04-000625RX Keith Luther Fernandez vs. Department Of Financial Services Status: Closed DOAH Final Order on Friday, August 13, 2004.

Summary: The rule, as promulgated, does not exceed enabling legislation, but as applied by the Respondent, exceeds the grant of rulmaking authority and enlarges or modifies specific terms of enabling legislation.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

KEITH LUTHER FERNANDEZ, )

)

Petitioner, )

)

vs. ) Case No. 04 - 0625RX

)

DEPARTMENT OF FINANCIAL )

SERVICES, )

)

Respondent. )

)

FINAL ORDER

Adminis trative Law Judge (ALJ) Daniel Manry conducted the

administrative hearing in this proceeding on behalf of the

Division of Administrative Hearings (DOAH), on May 27, 2004, in

Orlando, Florida.

APPEARANCES

For Petitioner: Keith Luther Fernandez, pro se

3667 Oakhill Drive

Titusville, Florida 32780

605 Casa Park Court M

Winter Springs, Florida 32708

For Respondent: Dana M. Wiehle, Esquire

Departm ent of Financial Services

612 Larson Building

200 East Gaines Street

Tallahassee, Florida 32399 - 0333

STATEMENT OF THE ISSUE

The issue is whether Florida Administrative Code

Rule 69B - 211. 042(6), (8), and (14) is an invalid exercise of

delegated legislative authority within the meaning of

Subsections 120.52(8)(b), (c), and (e), Florida Statutes (2002).

PRELIMINARY STATEMENT

On February 3, 2004, Petitioner challenged Florida

Administrative Code Rule 68B - 211.042(6), (8), and (14) pursuant

to Section 120.56, Florida Statutes (2003). The ALJ

consolidated the rule challenge with DOAH Case No. 03 - 4495, in

which Petitioner challenges the proposed denial of his

application to be licensed in Florid a as a resident insurance

adjuster. The ALJ addresses the issues raised in DOAH Case

No. 03 - 4495 in a separate Recommended Order issued on the same

date as this Final Order (the Recommended Order).

At the hearing, Petitioner presented the testimony of eig ht

witnesses, including Petitioner, and submitted seven exhibits

for admission into evidence. Respondent presented the testimony

of two witnesses and submitted 11 exhibits for admission into

evidence. The identity of the witnesses and exhibits and the

ru lings regarding each are reported in the one - volume Transcript

of the hearing filed with DOAH on June 24, 2004.

Pursuant to Petitioner's unopposed request to extend the

deadline for filing proposed final orders (PFOs), the parties'

respective PFOs were to be filed with DOAH no later than

July 16, 2004. Each party timely filed a PFO on July 16, 2004.

FINDINGS OF FACT

1. Respondent is the state agency responsible for

licensing insurance agents in the State of Florida, pursuant to

Chapter 626, Florida Statut es (2002). On April 3, 2003,

Petitioner applied for a license as a resident company employee

property and casualty adjuster (resident adjuster license).

Petitioner truthfully answered all questions on the application,

including those questions pertaining to Petitioner's criminal

history and guilty plea to a felony charge in Georgia.

2. On September 25, 2003, Respondent issued a Notice of

Denial of Petitioner's license application. Respondent based

the denial, in relevant part, on the grounds that Flori da

Administrative Code Rule 69B - 211.042(6) and (14) prohibit

Respondent from granting the application while Petitioner is on

probation or in a pre - trial intervention program; and that

Florida Administrative Code Rule 69B - 211.042(8) requires

Petitioner to w ait five years after the plea dated May 14, 2002,

before applying for a license.

3. On a date not disclosed in the record, Respondent

issued a Second Amended Notice of Denial (the Amended Notice of

Denial). The record does not disclose a first amended notice of

denial. The Amended Notice of Denial, in relevant part, deletes

grounds for the proposed denial that are not relevant to this

Final Order.

4. On May 14, 2002, Petitioner pled guilty to a single

felony charge of possession of cocaine. A Geor gia court

sentenced Petitioner under Georgia's First Offender Act. If

Petitioner successfully completes probation, Georgia will

dismiss the felony charge. If Petitioner does not successfully

complete probation, the Georgia court may revoke Petitioner's

p robation, adjudicate Petitioner guilty as charged, and sentence

Petitioner to the maximum sentence authorized under Georgia law.

5. Petitioner challenges the following provisions in

Florida Administrative Code Rule 69B - 211.042:

(6) Probation. The Depart ment shall not

grant licensure to any person who at the

time of application or at any time during

the pendency of the application is serving a

probationary term on any felony crime, or

any misdemeanor crime, except for those

crimes specified in Chapter 316 , F.S., which

are not punishable by imprisonment. The

Department shall not substantively consider

an application until the applicant has

successfully completed his or her

probationary term.

* * *

(8) Required Waiting Periods for a Single

Felony Cri me. The Department finds it

necessary for an applicant whose law

enforcement record includes a single felony

crime to wait the time period specified

below (subject to the mitigating factors set

forth elsewhere in this rule) before

licensure. All waiting periods run from the

trigger date.

(c) Class C Crime. The applicant will not

be granted licensure until 5 years have

passed since the trigger date.

* * *

(14) Pre - Trial Intervention: Specific

Policy.

(b) The Department will not grant licensure

to any person who at time of application is

participating in a pre - trial intervention

program. The Department finds it necessary

to the public welfare to wait until the pre -

trial intervention is successfully completed

before licensure will be considered.

6. Petitioner challenges the foregoing provisions in

Florida Administrative Code Rule 69B - 211.042 on the grounds that

each provision violates Subsections 120.52(8)(b), (c), and (e),

Florida Statutes (2002). Petitioner alleges that each

challenged provi sion of the rule, respectively, exceeds the

grant of rulemaking authority; enlarges, modifies, or

contravenes the specific provisions of law implemented; or is

arbitrary or capricious within the meaning of

Subsections 120.52(8)(b), (c), and (e), Florida S tatutes (2002).

7. The challenged provisions of the rule may reasonably be

construed in a manner that preserves the validity of the rule.

The express terms of the rule do not mandate an interpretation

that violates Subsections 120.52(8)(b), (c), and (e ), Florida

Statutes (2002). However, Respondent interprets the challenged

provisions of the rule in a manner that, if accepted, would

violate Subsections 120.52(8)(b) and (c), Florida Statutes

(2002).

8. The enabling legislation for Florida Administrativ e

Code Rule 69B - 211.042 is Subsection 626.207(1), Florida Statutes

(2002). Subsection 626.207(1), Florida Statutes (2002),

authorizes Respondent to adopt rules establishing specific

waiting periods that Respondent must apply after Respondent

denies, suspe nds, or revokes Petitioner's license pursuant to

specifically enumerated Florida statutes. In relevant part,

Subsection 626.207(1), Florida Statutes (2002), provides that

Respondent:

. . . shall adopt rules establishing

specific waiting periods for applic ants to

become eligible for licensure following

denial, suspension, or revocation . . . .

(emphasis supplied)

9. Subsection 626.207(1), Florida Statutes (2002),

prescribes a statutory prerequisite to the imposition of any

waiting period pursuant to Florid a Administrative Code

Rule 69B - 211.042. The statutory prerequisite is that Respondent

must first deny, suspend, or revoke an existing license based on

statutory provisions enumerated in the enabling legislation;

enumerated provisions that are independent of any waiting

periods. Thereafter, Respondent may impose relevant waiting

periods to any application that follows Respondent's denial,

suspension, or revocation of a license.

10. The express terms of Florida Administrative Code

Rule 69B - 211.042 do n ot mandate the imposition of waiting

periods without first satisfying the statutory prerequisite

prescribed in the enabling legislation. The challenged

provisions of the rule may reasonably be construed as

authorizing the imposition of waiting periods fol lowing

Respondent's denial, suspension, or revocation of an existing

license.

11. Respondent interprets the challenged provisions of the

rule as authorizing Respondent to impose waiting periods without

satisfying the statutory prerequisite in the enabli ng

legislation. The waiting period that Respondent proposes to

impose against Petitioner does not follow Respondent's denial,

suspension, or revocation of a license within the meaning of

Subsection 626.207(1), Florida Statutes (2002).

12. When Georgia authorities arrested Petitioner for

possession of cocaine on November 4, 2001, Petitioner held a

Florida nonresident company all - lines adjuster license pursuant

to license number A082918 (a nonresident adjuster license).

Petitioner voluntarily cancelled t he nonresident adjuster

license on October 21, 2002.

13. Respondent did not deny an application for renewal of

the nonresident adjuster license. Nor did Respondent suspend or

revoke Petitioner's nonresident adjuster license.

14. The application for a resident adjuster license at

issue in this proceeding indicates that no administrative action

was ever taken against Petitioner's nonresident adjuster

license. Respondent stipulated that Petitioner answered all

questions on the application truthfully. The Florida licensure

file that Respondent maintains shows that Respondent took no

administrative action against Petitioner's nonresident adjuster

license.

15. Respondent proposes to impose a waiting period against

Petitioner that that does not follow denial, suspension, or

revocation of either Petitioner's previous nonresident adjuster

license or the resident adjuster license that Petitioner seeks

in this proceeding. The second page of the application that

Petitioner submitted states that Respondent w ill not consider

the application while Petitioner is under probation or in a pre -

trial intervention program. In relevant part, the second page

of the application provides:

NOTE: IF YOU ARE CURRENTLY ON PROBATION OR

PARTICIPATING IN A PRE - TRIAL INTERVENTI ON

PROGRAM, YOU MAY WANT TO WAIT TO FILE YOUR

APPLICATION WITH THE DEPARTMENT UNTIL YOUR

PROBATION OR PRE - TRIAL PROGRAM HAS

TERMINATED. (For other than minor traffic

violations, the rules of the Department

prohibit the approval of licensure for an

individ ual who is currently serving a

probationary term or participating in a pre -

trial intervention program. . . .)

(emphasis not supplied)

16. After receiving the application for a resident

adjuster license, Respondent issued a letter dated April 7,

2003, st ating Respondent's intent to deny the application. In

relevant part, the letter stated:

[W]e are in receipt of the certified

documents, however, a review of the

documents indicate[s] that you are still on

probation. The rules of the Department

prohibit t he approval of licensure for an

individual who is currently serving a

probationary term. Please write and let us

know if we need to close or withdraw your

application.

17. The express terms of Subsection 626.207(1), Florida

Statutes (2002), require a n interpretation of Florida

Administrative Code Rule 69B - 211.042 that limits the imposition

of relevant waiting periods to periods that follow Respondent's

denial, suspension, or revocation of a license. The waiting

periods begin on "trigger dates" define d in Florida

Administrative Code Rule 69B - 211.041(11). The express terms of

the enabling legislation do not authorize the imposition of

waiting periods unless the waiting periods follow a denial,

suspension, or revocation of a license by Respondent in

acc ordance with Florida law.

18. If Respondent were to deny Petitioner's application

for a resident adjuster license on the grounds that Petitioner

violated one of the statutes enumerated in the enabling

legislation, Subsection 626.207(1), Florida Statut es (2002),

would authorize Respondent to apply the challenged provisions of

Florida Administrative Code Rule 69B - 211.042 to prevent

Petitioner from applying for a license before the expiration of

the applicable waiting period. Similarly, if Respondent wer e to

have suspended or revoked Petitioner's nonresident adjuster

license, Subsection 626.207(1), Florida Statutes (2002), would

have authorized Respondent to apply the relevant waiting period

to prevent Petitioner from applying for another nonresident

adju ster license; or arguably to prevent Petitioner from

applying for the resident adjuster license at issue in this

proceeding.

CONCLUSIONS OF LAW

19. DOAH has jurisdiction over the parties and subject

matter of this proceeding. §§ 120.569 and 120.56, Fl a. Stat.

(2002). DOAH provided the parties with adequate notice of the

administrative hearing.

20. Petitioner bears the ultimate burden of proving the

invalidity of the challenged provisions in Florida

Administrative Code Rule 69B - 211.042. Florida Boar d of

Medicine, et. al v. Florida Academy of Cosmetic Surgery, Inc.,

et al. ; 808 So. 2d 243 (Fla. 1st DCA 2002). Petitioner must

show by a preponderance of the evidence that the challenged

provisions of the rule are invalid as promulgated.

21. Petiti oner did not show that the challenged provisions

of Florida Administrative Code Rule 69B - 211.042 are invalid as

promulgated. The express terms of the rule do not mandate an

interpretation that invalidates the rule.

22. Petitioner showed that the chall enged provisions of

Florida Administrative Code Rule 69B - 211.042 are invalid as

applied by Respondent. The enabling legislation in

Subsection 626.207(1), Florida Statutes (2002), authorizes

Respondent to promulgate rules establishing waiting periods that

follow Respondent's denial, suspension, or revocation of a

license based on violations of enumerated statutes. Nothing in

the express terms of the enabling legislation authorizes

Respondent to impose waiting periods unless the waiting periods

follow the requisite denial, suspension, or revocation of a

license under Florida law. Respondent's proposed interpretation

of its rule would effectively amend the specific terms of the

enabling legislation to authorize Respondent to impose waiting

periods that do n ot follow the requisite denial, suspension, or

revocation of an existing license.

23. Respondent argues that its interpretation of Florida

Administrative Code Rule 69B - 211.042(6), (8), and (14) is

reasonably related to the purpose of Subsection 621.207(1) ,

Florida Statutes (2002), and to a policy of deference to courts

exercising jurisdiction over persons in probation or in pre -

trial intervention programs. That may be. However, no agency

has authority to adopt a rule solely because the rule is

reasonably related to the purpose of the enabling legislation.

Respondent must interpret Florida Administrative Code

Rule 69B - 211.042(6), (8), and (14) in a manner that implements

the specific powers granted in Subsection 621.207(1), Florida

Statutes (2002). § 12 0.52(8), Fla. Stat. (2003).

ORDER

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

ORDERED that the challenged provisions in Florida

Administrative Code Rule 69B - 211.042 are valid as promulgated.

DONE AND ORDERED this 13th day o f August, 2004, in

Tallahassee, Leon County, Florida.

S

DANIEL MANRY

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.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 13th day of August, 2004.

COPIES FURNISHED :

Keith Luther Fernandez

605 Casa Park Court M

Winter Springs, Florida 3270 8

Keith Luther Fernandez

3667 Oakhill Drive

Titusville, Florida 32780

Dana M. Wiehle, Esquire

Department of Financial Services

612 Larson Building

200 East Gaines Street

Tallahassee, Florida 32399 - 0333

Honorable Tom Gallagher

Chief Financial Officer

D epartment of Financial Services

The Capitol, Plaza Level 11

Tallahassee, Florida 32399 - 0300

Pete Dunbar, General Counsel

Department of Financial Services

The Capitol, Plaza Level 11

Tallahassee, Florida 32399 - 0300

Scott Boyd, Executive Director/General Counsel

Joint Administrative Procedures Committee

120 Holland Building

Tallahassee, Florida 32399 - 1300

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this Final Order is

entitled to judicial review pursuant to Section 120.68, Florida

Statutes. Review proceedings are governed by the Florida Rules

of Appellate Procedure. Such proceedings are commenced by

filing the original notice of appeal with the Clerk of the

Division of Administrative Hearings and a copy, accompanied by

fi ling fees prescribed by law, with the District Court of

Appeal, First District, or with the District Court of Appeal in

the Appellate District where the party resides. The notice of

appeal must be filed within 30 days of rendition of the order to

be revie wed.