07-002827 William J. Burkett vs. Department Of Financial Services Status: Closed Recommended Order on Friday, November 2, 2007.

Summary: Recommend approval of licensure application as a resident life, variable annuity, and health insurance agent.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

WILLIAM J. BURKETT , )

)

Petitioner , )

)

vs. ) Case No. 07 - 2827

)

DEPARTMENT OF FINANCIAL )

SERVICES , )

)

Respondent . )

)

RECOMMENDED ORDER

Pursuan t to notice, a final hearing was conducted in this

case on September 25, 2007, in Tallahassee, Florida, before

Administrative Law Judge R. Bruce McKibben of the Division of

Administrative Hearings (DOAH).

APPEARANCES

For Petitioner: William J. Burkett, pr o se

10177 Sailwinds Boulevard , South

Unit J101

Largo, Florida 33773 - 2375

For Respondent: Bruce Pelham, Esquire

Robin Levy, Law Clerk

Departmen t of Financial Services

612 Larson Building

200 East Gaines Street

Tallahassee, Florida 32399 - 0333

STATEMENT OF THE ISSUE

The issue in this case is whether Petitioner's application

for lic ensure as a resident life, variable annuity , and health

insurance agent should be denied or approved.

PRELIMINARY STATEMENT

Petitioner filed an application to obtain a license as a

resident life, variable annuity, and health insurance agent on

or about Oct ober 5, 2006. The application was denied by the

Department of Financial Services (the "Department") on the basis

that Petitioner was not trustworthy.

A unilateral pre - hearing stipulation was filed by the

Department. At the final hearing held in this matt er,

Petitioner represented himself and was the only witness called

to testify. Petitioner offered no independent exhibits into

evidence but stipulated to and adopted Respondent's three

exhibits. Respondent did not call a witness to testify at final

hear i ng.

A Transcript of the final hearing was filed at DOAH on

October 5, 2007. The parties were given ten days from the

filing of the Transcript at DOAH in which to submit proposed

recommended orders. Both parties timely filed Proposed

Recommended Orders, a nd they were duly - considered by the

undersigned in the prepara tion of this Recommended Order.

FINDINGS OF FACT

1. Petitioner is a 71 - year - old man, who has been licensed

to sell insurance since 1974. He was licensed in the State of

Ohio to sell variable a nnuities, life, and health insurance; the

same license he is now seeking in the State of Florida.

2. The Department is the governmental agency responsible

for, inter alia , licensing and monitoring persons wishing to

sell insurance in the State of Florida.

3. Petitioner obtained a license to sell insurance in the

State of Ohio in 1974. He made his living selling insurance and

expressed an appreciation of his occupation as being very

fulfilling. He wishes to continue selling insurance at this

time.

4. Wh ile residing in Ohio, Petitioner began selling

limited partnerships in cable funds for an entity called CabTel.

Before doing so, Petitioner inquired of the Ohio Department of

Securities whether he would need a securities license to market

the cable funds. He was told no such license was required as

long as his employer (CabTel) duly - registered the funds.

5. CabTel would purchase the rights to sell cable services

in small towns, trailer parks, and other areas around the mid -

West. These rights would be pa ckaged in individual "funds,"

which were numbered. Petitioner sold limited partnerships in

funds from five different groups of cable funds numbered XXV,

XXVI, XXVII, XVIII, and XXIX. Each of those funds was duly -

registered by CabTel , and Petitioner's sal es of those limited

partnerships are not a concern. However, for some reason ,

CabTel then failed to register cable funds numbers XXX and XXXI.

Petitioner has not been able to ascertain from CabTel why the

funds were not registered. The owner of CabTel, a Mr. Wilson,

has not returned Petition er's repeated telephone calls.

6. During his residency in Ohio, Petitioner sold limited

partnerships to the two non - registered cable funds. He was not

aware the funds had not been registered and, in fact, presumed

t hat they were registered just like the prior groups of funds.

It was CabTel's responsibility, not Petiti oner's, to register

the funds.

7. Then, during calendar year 2000, Petitioner moved to

Florida. Upon arrival in Florida, Petitioner applied for and

w as issued a non - resident license to sell variable annuities,

life , and health insurance. His application for licensure was

full and complete at that time.

8. In January 2003, the State of Ohio sent Petitioner a

N otice of I ntent to i ssue a c ease and d esis t o rder, requiring

him to stop selling limited partnerships in the cable funds.

Inasmuch as Petitioner had resigned from CabTel and had no

intention to sell additional partnerships, he agreed to a

Consent Order with the State of Ohio. The Cease and Desis t

Order was entered on February 23, 2007. The Order gave

Petitioner a right to appeal, but he did not do so because he

was in agreement with the terms of the Order, i.e. , that he stop

selling the limited partnerships. Meanwhile, Petitioner

continued to l egally sell insurance in Ohio and Florida.

9. Despite Florida regulations requiring him to do so,

Petitioner failed to notify the State of Florida concerning the

Cease and Desist Order entered in Ohio. There is no evidence in

the record as to why Petitio ner failed to notify the State of

Florida about the Ohio Consent Order. Florida then offered

Petitioner a settlement stipulation for Consent Order wherein

Petitioner would admit he had failed to provide notice and agree

to pay a fine of $500. Petitioner agreed to the stipulation and

duly - p aid the fine. The Florida Consent Order stated that it

was intended to "resolve all issues which pertain to the matters

raised in the Department's investigation." Under the Consent

Order, Petitioner's license remained in force and effect.

10. On September 15, 2005, the State of Ohio issued a

second Consent Order. This one permanently revoked Petitioner's

license to sell insurance in Ohio (based on the same issues as

in the previous Consent Order). Petitioner initiall y challenged

that Consent Order. Petitioner then made the decision to remain

permanently in Florida, so he withdrew his challenge to the

revocation of his Ohio license.

11. As a result of losing his Ohio license, Petitioner was

no longer eligible for a n on - resident license in Florida. He

therefore applied for a resident license so he could continue to

sell insurance in this state as he had been doing since 2000.

12. The Department denied Petitioner's license application

on the basis of three cited statu tory sections:

Section s 626.611 , 626.785 , and 626.831 , Florida Statutes (200 7 ) .

No testimony or evidence was introduced at final hearing to

explain facts which would make those statutory references

pertinent to this case. It may be reasonably inferred that the

entry of two consent orders in Ohio forms the basis fo r the

Department's action.

13. Petitioner's unrefuted testimony at final hearing is

credible. His demeanor and frankness lead to the conclusion

that his improper sale of securities in Ohio wa s unintentional,

excusable, and absent any inten t to deceive or mislead anyone.

14. Petitioner has admitted all aspects of his licensure

history in Ohio to the Department. He has voluntarily paid the

fine imposed by the Department for failing to timely d isclose

the existence of the Ohio Consent Order. There has been no

showing of untrustworthiness by the evidence presented at final

hearing.

15. There is no credible evidence in this proceeding that

Petitioner's actions in Ohio and/or Florida indicate a l ack of

trustworthiness. To the contrary, Petitioner's actions were at

worst neg ligent or due to carelessness.

CONCLUSIONS OF LAW

16. The Division of Administrative Hearings has

jurisdiction over the parties to and the subject matter of this

proceeding pu rsuant to Section 120.569 and Subsection 120.57(1),

Florida Statutes (2007).

17. Petitioner has the burden to prove entitlement to a

license by a preponderance of the evidence. See Department of

Banking and Finance, Division of Investor Protection v. Osb orne

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

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

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

18. The following provisions of the Florida Statutes,

taken directly from the Department's Notice of Denial in this

case, are relevant to this matter:

[ Subsection ] 626.611 Grounds for compulsory

refusal, suspension, or revocation of

agent's, title agency's , adjuster ' s,

customer representative ' s, service

representative ' s, or managing general

agent's license or appointment. " The

department shall deny an application for,

suspend, revoke, or refuse to renew or

continue the license or appointment of any

applicant, agent , title agency, adjust er ,

customer representative, servic e

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

ground s exist:

(1) Lack of one or more of the

qualifications for the license or

appointment as specified in this code.

(2) Material misstatement,

misrepresentation, or fraud in obtaining the

license or appointment or in attempting to

obtain the license or ap pointment.

[ * * * ]

(7) Demonstrated lack of fitness or

trustworthiness to engage in the business of

insurance. "

[ Subsection ] 626.785 Qualifications for

license. " ( 1) The department shall not

grant or issue a license as life agent to

any indi vidual found by it to be

untrustworthy or incompetent, or who does

not meet the following qualifications: "

[ * * * ]

[ S ubsection ] 626.831 Qualification for

license. " (1) The department shall not

grant or issue a license as health agent as

to any individual found by it to be

untrustworthy or incompetent , . . . "

19. Respondent attempts to infer from its reading of the

statutes that Petitioner's actions are , ipso facto ,

untrustworthy in nature. Even though an agency has broad

discretion to interp ret statutes which it administers . S ee Pan

American World Airways, Inc. v . Florida Public Service

Commission , 427 So. 2d 716, 719 (Fla. 1983) . T here is no

factual basis in the instant case on which to equate

Petitioner's actions with untrustworthiness as used in the

aforementioned statutes. Respondent did not show any ill intent

on the part of Petitioner, nor did Respondent present any

testimony to even insinuate that Petitioner's actions were

somehow done knowingly. The statutes require a showing of

un trustworthiness based on a person's actions, not simpl y based

on the agency's whim.

20. Respondent in its Proposed Recommended Order cites to

Natelson v. Department of Insurance , 454 So. 2d 31 (Fla. 1st DCA

1984) , for the proposition that the Department m ay interpret its

governing statutes to arrive at a conclusion of

untrustworthiness in the instant case. The cited case refers to

intentional, criminal actions on the part of the applicant. In

this case, there was an unintentional mistake made by

Petition er, followed by acceptance of and acquiescence to the

imposed sanctions. That behavior did not rise to the level of

"untrustworthiness" as contemplated by the statutes. As stated

by the Court in Werner v . State of Florida, Department of

Insurance and Tre asurer , 689 So. 2d 1211 (Fla. 1st DCA 1997), a

finding of lack of fitness or trustworthiness "contemplates more

than a solitary lapse." Petitioner has not shown a propensity

toward behavior which could be deemed untrustworthy.

21. Petitioner has satisfie d his burden of proof to show

that he meets the requirements for a license to sell insurance

in this s tate. His testimony sufficiently refutes any

suggestion by Respondent that Petitioner is unworthy to sell

insurance. Petitioner's status as a licensed i nsurance salesman

for the past seven years in this s tate confirms his satisfaction

of all relevant requirements for the license now being sought.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that a final order be entered by the Department

of Financial Services granting Petitioner a license as a

r esident l ife , v ariable a nnuity , and h ealth insurance agent.

DONE AND ENTERED this 2nd day of November , 2007 , in

Tallahassee, Leon County, Florida.

S

R. BRUCE MCKIBBEN

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 2nd day of November , 2007 .

COPIES FURNISHED :

Bruce Pelham, Esquire

Robin Levy, Law Clerk

Department of Financial Services

612 Larson Building

200 East Gaines Street

Tallahassee, Flori da 32399 - 0333

William J. Burkett

10177 Sailwinds Boulevard , South

Unit J101

Largo, Florida 33773 - 2375

Honorable Alex Sink

Chief Financial Officer

Department of Financial Services

The Capitol, Plaza Level 11

Tallahassee, Florida 32399 - 0300

Daniel Sum ner, General Counsel

Department of Financial Services

The Capitol, Plaza Level 11

Tallahassee, Florida 32399 - 0307

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

10 days from the date of this Recommen ded Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.