04-002662 Department Of Financial Services, Division Of State Fire Marshal vs. Bc &Amp; Abc Fire Entinguisher Maintenance And Ricardo Cabrera, Qualifier Status: Closed Recommended Order on Wednesday, December 22, 2004.

Summary: Respondents` failure to maintain continuously in force a policy of comprehensive general liability insurance justifies the imposition of discipline upon their license to do business as a Fire Equipment Dealer.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL )

SERVICES, )

)

Petitioner, )

)

vs. ) Case No. 04 - 2662

)

BC & ABC FIRE ENTINGUISHER )

MAINTENANCE AND RICARDO )

CABRERA, QUALIFIER, )

)

Respondents. )

)

RECOMMENDED ORDER

This case came before Administrative Law Judge John G.

Van Laningham for final hearing by video teleconference on

October 1, 2004, at sites in Tallahassee and Miami, Florida.

APPEARANCES

For Pet itioner: Casia R. Sinco, Esquire

Department of Financial Services

200 East Gaines Street, Room 612

Tallahassee, Florida 32399 - 0333

For Respondent: Ricardo Cabrera, pro se

3340 South Lake Drive

Miami, Florida 33155

STATEMENT OF THE ISSUE

The issue in this case is whether discipline should be

imposed upon Respondents' license to do business as a Fire

Equipment Dealer, based on allegations that Respondents failed

to maintain continuously in force a po licy of comprehensive

general liability insurance, failed to provide proof of

insurance to Petitioner, and failed to maintain a qualification

for licensure.

PRELIMINARY STATEMENT

On June 29, 2004, Petitioner Department of Financial

Services issued an Ad ministrative Complaint against Respondents

Ricardo Cabrera and BC & ABC Fire Extinguisher Maintenance.

Petitioner charged Respondents with offenses relating to

Respondents' alleged failures to timely renew required liability

insurance coverage and to prov ide proof of such coverage to

Petitioner in the proper manner. Respondents timely requested a

formal hearing, and on July 28, 2004, Petitioner filed the

pleadings with the Division of Administrative Hearings, where

the undersigned Administrative Law Judge was assigned to preside

in the matter.

The final hearing took place as scheduled on

October 1, 2004, with all parties present. Petitioner called

two witnesses: Milagros Novoa, an insurance agent with Power

Insurance Agency; and Terry Hawkins, who work s for Petitioner as

a Safety Program Manager in the Division of State Fire Marshal.

As well, Petitioner's Exhibits 1 through 11 were offered and

received in evidence.

Mr. Cabrera testified on behalf of Respondents, who offered

no exhibits or other eviden ce.

At Petitioner's request, the undersigned took official

recognition of Sections 633.061 and 633.162, Florida Statutes,

and Florida Administrative Code Rules 69A - 21.102 and 69A - 21.114.

The final hearing transcript was filed on November 8, 2004.

Each p arty timely filed a Proposed Recommended Order on or

before the established deadline, which was November 18, 2004.

Unless otherwise indicated, citations to the Florida

Statutes refer to the 2004 Florida Statutes.

FINDINGS OF FACT

1. Respondent Ricardo C abrera, as the qualifier for

Respondent BC & ABC Fire Extinguisher Maintenance ("BC"), is

licensed by the State of Florida to do business under BC's name

as a Class C Fire Equipment Dealer. For the purposes of this

case, the actions of BC and the actions of Mr. Cabrera are

indistinguishable. Thus, Respondents will be referred to

collectively as "Cabrera."

2. As a licensed Fire Equipment Dealer, Cabrera is subject

to the regulatory jurisdiction of Petitioner Department of

Financial Services (the "Departm ent").

3. Class C licensees are required by law to maintain

comprehensive general liability ("CGL") insurance in an amount

not less than $100,000 and to provide the Department with proof

of such coverage.

4. In compliance with Florida law, Cabrera ma intained CGL

coverage in the amount of $300,000 for the policy period from

January 29, 2003 to January 29, 2004, and he submitted proof of

such coverage to the Department.

5. By letter dated December 1, 2003, the Department

notified Cabrera that, because his existing CGL policy was due

to expire on January 29, 2004, he would need to submit evidence

of continuing coverage beyond that date. Enclosed with this

letter was a blank Certificate of Insurance in the form required

by the Department as proof of ins urance, for Cabrera to complete

and return.

6. Cabrera failed to timely renew his CGL policy and the

coverage lapsed following January 29, 2004, which was the last

day of the policy period.

7. A few weeks later, Cabrera obtained another CGL policy

for his business, in the amount of $300,000. This policy

provides coverage for the period from February 23, 2004 to

February 23, 2005.

8. Cabrera was without the required CGL coverage for 24

days, from January 30, 2004 through February 22, 2004.

9. On February 24, 2004, the Department received, by

facsimile transmission, a Certificate of Insurance, in the

proper form, showing that Cabrera was insured for the period

from February 23, 2004 to February 23, 2005, in the amount

$300,000. 1 Cabrera was erron eously identified on the form as a

"Class A Fire Equipment Dealer." This misidentification, the

undersigned reasonably infers from the evidence presented, was

the result of a scrivener's mistake; it had no effect whatsoever

on Cabrera's coverage, which wa s, in fact, for an amount well in

excess of the statutory minimum for Class C licensees.

10. By letter dated February 25, 2004, the Department

notified Cabrera of three alleged deficiencies relating to his

recently filed proof of insurance, namely: (1) the

misidentification of Cabrera as a Class A licensee; (2) the 24 -

day coverage gap; and (3) the fact that a copy of the

Certificate of Insurance, rather than the original , had been

submitted. The Department requested a response.

11. Cabrera failed to respond to the Department's

deficiency letter. Consequently, by letter dated

April 21, 2004, the Department gave Cabrera a "final notice" of

his alleged noncompliance with the statutory requirements

concerning proof of insurance. Cabrera still did not r espond.

12. On June 29, 2004, the Department issued an

Administrative Complaint against Cabrera, charging him with

failing to provide proof of insurance or failing to maintain

coverage in force, an offense described in Section

633.162(4)(e), Florida Stat utes; and failing to maintain one or

more qualifications for licensure, an offense pursuant to

Section 633.162(4)(f).

13. Thereafter, around July 21, 2004, the Department

received a corrected copy of Cabrera's Certificate of Insurance,

one which identifi ed him accurately as a Class C licensee.

Ultimate Factual Determinations

14. Cabrera is guilty of failing to maintain continuously

in force the statutorily required insurance coverage, which is a

specific offense disciplinable pursuant to Section

633.1 62(4)(e), Florida Statutes.

15. Although Cabrera's failure to maintain continuously in

force the statutorily required insurance coverage also

necessarily constituted a failure to maintain a qualification

for licensure —— which latter is a general offense disciplinable

pursuant to Section 633.162(4)(f), Florida Statutes —— his

misconduct in allowing a gap in insurance coverage is, as a

matter of ultimate fact, a single wrong and hence should be

treated as a single violation. Since the particular wrong that

Cabrera committed is specifically punishable under Section

633.162(4)(e) as a failure to maintain insurance coverage

continuously in force, that is the offense for which he should

be disciplined, not the general offense described in Section

633.162(4)(f).

16. Cabrera is not guilty of failing to provide proof of

insurance to the Department.

CONCLUSIONS OF LAW

17. The Division of Administrative Hearings has personal

and subject matter jurisdiction in this proceeding pursuant to

Sections 120.569, and 12 0.57(1), Florida Statutes.

18. Among the conditions for licensure as a Fire Equipment

Dealer is that the applicant or licensee must submit

to the State Fire Marshal proof of insurance

providing coverage for comprehensive general

liability for bodily injur y and property

damage, products liability, completed

operations, and contractual liability. The

State Fire Marshal shall adopt rules

providing for the amounts of such coverage,

but such amounts shall not be less than

$300,000 for Class A or Class D licens es,

$200,000 for Class B licenses, and $100,000

for Class C licenses; and the total coverage

for any class of license held in conjunction

with a Class D license shall not be less

than $300,000. The State Fire Marshal may,

at any time after the issuance of a license

or its renewal, require upon demand, and in

no event more than 30 days after notice of

such demand, the licensee to provide proof

of insurance, on a form provided by the

State Fire Marshal, containing confirmation

of insurance coverage as requir ed by this

chapter. Failure, for any length of time,

to provide proof of insurance coverage as

required shall result in the immediate

suspension of the license until proof of

proper insurance is provided to the State

Fire Marshal. An insurer which provid es

such coverage shall notify the State Fire

Marshal of any change in coverage or of any

termination, cancellation, or nonrenewal of

any coverage.

§ 633.061(3)(c)3., Fla. Stat.

19. Section 633.162, Florida Statutes, under which Cabrera

has bee n charged, sets forth the acts for which punishment,

including the suspension or revocation of a license, can be

imposed upon proof of guilt. This statute provides, in

pertinent part, as follows:

(4) [I]t is cause for denial, nonrenewal,

revocation, or s uspension of a license or

permit by the State Fire Marshal if she or

he determines that the licensee or permittee

has:

* * *

(e) Failed to provide proof of insurance to

the State Fire Marshal or failed to maintain

in force the insurance coverage required by

s. 633.061.

(f) Failed to obtain, retain, or maintain

one or more of the qualifications for a

license or permit as specified in this

chapter.

20. The statutory insurance requirements are implemented

and amplified in Florida Administrative Code Rule 69A - 21.114,

which provides as follows:

(1) The Fire Equipment Dealer A, B, C and D

licensed pursuant to Section 633.061, F.S.,

shall provide evidence of current and

subsisting insurance coverage meeting the

requirements of Section 633.061, F.S. , to

the Regulatory Licensing Section on a Form

DI4 - 28, "Insurance Certificate Fire

Equipment Dealer", revised and dated 10/99,

as adopted and incorporated herein by

reference. This form is available from the

Regulatory Licensing Section, Bureau of Fire

P revention, 200 East Gaines Street,

Tallahassee, Florida 32399 - 0342.

(2) The licensed Fire Equipment Dealer A,

B, C and D shall be responsible to ensure

current and subsisting insurance coverage

meeting the requirements of Section 633.061,

F.S., is on file with the State Fire

Marshal.

(3) Failure to provide evidence of current

and subsisting insurance coverage within 30

days of the expiration date of the policy or

within 30 days of a notice to provide

evidence of coverage shall result in

administrative pro ceedings pursuant to

Section 633.162, F.S.

21. A proceeding, such as this one, to suspend, revoke, or

impose other discipline upon a professional license is penal in

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

281 So. 2d 487, 491 (Fl a. 1973). Accordingly, to impose

discipline, the Department must prove the charges against

Cabrera by clear and convincing evidence. Department of Banking

and Finance, Div. of Securities and Investor Protection v.

Osborne Stern & Co. , 670 So. 2d 932, 935 - 36 (Fla. 1996)(citing

Ferris v. Turlington , 510 So. 2d 292, 294 - 95 (Fla. 1987)); Nair

v. Department of Business & Professional Regulation , 654 So. 2d

205, 207 (Fla. 1st DCA 1995).

22. Regarding the standard of proof, in Slomowitz v.

Walker , 429 So. 2d 79 7, 800 (Fla. 4th DCA 1983), the Court of

Appeal, Fourth District, canvassed the cases to develop a

"workable definition of clear and convincing evidence" and found

that of necessity such a definition would need to contain "both

qualitative and quantitative standards." The court held that

clear and convincing evidence requires that

the evidence must be found to be credible;

the facts to which the witnesses testify

must be distinctly remembered; the testimony

must be precise and explicit and the

witnesses m ust be lacking in confusion as to

the facts in issue. The evidence must be of

such weight that it produces in the mind of

the trier of fact a firm belief or

conviction, without hesitancy, as to the

truth of the allegations sought to be

established.

Id. The Florida Supreme Court later adopted the fourth

district's description of the clear and convincing evidence

standard of proof. Inquiry Concerning a Judge No. 93 - 62 , 645

So. 2d 398, 404 (Fla. 1994). The First District Court of Appeal

also has followed the Slomowitz test, adding the interpretive

comment that "[a]lthough this standard of proof may be met where

the evidence is in conflict, . . . it seems to preclude evidence

that is ambiguous." Westinghouse Elec. Corp., Inc. v. Shuler

Bros., Inc. , 590 So. 2d 986, 988 (Fla. 1st DCA 1991), rev .

denied , 599 So. 2d 1279 (1992)(citation omitted).

23. The evidence in this case is clear —— indeed it is

undisputed —— that Cabrera allowed his CGL insurance coverage to

lapse. Thus, the undersigned was compelled to fi nd, as a matter

of ultimate fact, that Cabrera had committed the offense of

failing to maintain in force the required insurance coverage.

See § 633.162(4)(e), Fla. Stat.

24. While Cabrera's allowing a gap in coverage also

constituted a failure to main tain a qualification for licensure

(namely, current and subsisting CGL coverage), which is an

offense pursuant to Section 633.162(4)(f), the undersigned

concludes that Cabrera cannot be disciplined under both the

specific provisions of Section 633.162(4)(e ) and the general

provisions of Section 633.162(4)(f) as if he had committed two

violations. This conclusion is based, first, on the ultimate

factual determination that Cabrera committed one substantial

wrong, i.e. , the failure to maintain his CGL coverag e

continuously in force; and, second, on the legal conclusion that

Section 633.162(4)(e), being specific with respect to the

offense of failing to maintain the required insurance coverage,

controls over Section 633.162(4)(f), which describes the same

offen se (and others), but only in broad general terms. See

Gretz v. Florida Unemployment Appeals Com'n , 572 So. 2d 1384,

1386 (Fla. 1991)(specific statute controls over general statue

covering the same subject matter); accord , Cone v. State Dept.

of Health , __ _ So.2d ___, 29 Fla.L.Weekly D2413, 2004 WL

2402638, *4 (Fla. 1st DCA Oct. 20, 2004). Accordingly, it is

concluded that discipline should be imposed under Section

633.162(4)(e) and not Section 633.162(4)(f).

25. The Department's charge that Cabrera f ailed to provide

proof of insurance rests on the premise that an original

Certificate of Insurance must be filed, not merely a copy

thereof. It is undisputed that Cabrera submitted copies, but

not the originals, of a Certificate of Insurance and a correct ed

Certificate of Insurance showing that he has the requisite

coverage in place for the period from February 23, 2004 to

February 23, 2005. Therefore, the Department argues, Cabrera is

guilty of failing to provide proper proof of insurance.

26. The prob lem with the Department's position is that the

requirement of filing an original Certificate of Insurance is

nowhere stated in Section 633.061, Florida Statutes, or Florida

Administrative Code Rule 69A - 21.114. Thus, if an original

certificate must be file d, the obligation arises under an

unpublished, and in that sense informal, mandate.

27. It is not clear from the record whether the

Department's "best evidence" requirement is applicable to all

licensees (in which case it is a rule by definition), is

appl icable only some of the time ( i.e. is not generally

applicable and hence not a "rule"), or is an emerging policy

that has not yet crystallized to the point that rulemaking is

feasible. In any event, to urge this informal policy as the

basis for adjudicati ng Cabrera's substantial interests, the

Department needed to explicate, defend, and support with

evidence the policy's grounds and rationale. See , e.g. , Gulf

Coast Home Health Services of Florida, Inc. v. Department of

Health and Rehabilitative Services , 513 So. 2d 704, 707 (Fla.

1st DCA 1987).

28. The undersigned can find nothing in the record to

justify the Department's disallowance of Cabrera's Certificates

of Insurance. As a general rule, a duplicate certificate would

be admissible as evidence in a court of law to the same extent

as the original, unless a genuine question were raised about the

either the copy's or the original's authenticity or some other

particular unfairness would result. See § 90.953, Fla. Stat.

Likewise, a copy would be admissi ble as evidence, in lieu of the

original, in an administrative proceeding, provided such a copy

would "commonly [be] relied upon by reasonably prudent persons

in the conduct of their affairs." See § 120.569(2)(g), Fla.

Stat. In this instance, there is no evidence suggesting that

the certificates in question are anything but true copies of

authentic originals, the kind of facsimile that reasonably

prudent persons ordinarily rely upon in everyday transactions.

These copies therefore constitute "evidence" o r "proof" of

insurance and should be accepted as such by the Department.

29. The Department concedes, and the undersigned agrees,

that Cabrera's conduct does not warrant the penalty of

suspension or revocation. The Department is authorized in such

circu mstances to impose a fine not to exceed $1,000 per

violation, see Section 633.163(1), and/or to place the offending

licensee on probation for a period not to exceed two years, see

Section 633.167(1).

30. Unfortunately, it appears there are no penalty

guid elines for determining what particular penalty or penalties

would be appropriate here, within the ranges just mentioned.

Absent specific guidance, the undersigned has little choice but

to recommend such punishment as seems to him commensurate with

the off ense. In this regard, although the coverage gap was

relatively short here, the undersigned is mindful that should

Cabrera be found liable for an occurrence of professional

negligence causing harm during the period from January 30, 2004

through February 22 , 2004, the injured party or parties might

not have, as a recourse, a source of financial security in the

form of liability insurance that Florida law dictates be

available for the protection of the public. This is a serious

matter that cannot be excused simply because, in this instance,

it appears there was no harm done. 2

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Department enter a final order

finding Cabrera guilty of failing to maintain con tinuously in

force the required CGL insurance coverage, an offense under

Section 633.162(4)(e), Florida Statutes. For this violation, it

is further RECOMMENDED that Cabrera be ordered to pay an

administrative fine of $1,000 and be placed on probation for a

period of one year, on such reasonable terms and conditions as

the Department may specify in its final order.

DONE AND ENTERED this 22nd day of December, 2004, in

Tallahassee, Leon County, Florida.

S

___________________________________

JOHN G. VAN LANING HAM

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

Divisi on of Administrative Hearings

this 22nd day of December, 2004.

ENDNOTES

1 / By letter dated February 3, 2004, the Department had

attempted to notify Cabrera of his failure to provide evidence

of continuing insurance coverage and de manded that he submit an

original Certificate of Insurance within 10 days after receiving

the letter. Cabrera testified that he had not received this

correspondence. It is not necessary to decide whether Cabrera

actually received the Department's letter of February 3, 2004,

because the outcome does not hinge on this fact.

2 / No evidence was presented concerning occurrences for which

insurance coverage would be unavailable. As of this writing,

however, the statute of limitation would not yet have run on

such claims. Therefore, at this time, it cannot be said for

certain that no one will be harmed by Cabrera's failure to

maintain the required insurance coverage.

COPIES FURNISHED :

Casia R. Sinco, Esquire

Department of Financial Services

200 East Gaines Street, Room 612

Tallahassee, Florida 32399 - 0333

Ricardo Cabrera

3340 South Lake Drive

Miami, Florida 33155

Tom 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

Tallahas see, 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.