Findings Of Fact Respondent Shaughnessy is a licensed real estate broker in Florida, holding license number 0079279 at all material times. He has been a real estate broker for 18 years. Respondents Conifer Consulting Group, Inc. and Conifer Realty Group, Inc. are corporations registered as real estate brokers, holding license numbers 0271201 and 0271202, respectively. In January 1992, Mr. Shaughnessy answered a want ad seeking a sales manager for single-family and condominium sales for Respondent Conifer Consulting Group, Inc. Mr. Shaughnessy received an interview with Scott Spence, the minority owner of both Conifer corporations. Following a successful interview, Mr. Shaughnessy interviewed with Bruce Houran, the majority owner of the Conifer corporations. Mr. Spence was the marketing director of the Conifer corporations. A civil engineer, Mr. Houran had provided the money for the businesses and relied on Mr. Spence's expertise in a wide variety of business matters, including the real estate operations. Following a successful interview with Mr. Houran, Mr. Shaughnessy had a final interview with Mr. Spence and Mr. Houran. At the conclusion of the third interview, the three men agreed that Mr. Shaughnessy would join the Conifer corporations as a sales manager, devoting his efforts to managing the sole salesperson working for the Conifer corporations at Bocilla Island Club in Bokeelia. In return for his efforts, the Conifer corporations agreed to pay Mr. Shaughnessy the sum of $350 weekly plus certain expenses. During the course of the interviews, Mr. Shaughnessy mentioned that he was a licensed real estate broker. The Conifer corporations were employing Ms. McClaran as their registered broker, but she had in reality only lent her license to the Conifer corporations in return for a portion of the sales and rental commissions. Following the interviews, and outside the presence of Mr. Shaughnessy, Mr. Houran expressed interest to Mr. Spence in replacing Ms. McClaran with Mr. Shaughnessy. Pursuant to this plan, Mr. Houran sent a letter to Ms. McClaran, with a copy to Mr. Spence but not Mr. Shaughnessy, terminating her employment with the Conifer corporations. The letter states that they have hired Mr. Shaughnessy as a "sales manager with a Broker's license" and adds that he will be providing his license to the Conifer corporations. Pursuant to the employment contract with Ms. McClaran, the letter gives her 90 days' notice, and she continued to earn commissions on sales contracts executed during that time. Unfortunately, no one told Mr. Shaughnessy that he was the new broker for the Conifer groups. Ms. McClaran's name continued to appear on the door to the real estate offices, even after the 90 days had expired. The Conifer corporations never had business cards printed up showing Mr. Shaughnessy as the broker, nor did Mr. Shaughnessy or anyone else hold Mr. Shaughnessy out as the broker for the companies. In late October 1992, the Conifer real estate salesperson contacted the Florida Real Estate Commission to inquire as to the status of her pending application to become a broker. She learned that the Conifer corporations were no longer properly licensed, as their license had expired in March 1992. The salesperson contacted Mr. Houran and told him about what she had learned. Mr. Houran called Mr. Shaughnessy and informed him of the licensing situation. Mr. Shaughnessy immediately began the process of placing his broker's license with Conifer Realty Group, Inc. (Mr. Houran decided not to continue to involve Conifer Consulting Group, Inc. in real estate activities.) Mr. Houran appointed Mr. Shaughnessy as an officer of Conifer Realty Group, Inc. on October 23, 1994. On November 4, 1992, Mr. Shaughnessy filed with Petitioner a Request for Change of Status to effect the necessary change. Only when Mr. Shaughnessy filed the paperwork with Petitioner did his rate of compensation change. His old pay rate of $350 weekly was replaced by a new arrangement in which he received an equity interest in future developments created by either Conifer corporation. In late October or early November 1992, Mr. Shaughnessy also began the process of creating an escrow account for Conifer Realty Group, Inc. Previously, all escrow monies had been deposited in the general operating account of the corporation. No one performed monthly reconciliations of escrow monies, although no monies were ever lost. Working as quickly as possible to transfer sales and rental escrow monies into the new account, Mr. Shaughnessy received the first bank statement for the account around December 6, 1992, performed the required reconciliation, and determined that the escrow account was in good order and balanced. By the time of an inspection from one of Petitioner's investigators on December 4, 1992, there was no sign on the door of the real estate office at Bocilla Island Club. However, at that time, neither Conifer corporation had any relationship with the developer of the units, nor was either Conifer corporation conducting business of any sort out of this office. The salesperson who had discovered the problem had resigned, had formed a new company, had assumed Conifer's responsibilities for sales and rentals, and was using the old office at the Bocilla Island Club. Until the time of the filing with Petitioner in November, Mr. Shaughnessy was never aware, nor could he have reasonably been aware, that his broker's license was to be used to qualify the Conifer corporations. Communications had broken down between Mr. Houran and Mr. Spence or Mr. Spence and Mr. Shaughnessy. In any event, Mr. Shaughnessy never agreed to place his license with either Conifer corporation until October 1992. At all material times during which Mr. Shaughnessy's broker's license was placed with the Conifer corporations, the escrow account was maintained and properly reconciled. There is no evidence that the signage was improper at anytime, except possibly in connection with the real estate office operated by the former salesperson. However, the Conifer corporations are liable for the substantial period of time during which they operated without an escrow account. Although no money was lost or unaccounted for, management's casual attitude toward serious legal responsibilities is manifest in the sloppy way that the Conifer companies handled the transition between brokers and the improper relationship that they earlier maintained with Ms. McClaran. As a result of her involvement in the matter, Ms. McClaran, who was an inexperienced broker and personal friend of Mr. Spence, had her broker's license suspended for 90 days. It is a matter of some mitigation that Mr. Spence is no longer involved with either Conifer corporation and that Mr. Houran reasonably expected that his noninvesting co-owner would provide something of value to the companies--namely, his expertise in real estate matters, including licensing. The absence of injury to the public, although irrelevant to the issue of liability, is another factor in mitigation, as is the quick action taken by the corporations, through Mr. Shaughnessy and at Mr. Houran's direction, to correct the situation as soon as it was brought to their attention.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Florida Real Estate Commission enter a final order dismissing the Administrative Complaint against William P. Shaughnessy; finding Conifer Realty Group, Inc. and Conifer Consulting Group, Inc. guilty of failing to maintain an escrow account and operating as a broker without holding a valid and current license as a broker; imposing an administrative fine of $4000 against the Conifer companies, jointly and severally; and issuing a reprimand against both companies. ENTERED on April 20, 1994, in Tallahassee, Florida. ROBERT E. MEALE 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 on April 20, 1994. APPENDIX Rulings on Petitioner's Proposed Findings 1-8: adopted or adopted in substance. 9: rejected as unsupported by the appropriate weight of the evidence. 10-12: adopted or adopted in substance. 13: rejected as unsupported by the appropriate weight of the evidence and subordinate except for fact that there was no escrow account, which is adopted. 14-15: adopted or adopted in substance. 16: to the extent of implication that the office was that of a Respondent, rejected as unsupported by the appropriate weight of the evidence. Rulings on Respondent's Proposed Findings 1-8 and 10: adopted or adopted in substance. 9: the state of mind of Respondents, as well as their degree of culpability, has been addressed in the recommended order. COPIES FURNISHED: Darlene F. Keller Division Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900 Steven W. Johnson BPR, Division of Real Estate 400 West Robinson Street N308 Orlando, Florida 32802 Leonard P. Reina Forsyth, Brugger 600 Fifth Avenue, South #210 Naples, Florida 33940
The Issue Whether Respondent, Greenway Nursery, Inc. (“Greenway”), is liable to Petitioner, Huntsman Tree Supplier, Inc. (“Huntsman”), for the purchase of landscaping trees, and, if so, in what amount.
Findings Of Fact Based on the oral and documentary evidence adduced at the final hearing, and the entire record in this proceeding, the following Findings of Fact are made: Huntsman is a Florida corporation for profit, located in Lake City, and engaged in the business of commercial tree farming. Its owners are James and Michelle Huntsman. Mr. Huntsman is the president of the company and Ms. Huntsman is the secretary. Greenway is a Florida corporation for profit, located in Morriston, and engaged in the business of commercial nursery and landscaping. Its owner and president is Brian D. Love. At issue in this proceeding are two deliveries of trees from Huntsman to Greenway, one on March 12, 2015, and one on June 23, 2015. The invoice for the March 12 delivery indicates that it was billed to Greenway. It is for 12 East Palatka holly trees, 65 gallons each. The trees are billed at the rate of $240 each, for a total bill of $2,880. The invoice indicates that Greenway took delivery of the trees by customer pick-up. The invoice for the June 23 delivery also states that it was billed to Greenway. The invoice includes one ligustrum, eight feet in height, for $200; one 2.5-inch DBH1/ slash pine for $130; two 4-inch live oaks with a height of 14 to 16 feet for $250 each; and one cypress for $240. The total amount of the invoice is $1,070. Again, the invoice indicates that Greenway took delivery by picking up the trees. All of the trees in both invoices were destined for a landscaping project at Adena Golf and Country Club in Ocala (“Adena”). Both parties were involved in planting trees in different areas of the Adena property. The parties’ course of dealing until June 2015, was not completely explained at the hearing. It was clear that Huntsman would directly bill Greenway for the trees and that Greenway would take delivery of the trees by pick-up. It was unclear whether Huntsman expected to receive payment directly from Adena or whether Greenway would pay Huntsman for the trees from payments Greenway received from Adena. In any event, Greenway accepted the billings and took delivery of the trees in each instance, thus accepting ultimate responsibility for payment to Huntsman. In its answer to the Complaint, and again at the final hearing, Greenway admitted liability for the $2,880 stated in the March 12 invoice. Mr. Love agreed to pay Huntsman that amount within 15 days of entry of the final order in this case. However, Greenway denied liability for the $1,070 stated in the June 23 invoice. Mr. Love stated that his company was not liable for these trees because they were not part of his project with Adena. He stated that he installed these trees to replace trees on the Adena property that had died, but that the dead trees had not been the responsibility of his company. Ms. Huntsman denied that the dead trees had been installed in the area of the Adena property where her company was working. She testified that Adena’s representative told her that she should seek payment from Greenway because the June 23 tree delivery constituted “warranty work.” Greenway had planted trees on the Adena property that had died, and Adena considered Greenway the warrantor of those trees and therefore liable for their replacement. Based on all of the testimony, it appears that Huntsman found itself in the middle of a dispute between Greenway and Adena as to whether Greenway had warranted the trees that died, and became aware of the dispute only after it had billed and delivered the trees to Greenway in accordance with the parties usual course of dealing. The evidence was insufficient to establish that Huntsman had any responsibility for, or prior knowledge of, the dead trees. It will be left to one or the other of these parties to take up the issue of payment with Adena. Fundamental fairness dictates that this burden should fall to Greenway. Greenway had the warranty dispute with Adena that caused this controversy. Greenway accepted the bill of lading and the invoice for the June 23 shipment, and took delivery of the trees in accordance with the parties usual course of business. As the innocent supplier of the trees, Huntsman should be made whole.
Recommendation Based on the foregoing, it is, therefore, RECOMMENDED that the Department of Agriculture and Consumer Services enter a final order approving the claim of Huntsman Tree Supplier, Inc., against Greenway Nursery, Inc., in the amount of $4,000. DONE AND ENTERED this 12th day of April, 2016, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 12th day of April, 2016.
The Issue The issues for determination are whether Respondent violated Section 475.25(1)(s), Florida Statutes,1 by having a registration for a state license revoked and, if so, what, if any, penalty should be imposed.
Findings Of Fact Petitioner is the governmental agency responsible for issuing licenses to practice real estate. Petitioner is also responsible for regulating licensees on behalf of the state. Respondent is licensed as a real estate sales person under license number 0532841. Respondent's license is issued c/o Pan American Equities, Inc., 35725 Tanglewood Drive, Eustis, Florida, 32726. Respondent is also licensed as a mortgage broker. He earns his living as a real estate broker and as a mortgage broker. Prior to January 5, 1996, Respondent was licensed as an insurance agent by the Florida Department of Insurance (the "Department") pursuant to license number 589181909. Sometime prior to January 5, 1996, Respondent had terminated his involvement in the business of insurance and had become employed as a real estate salesman and as a mortgage broker. On December 11, 1995, the Department filed a 16 page administrative complaint against Respondent alleging violations in five separate counts. At the time, Respondent was employed full time as a real estate salesman and mortgage broker and was preoccupied with his wedding plans. On January 5, 1996, Respondent voluntarily surrendered his insurance license and signed a settlement stipulation for a consent order. On January 9, 1996, the Department entered a consent order. The settlement stipulation and consent order are analogous to a plea of convenience. Respondent did not admit to the allegations in the administrative complaint filed by the Department. In relevant part, the settlement stipulation stated: . . . The Department conducted an investigation of the Respondent in his capacity as an insurance agent. As a result thereof, the Department alleges that the Respondent made material misrepresentations in surplus lines business and engaged in illegal premium financing and sliding. (emphasis supplied) * * * . . . By execution of this Settlement Stipulation For Consent Order and by entry of the subsequent Consent Order in this case, the Department and the Respondent intend to and do resolve all issues which pertain to the matters raised in the Department's investigation. (emphasis supplied) Like the settlement stipulation, the consent order contains no admission of guilt by Respondent. The consent order states, in relevant part: . . . The Settlement Stipulation for Consent Order dated January 5, 1996, is hereby approved and fully recorded herein by reference. . . . The licenses and eligibility for licensure and appointment of the Respondent . . . as an insurance agent in this state are hereby surrendered to the Department . . . . . . . The surrender . . . shall have the same force and effect as a revocation pursuant to Section 626.641(4). Respondent surrendered his insurance license because he no longer needed it as a real estate agent and as a mortgage broker. Respondent was not represented by counsel and was not fully informed that the surrender of his insurance license would jeopardize his real estate license. When Respondent learned that the surrender of his insurance license threatened his real estate license, Respondent retained counsel. Counsel moved to vacate the Department's consent order. The Department denied Respondent's motion.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order finding Respondent guilty of violating Section 475.25(1)(s) and reprimanding Respondent for doing so. RECOMMENDED this 21st day of February, 1997, in Tallahassee, Florida. DANIEL MANRY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 21st day of February, 1997.
The Issue Whether one or more grounds exist for suspending, or imposing other discipline against, Respondent’s license, where Petitioner charges that Respondent engaged in fraudulent or dishonest practices in the conduct of business as a licensed health insurance agent.
Findings Of Fact The evidence presented at final hearing established the facts that follow. The Big Picture 1. Gonzalez is, and at all times material was, a Florida- licensed health insurance agent whose conduct qua licensee is subject to the regulatory jurisdiction of the Department. 2. From April 1997 until January 25, 1999, Gonzalez worked as a sales representative for Foundation Health, a Florida Health Plan, Inc. (“Foundation”) at its offices in Dade County, Florida. Foundation paid Gonzalez a base salary and car allowance plus commissions and bonuses tied to production. 3. As an agent of Foundation, Gonzalez’s job was to solicit applications from Medicare recipients for membership in Foundation’s Senior Value Medicare Plan, a health maintenance organization (“HMO”) that, through managed care, provided a broader spectrum of benefits than otherwise was available under traditional Medicare coverage. For each Medicare recipient enrolled in the Senior Value Medicare Plan, Foundation received a monthly payment from the federal Health Care Financing Administration (“HCFA”). 4. On January 14, 1999, Gonzalez, as Foundation’s representative, signed an application for enrollment in the Senior Value Medicare Plan that had been filled out for an applicant named “Doris Simpson.” Included in the application were numerous identifying data such as Ms. Simpson’s address, phone number, date of birth, social security number, and Medicare number. Gonzalez submitted Ms. Simpson’s January 14, 1999, application to Foundation, initiating the enrollment process. 5. The Doris Simpson who fit the application’s description had died on or around July 1, 1998. The fact of her death was discovered in short order by HCFA during the ordinary course of the enrollment process. HCFA naturally rejected the bogus application and notified Foundation of the problem on or around January 20, 1999. 6. On January 22, 1999, Foundation suspended Gonzalez for three days, effective immediately, pending the outcome of its investigation into the Doris Simpson matter. 7. Gonzalez resigned his employment with Foundation on January 25, 1999. Thereafter, on February 1, 1999, Gonzalez began working for Physicians Healthcare Plans, Inc. as a sales representative, a job he has held ever since. Mistake or Misconduct? 8. The foregoing facts are largely undisputed; those that follow mostly are, hotly. Getting to the bottom of whether Gonzalez made an honest mistake, as he maintains, or submitted a fraudulent application, as the Department has charged, is facilitated by a careful scrutiny of Gonzalez’s conflicting explanations of what happened. 9. Gonzalez’s most contemporaneous account of the Simpson affair appears to be contained in an undated handwritten document, entitled simply “Statement,” that Gonzalez himself indisputably prepared and signed. The full text of this paper follows: STATEMENT Prospect: Doris Simpson Ss# 075-22-6675 Agent: George J. Gonzalez Ss# 263-92-7916 To whom it may concern: To the best of my recollection I arrived at 20879 N.W. 9th Ct #107 (Walden Ponds Community) during the morning of (on or about) 11 a.m. 14th Jan.—through the gate system. Ms. Simpson agreed to my visit & let me in. Ms. Simpson opened [the] door and throughout my presentation produced a Medicare card and then proceeded to verification. Verification person was “DAWN.” Throughout the whole process everything proceeded to a normal sit down “application-to-verification” prospect call. P.S. She is blind, African-American. {Signed] George J. Gonzalez 10. Gonzalez’s manager at Foundation, Sergio Rumie, testified that sometime between January 20 and January 22, 1999, Gonzalez personally had handed him this Statement, which, according to Mr. Rumie, constituted Gonzalez’s written explanation of what had occurred with the Simpson application. Mr. Rumie recalled that in a discussion between the two of them, Gonzalez had told him that he (Gonzalez) had met with someone (obviously not Doris Simpson) in the Simpson household on January 14, 1999, who had held herself out as Ms. Simpson and signed the application. Mr. Rumie believed Gonzalez. 11. Although the Statement is not dated, two details in Gonzalez’s handwritten memorandum strongly suggest that the events of January 14, 1999, were its intended subject. The first of these telltale details is the date itself. The controversial Simpson application is dated January 14, 1999. The Statement refers to a meeting between Gonzalez and Doris Simpson on January 14. No imagination is required to connect one to the other. 12. The second common denominator linking the Statement to the phony Simpson application is the verifier’s name, Dawn. Before going on, however, some additional background must be provided, so that the significance of this datum may be understood. 13. At all times material, an independent contractor located in Utah performed application verification services for Foundation. The name of this contractor is not in evidence. For convenience’s sake, following the witnesses’ lead, the contractor will be referred to simply as “Utah.” 14. As part of the approved sales process, Foundation required its agents to place a telephone call to Utah, in the presence of the prospective enrollee, whenever an application had been completed. Once connected, the agent was supposed to introduce the applicant to the verifier, and then turn the phone over to the applicant. Using a script, the verifier would ask the applicant a series of questions, to confirm that he or she understood the transaction at hand. If the interview went well, the verifier would give the agent a verification number along with his or her name, both of which the agent would record on the face of the application. Foundation would not accept an _application unless it contained a verification number. 15. On the controversial Simpson application of January 14, 1999, Gonzalez wrote, by hand, a verification number and the verifier’s name, which happens to have been Dawn—the very name, recall, of the verifier who was so prominently identified (as “DAWN”) in the Statement. 16. If the story ended here, it would be difficult to find that Gonzalez had willfully submitted a false application. Rather, to this point, Gonzalez seems to have been the victim of a strange hoax, fooled by an imposter pretending (for reasons that admittedly are not readily apparent) to be the late Doris Simpson. Mr. Rumie, after all, who knew Gonzalez and was ina position to assess his character and credibility at the time of the incident, had believed this to be the case. 17. But there is more to the story. The exculpatory scenario just mentioned holds water only if Gonzalez were unacquainted with the real Doris Simpson, for if Gonzalez had known the decedent personally, then common sense would counsel that he could not have fallen for a poseur’s deceit. 18. Gonzalez testified that he had been to Ms. Simpson's home on three occasions before January 1999, and that he knew her well. Twice, he said, he had taken an application from Ms. Simpson in person, had submitted the application, which was accepted, and thereby had succeeded in enrolling her in Foundation’s HMO. Each time, however, Ms. Simpson had dis- enrolled before long. Corroborating Gonzalez’s account are two completed applications, dated March 31, 1997, and June 4, 1998, and the fact that Ms. Simpson had been a member of the Senior Value Medical Plan for brief periods following these dates. 19. Gonzalez claimed also to have taken an application from Ms. Simpson in January 1998 that was rejected. In contrast to the other two, however, no application from January 1998 was produced at hearing—indeed, no persuasive corroborating evidence of any kind was adduced in support of this supposed January 1998 application. 20. The reliability of Gonzalez's testimony that he knew Ms. Simpson personally from dealings between them that had occurred before January 1999 is high because the fact is against his interests; this much of Gonzalez's testimony, therefore, is accepted as true and adopted as a fact finding. 21. On the other hand, Gonzalez's testimony that he met with Ms. Simpson in January 1998 and took an application from her at that time is suspiciously self-serving (as will be seen) and, ultimately, not believable. Initially, Gonzalez’s failure to produce the purported application raises a skeptical eyebrow. But what sinks Gonzalez's story about meeting Ms. Simpson in January 1998 is that the tale was told in an incredible attempt to explain away the Statement (which, if intended to refer to events of January 14, 1999, cannot be squared with Gonzalez’s admission that he had by then known Ms. Simpson personally from prior dealings) as a memorandum regarding this purported January 1998 visit. Gonzalez maintained that, by coincidence, he had happened to meet with Ms. Simpson on January 14, 1998, and again on January 14, 1999, and that both times the verifier, as chance would have it, was Dawn. This contention is contrived and forced. 22. Taken as a whole, the evidence is convincing that Gonzalez wrote the Statement in January 1999 for his former employer and delivered it to Mr. Rumie between January 20 and January 22, 1999, with the intent that the Statement be understood as a description of the circumstances surrounding Gonzalez’s solicitation of the January 14, 1999, application from the putative Ms. Simpson. The contents of the Statement, 10 however, are false and misleading, as was Gonzalez's testimony at hearing about the Statement. 23. Gonzalez gave a different account of the Simpson application to the Department of Insurance in response to the Administrative Complaint in this matter. In an undated letter to the Department which the Department received on September 6, 2000, Gonzalez wrote: By recollection I believe this case involves a mail-in situation. I recall that I sent maybe two/three such invitation packages in the Spring of 1998 and one could have been for Mrs. Simpson. That practice is no longer tolerated after a new Vice-president of marketing (Medicare) was installed in the Sawgrass Headquarters late May of that same year. As 1998 was ending in December (late) I believe I received an application signed and (I believe) it was the Simpson one. I completed the data in those days that followed early in January 1999, before starting my new job did a phone verification (3 way) or gave this information to a verifying person (Utah) and the person was thus verified (I cannot be clear on this). Hearing no problems from Utah I recorded the authorization # on a call back from Utah or after the verification; if done by 3-way. I did not know of her death and in fact only found out when receiving your package of counts and allegations on August 21, 2000. I would only add that Mrs. Simpson had a family member there, perhaps her sister. During my first application for the plan with Mrs. Simpson in late 1997 I believe she helped in the signing and subsequent verification of her sister. Mrs. Simpson 11 could not sign any proper way the petitions. I believe she was blind in my recollections. 24. Ironically, one of the few unqualified representations in this letter of Gonzalez's to the Department—that he “in fact” had first learned of Ms. Simpson’s death upon receipt of the Administrative Complaint—was clearly untrue. In fact, Gonzalez undeniably had known of Ms. Simpson's death at the time of his resignation from Foundation on January 25, 1999, if not sooner, and certainly long before August 21, 2000, in any event. 25. As for the rest of this explanation, Gonzalez essentially stuck with it at hearing, although his memory apparently had improved by then, for he seemed far more confident of the details than he had as author of the above- quoted letter. 26. In a nutshell, Gonzalez claimed that, on his own initiative, he had mailed a partially filled-out application to Ms. Simpson in June or July 1998 with note asking her to sign and return the document if she wanted to re-enroll in Foundation's Medicare HMO. He claimed to have had no further contact with Ms. Simpson until, in late December 1998 or early January 1999, he received through the mail Ms. Simpson's signed- but-undated application. According to Gonzalez, despite the delay of some five months, Gonzalez failed to call Ms. Simpson to confirm her continued interest and instead signed the 12 application on January 14, 1999, inscribing the same date next to the purported signature of Ms. Simpson. He claimed to have contacted Utah, provided the necessary information to the verifier, and in due course to have received a verification number from Dawn, which signified to him that all was in order. 27. This story is facially unbelievable and is rejected as a fabrication. Moreover, there is an out-of-place detail on the January 14, 1999, application that exposes the chicanery; namely, the designated primary care physician, a Dr. Nidal Radwan, who is specifically identified therein as Ms. Simpson's current physician. When Gonzalez was asked at hearing to point out the parts of the application that he had filled out, Gonzalez replied, making reference to the top quarter of the first page where the primary care physician information appears, that [t]he part that's my handwriting is the name, the address, the phone number, and the date of birth, and doctor selected, which was her last doctor. I put it there, I said does she [sic] want this doctor again. Transcript of Final Hearing at 193 (emphasis added). 28. At the time Gonzalez supposedly prepared this application, in June or July 1998, he had not spoken with Ms. Simpson specifically about doing so; indeed, she may well already have passed away. He certainly did not speak with her about doctors after July 1, 1998. Yet on the previous 13 application that Gonzalez had taken from Ms. Simpson just a few weeks before her death, dated June 4, 1998 (Respondent's Exhibit 4), Ms. Simpson had chosen a Dr. [Illegible] -Nunez as her primary care physician—not Dr. Radwan. 29. It is commonly known that for a genuine insurance application, the sales representative or agent will endeavor to elicit truthful, complete, and current information from the applicant and rely upon the applicant's representations in preparing the paperwork. The fact that Gonzalez's selection of Dr. Radwan as Ms. Simpson's "current" primary care physician was not based on information obtained from Ms. Simpson—aindeed, his election deviated from her last (known) written expression of intent in this regard—-exposes the act as an arbitrary choice of Gonzalez's, which in turn underscores the counterfeit nature of the January 14, 1999, application. The Charges 30. In Count I of its Administrative Complaint, based on allegations that Gonzalez had signed and presented an application for insurance in the name Doris Simpson, who was at the time deceased, the Department accused Gonzalez of having submitted an enrollment form that he "knew or should have known" contained false or fraudulent information, in violation of Sections 626.611 and 626.621, Florida Statutes. Specifically, the Department alleged the following grounds for discipline: 14 (a) Willful misrepresentation of any insurance policy or annuity contract or willful deception with regard to any such policy or contract, done either in person or by any form of dissemination of information or advertising. [Section 626.611(5), Florida Statutes] ; (b) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance. [Section 626.611(7}, Florida Statutes] ; (c) Fraudulent or dishonest practices in the conduct of business under the license or appointment. [Section 626.611(9), Florida Statutes] ; (d) Willful failure to comply with, or willful violation of, any proper order or rule of the department or willful violation of any provision of this code. [Section 626.611(13), Florida Statutes] ; (e) Violation of any provision of this code or of any other law applicable to the business of insurance in the course of dealing under the license or appointment. [Section 626.621(2), Florida Statutes] ; (£) In the conduct of business under the license or appointment, engaging in unfair methods of competition or in unfair or deceptive acts or practices, as prohibited under part X of this chapter, or having otherwise shown himself or herself to be a source of injury or loss to the public or detrimental to the public interest. [Section 626.621(6), Florida Statutes] ; [and] (g} UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE ACTS.- The following are defined as unfair methods of competition and unfair or deceptive acts or practices: Misrepresentation in insurance applications.- Knowingly making a false or 15 fraudulent written or oral statement or representation on, or relative to, an application or negotiation for an insurance policy for the purpose of obtaining a fee, commission, money, or other benefit from any insurer, agent, broker, or individual. [Section 626.9541(1) (k), Florida Statutes] [.] Ultimate Factual Determinations 31. Because the evidence does not illuminate all the particulars of Gonzalez’s scheme, it is impossible to reconstruct completely the precise course of his misconduct. The evidence is sufficient, however, to establish, clearly and convincingly, that on or around January 14, 1999, Gonzalez: (a) signed an insurance application for Ms. Doris Simpson knowing that she had neither requested the sought-after coverage, nor supplied information for that application, nor executed the application herself; (b) placed a date next to the purported signature of Ms. Simpson (which he knew was not hers) intentionally to represent, falsely, that “she” and he had signed the instrument contemporaneously (and hence, implicitly, in one another’s presence); and (c) with intent to deceive, submitted this bogus application to his employer, Foundation, for the purpose of obtaining a commission or other benefit. 16
Conclusions For Petitioner: Anoush A. Arakalian, Esquire Department of Insurance Division of Legal Services 200 East Gaines Street Tallahassee, Florida 32399-0333 For Respondent: Ignacio Siberio, Esquire 525 Northwest 27th Avenue, Suite 100 Miami, Florida 33125
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a final order suspending Gonzalez’s health insurance agent license for a period of one year. 21 DONE AND ENTERED this 10 day of July, 2001, in Tallahassee, Leon Count 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 lot day of July, 2001.
The Issue The issue in this case is whether the license of Allen Franklin Meredith (Respondent) should be disciplined by the Department of Insurance and Treasurer (Petitioner) for allegedly allowing others to use his general lines insurance agent license, and to sign his name to insurance policy applications while Respondent was not present, as more particularly set forth in the Administrative Complaint issued herein on or about October 12, 1989.
Findings Of Fact At all times material hereto, Respondent has been licensed, and eligible for licensure, in the State of Florida as a life and health insurance agent, health insurance agent, and a general lines insurance agent. During April, 1989, Respondent approached Gordon Rowan, owner of Gordon Rowan Real Estate and Insurance in Winter Haven, Florida, to inquire whether Rowan would assist Respondent in obtaining a renewal of his general lines insurance agent license. Respondent was residing with his family in Georgia at the time, and told Rowan that his Florida general lines agent license was about to expire, and he needed to get licensed with a Florida company in order to apply for renewal. Rowan agreed to pay for Respondent's renewal fee, and for licensing him with a Florida Company doing business through Rowan's agency. On or about April 30, 1987, Rowan applied to National Insurance Associates for licensure on behalf of Respondent, and paid the applicable license fee. On or about May 20, 1987, Respondent was licensed with National Insurance Associates as a general lines insurance agent, and his Florida general lines license was renewed. Respondent admitted in an affidavit executed on November 16, 1987, that he did authorize Rowan to use his general lines license from the beginning of May to the end of June, 1987, while he was still living in Georgia. This authorization was in exchange for Rowan's assistance in obtaining Respondent's licensure with National Insurance Association, and renewal of his Florida license. However, at hearing Respondent testified that he never authorized Rowan to "use" his license, only to "place" his license with Rowan's agency. Rowan testified that Respondent had, in fact, told him that he could use his license and write business under it, including signing Respondent's name to policy applications, even though Respondent was not in the office and did not participate in these transactions. Rowan's assistant, May Satava, was present when Rowan and Respondent discussed their arrangement, and confirmed Rowan's testimony. Based upon the demeanor of the witnesses, as well as the affidavit executed by the Respondent shortly after the events involved in this matter, it is found that Respondent's uncorroborated testimony at hearing is not credible, while that of Rowan and Satava is found to be credible and consistent with statements made to Luis Rivera, the Petitioner's investigator, in October, 1987. Respondent did tell Rowan that he could use his general lines license to write business, and to sign his name to applications in exchange for Rowan's assistance in obtaining the renewal of his Florida general lines agent license. Working under Rowan's control and supervision, Satava did sign Respondent's name to approximately 48 policy applications from May through July, 1987, while Respondent actually signed only 3 additional policy applications during this period. Thus, the vast majority of business written under Respondent's license during this time was actually completed by Satava, an unlicensed person working under the control and supervision of Rowan, without any involvement of Respondent, pursuant to his agreement with Rowan that Rowan could use his license. Respondent did receive a commission payment in the amount of $200 from Rowan for June and July commissions. This represented Rowan's estimate of a reasonable payment to Respondent for the use of his license during this time when Satava signed Respondent's name to approximately 48 policy applications.
Recommendation Based upon the foregoing, it is recommended that Petitioner enter a Final Order suspending Respondent's general lines agent license, and eligibility for licensure, for a period of six months. DONE AND ENTERED this 9th Florida. day of March, 1990 in Tallahassee, DONALD D. CONN Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 Filed with the Clerk of the Division of Administrative Hearings this 9th day of March, 1990. APPENDIX Rulings on the Petitioner's Proposed Findings of Fact: 1-2. Adopted in Finding 1. Adopted in Finding 2. Adopted in Finding 3. 5-6. Adopted in Finding 6. Adopted in Finding 7. Adopted in Finding 8. Respondent did not file Proposed Findings of Fact. COPIES FURNISHED: Gordon T. Nicol, Esquire 412 Larson Building Tallahassee, FL 32399-0300 Allen Franklin Meredith 140 Flamingo Drive Auburndale, FL 33823 Don Dowdell, Esquire General Counsel Department of Insurance The Capitol, Plaza Level Tallahassee, FL 32399-0300 Hon. Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, FL 32399-0300
The Issue By these consolidated actions, the Petitioners seek to recover attorney's fees and costs as alleged prevailing small business parties under authority set forth in Section 57.111, Florida Statutes.
Findings Of Fact In accordance with Chapter 380, Florida Statutes, the Department of Community Affairs (Department), at times relevant to this inquiry, has maintained the duty and responsibility to enforce and administer that law. Following entry of the subject Development Order on March 23, 1976, Leon County, Florida, became responsible for administering that Development Order in accordance with Chapter 380, Florida Statutes. The Development Order had been issued upon application by Killearn Properties, Inc., the principal developer. Through property conveyance, the principals within Kinhega Landing and Kinhega Oaks purchased parcels within the geographical boundaries of the development of regional impact (DRI) authorized by Chapter 380, Florida Statutes, and the subject of the Development Order. The property transactions pertaining to the parcels purchased by the Kinhega landing and Kinhega Oaks groups, when recorded in the property records for Leon County, Florida, did not reflect the existence of the Development Order, nor did any history of the chain of title indicate that the parcels were within the DRI. The record does not reflect that the developer, Killearn Properties, Inc., and other persons subsequently involved with the conveyance of the subject parcels purchased by the Kinhega Landing and Kinhega Oaks principals made the Kinhega Landing and Kinhega Oaks groups aware that the parcels being purchased were within the DRI. The Development Order contained a requirement that the DRI be served by a wastewater treatment facility from the inception. The Development Order did not allow the use of septic tanks for individual lots as an interim measure pending the availability of wastewater treatment service through a central plant. Contrary to the requirements set forth in the Development Order, certain restrictive covenants recorded within the public records of Leon County, Florida, pertaining to the parcels purchased by the Kinhega Landing and Kinhega Oaks groups indicated that septic tanks could be utilized. The Kinhega Landing and Kinhega Oaks groups were mindful of the restrictive covenants which allowed the use of septic tanks. This knowledge was gained through an examination of the public records of Leon County, Florida. Moreover, in seeking preliminary plats, the principals for Kinhega Landing and Kinhega Oaks were subsequently issued preliminary plats, pursuant to conditions which allowed the use of septic tanks for individual homeowners and lots pending the availability of wastewater treatment through a central service. Notwithstanding the fact that Leon County was responsible for administering the Development Order and acting consistent with its terms, the Leon County employees who issued the preliminary plats knowingly acted contrary to the terms set forth in the Development Order by allowing septic tanks, instead of requiring the provision of wastewater treatment through central service. Neither did the Leon County employees apprise the Kinhega Landing and Kinhega Oaks groups that the Development Order existed, and thereby allow those groups to make their own determination concerning the consistency of the preliminary plats when measured against the requirements set forth in the Development Order. Chapter 380, Florida Statutes, as it existed when the Development Order was issued did not mandate that the Development Order be recorded in the public records of Leon County, Florida. The amendments which were made to Chapter 380, Florida Statutes, following the date upon which the Development Order was entered did not retroactively mandate the need to record the existence of the Development Order in the public records of Leon County, Florida. That fact taken together with the inability to ascertain the existence of the Development Order through property records related to the specific parcels purchased by the Kinhega Landing and Kinhega Oaks groups, the failure by the initial developer, Killearn Properties, Inc., and others who had been involved with the subject parcels to advise the Kinhega Landing and Kinhega Oaks groups that the parcels being purchased were subject to a Development Order, and the failure by Leon County officials to advise the Kinhega Landing and Kinhega Oaks principals that the parcels were subject to a Development Order, establishes that the Kinhega Landing and Kinhega Oaks groups were without actual or constructive notice of the requirement to provide central wastewater service. To the contrary, Leon County employees provided advice that specifically violated the terms set forth in the Development Order, in a setting in which the Leon County officials were charged with the responsibility to act consistent with the terms set forth in the Development Order. This leads to the conclusion that the Kinhega Landing and Kinhega Oaks groups could not reasonably have ascertained that the Development Order existed as a means of avoiding actions that were inconsistent with the Development Order. This finding also takes into account that the property records reflecting restrictive covenants, as they would inform the public, allowed the use of septic tanks and coincided with the development permission given by the planning officials within Leon County. When investigating and deciding to bring the Notice of Violation, the Department spent considerable time in discussion with the Killearn Properties, Inc., principals. It had no contact with the Kinhega Landing and Kinhega Oaks principals. The Department also met with Leon County concerning the County's administration of the terms of the Development Order. The Department never asked anyone employed by Leon County whether County employees had told the Kinhega Landing and Kinhega Oaks groups that a Development Order had been entered which limited the manner in which development could be pursued, to include the inability to use septic tanks on individual homeowner lots. Neither does it appear that the Department interrogated the principals for Killearn Properties, Inc. concerning whether those individuals had told the principals at Kinhega Landing and Kinhega Oaks that the parcels purchased by the latter groups were under restrictions and were subject to requirements set forth in the Development Order. Nor does it appear that the Department interrogated anyone else concerning advice to these groups about the existence of the Development Order. The Department was aware that the preliminary plats for Kinhega Landing and Kinhega Oaks allowed the use of septic tanks until central sewer service became available and held the opinion that this arrangement violated the requirement to provide wastewater treatment service from a central location from the inception of the DRI. Although the Department has stated that it decided to name Kinhega Landing and Kinhega Oaks in the Notice of Violation to bring before the administrative tribunal all parties necessary for an adjudication of rights and remedies in the overall DRI, in fact, the Department did not name all parties who had property rights subject to the DRI when seeking enforcement through the Notice of Violation. Moreover, it did not occur to the Department that it would be advisable to inquire of the principals within Kinhega Landing and Kinhega Oaks concerning their knowledge of the existence of the Development Order. As stated, the Department had no realization concerning whether the County had advised the principals within Kinhega Landing and Kinhega Oaks regarding the existence of the Development Order when those entities applied for preliminary plats. The Department, when deciding to bring the Notice of Violation against Kinhega Landing and Kinhega Oaks, made note of the conditions associated with the issuance of the preliminary plats wherein it was anticipated that the individual homeowners would need to tie into central sewer service when it was made available. The Department then assumed that it was common knowledge in the development community that the property encompassed within the DRI, to include Kinhega Landing and Kinhega Oaks parcels, was under a Development Order. In addition to looking at the Leon County plat records concerning the Kinhega Landing and Kinhega Oaks parcels, which reflected the permission to use septic tanks subject to availability of central wastewater service, the Department did "some title work" related to the Kinhega Landing and Kinhega Oaks parcels. None of the activities can be seen to educate the Department as to the existence of a Development Order which knowledge could be imputed to Kinhega Landing and Kinhega Oaks principals. The Department was aware that the Development Order had been issued in 1976 at a time when there was no requirement to record the Development Order in the public records of Leon County, Florida. Further, the Department knew that the Development Order had not been recorded in the public records of Leon County, Florida. At the point in time where the decision was being reached to name Kinhega Landing and Kinhega Oaks in the Notice of Violation, the Department assumed, without rational basis, that Leon County affirmatively stated to Kinhega Landing and Kinhega Oaks that the parcels held by those entities were within the DRI. At hearing, concerning the request to be reimbursed for attorney's fees and costs, counsel for the Department who was principally responsible for the case involving the Notice of Violation was uncertain whether the Department of Community Affairs had inquired of Leon County concerning whether Leon County had made Kinhega Landing aware of the existence of the Development Order. Moreover, the Department of Community Affairs assumed that because the Development Order did not allow the use of septic tanks and that the preliminary plats allowed the use of septic tanks on an interim basis, this was seen as evidence that Leon County had brought the existence of the Development Order to the attention of Kinhega Landing and Kinhega Oaks. Such assumption lacked any rational basis. The present Petitioners learned of the existence of the Development Order when served with the Notice of Violation. The Department of Community Affairs became aware that the Kinhega Landing and Kinhega Oaks groups did not know of the Development Order after the Department of Community Affairs had filed the Notice of Violation, and notwithstanding that knowledge continued to pursue the underlying action. When deciding to file the Notice of Violation against Kinhega Landing and Kinhega Oaks, the Department was not aware of any specific legal authority which would support the conclusion that purchasers without notice of the existence of the Development Order would nonetheless be bound by the Development Order and could not defend themselves against acts taken contrary to the Development Order, such as installation of septic tanks in a setting in which the Development Order only allowed wastewater treatment through a central service. Without regard for specific precedent concerning the legal question of whether bona fide purchasers for value, purchasers without knowledge of the Development Order, could defend their actions which were inconsistent with the Development Order, the Department proceeded with its Notice of Violation because it declined to resolve the question of whether those purchasers would nonetheless be held to comply with the Development Order. The Kinhega Landing and Kinhega Oaks principals are prevailing same business parties whose respective expenses in defending the notice of violation exceed $15,000.00. In summary, the Department of Community Affairs was aware that Kinhega Landing and Kinhega Oaks principals were not subject to constructive notice concerning the existence of the Development Order when charging Kinhega Landing and Kinhega Oaks principals with the notice of violation. The Department of Community Affairs failed to establish whether the Kinhega Landing and Kinhega Oaks principals had actual knowledge of the existence of the Development Order prior to bringing the Notice of Violation against those parties and the assumptions which the Department of Community Affairs made concerning actual notice by Kinhega Landing and Kinhega Oaks principals were not reasonable assumptions, especially when relying on Leon County to impart knowledge in a setting in which the Department of Community Affairs had concluded that Leon County had violated the Development Order in its own right, when allowing septic tanks to be used in lieu of wastewater treatment through central service. Misfeasance by Leon County in relation to that topic did not create the proper inference that Kinhega Landing and Kinhega Oaks principals were willing participants in that course of conduct. Kinhega Landing and Kinhega Oaks principals were not aware of the existence of the Development Order prior to being charged with the Notice of Violation.
The Issue As to DOAH Case No. 03-1447PL, whether the licensure as an insurance agent in Florida held by Respondent Jerrod Keith Zelanka (Jerrod Zelanka) should be disciplined based on the allegations of the Administrative Complaint filed against him and, if so, the extent of such discipline. As to DOAH Case No. 03-1448PL, whether the licensure as an insurance agent in Florida held by Respondent Fredric Stuart Zelanka (Fredric Zelanka) should be disciplined based on the allegations of the Administrative Complaint filed against him and, if so, the extent of such discipline.
Findings Of Fact Jerrod Zelanka is currently eligible for licensure and licensed in Florida as a general lines insurance agent. Fredric Zelanka is currently eligible for licensure and licensed in Florida as a general lines insurance agent. American Insurance Management, Inc. (AIM) was incorporated as a Florida corporation on December 16, 1994. AIM was dissolved as a corporation on August 23, 1996. At all times pertinent to this proceeding, Accredited Insurance Group, Inc. (AIG) was an active Florida corporation and Fredric Zelanka was a director and officer of that corporation. At all times pertinent to this proceeding, American Professional Insurance Services, Inc. (APIS) was an active Florida corporation and Jerrod Zelanka was a director and officer of that corporation. There was no evidence as to any formal relationship between AIG (Fredric Zelanka's corporation) and APIS (Jerrod Zelanka's corporation), although the two corporations shared the same offices. At all times pertinent to this proceeding, Explorer was an insurance company doing business in Florida. On May 13, 1999, Explorer, as insurer, entered into an agency agreement with "Accreditted (sic) Insurance Group, Inc.: DBA American Insurance Management," as agent (the Agency Agreement).2 Fredric Zelanka signed the Agency Agreement on behalf of the agent. At all times pertinent to this proceeding, Fredric Zelanka was the agent of record with Explorer. The Agency Agreement authorized the agent to bind policies of insurance on behalf of Explorer. Paragraph 4 of the Agency Agreement was as follows: 4. The Company (Explorer) authorizes the Agent to collect, receive and receipt for premiums on insurance submitted by the Agent to, and accepted by, the Company. All premiums and return premiums received by the Agent either before or after the termination of this Agreement shall be held by the Agent in a fiduciary capacity as trustee for the Company until delivered to the Company, or in the case of return premiums, to the insured. Paragraph 5.B.(2) of the Agency Agreement required the agent to send to Explorer the required premium down payment or payment in full for the policy within five days of binding an insurance policy. Explorer received nine checks drawn on an account held by APIS at the MetroBank branch office located in Lighthouse Point, Florida. The first of these nine checks was dated August 9, 2001, and the last was dated September 14, 2001. Jerrod Zelanka signed eight of these checks. Each check represented the total or partial payment of premium for a policy of insurance bound pursuant to the Agency Agreement. MetroBank dishonored each of these checks because the check was not properly signed (one check), the account did not have sufficient funds to pay the check (three checks), the funds were uncollected3 (one check), or the account was closed when the checks were presented for payment (four checks). Explorer received ten checks drawn on an account held by APIS at the BankAtlantic branch office located in Deerfield Beach, Florida. The first of these ten checks was dated September 24, 2001, and the last was dated October 28, 2001. Jerrod Zelanka signed each check. Each check represented the total or partial payment of premium for a policy of insurance bound pursuant to the Agency Agreement. BankAtlantic dishonored each check because the account did not have sufficient funds to pay the check when it was presented. The 19 dishonored checks totaled $5,597.00. Fredric Zelanka was not a signatory on the account at MetroBank or on the account at BankAtlantic. Although the checks remitted by APIS to Explorer were dishonored, Explorer issued the policies of insurance that had been bound pursuant to the Agency Agreement. After the checks were dishonored, Explorer demanded payment of the premiums from Respondents. Explorer thereafter terminated the Agency Agreement because Respondents failed to remit the premiums to Explorer. After the termination of the Agency Agreement, Explorer withheld from Respondents commissions that had been earned pursuant to the Agency Agreement, which reduced the debt Respondents owed Explorer. On April 17, 2003, Jerrod Zelanka, on behalf of American Insurance Management, agreed that it owed Explorer the sum of $1,699.11 and agreed to a payment schedule. At the time of the final hearing, Respondents owed Explorer approximately $1,600.00. Fredric Zelanka was hospitalized with health problems and unable to work when the checks at issue in this proceeding were written by Jerrod Zelanka.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a final order finding Jerrod Zelanka guilty of violating the provisions of Sections 626.561(1) and 626.611(7), (9), and (10), Florida Statutes. As penalty for these violations, it is RECOMMENDED that Petitioner suspend Jerrod Zelanka's insurance licenses and eligibility for licensure for a period of nine months. It is FURTHER RECOMMENDED that Petitioner enter a final order finding Fredric Zelanka guilty of violating the provisions of Sections 626.561(1), 626.611(10), and 626.621(4), Florida Statutes. As penalty for these violations, it is recommended that Petitioner suspend Fredric Zelanka's insurance licenses and eligibility for licensure for a period of three months. DONE AND ENTERED this 15th day of August, 2003, in Tallahassee, Leon County, Florida. S CLAUDE B. ARRINGTON 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 15th day of August, 2003.
The Issue Whether Petitioner, Gateway Farms, LLC, is entitled to payment from Landscape Service Professionals, Inc., and the Gray Insurance Company, as Surety, pursuant to sections 604.15 through 604.34, Florida Statutes (2015), for the purchase of trees; and, if so, in what amount.
Findings Of Fact The Parties Gateway is a producer and seller of agricultural products, including slash pine trees. Gateway operates tree farms on 200 acres in five different locations in Columbia, Alachua, and Suwannee Counties. David Hajos is the owner and principal operator of Gateway. Mr. Hajos has 17 years of experience in growing, harvesting, and selling pine and other species of trees in Florida. Respondent Landscape is a Florida licensed dealer in agricultural products, pursuant to chapter 604. Landscape is a full-service landscape business located in Tamarac, Florida. Sandy Benton has been the president of Landscape for 18 years. Respondent, Insurance Company, filed a denial of the claim and was represented at hearing by Landscape’s counsel. Gateway has been doing business with Landscape for many years, with no indication of prior problems relating to the quality of trees provided. Lynn Griffith, Landscape’s plant and soil expert, considers Gateway to be a competent and professional grower. The Setting At all relevant times, Landscape was a contractor responsible for installing landscaping at the Palm Beach County Solid Waste Authority (SWA) site on Jog Road in Palm Beach County, Florida. Pursuant to orders placed by Landscape, Gateway sold a total of 148 slash pines for use at the SWA site. The invoices for those pines are dated January 22 and 23, and February 9 and 16, 2015. Upon their arrival at the site, authorized personnel of Landscape received, inspected, and accepted the 148 slash pine trees. No problems or concerns were expressed regarding the delivery or condition of the slash pines. The Dispute Giving Rise to this Proceeding Between 20 and 30 of the trees ordered from Gateway were intended as replacement trees for the approximately 150 slash pines provided by six other vendors that had been planted by Landscape, and then died. When the dead trees were removed by Landscape, pine beetles were observed infesting the trees. Within several weeks of planting, 58 of the slash pines purchased from Gateway began to show signs of decline, resulting in their eventual death. Landscape consulted with the Palm Beach County Extension Service and industry professionals as to the cause of the death and decline of the slash pine trees, who undertook an investigation into the same. Slash pine trees are very sensitive and can be easily stressed. Stress can be caused by a variety of factors including: transplanting; harsh handling; bark exposure to sunlight, including superficial wounds to the bark; too much or too little water; or planting too deeply. The stress will cause a tree to emit chemicals that attract beetles, which inhabit the trees and may kill a stressed tree within a week or two of the infestation. In March 2015, Lynn Griffith, an agricultural consultant, conducted an SWA site visit. Mr. Griffith noted that a majority of the planted pines were healthy, but there were some that were not doing well; some had holes in them indicative of a pine beetle infestation. In his report dated March 12, 2015, Mr. Griffith opined on the impact of the ambrosia (pine) beetle infestation on the slash pines: The quantities of boreholes in some of the dead or declining pines would lead me to conclude that borers could be a primary cause of death, but in other cases the number of holes was low, indicating the pine decline was initiated by other factors. In an e-mail dated April 24, 2015, Ms. Benton advised Gateway (and JWD Trees, another supplier of slash pines to the SWA site) that the cause of the death and decline of the slash pine trees were because the two suppliers failed to properly prepare them in the nursery, and had sold them to Landscape with root systems inadequate to support the normal performance of the plant. At hearing, Ms. Benton’s opinion regarding the cause of death of the pines was echoed by John Harris, accepted as an expert in landscape economics and arborism. Mr. Harris’s opinion centered on only one possible explanation for the trees’ demise: a failure to have an adequate root system or an inability of the roots to generate new growth. Typically, this is caused by improper “hardening off” of the root system by the grower. However, on cross-examination, Mr. Harris acknowledged that while pine beetles typically infest stressed trees, if the beetle population builds up enough in an area they will attack otherwise healthy trees. At hearing, Mr. Hajos testified that the pine trees he supplied to Landscape had been properly hardened off for a period of six weeks: Hardened off is a process when you dig a tree and you hold it until it starts to regenerate new roots, so instead of just digging it up and selling it we dig it up and hold it under optimal irrigation and nursery conditions before we ship the tree. Mr. Hajos further testified that any trees that are going to die due to the stress of being dug out of the ground will die during the hardening off process. Mr. Hajos attributed the death of the Gateway trees to several factors, including stress caused by improper lifting of the trees during loading and unloading, stress caused by a delay in planting the trees after they arrived at the SWA site, and the pre-existing pine beetle infestation. Mr. Hajos examined a photograph received in evidence and explained that it showed a tree being improperly lifted by Landscape personnel during unloading. The photograph showed the strap around the tree trunk doing the primary lifting. The result is that rather than distributing the pressure between the trunk and the strap on the root ball, the root ball will be loosened, which will stress the tree. Mr. Hajos testified that he was aware that the Gateway trees that had been delivered to the SWA site were left on the ground for days before being planted. This testimony was corroborated by Landscape’s Daily Job Report log which reflected the delivery of the first load of Gateway pines to the SWA site on January 23 and 24, 2015, but that planting of those trees did not begin until January 29, 2015. On one occasion, a Landscape truck that had picked up trees from Gateway, broke down in Ocala on its return trip to Palm Beach County and had to return to the Gateway site in High Springs. There, the trees were unloaded, and then reloaded onto a different truck where they were delivered two days later to the SWA job site. This inordinate delay and additional loading and unloading further stressed the trees. Once Landscape became aware that it had a beetle infestation at the SWA site, it began a preventative spray program. However, once a pine beetle has entered the bark of a pine tree preventative spraying will be ineffective at eradicating the pest. Newly planted pine trees at the SWA site were not sprayed on the day of planting, thereby providing the pine beetles an opportunity to infest the new trees. Guy Michaud was Landscape’s job foreman at the SWA site. Mr. Michaud has been in the business of planting trees since 1983, and has worked for Landscape for 14 years. Mr. Michaud could not testify with certainty that the Gateway trees died of inadequate roots, as opposed to a beetle infestation. None of the other species of trees sold by Gateway for use at the SWA site experienced problems. Based on the totality of the evidence, it is more likely than not that a combination of factors contributed to the SWA slash pine deterioration, including delays in planting the trees after delivery, rough handling, and the beetles. None of these causes are attributable to the actions of Gateway. Likewise, the greater weight of the evidence does not support a conclusion that the trees sold by Gateway to Landscape were non- viable nursery stock. Subsequent to filing its claim in the amount of $13,462.30 with the Department, Gateway received a payment of $5,528.84 from Landscape. Thus, the unpaid balance due Gateway for the 58 slash pines is $7,933.46. Gateway is entitled to payment in the amount of $7,933.46 for the slash pine trees it provided to Landscape. Besides the amount set forth above, Gateway claims the sum of $50.00 paid for the filing of the claim against Landscape and its bond. The total sum owed to Gateway by Landscape is $7,983.46.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Department of Agriculture and Consumer Services approving the claim of Gateway Farms, LLC, against Landscape Professional Services, Inc., in the total amount of $7,983.46 ($7,933.46 plus $50 filing fee); and if Landscape Professionals Services, Inc., fails to timely pay Gateway Farms, LLC, as ordered, that Respondent, The Gray Insurance Company, as Surety, be ordered to pay the Department of Agriculture and Consumer Services as required by section 604.21, Florida Statutes, and the Department reimburse the Petitioner as set out in section 604.21, Florida Statutes. DONE AND ENTERED this 18th day of March, 2016, in Tallahassee, Leon County, Florida. S W. DAVID WATKINS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 18th day of March, 2016.
Findings Of Fact On August 6, 1986, an indemnity bond was executed between RAINMAKER as principal and FIDELITY as surety. The effective dates of the bond were from October 21, 1986, to October 20, 1987. The bond was required under Sections 604.15-604.30, Florida Statutes, in order for RAINMAKER to become licensed as a dealer in agricultural products in Florida. The purpose of the bond is to secure the faithful accounting for a payment to producers or their agents or representatives of the proceeds of all agricultural products handled or purchased by RAINMAKER. The Petitioner, SHAN-RON, is a corporation whose address is 276 Cypress Street, La Belle, Florida. Its purpose is to conduct business by finding buyers for sod located on acreage owned by various cattle ranchers in Lee County, Florida. This practice is commonly known as "bird dogging" in the agricultural trade. The way the business is conducted is as follows: SHAN-RON is contracted by sod installers to whom it sells sod in specific quantities for a fixed price. Once the oral agreement is made, SHAN-RON tells the sod installer where a sod field is located. At this point in the business transaction, the sod installer sends independent truck drivers to the designated sod field. If the sod installer is unable to locate truckers, he telephones a SHAN-RON field foreman. The foreman, as a courtesy, will check to see if any of the independent truckers currently as the sod field can haul a load for the sod installer. Once a trucker is located, employees from SHAN-RON mow the grass, cut the sod, and load it onto pallets owned by SHAN-RON. The truck is loaded with pallets by SHAN-RON employees and the driver is given two copies of the load ticket, one for him and one for the sod installer. The driver delivers the sod and pallets to the address placed upon the load tickets. Upon delivery, the driver has the responsibility to deliver the load ticket to the business office of the sod installer. If he does not deliver the ticket, he does not get paid for hauling the sod. Employees of the sod installer are usually at the delivery site. The sod is laid and the empty pallets are returned to the sod field by the truckers. Every Friday, a representative of SHAN-RON personally delivers a weekly bill to the sod installer in order to collect is owed. When the money is collected, the funds are divided between the rancher whose sod was sold and SHAN-RON. The accountability system used within the sod industry leaves room for a high margin of error at various stages. The SHAN-RON employees occasionally short pallet loads or two layers of sod. The truck drivers occasionally misnamed the sod installer to whom the sod is to be delivered. The truck drivers also occasionally do not take empty pallets under their control back to SHAN-RON. They sell the pallets and pocket the money. The sod installer is financially responsible for the pallet costs. RAINMAKER is a corporation whose address is Post Office Box 7385, Ft. Myers, Florida. The company is primarily in the business of installing sod. It transacted business with SHAN-RON between November 11, 1986, and January 8, 1987. At the time of these transactions, RAINMAKER was licensed as a dealer in agricultural products supported by surety bond number 974 52 23 in the amount of $13,500.00. SHAN-RON, through testimony and the introduction of its business records, proved a prima facie case that RAINMAKER owes $12,964.00 for the purchase of sod between November 11, 1986, and January 8, 1987. Both parties Stipulated that $4,000.00 has been paid on the balance of the account which should be deducted from the balance owed SHAN-RON. In rebuttal to SHAN-RON's presentation, RAINMAKER presented testimony and a business record summary which revealed that six invoices were improperly charged, against its account in the amount of $1,260.00. The record summary was based upon a comparison of load tickets against production records during the time period involved. In addition, RAINMAKER's records reveal that the two drivers, Stormy and Fred Bower, were not paid for delivering the sod to RAINMAKER under the load ticket presentation to the sod installer which was previously described as an accounting method within the business. Because RAINMAKER set forth the issue of delivery discrepancies in its answer to the complaint and competent evidence was presented, $1,260.00 should be deducted from the `balance owed. SHAN-RON presented testimony that it is customary for the company to spray the sod for pest control. RAINMAKER received defective sod from SHAN-RON which contained "Creeping Charlie" weeds during the time of the deliveries in dispute. SHAN-RON was timely notified of the problem, and toad RAINMAKER to have the sod sprayed. A copy of the invoice for $300.00 was sent to SHAN-RON and has not been paid. Although the issue was not raised in RAINMAKER's answer to the complaint, it is properly before the Hearing Officer because of RAINMAKER's timely notification and cure of the defect in the product. The $300.00 should be deducted from the amount owed. Testimony relating to possible sod shortages was rejected as no evidence was presented that shortages occurred in the orders for which SHAN-RON seeks payment. The customary procedure In the sod business for handling credits for shortages requires the buyer to notify the seller within a responsible length of time of the shortages. Such notification did not take place as to the orders in dispute. The amount owed to SHAN-RON by RAINMAKER is $7,404.00. It is officially noticed that SHAN-RON's complaint was originally filed with the department on June 19, 1987, within nine months from the date of sale.
Recommendation Based upon the foregoing, it is RECOMMENDED: That the Department of Agriculture enter a final order requiring the Respondent RAINMAKER to make payment to the petitioner SHAN-RON in the amount of $7,404.00. In the event that RAINMAKER does not comply with the department's order within fifteen days from the date it final, FIDELITY should be ordered to provide payment and the conditions and provisions of the bond furnished to RAINMAKER. DONE and ENTERED this 12th day of April, 1988, in Tallahassee, Florida. VERONICA E. DONNELLY Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 12th day of April, 1987. COPIES FURNISHED: Clinton H. Coutler, JR., Esquire Department of Agriculture Mayo Building Tallahassee, Florida 32399-0800 Ben Pridgeon, Chief Bureau of License and Bond Department of Agriculture Lab Complex Tallahassee, Florida 32399-1650 Shan Ron Sod, Inc. 276 Cypress Street LaBELLE, FLORIDA 33935 Rainmaker Sod, Inc. 2290 Bruner Lane, South East Fort Myers, Florida 33912 Fidelity & Deposit Company of Maryland Post Office Box 1227 Baltimore, Maryland 21203 Honorable Doyle Conner Commissioner of Agriculture The Capitol Tallahassee, Florida 32399-0810 Robert Chastain General Counsel Department of Agriculture Mayo Building, Room 513 Tallahassee, Florida 32399-0800
