01-002790PL Department Of Insurance vs. Oscar Gerard Martinez, Jr. Status: Closed Recommended Order on Thursday, June 20, 2002.

Summary: Public insurance adjuster misled one client, made misrepresentation to another client, and breached fiduciary duty.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF INSURANCE, )

)

Petitioner, )

)

vs. ) Case No. 01 - 2790PL

)

OSCAR GERARD MARTINEZ, JR., )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant t o notice, a final hearing was conducted on

January 14 and 15, 2002, in Miami, Florida, before Claude B.

Arrington, a duly - designated Administrative Law Judge of the

Division of Administrative Hearings.

APPEARANCES

For Petitioner: A. Collin Cherry, Esquire

Department of Insurance

612 Larson Building

200 East Gaines Street

Tallahassee, Florida 32399 - 0333

For Respondent: Richard B. Marx, Esquire

O. Frank Valladares, Esquire

66 West Flagler Street, Second Floor

Miami, Florida 33130

STATEMENT OF THE ISSUES

Whether Respondent, a licensed public adjuster, committed

the offenses alleged in the Fi rst Amended Administrative

Complaint and the penalties, if any, that should be imposed.

PRELIMINARY STATEMENT

On April 18, 2001, Petitioner filed an Administrative

Complaint against Respondent. Respondent timely requested a

formal administrative hearing to challenge the allegations of

the Administrative Compliant. On July 13, 2001, the matter was

referred to the Division of Administrative Hearings, and this

proceeding followed.

By order entered November 15, 2001, Petitioner was

permitted to file its F irst Amended Administrative Compliant

against Respondent. The following is intended to be a general

summary of the four counts of the First Amended Administrative

Complaint. Any questions pertaining to the First Amended

Administrative Complaint should be resolved by reading that

pleading in its entirety.

Respondent is a public adjuster who represents consumers in

dealing with their insurance companies following a covered loss,

such as fire or other damage to property. Petitioner alleged

that Respondent had either direct or indirect (through his wife)

ownership interests in two companies. Petitioner also alleged

that Respondent had a business relationship with a man named

Carlos Schaparo (also known as Chaparo and Chapara).

Count I alleged certain facts pertaining to Respondent's

acts and statements following a fire that damaged the home of

Ms. Ileana Fuentes in March 1997. Based on those factual

allegations, Petitioner alleged in Count I that Respondent

committed multiple violations of the Florida Insu rance Code.

Specifically, Petitioner alleged in Count I that Respondent

violated the following provisions of the Florida Insurance Code:

Sections 626.611(7), 626.611(8), 626.611(9), 626.611(13),

626.621(2), 626.621(3), and 626.878, Florida Statutes, and

Rules 4 - 220 - 051(7)(c), 4 - 220.201(4)(a), 4 - 220.201(4)(b),

4 - 220.201(4)(l), and 4 - 220.201(4)(m), Florida Administrative

Code.

Count II alleged certain facts pertaining to Respondent's

acts and statements following a fire that damaged the home of

th e late Arthur Lee, Sr., in June 1997. Based on those factual

allegations, Petitioner alleged in Count II that Respondent

committed multiple violations of the Florida Insurance Code.

The violations alleged in Count II include those alleged in

Count I. In addition, Count II relied on the following:

Rules 4 - 220.051(7)(c), 4 - 220.201(4)(s), 4 - 220.201(5)(c), and

4 - 220.201(5)(f), Florida Administrative Code.

Count III alleged certain facts pertaining to certain

advertisements Respondent posted in February 1998. Based on

those factual allegations, Petitioner charged Respondent with

violating multiple provisions of the Florida Insurance Code

pertaining to advertising. Petitioner alleged in Count III that

Respondent violated the following provisions of the F lorida

Insurance Code: Sections 626.611(7), 626.611(8), 626.611(9),

626.611(13), 626.621(2), 626.621(3), 626.878, and

626.9541(1)(b), Florida Statutes, and Rules 4 - 220.201(4)(a),

4 - 220.201(4)(l), 4 - 220.051(c), and 4 - 220.051(d), Florida

Administrative Co de.

Count IV alleged that Respondent failed to timely notify

Petitioner of a change in his office address. Petitioner

alleged in Count IV that Respondent violated the following

provisions of the Florida Insurance Code: Sections 626.551,

626.611(13), and 626.621(2), Florida Statutes.

At the final hearing, the following pre - marked Petitioner

exhibits were admitted into evidence: 1 - 13, 15, 18, 19, 21 - 23,

25, 27, 28, 30, 31A, 31B, 31C, 31D, 32A, 33 - 36, 40 - 42, 44 - 52,

60C (deposition of Carlos Schaparo taken No vember 28, 1998), 60D

(deposition of Respondent taken November 20, 1998), 60E

(deposition of Respondent taken October 30, 2001), and 60F

(deposition of Donna Presswood 1 taken November 8, 2001). The

following pre - marked Petitioner exhibits were rejected: 1 4, 16,

17, 32B, and 53. The remaining pre - marked Petitioner exhibits

were not offered. Petitioner presented the testimony of Judith

Stanley, Carol Sheridan, Ileana Fuentes, Jaime Farach, Miguel

Jimenez, Arthur Lee, Jr., Richard Walker, Patricia Lee, Guie rmo

Tejeda, Juan Rodriguez, and Luz Martinez. Ms. Stanley is

employed by Bank of America. Ms. Sheridan, Mr. Walker, and

Mr. Rodriguez were, at the times material to this proceeding,

investigators employed by Petitioner. Ms. Fuentes owned the

property at issue in Count I. Mr. Lee and Ms. Lee are children

of Arthur Lee, Sr., who owned the property at issue in Count II.

Mr. Farach is a general contractor. Mr. Jimenez is an architect

and contractor. Mr. Tejeda is an investigator employed by the

Departmen t of Business and Professional Regulation.

Ms. Martinez is the Respondent's spouse.

Respondent testified on his own behalf and presented the

additional testimony of Christian Fuxa, a public insurance

adjuster and contractor. Respondent presented thre e

sequentially numbered exhibits, each of which was admitted into

evidence.

A corrected transcript of the proceedings was filed on

March 28, 2002. Each party filed a Proposed Recommended Order,

which has been duly considered by the undersigned in the

pr eparation of this Recommended Order.

FINDINGS OF FACT

1. At all times material to this proceeding, Respondent

has been licensed pursuant to Chapter 626, Florida Statutes, as

a public insurance adjuster. Section 626.854(1), Florida

Statutes, defines the term "public adjuster" as follows:

(1) A "public adjuster" is any person,

except a duly licensed attorney at law as

hereinafter in s. 626.860 provided, who, for

money, commission, or any other thing of

value, prepares, completes, or files an

insuranc e claim form for an insured or

third - party claimant or who, for money,

commission, or any other thing of value,

acts or aids in any manner on behalf of an

insured or third - party claimant in

negotiating for or effecting the settlement

of a claim or claims f or loss or damage

covered by an insurance contract or who

advertises for employment as an adjuster of

such claims, and also includes any person

who, for money, commission, or any other

thing of value, solicits, investigates, or

adjusts such claims on behal f of any such

public adjuster.

2. Pursuant to Chapter 626, Florida Statutes, the Florida

Department of Insurance has jurisdiction over Respondent's

insurance licenses and appointments.

3. Respondent owns Reliance Insurance Adjusters, Inc.

(Reliance Adju sters), a corporation organized under the laws of

the State of Florida. Respondent conducts his business as a

public adjuster through Reliance Adjusters.

4. At all times pertinent to this proceeding, Respondent

has been married to Luz Adriana Romero Ma rtinez (Ms. Martinez).

5. A Insurance Restoration Contractors, Inc. (A Insurance

Restoration) was a corporation organized under the laws of the

State of Florida by documents filed with the Secretary of State

on August 8, 1997. Respondent prepared the pap ers necessary to

incorporate A Insurance Restoration and served as its Registered

Agent. Respondent was not a shareholder, officer, or director

of A Insurance Restoration at any time pertinent to this

proceeding. Ms. Martinez was an incorporator, owner o f one - half

of the corporation's common stock, and president of the A

Insurance Restoration from its inception until December 20,

1997. Ms. Martinez had a financial interest in A Insurance

Restoration through her stock ownership of the corporation.

Carlos Schaparo was an incorporator, owner of one - half of the

corporation's common stock, and vice president of the

corporation from its inception until December 20, 1997. On

December 20, 1997, Mr. Schaparo became the sole stockholder and

president of the corpo ration. The corporation was

administratively dissolved on September 24, 1999.

6. Online Salvage Company, Inc. (Online Salvage) was

incorporated under the laws of the State of Florida by documents

filed with the Secretary of State on September 14, 1995. This

corporation was administratively dissolved on October 16, 1998.

Respondent was the registered agent for Online Salvage and

helped his wife complete the paperwork necessary to incorporate

Online Salvage. 2 Respondent was not a shareholder, officer, or

director of Online Salvage. At all times pertinent to this

proceeding, Ms. Martinez was an officer and stockholder of

Online Salvage. On March 17, 1997, Mr. Schaparo became an

officer and shareholder of the corporation. At the times

pertinent to this proceeding, Respondent, his wife, and

Mr. Schaparo were authorized to sign checks on behalf of Online

Salvage.

7. There was a dispute whether Respondent had a direct or

indirect financial interest in Online Salvage. Petitioner

established that Responde nt had an indirect financial interest

in Online Salvage, but it failed to establish that he had a

direct financial interest in the corporation. Petitioner's

assertion that Respondent had a direct financial interest in the

corporation was based on the loan Respondent made to his wife to

start the corporation. That assertion is rejected because the

evidence established that Respondent loaned the money to his

wife, not to Online Salvage. There was insufficient evidence to

establish that Online Salvage was i ndebted to Respondent.

8. Petitioner established that Respondent had an indirect

financial interest in the corporation based on the benefit that

would inure to him if his wife profited from her ownership

interest in the corporation. Ms. Martinez testif ied that any

monies she received as a result of her ownership interest in the

corporation would be placed in a joint account with Respondent. 3

In addition, Ms. Martinez testified that she had in fact

received monies as a result of her ownership interest i n the

corporation and that those monies had been deposited in a joint

account with Respondent.

9. At all times pertinent to this proceeding, Sunshine

General Contractor, Inc. (Sunshine Contractor) was a corporation

that conducted business as a general contractor. Robert D.

Monroe, a duly - licensed general contractor, was the owner and

qualifier for Sunshine Contractor. Mr. Monroe died July 5,

1998. Following his death, there was no qualifier for Sunshine

Contractor. There was no allegation that Respo ndent owned an

interest in Sunshine Contractor that he should have disclosed.

10. Mr. Schaparo's legal relationship with Sunshine

Contractor and the degree to which Mr. Monroe supervised

Mr. Schaparo's activities at issue in this proceeding were not

cle arly established. On the work authorization forms

Mr. Schaparo signed with Ileana Fuentes and with Arthur Lee,

Sr., Mr. Schaparo identified himself as being a

"Salesperson/Representative" of Sunshine Contractor. In a

deposition, Mr. Schaparo referred to himself as a subcontractor

and testified that he had never been an employee, agent, or

representative of Sunshine Contractor, but he admitted that he

had told people that he was a salesman for Sunshine Contractor.

Mr. Schaparo further testified on deposit ion that he worked on

commission with Sunshine Contractor, but that he had never

received any compensation from Mr. Monroe or Sunshine

Contractor because he never completed any business with

Mr. Monroe. 4

11. On March 11, 1997, a fire damaged the home of

Ms. Fuentes in Miami, Florida.

12. Respondent and other public adjusters appeared at the

scene to solicit adjusting Ms. Fuentes' loss. Respondent talked

to Ms. Fuentes on the evening of March 11, 1997, after the

firemen had completed their work. He g ave her his business

card, informed her that he was soliciting her business as a

public insurance adjuster, and learned where he could reach her

the next day.

13. Respondent and Ms. Fuentes met for the second time on

March 12, 1997. After listening to Respondent's sales

presentation on March 12, 1997, Ms. Fuentes signed a contract

with Reliance Adjusters to represent her as a public insurance

adjuster. Respondent signed the contract on behalf of Reliance

Adjusters. The contract provided, in pertinent part, as

follows:

I/we hereby retain Reliance Adjusters,

Inc. to be my agent and representative, to

advise and assist in the adjustment of fire

loss on March 11, 1997 at 6850 SW 78 Terrace

and agree to pay, in consideration thereof,

and hereby assigns to Reliance Adjusters,

Inc. 10 per cent of the whole amount of

actual loss and damages recovered by

adjustment or otherwise, when paid by the

Insurance Companies involved or any third

Parties, and authorize their interest to

appear accordingly.

Relia nce Adjusters, Inc. agrees not to

accept any settlement or adjustment unless

it is satisfactory to me. I also understand

that I have three days to cancel this

contract in writing.

14. The provision in the contract executed by Ms. Fuentes

and Responden t that provided Reliance Adjusters would be

entitled to ten percent of the whole amount of the actual loss

included the insurance payoff for damages to the residence, for

loss of contents, and for additional living expenses. The

insurance company paid the final payment for each category of

loss on June 4, 1997. 5

15. The fire and/or the efforts of the fire department to

extinguish the fire damaged the windows and doors to

Ms. Fuentes’ house. One of the first things that is typically

necessary following a fire is to secure the premises by boarding

up damaged or missing windows and doors. After Ms. Fuentes

signed the contract with Reliance Adjusters, Respondent hired

Mr. Schaparo and Online Salvage to board - up Ms. Fuentes' home.

Online Salvage paid its w orkers the sum of $150.00 to board - up

Ms. Fuentes' home. This payment was made from Online Salvage's

operating account by check numbered 1015 signed by Ms. Martinez

on March 16, 1997.

16. On or about March 12, 1997, Respondent asked

Ms. Fuentes whether s he had a contractor to repair the damage to

her house. When she answered that she did not, Respondent made

an unsolicited recommendation to Ms. Fuentes that she use

Mr. Schaparo. Respondent told Ms. Fuentes that he had worked

with Mr. Schaparo before on other claims and from church.

Respondent told her he knew Mr. Schaparo's work and he

recommended Mr. Schaparo as being very reliable. Respondent

told Ms. Fuentes that Mr. Schaparo knew how to repair damages

caused by fire. Respondent represented to Ms. Fuentes that

Mr. Schaparo was a reliable person who would be the best person

to take care of Ms. Fuentes' problems in an expeditious manner.

17. Mr. Schaparo is not and has never been a licensed

general contractor. At all times pertinent to this proceedi ng,

Respondent knew that Mr. Schaparo was not a licensed general

contractor.

18. Respondent did not disclose to Ms. Fuentes that he had

a direct or indirect financial interest or business relationship

with Mr. Schaparo or with Online Salvage at any time pertinent

to these proceedings. Respondent did not disclose his wife's

business relationship with Mr. Schaparo or with Online Salvage

at any time pertinent to these proceedings. 6

19. As a result of Respondent's recommendation,

Ms. Fuentes signed a for m contract, styled work authorization

(the work authorization), presented to her by Mr. Schaparo. The

general contractor identified by the work authorization was

Sunshine Contractor. Mr. Schaparo signed the work authorization

as "Salesperson/Representati ve" of Sunshine Contractor. The

work authorization was dated March 12, 1997. Ms. Fuentes

testified, credibly, that the work authorization was signed a

few days after March 12, 1997.

20. On the work authorization form under the full

corporate name for Sunshine Contractor appeared a general

contractor's license number and what purported to be the address

and telephone numbers for Sunshine Contractor. The general

contractor's number was that issued to Mr. Monroe.

21. Ms. Fuentes testified, credibly, t hat she believed at

the time she executed the work authorization that Mr. Schaparo

was the owner and qualifier of Sunshine Contractor. Respondent

deliberately misled Ms. Fuentes into believing that Mr. Schaparo

was a licensed contractor, thereby engaging in fraud and

dishonest dealing.

22. The final payment from the insurance company for

damages to the residence was made payable to Florida Realty

Mortgage (the holder of the mortgage on Ms. Fuentes' residence),

the owners of the residence, and Reliance A djusters. The check,

dated June 4, 1997, was signed by the payees and deposited in an

escrow account maintained by Florida Realty Mortgage.

23. On July 21, 1997, Florida Realty Mortgage, at

Respondent's request, issued a check, in the amount of

$15,290 .00 made payable to Ms. Fuentes, Reliance Adjusters, and

Sunshine Contractor as the first draw to begin repairs to

Ms. Fuentes home. Respondent had Ms. Fuentes endorse the check

and he thereafter deposited the check into the Reliance

Adjusters operating a ccount at First Union Bank. Respondent

then transferred these funds to the control of Online Salvage by

writing a check out of the Reliance Adjusters operating account

and personally depositing the sum of $15,290.00 into the Online

Salvage operating accou nt at First Union Bank.

24. Respondent received the first draw from Florida Realty

Mortgage in his capacity as agent, representative, and public

adjuster of Ms. Fuentes. Consequently, the funds he received

were in a fiduciary capacity. Respondent breach ed his fiduciary

responsibility to Ms. Fuentes by depositing the first draw in

the Online Salvage operating account without the knowledge or

consent of Ms. Fuentes. That breach is exacerbated by the fact

that Respondent had an undisclosed financial intere st in Online

Salvage and by the fact that Respondent, Ms. Martinez, and

Mr. Schaparo could write checks out of that account.

25. There was no evidence at the final hearing to show

that Mr. Monroe or Sunshine Contractor purchased any

construction supplie s or paid any subcontractor to do any work

on the Fuentes property. Ms. Fuentes never met Mr. Monroe and

there was insufficient evidence to establish that Mr. Monroe

ever visited the job site or pulled any permits for the job.

26. Respondent, Ms. Mar tinez, and Mr. Schaparo wrote

checks out of the Online Salvage operating account to board - up

the premises, to demolish damaged areas and clean the premises,

to prepare engineering drawings, and to purchase construction

materials.

27. In September of 199 7, Ms. Fuentes discovered that what

little work was done to her home had been done without a permit

and did not meet building code. On October 9, 1997, the City of

South Miami issued a Notice of Violation which stopped further

repair work because no permi ts had been obtained.

28. On November 14, 1997, Ms. Fuentes filed a civil

complaint against Respondent, Reliance Adjusters, Sunshine

Contractor, and Carlos Schaparo seeking damages, fees, and costs

based on the facts that underpin the allegations of Cou nt I.

That suit was still pending at the time of the final hearing.

29. Following the filing of the civil complaint,

Respondent was instructed by his attorney not to discuss the

facts that underpin Count I. Until the civil action was filed,

Respondent h ad been cooperating with Petitioner's investigators

in the instant proceeding. After the civil action was filed,

Respondent declined to cooperate further with Petitioner's

investigators in the instant proceeding.

30. On June 13, 1997, a fire damaged th e home of

Mr. Arthur Lee, Sr., in Miami, Florida. Mr. Lee, Sr., was

elderly and blind at the time of the fire, and he died prior to

the final hearing. Mr. Lee, Sr., lived in the house with his

son and daughter, Arthur Lee, Jr., and Paulette Lee. 7

31. Respondent appeared at the Lee's residence on the day

after the fire, and Respondent discussed with Mr. Lee, Sr., and

his family the role of a public insurance adjuster and the

reasons they should permit him, through his company, to

represent them as their adjuster. According to Mr. Lee, Jr., on

June 14, 1997, Respondent told him, his father, and his sisters,

Patricia and Paulette, that he had contractors and that he was

going to take care of all the work for ten percent of what was

obtained from the insur ance company. Respondent told them that

he would repair the house and pay all their housing and living

expenses in the amount of $550 per month until the house was

rebuilt plus the costs of storing the undamaged contents of the

dwelling. According to Mr. Lee, Jr., Respondent further

represented that the house would be ready no later than December

of 1997.

32. On June 14, 1997, Respondent, on behalf of Reliance

Adjusters, and Arthur Lee, Jr., on behalf of his father,

executed a contract whereby Reliance Adjusters was appointed to

adjust the Lee loss. This form contract was identical in all

material respects to the contract Respondent and Reliance

Adjusters had signed with Ms. Fuentes. This written contract

did not reflect the representations that Respo ndent made to the

Lee family regarding the construction timeline or the expenses

Respondent would pay.

33. On or about June 18, 1997, Respondent returned to the

Lee home and brought Mr. Schaparo with him. Respondent

introduced Mr. Schaparo to the Lee f amily by telling them that

Mr. Schaparo was a licensed contractor and that he would be

doing the repair work. Respondent's representations were false.

Respondent knew that Mr. Schaparo was not a licensed contractor

and he knew or should have known that M r. Schaparo purported to

represent Sunshine Contractor.

34. Respondent failed to disclose to the Lee family that

they had a choice in who they could use as a contractor.

35. Respondent failed to disclose to the Lee family any

financial interest or bus iness relationship that he had in

Online Salvage, A Insurance Restoration, his business

relationship to Carlos Schaparo, and his wife’s business

relationship and financial interests with Mr. Schaparo.

36. As a result of Respondent’s steering the Lee fami ly to

Mr. Schaparo as the contractor to repair their home, Mr. Lee,

Jr., signed a work authorization with Mr. Schaparo on June 18,

1997, on a form identical in all material respects to the form

Mr. Schaparo had Ms. Fuentes sign. The general contractor

ide ntified by the work authorization was Sunshine Contractor.

Mr. Schaparo signed the work authorization as

"Salesperson/Representative" of Sunshine Contractor.

37. On or after August 25, 1997, Fireman’s Fund issued a

claim check to Arthur Lee and Relia nce Adjusters in the amount

of $43,317.90. Respondent took the claim check to Mr. Lee’s

home and had Mr. Lee, Jr., endorse over the check. Respondent

then took the claim check from Mr. Lee and deposited the Lee’s

$43,317.90 into the Reliance Adjusters' o perating account at

First Union Bank. Respondent received these funds in his

capacity as agent, representative, and public adjuster of the

Lees. Consequently, he received the funds in a fiduciary

capacity.

38. For approximately eight months, Responden t and

Mr. Schaparo wrote checks to the Lee family for living expenses

and storage costs from the Reliance Adjusters checking account

and from the A Insurance Restoration checking account,

respectively.

39. All of the Lee’s furniture that was taken from the

fire damaged home then placed in a rented storage unit was lost

as a result of Respondent’s failure to continue to pay as

promised for storage of the furniture until the Lee’s home was

rebuilt.

40. Respondent and Mr. Schaparo attempted to have Miguel

Jiminez, an architect and general contractor, replace Sunshine

Contractor as the general contractor on the job following

Mr. Monroe's death. Shortly thereafter, the whereabouts of

Mr. Schaparo became unknown, and no additional work was done on

the Lee's house. 8

41. Respondent kept his full fee for adjusting the Lee

home. As of the final hearing, the Lee home had not been

rebuilt and the insurance money had not been returned to the Lee

family. No accounting of the insurance check in the amount of

$43,3 17.90, paid August 25, 1997, was presented at the final

hearing.

42. On or after February 23, 1998, Respondent placed

advertisements, in the form of a flyer, on homes in Kissimmee,

Florida, that had been destroyed or incurred damage as a result

of sever e tornadoes.

43. The owners of the property did not give permission to

Respondent to place the advertisements on their property.

Respondent placed and had others place the advertisements on

homes that were not occupied at the time.

44. The flyer used by Respondent was misleading and

deceptive. The flyer consisted of nine lines of print. The

largest and darkest print appeared on the first and seventh

lines. The third and fourth lines were also of dark print. The

telephone number appearing on the six th line was also in dark

print. The following appeared on the first line of the flyer in

large, dark, bold print: "NOTICE: OWNER." The following

appeared as the second line of the flyer: "THIS PROPERTY SHOULD

BE HANDLED BY." The following appeared as the third line of the

flyer: "RELIANCE ADJUSTERS, INC." The following appeared as

the fourth line of the flyer: "PUBLIC INSURANCE ADJUSTERS."

The following appeared as the fifth and sixth lines of the

flyer: "Any person wishing to contact us regarding this loss

must call us at 1.800.579.6637." The following appeared as the

seventh line of the flyer in large, dark, bold print: "NO

TRESPASSING." The following appeared as the eighth line of the

flyer: "Oscar Martinez Fl. Public Adjusters Lic #:2616561 60."

The following, in the extreme right hand corner of the flyer in

small print, appeared as the ninth line of the flyer:

"Advertisement."

45. The flyer, attached to a damaged home, would have

misled other public insurance adjusters to wrongfully belie ve

that Respondent and/or Reliance Adjusters represented the

homeowner and no one should trespass on the property or deal

directly with the owner of the property. The flyer would have

reasonably dissuaded other public adjusters from soliciting

business fr om the homeowner because they would think that

Respondent, through Reliance Adjusters, had already obtained

that homeowner’s adjusting business.

46. The middle name of Respondent does not appear on the

sticker advertisement.

47. The official Florida Department of Insurance records

contain the name “Oscar Gerard Martinez, Jr.”, for Respondent .

48. The typeface for the name of Respondent in the

advertisement is smaller than the main body of the text.

49. Carol Sheridan, an investigator for Petitione r,

conducted an investigation of Respondent's business on March 11,

1998. Ms. Sheridan went to Respondent's home at 10111 Southwest

134th Place, Miami, Florida, to conduct the investigation

because that was the location that Respondent had listed with

Pet itioner as being his business address. Approximately six

months prior to Ms. Sheridan's visit, Respondent had moved his

office out of his residence to an office located at 12265

Southwest 132nd Court, Miami, Florida. Respondent did not

timely notify Peti tioner of his new business address.

50. Respondent's license has been the subject of prior

administrative action. In Case No. 94 - L - 133 - C&S, Petitioner

placed Respondent on probation for a year and fined him $500.00.

In Case No. 09568 - 94 - A, Petitioner suspended Respondent's

license for 90 days, placed him on probation for two years,

fined him in the amount of $1,000, and assessed costs against

him in the amount of $2,000. Respondent was fined $500.00 in

Case No. 150035 - 95 - A.

51. Respondent's previous discipline included advertising

violations, pressuring and taking advantage of the elderly

during a time of emotional distress, and misrepresentation.

CONCLUSIONS OF LAW

52. The Division of Administrative Hearings has

jurisdiction over the subject mat ter of and the parties to this

case pursuant to Sections 120.569 and 120.57(1), Florida

Statutes.

53. Petitioner has the burden of proving by clear and

convincing evidence the allegations against Respondent. See

Ferris v. Turlington , 510 So. 2d 292 (Fla. 1987); Evans Packing

Co. v. Department of Agriculture and Consumer Services , 550

So. 2d 112 (Fla. 1st DCA 1989); and Inquiry Concerning a Judge ,

645 So. 2d 398 (Fla. 1994). The following statement has been

repeatedly cited in discussions of the clear and convincing

evidence standard:

Clear and convincing evidence requires

that the evidence must be found to be

credible; the facts to which the witnesses

testify must be distinctly remembered; the

evidence must be precise and explicit and

the witnesses mus t be lacking in confusion

as to the facts in issue. The evidence must

be of such weight that it produces in the

mind of the trier of fact the firm belief of

[sic] conviction, without hesitancy, as to

the truth of the allegations sought to be

established. Slomowitz v. Walker , 429

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

54. Section 626.611, Florida Statutes, provides grounds

for the mandatory suspension or revocation of an insurance

license, in pertinent part, as follows:

The department shall deny an appli cation

for, suspend, revoke, or refuse to renew or

continue the license or appointment of any

applicant, agent, title agency, solicitor,

adjuster, customer representative, service

representative, or managing general agent,

and it shall suspend or revoke th e

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.

(9) Fraudulent or dishonest practices in

the conduct of busi ness under the license or

appointment.

* * *

(13) 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.

55. Section 626.621, Florida Statutes, prov ides the

following grounds for the discretionary suspension or revocation

of an insurance license in pertinent part, as follows:

The department may, in its discretion,

deny an application for, suspend, revoke, or

refuse to renew or continue the license or

appointment of any applicant, agent,

solicitor, adjuster, customer

representative, service representative, or

managing general 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 applicant, licensee, or

appointee 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 provisio n of this

code or of any other law applicable to the

business of insurance in the course of

dealing under the license or appointment.

(3) Violation of any lawful order or rule

of the department.

56. Section 626.878, Florida Statutes, provides as

follo ws:

An adjuster shall subscribe to the code of

ethics specified in the rules of the

department.

57. Rule 4 - 220.201, Florida Administrative Code, provides

a code of ethics, in pertinent part, as follows:

(4) Code of Ethics. The work of

adjusting insurance claims engages the

public trust. An adjuster must put the duty

for fair and honest treatment of the

claimant above the adjuster's own interests,

in every instance. The following are

standards of conduct that define ethical

behavior.

(a) An adjuster shall disclose all

financial interest in any direct or indirect

aspect of an adjusting transaction. For

example: an adjuster shall not directly or

indirectly refer or steer any claimant

needing repairs or other services in

connection with a loss to any person with

whom the adjuster has an undisclosed

financial interest, or which person will or

is reasonably anticipated to provide the

adjuster any direct or indirect compensation

for the referral or for any resulting

business.

(b) An adjuster s hall treat all claimants

equally. An adjuster shall not provide

favored treatment to any claimant. An

adjuster shall adjust all claims strictly in

accordance with the insurance contract.

* * *

(h) An adjuster shall exercise

extraordinary care whe n dealing with elderly

clients, to assure that they are not

disadvantaged in their claims transactions

by failing memory or impaired cognitive

processes.

* * *

(l) An adjuster shall not attempt to

negotiate with or obtain any statement from

a clai mant or witness at a time that the

claimant or witness is, or would reasonably

be expected to be, in shock or serious

mental or emotional distress as a result of

physical, mental, or emotional trauma

associated with a loss. Further, the

adjuster shall not conclude a settlement

when such settlement would be

disadvantageous or to the detriment of a

claimant who is in the traumatic or

distressed state described above.

(m) An adjuster shall not knowingly fail

to advise a claimant of their claim rights

in ac cordance with the terms and conditions

of the contract and of the applicable laws

of this state. An adjuster shall exercise

care not to engage in the unlicensed

practice of law as prescribed by the Florida

Bar.

* * *

(5) Public Adjusters, Other E thical

Constraints. In addition to considerations

set out above for adjusters, the following

ethical considerations are specific to

public adjusters.

* * *

(c) The public adjuster shall ensure that

if a contractor, architect, engineer, or

other l icensed professional is used in

formulating estimates or otherwise

participates in the adjustment of the claim,

the professional must be licensed by the

Florida Department of Business and

Professional Regulation.

* * *

(f) A public adjuster shall not accept

referrals of business from any person with

whom the public adjuster may conduct

business where there is any form or manner

of agreement to compensate the person,

whether directly or indirectly, for

referring business to the public adjuster.

Exce pt as between licensed public adjusters,

or licensed public adjusters and members of

the Florida Bar, no public adjuster may

compensate any person, whether directly or

indirectly, for the principal purpose of

referring business to the public adjuster.

58. Rule 4 - 220.051(7)(c), Florida Administrative Code,

provides as follows:

(1) Purpose and Scope. This rule sets

forth Department policy as to certain

matters generally affecting public

adjusters. Procedures regarding application

for licensure are not dealt with in this

rule. Ethical provisions are not dealt with

in this rule.

* * *

(4) Advertising.

(a) As with all forms of advertising

concerning the business of insurance, public

adjusters shall not falsely inform or

advertise as set forth in Section

626.9541(1)(b), Florida Statutes, as well as

any other section within the Insurance Code

which relates to advertising.

* * *

(c) Advertisements to Show Licensee's

Full Name. Any advertisement by a resident

public adjuster shall state t he full name as

specified in Department records of the

public adjuster who has caused the

advertisement to appear. . . .

1. Print Advertisements. In print

advertisements the public adjuster's full

name as specified in Department records

shall be in ty peface no smaller than the

typeface of the main body of text in the

advertisement. Print advertisements include

newspapers, magazines, flyers, brochures,

business cards, adhesive and magnetic

publication, and similar printed

materials. . . .

59. Petitio ner established by clear and convincing

evidence that Respondent violated the code of ethics set forth

in Rule 4 - 220.201, Florida Administrative Code, as alleged in

Count I of the Administrative Complaint by failing to advise

Ms. Fuentes of his indirect fi nancial interest in Online

Salvage. Respondent's failure to adhere to the code of ethics

violated Section 626.878, Florida Statutes, thereby violating

Section 626.621(2) and (3), Florida Statutes. In addition,

Petitioner established by clear and convinci ng evidence that

Respondent breached his fiduciary duty to Ms. Fuentes by placing

the first draw from the insurance proceeds in the Online Salvage

operating account. That breach of duty constituted a violation

of Section 626.611(7), Florida Statutes. Pet itioner also

established by clear and convincing evidence that Respondent

deliberately misled Ms. Fuentes into assuming that Mr. Schaparo

was a contractor, thereby violating the provisions of Section

626.611(9), Florida Statutes.

60. Petitioner establishe d by clear and convincing

evidence that Respondent failed to make disclosures required by

the code of ethics as alleged in Count II. Respondent's failure

to adhere to the code of ethics violated Section 626.878,

Florida Statutes, thereby violating Section 626.621(2) and (3),

Florida Statutes. Petitioner also established by clear and

convincing evidence that Respondent misrepresented

Mr. Schaparo's status to the Lees. That misrepresentation

violated the provisions of Section 626.611(9), Florida Statutes.

61. Petitioner established by clear and convincing

evidence that Respondent posted a flyer that did not comply with

the requirements of Rule 4 - 220.051(7)(c), Florida Administrative

Code, as alleged in Count III. Moreover, the flyer was a

misleading a dvertisement, which violates Section 626.9541(1)(b),

Florida Statutes, and Rule 4 - 220.051(4)(a), Florida

Administrative Code. Respondent's failure to comply with a

statute and rules pertaining to advertising violated Section

626.621(2) and (3), Florida S tatutes.

62. Petitioner established by clear and convincing

evidence that Respondent moved his office without notifying

Petitioner within 30 days as required by Section 626.551,

Florida Statutes. Respondent's failure to comply with that

statute violate d Section 626.621(2), Florida Statutes.

63. Chapter 4 - 231, Florida Administrative Code, provides

penalty guidelines pertinent to this proceeding. Rule 4 -

231.040, Florida Administrative Code, provides, in pertinent

part, the following method for calcula ting the penalty for a

count in an administrative complaint containing multiple

violations of Sections 626.611 and 626.621, Florida Statutes,

and the method for assessing the total penalty:

(a) The Department is authorized to find

that multiple grounds exist under sections

626.611 and 626.621, Florida Statutes, 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 ch apter, 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 pen alty 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. 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

f actors; provided, however, the Department

shall convert the total penalty to an

administrative fine and probation in the

absence of a violation of section 626.611,

Florida Statutes, if warranted upon the

Department's consideration of the factors

set forth in rule subsection 4 - 231.160(1).

64. The highest penalty for the violations found in

Count I is for the violation of Section 626.611(9), Florida

Statutes. The recommended penalty for that violation, as set

forth in Rule 4 - 231.080(7), Florida Administrat ive Code, is the

suspension of Respondent's license for nine months.

65. The highest penalty for the violations found in

Count II is for the violation of Section 626.611(9), Florida

Statutes. The recommended penalty for that violation, as set

forth in Rule 4 - 231.080(9), Florida Administrative Code, is the

suspension of Respondent's license for nine months.

66. The highest penalty for the violations found in

Count III is for the violation of Section 626.621(2) or

Section 626.621(3), Florida Statutes, b y failing to adhere to

the code of ethics set forth in duly - adopted rules. The

recommended penalty for either violation, as set forth in

Rule 4 - 231.090(2) and (3), Florida Administrative Code, is the

suspension of Respondent's license for three months.

6 7. The highest penalty for the violations found in

Count IV is for the violation of Section 626.621(2), Florida

Statutes, by failing to comply with Section 626.551, Florida

Statutes. The recommended penalty for that violation, as set

forth in Rule 4 - 231. 090(2), Florida Administrative Code, is a

suspension of Respondent's license for three months.

68. Rule 4 - 231.160, Florida Statutes, provides the

following aggravating and mitigating factors to be considered in

determining the penalties to be imposed aga inst a licensee:

The Department shall consider the

following aggravating and mitigating factors

and apply them to the total penalty in

reaching the final penalty assessed against

a licensee under this rule chapter. After

consideration and application of these

factors, the Department shall, if warranted

by the Department's consideration of the

factors, either decrease or increase the

penalty to any penalty authorized by law.

(1) For penalties other than those

assessed under rule 4 - 231.150:

(a) willf ulness 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 agent;

(g) financial gain or loss to agent;

(h) coo peration with the Department;

(i) vicarious or personal responsibility;

(j) related criminal charge; disposition;

(k) existence of secondary violations in

counts;

(l) previous disciplinary orders or prior

warning by the Department; and

(m) other relevant factors.

69. In considering the penalty recommendations that

follow, the undersigned has considered Respondent's prior

disciplinary history, the nature of the violations found herein,

the lack of trustworthiness demonstrated by Respondent, and the

damages suffered by Ms. Fuentes and the Lee family. Based on

those considerations, the undersigned recommends that

Respondent's license be revoked.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDE D that Petitioner enter a final order that

adopts the Findings of Fact and Conclusions of Law contained

herein. It is further RECOMMENDED that Respondent's license be

revoked.

DONE AND ENTERED this 20th day of June, 2002, in

Tallahassee, Leon County, Flo rida.

___________________________________

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.f l.us

Filed with the Clerk of the

Division of Administrative Hearings

this 20th day of June, 2002.

ENDNOTES

1/ The alleged misleading advertisements set forth in Count III

were posted in Kissimmee, Florida, following a series of

tornados. Ms. Presswood is a code enforcement officer employed

by the City of Kissimmee.

2/ The fact that he was its registered agent does not constitute

a direct or indirect financial interest in the corporation.

3/ As discussed in the Conclusions of Law section of this

Recommended Order, Respondent had a duty to disclose that

indirect financial interest to Ms. Fuentes once Online Salvage

became involved in the board - up and the construction of her

residence, but he failed to do so. The code of ethics for

public insurance adjusters clearly requires such disclosure.

See Rule 4 - 220.201(4)(a), Florida Administrative Code.

4/ Petitioner introduced evidence that Respondent had used Mr.

Schaparo to p repare estimates that Respondent used in adjusting

losses. That evidence has not been considered by the

undersigned because the evidence does not specifically pertain

to either of the jobs at issue in this proceeding and because

that allegation was not pl ed in the First Amended Administrative

Complaint.

5/ There is no issue that Respondent failed to negotiate an

appropriate settlement with the insurance company.

6/ A Insurance Restoration was created after August 8, 1997,

which was after Ms. Fuentes entered into the contract with

Reliance Adjusters to adjust the loss and it was after she

authorized Sunshine Contractors to begin the necessary repair

work. Although Respondent failed to disclose his direct or

indirect interest in A Insurance Restoration to Ms. Fuentes,

Petitioner failed to establish that he had a duty to do so.

7/ Patricia Lee, Mr. Lee, Sr.'s other daughter, testified at the

final hearing.

8/ Petitioner attempted to prove that Respondent forged the

signature of Jamie Farach on an application for a building

permit pertaining to the Lee job. That evidence has not been

considered by the undersigned because that allegation was not

pled by the First Amended Administrative Complaint.

COPIES FURNISHED:

A. Collin Cherry, Esquire

Dep artment of Insurance

612 Larson Building

200 East Gaines Street

Tallahassee, Florida 32399 - 0333

Richard B. Marx, Esquire

O. Frank Valladares, Esquire

66 West Flagler Street, Second Floor

Miami, Florida 33130

Honorable Tom Gallagher

State Treasurer/Ins urance Commissioner

Department of Insurance

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

NOTICE OF RIGHT TO SUBMIT EXCEPTI ONS

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.

1 The alleged misleading advertisements set forth in Count III were posted in

Kissimmee, Florida, following a series of tornados. Ms. Presswood is a code

enforcement officer employed by the City of Kissimmee. 2

The fact that he was its registered agent does not constitute a direct or

indirect financial interest in the corporation.

3 As discussed in the Conclusions of Law section of this Recommended Order,

Respondent had a duty to disclose that indirect financial interest to Ms.

Fuentes once Onl ine Salvage became involved in the board - up and the

construction, but he failed to do so. T he code of ethics for public

insurance adjusters clearly requires such disclosure. See, Rule 4 -

220.201(4)(a), Florida Administrative Code. 4

Petitioner introduc ed evidence that Respondent had used Mr. Schaparo to

prepare estimates that Respondent used in adjusting losses. That evidence

has not been considered by the undersigned because the evidence does not

specifically pertain to either of the jobs at issue in this proceeding and

because that allegation was not pled in the First Amended Administrative

Complaint. 5

There is no issue that Respondent failed to negotiate an appropriate

settlement with the insurance company. 6

A Insurance Restoration was created after August 8, 1997, which was after

Ms. Fuentes entered into the contract with Reliance Adjusters to adjust the

loss and it was after she authorized Sunshine Contractors to begin the

necessary repair work. Although Respondent failed to disclose his dire ct or

indirect interest in A Insurance Restoration to Ms. Fuentes, Petitioner

failed to establish that he had a duty to do so. 7

Patricia Lee, Mr. Lee, Sr.'s other daughter, testified at the final

hearing. 8

Petitioner attempted to prove that Respond ent forged the signature of Jamie

Farach on an application for a building permit pertaining to the Lee job.

That evidence has not been considered by the undersigned because that

allegation was not pled by the First Amended Administrative Complaint.