07-001808PL Department Of Financial Services vs. Laura J. King Status: Closed Recommended Order on Friday, February 8, 2008.

Summary: The evidence failed to establish that Respondent committed prohibited acts constituting "sliding."

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL )

SERVICES , )

)

Petitioner , )

)

vs. ) Case No. 07 - 1808PL

)

LAURA J. KING , )

)

Respondent . )

)

RECOMMENDED ORDER

Pursuant to notice, this cause was heard by Lawrence P.

Stevenson, a duly - designated Administrative Law Judge of the

Division of Administrative Hearings, on August 14 and August 21,

2007, in New Port Richey, Florida.

APPEARANCES

For Petitioner: Greg S. Marr, Esqu ire

Thomas A. David, Esquire

Department of Financial Services

Division of Legal Services

200 East Gaines Street

Tallahassee, Florida 32399 - 0333

For Respondent: L. Micha el Billmeier, Jr., Esquire

Galloway, Brennan & Billmeier

240 East Fifth Avenue

Tallahassee, Florida 32303

Michael Rothschild, Esquire

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

1926 Harrison Street

Hollywood, Florida 33020

STATEMENT OF THE ISSUE

The issue presented is whether Respondent is guilty of the

allegations contained in the Administrative Complaint, and, if

so, what disciplinary acti on should be imposed.

PRELIMINARY STATEMENT

On March 28, 2007, Petitioner, the Department of Financial

Services (the "Department") issued a 14 - C ount Administrative

Complaint against Respondent, Laura J. King, alleging that she

had violated several provisi ons of the Florida Insurance Code 1 by

selling ancillary products to her automobile insurance customers

without the customers' informed consent, a practice referred to

as "sliding," by selling a surplus lines insurance product

without making a diligent effo rt to place the coverage with an

insurer authorized to transact that type of insurance in this

state, and by failing to notify the Department of a change of

address as required by law. Respondent denied the allegations

and requested a formal hearing. On April 20, 2007, the matter

was referred to the Division of Administrative Hearings ("DOAH")

for the assignment of an Administrative Law Judge and the

conduct of a formal hearing. The matter was continued twice

before commencing on August 14, 2007, and con cluding on

August 21, 2007. By stipulation of the parties, the record was

left open to provide the parties the opportunity to take the

deposition of a witness who was unavailable for the hearing. On

September 7, 2007, counsel for Petitioner filed a L ett er

notifying this tribunal that the parties had agreed that the

testimony of the witness was no longer required. By O rder ,

dated September 11, 2007, the record in this proceeding was

closed.

On August 6, 2007, the parties filed a Pre - Hearing

Stipulation i n which the Department dismissed Counts XI, XII,

XIII, and XIV of the Administrative Complaint, which were the

counts relating to the "diligent effort" requirement associated

with placing surplus lines coverage. As to the remaining

allegations, the Pre - He aring Stipulation contained the following

Statement of Facts Admitted:

1. Respondent is licensed by Petitioner as

a life including variable annuity and

health, life and health, and a general lines

insurance agent, and has been issued license

number A04696 2.

2. Respondent was so licensed at all times

relevant to the dates and occurrences

referenced in the Administrative Complaint.

3. The Department has jurisdiction over

Respondent's insur ance licenses and

appointments.

4. At all times relevant to the dates and

occurrences referenced in the Administrative

Complaint, Respondent was employed or

affiliated with Direct General Insurance

Agency, Inc., a Tennessee corporation, doing

business in Florida as Cash Register

Insurance.

5. On or about October 7, 2 005, Respondent

sold James Gatlin a private passenger

automobile insurance policy as evidenced by

Joint Exhibit 2.

6. On or about October 7, 2005, Respondent

sold James Gatlin a travel protection plan

as evidenced by Joint Exhibit 2.

7. On or about Oct ober 7, 2005, Respondent

sold James Gatlin an accident medical

protection plan as evidenced by Joint

Exhibit 2.

8. On or about October 7, 2005, Respondent

sold James Gatlin a term life insurance

policy as evidenced by Joint Exhibit 2.

9. On or about Au gust 17, 2006, Respondent

sold Gabriella Jungling a private passenger

automobile insurance policy as evidenced by

Joint Exhibit 3.

10. On or about August 17, 2006, Respondent

sold Gabriella Jungling a vehicle protection

plan as evidenced by Joint Exhibit 3.

11. On or about August 17, 2006, Respondent

sold Gabriella Jungling a term life

insurance policy as evidenced by Joint

Exhibit 3.

12. On or about August 19, 2006, Respondent

sold Bruce Hansen a private passenger

automobile insurance policy as evide nced by

Joint Exhibit 4.

13. On or about August 19, 2006, Respondent

sold Bruce Hansen a vehicle protection plan

as evidenced by Joint Exhibit 4.

14. On or about August 19, 2006, Respondent

sold Bruce Hansen a term life insurance

policy as evidenced by Joint Exhibit 4.

15. On or about July 20, 2006, Respondent

sold Sidney Dossantos a private passenger

automobile insurance policy as evidenced by

Joint Exhibit 5.

16. On or about July 20, 2006, Respondent

sold Sidney Dossantos a vehicle protection

plan as evidenced by Joint Exhibit 5.

17. On or about July 20, 2006, Respondent

sold Sidney Dossantos a term life insurance

policy as evidenced by Joint Exhibit 5.

18. On or about August 9, 2006, Respondent

changed her principal business street

address fro m 6318 U.S. Highway 19, North,

New Port Richey, [ 2 ] Florida, to 5116 U.S.

Highway 19, North, New Port Richey, Florida,

but did not, until on or about March 3,

2007, notify Petitioner of this change in

principal business street address.

19. During the peri od covered by the

Administrative Complaint, Respondent earned

approximately thirty - four percent (34%) of

her total compensation from Direct General

Insurance Agency, Inc., from commissions on

the sale of the accident medical protection

plan, the travel pro tection plan, the

vehicle protection plan, and the term life

policy.

During its case - in - chief at the final hearing, the

Department presented the testimony of Carol Lee Burinskas, Susan

Jordan, James Gatlin, Sidney Dossantos, Bruce Hansen, and

Gabriella Jo hnson, nee Jungling. The Department also presented

the rebuttal testimony of Susan Jordan, Tracie Drake, Iraida

Holland, Miranda Clay, and Joan Levandowski. Respondent

testified on her own behalf and presented the live testimony of

Tim Arnold and the dep osition testimony of David Lane .

Joint Exhibits 1 through 7 and 12 were admitted by

stipulation of the parties. The Department's Exhibits 8, 9, and

10 were also admitted into evidence. Respondent objected to the

introduction of Department Exhibits 8 and 9, and did not object

to Department Exhibit 10.

The four - volume T ranscript was filed at DOAH on

September 12, 2007. On September 13, 2007, the parties filed a

joint motion to extend the time for filing proposed recommended

orders until October 15, 2007. This motion was granted by an

O rder dated September 13, 2007. On October 10, 2007, the

parties filed a second joint motion seeking an extension of the

time for filing proposed recommended orde rs until October 22,

2007. By O rder dated October 11, 2007, t he motion was granted.

The parties timely filed their P roposed R ecommended O rders in

compliance with the O rder of October 11, 2007.

FINDINGS OF FACT

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

a whole, the following findings of fact are ma de to supplement

and clarify the extensive factual stipulations set forth in the

parties' Statement of Facts Admitted 3 :

1. Respondent works as the manager of a Cash Register

Insurance ("Cash Register") office in New Port Richey. Cash

Register is owned by Direct General Insurance Agency, Inc.

("Direct General").

2. Respondent sells automobile insurance to individual

customers. During the relevant period, Respondent also sold

four ancillary products: a vehicle protection plan, an accident

medical protect ion plan, a travel protection plan, and a term

life insurance policy. 4 Respondent is paid a salary, and

receives no commission on the sale of automobile insurance.

Respondent does receive a ten percent commission on the sale of

ancillary products. Respo ndent received 34 percent of her

overall income from the sale of ancillary products during the

relevant time period.

3. Respondent deals with at least 50 customers per day,

six days per week. She sells between seven and ten automobile

insurance policies per day, on average.

4. Given her customer volume, Respondent cannot remember

each customer to whom she has sold insurance. Respondent

frankly testified that she had no specific recollection of

selling the policies to the individuals named in th e Stateme nt

of Facts Admitted.

5. However, Respondent also testified that she sells

insurance according to a script, and that in light of this

unvarying practice she could state with confidence whether she

had or had not engaged in the specific sales techniques al leged

by the Department and its witnesses.

6. Respondent testified at length as to her sales routine.

When talking to potential customers on the telephone, Respondent

must follow the script provided by Direct General. Respondent

testified that agents a re not required to follow the script when

customers come in to the office, but that she generally adheres

to the format provided by her employer. All of the sales at

issue in this proceeding were generated via in - person sales at

Respondent's Cash Register office.

7. Respondent first obtains basic information from the

customer: name, address, date of birth, Social Security number,

whether there are persons over age 14 in the household and

whether those persons will drive the insured vehicle. She then

ask s the type of vehicle and the type of coverage the customer

wants to purchase.

8. Respondent enters the information into her computer,

which generates a price quote. If the customer wants only basic

personal injury protection ("PIP") and property damage coverage,

Respondent informs the customer that the quoted price includes

PIP with an optional deductible of $1,000, a coverage limit of

$10,000, and property damage coverage of $10,000.

9. The price quote includes a down payment and monthly

payments. The quoted amounts vary depending on whether the

customer chooses to make 10 or 12 payments. During her

presentation, Respondent mentions that the price quoted for the

monthly payments includes the ancillary products.

10. Once the customer has agreed to t he price quote,

Respondent makes a computer inquiry to obtain the customer's

driving record. While waiting on these records, Respondent goes

over a "pen sale" document with the customer. The pen sale

document is a handwritten sheet that Respondent draws up in the

presence of the cus tomer to explain the policies.

11. Respondent's pen sale sheets for Mr. Gatlin,

Ms. Johnson, Mr. Hansen, and Mr. Dossantos (hereinafter referred

to collectively as the "Complaining Customers") were admitted

into evidence. At the top of the page, under the heading

"Mandatory," Respondent outlined the PIP and property damage

coverages, with the customer's options regarding deductibles.

Lower on the page, under the heading "Optional," Respondent

outlined the details of the anci llary coverag es included in the

price quote.

12. Respondent testified that she sits with the customer

and uses the pen sale sheet to explain the mandatory coverages

in detail. She explains that Florida law requires that she

offer bodily injury liability coverage , but that the customer

has the option to reject it, and she indicates the customer's

decision on the pen sale sheet. She explains the ancillary

policies, and indicates on the pen sale sheet which of these

policies the customer accepts and which o nes the customer

rejects. The customer is asked to sign the bottom of the sale

sheet.

13. When shown the pen sale sheet for each Complaining

Customer, Respondent was able to state with confidence which

ancillary policies each of them has accepted or reje cted. None

of the Complaining Customers denied having been shown the pen

sale sheet, though none of them appeared to grasp its

significance. Each of the Complaining Customers conceded that

the signature at the bottom of his or her respective pen sale

she et was genuine.

14. After Respondent obtains the customer's signature on

the pen sale sheet, and has received the customer's driving

records, she prints out the policy paperwork and goes over it

with the customers.

15. The earliest of the Complaining Cus tomers was James

Gatlin (Counts I, II, and III of the Administrative Complaint),

who purchased insurance from Respondent on October 7, 2005. 5

Mr. Gatlin's signed pen sale sheet indicated that he accepted

the accident medical protection plan, the travel p rotection

plan, and the term life policy. It also indicated that he

rejected optional uninsured motorist, medical payment,

accidental death, and comprehensive and collision policies

offered by Respondent. Mr. Gatlin's policy paperwork was

admitted into evidence.

16. After explaining the automobile policy, Respondent

explained the ancillary products that Mr. Gatlin had initially

accepted on the pen sale sheet. 6 Respondent first showed

Mr. Gatlin a spreadsheet titled, "Explanation of Policies,

Coverage s and Cost Breakdown (Including Non - Insurance

Products)." Under the subheading "Auto Policy Coverages," the

spreadsheet set forth the amount and type of coverage for each

of the two cars fo r which Mr. Gatlin was buying insurance, as

well as a premium esti mate for each vehicle. Under the

subheading "Optional Policies," the spreadsheet set forth the

following: "American Bankers Travel Protection Plan," "Lloyds

Accident Medical Protection Plan," and "Life Insurance." A

monthly premium amount was set forth next to each of the three

optional coverages.

17. The subheading "Optional Policies," the list of the

optional policies, the premium amounts for each optional policy,

and the total estimated cost of all products are separately

circled by hand on the sprea dsheet. Respondent testified that

it is her practice to circle these items as she explains them to

the customer. Mr. Gatlin's initials appear above the list of

optional policies.

18. Below the grids of the spreadsheet is the following

text (emphasis ad ded):

I, the undersigned, acknowledge that:

The above premiums are estimates and that

the actual premium charged to me will be

determined by the Insurance Company issuing

the policy. Further, I am responsible for

the amount of the premium charged at the

time the policy is issued.

I agree that if my down payment or full

payment check is returned by the bank for

any reason, coverage will be null and void

from the date of inception.

I acknowledge that I have been advised of

and understand the above coverag e(s), and

cost breakdowns, including non - insurance

products, if any, and further [sic] that I

have received a complete copy of this

product.

This document is only an explanation of

insurance coverage and other products, if

applicable — it is not a contract. The

policy, if issued, will contain the terms

and conditions of coverage. The level of

coverage illustrated above is based on

preliminary information which I have

supplied. My eligibility for coverage is

subject to the acceptance of my application

in a ccordance with the Insurance Company's

underwriting requirements.

__________________ ___________

Customer Signature Date

19. The signature line was signed by "James D. Gatlin" and

dated October 7, 2005. At the hearing, Mr. Gatli n conceded the

authenticity of his initials and signature on the spreadsheet.

20. Respondent next explained the details of the accident

medical protection plan to Mr. Gatlin. She explained the

coverage options (individual, husband and wife, or family), and

the annual premium for each. On the application, Respondent

circled the "Individual Coverage Only" option. Mr. Gatlin

placed his initials in the space provided to indicate his choice

of coverage, and signed the application on the line provided.

21. A second page, titled "Accident Medical Protection

Plan," detailed the coverage provided and the method of filing a

claim under the policy. The following text is provided at the

bottom of the page (emphasis added):

THE ACCIDENT MEDICAL PLAN IS A LIMITED

P OLICY. READ IT CAREFULLY.

I, the undersigned, understand and

acknowledge that:

The Accident Medical Plan does not provide

Liability Coverage insurance for bodily

injury or property damage, nor does it meet

any financial responsibility law. I am

electin g 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

acknowledgement.

If I decide to select another option, or

cancel this policy, I must notify the

compa ny or my agent in writing.

I agree that if my down payment or full

payment check is returned by the bank for

any reason, coverage will be null and void

from the date of inception.

_______________________ ______________

Insured's Signature D ate

I hereby REJECT this valuable coverage:

_______________________ _______________

Insured's Signature Date

22. Mr. Gatlin signed and dated the form on the first line

provided, indicating his acceptance of the accident medical

protection plan.

23. Respondent next explained the travel protection plan.

The two forms associated with this plan set forth the coverages

provided, the limits of those coverages, and the premium

associated with the plan. The first form was titled, "American

Bank ers Insurance Company Optional Travel Protection Plan."

After listing the coverages and their limits, the form read as

follows:

Purchasing the Optional Travel Protection

Plan is not a condition of purchasing your

automobile liability policy.

I hereby ack nowledge I am purchasing an

Optional Travel Protection Plan, and that I

have received a copy of this

acknowledgement.

_______________________ _____________

Insured Signature Date

I HEREBY REJECT THIS VALUABLE COVERAGE:

___________________

Insured Signature

___________________

Date

24. Mr. Gatlin signed and dated the first line of the

form, indicating his acceptance of the policy. The seco nd form,

titled "Travel Protection Plan — Florida Declarations," listed the

effective dates of the policy, the premium, the automobile

covered, repeated the coverages and their limitations, and gave

notice to the insured of his 30 - day right to examine the po licy

and return it for a full refund provided no loss has occurred.

Mr. Gatlin signed and dated the "Applicant's Signature" line.

25. Respondent next went over the documents relating to

the term life policy that Mr. Gatlin accepted on the pen sale

sheet. The policy named Carol Burinskas, with whom Mr. Gatlin

lived, as the beneficiary on the $10,000 policy, and stated an

annual premium of $276.00. Mr. Gatlin initialed his "no"

answers to six standard insurability questions dealing with

recent medical his tory and exposure to HIV. Mr. Gatlin signed

and dated his acceptance of the policy on the signature line

provided.

26. After completing her explanation of the various

policies and obtaining Mr. Gatlin's acceptance, Respondent next

explained the premium f inance agreement. On the first page of

the agreement, under the heading, "Itemization of Amounts

Financed," was stated the type of policy, the insurance company,

and the annual premium for each of the four policies accepted by

Mr. Gatlin, totaling $1,363. 00, plus $4.55 in documentary stamp

tax, less a down payment of $151.00, for a total amount financed

of $1,216.55. The page disclosed the finance charge ($139.99)

and the annual percentage rate of the loan (24.37%). Mr. Gatlin

opted to make 10 monthly pa yments of $135.65, and initialed the

bottom of the first sheet of the premium finance agreement, then

signed the second page to indicate his acceptance of the loan

terms.

27. Finally, Respondent showed Mr. Gatlin a document

titled "Insurance Premium Finan cing Disclosure Form," which

redundantly set forth in a simplified form exactly what

Mr. Gatlin was purchasing and a breakdown of what each element

of his purchase contributed to the total cost of the loan. The

itemization read as follows:

Insurance you are REQUIRED by law to have:

Personal Injury Protection (PIP) $578

Property Damage Liability (PD) $314

Other insurance which you MAY be required by

law to have:

Bodily Injury (if an SR - 22 has been

issued) 7 $0

OPTIONAL insurance coverage:

B odily Injury (if an SR - 22 has NOT been

issued) $0

Medical Payments $0

Uninsured Motorist $0

Comprehensive $0

Collision $0

Accidental Death $0

Towing $0

Travel Protection Plan $60

Rental $0

Hospital Indemnity $110

Life Insurance $266

Life Policy Fee $10

SR - 22 Fee $0

Recoupment Fee, if applicable $0

Policy Fee, if applicable $25

TOTAL INSURANCE PREMIUMS $1,363

Document Stamp Tax, if applicable $4.55

Less Down Payment applied $151.00

AMOUNT FINANCED (loan ed to you) $1,216.55

I, James Gatlin, have read the above and

understand the coverages I am buying and how

much they cost.

________________________ _ _ ___________

Signature of Named Insured Date

28. Mr. Gatlin signed and dated the Insurance Premium

Financing Disclosure Form on the spaces indicated.

29. As noted above, Carol Burinskas lives with Mr. Gatlin

and was named as the beneficiary in the term life policy the

Respondent sold to Mr. Gatlin. Ms. Burinskas testified that she

went into R espondent's Cash Register office on Mr. Gatlin's

behalf a day or two before he completed the transaction.

Ms. Burinskas had obtained quotes from several agencies in the

course of doing the legwork for Mr. Gatlin's insurance purchase.

30. Ms. Burinskas t estified that she told Respondent that

she was shopping for Mr. Gatlin, and was seeking quotes on the

bare minimum insurance, "just what we needed to get a tag for

the car." Based on information provided by Ms. Burinskas,

Respondent provided a price quote , which Ms. Bruinskas showed to

Mr. Gatlin at home that evening. Mr. Gatlin looked over the

quote and pronounced it acceptable. He told Ms. Burinskas that

he would stop in at the Cash Register office the next day and

complete the paperwork for the policy .

31. Mr. Gatlin testified that he believed the Cash

Register quote offered the most reasonable price he had seen,

but he was unaware that Respondent's quote included the

ancillary policies discussed above. When he went into

Respondent's office, he reite rated to her that he wanted only

"the bare minimum insurance." Mr. Gatlin owned his vehicles

outright and saw no need to carry extra coverage on them.

32. Mr. Gatlin testified that Respondent asked him if he

wanted life insurance, and he declined. Mr. G atlin already had

a $250,000 life insurance policy through his employer, Pasco

County, for which Mr. Gatlin's sister is the beneficiary. He

testified that if he had known he was purchasing a life

insurance policy from Respondent, he would have made his si ster

the beneficiary. As noted above, Ms. Burinskas is the stated

beneficiary of the term life policy Respondent sold to

Mr. Gatlin.

33. Mr. Gatlin testified that Respondent "was speaking

very quickly and putting the papers in front of me just as fast

a s she was talking, so I was busy signing and dating." By the

end of the process, "there was a stack of papers, rather thick"

in front of Mr. Gatlin.

34. Mr. Gatlin never heard Respondent say that some of the

items he was purchasing were optional. In fac t, he could not

remember much at all about the content of Respondent's

presentation. He remembered that Respondent talked while he

initialed and signed in the places where she pointed.

35. On cross - examination, Mr. Gatlin conceded that

Respondent may hav e explained the ancillary policies, but so

fast that he could not understand. He even conceded that he had

allowed Respondent to talk him into buying the policies, though

he later amended his answer to assert that he had been

"bamboozled."

36. Mr. Gatlin made no effort to slow down Respondent's

presentation, and he had no questions about anything Respondent

was saying. Mr. Gatlin stated that his only concern was how

much he was paying, and that he was satisfied with the price

quoted by Respondent at the time he bought the policies.

37. Mr. Gatlin stated that it should have been obvious to

Respondent that he was not reading the documents he was signing.

H e trusted Respondent to treat him the right way, and not sell

him products without his knowledge.

38 . Respondent denied that she ever rushes anyone through

the sales process, or has ever sold a customer a policy the

customer did not agree to purchase.

39. Ms. Burinskas discovered the ancillary policies only

after reading a newspaper article about Direc t General and the

practice of sliding. She asked Mr. Gatlin if he had purchased

any policies mentioned in the article, and he said that he had

not, "as far as he knew." Ms. Burinskas pulled out the

insurance paperwork , and in short order was able to asce rtain

that Mr. Gatlin had purchased the ancillary products described

above.

40. The next Complaining Customer was Gabriella Jungling,

now known by her married name of Johnson (Counts IV and V). On

August 17, 2006, Ms. Jungling and her future husband, Jer emy

Johnson, were at a Division of Highway Safety and Motor Vehicles

("DHSMV") office. Mr. Johnson was attempting to have his

suspended license reinstated, but was informed that he must

obtain the SR - 22 form before his license could be issued. A

DHSMV em ployee gave Ms. Jungling the names of several insurance

companies that could immediately write a policy. Ms. Jungling

noted that Respondent's Cash Register office was near the DHSMV

office. Ms. Jungling and Mr. Johnson drove to Respondent's

office.

41. Ms. Jungling testified that she handled all the

transactions that occurred at Respondent's office. She and

Mr. Johnson intended to obtain "full coverage," whatever they

needed to fulfill the SR - 22 requirement and satisfy the bank

that financed Mr. Johns on's truck, which was the only vehicle on

the resulting policy. Ms. Jungling told Respondent that she

wanted full c overage for a financed truck.

42. Respondent made her standard sales presentation to

Ms. Jungling. She gathered the basic information des cribed in

Finding of Fact 7 above, then gave Ms. Jungling a price quote

that included the amount of the down payment and monthly payment

amounts. Included in the price quote were the optional vehicle

protection plan and a term life insurance policy. Resp ondent

explained to Ms. Jungling that the optional vehicle protection

plan included $125 per day for hospitalization resulting from an

accident and $25 per day for a rental car if the insured car is

in an accident or is stolen. Ms. Jungling agreed to the price

quote.

43. Respondent next went over a pen sale sheet with

Ms. Jungling. As noted in the general pen sale findings above,

Ms. Jungling did not deny having seen the pen sale sheet and

admitted that she signed it. The pen sale document was

differen t from that shown to Mr. Gatlin because Direct General

had ceased offering the travel protection plan and instead

offered the vehicle protection plan. See footnote 4, supra .

44. The signed pen sale sheet indicated that Ms. Jungling

accepted the vehicle protection plan and the term life insurance

policy. It also indicated that she rejected optional uninsured

motorist, medical payment, accidental death, comprehensive and

collision policies.

45. Respondent next printed the policy paperwork and

reviewed i t with Ms. Jungling. Ms. Jungling signed the vehicle

protection plan application on the signature line, directly

beneath the following language: "The purchase of this plan is

optional and is not required with your auto insurance policy. I

hereby request that the above coverages be placed in effect on

the date and for the term indicated." The application indicated

that Ms. Jungling was opting for a "family plan" 8 with a term of

one year.

46. Ms. Jungling also signed a separate page titled,

"Optional Veh icle Protection Plan Summary & Acknowledgement."

This form listed the coverages and limitations provided under

the vehicle protection plan. Below this listing, in bold type,

was the statement, "Please Read Your Policy Carefully For A Full

Explanation of B enefits." Beneath the bold type was the

following language:

Purchasing the Vehicle Protection Plan is

not a condition of purchasing your

automobile policy.

I hereby acknowledge that my agent has fully

explained to me and I understand:

1. the coverage provided under the Vehicle

Protection Plan;

2. that the Vehicle Protection Plan is an

optional insurance product that is separate

from my automobile insurance policy;

3. that purchasing this optional Vehicle

Protection Plan is not a condition of

purcha sing my automobile insurance policy;

4. I have made an informed decision to

purchase the Vehicle Protection Plan, and

5. I have received a copy of my signed

acknowledgement.

______________________ ________________

Insured Signature Date

I H EREBY REJECT THIS VALUABLE COVERAGE:

______________________ ________________

Insured Signature Date

47. Ms. Jungling signed the first signature line,

indicating her acceptance of the policy.

48. Respondent went over the documents relating to t he

term life policy that Ms. Jungling accepted on the pen sale

sheet. The policy named Mr. Johnson as the beneficiary on the

$10,000 policy, and stated an annual premium of $108.00.

Ms. Jungling initialed her "no" answers to the standard

insurability qu estions, and signed and dated her acceptance of

the policy on the signature line provided.

49. Respondent showed Ms. Jungling an "Explanation of

Policies, Coverages and Cost Breakdown (Including Non - Insurance

Products)" spreadsheet identical in form to th at shown

Mr. Gatlin. The "Optional Policies" subheading listed the

optional policies, their premium amounts, and the total

estimated cost of all products. These optional items were

individually circled by Respondent and initialed by

Ms. Jungling. The spreadsheet contained language identical to

that set forth in Finding of Fact 18 above. Ms. Jungling signed

and dated the sheet in the spaces provided.

50. Respondent presented the premium finance agreement to

Ms. Jungling in the same fashion described i n Finding of Fact 26

above. On the first page of the agreement, under the heading,

"Itemization of Amounts Financed," was stated the type of

policy, the insurance company, and the annual premium for each

of the three policies (auto, life, and vehicle prot ection)

accepted by Ms. Jungling, totaling $3,052.00, plus $9.80 in

documentary stamp tax, less a down payment of $295.00, for a

total amount financed of $2,766.80. The page disclosed the

finance charge ($308.35) and the annual percentage rate of the

loan (23.51%). Ms. Jungling opted to make 12 monthly payments

of $256.26, and initialed the bottom of the first sheet of the

premium finance agreement, then signed the second page to

indicate her acceptance of the loan terms.

51. Finally, Respondent showed M s. Jungling the Insurance

Premium Financing Disclosure Form. The itemization for

Ms. Jungling's policies read as follows:

Insurance you are REQUIRED by law to have:

Personal Injury Protection (PIP) $491

Property Damage Liability (PD) $405

Other in surance which you MAY be required by

law to have:

Bodily Injury (if an SR - 22 has been

issued) [ 9 ] $0

OPTIONAL insurance coverage:

Bodily Injury (if an SR - 22 has NOT been

issued) $782

Medical Payment s $0

Uninsured Motorist $0

Comprehensive $131

Collision $830

Accidental Death $20

Towing $0

Rental $0

Life Insurance $98

Accident Medical Plan $0

Vehicle Protection Insurance $260

Life Policy Fee $10

SR - 22 Fee $0

Recoupment Fee, if applicable $0

Policy Fee, if applicab le $25

TOTAL INSURANCE PREMIUMS $3,052

Document Stamp Tax, if applicable $9.80

Less Down Payment applied $295.00

AMOUNT FINANCED (loaned to you) $2,766.80

I, Gabriella N. Jungling, have read the

above and understand the coverages I am

buying and how much they cost.

_______________________ _ __ ___________

Signature of Named Insured Date

52. Ms. Jungling signed and dated the Insurance Premium

Financing Disclosure Form on the spaces indicated.

53. Ms. Jungling t estified that she already has a life

insurance policy through her employer, Wells Fargo, and that she

told Respondent that she was not interested in buying more. She

admitted that the initials and signatures on the life insurance

policy were hers, but had no recollection of Respondent's

explanation of the policy. Ms. Jungling believed that she would

have recalled an explanation had one been given by Respondent,

and stated that she would have rejected the policy had

Respondent told her it would cost $108.0 0 over and above the

amount she was paying for auto insurance.

54. However, Ms. Jungling conceded that Respondent did not

rush her through the signing process. Ms. Jungling was in a

hurry to purchase insurance and get back to her job. She

admitted that Respondent presented the paperwork page by page,

and that nothing prevented her from reading the paperwork.

Ms. Jungling had no problem with the price quoted by Respondent.

55. The life insurance paperwork plainly states, in bold

lettering above Ms. Jun gling's signature, that the annual

premium for the policy is $108.00. The price of the policy is

also stated on the Explanation of Policies, Coverages and Cost

Breakdown page and on the Insurance Premium Financing Disclosure

Form, both of which were signe d by Ms. Jungling.

56. Ms. Jungling also did not recall the explanation given

to her by Respondent of the vehicle protection plan paperwork.

She testified that she would have rejected the policy if

Respondent had told her that it was separate and apart f rom the

automobile insurance required by law. However, as noted above,

the Optional Vehicle Protection Plan Summary & Acknowledgement

page clearly stated that the vehicle protection plan was not a

condition of purchasing an automobile policy and was an op tional

product separate from the automobile insurance policy.

Ms. Jungling acknowled ged that she signed this page.

57. Ms. Jungling testified that she did not really read

her insurance paperwork until she received a call from a

Department investigator, who asked if she had knowingly

purchased life insurance and the vehicle protection plan.

Ms. Jungling gave a statement to a Department investigator in

February 2007. On March 16, 2007, she went to Respondent's

office and signed the paperwork to cancel t he term life and

vehicle protection policies, for which she received a pro - rated

refund.

58. The next Complaining Customer was Bruce Hansen

(Counts VI and VII). On August 19, 2006, Mr. Hansen entered

Respondent's Cash Register office to purchase insura nce.

Mr. Hansen testified that he has done business with Cash

Register for years, but this was the first time he had done

business with Respondent's office. Mr. Hansen stated that he

had never bought anything other than basic auto coverage from

Cash Reg ister, and had no intention of buying anything else when

he walked into Respondent's office.

59. Mr. Hansen was purchasing new insurance, not renewing

an existing policy. In fact, his driver's license had been

suspended for lack of insurance coverage. M r. Hansen testified

that he told Respondent he wanted the most basic insurance that

would get his license reinstated. He owned his car outright,

and therefore was unconcerned about satisfying a financing

entity.

60. Respondent made her standard presentat ion to

Mr. Hansen. She gathered the basic information described in

Finding of Fact 7 above, then gave Mr. Hansen a price quote that

included the amount of the down payment and monthly payment

amounts. Included in the price quote were the optional vehicl e

protection plan and a term life insurance policy. Mr. Hansen

agreed to the price quote.

61. Respondent next went over a pen sale sheet with

Mr. Hansen. As noted in the general pen sale findings above,

Mr. Hansen did not deny having seen the pen sale sheet and

admitted that he signed it. The pen sale document was identical

to that shown to Ms. Jungling.

62. Respondent used the pen sale sheet to explain to

Mr. Hansen that the optional vehicle protection plan included a

$1,000 medical expense that co uld be used toward his PIP

deductible, hospital coverage of $125 per day, and rental car

reimbursement of $25 per day if the insured car is in an

accident or is stolen. Respondent also used the pen sale sheet

to explain the term life insurance offered in the price quote.

63. The signed pen sale sheet indicated that Mr. Hansen

accepted the vehicle protection plan and the term life insurance

policy. It also indicated that he rejected optional uninsured

motorist, medical payment, accidental death, comprehen sive and

collision policies.

64. Respondent next printed the policy paperwork and

reviewed it with Mr. Hansen. The paperwork for the vehicle

protection plan application was identical to that described in

Findings of Fact 45 and 46 relating to Ms. Junglin g. Mr. Hansen

opted for the "individual plan" with a term of one year. He

signed on the signature line of the application page, and signed

the "Optional Vehicle Protection Plan Summary & Acknowledgement"

page indicating his acce ptance of this optional policy.

65. Respondent went over the documents relating to the

term life policy. The policy named Mr. Hansen's mother, who

lived with Mr. Hansen, as the beneficiary on the $10,000 policy,

and stated an annual premium of $108.00. Mr. Hansen initialed

"no " answers to the standard insurability questions, and signed

and dated his acceptance of the policy on the signature line

provided.

66. Respondent showed Mr. Hansen an "Explanation of

Policies, Coverages and Cost Breakdown (Including Non - Insurance

Product s)" spreadsheet identical in form to that shown

Mr. Gatlin and Ms. Jungling. The "Optional Policies" subheading

listed the optional policies, their premium amounts, and the

total estimated cost of all products. These optional items were

individually cir cled by Respondent and initialed by Mr. Hansen.

The spreadsheet contained language identical to that set forth

in Finding of Fact 18 above. Mr. Hansen signed and dated the

sheet in the spaces provided.

67. Respondent presented the premium finance agreem ent to

Mr. Hansen in the same fashion described in Finding of Fact 26

above. On the first page of the agreement, under the heading,

"Itemization of Amounts Financed," was stated the type of

policy, the insurance company, and the annual premium for each

of the three policies (auto, life, and vehicle protection)

accepted by Mr. Hansen, totaling $833.00, plus $2.80 in

documentary stamp tax, less a down payment of $92.00, for a

total amount financed of $743.80. The page disclosed the

finance charge ($93.36) a nd the annual percentage rate of the

loan (26.56%). Mr. Hansen opted to make 10 monthly payments of

$83.72, initialed the bottom of the first sheet of the premium

finance agreement, then signed the second page to indicate his

acceptance of the loan terms.

68. Finally, Respondent showed Mr. Hansen the Insurance

Premium Financing Disclosure Form. The itemization for

Mr. Hansen's policies read as follows:

Insurance you are REQUIRED by law to have:

Personal Injury Protection (PIP) $311

Property Damage L iability (PD) $219

Other insurance which you MAY be required by

law to have:

Bodily Injury (if an SR - 22 has been

issued) [ 10 ] $0

OPTIONAL insurance coverage:

Bodily Injury (if an SR - 22 has NOT been

issued) $0

Medical Payments $0

Uninsured Motorist $0

Comprehensive $0

Collision $0

Accidental Death $0

Towing $0

Rental $0

Life Insurance $98

Accident Medical Plan $0

Vehicle Protection Insurance $170

Life Policy Fee $10

SR - 22 Fee $0

Recoupment Fee, if applicable $0

Policy Fee, if applicable $25

TOTAL INSURANCE PREMIUMS $833

Document Stamp Tax, if applicable $2.80

Less Down Payment applied $92.00

AMOUNT FINANCED (loaned to you) $743.80

I, Bruce K. Hansen, have read the above and

un derstand the coverages I am buying and how

much they cost.

_______________________ _ __ ___________

Signature of Named Insured Date

69. Mr. Hansen signed and dated the Insurance Premium

Financing Disclosure Form on the spaces indicated.

70. Mr. Hansen testified that he left Respondent's office

believing he had bought only basic automobile insurance. He did

not recall Respondent's explanations of the optional policies,

and conceded that he was in a hurry to complete the transaction

and spent a t otal of a half - hour in Respondent's office that

day. Mr. Hansen testified that "I was flipping page after page,

just signing my name to get out of there . . . I was trusting

the person I was working with."

71. Mr. Hansen testified that he did not recall Respondent

explaining that the vehicle protection plan was a separate

optional policy that would cost him an extra $170. He did

recall Respondent asking the insurability questions related to

the life insurance policy, but he thought they were just

"proced ure." Mr. Hansen conceded that Respondent might have

explained every page of the paperwork to him, but that he was

not paying attention.

72. Mr. Hansen left Respondent's office with a copy of all

the paperwork on his policies. He never looked at the pa perwork

until he was contacted by a Department investigator in

February 2007. Mr. Hansen gave a statement to the Department

investigator and agreed to testify in order to "stop stuff like

this from happening," as well as try to obtain a full refund for

t he vehicle protection and term life policies. On March 3,

2007, he went to Respondent's office and signed the paperwork to

cancel the term life and vehicle protection policies, for which

he received a pro - rated refund.

73. The final Complaining Customer was Sidney Dossantos

(Counts VIII and IX). On July 20, 2006, Mr. Dossantos entered

Respondent's Cash Register office to purchase insurance.

Mr. Dossantos was renewing his policy with Direct General,

though this was the first time he had done business wi th

Respondent's office. In August 2005, Mr. Dossantos had

purchased auto insurance plus an optional accident medical

protection plan, a travel protection plan, and a term life

insurance policy. Mr. Dossantos testified that he told

Petitioner that he wish ed to purchase only basic automobile

insurance, and that he rejected the optional term life and

vehicle protection policies when Petitioner offered them.

74. Respondent testified that her initial procedure is

different with a renewing customer. She looks up the customer

on her computer to verify the existing policies and determine if

any money is owed. She verifies the customer's name, address

and phone number. Respondent testified that the address is

important because the customer's zip code is partial ly

determinative of the rates offered on auto insurance.

75. Respondent stated that the computer also lists the

optional policies that are also due for renewal, and that it is

her practice to go over these and inquire whether the customer

wants to renew t hem. Mr. Dossantos' case was complicated by the

fact that Direct General no longer offered the travel protection

plan as a separate product. In these cases, Respondent would

explain the vehicle protection plan, which was the current

equivalent of the acc ident medical protection and travel

protection plans that Mr. Dossantos purchased in 2005. See

footnote 4, supra .

76. Respondent testified that, after the customer verifies

the information on file and states which policies he wishes to

renew, she goes ov er a pen sale sheet with the customer. As

noted in the general pen sale findings above, Mr. Dossantos did

not deny having seen the pen sale sheet and admitted that he

signed it. The pen sale document was identical to those shown

to Ms. Jungling and Mr. H ansen.

77. The signed pen sale sheet indicated that Mr. Dossantos

accepted the vehicle protection plan and the term life insurance

policy. It also indicated that he rejected optional uninsured

motorist, medical payment, accidental death, comprehensive an d

collision policies.

78. Respondent next printed the policy paperwork and

reviewed it with Mr. Dossantos. The paperwork for the vehicle

protection plan application was identical to that described in

Findings of Fact 45 and 46 relating to Ms. Jungling.

Mr. Dossantos opted for the "individual plan" with a term of one

year. He signed on the signature line of the application page,

and signed the "Optional Vehicle Protection Plan Summary &

Acknowledgement" page indicating his accep tance of this optional

po licy.

79. Respondent went over the documents relating to the

term life policy. The policy named Mr. Dossantos' parents as

the beneficiaries on the $10,000 policy, and stated an annual

premium of $108.00. Mr. Dossantos was not asked the standard

insurabi lity questions , because this was a renewal of an

existing policy. Mr. Dossantos signed and dated his acceptance

of the policy on the signature line provided.

80. Respondent showed Mr. Dossantos an "Explanation of

Policies, Coverages and Cost Breakdown (I ncluding Non - Insurance

Products)" spreadsheet identical in form to that shown to

Mr. Gatlin, Ms. Jungling, and Mr. Hansen. The "Optional

Policies" subheading listed the optional policies, their premium

amounts, and the total estimated cost of all product s. These

optional items were individually circled by Respondent and

initialed by Mr. Dossantos. The spreadsheet contained language

identical to that set forth in Finding of Fact 18 above.

Mr. Dossantos signed and dated the sheet in the spaces provided.

81. Respondent presented the premium finance agreement to

Mr. Dossantos in the same fashion described in Finding of Fact

26 above. On the first page of the agreement, under the

heading, "Itemization of Amounts Financed," was stated the type

of policy, t he insurance company, and the annual premium for

each of the three policies (auto, life, and vehicle protection)

accepted by Mr. Dossantos, totaling $913.00, plus $3.15 in

documentary stamp tax, less a down payment of $80.00, for a

total amount financed of $836.15. The page disclosed the

finance charge ($102.47) and the annual percentage rate of the

loan (25.93%). Mr. Dossantos opted to make 10 monthly payments

of $93.86, initialed the bottom of the first sheet of the

premium finance agreement, then signe d the second page to

indicate his acceptance of the loan terms.

82. Finally, Respondent showed Mr. Dossantos the Insurance

Premium Financing Disclosure Form. The itemization for

Mr. Dossantos' policies read as follows:

Insurance you are REQUIRED by law to have:

Personal Injury Protection (PIP) $368

Property Damage Liability (PD) $242

Other insurance which you MAY be required by

law to have:

Bodily Injury (if an SR - 22 has been

issued) [ 1 1 ] $0

OPTIONAL insurance coverage:

Bodily Injury (if an SR - 22 has NOT been

issued) $0

Medical Payments $0

Uninsured Motorist $0

Comprehensive $0

Collision $0

Accidental Death $0

Towing $0

Rental $0

Life Insurance $98

Accident Medical Plan $0

Vehicle Protection Insurance $170

Life Policy Fee $10

SR - 22 Fe e $0

Recoupment Fee, if applicable $0

Policy Fee, if applicable $25

TOTAL INSURANCE PREMIUMS $913

Document Stamp Tax, if applicable $3.15

Less Down Payment applied $80.00

AMOUNT FINANCED (loaned to you) $836.15

I, Sidney Dossantos, have read the above and

understand the coverages I am buying and how

much they cost.

___________________ _ ___ _ __ ___________

Signature of Named Insured Date

83. Mr. Dossantos signed and dated the Insura nce Premium

Financing Disclosure Form on the spaces indicated.

84. As noted above, Mr. Dossantos testified that he told

Respondent he only wanted basic automobile insurance.

Mr. Dossantos, a 25 - year - old college student at the time he

purchased insurance from Respondent, acknowledged having

purchased the optional policies the previous year, when he was

still living with his parents. However, in July 2006 he was

living in an apartment with his girlfriend and money was

tighter. He received life insurance through his employer,

Publix Supermarkets, and did not want more.

85. Mr. Dossantos conceded that his policy paperwork

clearly stated that the vehicle protection plan was optional,

but that he did not read it during the sale. Mr. Dossantos

simply signed whatever papers Respondent placed in front of him.

86. Mr. Dossantos testified that when he walked out of

Respondent's office on July 20, 2006, he believed that he had

bought basic auto insurance and nothing else. Like Ms. Jungling

and Mr. Hansen, he lea rned otherwise only after being contacted

by the Department's investigator in February 2007. Unlike

Ms. Jungling and Mr. Hansen, Mr. Dossantos did not late r cancel

the optional policies.

87. All four of the Complaining Customers credibly

testified that the Department made no promises that they would

obtain full refunds of the premiums paid on the optional

policies in exchange for their written statements or their

testimony in this proceeding.

88. On or about August 9, 2006, Respondent changed her

princi pal business street address from 6318 U.S. Highway 19

North, New Port Richey, Florida, to 5116 U.S. Highway 19 North,

New Port Richey, Florida, but did not notify the Department of

this change in principal business street address unti l on or

about March 3, 2007.

CONCLUSIONS OF LAW

89. DOAH has jurisdiction over the subject matter of this

proceeding and of the parties hereto , pursuant to Chapter 120,

Florida Statutes.

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

651 constitute the "Florida Insu rance Code." § 624.01, Fla.

Stat. It is the Department's responsibility to enforce the

provisions of the Florida Insurance Code, including the

licensure and di scipline of insurance agents. § 624.307, Fla.

Stat.

91. The Department is authorized to suspe nd or revoke

agents' licenses, pursuant to Sections 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 disciplinar y

action "by an amount equal to any commissions received by or

accruing to the credit of the [agent] in connection with any

transaction" related to the grounds for suspension or

revocation, pursuant to Section 626.681, Florida Statutes; to

place agents on probation for up to two years, pursuant to

Section 626.691, Florida Statutes 12 ; and to order agents "to pay

restitution to any person who has been deprived of money by [the

agent's] misappropriation, conversion, or unlawful withholding

of moneys belonging to insurers, insureds, beneficiaries, or

others," pursuant to Sect ion 626.692, Florida Statutes.

92. In its Administrative Complaint, the Department seeks

to impose penalties against Respondent that include suspension

or revocation of Respondent's license and/or the imposition of

an administrative fine. Therefore, the Department has the

burden of proving by clear and convincing evidence that

Respondent committed the violations alleged in the

Administrative Complaint. See Department of Banking and

Finance , Division of Securities and Investor Protection v.

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

Turlington , 510 So. 2d 292 (Fla. 1987). Clear and convincing

evidence is the proper standard in license revocation

proceedings, because th ey are penal in nature and implicate

significant property rights. See Osbourne Stern , 670 So. 2d

at 935.

93. In Evans Packing Co. v. Department of Agriculture and

Consumer Services , 550 So. 2d 112, 116, n. 5 (Fla. 1st DCA

1989), the Court defined clear and convincing evidence as

follows:

[C]lear 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

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 such weight that it produces in the

mind of the trier of fact the firm belief of

conviction, without hesitancy, as to the

truth of the allegations sought to be

established. S lomowitz v. Walker , 429 So.

2d 797, 800 (Fla. 4th DCA 1983).

94. Judge Sharp, in her dissenting opinion in Walker v.

Florida Department of Business and Professional Regulation , 705

So. 2d 652, 655 (Fla. 5th DCA 1998)(Sharp, J., dissenting),

reviewed rece nt pronouncements on clear and convincing evidence:

Clear and convincing evidence requires more

proof than preponderance of evidence, but

less than beyond a reasonable doubt. In re

Inquiry Concerning a Judge re Graziano , 696

So. 2d 744 (Fla. 1997). It is an

intermediate level of proof that entails

both qualitative and quantative [sic]

elements. In re Adoption of Baby E.A.W. ,

658 So. 2d 961, 967 (Fla. 1995), cert.

denied , 516 U.S. 1051, 116 S. Ct. 719, 133

L.Ed.2d 672 (1996). The sum total of

evidence mu st be sufficient to convince the

trier of fact without any hesitancy. Id.

It must produce in the mind of the fact

finder a firm belief or conviction as to the

truth of the allegations sought to be

established. Inquiry Concerning Davey , 645

So. 2d 398, 4 04 (Fla. 1994).

95. In determining whether Petitioner has met its burden

of proof, it is necessary to evaluate its evidentiary

presentation in light of the specific allegations of wrongdoing

made in the charging instrument. Due process prohibits an

agen cy 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 Protect ion , 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).

96. The Administrative Complaint, as modified by the Pre -

h earing Stipulation, contains 10 counts. Counts I through IX

are the "sliding" counts, alleging that Respondent violated

S ubs ections 626.611(7) and (9), 626.621(6), 626.9521(1), and

626.9541(1)(z)1 . through 3 . , Florida Statutes, by sel ling

ancillary insurance products to customers without their

"informed consent." Count I concerns Mr. Gatlin's October 7,

2005, purchase of a travel protection plan from Respondent.

Count II concerns Mr. Gatlin's October 7, 2005, purchase of an

accident medical protection plan from Respondent. Count III

concerns Mr. Gatlin's October 7, 2005, purchase of a term life

policy from Respondent. Count IV concerns Ms. Jungling's

August 17, 2006, purchase of a vehicle protection plan from

Respondent. Count V c oncerns Ms. Jungling's August 17, 2006,

purchase of a term life policy from Respondent. Count VI

concerns Mr. Hansen's August 19, 2006, purchase of a vehicle

protection plan from Respondent. Count VII concerns

Mr. Hansen's August 19, 2006, purchase of a term life policy

from Respondent. Count VIII concerns Mr. Dossantos' July 20,

2006, purchase of a vehicle protection plan from Respondent.

Count IX concerns Mr. Dossantos' July 20, 2006, purchase of a

ter m life policy from Respondent.

97. Count X alleg es that Respondent violated S ubs ection

626.621(2), Florida Statutes, by failing to "notify the

department . . . in writing within 60 days after a change of

name, residence address, principal business street address, or

mailing address" as required by Secti on 626.551, Florida

Statutes. In the Pre - h earing Stipulation, Respondent conceded

the facts establishing that she failed to notify the Department

in writing within 60 days of a change in her principal business

street address.

98. At all times relevant to this case, S ubs ection s

626.611(7) and (9), Florida Statutes, has provided as follows,

in pertinent part:

The department shall deny an application

for, suspend, revoke, or refuse to renew or

continue the license or appointment of any

applicant, agent, titl e agency, adjuster,

customer representative, service

representative, or managing general agent,

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:

* * *

(7) Demonstrated lack of fitness or

trustworthiness to engage in the business of

insurance.

* * *

(9) Fraudulent or dishonest practices in

the conduct of business under the

license. . . .

99. At all times relevant to this case, S ubs ection

626.621(6), Florida Statutes, has provided as follows, in

pertinent part:

The department may, in its discretion, deny

an application for, suspend, revoke, or

refuse to renew or conti nue the license or

appointment of any applicant, agent,

adjuster, customer representative, service

representative, or managing general agent,

and it may 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 under circumstances for which such

denial, suspension, revocation, or refusal

is not mandatory under s. 626.611:

* * *

(6) In the conduct of b usiness under the

license . . . , 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 publi c. . . .

100. At all times relevant to this case, S ubs ection

626.9521(1), Florida Statutes, has provided as follows:

No person shall engage in this state in any

trade practice which is defined in this part

as, or determined pursuant to s. 626.951 or

s. 6 26.9561 to be, an unfair method of

competition or an unfair or deceptive act or

practice involving the business of

insurance.

101. At all times material to the instant case,

S ubs ection s 626.9541 (1)(z)1 . through 3 . , Florida Statutes, has

provided as foll ows:

(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. Representi ng 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 required;

2. Representing to the applicant that a

specific ancillary coverage or produ ct is

included in the policy applied for without

an additional charge when such 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 infor med consent of

the applicant.

102. Case law has established that an agent violates

Section 626.9541, Florida Statutes, if he or she fails to

provide the applicant an adequate "oral explanation" of the

ancillary nature of the product in question, notwiths tanding

that the applicant is given and signs 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); Thomas v. State, Department of

Ins urance and Treasurer , 559 So. 2d 419 (Fla. 2d DCA 1990). The

requirement for an oral explanation of the ancillary policy is

based on the fiduciary relationship between the insurance agent

and her customers. See Thomas , 559 So. 2d at 421; Sewall v.

State , 783 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 an upward departure from sentencing

guidelines.); Nate lson v. Department of Insurance , 454 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 B eardmore 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 in surance

counselor, Abbott.").

103. Because they are penal in nature, the foregoing

statutory provisions must be strictly construed, with any

reasonable doubts as to their meaning being resolved in favor of

the licensee. See Capital National Financial Cor poration v.

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

1997); Dyer v. Department of Insurance & Treasurer , 585 So. 2d

1009 (Fla. 1st DCA 1991); Bowling v. Department of Insurance 394

So. 2d 165, 171 - 172 (Fla. 1st DCA 1981).

104. The test imonial evidence against Respondent was

equivocal at best. None of the Complaining Customers could

testify as to a clear recollection of Respondent's sales

presentation. The common theme of Mr. Gatlin, Ms. Jungling, and

Mr. Hansen was that they were in a hurry and did not bother to

attend to Respondent's presentation or read what they were

initialing and signing. Mr. Dossantos had previously purchased

ancillary policies from Direct General, and noted that he was

signing paperwork for "optional" policies, but asked no

questions. Mr. Gatlin at one point conceded that he allowed

Respondent to talk him into purchasing the ancillary policies,

rendering his assertion of ignorance as to the purchase less

than credible. 13 Lessening the credibility of the Compla ining

Customers regarding their lack of attention was the fact that

their signed pen sale sheets showed that they each rejected

several optional policies offered by Respondent.

105. Respondent credibly testified that her practice was

to explain that the i nitial price quote includes the ancillary

products, that she used a pen sale sheet to explain the

ancillary products to the customers and offer them the option of

accepting or rejecting the optional items, and that she then

walked the customers through eac h page of the paperwork. She

circled the optional items and had the customers initial them.

The paperwork admitted into evidence showed Respondent's

markings and the initials of the Complaining Customers,

corroborating Respondent's testimony.

106. The u ndersigned has noted the testimony of the

Complaining Customers that they had no intention of purchasing

ancillary policies and would have rejected them had Respondent

explained their optional nature. However, these conclusory

assertions cannot meet the s tandard for clear and convincing

evidence set forth in Evans Packing , 550 So. 2d at 116, n.5,

that "the facts to which the witnesses testify must be

distinctly remembered" and that "the evidence must be precise

and explicit and the witnesses must be lackin g in confusion as

to the facts in issue . . . ."

107. The undersigned has also noted the testimony of the

Complaining Customers that they left Respondent's office

thinking they had purchased only such insurance as required by

Florida law to maintain valid registration and licensure. It

strains credulity that a customer could look at the policy

paperwork discussed and quoted at length above, even if only

long enough to sign or initial it, and come away with no inkling

that he ha s purchased optional products .

108. As to Counts I through IX of the Administrative

Complaint, the evidence presented in this case has not produced

in the mind of the undersigned "a firm belief or conviction as

to the truth of the allegations sought to be established." It

is therefo re concluded that Counts I through IX should be

dismissed.

109. As to Count X of the Administrative Complaints, the

Department proved by clear and convincing evidence that

Respondent failed to notify the Department in writing within 60

days of a change in her principal business street address, as

required by Section 626.551, Florida Statutes.

110. No evidence was presented that Respondent's license

has previously been subject to discipline for a violation of

Section 626.551, Florida Statutes. The undersi gned recommends

that 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 f inal o rder f inding

Respondent guilty of committing the violation alleged in Count X

of the Administrative Complaint, fining her $250.00 for such

violation, and dismissing the remaining counts of the

Administrative Complaint.

DONE AND ENTER ED this 8th day of February , 2008 , in

Tallahassee, Leon County, Florida.

S

LAWRENCE P. STEVENSON

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 8th day of February , 2008 .

ENDNOTES

1/ Chapters 624 through 632, 634, 535, 636, 641, 642, 648, and

651, Florida Statut es, constitute the "Florida Insurance Code."

See Section 624.01, Florida Statutes. Because the events at

issue in this case were alleged to have taken place during late

2005 through 2006, all references to the Florida Statutes will

be to the 2006 codific ation unless otherwise noted.

2 / The Pre - Hearing Stipulation consistently spelled New Port

Richey as "New Port Richie." The misspelling has been corrected

in the quoted text.

3/ The undersigned has accepted these factual stipulations. See

Columbia Ba nk for Cooperatives v. Okeelanta Sugar Cooperative ,

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

stipulated facts the stipulation is conclusive upon both the

trial and appellate courts in respect to matters which may

validly be made the subjec t 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 Retir ement , 579 So. 2d 300, 302

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

tried upon stipulated facts, 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/ At the time of the James Gatlin transaction on October 7,

2005, Direct General offered the travel protection plan, which

included bail bond coverage, ambulance assistance, and

automobile rental reimbursement, and off ered the accident

medical protection plan, which covered hospitalization and other

medical treatment. By the time of the later transactions,

Direct General had folded the elements of the travel protection

and accident medical protection plans into a new " vehicle

protection plan."

5/ Mr. Gatlin's insurance purchase was both first in time and

the first matter alleged in the Administrative Complaint. The

remaining three Complaining Customers will be treated in the

order presented by the Administrative Comp laint rather than in

chronological order.

6/ The findings as to the policy documents are largely based on

the documents themselves, supplemented by the testimony of

Respondent and the Complaining Customers. As noted above,

Respondent had no direct recol lection of the transactions with

the Complaining Customers, but she was able to explain her sales

script and state the likely course of events by reviewing the

policy documents.

7/ Florida law requires persons who have had their driver

licenses suspended or revoked , pursuant to Section 322.26 or

322.27, Florida Statutes, to submit proof of financial

responsibility as to all motor vehicles registered by such

persons. § 324.072, Fla . Stat. Such person must carry bodily

injury liability insurance, in addit ion to the other required

coverages. The SR - 22 is the form filed by the insurance company

to verify the insured's compliance with the financial

responsibility law. See Fla. Admin. Code R. 15A - 3.005.

8/ Ms. Jungling had a young son who lived with her.

9/ Florida law requires persons who have had their driver

licenses suspended or revoked , pursuant to Section 322.26 or

322.27, Florida Statutes, to submit proof of financial

responsibility as to all motor vehicles registered by such

persons. § 324.072, F la . Stat. Such person must carry bodily

injury liability insurance, in addition to the other required

coverages. The SR - 22 is the form filed by the insurance company

to verify the insured's compliance with the financial

responsibility law. See Fla. Admi n. Code R. 15A - 3.005.

10/ Florida law requires persons who have had their driver

licenses suspended or revoked , pursuant to Section 322.26 or

322.27, Florida Statutes, to submit proof of financial

responsibility as to all motor vehicles registered by suc h

persons. § 324.072, Fla . Stat. Such person must carry bodily

injury liability insurance, in addition to the other required

coverages. The SR - 22 is the form filed by the insurance company

to verify the insured's compliance with the financial

responsibi lity law. See Fla. Admin. Code R. 15A - 3.005.

11/ Florida law requires persons who have had their driver

licenses suspended or revoked , pursuant to Section 322.26 or

322.27, Florida Statutes, to submit proof of financial

responsibility as to all motor ve hicles registered by such

persons. § 324.072, Fla . Stat. Such person must carry bodily

injury liability insurance, in addition to the other required

coverages. The SR - 22 is the form filed by the insurance company

to verify the insured's compliance with the financial

responsibility law. See Fla. Admin. Code R. 15A - 3.005.

12/ 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]

rev ocation . . . is mandatory." §§ 626.681(1) and 626.691(1),

Fla. Stat.

13/ As soon as she looked at the paperwork, Ms. Burinskas

ascertained that Mr. Gatlin had purchased three ancillary

policies and confronted him about the matter. It appears likely

to the undersigned that embarrassment at Ms. Burinskas' learning

that he had succumbed to Respondent's sales presentation colored

Mr. Gatlin's testimony, leading him to claim that he just wasn't

paying attention when he signed the papers.

COPIES FURNISHED :

L. Michael Billmeier, Jr., Esquire

Galloway , Brennan & Billmeier

240 East Fif th Avenue

Tallahassee, Florida 32303

Michael Rothschild, Esquire

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

1926 Harrison Street

Hollywood, Florida 33020

Thomas A. David, Esquire

D epartment of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399 - 0333

Daniel Sumner, General Counsel

Department of Financial Services

The Capito l , P laza L evel 11

Tallahassee, Florida 32399 - 0300

Honorable Alex Sink, Chief Financial Offi cer

Department of Financial Services

The Capit o l , P laza L evel 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 ex ceptions

to this recommended order should be filed with the agency that

will issue the final order in this case.