03-002859RX Guido Perou vs. Department Of Financial Services
 Status: Closed
DOAH Final Order on Friday, November 7, 2003.


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Summary: Petitioner failed to show that Rule 4.211.042(8), Florida Administrative Code, enlarges, modifies, or contravenes Section 626.641(2), Florida Statutes.

1STATE OF FLORIDA

4DIVISION OF ADMINISTRATIVE HEARINGS

8GUIDO PEROU, )

11)

12Petitioner, )

14)

15vs. ) Case No. 03 - 2859RX

22)

23DEPARTMENT OF FINANCIAL )

27SERVICES, )

29)

30Respondent. )

32______________________________)

33FINAL ORDER

35Robert E. Me ale, Administrative Law Judge of the Division

45of Administrative Hearings, conducted the final hearing in

53Tallahassee, Florida, on September 22, 2003. The sole witness

62testified by videoconference from Miami where the court reporter

71was located. The Admin istrative Law Judge and attorneys were in

82Tallahassee.

83APPEARANCES

84For Petitioner: Steven M. Malono

89Pennington, Moore, Wilkinson,

92Bell & Dunbar, P.A.

96Post Office Box 10095

100215 South Monroe Street, Second Floor

106Tallahassee, Florida 32301

109For Respondent: S. Marc Herskovitz

114Terry Butler

116Department of Financial Services

120Division of Legal Services

124612 Larson Building

127200 East Gaines Street

131Tallahassee, Florida 32399 - 4260

136STATEMENT OF THE ISSUE

140The issue is whether Rule 4 - 211.042(8), Florida

149Administrative Code, co ntravenes Section 626.641(2), Florida

156Statutes, by imposing a waiting period in excess of two years

167for licensee whose license has been revoked to reapply for

177licensure.

178PRELIMINARY STATEMENT

180By Petition for a Determination of the Invalidity of an

190Existin g Rule filed August 5, 2003, Petitioner alleged that Rule

2014 - 211.042(8), Florida Administrative Code, is an invalid

210exercise of delegated legislative authority because the rule

"218enlarges, modifies and contravenes" the specific provisions of

226Section 626.641, Florida Statutes (2002), which is purportedly

234implemented by the rule. Specifically, the petition alleges

242that the rule imposes a 15 - year waiting period for reapplication

254following the commission of a specified felony, but the statute

264requires only a two - year waiting period. The petition also

275states an additional issue is whether the rule is arbitrary or

286capricious.

287Respondent's Pre - Hearing Stipulation, which was filed

295September 17, 2003, raises the issue of whether Petitioner has

305standing to maintain t his rule challenge.

312At the hearing, Petitioner called one witness, himself. He

321testified solely on the issue of standing. Petitioner offered

330into evidence four exhibits: Petitioner Exhibits 1 - 4.

339Respondent called no witnesses and offered into evidence three

348exhibits: Respondent Exhibits 1 - 3. All exhibits were admitted.

358The court reporter filed the transcript on September 26,

3672003. The parties filed their proposed final orders on

376October 31, 2003.

379FINDINGS OF FACT

3821. From 1984 through November 28, 2 000, Petitioner was

392licensed as a general lines insurance agent.

3992. On May 15, 2000, the Miami - Dade County State Attorney

411charged Petitioner with a felony violation of Section

419817.034(3)(d), Florida Statutes (2003). The information alleged

426that Petitione r had participated in an organized scheme to

436defraud a person of less than $20,000 from December 1, 1997,

448through January 31, 1999. (All references to Sections are to

458Florida Statutes (2003), unless the context indicates

465otherwise.)

4663. On September 14, 200 0, Petitioner entered a plea of no

478contest to the charge, and the court entered a finding of guilt,

490but withheld adjudication. The court ordered that Petitioner

498remain on probation and pay court costs. The period of

508probation was specified in a separate order that is not part of

520the present record.

5234. On the same day, Petitioner entered into a Settlement

533Stipulation for Consent Order with Respondent. The settlement

541stipulation acknowledges that Respondent has alleged that

548Petitioner misappropriated homeow ners and flood insurance

555premiums and uttered forged insurance documents. The settlement

563stipulation memorializes Petitioner's "voluntary return" to

569Respondent of all licenses previously issued to him by

578Respondent and Petitioner's understanding that the return of the

587licenses has the same effect as a revocation of these licenses,

598pursuant to Section 626.641, Florida Statutes (2000).

6055. The final paragraph of the settlement stipulation

613states:

614No person whose licenses, appointments and

620eligibility for licen sure have been revoked

627by the Department shall have the right to

635apply for another license or appointment

641under the Insurance Code within two (2)

648years from the date of the Consent Order to

657be issued in this case. The Department

664shall not, however, grant a new license or

672appointment or reinstate eligibility to hold

678such license or appointment if it finds that

686the circumstance or circumstances for which

692the eligibility was revoked or for which the

700previous license or appointment was revoked

706still exist or a re likely to recur.

7146. After the Treasurer and Insurance Commissioner approved

722the settlement stipulation, Respondent issued a Consent Order,

730which incorporates the settlement stipulation and revokes

737Petitioner's "licensure and eligibility for licensure as an

745insurance agent . . . pursuant to Section 626.641(2), Florida

755Statutes (2000)." The final paragraph of the Consent Order,

764which was filed November 28, 2000, contains a paragraph

773identical to the final paragraph, quoted above, of the

782settlement stipula tion, except for minor rewording and the

791addition of a citation in the second sentence to Section

801626.641(1), Florida Statutes (2000).

8057. Prior to the expiration of two years following the

815issuance of the Consent Order, the Legislature passed Chapter

8242002 - 2 06, Laws of Florida. Taking effect on October 1, 2002,

837Section 11 adds Section 626.207 which provides:

844(1) The department shall adopt rules

850establishing specific waiting periods for

855applicants to become eligible for licensure

861following denial, suspension , or revocation

866pursuant to s. 626.611, s. 626.621,

872s. 626.8437, s. 626.844, s. 626.935,

878s. 626.9917, s. 634.181, s. 634.191,

884s. 634.320, s. 634.321, s. 634.422,

890s. 634.423, s. 642.041, or s. 642.043. The

898purpose of the waiting periods is to provide

906suffi cient time to demonstrate reformation of

913character and rehabilitation. The waiting

918periods shall vary based on the type of

926conduct and the length of time since the

934conduct occurred and shall also be based on

942the probability that the propensity to commit

949i llegal conduct has been overcome. The

956waiting periods may be adjusted based on

963aggravating and mitigating factors

967established by rule and consistent with this

974purpose.

9758. On October 17, 2002, Respondent adopted Rule 4 - 211.042,

986Florida Administrative Code. (All references to Rules are to

995the Florida Administrative Code.) Rule 4 - 211.042(8) provides:

1004(8) Required Waiting Periods for a Single

1011Felony Crime. The Department finds it

1017necessary for an applicant whose law

1023enforcement record includes a single fel ony

1030crime to wait the time period specified

1037below (subject to the mitigating factors set

1044forth elsewhere in this rule) before

1050licensure. All waiting periods run from the

1057trigger date.

1059(a) Class A Crime. The applicant will

1066not be granted licensure unt il 15 years have

1075passed since the trigger date.

1080(b) Class B Crime. The applicant will

1087not be granted licensure until 7 years have

1095passed since the trigger date.

1100(c) Class C Crime. The applicant will

1107not be granted licensure until 5 years have

1115pas sed since the trigger date.

1121(d) The Department shall not impose any

1128waiting period pursuant to this rule where

1135the only crime in an applicant’s law

1142enforcement record is a single felony crime

1149that results from the applicant’s passing of

1156a worthless che ck, or obtaining property in

1164return for a worthless check, and the amount

1172of the check or checks involved in the

1180single felony crime is $500 or less.

1187However, this subparagraph shall not apply

1193where a felony crime resulting from the

1200applicant’s passing of a worthless check, or

1207obtaining property in return for a worthless

1214check is not the only crime in an

1222applicant’s law enforcement record.

12269. Rule 4 - 211.042(21) provides that Class A crimes include

123764 felonies ranging from treason, murder, and air piracy, to

1247unlawful possession of a postal key and defrauding an innkeeper.

1257Rule 4 - 211.042(21)(2) includes fraud. Rule 4 - 211.041(11)

1267provides that the "trigger date" is the date on which the

1278applicant was found guilty, pleaded guilty, or pleaded no

1287contest. As is apparent from the Notice of Denial, described

1297below, the trigger date is the earliest of these three events.

130810. Section 626.641(2) provides:

1312No person or appointee under any license or

1320appointment revoked by the department or

1326office, nor any person wh ose eligibility to

1334hold same has been revoked by the department

1342or office, shall have the right to apply for

1351another license or appointment under this

1357code within 2 years from the effective date

1365of such revocation or, if judicial review of

1373such revocation is sought, within 2 years

1380from the date of final court order or decree

1389affirming the revocation. The department or

1395office shall not, however, grant a new

1402license or appointment or reinstate

1407eligibility to hold such license or

1413appointment if it finds that the

1419circumstance or circumstances for which the

1425eligibility was revoked or for which the

1432previous license or appointment was revoked

1438still exist or are likely to recur; if an

1447individual's license as agent or customer

1453representative or eligibility to hold s ame

1460has been revoked upon the ground specified

1467in s. 626.611(12), the department or office

1474shall refuse to grant or issue any new

1482license or appointment so applied for.

148811. On January 10, 2003, Petitioner filed an application

1497for licensure as a general l ines agent. On February 13, 2003,

1509Respondent issued a Notice of Denial. The Notice of Denial

1519explains that Section 626.611(14) provides that Respondent shall

1527deny an application for a license if it finds that the applicant

1539has been found guilty of, or pl eaded guilty or no contest to, a

1553felony involving moral turpitude, without regard to

1560adjudication, and that Section 626.621(8) provides that

1567Respondent may deny an application for a license if it finds

1578that the applicant has been found guilty of, or pleade d guilty

1590or no contest to, a felony. The Notice of Denial cites Rule

16024 - 211.042(8) with respect to the waiting time before licensure

1613due to a record of a single felony. The Notice of Denial

1625concludes that Respondent is subject to a waiting period of 14

1636ye ars from when he was found guilty, pleaded guilty, or pleaded

1648no contest.

165012. Petitioner is substantially affected by Rule

16574 - 211.042(8)(a). The effect of this rule is to preclude

1668Petitioner's application from consideration for 14 years from

1676the trigger d ate. Given the resolution of this case, it is

1688unnecessary to determine if Petitioner has standing to contest

1697the remaining subsections of Rule 4 - 211.042(8).

1705CONCLUSIONS OF LAW

170813. The Division of Administrative Hearings has

1715jurisdiction over the subjec t matter, pursuant to Section

1724120.56(3). Petitioner has standing, pursuant to Section

1731120.56(1)(a) and (3)(a).

173414. Pursuant to Section 120.56(3)(a), Petitioner has the

1742burden of proving that Rule 4 - 211.042(8) is an invalid exercise

1754of delegated legisla tive authority.

175915. Petitioner argues that the 15 - year waiting period in

1770Rule 4 - 211.042(8)(a) contravenes the two - year waiting period in

1782Section 626.641(2). However, there is no conflict between these

1791provisions. The statute deprives a licensee whose li cense has

1801been revoked of the right to reapply for two years. The rule

1813does nothing to change this statutory prohibition.

182016. Petitioner finds a negative implication in the statute

1829that limits to two years the period during which the revoked -

1841licensee may not reapply. However, such a negative implication

1850results in a conflict between Section 626.641(2) and the newer

1860Section 626.207(1). A reasonable interpretation that avoids any

1868conflict between the older and newer statutes limits the older

1878statute to it s two - year term and finds no implication that,

1891after two years, previously revoked applicants may file

1899applications. By this interpretation, Section 626.207(1) merely

1906builds upon the two - year waiting period in the older statute by

1919specifying waiting perio ds of five, seven, and fifteen years,

1929depending on the type of felony.

193517. Petitioner also relies on language in the second

1944sentence of Section 626.641(2) that prohibits Respondent from

1952issuing a license "if it finds that the circumstance or

1962circumstances for which the eligibility was revoked or for which

1972the previous license or appointment was revoked still exist or

1982are likely to recur." This provision imposes an additional

1991restriction upon Respondent that, when any statutory waiting

1999period has expired, Respondent may not issue a new license if

2010the factual basis for revocation still exists or the acts or

2021omissions on which revocation was based are likely to recur.

2031This provision applies even after the expiration of the longer

2041waiting periods authorized b y Section 626.207(1) and adopted by

2051Rule 4 - 211.042. The statute and rule establish these periods as

2063the minimum terms required for the applicant to demonstrate his

2073or her suitability for licensure and do not assure the applicant

2084that his or her applicant will be granted after the waiting

2095period has run.

209818. Respondent contends that Petitioner has not adequately

2106raised the issue of whether Rule 4 - 211.042(8) is arbitrary or

2118capricious. The petition mentions this issue, but does not

2127provide any explanation of how the rule is arbitrary or

2137capricious. In his proposed final order, Petitioner argues only

2146that the rule is arbitrary and capricious due to the perceived

2157conflict between the rule's 15 - year waiting period and the two -

2170year waiting period in Section 62 6.641(2). However, for the

2180reasons set forth above, no such conflict exists, so Rule

21904 - 211.042(8) is not arbitrary or capricious for the reason

2201advanced by Petitioner.

2204ORDER

2205It is

2207ORDERED that the Petition for a Determination of the

2216Invalidity of an E xisting Rule is dismissed.

2224DONE AND ORDERED this 7th day of November, 2003, in

2234Tallahassee, Leon County, Florida.

2238S

2239___________________________________

2240ROBERT E. MEALE

2243Administrative Law Judge

2246Division of Administrative Hearings

2250The DeSoto Building

22531230 Apalachee Parkway

2256Tallahassee, Florida 32399 - 3060

2261(850) 488 - 9675 SUNCOM 278 - 9675

2269Fax Filing (850) 921 - 6847

2275www.doah.state.fl.us

2276Filed with the Clerk of the

2282D ivision of Administrative Hearings

2287this 7th day of November, 2003.

2293COPIES FURNISHED:

2295Honorable Tom Gallagher

2298Chief Financial Officer

2301Department of Financial Services

2305The Capitol, Plaza Level 11

2310Tallahassee, Florida 32399 - 0300

2315Mark Casteel, General Counsel

2319Department of Financial Services

2323The Capitol, Plaza Level 11

2328Tallahassee, Florida 32399 - 0300

2333Scott Boyd, Acting Executive Director

2338General Counsel

2340Joint Administrative Procedures Committee

2344120 Holland Building

2347Tallahassee , Florida 32399 - 1300

2352Steven M. Malono

2355Pennington, Moore, Wilkinson,

2358Bell & Dunbar, P.A.

2362Post Office Box 10095

2366215 South Monroe Street, Second Floor

2372Tallahassee, Florida 32301

2375S. Marc Herskovitz

2378Terry Butler

2380Department of Financial Services

2384Division of Legal Services

2388612 Larson Building

2391200 East Gaines Street

2395Tallahassee, Florida 32399 - 4260

2400NOTICE OF RIGHT TO JUDICIAL REVIEW

2406This decision is final unless an adversely affected party:

2415a) brings a civil action within 30 days in

2424the appropriate fede ral district court

2430pursuant to Section 1415( i )(2)(A) of the

2438Individuals with Disabilities Education Act

2443(IDEA); [Federal court relief is not

2449available under IDEA for students whose only

2456exceptionality is "gifted"] or

2461b) brings a civil action within 30 da ys in

2471the appropriate state circuit court pursuant

2477to Section 1415( i )(2)(A) of the IDEA and

2486Section 1003.57(5), Florida Statutes; or

2491c) files an appeal within 30 days in the

2500appropriate state district court of appeal

2506pursuant to Sections 1003.57(5) and 12 0.68,

2513Florida Statutes.

Select the PDF icon to view the document.
PDF
Date
Proceedings
PDF:
Date: 11/07/2003
Proceedings: DOAH Final Order
PDF:
Date: 11/07/2003
Proceedings: Final Order (hearing held September 22, 2003). CASE CLOSED.
PDF:
Date: 10/31/2003
Proceedings: Respondent`s Proposed Final Order filed.
PDF:
Date: 10/31/2003
Proceedings: Petitioner`s Proposed Final Order filed.
PDF:
Date: 09/29/2003
Proceedings: Transcript filed.
PDF:
Date: 09/29/2003
Proceedings: Notice of Filing Transcript filed.
Date: 09/26/2003
Proceedings: Transcript filed.
Date: 09/22/2003
Proceedings: CASE STATUS: Hearing Held.
PDF:
Date: 09/19/2003
Proceedings: Petitioner`s Supplement to Pre-Hearing Statement (filed via facsimile).
PDF:
Date: 09/18/2003
Proceedings: Unilateral Pre-Hearing Statement (filed by Petitioner via facsimile).
PDF:
Date: 09/17/2003
Proceedings: Respondent`s Pre-hearing Stipulation (filed via facsimile).
PDF:
Date: 09/12/2003
Proceedings: Agreed Motion for Continuance of Filing Date for Joint Prehearing Stipulation (filed by S. Malono via facsimile).
PDF:
Date: 09/05/2003
Proceedings: Notice of Appearance (filed by S. Herskovitz, Esquire).
PDF:
Date: 08/19/2003
Proceedings: Order of Consolidation. (consolidated cases are: 03-002146, 03-002859RX)
PDF:
Date: 08/06/2003
Proceedings: Order of Assignment.
PDF:
Date: 08/05/2003
Proceedings: Rule Challenge transmittal letter to Liz Cloud from Ann Cole copying Carroll Webb and the Agency General Counsel.
PDF:
Date: 08/04/2003
Proceedings: Petition for a Determination of the Invalidity of an Existing Rule (filed via facsimile).

Case Information

Judge:
ROBERT E. MEALE
Date Filed:
08/05/2003
Date Assignment:
08/11/2003
Last Docket Entry:
11/07/2003
Location:
Miami, Florida
District:
Southern
Agency:
Department of Financial Services
Suffix:
RX
 

Counsels

Related Florida Statute(s) (18):