09-005353PL Department Of Financial Services vs. Eileen P. Suarez Status: Closed Recommended Order on Tuesday, February 16, 2010.

Summary: Respondent violated several provisions of the insurance code, including collecting premiums, but not paying for bound insurance, misappropriating funds, and issuing a false certificate of insurance. Recommend license be revoked and restitution made.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL )

SERVICES, )

)

Petitioner, )

)

vs. ) Case No. 09-5353PL

)

EILEEN P. SUAREZ, )

)

Respondent. )

)

RECOMMENDED ORDER

This case came befo re Administrative La w Judge Eleanor M.

Hunter as scheduled on December 4, 2009, at video teleconference

sites in Miami and Tallahassee, Florida.

APPEARANCES

For Petitioner: Robert Alan Fox, Esquire Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399

For Respondent: Eileen P. Suarez,

pro se

6449 West 12 Avenue

Hialeah, Florida 33012

STATEMENT OF THE ISSUE

The issue in this case is whether Respondent committed the

offenses alleged by the Department of Financial Services in the

Administrative Complaint dated May 27, 2009, and, if so, what

penalty should be imposed.

PRELIMINARY STATEMENT

In a three-count Administrative Complaint dated May 27,

2009, the Petitioner charged Respondent, an insurance agent,

with having violated certain provisions of the Florida Insurance

Code.

Respondent requested an administrative hearing by filing an

Election of Proceedings form dated August 12, 2009. On

October 1, 2009, the case was forwarded to the Division of

Administrative Hearings for the assignment of an Administrative

Law Judge to conduct an evidentiary hearing. Initially assigned

to Administrative Law Judge Larry J. Sartin, the case was

transferred to the undersigned to conduct the final hearing that

was held on December 4, 2009.

At the final hearing Petitioner presented the testimony of

Paula McCartha, Steven Firestone, Daniel O'Leary, John Vila,

Ileana Vila, and Marilyn Peterson. Petitioner's Exhibits

Numbered 1, 1a, 2, 2a, 3, 3a, 6-11, 12a, and 13-21 were received

in evidence. Respondent testified on her own behalf.

Respondent's Exhibits A, B, C, D, and E were received in

evidence.

The Transcript of the final hearing was filed on

December 23, 2009. Petitioner filed its Proposed Recommended

Order on the date it was due, January 15, 2010.

FINDINGS OF FACT

1. Petitioner, the Department of Financial Services

("Petitioner" or "the Department") has regulatory responsibility

for Chapter 626, Florida Statutes (2009), the insurance

licensing procedures law.

2. Respondent, Eileen P. Suarez ("Respondent" or

"Suarez"), is a licensed general lines agent transacting in

property and casualty insurance, under license number E129078.

She operated and was the agent in charge of the Suarez Insurance

Agency, Inc. ("Agency"), in Hialeah, Florida. The Agency held a

valid state license from 7/21/2006 to 7/27/2009.

3. The Department filed a three-count Administrative

Complaint against Respondent alleging that she violated various

provisions of Chapter 626, Florida Statutes.

COUNT I

4. John Vila is the president of Vila Home Group, Inc., a

trucking company that is in the business of hauling sand, soil,

and gravel. In April 2005, he purchased a dump truck and, at

the suggestion of the dealer, contacted Suarez for insurance.

5. Suarez sold Vila two insurance policies, for the period

April 29, 2005 to April 29, 2006, one with AequiCap Insurance

Company ("AequiCap") and the other with the Underwriters at

Lloyds, London ("Lloyds"). The AequiCap Policy was a commercial

liability insurance policy. The Lloyds Policy was a commercial

automobile physical damage insurance policy.

6. In March 2006, Vila gave Suarez a check in the amount

of $10,876.41, made payable to the Agency to renew the AequiCap

and Lloyds policies, for the period April 29, 2006 to April 29,

2007. The AequiCap policy quote was approximately $5,350.00.

The Lloyds policy quote was approximately $5,500.00.

7. The check was deposited in the Agency's trust account,

but the Lloyds policy was allowed to expire on April 29, 2006,

and was not renewed until October 26, 2006, creating a six-month

gap in commercial automobile physical damage insurance coverage

for Vila. When it was renewed, the Lloyds Policy cost

$5,712.03.

8. Vila's AequiCap policy expired on April 29, 2006, and

was not renewed because Suarez failed to pay MAI Risk

Management, AequiCap's managing general agent. The funds were

not returned to Vila.

9. While the March 2006 quotes were pending, the

registered driver of the truck, Andres Vila, was involved in an

accident and was at fault for hitting a wire. Rather than risk

an increase in the pending insurance quotes, Vila paid Bellsouth

$2,390.36 in damages.

COUNT II

10. On or about October 26, 2006, Suarez provided Vila a

Certificate of Liability showing that the truck was insured with

AequiCap, under policy number TC012695, and with Lloyds, under

policy number R641440/0251, for the period April 29, 2006 to

April 29, 2007. Vila was not insured under AequiCap policy

number TC012695 from April 29, 2006 to April 29, 2007. The

Certificate of Liability was a false document that Suarez

created on her computer, printed, and gave to Vila.

COUNT III

11. Shelly, Middlebrooks & O'Leary, Inc. ("Shelly

Middlebrooks") is a licensed insurance agency, located in

Jacksonville, that acts as a general agent for multiple

insurance companies.

12. Suarez collected insufficient funds to include the

premiums that were intended to be forwarded to Shelley

Middlebrooks for policies to insure the following trucking

companies: All Nations Logistics, LLC (Policy Number 486865);

Jose Veiga, d/b/a JJ Freightways (Policy Number 486885); Gary

Castle/Diamond Mine (Policy Number 74APN338354); and Nics Oil,

Inc. (Policy Number 74APN401617).

13. For each of the four companies, she requested and

received binders for insurance from Shelly Middlebrooks,

followed by invoices for the premiums that were to have been

paid within ten days of the date the invoices were received. In

each instance, Suarez did not pay Shelly Middlebrooks, which

cancelled the policies for non-payment of the premium. It also

obtained a default judgment in the Circuit Court in and for

Duval County, Florida, that requires Suarez to pay it the

outstanding balances due for the four policies and a $25

insufficient funds check fee, for a total of $8,335.60, which

she has been unable to pay.

14. Instead of paying for insurance, Suarez used most of

the funds she collected to pay for various other corporate

expenses for the same trucking companies, including state and

federal government filings for intrastate or interstate travel

that were prerequisites to their becoming insurable. Suarez

expected to collect the additional funds needed for insurance

later, but the clients, the owners of the trucking companies,

did not pay her.

15. Suarez admits that she failed her clients in 2006,

after her father's death in February 2006. She realized the

Vila errors and tried to correct them in October. The Agency is

now closed. Suarez's husband has been unemployed for over a

year, and their home is in foreclosure. She is receiving social

security disability payments and has insufficient funds to file

for bankruptcy.

CONCLUSIONS OF LAW

16. The Division of Administrative Hearings has

jurisdiction over the parties and the subject matter of this

proceeding. §§ 120.569 and 120.57, Fla. Stat. (2009).

17. The Department seeks suspension or revocation of

Respondent's license and, therefore, has the burden of proving

by clear and convincing evidence that Respondent committed the

violations alleged in the Administrative Complaint. Ferris v.

Turlinaton , 510 So. 2d 292 (Fla. 1987); Department of Banking

and Finance v. Osborne Stern & Company , 670 So. 2d 932 (Fla.

1996).

18. "Clear and convincing evidence is an intermediate

standard of proof, more than the 'preponderance of the evidence

standard used in most civil cases, and less than the "beyond a

reasonable doubt standard used in criminal cases." Smith v.

Department of Health and Rehabilitative Services of Health and

Rehabilitative Services , 522 So. 2d 956, 958 (Fla. 1st DCA

1988). Clear and convincing evidence requires:

that the evidence must be found to be

credible; the fact to which the witnesses

testify must be precise and explicit and the

witnesses must be lacking in confusion as to

the fact in issue. The evidence must be of

such weight that it produces in the mind of

the trier of fact a firm belief or

conviction, without hesitancy, as to the

truth of the allegations sought to be

established.

Smith , 522 So. 2d at 958 (quoting Slomowitz v. Walker , 429 So.

2d 797, 800 (Fla. 4th DCA 1983)).

19. The provisions of Chapter 626 that are applicable to

this case have been in effect at all times material to this

case. 1 Section 626.611, Florida Statutes, has provided as

follows:

The department . . . shall . . . revoke, or

refuse to renew or continue the license or

appointment of any applicant, agent . . .

and it shall suspend or revoke the

eligibility to hold a license or appointment

of any such person, if it finds that as to

the applicant, licensee, or appointee any

one or more of the following applicable

grounds exist:

* * *

(7) Demonstrated lack of fitness or

trustworthiness to engage in the business of

insurance.

(8) Demonstrated lack of reasonably

adequate knowledge and technical competence

to engage in the transactions authorized by

the license or appointment.

* * *

(10) Misappropriation, conversion, or

unlawful withholding of moneys belonging to

insurers or insureds or beneficiaries or to

others and received in conduct of business

under the license or appointment.

20. Section 626.621, Florida Statutes, has provided as

follows:

The department may, in its discretion . . .

suspend, revoke, or refuse to renew or

continue the license or appointment of any

. . . agent... and it may suspend or revoke

the eligibility to hold a license or

appointment of any such person, if it finds

that as to the... licensee... any one or

more of the following applicable grounds

exist under circumstances for which such

denial, suspension, revocation, or refusal

is not mandatory under s. 626.611:

* * *

(2) Violation of any provision of the

Florida Insurance Code in the course of

dealing under the license or appointment.

* * *

(6) 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 IX of this chapter, or having

otherwise shown himself or herself to be a

source of injury or loss to the public.

21. Section 626.692, Florida Statutes, has provided as

follows:

If any ground exists for the suspension,

revocation, or refusal of a license or

appointment, the department may, in addition

to any other penalty authorized under this

chapter, order the licensee to pay

restitution to any person who has been

deprived of money by the licensee's

misappropriation, conversion, or unlawful

withholding of moneys belonging to insurers,

insureds, beneficiaries, or others . . . .

22. Subsection 626.561(1), Florida Statutes, has provided

as follows:

All premiums, return premiums, or other

funds belonging to insurers or others

received by an agent, insurance agency,

customer representative, or adjuster in

transactions under the license are trust

funds received by the licensee in a

fiduciary capacity. An agent or insurance

agency shall keep the funds belonging to

each insurer for which an agent is not

appointed, other than a surplus lines

insurer, in a separate account so as to

allow the department or office to properly

audit such funds. The licensee in the

applicable regular course of business shall

account for and pay the same to the insurer,

insured, or other person entitled thereto.

23. Subsection 626.9541 (1)(e)1., Florida Statutes, has

provided, in relevant part, as follows:

The following are defined as unfair methods

of competition and unfair or deceptive acts

or practices:

(e) False statements and entries.

1. Knowingly:

a. Filing with any supervisory or other

public official,

b. Making, publishing, disseminating,

circulating,

c. Delivering to any person,

d. Placing before the public,

e. Causing, directly or indirectly, to be

made, published, disseminated, circulated,

delivered to any person, or placed before

the public, any false material statement.

24. The evidence clearly and convincingly established that

Respondent (1) failed to timely forward Vila's premium to

Lloyds; (2) failed to forward Vila's premium to AequiCap; (3)

failed to return the money to Vila; and (4) failed to properly

manage a trust account.

25. Based on these acts and omissions, as alleged in Count

I of the Administrative Complaint, Petitioner clearly and

convincingly established that Respondent violated Subsections

626.611(7), (8) and (10); Subsection 626.561(1); Subsection

626.621(2); and Subsection 626.621(6), Florida Statutes.

COUNT II

26. The evidence clearly and convincingly established that

Respondent issued a Certificate of Insurance showing falsely and

deceptively that Vila was insured by AequiCap.

27. By showing that Respondent issued a false and

deceptive Certificate of Insurance to Vila, as alleged in Count

II of the Administrative Complaint, Petitioner clearly and

convincingly established that Respondent violated Subsections

626.611(7) and (8), 626.9541(1)(e)1, and 626.621(6), Florida

Statutes.

COUNT III

28. The evidence clearly and convincingly established that

Respondent (1) caused the Shelly Middlebrooks agency to provide

insurance; (2) never forwarded premiums to pay for that

insurance to Shelly Middlebrooks; and (3) has failed to pay the

money she owes, as confirmed by a court judgment, to Shelly

Middlebrooks.

29. Based on evidence of the transactions between

Respondent and Shelly Middlebrooks, Petitioner established

clearly and convincingly that Respondent violated Subsections

626.611(7), (8) and (10), 626.561(1), 626.621(2), and (6),

Florida Statutes, as charged in Count III of the Administrative

Complaint.

Penalty

30. Florida Administrative Code Rule 69B-231.040 sets

forth the method for calculating and applying penalties, and is

as follows:

69B-231.040 Calculating Penalty.

(1) Penalty Per Count.

(a) The Department is authorized to find

that multiple grounds exist under Sections

626.611 and 626.621, F.S. , for disciplinary

action against the licensee based upon a

single count in an administrative complaint

based upon a single act of misconduct by a

licensee. However, for the purpose of this

rule chapter, only the violation specifying

the highest stated penalty will be

considered for that count . The highest

stated penalty thus established for each

count is referred to as the "penalty per

count".

(b) The requirement for a single highest

stated penalty for each count in an

administrative complaint shall be applicable

regardless of the number or nature of the

violations established in a single count of

an administrative complaint.

(2) Total Penalty. Each penalty per count

shall be added together and the sum shall be

referred to as the "total penalty."

(3) Final Penalty.

(a) The final penalty which will be imposed

against a licensee under these rules shall

be the total penalty, as adjusted to take

into consideration any aggravating or

mitigating factors;

(b) The Department may convert the total

penalty to an administrative fine and

probation if the licensee has not previously

been subjected to an administrative penalty

and the current action does not involve a

violation of Section 626.611, F.S. ;

(c) The Department will consider the

factors set forth in rule subsection 69B-

231.160(1), F.A.C. , in determining whether

to convert the total penalty to an

administrative fine and probation.

(d) In the event that the final penalty

would exceed a suspension of twenty-four

(24) months, the final penalty shall be

revocation. (Emphasis added)

31. Penalties for violations of Chapter 626, Florida

Statutes, are set forth in Florida Administrative Code Chapter

69B which provides, in relevant part, as follows:

69B-231.080 Penalties for Violation of

Section 626.611.

If it is found that the licensee has

violated any of the following subsections of

Section 626.611, F.S. , for which compulsory

suspension or revocation of license(s) and

appointment(s) is required, the following

stated penalty shall apply:

* * *

(7) Section 626.611(7), F.S. - suspension 6

months

(8) Section 626.611(8), F.S. - suspension 6

months

* * *

(10) Section 626.611(10), F.S. - suspension

12 months. This provision does not apply if

the facts constitute a violation of Section

626.753, F.S.

69B-231.090 Penalties for Violation of

Section 626.621.

* * *

(2) Section 626.621(2), F.S. - suspension 3

months

* * *

69B-231.100 Penalties for Violation of

Subsection 626.621(6).

If a licensee is found to have violated

sub section 626.621(6), F.S. , by engaging in

unfair methods of competition or in unfair

or deceptive acts or practices as defined in

any of the following paragraphs of

sub section 626.9541(1), F.S. , the following

stated penalty shall apply:

* * *

(5) Section 626.9541(1)(e), F.S. -

suspension 6 months; except that the penalty

for a violation of Section 626.9541(1)(e)1.,

F.S., shall be a suspension of 12 months.

69B-231.110 Penalties for Violation of Other

Specific Provisions of the Florida Insurance

Code.

* *

(8) Section 626.561(1), F.S. - suspension 9

months

69B-231.120 Penalties for Violation of Other

Insurance Code Provisions.

If the licensee is found to have violated a

provision of the Insurance Code, the stated

penalty, unless otherwise prescribed in

these rules or in the code provision

violated, shall be a six (6) month

suspension if the violation was willful, or

shall be a three (3) month suspension if the

violation was nonwillful.

32. For Count I, the highest stated penalty, for violation

of Subsection 626.611 (10), Florida Statutes, is a 12-month

license suspension.

33. For Count II, the highest stated penalty, for a

violation of Subsection 626.9541(1)(e)1., Florida Statutes, is a

12-month license suspension.

34. For Count III, the highest stated penalty for a

violation of Subsection 626.611(10), Florida Statutes, is a

12-month suspension of the violator's licenses and appointments.

35. The total penalty to be imposed against Respondent is

a 36-six month suspension (12-month suspension for Count I,

12-month suspension for Count II, plus a 12-month suspension for

Count III). As provided in Florida Administrative Code Rule

69B-231.040(2), the penalty exceeds a 24-month suspension and

is, therefore, revocation.

36. The penalty can be altered if there is evidence of any

of the following aggravating and mitigating factors:

(a) Willfulness of licensee's conduct;

(b) Degree of actual injury to victim;

(c) Degree of potential injury to victim;

(d) Age or capacity of victim;

(e) Timely restitution;

(f) Motivation of licensee;

(g) Financial gain or loss to licensee;

(h) Cooperation with the Department;

(i) Vicarious or personal responsibility;

(j) Related criminal charge disposition;

(k) Existence of secondary violations in

counts;

(l) revious disciplinary orders or prior

warning by the Department; and

(m) Other relevant factors.

Fla. Admin. Code R. 69B-231.160.

37. In mitigation, Respondent has no previous disciplinary

history and her father's death affected her ability to function.

38. As aggravating factors, Respondent knowingly,

intentionally, and personally committed the acts and omissions

charged, with every count having secondary violations. There is

no evidence of Respondent's incapacity or aging issues at the

time these incidents were occurring. Respondent created a high

degree of potential harm by leaving a large commercial vehicle

uninsured for six months. Respondent has not made restitution

to Mr. Vila from whom she collected $10,876.41, and belatedly

used $5,712.03 to secure insurance for him, keeping for her use

the balance of $5,164.38. Respondent has not made restitution

in the amount of $8,335.60 to Shelly Middlebrooks for the

insurance coverage for the trucking companies.

39. After considering the mitigating and aggravating

factors, it is determined that no change to the penalty is

warranted and that the final penalty should be revocation. See

Department of Financial Services v. Noel , DOAH Case No. 05-

2728PL, 2006 Fla. Div. Adm. Hear. LEXIS 14 (R.O. 1/13/06, F.O.

3/17/06); and Hannifin v. Department of Financial Services , DOAH

Case No. 05-1339PL (R.O. 12/05/05; F.O. 3/03/06); per curium

affirmed 946 So. 2d. 1073 (Fla. 1st DCA 9/18/06).

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions

of Law, it is RECOMMENDED that a Final Order be entered by the

Department of Financial Services:

1) Finding Respondent guilty of violating Subsections

626.621(2) and (6), Florida Statutes, as charged in Count I of

the Administrative Complaint;

2) Finding Respondent guilty of violating Subsections

626.611(7) and (8); Subsection 626.621(6); and Subsection

626.9541 (1)(e)1., Florida Statutes, as charged in Count II of

the Administrative Complaint;

3) Finding Respondent guilty of violating Subsections

626.621(2) and (6), Florida Statutes, as charged in Count III of

the Amended Complaint;

4) Revoking Respondent's licenses and appointments issued

or granted under or pursuant to the Florida Insurance Code;

5) Ordering Respondent to make restitution to John Vila in

the amount of $5,164.38; and

6) Ordering Respondent to make restitution to Shelly

Middlebrooks & O'Leary in the amount of $8,335.60.

DONE AND ENTERED this 16th day of February, 2010, in

Tallahassee, Leon County, Florida.

S

ELEANOR M. HUNTER

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone]

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 16th day of February, 2010.

ENDNOTE

1 All references to Florida Statutes include the years 2006

through 2009.

COPIES FURNISHED :

Julie Jones, CP, FRP, Agency Clerk

Department of Financial Services

Division of Legal Services

200 East Gaines Street

Tallahassee, Florida 32399-0390

Benjamin Diamond, General Counsel

Department of Financial Services

The Capitol, Plaza Level 11

Tallahassee, Florida 32399-0307

Honorable Alex Sink

Chief Financial Officer

Department of Financial Services

The Capitol, Plaza Level 11

Tallahassee, Florida 32399-0300

Robert Alan Fox, Esquire

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399

Eileen P. Suarez

6449 West 12 Avenue

Hialeah, Florida 33012

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.