premiums on the Gulf Life policies for approximately three (3) years and also filed a claim for an accidental injury to Janet. Mrs. Tugwell called about her daughter's claim. Mrs. Tugwell was advised that the home office had requested medical records from the hospital. Mrs. Tugwell stated, "Why is it taking so long? There is nothing wrong with my daughter." The claim was initially denied by Gulf Life because two (2) different names were given to the hospital. The name "Tugwell" was listed on the claim form. The claim was eventually paid by Gulf Life and the check was cashed. Ms. Tugwell testified that her daughter's name on the application, "Janet I. Tugwell", was wrong. Her daughter never called herself "Janet I. Tugwell". She always goes by the name of "Janet T. Iturriaga". Therefore, Ms. Tugwell believes that the signature on the application was not her daughter's signature. However, she did not know whether Janet had signed the application. Mrs. Tugwell testified that she had authority to take out insurance on her daughter. She also testified that her daughter did not know that she was taking out new insurance on her. Clearly, Janet did not sign the application if she did not know insurance was being taken out. Ms. Tugwell did occasionally refer to her daughter as "Janet Tugwell", as evidenced by a premium check dated September 1, 1987. The check contains the following legend: "For Janet Tugwell, Policy #8710030". The policy number was the number of the new policies Ms. Tugwell had taken out on her daughter. Clearly, within 8 months of the insurance being taken out, Ms. Tugwell knew her daughter's policy number and knew the policy was under the name of "Janet Tugwell". The only way Ms. Tugwell could have received such information is if she had possession of the new policies or had her daughter's signature placed on the insurance application. In February of 1989, Mrs. Tugwell requested duplicate policies from Gulf Life and to have the name on the policies changed to Janet T. Iturriaga. To change the name on the policies, a policy change form was required. On March 13, 1989, Janet signed the policy change form and ratified the earlier coverage. Janet testified, however, that she did not sign the policy change form. The better evidence establishes that Ms. Ituriaga did sign the policy change form and simply has forgotten that fact. It should be noted that when the duplicate policies came in, Mrs. Tugwell had an agent from another insurance company look them over. The agent allegedly told her that the Gulf Life policies were not worth anything. It was then that Mrs. Tugwell filed her complaint. Mrs. Tugwell had insurance with Gulf Life and paid premiums for approximately three (3) years. She filed claims on the coverage and accepted the benefits. It appears that the reason behind Mrs. Tugwell's complaint seems to be based on the fact that she became dissatisfied with the coverage on her daughter because she had been told that the coverage was worthless. Given the fact that the alleged misrepresentation in regards to Ms. Iturriaga's health, which was in the application, is based upon a swearing match between Mr. Petersen and Ms. Tugwell and the obvious discrepancies in Ms. Tugwell's testimony, there is simply no clear and convincing evidence to sustain a finding that Mr. Petersen made misrepresentations in the policy application or signed Janet Tugwell's name to the policy application. Finally, as with Ms. Hammontree's case, the fact that Petitioner signed the Agent's Report does not clearly and convincingly demonstrate that Petitioner knowingly made any material misrepresentations to Gulf Life, especially since Ms. Tugwell and Iturriaga ratified the coverage. Such ratification eliminates the materiality of the Agent's Report. Therefore, Count VII of the Administrative Complaint should be dismissed.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department enter a Final Order dismissing the Administrative Complaint against the Respondent. It is further RECOMMENDED that Petitioner's application to represent Reserve Life Insurance Company and Pan-American Life Insurance Company be GRANTED. DONE and ENTERED this 9th day of July, 1991, in Tallahassee, Florida. DIANE CLEAVINGER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of July, 1991.
The Issue By this action Petitioner seeks to recover costs, expenses and damages associated with state response to an oil spill incident occurring February 26, 1987, within three miles of the Florida shoreline. Respondent's vessel was responsible for that spill. In particular the costs, expenses and damages claimed are related to salaries, per diem allowances, Federal Express charges, beach sand replacement, equipment, use of a cellular phone, and consulting work at the shore and off site. Petitioner also seeks damages for bird mortality resulting from the spill. See Chapter 376, Florida Statutes, and Chapter 16N- 16, Florida Administrative Code.
Findings Of Fact On the evening of February 26, 1987, the motor vessel Fernpassat struck the south jetty at the entrance to the St. Johns River at a location within three miles of the Florida shoreline. In doing so it ruptured the hull and spilled a substantial amount of heavy fuel oil. The type of the oil was No. 5 or 6 Bunker C. A preliminary estimate placed the amount of oil in excess of 100,000 gallons. While the true amount may have been somewhat less, it was a significant spill in that it substantially threatened the public's welfare and the environment and generated wide public interest. Petitioner's exhibit 3 is a map which depicts the basic location where the vessel collided with the jetty with an "X" mark. The area impacted by the discharge ran from roughly Atlantic Beach, Florida, to Guana State Park in St. Augustine, Florida. This is approximately 25 miles of beach front. Beach property over which Petitioner has regulatory and proprietary responsibility had oil deposited upon it. The oil spill killed or injured a number of birds. The event was responded to by the "Federal Region IV Regional Response Team" (RRT). The federal on-scene coordinator (OSC) was Captain Matthew Woods, U.S. Coast Guard. The RRT, through management and control provided by the OSC, took necessary steps to combat the effects of the spill. Respondent immediately accepted responsibility for the cleanup through the use of a consultant and cleanup contractor. Under this arrangement the OSC monitored the contractor's cleanup efforts to make certain that the job was done satisfactorily. Florida officials were part of the RRT. Rule 16N-16.009(21), Florida Administrative Code, calls for personnel from Petitioner; the State of Florida, Department of Environmental Regulation (DER); and the State of Florida, Department of Community Affairs (DCA) to represent state interests as members of the RRT. Each of these agencies participated as members of the RRT. This furthered the legislative intent expressed at Section 376.021(6), Florida Statutes, to support the RRT through implementation of the "Federal Water Pollution Control Act," which is also known as the "Clean Water Act," 33 U.S.C. ss. 1251-1376. By its efforts the RRT promoted the removal of the oil in accordance with a national contingency plan. Pursuant to Section 376.021(6), Florida Statutes, the state is expected to complement applicable provisions within the "Federal Water Pollution Control Act" as well as render the support previously described. Both the support and complementary functions of the state are part of Florida's "Pollutant Spill and Prevention Control Act," Sections 376.011-376.17, 376.19-376.21, Florida Statutes. Chapters 16N-16, Florida Administrative Code, more completely identifies the role played by the state agencies in this instance. This chapter was adopted pursuant to authority set out in Section 376.07, Florida Statutes, which, among other things, empowered Petitioner to make rules which developed and implemented criteria and plans to respond to spills such as the one at issue. In its complementary role the state has established a "State Response Team" (SRT). This organization in defined at Rule 16N-16.009(13), Florida Administrative Code. It is constituted of predesignated state agencies available continually to respond to a major spill. This incident was a major spill or discharge as defined in Rule 16N-16.009(18), Florida Administrative Code. The predesignated state agencies, pursuant to the rule defining the SRT and Section 376.07(2)(e), Florida Statutes, act independently of the federal authorities, although they are expected to cooperate with the federal authorities in the efforts at cleanup. What that meant here is that notwithstanding the concerns which Captain Woods had and the state participation in the RRT through Petitioner, DER and DCA, there was a parallel function by the SRT which had its own mandate. This allowed the SRT to pursue an independent agenda in the spirit of cooperation with the OSC in an attempt to protect the resources over which the state has jurisdiction, including the beach front and birds. Both Captain Woods and the consultant to the spiller, James L. O'Brien, who is a man of considerable credentials in giving advice about oil spill problems, expressed their understanding of the interests which the state might have in carrying out its functions and did not find that reality a hindrance in performing their duties. As a result, even though state employees and equipment and consultants to the state had limited utility for the OSC and the consultant to the spiller in carrying out their duties, it does not follow that claims by the state for reimbursement in categories set out in the statement of issues must fail unless found to support the OSC or spiller's choice in attempts at cleanup. The question is whether the costs, expenses and damages are reasonably related to support for the RRT or complementary of that function through the SRT and owed or expended from the Florida Coastal Protection Trust Fund (Fund) for recoverable items. See Section 376.11, Florida Statutes. Petitioner's exhibit 15 is a copy of the state contingency plan. See Section 376.07(2)(e), Florida Statutes. It identifies the membership of Petitioner, DER and DCA. Other claimants for costs, expenses, and damages who were involved in the response to this incident as predesignated agencies are the Florida Game and Fresh Water Fish Commission (Commission), the State of Florida, Department of Transportation (DOT), and the Attorney General. The state contingency plan explains the operational responsibilities of state agencies when responding to the incident. This is a more specific reference to those responsibilities as envisioned by the general guidelines announced in the "Pollution Spill Prevention and Control Act." Having considered the testimony and exhibits in the context of the state support and complementary role in responding to the spill contemplated by the aforementioned laws, regulations and contingency plans, the costs, expenses and damages sought by the Petitioner are reasonably related to those purposes. Those costs, expenses and damages are detailed in Petitioner's exhibit 16 and summarized in Petitioner's exhibits 8 and 9. With the exception of $15,654.37 in costs and expenses for Petitioner's Executive Office and Division of Law Enforcement and $3,336.16 for salaries for the Commission, DOT and DCA, all claims for expenses and costs have been paid from the Fund. Petitioner wishes to impose the costs, expenses and damages in the state response whether or not claims were disbursed from the Fund. The damage claim associated with future beach re-nourishment by replacement of sand that had been befouled by oil and needed to be removed is a reasonable claim in the amount of $10,222.50. It has been paid from the Fund and is held in the Erosion Control Trust Fund until needed. The on-scene consulting fee of $3,525.00 and the oil spill assessment study fee of $9,880.00 commissioned by Petitioner through Jacksonville University are reasonably related to the Department's role in response to the spill. As Petitioner's exhibit 8 depicts, $30,312.53 has been disbursed from the Fund in costs, expenses and damages reasonably related to the response to the spill. There remains unpaid from the Fund the aforementioned costs and expenses in the amount of $18,990.53 which are reasonably related to the response to the spill. Those latter amounts, although presented for payment from the Fund by the agencies in question, were not paid, based upon some fiscal anomaly. By inference, it does not appear from this record that the Fund owes the agencies for these claims. According to Section 376.13, Florida Statutes, on February 27, 1987, Governor Martinez declared a state of emergency in response to the oil spill. That proclamation was withdrawn on March 25, 1987. The activities for which claims for costs and expenses are advanced transpired in the time frame of the state of emergency declaration. The amount which Respondent has expended in the cleanup effort is $700,000 plus or minus $200,000. None of this money has been paid to satisfy claims for costs, expenses and damages previously described. While it has been found that costs, expenses, and damages are reasonably related to the state's purposes in responding to the spill, not all items are recoverable. They are only recoverable if recognized for recovery by Chapter 376, Florida Statutes, and Chapter 16N-16, Florida Administrative Code, and owed or expended from the Fund. Petitioner's claims in its exhibit 8 in the amount of $12,901.30 and DOT claims for $675.19 in that exhibit qualify for recovery as well as the on-scene consulting fee of $3,525.00. Other claims do not qualify with the exception of a limited recovery for bird mortality. Reasons for this fact finding are set forth in the conclusions of law. Petitioner has disbursed $176,058.00 to the Commission for damages related to alleged bird mortality. This money was disbursed from the Fund. Petitioner now concedes that the amount should be reduced by half. This recognizes that the cost estimate for damages dealt with pairs of birds not single birds. Petitioner now asks for $88,075.00. Two hundred fourteen (214) birds are said to have died as a result of the spill, according to Petitioner. Petitioner seeks damages for each of these birds. The number proven to have been killed by the event and the theory upon which the damage claim is predicated leads to a result which diminishes the claim for reasons to be explained. As with other claims, Section 376.021.(4)(c), Florida Statutes, anticipates the payment of damages from the Fund. Section 376.11(1), Florida Statutes, is in aid of recovery of damages, as is Section 376.11(4)(d), Florida Statutes. However, these claims must be susceptible to proof that readily identifies and explains valuation methods of the birds and recognizes the predicate of establishing the actual number lost in this episode. For the most part, Petitioner has failed in the endeavor. Mark Damian Duda is a wildlife biologist with the Commission. He earned a bachelor of science degree from West Virginia University and received his master's degree in natural resource policy and planning from Yale University, both with honors. He was assigned the task of trying to arrive at an acceptable method for valuing birds that had been killed. His assessment is generally set forth in a report, a copy of which is Respondent's exhibit 3. Having considered a number of options, he reached the decision to employ what he describes as the replacement value method. Quoting from his report concerning this method, he has this to say: Replacement Value Method We believe the replacement value method is the most useful and logical method to determine the value of wildlife lost in the February 27 Jacksonville oil spill. A replacement cost approach can avoid many of the problems involved in attempting to estimate the use of value of biological resources. Under the replacement cost approach, the resource is valued at what it would cost to replace it. If the resource is replaced, the problems of identifying all its uses, the monetary value of these uses, and the users affected by the resource loss are eliminated, except for the period between the initial loss and the replacement. Four Florida institutions were asked to estimate the cost of obtaining specimens of the birds killed in the Jacksonville oil spill, or the price at which they would be willing to sell members of each species. Their estimates are shown in Table 4. One problem with most of these estimates is that they are not true replacements costs; but rather the cost of collecting already existing specimens from the wild and redistributing them to the Jacksonville Area. This does not represent true replacement, since true replacement requires a complete recovery of the species population. This can be most clearly assured by using only captive breeding programs for replacement. However, many of the species in this list probably cannot be bred in captivity. Therefore, true replacement of these species through captive breeding is probably impossible. It is absurd to value them at zero since they cannot be replaced. Therefore, this section presents some calculations on the assumption that they could be redistributed or replaced. Table 1 presents the replacement costs for the birds. The numbers were derived by multiplying the number of dead birds times the average replacement costs given in Table 4. Using this approach, the total replacement costs for the birds estimated to have been killed in the Jacksonville oil spill is $176,058.00. It should be noted that we use a deliberately conservative approach, using body counts only, and thereby underestimating the total mortality. There is an increasing amount of scientific literature indicating that actual body counts appear to significantly underestimate the total mortality resulting from a spill. For example, there have been a variety of experiments that show only 5 percent to 25 percent of the birds that die at sea, wash in or beach themselves on shore. The percent of loons found is probably even lower because of their low buoyancy and wide-ranging distribution. An alternative approach to estimating replacement costs is to estimate the cost of creating new habitat or enhancing existing habitat to support enough nesting pairs of each species to replenish the population. Again, to represent true replacement costs, this should be new or enhances habitat, not just the cost of acquiring already existing habitat. Tables 1 and 4 within Respondent's exhibit 3 are replicated here for convenience as Appendix 2 and Appendix 3, respectively. The numbers of birds shown in Duda's table are not numbers about which he has direct knowledge. They are numbers purportedly obtained from Tim O'Meara and Peter Southall, biologists who work for the Commission who got their information from the Central Region and Northeast Region, respectively. In particular, they allegedly received their information from rehabilitators working in the two regions. Neither biologist testified at hearing, and the exhibits do not satisfactorily establish what involvement the biologists had in a direct inventory of birds, if any, or the other sources of their information which was then given to Duda in preparing his report. The rehabilitators in the Central Region did not testify nor were any exhibits presented which spoke to records kept by those individuals that set out bird deaths in that area. The only person who presented any reliable information concerning bird mortality was Cindy Mosling, rehabilitator in the Northeast Region. Any records which she maintained were not produced at hearing. Nonetheless, she did remember some details concerning bird mortality, and from this testimony 56 common loons, 3 gannets, 1 black skimmer and 2 hooded mergansers are found to have died as a result of the oil spill. The replacement value method by Duda speaks to the fact that his method does not constitute a complete recovery of the species population. Instead, what is shown in Respondent's exhibit 3 is averaging of estimates from Table 4 on costs for collecting existing specimens from the wild and releasing them back to the Jacksonville area after a period as opposed to a captive breeding program. That explanation is not correct, either, because there is no intention to release birds to the wild after raising them or rehabilitating them in captivity in one of the Florida institutions mentioned in Table 4. Moreover, only one of those programs has been relied upon by Petitioner in arriving at a cost estimate. That program is Sea World. As a consequence, the cost analysis in Table 1 related to hooded mergansers is incorrect in that it reflects an average of $150 and not the $200 quoted by Sea world. Again, the prices reflect pairs and not single birds. Robin Friday is the curator from Sea World who supplied cost estimates for pairs in Table 4 to Respondent's exhibit 3. He arrived at his price estimates in a 15 to 20 minute telephone conversation with Duda. To the extent he had no actual experience with price lists reflecting cost of a specie, he assumed that theoretical permits would be issued to collect live birds or eggs in the wild and that he would keep them in a captive environment, hoping they would breed while in captivity. In the latter category, the costs to promote the outcome of breeding in captivity formed his estimate. It can be seen that this departs from Duda's method for valuation. Notwithstanding this fact, Duda relied upon the price quotation by Friday. The main species of birds which Friday has had experience with are waterfowl. Of the species which have been verified as lost in this incident, he had had experience with common loons and hooded mergansers. The hooded merganser is a waterfowl with which he has close experience in breeding, acquisition and disposition. The common loon is a shore bird. In his career he has worked to rehabilitate two or three of those birds. He has had no experience with gannets and black skimmers, which are shore birds. As Friday identified, waterfowl may be sold, shore birds may not. Sale of the shore birds is prohibited by law. His price quotes for the hooded mergansers are from actual experience in sales. His quotations on the other species are matters of conjecture in collecting, housing, feeding and establishing a breeding program for them based upon limited experience in rehabilitating common loons and no experience with gannets and the black skimmer. The price estimate on the hooded merganser of $100 per bird is accepted. The price estimates for common loons, gannets and black skimmers are not. They are too speculative. Jean Benchinol is a curator in Gulf Breeze, Florida, who works for Animal Park, Inc. She testified at hearing. She was presented as a witness who could corroborate the Friday opinion on bird valuation. Her cost estimates may be found as Petitioner's exhibit 14, quotes for single birds. She has had direct involvement with hooded mergansers. She has sold those birds and quoted the price at hearing as being $100. This coincides with the price per bird quoted by Friday. For other birds in her price estimates that cannot be bought and sold and that remain at issue here, that is, common loons, gannets and the black skimmer, she categorized them as capable of surviving in captivity or not. The black skimmers can live in captivity and the common loon and gannet cannot, according to the witness. She had had a common loon in captivity before and noted that it did not do well, being more receptive to northern climes. At hearing her opinion about birds that could not survive in the Florida environment was rejected. In this final analysis, that refers to the common loons and gannets. Likewise, having considered her explanation concerning her valuation for the black skimmer, that opinion is rejected. In rejecting this method, the cross examination at hearing concerning valuation for the royal tern was significant in that it pointed out the inexact and unreliable nature of the method. This method contemplated receiving a live bird in her facility and the costs for medication, housing, feeding and staff time for approximately 60 days. In summary, on the subject of bird mortality, there is no inherent prohibition against valuation; birds do have a value that can be measured in monetary terms. Here the effort to arrive at that understanding fails in the inventory of casualties and method of valuation, with a limited exception. It is also observed that the Respondent had paid the rehabilitators to house, feed and nurse birds back to health that were injured, a similar activity to the theoretical exercise envisioned by Duda, Friday and Benchinol.
Recommendation Based upon the consideration of the facts and the conclusions of law reached, it is, RECOMMENDED: That a Final Order be entered which requires the Respondent to reimburse the Fund in the amount of $17,301.58 and dismisses all other charges against Respondent. DONE and ENTERED this 26th day of July, 1990, in Tallahassee, Florida. CHARLES C. ADAMS, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 26th day of July, 1990. APPENDIX 1 The following discussion is given concerning the proposed facts of the parties. Petitioner's Facts Paragraphs 1 and 2 are subordinate to facts found. Paragraph 3 is not necessary to the resolution of the dispute. Paragraphs 4 and 5 are subordinate to facts found. The first two sentences of Paragraph 6 are subordinate to facts found. The last two sentences are not necessary to the resolution of the dispute. Paragraph 7 is not necessary to the resolution of the dispute. Paragraph 8 is subordinate to facts found. The first two sentences of Paragraph 9 are subordinate to facts found. While it is agreed that the correspondence from Petitioner to Respondent did not indicate that claims for costs and expenses were only subject to collection if paid from the Florida Coastal Protection Trust Fund, in the administrative forum recoupment of costs, expenses and damages may only be permitted for monies owed or expended from the fund. Paragraphs 10-13 are subordinate to facts found. It is acknowledged as set forth in Paragraph 14 that money was transferred from Coastal Protection Trust Fund to the Erosion Control Trust Fund for future beach renourishment. The more relevant fact is whether the claim for damages of value under the renourishment is legitimate and that determination has been made favoring the Petitioner. The concept of using the funds that are being held for purposes of future renourishment is in keeping with a reasonable disposition of the damage claim. Paragraphs 15-24 are subordinate to facts found. The first sentence to Paragraph 25 is contrary to facts found. The second sentence is subordinate to facts found. The third sentence is an accurate statement of what Table 1 contributes but the findings in that table are rejected in part. The first sentence to Paragraph 26 is subordinate to facts found. The second sentence is accepted in the sense of recognizing that a list was maintained; however, that list was not produced at hearing as an aide in determining the number of birds that were killed. The third sentence is rejected. The fourth and fifth sentences are knowledged and those underlying facts were taken into account in accepting the representations by the witness Mosling concerning the number of birds that died as a result of the oil spill which she could recall. Paragraph 27 is subordinate to facts found. Paragraph 28 is subordinate to facts found. Paragraph 29 is not necessary to the resolution of the dispute. The first sentence to Paragraph 30 is subordinate to facts found. The second sentence is not necessary to the resolution of the dispute. The first sentence to Paragraph 31 is subordinate to facts found. The second sentence is accepted with the exception that certain categories of water fowl are bought and sold in the free market. Concerning the third sentence, while it is acknowledged that curators are the better persons to attempt valuation, they must have sufficient understanding of the varieties on which they are commenting to have their opinions accepted and their methods of analysis of costs must stand scrutiny. This was not achieved in this instance. The last sentence in Paragraph 31 is not accepted in that the replacement value method was not adequately explained and does not allow a ranking of whether it is inexpensive, or cheaper or some where in the middle. Paragraph 32 is subordinate to facts found. The first sentence to Paragraph 33 is subordinate to facts found. The second sentence is subordinate to facts found as it references hooded mergansers. The other references are to species which have not been found to have been lost to the spill. The last sentence is accepted in the sense that the remaining species have limitations placed upon their use by state and federal law which prohibits the buying and selling. Paragraph 34 in its reference to the cost of hooded mergansers is accepted. The balance of the information was not utilized in that the Petitioner failed to demonstrate that other species had been lost to the spill. In Paragraph 35 of the species that testimony was presented about, only the common loon, gannets and black skimmer pertain. While it is acknowledged that the method that the witness Friday used to estimate the value of those species is an accurate portrayal of his efforts, those efforts were rejected as were those of Ms. Benchinol described in Paragraph 36. In Paragraph 36 the explanation of her methods is correct. The methods were not accepted either in support of the testimony by Friday or in her own right. There is no significance to the discussion concerning the brown pelican and inadequate proof was made that the brown pelicans were lost. Respondent's Facts The first sentence to Paragraphs 1 is subordinate to facts found. The last two sentences are not necessary to the resolution of the dispute. As to Paragraph 2, it is acknowledged that Mr. Healey served as the liaison to the RRT and OSC. In the second sentence to that paragraph it is accepted that the state supports the RRT. It also has the function to compliment the RRT and to act independent of the federal response. The first sentence to Paragraph 3 is subordinate to facts found. The second and third sentences are not necessary to the resolution of the dispute. The fourth and fifth sentences are subordinate to facts found. While Paragraph 4 accurately describes the circumstance, this did not deter the state from pursuing its independent function in responding to the spill event. Paragraph 5 accurately portrays the OCS's idea of who was necessary to support the federal response. It does not preclude the activities of other state employees in carrying out their functions. Paragraph 6 is contrary to facts found. Paragraph 7 is a correct statement but does not preclude the state's efforts in its own right at responding to the spill. Paragraph 8 is subordinate to facts found. Paragraph 9 while an accurate portrayal does not preclude the state in its efforts. The same pertains to Paragraph 10. Paragraph 11 is contrary to facts found. Paragraph 12 is subordinate to facts found. Paragraph 13 is contrary to facts found as is Paragraph 14. Paragraph 15 is subordinate to facts found. Paragraph 16 is not relevant. Paragraph 17 is an accurate portrayal of the federal use of the state helicopter but does not preclude request for reimbursement for uses which the state had of that helicopter. Paragraph 18 is subordinate to facts found. The first two sentences within Paragraph 19 are subordinate to facts found. The third and fourth sentences are not relevant to the issue of whether the state was entitled to seek the assistance or Jacksonville University for its own purposes distinct from those of the federal response. The latter sentence is a correct portrayal of the outcome but for reasons different than contemplated by the Respondent. Paragraph 20 is subordinate to facts found. Paragraph 21 is subordinate to facts found. Paragraph 22 is subordinate to facts found in its first two sentences. The third sentence is not accepted beyond the fact that the Department of Interior using a nonconsumptive use technique, whether other federal agencies use that method was not subject to determination from the record. The first three sentences to Paragraph 23 are not necessary to the resolution of the dispute. The fourth sentence is not accepted. The fifth and sixth sentences are subordinate to facts found. As to the seventh sentence, it is not clear that there was the intention of redistributing to the Jacksonville area. The eighth sentence is subordinate to facts found. Paragraph 24 is subordinate to facts found as are Paragraphs 25 and 26. The suggestion of the price for hooded mergansers as set out in Paragraph 27 is not accepted. The lesser scaup was not found to have been lost to the spill. The state price of $100.00 per bird for hooded mergansers is accepted. Paragraphs 28-31 are subordinate to facts found as it pertains to the species that were proven to have been lost. Paragraph 32 is not necessary to the resolution of the dispute. Paragraphs 33 and 34 are subordinate to facts found, with the exception that it has been determined that the number of dead birds which Ms. Mosling can recall involvement with is accepted. Paragraphs 35 through 37 are subordinate to facts found in the species determined to have been lost, with the exception that the actual price for hooded mergansers was $100. COPIES FURNISHED: Tom Gardner, Executive Director Department of Natural Resources 3900 Commonwealth Boulevard Tallahassee, FL 32399 Kenneth J. Plante, General Counsel Lynn M. Finnegan, Assistant General Counsel Department of Natural Resources 3900 Commonwealth Boulevard Tallahassee, FL 32399 Robert B. Parrish, Esquire James F. Moody, Jr., Esquire Taylor, Moseley & Joyner 501 West Bay Street Jacksonville, FL 32202
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Respondent be found guilty as charged in the Administrative Complaint, except as to those parts which allege she converted funds to her own personal use, and that her license as an ordinary life, including disability agent and general lines agent be suspended for one (1) year. DONE and ENTERED this 29th day of July, 1983, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of July, 1983 COPIES FURNISHED: Dennis S. Silverman, Esquire and Susan Koch, Esquire Department of Insurance 413-B Larson Building Tallahassee, Florida 32301 Hugh T. Handley, Esquire 213 South Alcaniz Street Pensacola, Florida 32501 The Honorable Bill Gunter Insurance Commissioner & Treasurer The Capitol, Plaza Level Tallahassee, Florida 32301
Findings Of Fact Petitioners, Larry C. and Jan D. Giunipero, reside at 2345 Tour Eiffel Drive, Tallahassee, Florida. On February 29, 1984, they obtained a building permit from Franklin County to construct a single-family dwelling on their lot in Alligator Point, Franklin County, Florida. The Giuniperos engaged the services of a professional engineer to design their beach house. In so doing, the engineer designed the structure so as to comply with the Federal Emergency Management Association (FEMA) guidelines, which are minimum building requirements established by the Federal Insurance Administration to qualify for federal flood insurance. These guidelines have been adopted by the Franklin County Planning and Zoning Department, and insure that the structure can withstand winds of 110 miles per hour. Even before the Guiniperos obtained their permit, respondent, Department of Natural Resources (DNR), was in the process of adopting new Rule 16B-26.14, Florida Administrative Code, which would establish a coastal construction line for Franklin County. Under the proposed rule, a coastal construction control line on Alligator Point would be established, and any excavation or construction activities thereafter on property seaward of the control line would require a permit from DNR, and have to be in conformity with all structural requirements set forth in Rule 168-33.07, Florida Administrative Code. Because the Guiniperos' lot lies on the seaward side of the control line, they were obviously affected by the rule. The rule adoption process was quite lengthy and well publicized. It began in October, 1983 when a public workshop was held in Apalachicola and aerial displays of the control line were placed in the courthouse. Further public hearings were held in Tallahassee in February, March and April, 1984. These hearings were the subject of numerous notices and advertisements in the Florida Administrative Weekly, Tallahassee Democrat, Apalachicola Times, Panama City News Herald, and Franklin County News. Clearly, the agency met all legal requirements in advertising the rule. However, for some reason, neither the Giuniperos or their professional engineer were aware of the pending rule change. Similarly, the Franklin County planner failed to advise them of the imminent rule change even though aerial displays of the proposed line were in the courthouse when the permit was issued. Rule 168-26.14, Florida Administrative Code, was adopted by the Florida Cabinet on April 5, 1984, and eventually became effective on April 30, 1984. As of that date, any construction or excavation work seaward of the control line required DNR to issue a permit unless a dwelling was already "under construction" in which case the project was grandfathered in. The parties agree that petitioners do not fall in this category since the dwelling was not "under construction" within the meaning of DNR rules. A few days before the rule became effective, a DNR engineer met with the Franklin County planner to review all building permits issued since September, 1983 for construction on the seaward side of the control line. The engineer did this so that he could inspect all building sites after the line became effective and determine which, if any, were "under construction" and therefore exempt from DNR permitting requirements. Because of the volume of permits issued to persons seeking to beat the April 30 deadline, and his unfamiliarity with alligator Point, the planner was unable to give the DNR engineer the precise location of petitioners' lot. On or about May 1, 1984, the engineer visited the general locale of petitioners' lot. There was no activity on petitioners' lot, and no permit posted on the site. Accordingly, he assumed a recently completed beach house some 300 feet east of petitioners' lot was actually the Giuniperos' house. Since it was already completed, he merely filed a report the following day indicating that "if the location referenced above is accurate, the structure appeared to be completed at that time." On July 6, 1984, petitioners proceeded to install twenty-three 8" by 8" pilings on their lot at a cost of $1,760. DNR discovered this construction activity a few days later and notified petitioners by telephone that such activity was illegal without a permit. A formal cease and desist order was sent on July 11, 1984, and no activity has taken place since that time. An application for a permit remains in abeyance pending the outcome of this proceeding. The structural requirements of DNR are more stringent than those previously required by Franklin County and FEMA. Indeed, the FEMA guidelines are not a part of a coastal construction regulatory program but are merely minimum standards to meet federal flood insurance criteria. Therefore, while the Guiniperos' proposed dwelling is designed to withstand a windload of 110 miles per hour DNR requires a structure to meet a windload of 140 miles per hour. DNR also recommends that larger and more expensive pilings be used, and that the structure be designed to adequately resist a 100 year return interval storm event. Because the DNR requirements are more stringent, petitioners estimate they will incur total costs of $8,890 just to pull out the old pilings and install larger ones. 1/ Additional costs may be incurred to redesign and build the structure to withstand a wind velocity of 140 miles per hour. By rule, DNR does not grant a waiver of its permit requirements except where a building is already constructed and an applicant desires to make "minor additions" to existing nonconforming structures. The Giuniperos do not qualify for such a waiver.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that petitioners' request for a waiver from the permitting requirements of Rule 16B-33.07 be DENIED. DONE and ORDERED this 11th day of March, 1985, in Tallahassee, Florida. Hearings Hearings DONALD R. ALEXANDER Hearing Officer Division of Administrative The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative this 11th day of March, 1985.
Findings Of Fact Mr. Jewell was employed as a life insurance agent from February, 1977 until June 12, 1978, with Gulf Life Insurance Company. During his employment as a "debit agent" with Gulf Life, Mr. Jewell misappropriated $1,363.77 of premiums from the company policyholders for his own use. His defalcation was discovered by the company in May of 1978, and as a result his employment was terminated. Part of his job as a debit agent included collecting premiums from the company's policyholders on a periodic basis. He was then to forward these premiums to Gulf Life. An audit of his books by Gulf Life in May of 1978 revealed that he was in fact misappropriating the funds. When confronted with the facts he was cooperative in establishing the amount of the defalcation. He made however, no attempt at restitution. On October, 1979 Gulf Life wrote a letter to him stating that he had a deficiency in his accounts and demanded payment therefor. The letter did not state the amount owed. Mr. Jewell still made no attempt to pay the amount due even though as early as June, 1979, he knew from a partial audit that his accounts were at least $700.00 short. Thereafter Mr. Jewell was sued by Gulf Life in Circuit Court for the misappropriated funds and a default judgement was obtained against him in May, 1979 for more than $1,300.00. There is still approximately $600.00 owing on the judgement. In the last nine months prior to the hearing Mr. Jewell has been employed by Reserve Life Insurance Company. He was hired as a manager-trainee and then promoted to be the district manager for the company's Merritt Island Office. It is the policy of Reserve Life that its district managers must spend at least 30 percent of their time in direct insurance sales while devoting the balance of their time to managerial duties. If Mr. Jewell's insurance license is suspended or revoked, he could possibly lose his position with Reserve Life because of the 30 percent sales rule. Since he has worked for Reserve Life his employer has been well pleased with his performance. His office has produced a remarkable amount of new business. His present supervisor, Mr. Patrick Anthony, thinks very highly of Mr. Jewell's integrity and character. He appeared on Respondent's behalf at the instant final hearing. While he may have mentioned having had some kind of a problem at Gulf Life, it does not appear that Mr. Jewell was completely candid about the nature or the extent of his defalcation at the time he was hired by Mr. Anthony for Reserve Life.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That a final order be entered by the State of Florida, Department of Insurance, suspending the license of Gary Thomas Jewell to represent an insurance company as an agent for the period of three (3) months beginning from the date of the final order DONE and ENTERED this 8th day of July, 1980, in Tallahassee, Florida. MICHAEL PEARCE DODSON Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904)488-9675 COPIES FURNISHED: L. Terry Coggin, Esquire Department of Insurance Larson Building Room 428-A Tallahassee, Florida 32301 Fred D. Leone, Esquire 3017 Riveredge Boulevard Suite 108, Riveredge Plaza Post Office Box 1536 Cocoa, Florida 32922
The Issue The issues to be resolved in this proceeding concern whether the Petitioner properly secured the payment of workers' compensation benefits for employees by securing proper workers' compensation insurance coverage, as delineated by Subsection 440.107(2), Florida Statutes (2004) and, if not, what if any penalty for such failure is warranted.
Findings Of Fact The Petitioner in this proceeding is a Florida corporation engaged in the construction industry. Its business domicile is Destin, Florida, and the job site at issue was in the town of Cinco Bayou, Florida. The Respondent is an agency of the State of Florida charged with enforcing the provisions of Chapter 440, Florida Statutes, specifically Section 440.107, Florida Statutes (2004), requiring employers to secure the payment of compensation benefits for employees in the event they have an on- the-job injury. In this proceeding the Respondent has charged that the Petitioner failed to abide by the workers' compensation insurance coverage requirements of Chapter 440, Florida Statutes, regarding two subcontractors, Scott Williams, d/b/a Vinyl Masters, LLC, (Williams) domiciled in Alburn, Alabama, and J & L Concrete a/k/a Moses Construction, Inc., (J & L) of Liliburn, Georgia. There is no dispute that the Petitioner did not have its own workers' compensation insurance policy as of February 10, 2005. The most recent policy ended July 2, 2003. The Petitioner thus did not itself secure payment of workers' compensation on behalf of Williams or J & L during the period of proposed penalty assessment, September 8, 2004 through February 10, 2005. The Petitioner was the general contractor engaged to perform construction operations at 1028 Anniston Court, Cinco Bayou, Florida (job site), on February 10, 2005, the date of the investigator's inspection visit and investigation. The Petitioner was sub-contracting certain vinyl siding work at that job site to Williams, a subcontractor. The Respondent's investigator, Ralph Taylor, conducted his investigation at the job site and observed four workers installing vinyl siding. Upon investigation he determined that the four workers were employed by Williams in this effort and identified the workers as Juan Oriz, Noe Mendieta, Jose Palma, and Jose Aboyte. Mr. Taylor's investigation revealed that Williams did not have a current workers' compensation exemption applicable to Florida law nor did he have a Florida workers' compensation insurance policy. He determined this by examination of the Respondent's data base, the Coverage and Compliance Automated System (CCAS). Williams informed Mr. Taylor, however, that he had obtained a policy of workers' compensation insurance through the Cruchfield Insurance Agency of Birmingham, Alabama. A facsimile of the declaration page from a workers' compensation insurance policy issued by Alabama Home Builders Self Insurance Fund to Vinyl Masters, LLC (Williams) was transmitted to Mr. Taylor by a representative of the Cruchfield Insurance Agency of Birmingham. Florida law requires that an employer who has employees engaged in work in Florida must obtain a Florida policy or endorsement for such employees which employs Florida class codes, rates, rules, and manuals that are in compliance with the provisions of Chapter 440 as well as the Florida Insurance Code. See § 440.10(1)(g), Fla. Stat. (2004). Florida Administrative Code Rule 69L-6.019(2) requires that in order for an employer to comply with Sections 440.10(1)(g) and 440(38)(7), Florida Statutes, any policy or endorsement used by an employer to prove the fact of workers' compensation coverage for employees engaged in Florida work must be issued by an insurer that holds a valid certificate of authority in the State of Florida. The insurance policy held by Williams did not satisfy the standard. First, the Alabama Home Builders self-insurance fund is not authorized to write insurance in Florida. Secondly, the premium was based on a rate that was less than the Florida premium rate. The policy declaration page shows that Alabama Home Builders insured Vinyl Master effective January 1, 2005, for carpentry operations under class code 5645 at a premium of $20.58 per $100 of payroll. The premium rate using Florida rates for that same class code should have been $38.40 for $100 of payroll. Thus Vinyl Masters/Williams was not in compliance with the coverage law requirements at that job site at the time of the investigation on February 10, 2005. Employers employing on job sites in Florida are required to keep business records that enable the Respondent to determine whether the employer is in compliance with the workers' compensation law. § 440.107(2), Fla. Stat. (2004). Investigator Taylor issued a request for production of business records to Williams on February 10, 2005. That same date the Respondent issued a request for production of business records to the Petitioner. Each request asked the employer to produce, for the preceding three years, documents that reflected payroll, payments to each subcontractor, and proof of insurance. Williams produced no records. The Petitioner produced no records related to employment of Williams or Vinyl Masters. When an employer fails to provide requested business records which the statutes requires it to maintain and to make available to the Respondent Agency, the Respondent is authorized to impute that employer's payroll using "the statewide average weekly wage as defined in Section 440.12(2), multiplied by l.5." § 440.107(7)(e), Fla. Stat. (2004). The statewide average weekly wage for the four quarters beginning June 30, 2004, was $651.38. The Respondent thus could have imputed payroll for the entire three-year period for which it requested business records which were not produced. The Respondent imputed payroll however, for a lesser period, January 11, through February 10, 2005. This corresponds to the one-month period that the four Williams workers had told Investigator Taylor that they had worked "in the area." The amount that the Petitioner would have paid in premium under Section 440.107(7)(e), Florida Statutes (2004), based on payroll imputed from the statewide average weekly wage of $651.38 for work under class code 5651, during the period January 11, through February 10, 2005, multiplied by the statutory multiplier factor of 1.5, yields a penalty amount of $5,629.52. In any event, Williams did not properly secure the payment of compensation for Williams or the four workers in question, named above. Under Section 440.10(1)(b), Florida Statutes, (2004), the Petitioner could became the "statutory employer" of Williams and its workers if Williams, the subcontractor, had not secured the payment of workers' compensation. The credible evidence at hearing reveals, however, that Williams has already entered into a payment agreement with the Respondent to pay the subject penalty, referenced above, concerning Williams' failure to have "Florida-complaint" workers' compensation coverage properly secured for Florida workers and Florida operations. Additionally, the testimony of Mr. Grubbs, the manager for the Petitioner (which is accepted), reveals that the four workers in question only worked three days at most. Moreover, their hourly wage rate was only $15.00 per hour. Therefore, although the Petitioner supplied no business records in advance to the investigator regarding the subcontractor, Williams, which might allow the Respondent to impute payroll based on average weekly wage for calculation for a penalty under the applicable statutory authority; in this de novo proceeding context, the Petitioner did supply sworn testimony and records showing the actual wage rate and time worked for these employees, thus obviating use of the average weekly wage and imputed payroll for penalty calculation. Additionally, the Petitioner showed, through the testimony of Mr. Grubbs, that indeed the Petitioner had a certificate of insurance showing, to the best of Petitioner's knowledge at the time, that Williams had secured the payment of workers' compensation through the Alabama insurance carrier, named above, in accordance with accepted industry practice. Thus the Petitioner was under a good faith, reasonable belief that this subcontractor, Williams, had secured proper payment of workers' compensation coverage at the time the Petitioner engaged Williams as a subcontractor on the job-site in question. In summary, in view of these facts the assessment of penalty to the Petitioner is incorrect. The Investigator, Mr. Taylor's, testimony itself shows that had he known that the workers only worked for three days, the penalty should only be based upon that amount of work or hours applied to the penalty calculation formula. Because Williams has undertaken and agreed to pay the penalty in question for not properly securing workers' compensation coverage, no penalty is justifiably assessed against the Petitioner. If that were done the Respondent, in effect, would be treating both Williams and the Petitioner as employers of the same employees simultaneously, for the same job and occurrence. No evidence justifying this, given the relevant statutory scheme and case law, has been adduced. Subcontractor J & L Concrete In response to the Respondent's request for business records from the Petitioner concerning subcontractor J & L Concrete, the Petitioner produced ledgers showing payments to J & L. The Petitioner contracted with J & L during the period September 8, 2004 through February 10, 2005. During that period it paid J & L $155,413.98 for labor under class code 5403. During this period of time J & L had a workers' compensation policy covering its employees issued by Auto Owners Insurance Company of Lansing, Michigan (Auto Owners). The testimony of Maureen Haxton, a senior underwriter in the workers' compensation underwriting department of Auto Owners, confirmed that a policy endorsement was issued which took effect on July 13, 2004. That endorsement listed the State of Georgia in item 3A but did not list the State of Florida in item 3A. Auto Owners later issued a policy endorsement on May 10, 2005, that added Florida to item 3A, effective on March 18, 2005. The later endorsement issued by Auto Owners was not effective on February 10, 2005, when the SWO was issued to the Petitioner. The penalty sought to be assessed against the Petitioner for work attributable to J & L, based upon Section 440.107(7)(d)1., Florida Statutes (2004), is based on remuneration paid by the Petitioner to J & L for work under class code 5403 for period September 8, 2004 through February 10, 2005. Keith Cowart is an authorized insurance agent for Auto Owners Insurance Company. His agency is located in Lawrenceville, Georgia. He originally issued a workers' compensation policy to J & L in July of 2002 and a current policy is in effect for J & L to and including July 2006 and was in effect during the penalty assessment period. Mr. Cowart testified that had an employee in Florida suffered an injury on or before February 10, 2005, that the employee would have received workers' compensation benefits from Auto Owners and that employees injured in Florida would have received the level of benefits required by Florida law. Cowart indicated in his testimony that there are annual audits of J & L, under their contractual arrangement, by Auto Owners, to determine how much of its payroll is attributable to work conducted in Florida for workers' compensation insurance premium purposes. The J & L payroll is audited annually and J & L is billed a premium rate based upon Florida work and payroll and premium rates for workers' compensation insurance attributable to work done by its employees in the State of Florida. J & L is thus charged a higher premium for employees working in Florida and is obligated to pay that Florida premium rate. J & L previously paid $40,000.00 in payroll for Florida workers on Florida jobs and was billed Florida premium rates for workers' compensation coverage based upon that payroll after an annual audit. It was projected for the year 2005-2006 J & L would owe premiums for at least $70,000.00 of workers' compensation payroll in Florida and had paid premiums due for workers' compensation coverage in the past for Florida job workers based upon Florida premium rates, according to Mr. Cowart. In summary, the evidence, including Mr. Cowart's sworn testimony, establishes that J & L had a workers' compensation policy coverage in effect during the period of alleged non- compliance. Mr. Cowart opined that injured Florida employees during that period of time would have received the benefits authorized by Florida law. He established that J & L was charged Florida premium rates, and pursuant to the audit being conducted in July 2005, would be charged Florida premium rates for workers, jobs performed, and payroll attributable to Florida during the period of time in question in this case. Although the endorsement issued by Auto Owners showing Florida as a listed state in "item 3A," for purposes of the rule cited below, did not take effect until after March 18, 2005, the persuasive evidence, in the form of Mr. Cowart's testimony, shows that J & L had secured workers' compensation coverage which paid Florida- mandated benefits at Florida premium rates for workers at Florida jobs at times pertinent to the SWO. Moreover, the Petitioner required the sub-contractor J & L to provide evidence of workers' compensation coverage and relied on that evidence reasonably and in good faith. It changed its position to its detriment by continuing to work on the job without securing its own appropriate coverage.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is, therefore, RECOMMENDED that a final order be entered by the Respondent Agency rescinding Stop Work Order number 05-0721-1A issued to the Petitioner on February 10, 2005, and the Amended Order of Penalty Assessment issued to the Petitioner on March 30, 2005. DONE AND ENTERED this 29th day of November, 2005, in Tallahassee, Leon County, Florida. S P. MICHAEL RUFF 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 November, 2005. COPIES FURNISHED: Michael William Mead, Esquire Post Office Drawer 1329 Fort Walton Beach, Florida 32549 David C. Hawkins, Esquire Department of Financial Services Division of Legal Services 200 East Gaines Street Tallahassee, Florida 32399-4229 Honorable Tom Gallagher Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Carlos G. Muniz, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
