04-001095PL Department Of Financial Services vs. Charles Steven Lieberman Status: Closed Recommended Order on Tuesday, August 31, 2004.

Summary: Respondent demonstrated lack of fitness, knowledge, and competence when he sold customers seeking insurance to cover doctor office visits a discount card.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL )

SERVICES, )

)

Petitioner, )

)

vs. ) Case No. 04 - 1095PL

)

CHARLES STEVEN LIEBERMAN, )

)

Respondent. )

_________________________________)

RECOMMENDED ORDER

Pursu ant to notice, a formal hearing was held in this case

before Larry J. Sartin, an Administrative Law Judge of the

Division of Administrative Hearings, on July 8, 2004, by video

teleconferencing between West Palm Beach and Tallahassee,

Florida.

APPEARANCES

For Petitioner: Robert Alan Fox, Esquire

Division of Legal Services

Department of Financial Services

612 Larson Building

200 East Gaines Street

Tallahassee, Florida 32399 - 0333

For Respondent: Peter Ticktin, Esquire

Scholl, Ticktin, & Associates, P. A.

Boca Financial and Legal Plaza

5295 Town Center Road, Third Floor

Boca Raton, Florida 33486 - 1003

STATEMENT OF THE ISSUE

The issue in this case is whether Respondent, Charles

Steven Lieberman, committed the offenses alleged in an

Administrative Com plaint issued by Petitioner, the Department of

Financial Services, on January 26, 2004, and, if so, what

penalty should be imposed.

PRELIMINARY STATEMENT

On January 26, 2004, Petitioner issued an Administrative

Complaint alleging that Respondent had violat ed certain

statutory provisions governing the conduct of Florida insurance

agents. On February 9, 2004, Respondent, through counsel, filed

a document titled Election of Proceedings, disputing the factual

allegations of the Administrative Complaint and req uesting a

hearing pursuant to Section 120.57(1), Florida Statutes (2004).

A copy of the Administrative Complaint and the Election of

Proceedings was filed with the Division of Administrative

Hearings on March 3, 2004. The matter was designated DOAH Case

No. 04 - 1095PL and was assigned to the undersigned.

A final hearing, to be conducted by video teleconferencing,

was scheduled for May 14, 2004, by Notice of Hearing issued

April 13, 2004. An unopposed Motion for Continuance was filed

by Respondent on April 19, 2004. The Motion was granted by an

Order entered May 4, 2004. The final hearing was rescheduled

for July 8, 2004.

On May 7, 2004, Petitioner filed a Notice of Filing

Confidentiality Agreement. Pursuant to the Confidentiality

Agreement, the parties agreed that information and documents

specifically described in the Agreement would be treated as

confidential by the parties.

Prior to the commencement of the final hearing, Petitioner

filed a Joint Pre - Hearing Stipulation. In this Stipulation, the

parti es admitted certain facts and agreed that no proof on those

facts would be necessary at hearing. Those facts, to the extent

relevant, have been included in this Recommended Order.

The undersigned conducted, and the parties along with

Respondent's witnesse s participated in, the final hearing from a

public hearing room at the offices of the Division of

Administrative Hearings in Tallahassee, Florida. The court

reporter and Petitioner's witnesses participated in the final

hearing via video telecommunication from a public office located

in West Palm Beach, Florida.

At the final hearing, Petitioner presented the testimony of

W.E. and J.E. Eight exhibits were also offered for

identification as Petitioner's exhibits. Seven of the exhibits

were marked as Petitio ner's exhibits 1, 2, and 63 through 67.

The eighth exhibit, Petitioner's exhibit 68, consisting of the

deposition testimony of A. H., was taken after the conclusion of

the final hearing and filed on July 14, 2004. The exhibits,

with the exception of Peti tioner's exhibit 1, were admitted. A

ruling was reserved on Petitioner's exhibit 1. That exhibit,

which consists of a "Medical Discount Card Warning" from the

Florida Attorney General's internet web site, is hereby

rejected.

The Respondent testified on h is own behalf and presented

the testimony of Nanita Blevins. Respondent offered 26 exhibits

for identification. All were admitted.

By Notice of Filing of Transcript issued July 22, 2004, the

parties were informed that the Transcript of the final hearing

had been filed on July 20, 2004. The parties, pursuant to

agreement, therefore, had until August 3, 2004, to file proposed

recommended orders. On August 2, 2004, Respondent filed an

Unopposed Motion for Enlargement of Time to Serve and File

Proposed Find ings of Fact and Conclusions of Law requesting that

the parties be allowed to file their post - hearing submittals on

or before August 11, 2004. That Motion was granted. Both

parties filed proposed orders on August 11, 2004. The post -

hearing submittals ha ve been fully considered.

On August 25, 2004, Respondent filed an Objection to

Petitioner's Proposed Recommended Order. That Objection is

hereby overruled.

FINDINGS OF FACT

A. The Parties .

1. Petitioner, the Department of Financial Services

(hereinafte r referred to as the "Department"), is the agency of

the State of Florida charged with the responsibility for, among

other things, the investigation and prosecution of complaints

against individuals licensed to conduct insurance business in

Florida. Ch. 6 26, Fla. Stat. (2004). 1

2. Respondent, Charles Steven Lieberman, is currently, and

was at all times pertinent to this matter, licensed in Florida

as a resident Life & Variable Annuity (2 - 14); Life, Health &

Variable Annuity (2 - 15); Life (2 - 16); Life & Hea lth (2 - 18); and

Health (2 - 40) Agent. (Stipulated Facts). The Department has

jurisdiction over Mr. Lieberman's licenses and appointments

pursuant to Chapter 626, Florida Statutes. (Stipulated Facts)

3. Mr. Lieberman's license identification number is

A1 55409. (Stipulated Facts).

4. Mr. Lieberman graduated from Columbia University. From

1974 through 1992, Mr. Lieberman worked as a trader initially on

the floor of the Chicago Board of Options Exchange, and later,

the Chicago Mercantile Exchange.

5. Mr. Lieberman has held his insurance licenses for ten

years. This is the first administrative complaint issued

against him.

B. Mr. Lieberman's Business .

6. Mr. Lieberman, at all times pertinent, served as

president of Charles Lieberman, Inc. (Stipulated F acts).

7. Mr. Lieberman, at all times pertinent, was the

designated primary agent, as defined in Section 626.592, Florida

Statutes, of Charles Lieberman, Inc. (Stipulated Facts).

8. Charles Lieberman, Inc., at all times pertinent, owned

and did business as "National Medical Services" and "The

Insurance Center." (Stipulated Facts).

C. Mr. Lieberman's "Medical Benefits Plan"/"Medical

Savings Plan ."

9. Mr. Lieberman offers customers who are seeking medical

insurance a plan which he calls a "Medical Benefits Plan" or

"Medical Savings Plan" (hereinafter referred to as the

"Lieberman Medical Benefits Plan").

10. The Lieberman Medical Benefits Plan consists of the

following components (hereinafter referred collectively as the

"Plan Products"):

a. A ho spital and surgery expense payment policy

(hereinafter referred to as the "Hospital Insurance Plan");

b. A Catastrophe Major Medical Insurance Plan (hereinafter

referred to as the "Major Medical Insurance Plan"); and

c. A discount card titled "The Chambe r Card" (hereinafter

referred to as the "Chamber Card"), with a "Limited Product

Warranty."

11. None of the Plan Products included insurance coverage

for physician office visits, a fact which Mr. Lieberman was

fully aware of.

D. The Hospital Insurance Pl an .

12. The Hospital Insurance Plan provides coverage for

hospital and surgical expenses. It does not provide coverage

for physician office visits.

13. The Hospital Insurance Plan is a medical insurance

plan offered by United American Insurance Company (hereinafter

referred to as "United American").

14. Mr. Lieberman is an agent for United American.

15. Petitioner's Exhibit 64 is a copy of the hospital and

surgery expense policy that constitutes the Hospital Insurance

Plan sold by Mr. Lieberman. (Stip ulated Facts). Petitioner's

Exhibit 65 is a copy of the Schedule of Benefits for the

Hospital Insurance Plan. (Stipulated Facts).

E. The Major Medical Insurance Plan .

16. The Major Medical Insurance Plan provides coverage for

major medical expenses in excess of $25,000.00. It does not

provide coverage for physician office visits.

17. The Major Medical Insurance Plan is also a medical

insurance plan. It is offered by United States Life Insurance

Company (hereinafter referred to as "U.S. Life").

18. I n order to purchase a Major Medical Insurance Plan,

customers are required to join one of many organizations which

purchase Major Medical Insurance Plans through Seabury & Smith 2 ,

an organization which administers the sale of health insurance

for U.S. Life . Customers, once they join such an organization,

are then required to purchase the Major Medical Insurance Plan

through the organization they joined.

19. Mr. Lieberman is not an agent for U.S. Life or

affiliated with Seabury & Smith. He does not, there fore, sell

Major Medical Insurance Plans. Nor does he receive any

compensation if any of his customers purchase a Major Medical

Insurance Plan.

20. Mr. Lieberman does, however, recommend the purchase of

a Major Medical Insurance Plan as part of the Liebe rman Medical

Benefits Plan. In order to facilitate the purchase,

Mr. Lieberman has his customers join the "American Contract

Bridge League." 3 His customers then purchase a Major Medical

Insurance Plan directly based upon their League membership.

21. Pet itioner's Exhibit 63 is a copy of the Major Medical

Insurance Plan which by Mr. Lieberman recommended that his

customers purchase. (Stipulated Facts).

F. The Chamber Card .

22. In an effort to provide some relief for cost of

physician office visits, whic h was not covered by the Hospital

Insurance Plan or the Major Medical Insurance Plan, Mr.

Lieberman sold his customers the Chamber Card. The Chamber

Card, which is not insurance (Stipulated Facts), is a card which

entitles the holder thereof to a discount 4 for various medical

services, including physician office visits.

23. In an effort to enhance the discounts from the Chamber

Card available to Mr. Lieberman's customers, Mr. Lieberman also

provided what he termed a "Limited Product Warranty" which he

off ered through Charles Lieberman, Inc., d/b/a National Medical

Services. This Limited Product Warranty is also not insurance.

24. Pursuant to Mr. Lieberman's Limited Product Warranty,

Mr. Lieberman purportedly agreed to provide reimbursement of the

cost of any physician office visit in excess of $15.00, an

amount which he referred to as a "copay," which was not paid for

by the Chamber Card. The additional discounts were dependant,

however, on Mr. Lieberman's ability to negotiate a reduction in

the fees inc urred by his customers directly from the physician. 5

25. In describing the Chamber Card and the Limited Product

Warranty sold by Mr. Lieberman, he used the acronyms "PPO" and

"PHCS," and terms like "copay" and "claims" normally associated

with the insuran ce industry.

G. Customer W.E. (Count I of the Administrative

Complaint) .

26. Prior to September 12, 2002, W.E. spoke with

Mr. Lieberman by telephone. She explained to him that she was

interested in purchasing health insurance, and before she could

explain what she meant in any detail, he informed her that he

could provide any health insurance she wanted as long as she did

not have high blood pressure, which she did not.

27. On September 12, 2002, W.E. met with Mr. Lieberman

(Stipulated Facts) at h is home to discuss purchasing health - care

insurance. She explained to Mr. Lieberman that she wanted a

health insurance plan similar to what she had had before she

recently moved to Florida and that she wanted a plan with

minimum co - payments. She also ind icated that she wanted a basic

insurance plan until she was able to find employment where her

health insurance would be provided for her.

28. W.E. did not specifically tell Mr. Lieberman that she

wanted insurance that covered physician office visits. 6 Ra ther,

she reasonably assumed that by telling Mr. Lieberman that she

wanted to purchase "health insurance" that, as an insurance

agent, he would understand that she wanted coverage for

physician office visits.

29. Mr. Lieberman, rather than providing the i nsurance

coverage which he knew or should have known W.E. was seeking,

coverage which included physician office visits, suggested that

she purchase the Lieberman Medical Benefits Plan. While

Mr. Lieberman attempted to give some limited explanation of his

plan to W.E., based upon the manner in which he explained his

plan at hearing, it is understandable that W.E. did not

understand what she was purchasing, or, more specifically, that

the plan, while including some health care coverage, did not

include cover age for physician office visits.

30. On September 12, 2002, Mr. Lieberman sold or arranged

for the sale of the Plan Products, as more fully described in

Findings of Fact 9 through 25, to W.E.:

a. W.E. signed an application for membership in the

American Contract Bridge League (Stipulated Facts);

b. W.E. wrote a check for her membership in the American

Contract Bridge League (Stipulated Facts);

c. W.E. signed an application and wrote checks for the

Chamber Card and a United American Hospital Insurance Pl an

(Stipulated Facts); and

d. W.E. signed an application for a Major Medical

Insurance Plan from U.S. Life and wrote a check to Seabury &

Smith. (Stipulated Facts).

31. Mr. Lieberman knew or should have known that he was

selling W.E. a product which she was not interested in

purchasing and that he was not providing her with a significant

part of the insurance coverage she was interested in purchasing,

coverage of physician office visits.

32. While Mr. Lieberman gave some limited explanation of

what the Chamber Card was, he did not fully explain to W.E. that

it was not an insurance program, plan, or policy; that it would

not pay for physician office visits; or that it only provided

some unspecified discount on the cost of physician office

visits.

33. W.E . did not understand what she was purchasing. She

even believed incorrectly that she had not been provided any

insurance at all by Mr. Lieberman. While this incorrect

assumption was based in part upon comments she perceived were

made by a Department inve stigator, her comments show that she

was unknowledgeable about insurance and, therefore, placed her

full reliance on upon Mr. Lieberman.

34. Even though W.E. issued separate checks made payable

to "A.C.B.L." (the American Contract Bridge League), Seabury &

Smith (for the Major Medical Insurance Plan), United American

(for the Hospital Insurance Plan), and National Medical Services

(for the Chamber Card); signed an Acknowledgement & Disclaimer

and an Acknowledgement & Disclosures (both of which are quoted,

infra , in Finding of Fact 35); and signed a document titled

"Medical Benefits Plan” which contained an acknowledgement

(quoted, infra. In Finding of Fact 36), W.E., unlike

Mr. Lieberman, did not understand that she was purchasing a

product which she had no t requested and did not want.

35. The Acknowledgement & Disclaimer and Acknowledgement &

Disclosures signed by W.E. provided the following:

ACKNOWLEDGEMENT AND DISCLAIMER

I understand that the US Life Catastrophic

Insurance Policy is being purchased thro ugh

the mail from Seabury & Smith (Group

Insurance Plans), who are the brokers for

that plan. Although I am purchasing other

insurance from Charles Lieberman, I realize

that Mr. Lieberman is in no way representing

Seabury & Smith or US Life and that he is

only making me aware that this plan is

available.

I acknowledge that it is my sole

responsibility to review this plan and its

features to determine suitability once the

policy is received.

_________________ _____________

Insured Date

ACKNOWL EDGEMENT AND DISCLOSURES

I hereby acknowledge that I am purchasing

insurance that covers approximately 75% of

the first $10,000 in the hospital then

covers 100% hospitalization above $25,000.

Although my PHCS PPO Access/Medical Savings

Card (which is not insurance) will, in most

cases, reduce this potential liability;

through negotiated savings, it is not

guaranteed to eliminate it in it [sic]

entirety.

_________________ _____________

INSURED DATE

The foregoing Acknowledgement & Disclaimer and the

Acknowledgement & Disclosures are misleading at best, and

deceiving at worst. While the Acknowledgement & Disclosures

includes the language "which is not insurance," that language is

included after the terms "PHCS PPO Access/Medical Savings Card,"

te rms which are not clearly identified or explained and are,

along with other terminology used in the Disclosures (i.e.,

"PPO" and "copay") reasonably associated with health - care

insurance. More importantly, the Acknowledgement & Disclaimer

and the Acknowle dgement & Disclosures do not explain that

physician office visits are not being provided through health

care insurance. Finally, W.E. was not given an opportunity by

Mr. Lieberman to read the Acknowledgement & Disclaimer, the

Acknowledgement & Disclosures , or any other documents shown to

her by Mr. Lieberman. He simply placed most of the documents

which she had to sign in front of her with only the part she was

required to sign visible and told her to sign them, which she

did.

36. The following acknowled gment was also contained in a

document titled "Medical Benefits Plan" which W.E. signed:

By signing below, I agree that all

information provided above is complete,

accurate, and truthful. I recognize that

because of the high cost of health

insurance, Na tional Medical Savings, plan

administrator, has attempted to put together

a "medical savings/benefit plan" which

allows clients to purchase reasonably priced

hospitalization insurance from well known a -

rated insurance companies and combine it

with a produc t which is not insurance to

better suit the clients' needs. I

understand that anything associated with the

PPO repricing or copay rebates is part of

the "medical savings plan" and is in no way

to be considered as insurance, but rather as

an affordable alt ernative to satisfy the

need to reduce medical costs.

Like the Acknowledgments quoted in Finding of Fact 35, this

acknowledgement, which appears after a paragraph titled "Pre -

Authorized Payment Plan" on the form, is misleading. It is not

clear that it is referring to the Chamber Card, it contains

terms normally associated with insurance coverage in spite of

the disclaimer, and Mr. Lieberman gave W.E. no reasonable

opportunity to read the disclaimer before having her sign it.

37. After enrolling W.E. in t he Lieberman Medical Benefits

Plan, Mr. Lieberman mailed all the documents which W.E. had

signed on September 12, 2002, to her. This was her first

realistic opportunity to read the documents.

38. After receiving the documents concerning the Lieberman

Med ical Benefits Plan, W.E. cancelled all of the Plan Products.

39. Although there was some language in the

Acknowledgement and Disclosures and the form titled "Medical

Benefits Plan" signed by W.E. indicating that some part of the

Lieberman Medical Benefits Plan was not insurance, due to the

ambiguity of the language of the Acknowledgement and the

disclaimer, the lack of opportunity that W.E. had to read the

documents, the other language normally associated with insurance

used in the documents, and the lack of coherent explanation

provided by Mr. Lieberman, it is found that, as to W.E.,

Mr. Lieberman:

a. Did not inform her that the Chamber Card was not an

insurance program, plan, or policy;

b. "Portrayed" the Chamber Card as an insurance program,

plan, or p olicy; and

c. Sold her products, none of which provided insurance

coverage for the cost of physician office visits.

H. Customer A.H. (Count II of the Administrative

Complaint) .

40. Prior to April 11, 2003, Mr. Lieberman contacted and

spoke to A.H. by telephone. A.H. told Mr. Lieberman that she

was interested in purchasing health insurance, including

insurance covering physician office visits, with co - pay, and

hospitalization expenses, with a deductible.

41. On April 11, 2003, A.H. met with Mr. Li eberman

(Stipulated Facts) at his home to discuss purchasing health - care

insurance. She again explained to Mr. Lieberman that she was

interested in a policy that covered physician office visits,

with a co - pay, and hospitalization expenses, with a deductib le.

42. Mr. Lieberman, rather than providing insurance

coverage which he knew or should have known A.H. was seeking,

coverage which included physician office visits, suggested that

she purchase the Lieberman Medical Benefits Plan. While

Mr. Lieberman att empted to give some limited explanation of his

plan to A.H., based upon the manner in which he explained his

plan at hearing, it is understandable that A.H. did not

understand what she was purchasing, or, more specifically, that

the plan, while including s ome health care coverage, did not

include coverage for physician office visits.

43. On April 11, 2003, Mr. Lieberman sold or arranged for

the sale of the same Plan Products to A.H. that he had sold to

W.E., described in Finding of Fact 30, supra . (Stipula ted

Facts).

44. Mr. Lieberman knew or should have known that he was

selling A.H. a product which she was not interested in

purchasing and that he was not providing her with a significant

part of the insurance coverage she was interested in purchasing,

cov erage of physician office visits.

45. While Mr. Lieberman gave some limited explanation of

what the Chamber Card was, he did not fully explain to A.H. that

it was not an insurance program, plan, or policy; that it would

not pay for physician office visits ; or that it only provided

some unspecified discount on the cost of physician office

visits.

46. Like W.E., A.H. signed the Acknowledgment and

Disclaimer and the Acknowledgement and Disclosures quoted,

supra , in Finding of Fact 35, and the disclaimer quot ed, supra ,

in Finding of Fact 36. The Acknowledgements and the disclaimer

were deficient for the same reasons described in Findings of

Fact 35 and 36.

47. Like W.E., even though A.H. issued separate checks

made payable to "A.C.B.L." (the American Contrac t Bridge

League), Seabury & Smith (for the Major Medical Insurance Plan),

United American (for the Hospital Insurance Plan), and National

Medical Services (for the Chamber Card); signed the

Acknowledgement & Disclaimer and an Acknowledgement &

Disclosures; and signed the disclaimer contained in a form

titled "Medical Benefits Plan," A.H., unlike Mr. Lieberman, did

not understand that she was purchasing a product which she had

not requested and did not want. Having explained to

Mr. Lieberman that she wanted a policy that covered physician

office visits and not having been told that was not what she was

purchasing, she simply relied upon Mr. Lieberman.

48. After enrolling A.H. in the Lieberman Medical Benefits

Plan, Mr. Lieberman mailed all the documents whi ch A.H. had

signed on April 11, 2003, to her.

49. Some time after receiving the documents concerning the

Lieberman Medical Benefits Plan, A.H. cancelled all of the Plan

Products.

50. Although there was some language in the

Acknowledgement and Disclosures and the form titled "Medical

Benefits Plan" signed by A.H. indicating that some part of the

Lieberman Medical Benefits Plan was not insurance, due to the

ambiguity of the language of the Acknowledgement and the

Disclaimer, the other language normally asso ciated with

insurance used in the documents, and the lack of coherent

explanation provided by Mr. Lieberman, it is found that, as to

A.H., Mr. Lieberman:

a. Did not inform her that the Chamber Card was not an

insurance program, plan, or policy;

b. "Portr ayed" the Chamber Card as an insurance program,

plan, or policy; and

c. Sold her products, none of which provided insurance

coverage for the cost of physician office visits.

I. Customer R.G. (Count III of the Administrative

Complaint) .

51. R.G. di d not testify at the final hearing. The

factual allegations of Count III of the Administrative Complaint

were not proved.

J. Customer J.E. (Count IV of the Administrative

Complaint) .

52. Prior to January 17, 2003, J.E. spoke with

Mr. Lieberman by telephone. J.E. explained to Mr. Lieberman

that he was interested in purchasing health insurance to replace

the Blue Cross/Blue Shield health - care insurance he currently

had.

53. On January 17, 2003, J.E. met with Mr. Lieberman

(Stipulated Facts) at his home to discuss purchasing health - care

insurance. He explained to Mr. Lieberman that he was interested

in a policy to replace his current policy with Blue Cross/Blue

Shield. J.E. specifically requested a policy that covered

physician office visits.

54. Mr. Lieberman, rather than providing insurance

coverage which he knew or should have known J.E. was seeking,

coverage which included physician office visits, suggested that

he purchase the Lieberman Medical Benefits Plan. While

Mr. Lieberman attempted to give some limited explanation of his

plan to J.E., based upon the manner in which he explained his

plan at hearing, it is understandable that J.E. did not

understand what he was purchasing, or, more specifically, that

the plan, while including some health care coverage, did not

include coverage for physician office visits.

55. On January 17, 2003, Mr. Lieberman sold or arranged

for the sale to J.E. of the same Plan Products he sold to W.E.

described in Finding of Fact 30, supra . (Stipulated Facts).

56. M r. Lieberman knew or should have known that he was

selling J.E. a product which he was not interested in purchasing

and that he was not providing him with a significant part of the

insurance coverage he was interested in purchasing, coverage for

physician office visits.

57. While Mr. Lieberman gave some limited explanation of

what the Chamber Card was, he did not fully explain to J.E. that

it was not an insurance program, plan, or policy; that it would

not pay for physician office visits; or that it only p rovided

some unspecified discount on the costs of physician office

visits.

58. Like W.E. and A.H., J.E. also signed the

Acknowledgment and Disclaimer and the Acknowledgement and

Disclosures quoted, supra , in Finding of Fact 35, and the

disclaimer quoted, supra , in Finding of Fact 36. The

Acknowledgements and the disclaimer were deficient for the same

reasons described in Findings of Fact 35 and 36.

59. Like W.E. and A.H., even though J.E.. issued separate

checks made payable to "A.C.B.L." (the American C ontract Bridge

League), Seabury & Smith (for the Major Medical Insurance Plan),

United American (for the Hospital Insurance Plan), and National

Medical Services (for the Chamber Card); signed the

Acknowledgement & Disclaimer and an Acknowledgement &

Disclo sures; and signed the disclaimer contained in a form

titled "Medical Benefits Plan," J.E., unlike Mr. Lieberman, did

not understand that he was purchasing a product which he had not

requested and did not want. Having explained to Mr. Lieberman

that he wan ted a policy that covered physician office visits and

not having been told that was not what he was purchasing, he

simply relied upon Mr. Lieberman.

60. After enrolling J.E. in the Lieberman Medical Benefits

Plan, Mr. Lieberman mailed all the documents wh ich J.E. had

signed on January 17, 2003, to him.

61. Some time after receiving the documents concerning the

Lieberman Medical Benefits Plan, J.E. cancelled all of the Plan

Products.

62. Although there was some language in the

Acknowledgement and Disclosu res and the form titled "Medical

Benefits Plan" signed by J.E. indicating that some part of the

Lieberman Medical Benefits Plan was not insurance, due to the

ambiguity of the language of the Acknowledgement and the

disclaimer, the lack of opportunity to re ad the documents before

he signed them, the other language normally associated with

insurance used in the documents, and the lack of coherent

explanation provided by Mr. Lieberman, it is found that, as to

J.E., Mr. Lieberman:

a. Did not inform him that th e Chamber Card was not an

insurance program, plan, or policy;

b. "Portrayed" the Chamber Card as an insurance program,

plan, or policy; and

c. Sold him products, none of which provided insurance

coverage for the cost of physician office visits.

K. The A dministrative Complaint .

63. On January 26, 2004, the Department issued a four -

count Administrative Complaint against Mr. Lieberman.

(Stipulated Facts). 7

64. The Administrative Complaint contains four counts, one

each for Mr. Lieberman's association wit h W.E. (Count I), A.H.

(Count II), R.G. (Count III), and J.E. (Count IV).

65. The Administrative Complaint alleges that Mr.

Lieberman's conduct with all four individuals violated Section

626.611(6), (7), and (8), Florida Statutes, and Section

626.621(2), Florida Statutes. The Administrative Complaint also

alleges that, as to A.H., Mr. Lieberman violated Section

626.621(6), Florida Statutes.

66. In support of the alleged statutory violations, the

Department alleged, in part, that with regard to all four

i ndividuals:

a. Mr. Lieberman "did not inform [his customers] that The

Chamber Card was not an insurance program, plan or policy";

b. Mr. Liberman "portrayed The Chamber Card as an

insurance program, plan or policy"; and

c. That "[n]one of the products y ou, CHARLES STEVEN

LIEBERMAN, sold to [W.E., A.H., R.G., and J.E.] provide

insurance coverage for the cost of doctors' visits."

CONCLUSIONS OF LAW

A. Jurisdiction .

67. The Division of Administrative Hearings has

jurisdiction over the subject matter of th is proceeding and of

the parties thereto pursuant to Sections 120.569 and 120.57(1),

Florida Statutes (2004).

B. The Burden and Standard of Proof .

68. The Department seeks to impose penalties against Mr.

Lieberman through the Administrative Complaint tha t include

mandatory and discretionary suspension or revocation of his

licenses. Therefore, the Department has the burden of proving

the specific allegations of fact that support its charges by

clear and convincing evidence. See Department of Banking and

Finance, Division of Securities and Investor Protection v.

Osborne Stern and Co. , 670 So. 2d 932 (Fla. 1996); Ferris v.

Turlington , 510 So. 2d 292 (Fla. 1987); and Pou v. Department of

Insurance and Treasurer , 707 So. 2d 941 (Fla. 3d DCA 1998).

69. What c onstitutes "clear and convincing" evidence was

described by the court in Evans Packing Co. v. Department of

Agriculture and Consumer Services , 550 So. 2d 112, 116, n. 5

(Fla. 1st DCA 1989), as follows:

. . . [C]lear and convincing evidence

requires that th e 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 and the witnesses must be lacking

in confusion as to the facts in issue. The

evidence must be of suc h weight that it

produces in the mind of the trier of fact

the firm belief or 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).

See also In re Grazian o , 696 So. 2d 744 (Fla. 1997); In re

Davey , 645 So. 2d 398 (Fla. 1994); and Walker v. Florida

Department of Business and Professional Regulation , 705 So. 2d

652 (Fla. 5th DCA 1998)(Sharp, J., dissenting).

C. The Department's Charges .

70. Section 626.611, Florida Statutes, mandates that the

Department suspend or revoke the license of any insurance agent

if it finds that the agent has committed any of a number of acts

specified in that Section.

71. Section 626.621, Florida Statutes, gives the

Department th e discretion to suspend or revoke the license of

any insurance agent if it finds that the agent has committed any

of a number of acts specified in that Section.

72. The Department has alleged that Mr. Lieberman, in his

dealings with W.E., A.H., and J.E. , violated the following acts

described in Section 626.611, Florida Statutes:

(7) Demonstrated lack of fitness or

trustworthiness to engage in the business of

insurance.

(8) Demonstrated lack of reasonable

adequate knowledge and technical competence

to engage in the transactions authorized by

the license or appointment; and

(9) Fraudulent or dishonest practices in

the conduct of business under the license or

appointment.

73. The Department has alleged that Mr. Lieberman, in his

dealings with W. E., A.H., and J.E., committed the following act

in violation of Section 626.621, Florida Statutes:

(2) Violation of any provision of this

code or of any other law applicable to the

business of insurance in the course of

dealing under the license or appo intment.

74. Finally, the Department alleged that, as to A.H.,

Mr. Lieberman committed the following act in violation of

Section 626.621, Florida Statutes:

(6) In the conduct of business under the

license or appointment, engaging in unfair

methods of competition or in unfair or

deceptive acts or practices, as prohibited

under part IX of this chapter, or having

otherwise shown himself or herself to be a

source of injury or loss to the public or

detrimental to the public interest.

D. Mr. Lieberman's Violation of Section 626.611;

Incompetence or Dishonesty ?

75. Based upon the allegations of the Administrative

Complaint, the Department believed when it issued the

Administrative Complaint that Mr. Lieberman was either:

(a) Incompetent, in that hi s treatment of W.E., A.H., and

J.E. had demonstrated: a lack of fitness to engage in the

business of insurance in violation of Section 626.611(7),

Florida Statutes; and a lack of reasonably adequate knowledge

and technical competence to engage in transact ions authorized by

his licenses in violation of Section 626.611(8), Florida

Statutes; or

(b) Dishonest, in that he had: demonstrated a lack of

trustworthiness to engage in the business of insurance in

violation of Section 626.611(7), Florida Statutes; an d had

engaged in fraudulent or dishonest practices in the conduct of

his insurance business in violation of Section 626.611(9),

Florida Statutes.

76. In the Department's Proposed Recommended Order, the

Department has taken the position that Mr. Lieberman violated

Section 626.611(7) and (8), Florida Statutes, as alleged in

Counts I, II, and IV, but not Section 626.611(9), Florida

Statutes, apparently abandoning any assertion that

Mr. Lieberman's actions were dishonest.

77. The Department's position as to the W.E., A.H., and

J.E. is consistent with the evidence in this case. The facts

clearly and convincingly proved that Mr. Lieberman knew or

reasonably should have known that W.E., A.H., and J.E. came to

him with the desire to purchase health insurance th at included

coverage of physician office visits. Mr. Lieberman also knew

that the Lieberman Medical Plan did not include such insurance

and, therefore, that he was not providing specifically what his

customers were seeking.

78. Giving him the benefit of any doubt, it is concluded

that where Mr. Lieberman fell short was in his explanation or

lack thereof of what the Lieberman Medical Plan consisted of, or

more precisely, what it did not include: he failed to

adequately explain to W.E., A.H., and J.E. that the Chamber Card

was not insurance that would cover physician office visits, the

very thing they were seeking from him. Mr. Lieberman was too

terse in his explanation of the Lieberman Medical Plan. He

failed to recognize that these customers were reason ably relying

upon his "expertise" to provide them with what they had

requested. The written explanations and acknowledgements he had

them sign were confusing. He used some terminology commonly

associated with insurance. He gave them little time, if an y, to

read the documentation and acknowledgements they signed.

79. The evidence clearly and convincingly proved that

Mr. Lieberman violated Sections 626.611(7) and (8), Florida

Statutes, as alleged in Counts I, II, and IV of the

Administrative Complaint. The evidence failed to prove that he

violated Sections 626.611(7) or (8), Florida Statutes, as

alleged in Count III, or Section 626.611(9), Florida Statutes as

alleged in any Count.

E. Discretionary Grounds; Section 626.621, Florida

Statutes .

80. Independent of the violations of Section 626.611(7)

and (8), Florida Statutes, the evidence failed to prove that Mr.

Lieberman violated "any provision of this code or any other law

applicable to the business of insurance" in violation of Section

626.621(2) , Florida Statutes.

81. As to A.H. and Count II of the Administrative

Complaint, the evidence did prove clearly and convincingly that

Mr. Lieberman's conduct of business under his licenses was

detrimental to the public interest, in violation of Section

62 6.621(6), Florida Statutes. This violation, however, is

subservient to violations of Section 626.611, Florida Statutes,

as to penalty. See Dyer v. Department of Insurance and

Treasurer , 585 So. 2d 1009, at 1014 (Fla. 1st DCA 1991).

F. Penalty .

82. Flo rida Administrative Code Rule 69B - 231.080, sets out

guidelines for the appropriate penalty for a violation of

Section 626.611, Florida Statutes:

a. For a violation of Section 626.611(7), Florida

Statutes, the recommended penalty is a six month suspension.

Fla. Admin. Code R. 69B - 231.080(7); and

b. For a violation of Section 626.611(8), Florida

Statutes, the recommended penalty is also a six month

suspension.

83. Florida Administrative Code Rule 69B - 231.040 limits

the aggregate suspension for the three c ounts of violating

Sections 6262.611(7) and (8), Florida Statutes, to 18 months.

84. Given the lack of any substantial financial loss to

W.E., A.H., and J.E.; the fact that Mr. Lieberman has committed

no other violations of Chapter 626, Florida Statutes; and the

Department's failure to prove that he intentionally deceived his

customers, the length of the suspension should be reduced to 12

months. See Fla. Admin. Code R. 69B - 231.080(7) and (8).

RECOMMENDATION

Based on the foregoing Findings of Fact and Con clusions of

Law, it is RECOMMENDED that a final order be entered by the

Department finding that Charles Steven Lieberman violated

Sections 626.611(7) and (8), Florida Statutes, as alleged in

Counts I, II, and IV of the Administrative Code; dismissing

Count III of the Administrative Code; and suspending his

licenses for a period of 12 months from the date of the final

order.

DONE AND ENTERED this 31st day of August, 2004 , in

Tallahassee, Leon County, Florida.

___________________________________

LARRY J. SARTIN

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 31st day of August, 2004 .

ENDNOTES

1 / All references to Chapter 626, Florida Statutes, or sections

thereof, are to those versions pertinent to the times alleged in

the Administrative Complaint.

2 / Seabury & Smith sent a letter to Mr. Lieberm an suggesting

that he needed to be sure that he provided a disclosure to his

customers that he was not an agent for U.S. Life. Mr. Lieberman

suggested that the letter was "nasty," but this testimony was

not convincing. The letter was not offered in evide nce

3 / The American Contract Bridge League is an organization

intended generally for individuals who play the card game,

bridge. Members were not required, however, to actually be

bridge players in order to join the League.

4 / The evidence failed to p rove the amount of the discount

Chamber Card purchasers were entitled to receive.

5 / Mr. Lieberman explained how the Limited Product Warranty

worked at the final hearing and had admitted Respondent's

exhibits numbered 3, 22, and 23. Based upon a review of those

exhibits and Mr. Lieberman's explanation, which was difficult,

at best, to follow, it is concluded that the Chamber Card with

the Limited Product Warranty does not guarantee that a customer

will indeed only pay $15.00 for physician benefits.

6 / W.E. did testify on cross - examination that she told

Mr. Lieberman that she wanted coverage for physician office

visits, but that testimony was inconsistent with her testimony

on direct examination and is not credited.

7 / Mr. Lieberman has proposed findin gs of fact as to how the

investigation of him began, suggesting, without clear

explanation, involvement of the American Contract Bridge League,

Seabury & Smith, and U.S. Life. None of those proposed findings

of fact are relevant to this matter. If the ev idence proves, as

it has in this case, that Mr. Lieberman has indeed committed any

of the violations alleged in the Administrative Complaint, it

does not matter how the Department learned of the violations or

the motive of those complaining.

COPIES FURNISHED:

Robert Alan Fox, Esquire

Division of Legal Services

Department of Financial S ervices

612 Larson Building

200 East Gaines Street

Tallahassee, Florida 32399 - 0333

Peter Ticktin, Esquire

Scholl, Ticktin, Rosenberg,

Glatter & Litz, P.A.

Net First Plaza

5295 Town Center Road, Third Floor

Boca Raton, Florida 33486 - 1003

Honorable To m Gallagher

Chief Financial Officer

Department 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

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.