05-001910 Jerrod Keith Zelanka vs. Department Of Financial Services Status: Closed Recommended Order on Thursday, December 15, 2005.

Summary: Petitioner failed to prove entitlement to reinstatement of his suspended license.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

JERROD KEITH ZELANKA , )

)

Petitioner, )

)

vs. ) Case No.: 05 - 1910

)

DEPARTMENT OF FINANCIAL SERVICES , )

)

Respondent. )

___________________________________)

RECOMMENDED ORDER

Pursuant to notice, a final hearing in this case was

conducted by Florence Snyder Rivas, the duly - designated

Administrative Law Judge of the Division of Administrative

Hearings, via video teleconference at sites in Tallahassee and

Fort Lauderdale, Florida on September 23, 2005, and October 19,

2005.

APPEARANCES

For Petitioner: James Curran, Esquire

633 Southeast Third Avenue, Suite 201

Fort Lauderdale, Florida 33301

For Respondent: Michael T. Ruff, Esquire

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399 - 0333

STATEMENT OF THE ISSUE

Whether Petitioner's request for reinstatement of his

suspended insurance license should be granted.

PRELIMINARY STATEMENT

By Notice of Denial dated April 19, 2005, the Department of

Financial Services (Department), advised the Petitioner, Jerrod

Keith Zelanka (Petitioner), that his application for

rein statement of his general lines (2 - 20) license was denied.

The denial was based upon allegations of misconduct in

connection with an insurance transaction by the Petitioner while

he was a licensed agent. These allegations were not the subject

of the Petit ioner's previous administrative action. The

allegations centered around a complaint made by Mark Feehan

(Feehan), the owner and operator of JTS Woodworking (JTS) , a

cabinetry business and long - term insurance client of Petitioner.

The complaint against Pe titioner concerned Feehan's unsuccessful

effort to secure fire insurance for JTS in May of 2004. The

complaint essentially was that the Petitioner collected funds

and an application for insurance from Feehan, but did not

forward the funds to the insurance company, resulting in

Feehan ’s not having coverage when he needed to make a claim

following a fire. Petitioner timely asserted his right to an

administrative hearing.

The identity of witnesses, exhibits, and attendant rulings

are contained in the two - v olume transcript of the hearing, which

volumes were filed on October 10, 2005, and November 8, 2005,

respectively. The parties timely filed proposed recommended

orders which have been carefully considered.

References to statutes are to the Florida Statut es (2004)

unless otherwise noted.

FINDINGS OF FACT

Based on the oral and documentary evidence adduced at the

final hearing and the entire record in this proceeding, the

following findings of fact are made:

1. The Department is the agency of the State o f Florida

vested with the statutory authority to regulate the business of

insurance, including the licensing of insurance agents, and to

administer the disciplinary provisions of Chapter 626, Florida

Statutes.

2. Petitioner is, and at all material time s was, licensed

in Florida as an insurance agent and subject to the Department's

regulatory jurisdiction. Petitioner's license was suspended on

or about July 16, 2004.

3. Petitioner's license sus pension arises from a

September 11, 2003, Final Order in D epartment case number 65103 -

03 - AG (Final Order) issued against the Petitioner. The Final

Order determined that the Petitioner was guilty of violating

Sections 626.651(1), 626.611(7), 626.611(9), and 626.611(10),

Florida Statutes, and suspended his license and eligibility for

licensure for a period of nine months.

4. Petitioner exercised his right to judicial review of

the Final Order. In due course, the Final Order was affirmed,

per curiam , by the Florida Fourth District Court of Appeal. The

suspensi on of Petitioner's license pursuant to the Final Order

became effective with the issuance of an Order Terminating a

Stay of Final Order entered on July 27, 2004 (the Order

Terminating Stay). The Order Terminating Stay provided that

Petitioner's license an d eligibility for licensure would be

placed on suspension for a period of nine months, commencing

July 16, 2004. The Order Terminating Stay of Final Order also

stated that:

Pursuant to Section 626.641(4), Florida

Statutes, during the period of suspension

the Respondent shall not engage in or

attempt or profess to engage in any

transaction or business for which a license

or appointment is required under the

Insurance Code or directly or indirectly,

own, control, or be employed in any manner

by any insurance agent or agency or adjuster

or adjusting firm. Pursuant to Section

626.641(1), Florida Statutes, Respondent's

licensure shall not be reinstated except

upon request for such reinstatement, and the

Respondent shall not engage in the

transaction of insuranc e until his license

is reinstated. The Department shall not

grant such reinstatement if it finds that

the circumstance or circumstances for which

the license(s) was suspended still exist or

are likely to recur.

5. Petitioner properly requested reinst atement of his

license effective April 16, 2005. The Request for Reinstatement

of Suspended License/New ID License Request form requires

acknowledgment by the individual seeking reinstatement that:

the circumstances which led to the

suspension of my licen se(s) no longer exist

and are not likely to recur . . . I

understand that my request for reinstatement

in no way guarantees that my license(s) will

be reinstated.

6. At all times material to this case, Petitioner was

employed by American Professional I nsurance, also known as Ampro

(Ampro). More specifically, at all times relevant to the

allegations made by the Department in its Notice of Denial,

Petitioner was an employee, director, and shareholder of Ampro.

7. Feehan, as previously noted, is the own er and operator

of JTS, a cabinetry business. Feehan had been an insurance

client of Ampro from 1999 - 2004 and had experienced no problems

in the relationship. The business relationship between Feehan

and Petitioner ended following a fire at JTS on July 2 9, 2004,

when Feehan learned that there was no insurance coverage for the

fire. Feehan filed a complaint with the Department, which

complaint was investigated and thereafter formed the primary

basis for the Notice of Denial.

8. On or about May 4, 2004, Feehan executed a form

provided by Petitioner for the purpose of renewing coverage for

JTS for general liability as well as for the building that JTS

occupied at 75 Northwest 18th Avenue (JTS building). Feehan

paid for this insurance by check in the amoun t of $3,850.00.

The check was made out to Ampro and was deposited into the

payroll account of Ampro. At all times material to this case,

Petitioner has exclusive signature authority for this account.

Feehan knew the check he had issued had been negotiat ed and

believed he had insurance for JTS through Ampro.

9. Feehan never received a copy of any insurance policy

for JTS, nor was Feehan provided any type of identification of

the policy number. Feehan was instead provided by Petitioner

with certificat es of liability insurance which identified the

Nautilus Insurance Company (Nautilus) as the insurer.

Petitioner partially completed the certificates, omitting any

specific policy number. Petitioner signed the incomplete

certificates and provided them to Feehan. Feehan required the

certificates to show its contractors that JTS had general

liability insurance.

10. On July 29, 2004, a fire occurred at JTS' building.

Feehan attempted to make a claim. By this time, Petitioner's

suspension had taken effect . Feehan made several unavailing

efforts to contact Petitioner. Feehan eventually accepted the

services of a freelance adjuster who was on the scene at the

fire (the freelance adjuster). The freelance adjuster informed

Feehan that JTS did not have any i nsurance coverage in place.

Nevertheless, on his own initiative, Feehan then tried to

contact the Continental Insurance Company (Continental) directly

and file a claim. Feehan decided to contact Continental because

Feehan had seen Continental's name on s everal of the documents

provided to JTS from Ampro. Continental also informed Feehan

that JTS had no insurance. As of October 19, 2005, Feehan had

yet to receive a full or partial refund of the $3,850.00 Feehan

had paid to Ampro for insurance coverage fo r JTS.

11. Steve Finver (Finver) is the President of Continental

Agency of Florida (CAF), a business which acts as an insurance

wholesaler and assists retail agents in placing insurance

coverage. Finver oversees the entire operations of CAF, which

inc lude Continental. Finver is an authorized representative of

Continental and has access to the records kept in the ordinary

course of business. Nautilus is among the insurance carriers

that Finver works with.

12. Finver had enjoyed a business relations hip with the

Petitioner and Ampro which dated back a generation. The

relationship soured in the fall of 2003 over bad checks for

policies of insureds that Ampro wrote to Continental. In

response, Finver imposed upon Petitioner a requirement that

Ampro mu st henceforth pay by cashier's check or by finance

draft. The relationship between Continental and Petitioner and

Ampro ended when Finver learned that Petitioner had been

arrested for fraud sometime in May of 2004, although Continental

would continue to h onor any quotes already rendered to Ampro

clients.

13. Continental quoted an insurance policy for JTS for

Ampro in May of 2004. The quote was $3,226.76. A request to

bind was made by Ampro, but Continental never received payment

for the quoted JTS poli cy, so a policy was never issued.

CONCLUSIONS OF LAW

14. The Division of Administrative Hearings has

jurisdiction of the subject matter and the parties to this

proceeding pursuant to Sections 120.569 and 120.57(1), Florida

Statutes (2005).

15. To preva il in this proceeding, Petitioner bears

the ultimate burden to establish by a preponderance of the

evidence that he is entitled to be reinstated to his

license. State Department of Banking and Finance, Division

of Securities and Investor Protection v. Osb orne Stern and

Company , 670 So. 2d 932, 933 (Fla. 1996). Petitioner has

failed to meet this burden. To the extent the Department

is obliged to prove the material allegations set forth in

the Notice of Denial, it has done so by clear and

convincing eviden ce.

16. Section 626.611 , Florida Statutes, provides in

pertinent part:

626.611 Grounds for compulsory refusal,

suspension, or revocation of agent's, title

agency's, solicitor's, adjuster's, customer

representative's, service representative's,

managing gen eral agent's, or claims

investigator's license or appointment. — The

department shall deny an application for,

suspend, revoke, or refuse to renew or

continue the license or appointment of any

applicant, agent, title agency, solicitor,

adjuster, customer rep resentative, service

representative, managing general agent, or

claims investigator, and it shall suspend or

revoke the eligibility to hold a license or

appointment of any such person, if it finds

that as to the applicant, licensee, or

appointee any one or more of the following

applicable grounds exist:

* * *

(5) Willful misrepresentation of any

insurance policy or annuity contract or

willful deception with regard to any such

policy or contract, done either in person or

by any form of dissemina tion of information

or advertising.

* * *

(7) Demonstrated lack of fitness or

trustworthiness to engage in the business of

insurance.

(8) Demonstrated lack of reasonably

adequate knowledge and technical competence

to engage in the transacti ons authorized by

the license or appointment.

(9) Fraudulent or dishonest practices in

the conduct of business under the license or

appointment.

(10) Misappropriation, conversion, or

unlawful withholding of moneys belonging to

insurers or insureds or beneficiaries or to

others and received in conduct of business

under the license or appointment.

17. The grounds described in paragraphs (5) (7), (8), (9),

and (10) of Section 626.611, Florida Statutes, quoted

immediately above, are all established by P etitioner's conduct

described in the Findings of Fact. Such conduct constitutes a

"willful deception" with regard to a policy or contract within

the meaning of paragraph (5). Such conduct demonstrates a "lack

of fitness or trustworthiness to engage in th e business of

insurance" within the meaning of paragraph (7). Such conduct

demonstrates a "lack of reasonably adequate knowledge and

technical competence" within the meaning of paragraph (8). Such

conduct constitutes "fraudulent or dishonest practices in the

conduct of business under the license" within the meaning of

paragraph (9). Finally, such conduct constitutes

"misappropriation, conversion, or unlawful withholding of moneys

belonging to insurers or insureds" received in the conduct of

business unde r the license within the meaning of paragraph (10).

Under these circumstances, Section 626.611, Florida Statutes,

requires that Petitioner's request for reinstatement of his

license be denied.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions

of Law, it is

RECOMMENDED that the Department of Financial Services enter

a final order denying Petitioner's request for reinstatement of

his suspended insurance license.

DONE AND ENT ERED this 15th day of December, 2005, in

Tallahassee, Leon C ounty, Florida.

S

FLORENCE SNYDER RIVAS

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 15th day of December 2005.

COPIES FURNISHED :

James Curran, Esquire

633 Southeast Third Avenue, Suite 201

Fort Lauderdale, Florida 33301

Michael T. Ruff, Esquire

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399 - 0333

Honorable Tom Gallagher

Chief Financial Officer

Department of Financial Services

The Capitol, Plaza Level 11

Tallahassee, Florida 32399 - 0300

Mark Casteel, 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 Rec ommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.