00-003711PL Department Of Insurance vs. Ramona Lee Bolding Status: Closed Recommended Order on Friday, April 6, 2001.

Summary: Petitioner failed to prove that Respondent knew of insubstantial involvement of felon/unlicensed person in her bail bond business. Respondent`s claim for fees and costs dismissed because prosecution had reasonable basis in fact and law.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF INSURANCE, )

)

Petitioner, )

)

vs. ) Case No. 00-3711PL

)

RAMONA LEE BOLDING, )

)

Respondent. )

_____________________________)

RECOMMENDED ORDER

Robert E. Mea le, Administrative Law Judge of the Division

of Administrative Hearings, conducted the final hearing in

Tampa, Florida, on March 1, 2001.

APPEARANCES

For Petitioner : Anoush A. Arakalian

Division of Legal Services

Department of Insurance

612 Lars on Building

200 East Gaines Street

Tallahassee, Florida 32399-0333

For Respondent : Joseph R. Fritz

Joseph R. Fritz, P.A.

4204 North Nebraska Avenue

Tampa, Florida 33602

STATEMENT OF THE ISSUE

The issue is whether Respondent is guilty of unlawfully

employing a felon in the conduct of the bail bond business, in

violation of Sections 648.44(8)(b) and 648.45(3), Florida

Statutes, and Rule 4-221.001, Florida Administrative Code. If

so, an additional issue is what penalty should be imposed.

PRELIMINARY STATEMENT

By Administrative Complaint dated August 16, 2000,

Petitioner alleged that Respondent was licensed as a limited

surety agent and acted as president of Dolly Bolding Bail

Bonds, Inc. Petitioner twice amended the Administrative

Complaint.

Count II of the Second Amended Administrative Complaint

alleges that Respondent unlawfully employed Frank Cueto, Sr.,

a felon, in the bail bond business. Count II alleges that

Carver Taitt met Mr. Cueto at Respondent’s office, completed

the necessary paperwork, accepted the premium, and issued a

receipt in connection with a bail bond that Mr. Taitt sought

for his son, who had been arrested on drug charges. Count II

alleges that Mr. Taitt spoke with Mr. Cueto on the telephone

about a balance due on the premium and continuing to honor the

bond after his son failed to appear in court.

Counts I and III of the Second Amended Administrative

Complaint allege that Respondent unlawfully employed Donald

Raymond Davis, a felon, in the bail bond business. Mr. Davis

failed to appear at the final hearing. After hearing argument

of counsel, the Administrative Law Judge determined that the

circumstances surrounding service would not likely support an

effort by Petitioner to have a circuit court judge hold

Mr. Davis in contempt or otherwise enforce the subpoena. The

Administrative Law Judge thus denied Petitioner’s request to

continue the hearing to another date, at which Petitioner

would again try to obtain the attendance of Mr. Davis.

Lacking an indispensable witness, Petitioner dismissed Counts

I and III.

At the hearing, Petitioner called two witnesses and

offered into evidence seven exhibits : Petitioner Exhibits 1,

3, and 10-14, which were all admitted. Respondent called two

witnesses and offered into evidence no exhibits.

The court reporter filed the transcript on March 16,

2001.

FINDINGS OF FACT

1. At all material times, Respondent has been a licensed

limited surety agent, holding license number A025071. At all

material times, Respondent has been the president and owner of

Dolly Bolding Bail Bonds, Inc. (Dolly Bolding), which is

located at 108 South Armenia Avenue in Tampa.

2. In July 1999, Carver Taitt visited the office of

Dolly Bolding to obtain a bail bond for his son, who had been

arrested on drug charges. The judge had set bond at $20,000,

so the bail bond premium was $2000.

3. Mr. Taitt spoke with Respondent and said that he did

not have the entire $2000; he had only $1000. Respondent

declined to extend Mr. Taitt credit for the $1000 balance.

Mr. Ta itt then offered $1500, and Respondent agreed to allow

Mr. Taitt to owe Dolly Bolding the remaining $500.

4. At this time, Mr. Taitt saw Frank Cueto, Sr., also

known as “Paunch,” in the office of Dolly Bolding. Mr. Taitt

also told Mr. Cueto that Mr. Taitt would pay the remaining

$500.

5. Mr. Taitt had obtained bonds in the past five years

from Dolly Bolding. During this time, he had often seen

Respondent and Mr. Cueto in the office, and Mr. Taitt was

acquainted with both of them from these past purchases of

bonds.

6. Mr. Cueto contacted Mr. Taitt several times and asked

him to pay the remaining $500. At one point, Mr. Cueto

threatened that Dolly Bolding would revoke the bond if

Mr. Taitt did not immediately pay the remaining $500,

especially because he was about to take a trip whose cost

would approximate the outstanding balance. Mr. Taitt paid the

$500 on the day prior to his son’s court appearance. When he

complained to Mr. Cueto that he should have trusted Mr. Taitt

based on their past relationship, Mr. Cueto replied that money

is money.

7. Mr. Taitt’s son missed his court appearance, and the

judge ordered the forfeiture of the bond. The judge later

entered an order reinstating bail, but this order did not

reinstate the obligation previously undertaken under the bond

by Dolly Bonding or its principal.

8. Consequently, Mr. Taitt telephoned Dolly Bonding and

requested a reissuance of the bond. Told that Respondent was

unavailable, Mr. Taitt spoke with Mr. Cueto. Mr. Cueto told

Mr. Taitt that no surety company would a gree to reissue the

bond.

9. In the meantime, the assistant public defender

obtained an order from the judge for the administrative

release of Mr. Taitt’s son. By this means, the jail released

Mr. Taitt’s son immediately without posting any bond.

10. The facts contained in paragraphs 4-8 above are

derived from Mr. Taitt’s testimony. This constitutes some,

but not all, of Mr. Taitt’s testimony. The Administrative Law

Judge has not credited much of the remainder of the testimony,

including, most significantly, Mr. Taitt’s testimony that

Mr. Cueto was always in the office of Dolly Bolding and that

he seemed to run the bonding business.

11. Mr. Taitt was angered by Mr. Cueto’s involvement in

this transaction. Much of his uncredited testimony lacked the

detail of his credited testimony. As for the credited

testimony, Respondent, who was not always present in the

office, was not able to rebut the more-detailed portion of

Mr. Taitt’s description of Mr. Cueto’s handling of the

transaction. Mr. Cueto did not testify, al though he is

engaged to be married to Respondent and lives with her.

12. However, Respondent’s testimony is credited over

Mr. Taitt’s vague, conclusory testimony as to the business

relationship between Respondent and Mr. Cueto. Thus,

consistent with Respondent’s testimony, the Administrative Law

Judge finds that Mr. Cueto has not exercised any dominion over

Dolly Bolding or Respondent. Respondent is an articulate,

intelligent individual, who is a college graduate. She makes

all bonding decisions for Dolly Bolding.

13. Mr. Cueto is not an employee, officer, or

shareholder of Dolly Bolding, and Respondent is not an

employee, officer, or shareholder in any company owned by

Mr. Cueto. He maintains an office in the same building as

Dolly Bolding’s office, and he is present in the Dolly Bolding

office on a frequent basis. At least in the case of the bond

for Mr. Taitt’s son, Mr. Cueto has involved himself to some

extent in Respondent’s bonding business. It is entirely

possible that Mr. Cueto’s involvement in this bonding

transaction is isolated, as he may have been inclined to

involve himself to an unusual degree in a bonding matter due

to the number of years that Mr. Cueto has known Mr. Taitt. It

is even more likely that Mr. Cueto’s involvement in this

bonding transaction was without the knowledge of Respondent.

14. Mr. Cueto is a felon. He was convicted in 1994 of

unlawful engaging in the bail bond business and misleading

advertising. Mr. Cueto was formerly a licensed limited surety

agent, but Petitioner suspended his license sometime ago.

Respondent was at all times aware of these aspects of

Mr. Cueto's background.

15. In November 1991, Petitioner commenced an

administrative proceeding against Respondent, as a licensed

limited surety agent, for allowing an unlicensed person to

participate in the bail bond business. By Settlement

Stipulation for Consent Order and Consent Order, both signed

in April 1992, Respondent agreed, and was ordered, to pay an

administrative fine of $2000.

CONCLUSIONS OF LAW

16. The Division of Administrative Hearings has

jurisdiction over the subject matter. Section 120.57(1),

Florida Statutes. (All references to Sections are to Florida

Statutes. All references to Rules are to the Florida

Administrative Code.)

17. Section 648.45(2) provides in relevant part:

(2 ) The department shall deny, suspend,

revoke, or refuse to renew any license or

appointment issued under this chapter or

the insurance code, and it shall suspend or

revoke the eligibility of any person to

hold a license or appointment under this

chapter or the insurance code, for any

violation of the laws of this state

relating to bail or any violation of the

insurance code or for any of the following

causes:

(d ) Willful use, or intended use, of the

license or appointment to circumvent any of

the requirements or prohibitions of this

chapter or the insurance code.

(e ) Demonstrated lack of fitness or

trustworthiness to engage in the bail bond

business.

(j ) 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 chapter or the

insurance code.

18. Section 648.45(3)(c) provides:

The department may deny, suspend, revoke,

or refuse to renew any license or

appointment issued under this chapter or

the insurance code, or it may suspend or

revoke the eligibility of any person to

hold a license or appointment under this

chapter or the insurance code, for any

violation of the laws of this state

relating to bail or any violation of the

insurance code or for any of the following

causes:

(c ) Violation of any law relating to the

business of bail bond insurance or

violation of any provision of the insurance

code.

19. Section 648.30 provides:

(1 ) A person may not act in the capacity

of a bail bond agent, temporary bail bond

agent, or runner or perform any of the

functions, duties, or powers prescribed for

bail bond agents or runners under this

chapter unless that person is qualified,

licensed, and appointed as provided in this

chapter.

(2 ) No person shall represent himself or

herself to be a bail enforcement agent,

bounty hunter, or other similar title in

this state.

(3 ) No person, other than a certified law

enforcement officer, shall be authorized to

apprehend, detain, or arrest a principal on

a bond, wherever issued, unless that person

is qualified, licensed, and appointed as

provided in this chapter or licensed as a

bail bond agent by the state where the bond

was written.

(4 ) Any person who violates any provision

of this section commits a felony of the

third degree, punishable as provided in s.

775.082, s. 775.083, or s. 775.084.

20. Section 648.44(8) provides in relevant part:

(8)(a ) A person who has been convicted of

or who has pleaded guilty or no contest to

a felony or a crime involving moral

turpitude or a crime punishable by

imprisonment of 1 year or more under the

law of any state, territory, or country,

regardless of whether adjudication of guilt

was withheld, may not participate as a

director, officer, manager, or employee of

any bail bond agency or office thereof or

exercise direct or indirect control in any

manner in such agency or office or own

shares in any closely held corporation

which has any interest in any bail bond

business. Such restrictions on engaging in

the bail bond business shall continue to

apply during a pending appeal.

(b ) Any person who violates the provisions

of paragraph (a) or any person who

knowingly permits a person who has been

convicted of or who has pleaded guilty or

no contest to a crime as described in

paragraph (a) to engage in the bail bond

business as prohibited in paragraph (a)

commits a felony of the third degree,

punishable as provided in s. 775.082, s.

775.083, or s. 775.084.

(c ) Any law enforcement agency, state

attorney's office, court clerk, or insurer

that is aware that a bail bond agent,

temporary bail bond agent, or runner has

been convicted of or who has pleaded guilty

or no contest to a crime as described in

paragraph (a) shall notify the department

of this fact.

(d ) Upon the filing of an information or

indictment against a bail bond agent,

temporary bail bond agent, or runner, the

state attorney or clerk of the circuit

court shall immediately furnish the

department a certified copy of the

information or indictment.

21. Rule 4-221.001 provides:

Any licensed bail bond agent, temporary

bail bond agent, or managing general agent

engaged in the bail bond business, who

permits any person not licensed, as

required under Chapter 648, Florida

Statutes, to solicit or engage in the bail

bond business in his behalf shall be deemed

in violation of Section 648.30, Florida

Statutes. A bail bond agent or duly

licensed person from another state may

apprehend, detain, or arrest a principal on

a bond, as provided by law.

22. Petitioner must prove the material allegations by

clear and convincing evidence. Department of Banking and

Finance v. Osborne Stern and Company, Inc. , 670 So. 2d 932

(Fla. 1996) and Ferris v. Turlington , 510 So. 2d 292 (Fla.

1987).

23. As a condition for discipline, Section

648.45(2)(d), (e), and (j) requires either willfulness or a

demonstrated lack of fitness or trustworthiness by Respondent.

Lacking clear and convincing evidence of any knowledge by

Respondent of Mr. Cueto’s role in the Taitt bond transaction ,

Petitioner is unable to establish a violation of Section

648.45(2)(d) and (j). Lacking clear and convincing evidence

of ongoing, substantial involvement of Mr. Cueto in

Respondent's bail bond business, even without her knowledge,

Petitioner is unable to establish a violation of Section

648.45(2)(e).

24. As a condition for discipline, Section 648.45(3)(c)

requires a violation of law, willful or otherwise, by

Respondent relating to the bail bond business or the insurance

code. Obviously, Mr. Cueto’s criminal conviction and license

suspension, of which Respondent was aware, prevented him from

performing bail bond activities requiring a license.

25. However, under Section 648.44(8)(b), Respondent’s

liability for any unlawful participation by an unlicensed

person in the bail bond business requires that Respondent

knowingly permitted a felon to serve as a director, officer,

manager, or employee of her bail bond business; directly or

indirectly control her bail bond business; or own shares in a

closely held corporation holding an interest in her bail bond

business. Lacking clear and convincing evidence of any

knowledge by Respondent of Mr. Cueto’s role in the Taitt bond

transaction, as well as clear and convincing evidence that

Mr. Cueto has unlawfully participated in Respondent's bail

bond business as a director, officer, manager, employee,

controlling person, or shareholder, Petitioner is unable to

establish a violation of Section 648.44(8)(b).

26. Similarly, under Rule 4-221.001, Respondent's

liability for any unlawful participation by an unlicensed

person in the bail bond business requires that Respondent

permitted an unlicensed person to solicit or engage in the

bail bond business. Although the rule does not explicitly

require an intentional or knowing act by a licensee,

“permission” requires knowledge of the unlawful act by the

person giving the permission. As already noted, clear and

convincing evidence fails to establish this knowledge on the

part of Respondent.

27. Unless it were redundant, the concept of "solicit"

would extend the coverage of Rule 4-221.001. As described in

Section 648.44(8)(a), "engaging in the bail bond business" is

limited to the activity described in paragraph 25 above.

However, the evidence also falls short of clear and convincing

that Mr. Cueto solicited Mr. Taitt's bond business in this

transaction.

28. Respondent has requested attorneys’ fees and costs

as a prevailing party under Section 57.111. Section

57.111(4)(a) precludes an award of fees and costs if an agency

action was "substantially justified." Section 57.111(3)(e)

defines "substantially justified" as having a "reasonable

basis in law and fact." After careful consideration of the

entire record, including the demeanor of Mr. Taitt and

Respondent, the Administrative Law Judge chose not to infer

sufficient control by Mr. Cueto, sufficient knowledge by

Respondent, or any careless or reckless disregard of

Mr. Cueto's activities by Respondent to establish a basis for

discipline. This decision was close in certain respects, and

Petitioner clearly had substantial justification, under the

law and facts, to bring this case against Respondent. The

Administrative Law Judge therefore dismisses Respondent's

claim for attorneys' fees and costs.

RECOMMENDATION

It is

RECOMMENDED that the Department of Insurance dismiss the

Second Amended Administrative Complaint against Respondent.

DONE AND ENTERED this 6th day of April, 2001, in

Tallahassee, Leon County, Florida.

___________________________________

ROBERT E. MEALE

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488- 9675 SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 6th day of April, 2001.

COPIES FURNISHED:

Honorable Tom Gallagher

Commissioner of Insurance and Treasurer

The Capitol, Plaza Level 02

Tallahassee, Florida 32399-0300

Mark Casteel, General Counsel

Department of Insurance

The Capitol, Lower Level 26

Tallahassee, Florida 32399-0307

Anoush A. Arakalian

Division of Legal Services

Department of Insurance

612 Larson Building

200 East Gaines Street

Tallahassee, Florida 32399-0333

Joseph R. Fritz

Joseph R. Fritz, P.A.

4204 North Nebraska Avenue

Tampa, Florida 33602

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 must be filed with the

agency that will issue the final order in this case.