02-001360PL Department Of Health, Board Of Hearing Aid Specialists vs. Gage Davey Status: Closed Recommended Order on Friday, September 6, 2002.

Summary: Hearing aid specialist who misrepresented time for obtaining a refund and switched hearing aids without telling customer is guilty of fraud and negligence and should have license revoked, fined $2000, make restitution of $3283.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF HEALTH, BOARD OF )

HEARING AID SPECIALISTS, )

)

Petitioner, )

)

vs. ) Case No. 02 - 1360PL

)

GAGE DAVEY, )

)

Respondent. )

)

RECOMMENDED ORDER

Administrative Law Judge (ALJ) Daniel Manry conducted the

administrative hearing of this proceeding on June 4, 2002, in

New Port Richey, Florida, on behalf of the Division of

Administrative Hearings (DOAH).

APPEARANCES

For Petitioner: Gary L. A sbell, Esquire

Agency for Health Care Administration

2727 Mahan Drive

Fort Knox Building 3, Mail Stop 39

Tallahassee, Florida 32308

For Respondent: Gage Davey, pro se

6521 Berea Lane

New Port Richey, Florida 34653

STATEMENT OF THE ISSUES

The issues in this case are whether Respondent violated

Subsections 484.056(1)(g) and (h), Florida Statutes (1999),

respectively, by committing fraud, deceit, negligence,

incompetence, or misconduct in the dispen sing of a hearing aid

and by failing to provide a sales receipt and other required

information; and, if so, what penalty, if any, should be imposed

against Respondent's license as a hearing aid specialist. (All

chapter and section references are to Florid a Statutes (1999)

unless otherwise stated.)

PRELIMINARY STATEMENT

On July 10, 2000, Petitioner filed an Administrative

Complaint against Respondent. Respondent timely requested an

administrative hearing.

At the hearing, Petitioner presented the testimo ny of three

witnesses and submitted three exhibits for admission in

evidence. Respondent testified in his own behalf and submitted

one exhibit for admission in evidence.

The identity of the witnesses and exhibits and any

attendant rulings are set forth in the Transcript of the hearing

filed on July 10, 2002. At the request of Petitioner, the ALJ

extended the time for filing the proposed recommended orders

("PROs") until August 6, 2002. Petitioner timely filed its PRO

on July 23, 2002. Respondent did n ot file a PRO.

FINDINGS OF FACT

1. Petitioner is the state agency responsible for

regulating the practice of hearing aid specialists in Florida

pursuant to Chapter 484. Respondent is licensed as a hearing

aid specialist in Florida pursuant to license n umber AS0002712.

2. The Administrative Complaint involves the sale and

service of an original pair of hearing aids and replacement

hearing aids to a single customer. The record identifies the

customer as C.P. in order to preserve the customer's

confide ntiality.

3. C.P. is an elderly gentleman who is hearing impaired.

C.P.'s wife accompanied and assisted C.P. in most of his

dealings with Respondent.

4. On February 16, 1999, Respondent performed a free

hearing test on C.P. at Elfers Optical and Heari ng Company

(Elfers). Elfers is located on State Road 54 in New Port

Richey, Florida. C.P. had heard of Respondent from a friend and

responded to a newspaper advertisement by Elfers for a free

hearing test.

5. Respondent advised C.P. that C.P. needed t wo hearing

aids. Respondent concluded that C.P. needed a hearing aid for

each ear for balance.

6. Respondent recommended programmable hearing aids for

several reasons. Respondent represented that programmable

hearing aids could be programmed for heari ng needs that change

over time and therefore would not have to be replaced. However,

programmable hearing aids are more expensive than others.

7. C.P. stated that he wanted to think about it. C.P.

left the office and subsequently made an appointment f or a

return visit on February 19, 1999.

8. When C.P. returned to Elfers on February 19, 1999,

Respondent was sick and not in the office. Ms. Phillys Strand

(Strand), Respondent's employee, saw C.P. and his wife.

9. C.P. stated that he had decided to purchase the

programmable hearing aids recommended by Respondent. Strand

fitted C.P. for two hearing aids and had C.P. execute a contract

for the purchase of two Philips Encanto II programmable hearing

aids (Encantos) at the total price of $3,832 (the co ntract).

C.P. paid $3,832 on February 19, 1999.

10. The contract states that there was a one - year warranty

on the hearing aids. The one - year warranty covered replacement

or repair but not a refund of the purchase price. The contract

specifically state s that C.P. had only 30 days from the date of

delivery (the 30 - day trial period) in which to obtain a refund

of the purchase price.

11. Respondent delivered the Encantos to C.P. on March 1,

1999. C.P. returned to Elfers on March 3, 1999, complaining

t hat the hearing aids hurt his ears. Respondent ground down the

hearing aids, and C.P. left Elfers with the modified hearing

aids.

12. C.P. returned to Elfers on March 10, 1999, and

requested a refund from Respondent. C.P. explained that he had

recentl y learned that he needed surgery on one of his ears to

remove a cancerous legion and would be unable to use the hearing

aids before the expiration of the 30 - day trial period for

obtaining a refund.

13. On March 10, 1999, Respondent stated to C.P. that

u nder Florida law C.P. had one year in which to obtain a refund.

Neither Florida law nor the manufacturer provides a warranty

that authorizes a refund for one year.

14. The provisions in the contract pertaining to a refund

of the purchase price merely r eflect the terms of the applicable

section of Florida Statutes. In relevant part, the purchase

contract provides:

Unless otherwise stated, the hearing aid is

new and warranted for one year by dispenser

. . . . The guarantee shall permit the

purchaser to cancel for a valid reason

within 30 days of the receipt of the hearing

aid(s). A valid reason shall be defined as

failure by the purchaser to achieve

satisfaction from use of the hearing aid(s),

so long as the hearing aid(s) is returned to

the seller with in the 30 - day trial period in

good working condition. In the event of

cancellation within the 30 - day trial period,

[Elfers] will retain $150 plus 5% of total

purchase price on monaural fitting, or $200

plus 5% of total purchase price on binaural

fitting f or ear molds and services provided

to fit the hearing aids, pursuant to

484.0512FS. . . .

15. On March 10, 1999, C.P. properly tendered the Encantos

to Respondent in accordance with the requirements of the

contract and Section 484.0512. C.P. had a val id reason, within

the meaning of the contract and applicable law, for the failure

to achieve satisfaction with the Encantos. C.P. properly

requested a refund within the 30 - day trial period that began on

March 1, 1999, when Respondent delivered the Encanto s to C.P.

16. On March 10, 1999, Respondent had actual knowledge

that C.P. had properly tendered the Encantos for a valid reason

and properly requested a refund. Respondent had actual

knowledge of the falsity of the statement that Florida law

allowed C.P . one year in which to obtain a refund. Respondent

had actual knowledge that neither Florida law nor any warranty

amends the 30 - day trial period prescribed in the contract and

Section 484.0512 for obtaining a refund. In any event,

Respondent had construc tive knowledge that his statements to

C.P. were false.

17. The misrepresentation by Respondent on March 10, 1999,

induced C.P. to retain the Encantos. The false statements by

Respondent on March 10, 1999, induced C.P. to unknowingly allow

the lapse of hi s statutory and contractual right to a refund.

Respondent had actual, or constructive knowledge, of the effect

of Respondent's false statement to C.P.

18. C.P. underwent surgery on March 24, 1999, and could

not wear the Encantos again until May 21, 199 9. When C.P. began

wearing the Encantos again on May 21, 1999, the left hearing aid

hurt his ear. C.P. compared the two hearing aids and discovered

that the left hearing aid was longer than the right.

19. On May 27, 1999, C.P. and his wife returned to

R espondent. Respondent made a new impression, using a substance

different from that used by Strand for the initial impression,

and told C.P. that Respondent would send the impression to the

manufacturer for a new set of hearing aids. C.P. and his wife

wou ld be traveling in New York when Respondent received the new

hearing aids, and Respondent agreed to mail the new hearing aids

to C.P. in New York.

20. C.P. received the new hearing aids while he was in New

York. C.P. heard a "swishing" noise in the new hearing aids

when people around him were talking.

21. C.P. advised Respondent of the bothersome noise.

Pursuant to Respondent's instructions, C.P. returned the hearing

aids to Respondent.

22. C.P. received hearing aids directly from the

manufacturer on July 21, 1999, while C.P. was still in New York.

The hearing aids created a pulsating sound. The volume wheel

did not work, and the left hearing aid fell out of C.P.'s ear on

at least one occasion.

23. Respondent told C.P. that Respondent would h ave Betty

Lou Gage (Gage), Respondent's assistant, locate a hearing aid

specialist in New York where C.P. could take the hearing aids.

On August 6, 1999, C.P. took the hearing aids to Genesee Hearing

Aid in Buffalo, New York (Genesee), pursuant to Gage's

instructions. Genesee advised C.P. that they did not work on

Phillips programmable hearing aids and charged C.P. $15.

24. On September 30, 1999, C.P. and his wife went to

Respondent's office. C.P. complained that the hearing aids were

whistling and fal ling out of his ears.

25. While C.P. was in Respondent's office on September 30,

1999, C.P. requested a refund of the purchase price for a valid

reason and tendered the hearing aids to Respondent in good

condition. The tender and request for refund was within the

one - year period previously represented by Respondent as required

by Florida law.

26. Respondent advised C.P. that the warranty was over.

Respondent asked C.P. if C.P. wanted Respondent to send the

hearing aids back to the manufacturer and h ave the manufacturer

make the hearing aids automatic. C.P. agreed.

27. On October 21, 1999, C.P. returned to Respondent's

office for the new hearing aids. The toggle switch used for

adjusting hearing aids was still on the outside of the hearing

aids, but C.P. accepted the hearing aids anyway. Respondent

advised C.P. not to wear the hearing aids while hunting.

28. C.P. did not wear the hearing aids in November 1999

because he was hunting in New York. In December 1999, C.P.

asked his wife to check t he serial numbers on the hearing aids.

C.P. and his wife discovered that the hearing aids were not

Encantos.

29. When C.P. and his wife returned to Florida, they went

to Hearx, the provider of hearing aids under C.P.'s new

insurance policy with Humana. A specialist at Hearx examined

the hearing aids and confirmed that the hearing aids were not

Phillips programmable hearing aids. Rather, they were half -

shell conventional hearing aids with a retail value that ranged

from $700 to $900.

30. C.P. teleph oned Elfers on January 19, 2000. A

representative at Elfers advised C.P. that C.P. would need to

speak to Respondent and that Respondent was no longer employed

at that location. The representative advised C.P. to try

reaching Respondent at the Holiday of fice.

31. C.P. and his wife found Respondent at the Holiday

office. C.P. advised Respondent that the hearing aids were not

the Encantos C.P. had purchased and requested a refund. The

request for refund was made within the one - year period

represented by Respondent on March 10, 1999, in which C.P. could

request a refund. C.P. also requested the telephone number for

Phillips. Respondent told C.P. that Phillips was out of

business and left the office.

32. Jeff Ruff, another employee at the Holiday offic e,

offered to try a new substance to put a seal around the hearing

aids for a better fit. C.P. left the hearing aids with Ruff and

obtained a receipt.

33. C.P.'s wife telephoned Phillips, provided the serial

numbers for the Encantos, and asked whether Respondent had

returned the Encantos. The representative for Phillips stated

that Respondent had returned the Encantos on October 8, 1999,

and that Phillips had sent the half - shell conventional hearing

aids back to Respondent. The serial numbers of the h alf - shell

conventional hearing aids sent to Respondent matched those on

the hearing aids that C.P.'s wife checked in December 1999.

34. The market value of the half - shell conventional

hearing aids is more than $2,000 less than that of the Encantos.

Res pondent should have refunded the difference in market value

to C.P. Respondent did not refund the difference in market

price to C.P. Respondent did not provide C.P. with any written

documentation, including a sales receipt, for the half - shell

conventiona l hearing aids; did not provide C.P. with a warranty

for the half - shell conventional hearing aids; did not advise

C.P. that Respondent had changed the hearing aids provided to

C.P.; and did not advise C.P. of the difference in market value

between the Enca ntos and half - shell conventional hearing aids.

35. Respondent has not refunded any money to C.P.

Respondent has not otherwise made restitution for the harm

suffered by C.P.

36. This is not Respondent's first offense. Petitioner

has previously disciplin ed Respondent's license in two cases in

which Respondent either allowed the 30 - day trial period to lapse

before taking action requested by the customer or refused to

refund the entire amount of the purchase price. Petitioner

imposed administrative fines i n those two cases that totaled

$1,000; required Respondent to pay costs of $805; and required

Respondent pay a refund to the customer in the amount $544.

37. A substantial period of time has not lapsed since

Respondent's previous discipline. Petitioner entered a final

order in the previous two cases on April 15, 2002.

CONCLUSIONS OF LAW

38. DOAH has jurisdiction over the parties and the subject

matter. The parties received adequate notice of the

administrative hearing. Section 120.57(1).

39. Petit ioner has the burden of proof. Petitioner must

show by clear and convincing evidence that Respondent committed

the acts alleged in Administrative Complaint and the

reasonableness of any penalty. Department of Banking and

Finance, Division of Securities a nd Investor Protection v.

Osborne Stern and Company , 670 So. 2d 932, 935 (Fla. 1996);

State ex rel. Vining v. Florida Real Estate Commission , 281

So. 2d 487 (Fla. 1973); Ferris v. Turlington , 510 So. 2d 292

(Fla. 1st DCA 1987).

40. Petitioner satisfied i ts burden of proof. Petitioner

showed by clear and convincing evidence that Respondent

dispensed both the Encantos and conventional hearing aids,

within the meaning of Section 484.041(3); and committed fraud,

deceit, and misconduct in the practice of hear ing aid dispensing

in violation of Section 484.056(1)(g). Respondent had either

actual or constructive knowledge that: C.P. did not have one

year in which to obtain a refund of the $3,832 that C.P. paid

for the Encantos; Respondent replaced the Encantos w ith

substantially less expensive conventional hearing aids; did not

inform C.P. of the change in hearing aids; and did not refund

the difference in purchase price to C.P. If it were determined

that Respondent did not have the culpable knowledge required t o

be guilty of fraud, deceit, and misconduct, Respondent is guilty

of negligence and incompetence.

41. Petitioner showed by clear and convincing evidence

that Respondent violated Section 484.056(1)(h) by failing to

provide C.P. with a sales receipt for the half - shell

conventional hearing aids. Respondent also failed to provide

C.P. with any other written documentation of the sale of the

second pair of hearing aids, including a written warranty or

written documentation of the serial numbers.

42. Flor ida Administrative Code Rule 64B6 - 7.002(2)(u) and

(v) authorizes a range of penalties for the violations committed

by Respondent in this case. The Rule authorizes Petitioner to

discipline Respondent's license with a penalty that ranges from

a reprimand to revocation of Respondent's license and to impose

an administrative fine in an amount that ranges from $500 to

$1,000. Rule 64B6 - 7.002(3) authorizes Petitioner to deviate

from the penalties described in the preceding paragraph if the

facts and circumstanc es in a particular case demonstrate

aggravating circumstances.

43. Petitioner showed by clear and convincing evidence the

presence of aggravating circumstances that warrant license

discipline greater than those generally authorized in Rule 64B6 -

7.002(2). First, Respondent's fraud, deceit, misconduct,

negligence, and incompetence were not limited to a single

isolated event but continued for several months. Second,

Respondent's violations resulted in substantial financial harm

to C.P. Third, Respondent ha s not made restitution to C.P.

Fourth, this is not the first offense by Respondent. Fifth, the

previous offenses by Respondent involve similar facts to those

in this case. Finally, the previous offenses by Respondent are

recent and are not removed in ti me from the current offense.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions

of Law, it is

RECOMMENDED that Petitioner enter a Final Order finding

Respondent guilty of violating Subsections 484.056(1)(g) and

(h); revoking Respon dent's license; assessing an administrative

fine of $2,000 and the costs of investigation and prosecution;

requiring Respondent to make restitution to C.P. in the amount

of $3,832; and requiring Respondent to pay all fines, costs, and

restitution within 30 days of the date of the Final Order.

DONE AND ENTERED this 6th day of September, 2002, in

Tallahassee, Leon County, Florida.

___________________________________

DANIEL MANRY

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Buildin g

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 6th day of September, 2002.

COPIES FURNISHED :

Kathryn E. Price, Esquire

Bureau of Practitioner Regulation

Department of Health

4052 Bald Cypress Way, Bin C - 65

Tallahassee, Florida 32399 - 3265

Gage Davey

6521 Berea Lane

New Port Richey, Florida 34653

R. S. Power, Agency Clerk

Department of Health

4052 Bald Cypress Way, Bin A02

Tallahassee, Florida 32399 - 1701

Susan Foster, Executive Director

Board of Hearing Aid Specialists

Department of Health

4052 Bald Cypress Way, Bin C08

Tallahassee, Florida 32399 - 1701

William W. Large, General Counsel

Depa rtment of Health

4052 Bald Cypress Way, Bin A02

Tallahassee, Florida 32399 - 1701

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.