01-004541PL
Department Of Insurance vs.
Michael Scott Kelly
Status: Closed
Recommended Order on Tuesday, April 23, 2002.
Recommended Order on Tuesday, April 23, 2002.
1STATE OF FLORIDA
4DIVISION OF ADMINISTRATIVE HEARINGS
8DEPARTMENT OF INSURANCE, )
12)
13Petitioner, )
15)
16vs. ) Case No. 01 - 4541PL
23)
24MICHAEL SCOTT KELLY, )
28)
29Respondent. )
31)
32RECOMMENDED ORDER
34Upon due notice , William R. Cave, an Administrative Law
43Judge for the Division of Administrative Hearings, held a formal
53hearing in this matter on February 20 - 21, 2002, in Daytona
65Beach, Florida.
67APPEARANCES
68For Petitioner: Dickson E. Kesler, Esquire
74Department of Insurance
77Division of Legal Services
81200 East Gaines Street
85612 Larson Building
88Tallahassee, Florida 32399 - 0333
93For Respondent: Steven G. Casano va, Esquire
100100 Rialto Place, Suite 510
105Melbourne, Florida 32935
108STATEMENT OF THE ISSUES
112Should Respondent's license as a bail bond agent in the
122State of Florida be disciplined for the alleged violation of
132cert ain provisions of Chapter 648, Florida Statutes, as set
142forth in the Administrative Complaint and, if so, what penalty
152should be imposed?
155PRELIMINARY STATEMENT
157By an Administrative Complaint dated September 7, 2001, and
166filed with the Division of Adminis trative Hearings (Division) on
176November 27, 2001, the Department of Insurance (Department) is
185seeking to revoke, suspend, or otherwise discipline Respondent's
193license as a bail bond agent in the State of Florida.
204As grounds therefor, the Department alleg es in the
213Administrative Complaint that Respondent violated Subsections
219648.442(1) and (3); and 648.45(2)(d),(e),(g),(h),(j), and (n),
230and (3)(a),(c),(d), and (e), Florida Statutes. By an Election
241of Rights dated September 13, 2001, Respondent disputed th e
251charges and requested an administrative hearing. By letter
259dated November 21, 2001, the Department referred this matter to
269the Division for the assignment of an Administrative Law Judge
279and for the conduct of an administrative hearing.
287At the hearing, the Department presented the testimony of
296Johnny Lamb, Linda Jones, William Travis, Jeanette Halstead, and
305Charles A. Parish. The Department's Exhibits 1 and 2, and
315Composite Exhibit 3(3A - 3H) were admitted in evidence.
324Respondent testified in his own beh alf and presented the
334testimony of Linda Jones, Randall Ecker, Therese Ecker, Mary Ann
344Hinckle, and Selena Kelly. Respondent's Exhibits 1 - 4 were
354admitted in evidence.
357The second volume of a two - volume Transcript of this
368proceeding was filed with the Divis ion on March 7, 2002, with
380the first volume being filed on March 13, 2002. The parties
391timely filed their Proposed Recommended Orders.
397FINDINGS OF FACT
400Upon consideration of the oral and documentary evidence
408adduced at the hearing, the following relevant findings of fact
418are made:
4201. The Department is the agency of the State of Florida
431vested with the statutory authority to administer the
439disciplinary provisions of Chapter 648, Florida Statutes.
4462. Respondent, at all times relevant to this proceeding,
455wa s licensed as a bail bond agent in the State of Florida and
469subject to the provisions of Chapter 648, Florida Statutes.
4783. Respondent, at all times relevant to this proceeding,
487was employed by Alliance Bail Bonds (Alliance), which was owned
497by Linda Jon es. There was a verbal employment agreement between
508Alliance and Respondent, which provided for, among other things,
517Respondent's salary. However, the verbal employment agreement
524did not require that Respondent write bail bonds exclusively for
534Alliance.
5354. At all times relevant to this proceeding, Alliance's
544office was located in Respondent's home in Titusville, Brevard
553County, Florida, which had a separate entrance and separate
562telephone for Alliance. Alliance's files, both active and
570inactive, were al so housed in this office.
5785. On March 30, 2000, a person identifying himself as
588Johnny Lamb contacted Respondent by telephone concerning a bail
597bond for an individual known as Bernard J. Dougherty who was
608being held in the Brevard County, Florida, jail. The bond
618amount was $8,500.00. Since Dougherty was not a resident of the
630State of Florida, Respondent wanted Lamb to put up the full
641amount of the bond as collateral. However, Lamb advised
650Respondent that he did not have enough cash to put up the full
663am ount of the bond. Therefore, Respondent and Lamb eventually
673agreed on $7,000.00 cash as collateral. Additionally,
681Respondent advised Lamb that the premium for writing the bail
691bond would be $850.00 (10 percent of the bond amount).
7016. Later that same day , Lamb came to Respondent's office
711to complete the paperwork and put up the necessary funds for the
723collateral and bond premium. Lamb paid Respondent the
731collateral and bond premium in cash (U.S. currency, 20's, 50's,
741and 100's).
7437. Respondent prepared a Collateral Receipt and
750Informational Notice (Collateral Receipt), which was signed by
758Lamb. The Collateral Receipt indicated that Lamb had deposited
767the $7,000.00 collateral with Respondent and had executed an
777Indemnity Agreement and Promissory Note. La mb also executed a
787Bail Application. Respondent gave Lamb the white copy of the
797Collateral Receipt for his records. The goldenrod copy of the
807Collateral Receipt was also given to Lamb to be delivered to
818Dougherty at the jail. The yellow copy and pink co py of the
831Collateral Receipt were retained by Respondent for Alliance's
839record.
8408. Lamb also paid Respondent $850.00 in cash (U.S.
849Currency) for the bail bond premium for which Respondent gave
859Lamb a receipt (number 20454) indicating that Lamb had paid th e
871bail bond premium in the amount of $850.00.
8799. After completing the bond transaction with Lamb,
887Respondent prepared a file in Dougherty's name, which included
896the copies of the Collateral Receipt, Promissory Note, Indemnity
905Agreement, Bail Application, and a copy of the receipt for the
916bail bond premium.
91910. After preparing the file, Respondent prepared two
927Powers of Attorney (Powers), one in the amount of $5,000.00 and
939one in the amount of $3,500.00, and proceeded to the Brevard
951County jail to intervie w Dougherty.
95711. Upon arriving at the Brevard County jail, Respondent
966was advised that in addition to the Brevard County charges,
976there was an outstanding warrant for Dougherty from Volusia
985County and a hold for a parole violation in the State of
997Pennsy lvania.
99912. Lamb was not present at the Brevard County jail at
1010this time. Therefore, Respondent advised Dougherty of the
1018Volusia County warrant and the hold from Pennsylvania.
1026Respondent further advised Dougherty that although he could post
1035bond for t he Brevard County charges, Dougherty would not be
1046released because of the Volusia County warrant and the hold for
1057parole violation in Pennsylvania.
106113. Dougherty advised Respondent that he did not want to
1071post bond. Whereupon, Respondent attempted to con tact Lamb
1080using the telephone numbers furnished Respondent by Lamb but was
1090unsuccessful in locating Lamb.
109414. On March 31, 2000, Respondent called the Brevard
1103County jail and had Lamb paged. Upon being advised that Lamb
1114was present in the Brevard County jail, Respondent asked that
1124they instruct Lamb to call Respondent at his office. Lamb
1134called Respondent at his office and was advised of the situation
1145concerning Dougherty. Respondent also advised Lamb that he was
1154on his way to the jail and would bring L amb's money with him.
116815. Upon arriving at the Brevard County jail, Respondent
1177explained the circumstances regarding the posting of bail for
1186Dougherty and proceeded to return Lamb's money. Lamb did not
1196have the copies of the Collateral Receipt with him t hat had been
1209given to Lamb on March 30, 2000. Therefore, Respondent took his
1220copy of the Collateral Receipt and documented the return of the
1231$7,000.00 collateral and the $850.00 premium fee. Lamb signed
1241the documentation on the Collateral Receipt showing the return
1250of the $7,000.00 collateral and the $850.00 premium fee.
126016. Respondent then placed all of the documents, including
1269the Collateral Receipt with the documentation showing the return
1278of the $7,000.00 collateral and the $850.00 bond premium, in
1289D ougherty's file with Dougherty's name highlighted in blue for
1299filing. Afterwards, Respondent voided the Powers by writing
"1307Void" across the front of the Powers and had them sent to Linda
1320Jones by UPS. Subsequently, the Powers were forwarded by Linda
1330Jone s to Charles A. Parish, Agent for Continental Heritage
1340Insurance Co., on whom the Powers were written.
134817. On March 31, 2000, Respondent returned the $7,000.00
1358collateral plus the $850.00 bond premium fee to Lamb,
1367notwithstanding the testimony of Lamb to the contrary, which
1376lacks credibility.
137818. Respondent did not at any time present any of the
1389paperwork for posting Dougherty's bond, including the Powers, to
1398the Brevard County jail personnel.
140319. Since Alliance's Brevard County files were being kept
1412at Respondent's office in Titusville, Florida, Respondent did
1420not forward Dougherty's file to Linda Jones. However, as a
1430caution, Respondent advised Linda Jones by telephone of what had
1440occurred in regards to Dougherty, notwithstanding Linda Jones'
1448testimony to the contrary, which lacks credibility.
145520. Sometime in January 2001, Linda Jones came into
1464Respondent's office in Titusville, Florida, and removed all of
1473Alliance's Brevard County files, both active and inactive, that
1482were in the possession of Respond ent. The Alliance files
1492removed by Linda Jones included Dougherty's inactive file with
1501the documentation concerning the return of the $7,000.00
1510collateral and the $850.00 bail bond premium, notwithstanding
1518Linda Jones' testimony to the contrary, which lac ks credibility.
152821. By letter dated May 10, 2001, after talking to William
1539Travis and Linda Jones, Lamb filed a complaint with the
1549Department alleging that Respondent had failed to return the
1558$7,000.00 collateral and this proceeding ensued.
1565CONCLUSIONS OF LAW
156822. The Division of Administrative Hearings has
1575jurisdiction over the parties and the subject matter of this
1585proceeding pursuant to Subsections 120.57(1), Florida Statutes.
159223. Subsections 648.442(1) and (3), Florida Statutes,
1599provide in pertin ent part as follows:
1606(1) Collateral security or other
1611indemnity accepted by a bail bond agent,
1618except a promissory note or an indemnity
1625agreement, shall be returned upon final
1631termination of liability on the bond. . . .
1640* * *
1643(3) Such collateral se curity shall be
1650received and held in the insurer's name by
1658the bail bond agent in a fiduciary capacity
1666and, prior to any forfeiture of bail, shall
1674be kept separate and apart from any other
1682funds or assets of such bail bond agent.
1690When collateral security in excess of
1696$5,000.00 cash or its equivalent is received
1704by a bail bond agent, the entire amount
1712shall be immediately forwarded to the
1718insurer or managing general agent. . . .
172624. Subsections 648.45(2)(d),(e),(g),(h),(j), and (n),
1735and (3)(a),(c),(d ), and (e), Florida Statutes, provide
1745in pertinent part as follows:
1750(2) The department shall deny, suspend,
1756revoke, or refuse to renew any license or
1764appointment issued under this chapter or the
1771insurance code, and it shall suspend or
1778revoke the eligibi lity of any person to hold
1787a license or appointment under this chapter
1794or the insurance code, for any violation of
1802the laws of this state relating to bail or
1811any violation of the insurance code or for
1819any of the following causes:
1824* * *
1827(d) Willful use , or intended use, of the
1835license or appointment to circumvent any of
1842the requirements or prohibitions of this
1848chapter or the insurance code.
1853(e) Demonstrated lack of fitness or
1859trustworthiness to engage in the bail bond
1866business.
1867* * *
1870(g) Fraudule nt or dishonest practices in
1877the conduct of business under the license or
1885appointment.
1886(h) Misappropriation, conversion, or
1890unlawful withholding of moneys belonging to
1896a surety, a principal, or others and
1903received in the conduct of business under a
1911lice nse.
1913* * *
1916(j) Willful failure to comply with or
1923willful violation of any proper order or
1930rule of the department or willful violation
1937of any provision of this chapter or
1944insurance code.
1946* * *
1949(n) Failure to return collateral.
1954(Emphasis Furnished. )
1957* * *
1960(3) The department may deny, suspend,
1966revoke, or refuse to renew any license or
1974appointment issued under this chapter or the
1981insurance code, or it may suspend or revoke
1989the eligibility of any person to hold a
1997license or appointment under this chapter or
2004the insurance code, for any violation of the
2012laws of this state for any of the following
2021causes:
2022(a) A cause for which issuance of the
2030license or appointment could have been
2036refused had it then existed and been known
2044to the department.
2047* * *
2050(c) Violation of any law relating to the
2058business of bail bond insurance or violation
2065of any provision of the insurance code.
2072(d) Failure or refusal, upon demand, to
2079pay over to any insurer the bail bond agent
2088represents or has represented any mon ey
2095coming into his or her hands which money
2103belongs to the insurer.
2107(e) Being found to be a source of injury
2116or loss to the public or detrimental to the
2125public interest or being found by the
2132department to be no longer carrying on the
2140bail bond business in good faith. (Emphasis
2147furnished.)
214825. The burden of proof is on the party asserting the
2159affirmative of an issue before an administrative tribunal,
2167Florida Department of Transportation v. J.W.C. Company, Inc .,
2176396 So. 2d 778 (Fla. 1st DCA 1981). To meet this burden, the
2189Department must establish facts upon which its allegations are
2198based by clear and convincing evidence. Department of Banking
2207and Finance, Division of Securities and Investor Protection v.
2216Osborne Stern and Company , 670 So. 2d 932 (Fla. 1996) and
2227Subsection 120.57(1)(j), Florida Statutes.
223126. The Department has failed to show by clear and
2241convincing evidence that Respondent, Michael Scott Kelly, failed
2249to return the $7,000.00 collateral and the $850.00 bail bond
2260premium to Joh nny Lamb as alleged in the Administrative
2270Complaint. Thus the Department has failed to establish that
2279Respondent violated Subsections 648.442(1) and (3); and 648.45
2287(2)(d),(e),(g),(h),(j), and (n), and (3)(a),(c),(d), and (e),
2300Florida Statutes.
2302RECOMMENDA TION
2304Based on the foregoing Findings of Fact and Conclusions of
2314Law, it is
2317RECOMMENDED that the Department enter a final order finding
2326Respondent, Michael Scott Kelly, not guilty of violating
2334Subsections 648.442(1) and (3); and 648.45(2)(d),(e),(g),(h),
2343( j), and (n), and (3)(a),(c),(d), and (e), Florida Statutes, and
2356dismissing the Administrative Complaint filed against Michael
2363Scott Kelly.
2365DONE AND ENTERED this 23rd day of April, 2002, in
2375Tallahassee, Leon County, Florida.
2379________________________________ ___
2381WILLIAM R. CAVE
2384Administrative Law Judge
2387Division of Administrative Hearings
2391The DeSoto Building
23941230 Apalachee Parkway
2397Tallahassee, Florida 32399 - 3060
2402(850) 488 - 9675 SUNCOM 278 - 9675
2410Fax Filing (850) 921 - 6847
2416www.doah.state.fl.us
2417Filed with the Cle rk of the
2424Division of Administrative Hearings
2428this 23rd day of April, 2002.
2434COPIES FURNISHED :
2437Dickson E. Kesler, Esquire
2441Department of Insurance
2444Division of Legal Services
2448200 East Gaines Street
2452612 Larson Building
2455Tallahassee, Florida 32399 - 0333
2460Hono rable Tom Gallagher
2464State Treasurer/Insurance Commissioner
2467Department of Insurance
2470The Capitol, Plaza Level 02
2475Tallahassee, Florida 32399 - 0300
2480Mark Casteel, General Counsel
2484Department of Insurance
2487The Capitol, Lower Level 26
2492Tallahassee, Florida 32399 - 0 307
2498Steven G. Casanova, Esquire
2502100 Rialto Place, Suite 510
2507Melbourne, Florida 32935
2510NOTICE OF RIGHT TO SUBMIT EXCEPTIONS
2516All parties have the right to submit exceptions within 15 days
2527from the date of this Recommended Order. Any exceptions to this
2538R ecommended Order should be filed with the agency that will
2549issue the Final Order in this case.
![](/images/view_pdf.png)
- Date
- Proceedings
-
PDF:
- Date: 04/23/2002
- Proceedings: Recommended Order cover letter identifying hearing record referred to the Agency sent out.
-
PDF:
- Date: 04/23/2002
- Proceedings: Recommended Order issued (hearing held February 20-21, 2002) CASE CLOSED.
-
PDF:
- Date: 03/20/2002
- Proceedings: Letter to Judge Cave from D. Kesler regarding transcript pages filed.
- Date: 03/13/2002
- Proceedings: Transcript of Proceedings filed.
- Date: 03/07/2002
- Proceedings: Transcript of Proceedings filed.
- Date: 02/20/2002
- Proceedings: CASE STATUS: Hearing Held; see case file for applicable time frames.
-
PDF:
- Date: 02/11/2002
- Proceedings: Amended Notice of Hearing issued. (hearing set for February 20 and 21, 2002; 1:00 p.m.; Daytona Beach, FL, amended as to location and place).
-
PDF:
- Date: 02/11/2002
- Proceedings: Response to Petitioner`s Motion to Receive Witness Testimony by Telephone or Deposition (filed by Respondent via facsimile).
-
PDF:
- Date: 02/07/2002
- Proceedings: Petitioner`s Motion to Receive Witness Testimony by Telephone or Deposition (filed via facsimile).
-
PDF:
- Date: 01/29/2002
- Proceedings: Order Granting Continuance and Re-scheduling Hearing issued (hearing set for February 20 and 21, 2002; 1:00 p.m.; Titusville, FL).
-
PDF:
- Date: 12/12/2001
- Proceedings: Notice of Hearing issued (hearing set for February 5, 2002; 9:00 a.m.; Titusville, FL).
Case Information
- Judge:
- WILLIAM R. CAVE
- Date Filed:
- 11/27/2001
- Date Assignment:
- 01/25/2002
- Last Docket Entry:
- 05/22/2002
- Location:
- Daytona Beach, Florida
- District:
- Northern
- Agency:
- ADOPTED IN TOTO
- Suffix:
- PL
Counsels
-
Steven G. Casanova
Address of Record -
Dickson E Kesler, Esquire
Address of Record