01-004438PL Department Of Insurance vs. Gus Jones, Jr. Status: Closed Recommended Order on Wednesday, February 20, 2002.

Summary: Licensee`s plea of nolo contendere to felony related to practice of insurance mandated suspension of license.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF INSURANCE, )

)

Petitioner, )

)

vs. ) Case No. 01 - 4438PL

)

GUS JONES, JR., )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a f inal hearing was conducted on

January 17, 2002, by video teleconference between Fort

Lauderdale and Tallahassee, Florida, before Claude B. Arrington,

a duly - designated Administrative Law Judge of the Division of

Administrative Hearings.

APPEARANCES

For Petitioner: Mathew A. Nowels, Esquire

Dickson Kesler, Esquire

Department of Insurance

200 East Gaines Street

Tallahassee, Florida 32399 - 0333

For Respondent: James O. Walker, III, Esquire

1339 Northeast 4th Street

Fort Lauderdale, Florida 33304

STATEMENT OF THE ISSUES

Whether Respondent, a licensed insurance agent, committed

the offenses alleged in the Administra tive Complaint and the

penalties, if any, that should be imposed.

PRELIMINARY STATEMENT

On October 15, 2001, Petitioner filed an Administrative

Complaint against Respondent containing two counts. Count I

alleged that Respondent had entered a plea of nol o contendere to

certain criminal charges. Based on the factual allegations,

Petitioner charged Respondent with violating the provisions of

Sections 626.611(7), (13), and (14) and Section 626.621(1) and

(8), Florida Statutes. Section 626.611, Florida Stat utes,

provides grounds that mandate the suspension or revocation of an

insurance license. Section 626.621, Florida Statutes, provides

grounds for the discretionary suspension or revocation of an

insurance license.

Count II alleged that Respondent failed to timely notify

Petitioner of his plea in the criminal proceeding and charged

that the failure violated the provisions of Section 626.621(11),

Florida Statutes.

Respondent timely requested an administrative hearing to

challenge the allegations of the Ad ministrative Complaint, the

matter was referred to the Division of Administrative Hearings,

and this proceeding followed.

Respondent did not dispute the factual allegations of the

Administrative Complaint, but argues that the statute mandating

the suspen sion or revocation of his licensure creates an

irrebuttable presumption that violates his due process rights.

At the final hearing, Petitioner presented two composite

exhibits, which were admitted into evidence as Petitioner's

Exhibits 1 1 and 2. Respond ent testified on his own behalf and

presented the additional testimony of Simon Blank, an

investigator for the Department of Insurance, Division of

Insurance Fraud. Respondent presented no exhibits. Petitioner

thereafter re - called Mr. Blank as a rebuttal witness.

A transcript of the proceedings was filed on January 22,

2002. Each party filed a Proposed Recommended Order, which has

been duly - considered by the undersigned in the preparation of

this Recommended Order.

FINDINGS OF FACT

1. At all times m aterial to this proceeding, Respondent

has been licensed as a general lines insurance agent (2 - 20), a

life and health insurance agent (2 - 18), and a health insurance

agent (2 - 40).

2. In June 2000, the statewide prosecutor filed an

information against Respo ndent in the Circuit Court in and for

Orange County, Florida, where it was assigned Case No. CR - 0 - 00 -

9771/A. The information charged that Respondent was guilty of

organized insurance fraud involving $50,000 or more in violation

of Section 817.034(4)(a), F lorida Statutes, which is a first

degree felony and a crime involving moral turpitude.

3. Simon Blank, an investigator employed by Petitioner's

Division of Insurance Fraud, participated in the investigation

that culminated in the charges being filed aga inst Respondent.

Respondent cooperated with Mr. Blank's investigation and

candidly answered questions that were put to him.

4. On July 31, 2001, Respondent entered a plea of nolo

contendere to the charges against him. At Respondent's plea

hearing the prosecutor summarized the facts he expected to be

able to prove, including the fact that Respondent engaged in

fraudulent activity involving workers' compensation insurance. 2

Thereafter, Respondent stipulated that there was a factual basis

for his plea. The Court accepted Respondent's plea, but

withheld adjudication of guilt. The Court sentenced Respondent

to two days in jail with credit for time served and placed him

on probation under the supervision of the Florida Department of

Corrections for a perio d of ten years. Respondent was ordered

to perform 100 hours of community service and to pay restitution

in the total amount of $16,179.00, which included the costs of

investigation. As a condition of his probation, Respondent was

ordered not to write or renew any policy of workers'

compensation for a period of five years.

5. Prior to the filing of the Administrative Complaint

against him, Respondent had not notified Petitioner in writing

that he had entered a plea of nolo contendere to the criminal

c harges that had been filed against him.

6. Respondent has been the owner of A Maples Insurance

Agency in Pompano Beach, Florida, since 1987.

7. Consistent with his probation, Respondent no longer

writes or renews workers' compensation insurance.

8. At the time of the final hearing, Respondent was

current with his continuing education classes.

9. Respondent has not been convicted of a felony or a

misdemeanor.

10. Respondent testified that his plea in the criminal

proceeding was a plea of convenience a nd that he could not

afford to contest the charges. Respondent did not believe the

plea would lead to the suspension of his license because the

suspension of his license was not a condition of his probation.

He mistakenly believed that the entry of his p lea in the

criminal proceeding would resolve all issues with the Petitioner

since Petitioner participated in the investigation of the case.

11. Respondent testified that his attorney said he had

received something from the Department of Insurance that g ave

reason to believe that they already knew about the plea. That

correspondence was not admitted into evidence and Respondent's

self - serving testimony was not corroborated.

12. Respondent's license was previously disciplined in

Case No. 93 - L - 222JDM, w hich involved allegations of

misappropriation of funds. Petitioner's records reflect that

Respondent was placed on probation for one year as a result of

that proceeding.

CONCLUSIONS OF LAW

13. The Division of Administrative Hearings has

jurisdiction o ver the subject matter of and the parties to this

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

Statutes.

14. Petitioner has the burden of proving by clear and

convincing evidence the allegations against Respondent. See

Ferris v. Turlington , 5 10 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 discussio ns 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 an d

the witnesses must 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).

15. Count I of the Administrative Complaint alleges that

Respondent violated the following provisions of the Florida

Insurance Code: Section 626.611(7), (13), and (14) and Section

626.621(1) and (8), Florida Statutes.

16. Section 626.611, Florida Statutes, provides grounds

for the mandatory suspension or revocation of an insurance

license. Section 626.611(7), (13), and (14), Florida Statutes,

provides, in pertinent part , as follows:

The department shall deny an application

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 managin g general 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.

* * *

(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.

(14) Having been found guilty of or

having pleaded guilty or nolo contendere to

a felony or a crime punishable by

imprisonment of 1 year or more under the law

of the United States of America or of any

state thereof or under the law of any other

country which involves moral turpitude,

without regard to whether a judgment of

conviction has been entered by the court

having jurisdiction of such cases.

17. Section 626.621(1) and (8), Florida Statutes, provides

the following grounds for the discretio nary suspension or

revocation of an insurance license.

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

rep resentative, 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:

(1) Any cause for which issuance of the

license or appointment could have been

refused had it then existed and bee n known

to the department.

* * *

(8) Having been found guilty of or having

pleaded guilty or nolo contendere to a

felony or a crime punishable by imprisonment

of 1 year or more under the law of the

United States of America or of any state

thereof or under the law of any other

country, without regard to whether a

judgment of conviction has been entered by

the court having jurisdiction of such cases.

18. Petitioner proved by clear and convincing evidence

that Respondent plead nolo contendere to vio lating Section

817.034(4)(a), Florida Statutes, which is a first degree felony

and a crime involving moral turpitude. Pursuant to Section

626.611(14), Florida Statutes, the entry of that plea

constitutes grounds for the mandatory suspension or revocation

of Respondent's license. Although the entry of the plea may

arguably constitute violations of Section 626.611(7) and (13),

and of Section 626.621(1) and (8), Florida Statutes, those

arguable statutory violations are more appropriately treated as

being sub sumed in the violation of Section 626.611(14), Florida

Statutes.

19. The undersigned does not have the authority to declare

a statute unconstitutional. See Florida Public Employees

Council 79, AFSCME v. Department of Children and Families , 745

So. 2d 4 87 (Fla. 1st DCA 1999). Respondent's constitutional

attack on the statutes at issue in this proceeding will have to

be addressed by a court of competent jurisdiction.

20. Count II of the Administrative Complaint charges

Respondent with failing to timel y notify Petitioner in writing

of his plea in the criminal proceeding. Section 626.621(11),

Florida Statutes, provides the following discretionary grounds

for the suspension or revocation of an insurance license:

(11) Failure to inform the department in

writing within 30 days after pleading guilty

or nolo contendere to, or being convicted or

found guilty of, any felony or a crime

punishable by imprisonment of 1 year or more

under the law of the United States or of any

state thereof, or under the law of any other

country without regard to whether a judgment

of conviction has been entered by the court

having jurisdiction of the case.

21. Petitioner proved the violation alleged in Count II of

the Administrative Complaint by clear and convincing evidence .

Respondent was not relieved of his responsibility to notify

Petitioner in writing of his plea by his belief that Petitioner

had actual knowledge of the plea.

22. Rule 4 - 231.150(2)(a), Florida Administrative Code,

contains the following penalty guid elines pertinent to this

proceeding:

If it is found that a licensee has

violated either section 626.611(14) or

626.621(8), the following stated penalty

shall apply:

* * *

(2) If the licensee is not convicted of,

but has been found guilty of or h as pleaded

guilty or nolo contendere to, a felony or a

crime punishable by imprisonment of one (1)

year or more under the law of the United

States of America or of any state thereof or

under the law of any other country which

involves moral turpitude, the penalties are

as follows:

(a) If the conduct directly relates to

activities involving an insurance license,

the penalty shall be a twenty - four (24)

month suspension.

23. Rule 4 - 231.090(11), Florida Administrative Code,

provides that the penalty guidel ine for a violation of Section

621(11), Florida Statutes, is suspension of licensure for a

period of three months.

24. Petitioner established that Respondent's license has

been previously disciplined, which is an aggravating factor.

That aggravating fa ctor is offset by Respondent's long history

as a licensee and by his full cooperation during the course of

the investigation that culminated in the criminal charges.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of

Law, it is RE COMMENDED that Petitioner enter a final order that

finds Respondent guilty of violating Section 626.611(14),

Florida Statutes, as alleged in Count I of the Administrative

Complaint, and guilty of violating Section 626.621(11), Florida

Statutes, as alleged in Count II. It is further RECOMMENDED

that the final order suspend Respondent's licensure for a period

of 24 months for the Count I violation, and for a period of

three months for the Count II violation. It is further

RECOMMENDED that the final order pr ovide that the periods of

suspension shall run concurrently.

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

Tallahassee, Leon County, Florida.

___________________________________

CLAUDE B. ARRINGTON

Administrative Law Judge

Division of Administr ative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675 SUNCOM 278 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 20th day of Feb ruary, 2002.

ENDNOTES

1/ Petitioner was permitted to submit, as a late - filed exhibit,

a certification under seal that its Exhibit 1 was a true and

correct copy of Petitioner's records. Counsel for Petitioner

represented at the final hearing that such a certification under

seal was part of the exhibit package when it was delivered to

DOAH.

2/ The gravamen of the charges was that between December 13,

1992 and November 5, 1998, while acting as an insurance agent,

Respondent participated in a scheme to defraud certain named

insurance companies by submitting applications for workers'

compensation insurance that contained false or misleading

information. Because of those false or misleading applications,

the insurance companies issued policies for workers '

compensation insurance they would not have issued had they had

accurate information or they issued policies for a lower

premium. In addition, Respondent was charged with issuing false

certificates of insurance pertaining to workers' compensation

coverag e.

COPIES FURNISHED:

Mathew A. Nowels, Esquire

Dickson Kesler, Esquire

Department of Insurance

200 East Gaines Street

Tallahassee, Florida 32399 - 0333

James O. Walker, III, Esquire

1339 Northeast 4th Street

Fort Lauderdale, Florida 33304

Honorabl e Tom Gallagher

State Treasurer and Insurance 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 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.

1 Petitioner was permitted to submit, as a late - filed exhibit, a

certification under seal that its Exhibit 1 was a true and correct copy of

Petitioner's records. Counsel for Petitioner represented at the fi nal

hearing that such a certification under seal was part of the exhibit package

when it was delivered to DOAH.

2 The gravamen of the charges was that between December 13, 1992 and November

5, 1998, while acting as an insurance agent, Respondent particip ated in a

scheme to defraud certain named insurance companies by submitting

applications for workers' compensation insurance that contained false or

misleading information. Because of those false or misleading applications,

the insurance companies issued policies for worker's compensation insurance

they would not have issued had they had accurate information or they issued

policies for a lower premium. In addition, Respondent was charged with

issuing false certificates of insurance pertaining to worker's compensation

coverage.