06-003862PL Department Of Financial Services vs. Radcliffe H. Mckenzie Status: Closed Recommended Order on Thursday, March 29, 2007.

Summary: The proof was insufficient to support "sliding" charges against Respondent, but was sufficient to sustain the charge that he failed to timely notify Petitioner of a change of address.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL SERVICES , )

)

Petitioner, )

)

vs. ) Case No. 06 - 3862PL

)

RADCLIFFE H. MCKENZIE , )

)

Respondent. )

__________________________________)

RECOMMENDED ORDER

Pursuant to notice, a hearing was conducted in this cas e

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

before Stuart M. Lerner, a duly - designated administrative law

judge of the Division of Administrative Hearings (DOAH), on

February 7, 2007, by video teleconference at sites in Lauderdale

Lak es and Tallahassee, Florida.

APPEARANCES

For Petitioner: Greg S. Marr , Esquire

Department of Financial Services

Division of Legal Services

200 East Gaines Street

612 Larson Building

Tallahassee, Florida 32399 - 0333

For Respondent: L. Michael Billmeier, Jr., Esquire

Galloway, Brennan & Bil l meier

240 East 5th Avenue

Tallahassee, Florida 32303

Larry S. Davis, Esquire

Michael I. Rothschild, Esquire

Law Office s of Larry S. Davis, P.A.

1926 Harrison Street

Hollywood, Florida 33020

STATEMENT OF THE ISSUE

Whether Respondent committed the v iolations alleged in the

Amended Administrative Complaint issued against him, as modified

at hearing, and, if so, what penalty should be imposed.

PRELIMINARY STATEMENT

On August 3, 2006, Petitioner issued a n 11 - count

Administrative Complaint against Resp ondent notifying him that ,

based on the allegations of wrongdoing made therein, it

"intend[ed] to enter an Order suspending or revoking [his]

licenses and appointments as an insurance agent or impose such

penalties as may be provided under [the law]. " On August 28,

2006 , Respondent filed a petition with Petitioner requestin g " a

hearing to contest the allegations set forth in the

Administrative Complaint." On October 6, 2006 , the matter was

referred to DOAH.

On November 27, 2006, Petitioner filed with DOAH an

unopposed Motion to Amend Administrative Complaint, along with

an Amended Administrative Complaint. By order issued

November 29, 2006, the motion was granted. The Amended

Administrative Complaint charged Respondent with 13 counts of

engaging in the p rohibited practice of sliding by selling

ancillary insurance products "without [the] informed consent" of

the customer (Counts I through IX and XV through XVIII ,

hereinaf ter referred to collectively as the "sliding counts " );

one count of failing to "notify [Petitioner] in writing within

60 days after a change of . . . principal business address"

(Count X) ; and six counts of selling a surplus lines insurance

product without "mak[ing] a diligent effort to place the desired

coverage with an insurer authorized to transact that type of

insurance in this state " ( Counts XI through XIV, XIX, and XX,

hereinafter referred to collectively as the "lack of diligent

effort counts ") .

On February 6, 2007, the parti es filed a Pre - hearing

Stipulation, which contained the foll owing Statement of Fa c ts

Admitted:

1. Respondent is licensed by Petitioner as

a life including variable annuity, life, and

general lines agent and has been issued

license number A173451.

2. Respondent was so licensed at all times

relevant to the dates a nd occurrences

referenced in the Amended Administrative

Complaint.

3. The Department has jurisdiction over

Respondent's insurance licenses and

appointments.

4. At all times relevant to the dates and

occurrences referenced in the [Amended]

Administrati ve Complaint, Respondent was

employed or affiliated with Direct General

Insurance Agency, Inc., a Tennessee

corporation , doing business in Florida as

Direct General Insurance Agency.

5. On or about May 7, 2004, Respondent sold

Stacelyn Roberts - Hall a pri vate passenger

automobile insurance policy as evidenced by

Joint Exhibit 3.

6. On or about May 7, 2004, Respondent sold

Stacelyn Roberts - Hall an accident medical

protection plan as evidenced by Joint

Exhibit 3.

7. On or about May 7, 2004, Respondent so ld

Stacelyn Roberts - Hall a term life insurance

poli [ c ] y as evidenced by Joint Exhibit 3.

8. On or about September 16, 2003,

Respondent sold Rudolph Bentivegna a private

passenger automobile insurance policy as

evidenced by Joint Exhibit 4.

9. On or abo ut September 16, 2003,

Respondent sold Rudolph Bentivegna an

accident medical . . . protection plan as

evidenced by Joint Exhibit 4.

10. On or about September 16, 2003,

Respondent sold Rudolph Bentivegna a travel

protection plan as evidenced by Joint

Exh ibit 4.

11. On or about May 13, 2004, Respondent

sold Kenneth Moore a private passenger

automobile insurance policy as evidenced by

Joint Exhibit 5.

12. On or about May 13, 2004, Respondent

sold Kenneth Moore an accident medical

protection plan as evid enced by Joint

Exhibit 5.

13. On or about May 13, 2004, Respondent

sold Kenneth Moore a travel protection plan

as evidenced by Joint Exhibit 5.

14. On or about May 13, 2004, Respondent

sold Kenneth Moore a term life insurance

policy as evidenced by Joi nt Exhibit 5.

15. On or about October 31, 2005,

Respondent sold Paul Booker a private

passenger automobile insurance policy as

evidenced by Joint Exhibit 6.

16. On or about October 31, 2005,

Respondent sold Paul Booker an accident

medical protection pl an as evidenced by

Joint Exhibit 6.

17. On or about October 31, 2005,

Respondent sold Paul Booker a travel

protection plan as evidenced by Joint

Exhibit 6.

18. On or about May 12, 2005, Respondent

sold Stacelyn Roberts - Hall a private

passenger automobi le insurance policy as

evidenced by Joint Exhibit 7.

19. On or about May 12, 2005, Respondent

sold Stacelyn Roberts - Hall an accident

medical protection plan as evidenced by

Joint Exhibit 7 .

20. On or about May 12, 2005, Respondent

sold Stacelyn Roberts - Hall a term life

insurance policy as evidenced by Joint

Exhibit 7.

21. On or about May 13, 2006, Respondent

sold Stacelyn Roberts - Hall a private

passenger automobile insurance policy as

evidenced by Joint Exhibit 8.

22. On or about May 13, 2006, Respo ndent

sold Stacelyn Roberts - Hall an accident

medical protection plan as evidenced by

Joint Exhibit 8.

23. On or about May 13, 2006, Respondent

sold Stacelyn Roberts - Hall a term life

insurance policy as evidenced by Joint

Exhibit 8.

24. During the perio d covered by the

Amended Administrative Complaint, Respondent

earned approximately twenty - eight percent

(28%) of his total compensation from Direct

General Insurance Agency, Inc., from

commissions on the sale of the accident

medical protection plan, the tr avel

protection plan, and the term life policy.

As noted above, the final hearing in this case was held on

February 7, 2007 . Six witnesses testified at the hearing:

Rober t Keegan, Kenneth Moore, Stacelyn Roberts - H all, Rudolph

Bentivegna, Sara Si lot, and Respondent. In addition to these

six witnesses' testimony, 13 exhibits ( Joint Exhibits 1 through

8, and Petitioner's Exhibits 9, 10, 12, 13, and 16 ) were offered

and received into evidence. 2

After concluding the presentation of Petitioner's case - in -

chief , counsel for Petitioner announced on the record that

Petitioner was voluntarily dismissing eight of the 20 counts of

the Amended Administrative Complaint: two of the " sliding

counts " ( Count s VIII and IX, both dealing with Respondent's

October 31, 2005, t ransaction with Paul Booker) and all six of

the " lack of diligent effort counts " (Counts XI through XIV,

XIX , an d XX) .

The deadline for the filing of proposed recommended orders

was set at 20 days from the date of the filing with DOAH of the

hearing trans cript .

The hearing t ranscript (consisting of one volume) was filed

with DOAH on February 19, 2007 .

Petitioner and Respondent filed their Proposed Recommended

Order s on Monday, March 12, 2007 .

FINDINGS OF FACT

Based on the evidence adduced at hearing, and the record as

a whole, the following findings of fact are made to supplement

and clarify the extensive factual stipulations set forth in the

parties' Statement of Facts Admitted 3 :

1. Respondent has been employed by Direct General

Insurance Agency, Inc. ( Direct General) for the past five years.

2. He is the manager of a Direct General office located at

7558 West Commercial Boulevard , Lauderhill, F lorida.

3. This has been Respondent's principal business address

since September 2005.

4. Prior to September 2005, Respondent was the manager of a

Direct General office located at 8300 West Oakland Park Boulevard ,

Sunrise , Florida.

5. Respondent did not notify Petitioner of this September

2005 change of his principal business address within 60 days of

th e chang e . He assumed , erroneously it turns out, that Direct

General's "licensing department" would inform Petitioner of the

change.

6. At all times material to the instant case, Respondent, as

a licensed agent acting on behalf of Direct General, sold

automob ile insurance, along with three ancillary or "add - on"

products .

7. The three "add - on" products Respondent sold were an

accident medical protection plan, a travel protection plan, and

a term life insurance policy ( hereinafter referred to

collectively as the "Add - Ons") .

8 . From September 2003 to May 2006, Respondent sold these

Add - Ons to approximately 1300 customers, including Ms. Roberts -

Hall, Mr. Bentivegna, and Mr. Moore .

9 . For his efforts on behalf of Direct General , Respondent

was paid an hourly wage, plus a commission for each of the Add -

Ons he sold. He did not receive a commission for any automobile

insurance policy sales he made .

10 . Direct General had sales goals with respect to Add - Ons

that it e xpected its agents to meet . How well an agen t did in

meeting these goals was an "important factor" in the job

performance evaluation the agent received annually from his

supervisor ( as Respondent was aware ) . An agent's failure to

meet a particular goal, however, did not inevitably lead to the

"fir [ing]" of the agent. Nonetheless, it was obviously in the

agent's best interest to sell as many Add - Ons as possible.

11. Respondent's supervisor was Sara Silot, a Direct

General District Manager. In addition to an annual job

performance evaluation, Ms. Silot provided Respondent, as well

as her other subordinates , with regular feedback during the

cour se of the year regarding their Ad d - On sales numbers.

12. Each of the customers (Ms. Roberts - Hall, Mr.

Bentivegna, and Mr. Moore, hereinafter referred to co llectively

as the "Complaining Customers") referenced in Counts I through

VII and XV through XVIII of the Amended Administrative Complaint

(hereinafter referred to collectively as the "remaining sliding

counts") purchased the policies referenced in these c ounts in

person at Respondent's office, where they were given paperwork

to review and to then initial, sign, and/or date in numerous

places in order to consummate the transaction. This p aperwork

consisted of , depending on the transaction, as few as 14 , an d as

many as 20, pages of various documents (hereinafter referred to

collectively as the "Transactional Paperwork") . The

Transactional Paperwork clearly and conspicuously informed the

reader , consistent with what Petitioner orally explained at the

time of purchase to each of the Complaining C ustomers , that the

Add - Ons being purchased were optional policies that were

separate and distinc t from the automobile insurance policy also

being purchased and that these Add - Ons carried charge s in

addition to the auto mobile insurance policy premium. In

providing his oral explanation to the Complaining Customers,

Respondent circled ( with a writing utensil ) language in the

Transactional P aperwork that conveyed this information about the

Add - Ons. His purpose in doin g so was to bring this language to

the attention of the Complaining Customers. In view of the

contents of the Transactional Paperwork , including the portions

highlighted by Respondent, and what Respondent told the

Complaining Customers concerning the Add - Ons , it was reasonable

for Respondent to believe that the Complaining Customers were

informed about the Add - On products they were being sold and were

(by executing the paperwork) consenting to purchase them.

13. The Transactional P aperwork included, among ot her

things, a one - page Accident M edical Protection P lan form ; a one -

page Accident Medical P rotection Plan Application form; a one -

page American Bankers Insurance Company Optional Travel

Protection Plan form; a one - page Statement of Policy Cost and

Benefit Information - One Year Term Life Insurance Policy form; a

one - page Explanation of Policies, Co verages and Cost Breakdown

form ; a multi - page Premium Finance Agreement; and a one - page

Insurance Premium Financing Disclosure form.

14. Among the information co ntained on the top half of the

Accident Medical Protection Plan form was the cost of the plan.

The bottom half of the form read as follows :

THIS IS A LIMITED POLICY. RE A D IT

CAREFULLY.

I the undersigned understand and acknowledge

that:

This Policy does not provide Liability

Coverage for B odily Injury and Property

Damage, nor does it meet any Financial

Responsibility Law. I am electing to

purchase an optional coverage that is not

required by the State of Florida. My agent

has provided me with an outline of coverage

and a copy of this acknowledgment.

If I decide to select another option or

cancel this policy, I must notify the

company or my agent in writing.

I agree that if my down payment or full

payment check is returned for any reason,

coverage will be null and void from the date

of inception.

________________ ___ ____

Insured's Signature Date

I HEREBY REJECT THIS VALUABLE COVERAGE :

___________________ ____

Insured's Signature Date

15. The Accident M edical Protection Plan Application form

indicated what the annual premium was for each of the three

categories of coverage offered: individual, husband and wife,

and family.

16. The top half of t he American Bankers Insurance Company

Optional Travel Prote ction Plan form summarized the benefits

available under the plan. The bottom half of the form read as

follows:

Please Re a d Your Policy Carefully for a Full

Explanation of Benefits

Purchasing the Optional Travel Protection

Plan is not a condition of purch asing your

automobile liability policy.

I hereby acknowledge I am purchasing an

Optional Travel Protection Plan, and that I

have received a copy of this

acknowledgement.

________________ ___ ____

Insured's Signature Date

I HEREB Y REJECT THIS VALUABLE COVERAGE:

___________________

Insured's Signature

____

Date

17. The Statement of Policy Cost and Benefit Information -

One Year Ter m Life Insurance Policy form noted the amount of the

"Annual Premium for this policy" and that the "Annual Premium

included a $10.00 policy fee that [was] fully earned."

18. On the Explanation of Policies, Coverages and Cost

Breakdown form, the Add - Ons we re listed under the heading of

"optional Policies" and the cost of each Ad d - On was separately

stated.

19. The first page of the Premium Finance Agreement also

contained an itemization of the cost of each Add - On , as did t he

Insurance Premium Financing Di sclosure form . On this latter

form, the Add - Ons were included in a section entitled "Optional

insurance coverage." The form also advised, in its prefatory

paragraph, that:

Florida law requires the owner of a motor

vehicle to maintain Personal Injury

Prot ection and Property Damage liability

insurance. Under certain circumstances as

provided in Chapter 324, Florida Statutes,

additional liability insurance may be

required for Bodily Injury liability. Also,

additional insurance is usually required by

a lien holder of a financed vehicle. Florida

law does not require other insurance. The

direct or indirect premium financing of auto

club membership and other non - insurance

products is prohibited by state law.

20. Each of the Complaining Customers was capabl e of

reading the above - described documents and understanding that

purchasing the Add - Ons was optional, not mandatory, and involved

an additional cost. 4 Respondent gave each of them as much time

as they wanted to read these documents , and he did not refuse to

answer any of their questions.

21. Ms. Roberts - Hall rejected the travel protection plan ,

and signed and dated the American Bankers Insurance Company

Optional Travel Protection Plan form so indicating , in 2004,

2005, and 2006.

22. Mr. Bentivegna rejec ted the term life insurance

policy , as documented by his signature next to the word

"Rejected , " which was written in by hand at the bottom of the

Statement of Policy Cost and Benefit Information - One Year Term

Life Insurance Policy form .

23. As noted above , unlike Mr. Bentivegna, Ms. Roberts -

Hall and Mr. Moore each signed up for a term life insurance

policy.

24. On Mr. Moore's Application for Life Insurance , his

three children, Melissa Moore, Kenneth Moore, Jr., and Timothy

Brown - Moore , were named as " Be neficiar [ies] . " While Kenneth

Moore, Jr., and Timothy Brown - Moore were listed as " Members of

Applicant's H ousehold " on Mr. Moore's application for automobile

insurance, Melissa Moore ( who , at the time , was away at college)

was not.

25. Elsewhere on Mr. Moore's Application for Life

Insur ance, in the "Insurability Data " section, the question,

"Have you during the past two (2) years had, or been told you

have, or been treated for . . . a) Heart trouble or high blood

pressure?" was answered , incorrectly, in the negative.

Mr. Moore placed his initials next to this answer.

26. Several days after her May 2004 purchases,

Ms. Roberts - Hall telephoned Respondent and told him that she was

having second thoughts about her accident medical protection

plan purchase. Respondent suggested that she come to his office

and speak with him in person, which she did. During this

follow - up visit, Respondent went over with her the benefits of

the plan , after which she told him that she was going to keep

the coverage .

27. Ms . Roberts - Hall took no action to cancel either of

the Ad d - Ons ( the accident medical protection plan and term life

insurance policy) she had purchased in May 2004. In fact, she

renewed these coverages in May 2005 and again in May 2006 (along

with her autom obile insurance policy) .

28. Prior to these renewals, in February 2005, when

contacted by one of Petitioner's investigators who was

conducting an investigation of possible "sliding" by Respondent,

Ms. Roberts - Hall had expressed her displeasure that Resp ondent

had "given her these additional products."

29. Mr. Bentivegna and Mr. Moore were also contacted by

Petitioner's investigative staff to discuss the Add - On purchases

they had made from Respondent .

30. Mr. Moore was contacted approximately ten mont hs after

his May 2004 purchases . T he three Ad d - Ons he had purchased were

still in effect at the time, but h e took no action to cancel any

of these policies. He did not renew them, however ; nor did he

do any other business with Respondent following his May 2004

purchases .

31. Petitioner's policy is have its investigators "make it

very clear from the beginning , " when interviewing aggrieved

con sumer s , that no promises are being made that these consumers

will be "get ting their money back" if they cooperat e in the

investigation. It does not appear that there was any deviation

from this policy in Petitioner's investigation of Respondent.

32. The investigation of Respondent led to the charges

against him that are the subject of the instant case.

CONCLUSIONS OF LAW

33. DOAH has jurisdiction over the subject matter of this

proceeding and of the parties hereto pursuant to Chapter 120,

Florida Statutes.

34. " Chapters 624 - 632, 634, 635, 636, 641, 642, 648, and

651 constitute the 'Florida Insurance Code.'" § 6 24.01, Fla.

Stat.

35. It is Petitioner's responsibility to "enforce the

provisions of this code." § 624.307, Fla. Stat.

36. Among its duties is to license and discipline

insurance agents.

37. Petitioner is authorized to suspend or revoke agents'

licen ses, pursuant to Section s 626.611 and 626.621, Florida

Statutes; to impose fines on agents of up to $500.00 or, in

cases where there are "willful violation[s] or willful

misconduct, " up to $3,500, and to " augment []" such disciplinary

action " by an amount e qual to any commissions received by or

accr uing to the credit of the [ agent ] in connection with any

transaction as to which the grounds for suspension, [or]

revocation . . . related," pursuant to Section 626.681, Florida

Statutes; to place agents on probat ion for up to two years,

pursuant to Section 626.691, Florida Statutes 5 ; and to order

agents "to pay restitution to any person who has been deprived

of money by [their] misappropriation, conversion, or unlawful

withholding of moneys belonging to insurers, insureds,

beneficiaries, or others , " pursuant to Section 626.692, Florida

Statutes.

38. Petitioner may take disciplinary action against an

agent only after the agent has been given reasonable written

notice of the charges and an adequate opportunity to request a

proceeding pursuant to Sections 120.569 and 120.57, Florida

Statutes.

39. An evidentiary hearing must be held if requested by

the agent when there are disputed issues of material fact.

§§ 120.569 and 120.57(1), Fla. Stat.

40. At the hearing, Petitioner bears the burden of proving

that the agent engaged in the conduct, and thereby committed the

violations, alleged in the charging instrument. Proof greater

than a mere preponderance of the evidence must be presented by

Petitioner to meet its bu rden of proof. Clear and convincing

evidence of the licensee's guilt is required. See Department of

Banking and Finance, Division of Securities and Investor

Protection v. Osborne Stern and Company , 670 So. 2d 932, 935

(Fla. 1996); Ferris v. Turlington , 5 10 So. 2d 292, 294 (Fla.

1987); Pou v. Department of Insurance and Treasurer , 707 So. 2d

941 (Fla. 3d DCA 1998); and § 120.57(1)(j), Fla. Stat.

("Findings of fact shall be based upon a preponderance of the

evidence, except in penal or licensure disciplinar y proceedings

or except as otherwise provided by statute . . . .").

41. Clear and convincing evidence is an "intermediate

standard," " requir [ing] more proof than a 'preponderance of the

evidence' but less than 'beyond and to the exclusion of a

reasonable doubt.'" In re Graziano , 696 So. 2d 744, 753 (Fla.

1997). For proof to be considered "'clear and convincing' . . .

the evidence must be found to be credible; the facts to which

the witnesses testify must be distinctly remembered; the

testimony must be p recise and explicit and the witnesses must 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 alleg ations sought to be established." In re

Davey , 645 So. 2d 398, 404 (Fla. 1994), quoting, with approval,

from Slomowitz v. Walker , 429 So. 2d 797, 800 (Fla. 4th DCA

1983) ; see also In re Adoption of Baby E. A. W. , 658 So. 2d 961,

967 (Fla. 1995) ("T he evide nce [in order to be clear and

convincing] must be sufficient to convince the trier of fact

without hesitancy ."). "Although this standard of proof may be

met where the evidence is in conflict, . . . it seems to

preclude evidence that is ambiguous." Westin ghouse Electric

Corporation, Inc. v. Shuler Bros., Inc. , 590 So. 2d 986, 989

(Fla. 1st DCA 1991).

42. In determining whether Petitioner has met its burden

of proof, it is necessary to evaluate its evidentiary

presentation in light of the specific allegati ons of wrongdoing

made in the charging instrument. Due process prohibits an

agency from taking penal action against an agent based on

matters not specifically alleged in the charging instrument,

unless those matters have been tried by consent. See Shore

Village Property Owners' Association, Inc. v. Department of

Environmental Protection , 824 So. 2d 208, 210 (Fla. 4th DCA

2002); Cottrill v. Department of Insurance , 685 So. 2d 1371,

1372 (Fla. 1st DCA 1996); and Delk v. Department of Professional

Regulation , 595 So. 2d 966, 967 (Fla. 5th DCA 1992).

43. The charging instrument in the instant case, the

Amended Administrative Complaint, as modified at hearing,

contains 12 counts .

44. Among them are the 11 " remaining sliding counts , " each

a lleging that Petit ioner violated Sections 624.11(1),

626.611(4),(7), (8), (9), and (13), 626.621(2), (3), and (6),

and 626.9541 (1)(z)1 through 3 , Florida Statutes, by selling an

ancillary insurance product to a customer without the customer's

"informed consent." Count I c oncerns Ms. Roberts - Hall's May 7,

2004, purchase of an accident medical protection plan from

Respondent. Count II concerns Ms. Roberts - Hall's May 7, 2004,

purchase of a term life insurance policy from Respondent. Count

III concerns Mr. Bentivegna's Septe mber 16, 2003, purchase of an

accident medical protection plan from Respondent. Count IV

concerns Mr. Bentivegna's September 16, 2003, purchase of a

travel protection plan from Respondent. Count V concerns

Mr. Moore's May 13, 2004, purchase of an acciden t medical

protection plan from Respondent. Count VI concerns Mr. Moore's

May 13, 2004, purchase of a travel protection plan from

Respondent. Count VII concerns Mr. Moore's May 13, 2004,

purchase of a term life insurance policy from Respondent. Count

XV concerns Ms. Roberts - Hall's May 12, 2005, purchase of an

accident medical protection plan from Respondent. Count XVI

concerns Ms. Roberts - Hall's May 12, 2005, purchase of a term

life insurance policy from Respondent. Count XVII concerns

Ms. Roberts - Hall' s May 13, 2006 , purchase of an accident medical

protection plan from Respondent. Count XVIII concerns

Ms. Roberts - Hall's May 13, 2006 , purchase of a term life

insurance policy from Respondent.

45. Count X, t he only other count of the Amended

Administra tive Complaint that remains following the voluntary

dismissals announced by Petitioner 's counsel at the close of

Petitioner's case - in - chief at hearing, alleges that Respondent

violated Sections 624.11(1) and 626.621(2), Florida Statutes, by

failing to "not ify [Petitioner] in writing within 60 days after

a change of . . . principal business address," as required by

Section 626.551, Florida Statutes.

46. At all times material to the instant case, Section

624.11(1), Florida Statutes, has provided as follows:

No person shall transact insurance in this

state, or relative to a subject of insurance

resident, located, or to be performed in

this state, without complying with the

applicable provisions of this code.

47. At all times material to the instant case, Sec tion

626.611(4), (7), (8), (9), and (13), Florida Statutes , has

provided , in pertinent part, as follows:

The department shall . . . suspend [or]

revoke . . . the license . . . of

any . . . agent . . . , and it shall suspend

or revoke the eligibility to h old a

license . . . of any such person, if it

finds that as to the . . . licensee . . .

any one or more of the following applicable

grounds exist:

* * *

(4) If the license . . . is willfully used,

or to be used, to circumvent any of the

requirements or prohibitions of this code.

(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 transactio ns authorized by

the license . . . .

(9) Fraudulent or dishonest practices in

the conduct of business under the

license . . . .

* * *

(13) Willful failure to comply with, or

willful violation of, any proper order or

rule of the department or willful violation

of any provision of this code.

48. At all times material to the instant case, Section

626.621(2), (3), and (6) , Florida Statutes, has provided , in

pertinent part, as follows:

The department may, in its discretion, . . .

suspend [or] revoke, . . . the license . . .

of any . . . agent . . . , and it may

suspend or revoke the eligibility to hold a

license . . . of any such person, if it

finds that as to the . . . licensee . . .

any one or more of the following applicable

grounds exist under circumstances for which

such . . . suspension [or] revocation . . .

is not mandatory under s. 626.611:

* * *

(2) Violation of any provision of this code

or of any other law applicable to the

business of insu rance in the course of

dealing under the license . . . .

(3) Violation of any lawful order or rule

of the department . . . .

* * *

(6) In the conduct of business under the

license . . . , engaging in unfair methods

of competi tion 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 . . . .

49. At all times material to the instant case, Section

62 6.9541 (1)(z)1 through 3, Florida Statutes, has provided as

follows:

(1) UNFAIR METHODS OF COMPETITION AND

UNFAIR OR DECEPTIVE ACTS. -- The following

are defined as unfair methods of competition

and unfair or deceptive acts or practices:

* * *

(z) Sliding. -- Sliding is the act or

practice of:

1. Representing to the applicant that a

specific ancillary coverage or product is

required by law in conjunction with the

purchase of insurance when such coverage or

product is not requir ed;

2. Representing to the applicant that a

specific ancillary coverage or product is

included in the policy applied for without

an additional charge when suc h charge is

required; or

3. Charging an applicant for a specific

ancillary coverage or product , in addition

to the cost of the insurance coverage

applied for, without the informed consent of

the applicant.

50. Of the foregoing statutory provision s, the latter,

Section 626.9541 (1)(z)3, Florida Statutes, most specifically

addresse s the conduct desc ribed in the "remaining sliding

counts. " Under Florida case law (which the undersigned is bound

to follow 6 ), a n agent violates this statutory provision if he or

she fails to provide the applicant an adequate " oral

explanation" of the ancillary nature of t he product in question,

notwithstanding that the applicant is given and sign s paperwork

that, if " read with care, " would provide the applicant with such

information . See Mack v. Department of Financial Services , 914

So. 2d 986, 989 (Fla. 1st DCA 2005 ); an d Thomas v. State,

Department of Insurance and Treasurer , 559 So. 2d 419 (Fla. 2 d

DCA 1990). This is because of the fiduciary relationship that

exists between the agent and the agent 's customer s. See Thomas ,

559 So. 2d at 421 ; see also Sewall v. State , 7 83 So. 2d 1171,

1178 (Fla. 5th DCA 2001)( " [T]he victims' ages coupled with the

fact that Sewall, their insurance agent who stood in a fiduciary

relationship with them, would be sufficient to justify the

departure."); Natelson v. Department of Insurance , 45 4 So. 2d

31, 32 (Fla. 1st DCA 1984)("Insurance is a business greatly

affected by the public trust, and the holder of an agent's

license stands in a fiduciary relationship to both the client

and insurance company ."); and Beardmore v. Abbott , 218 So. 2d

807, 808 - 809 (Fla. 3d DCA 1969)("We accept the view that the

record herein establishes that a confidential relationship

existed between the parties and that it was one in which

Beardmore reposed trust and confidence in his insurance

counselor, Abbott.").

51. At all times material to the instant case, Section

626.551, Florida Statutes, has provided as follows:

Every licensee shall notify the department

in writing within 60 days after a change of

name, residence address, principal business

street address, or mai ling address. Any

licensed agent who has moved his or her

residence from this state shall have his or

her license and all appointments immediately

terminated by the department. Failure to

notify the department within the required

time period shall result in a fine not to

exceed $ 250 for the first offense and, for

subsequent offenses, a fine of not less than

$500 or suspension or revocation of the

license pursua nt to s. 626.611 or s.

626.621.

This duty to notify imposed by Section 626.551 on agents who

c hange their " name, residence address, principal business street

address, or mailing address " is nondelegable.

52. Because they are penal in nature , the foregoing

statutory provisions must be strictly construed, with any

reasonable doubts as to their mean ing being resolved in favor of

the licensee. See Capital National Financial Corporation v.

Department of Insurance , 690 So. 2d 1335, 1337 (Fla. 3rd DCA

1997)("Section 627.8405 is a penal statute and therefore must be

strictly construed: . . . . ' When a statute imposes a penalty,

any doubt as to its meaning must be resolved in favor of a

strict construction so that those covered by the statute have

clear notice of what conduct the statute proscribes. ' " ).

53. Whether Petitioner met its burden of proof wit h

respect to the "remaining sliding counts" turns on the

undersigned's assessment of the hearing testimony of the

Complaining Customers that , in Respondent's oral presentation s

to them, he made no mention of the Add - On products he sold them

and led them to believe that they were purchasing just

automobile insurance and nothing else (hereinafter referred to

as the "Complaining Customers' Testimony ") . If the undersigned

is not "convinced . . . without hesitancy" of the truthfulness

of the Complaining Custome rs' Testimony , these counts must be

dismissed.

54. The Complaining Customers' Testimony was not

unrefuted. Respondent testified at hearing that , in his oral

presentations to the Complaining Customers, he told them about

each of the Add - Ons , explain ing that the y were optional and

entailed separate , additional charges. According to

Respondent 's testimony , as he provided this explanation to the

Complaining Customers , he circled portions of the Transactional

Paperwork that described these features of the A dd - Ons so as to

bring them to the attention of the Complaining Customers.

Significantly, a n examination of the Transactional Paperwork

(which is part of the evidentiary record in this case) reveals

such circular markings , and these documents therefore

cor roborate his testimony .

55. Respondent may not have been entirely forthright in

his responses to questions asked, during his depositions, about

his knowledge concerning Add - On sales production scores, and he

may have, in his hearing testimony, embellished details of his

encounters with the Complaining Customers. Nonetheless, the

undersigned finds Respondent's version of these encounters, at

its essential core, to be more credible than the Complaining

Customers' testimony to the contrary. Tipping the bala nce in

favor of such a finding is the impro bability of the Complaining

Customers' claims that they left Respondent's office , following

their transaction s , believing that they had purchased nothing

more than automobile insurance , when those pages of the

Tra nsactional Paperwork that they had initialed, signed, and /or

dated during the transactions contained prominently displayed,

easy - to - read language , including that highlighted by Respondent,

that plainly provided otherwise. 7

56. Inasmuch as the undersigne d is not "convinced . . .

without hesitancy" of the truthfulness of the Complaining

Customers' Testimony , he concludes that the "remaining sliding

counts" are not supported by clear and convincing evidence and

that they therefore should be dismissed. 8

57 . Petitioner did, however, prove by clear and convincing

evidence that, as alleged in Count X of the Amended

Administrative Complaint, Respondent failed to "notify

[Petitioner] in writing within 60 days after a change of . . .

principal business address," as required by Section 626.551,

Florida Statutes. That Respondent may have " relied on [ his ]

company to update that address for [him]," as he testified at

hearing, does not excuse his noncompliance with the notification

requirement of Section 626.551.

58. There is no evidence that Respondent has previously

been disciplined for violating Section 626.551, Florida

Statutes. Accordingly, the undersigned recommends that , for

violating Section 626.551, Florida Statutes, Respondent be fined

$250.00, the maximum punishment for a first offense under the

statute .

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions

of Law, it is hereby

RECOMMENDED that Petitioner issue a Final Order finding

Respondent guilty of committing the violation of Secti on

626.551, Florida Statutes, alleged in Count X of the Amended

Administrative Complaint , fining him $250.00 for such violation ,

and dismissing the remaining counts of the Amended

Administrative Complaint .

DONE AND ENTERE D this 29th day of March , 2007 , i n

Tallahassee, Leon County, Florida.

S

___________________________________

STUART M. LERNER

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 29th day of March , 2007 .

ENDNOTES

1 Unless otherwise noted, all references in this Recommended

Order t o Florida Statutes are to Florida Statutes (2006).

2 Petitioner's Exhibits 13 and 16 were transcripts of

depositions given by Respondent. On February 22, 2007, with

leave of the undersigned, Respondent filed a post - hearing

pleading entitled "Objections to Specific Portions of

Respondent's Deposition[s]." Having carefully considered these

objections, the undersigned hereby sustains objection numbers 1,

5, 7 through 12, 15, and 16 relating to Respondent's November

17, 2006, deposition and overrules the re maining objections made

in Respondent's post - hearing pleading.

3 The undersigned has accepted these factual stipulations. See

Columbia Bank for Cooperatives v. Okeelanta Sugar Cooperative ,

52 So. 2d 670, 673 (Fla. 1951) (" When a case is tried upon

stipu lated facts the stipulation is conclusive upon both the

trial and appellate courts in respect to matters which may

validly be made the subject of stipulation . "); Schrimsher v.

School Board of Palm Beach County , 694 So. 2d 856, 863 (Fla. 4th

DCA 1997) (" The hearing officer is bound by the parties'

stipulations."); and Palm Beach Community College v. Department

of Administration, Division of Retirement , 579 So. 2d 300, 302

(Fla. 4th DCA 1991)("When the parties agree that a case is to be

tried upon stipulated f acts, the stipulation is binding not only

upon the parties but also upon the trial and reviewing courts.

In addition, no other or different facts will be presumed to

exist.").

4 Mr. Bentivegna has only an eighth grade formal education , but

has the abil ity to read and comprehend what he is reading .

5 Petitioner may impose a fine or place an agent on probation

"in lieu of" suspension or revocation of the agent's license

" except on a second offense or when . . . suspension [or]

revocation . . . is manda tory." §§ 626.681 and 626.691, Fla.

Stat.

6 See Malu v. Security National Insurance Co. , 898 So. 2d 69, 73

n.3 (Fla. 2005)("The trial court was bound to follow Hunter

since it was the only district court decision that had

pronounced a ruling on the issu e."); Pardo v. State , 596 So. 2d

665, 666 (Fla. 1992)("[I]n the absence of interdistrict

conflict, district court decisions bind all Florida trial

courts."); Weiman v. McHaffie , 470 So. 2d 682, 684 (Fla.

1985)("District court decisions 'represent the law o f Florida

unless and until they are overruled by this Court.'"); Mikolsky

v. Unemployment Appeals Commission , 721 So. 2d 738, 740 (Fla.

5th DCA 1998)("An agency of this state, such as the Commission,

must follow the interpretations of statutes as interpret ed by

the courts of this state. Like trial courts, if there is a

controlling interpretation by a district court of appeal in this

state, the Commission must follow it, even if the court of

appeal is located outside the district of the trial court. If

the re is a conflict between interpretations by different courts

of appeal, that may provide a basis to reach the supreme court

for a final interpretation. Thereafter, the supreme court's

interpretation of the statute must prevail, barring future

legislative changes to the statute."); Wood v. Fraser , 677 So.

2d 15, 19 (Fla. 2d DCA 1996)("[I]n accord with the doctrine of

stare decisis, . . . once a point of law has been decided by a

judicial decision, it should be adhered to by courts of lesser

jurisdiction, un til overruled by another case, because it

establishes a precedent to guide the courts in resolving future

similar cases. ") ; Putnam County School Board v. Dubose , 667 So.

2d 447, 449 (Fla. 1st DCA 1996)("Under the doctrine of stare

decisis, lower courts ar e bound to adhere to the rulings of

higher courts when considering similar issues even though the

lower court might believe the law should be otherwise."); Dean

v. Dean , 607 So. 2d 494, 499 n.6 (Fla. 4th DCA 1992)("In the

absence of controlling precedent f rom its own district court,

any trial court in Florida, irrespective of the district in

which it sits, is required to follow the decision of any other

district court of appeal in Florida. ") ; and State v. Hayes , 333

So. 2d 51, 53 (Fla. 4th DCA 1976)("[I]t i s logical and necessary

in order to preserve stability and predictability in the law

that . . . trial courts be required to follow the holdings of

higher courts -- District Courts of Appeal. The proper hierarchy

of decisional holdings would demand that in t he event the only

case on point on a district court level is from a district other

than the one in which the trial court is located, the trial

court be required to follow that decision. . . . Alternatively,

if the district court of the district in which t he trial court

is located has decided the issue, the trial court is bound to

follow it.").

7 The undersigned finds particularly implausible Ms. Roberts -

Hall's testimony that, after learning that, during her May 2004,

visit to Respondent's office, Respond ent had sold her Add - On

products without his having had made any mention of them to her,

she nonetheless returned to his office in 2005 and again in 2006

to renew her automobile insurance policy and that she "just

signed where [Respondent] told [her] to si gn the forms," without

reading them, because she trusted Respondent.

8 It is within the province of the administrative law judge in a

disciplinary proceeding against an agent to determine whether

Petitioner's proof is clear and convincing . See Stins on v.

Winn , 938 So. 2d 554, 555 (Fla. 1st DCA 2006)("Credibility of

the witnesses is a matter that is within the province of the

administrative law judge, as is the weight to be given the

evidence. The judge is entitled to rely on the testimony of a

singl e witness even if that testimony contradicts the testimony

of a number of other witnesses."); Dyer v. Department of

Insurance & Treasurer , 585 So. 2d 1009 (Fla. 1st DCA 1991)("It

is not the function of this court when reviewing an agency order

by appeal to substitute our judgment for that of the agency as

to the weight of the evidence on any disputed issue of fact, nor

is it our function to determine whether the evidence as a whole

satisfies the clear and convincing standard of proof; these

functions lie wi th the trier of fact ."); see also United States

v. Jordan , 256 F.3d 922, 933 (9th Cir. 2001)("We remand to the

district court to determine whether the evidence is clear and

convincing that Jordan possessed a firearm during the bank

robbery and whether he a bducted Howard to facilitate his escape.

As we are not in a position to weigh conflicting evidence, which

is an important responsibility of the district court, we state

no opinion on what the district court's determination should be

under this heightened standard of proof."); and State v.

Uriarte , 194 Ariz. 275, 283 (Ariz. Ct. App. 1998)("Terms like

'convincing,' 'probable,' 'firm belief' or 'conviction' require

an assessment of the persuasiveness of the evidence, i.e., its

credibility, a function unique t o the trial court.").

COPIES FURNISHED :

Greg S. Marr, Esquire

Department of Financial Services

Division of Legal Services

200 East Gaines Street

612 Larson Building

Tallahassee, Florida 32399 - 0333

L. Michael Billmeier, Jr., Esquire

Galloway, Brennan & Billmeier

240 East 5th Avenue

Tallahassee, Florida 32303

Michael I. Roth schild, Esquire

Larry S. Davis, Esquire

Law Officers of Larry S. Davis, P.A.

1926 Harrison Street

Hollywood, Florida 33020

Honorable Alex Sink

Chief Financial Officer

Department of Financial Services

The Capitol, Plaza Level 11

Tallahassee, Florida 3239 9 - 0300

Daniel Sumner , General Counsel

Department of Financial Services

The Capitol, Plaza Level 11

Tallahassee, Florida 32399 - 030 7

N OTICE OF RIGHT TO SU BMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the da te 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.