07-003434PL Department Of Financial Services vs. Victoria Nolen Colon
 Status: Closed
Recommended Order on Wednesday, April 30, 2008.


View Dockets  
Summary: Recommend a 30-day suspension for sliding.

1STATE OF FLORIDA

4DIVISION OF ADMINISTRATIVE HEARINGS

8DEPARTMENT OF FINANCIAL )

12SERVICES, )

14)

15Petitioner, )

17)

18vs. ) Case No. 07-3434PL

23)

24VICTORIA NOLEN COLON, )

28)

29Respondent. )

31________________________________)

32RECOMMENDED ORDER

34Robert E. Meale, Administrative Law Judge of the Division

43of Administrative Hearings, conducted the final hearing in West

52Palm Beach, Florida, on November 30, 2007, and January 28, 2008.

63The hearing on November 30, 2007, was by videoconference with

73the Administrative Law Judge participating from Tallahassee.

80The hearing on January 28, 2008, was in West Palm Beach.

91APPEARANCES

92For Petitioner: William Gautier Kitchen

97Department of Financial Services

101Division of Legal Services

105200 East Gaines Street

109Tallahassee, Florida 32399-0333

112For Respondent: Jed Berman

116Infantino and Berman

119Post Office Drawer 30

123Winter Park, Florida 32790

127STATEMENT OF THE ISSUE

131The issue is whether Respondent is guilty of an unfair or

142deceptive trade practice by selling ancillary insurance products

150to customers without adequate disclosure, in violation of

158Sections 626.9541(1)(z) and 626.621(6), Florida Statutes.

164PRELIMINARY STATEMENT

166By Administrative Complaint dated April 27, 2007,

173Petitioner alleged that Respondent, as a licensed general lines

182agent, was employed by Econo Insurance Agency in Deerfield

191Beach.

192At the start of the hearing, Petitioner announced that it

202was dropping all allegations concerning delays in issuing

210refunds to customers because Respondent lacked the authority to

219sign the checks. The remaining allegations are set forth below.

229Count I of the Administrative Complaint alleges that, on

238July 27, 2004, Denise Parker visited the Econo Insurance Agency

248to renew her automobile insurance. Respondent allegedly sold

256Ms. Parker an accidental medical supplement with National Safe

265Drivers without informing her that she was purchasing such

274coverage or that such coverage was not required under Florida

284law. Count I alleges that Ms. Parker did not want an accidental

296medical supplement and would not have purchased such coverage,

305if it had been offered to her.

312Count I alleges that Respondent thus willfully used her

321license to circumvent requirements or prohibitions contained in

329the Insurance Code, in violation of Section 626.611(4), Florida

338Statutes; demonstrated a lack of fitness or trustworthiness to

347engage in the business of insurance, in violation of Section

357626.611(7), Florida Statutes; engaged in fraudulent or dishonest

365practices in the conduct of business, in violation of Section

375626.611(9), Florida Statutes; willfully failed to comply with

383any proper order or rule of the department or willfully violated

394any provision of the Insurance Code, in violation of Section

404626.611(13), Florida Statutes; violated any provision of the

412Insurance Code or other law applicable to the business of

422insurance in the course of dealing under the license, in

432violation of Section 626.621(2), Florida Statutes; violated any

440lawful order of the department, in violation of Section

449626.621(3), Florida Statutes; in conducting business under the

457license, engaged in unfair methods of competition or in unfair

467or deceptive acts or practices or otherwise showed herself to be

478a source of injury or loss to the public or detrimental to the

491public interest, in violation of Section 626.621(6), Florida

499Statutes; represented to the applicant that a specific ancillary

508coverage or product is required by law in conjunction with the

519purchase of insurance when such coverage or product is not

529required, in violation of Section 626.9541(1)(z)1. Florida

536Statutes; represented to the applicant that a specific ancillary

545coverage or product is included in the policy without an

555additional charge when such charge is required, in violation of

565Section 626.9541(1)(z)2. Florida Statutes; and charged the

572applicant for a specific ancillary coverage or product, in

581addition to the cost of the insurance coverage applied for,

591without the informed consent of the applicant, in violation of

601Section 626.9541(1)(z)3. Florida Statutes.

605Count II of the Administrative Complaint alleges that, on

614August 21, 2004, Luery Moreno visited the Econo Insurance Agency

624to purchase automobile insurance. Respondent allegedly sold

631Ms. Moreno an accidental medical supplement without informing

639her that she was purchasing such coverage or that such coverage

650was not required under Florida law. Count II alleges that

660Ms. Moreno did not want an accidental medical supplement and

670would not have purchased such coverage, if it had been offered

681to her. Count II alleges that Respondent thus violated the same

692provisions as cited in Count I.

698Count III of the Administrative Complaint alleges that, on

707July 30, 2004, Megan McCartin visited the Econo Insurance Agency

717to renew her automobile insurance. Respondent allegedly sold

725Ms. McCartin an accidental medical supplement without informing

733her that she was purchasing such coverage or that such coverage

744was not required under Florida law. Count III alleges that

754Ms. McCartin did not want an accidental medical supplement and

764would not have purchased such coverage, if it had been offered

775to her. Count III alleges that Respondent thus violated the

785same provisions as cited in Count I.

792Count IV of the Administrative Complaint alleges that, on

801October 26, 2004, Ashley McCartin visited the Econo Insurance

810Agency to renew her automobile insurance. Respondent allegedly

818sold Ms. McCartin an accidental medical supplement without

826informing her that she was purchasing such coverage or that such

837coverage was not required under Florida law. Count IV alleges

847that Ms. McCartin did not want an accidental medical supplement

857and would not have purchased such coverage, if it had been

868offered to her. Count IV alleges that Respondent thus violated

878the same provisions as cited in Count I.

886Count V of the Administrative Complaint alleges that, on

895November 19, 2004, Alta Thayer visited the Econo Insurance

904Agency to purchase automobile insurance for her 1990 Lincoln

913Continental. Respondent allegedly sold Ms. Thayer a motor club

922membership plan without informing her that she was purchasing

931such a plan or that such a plan was not required under Florida

944law. Count V alleges that Ms. Thayer did not want a motor club

957membership plan and would not have purchased such a plan, if it

969had been offered to her. Count V alleges that Respondent thus

980violated the same provisions as cited in Count I.

989Respondent denied the allegations and requested a formal

997hearing.

998At the hearing, Petitioner called five witnesses, and

1006Respondent called one witness. Both parties' exhibits, which

1014were all admitted, are identified in the transcript.

1022The court reporter filed the transcript on February 15,

10312008. The parties filed proposed recommended orders by

1039March 17, 2008.

1042FINDINGS OF FACT

10451. At all material times, Respondent has been a licensed

1055general lines agent, holding license number A192887. She has

1064been licensed for 15 years and has not been disciplined.

10742. From January 2000 to July 2007, Respondent was employed

1084by Econo Insurance Agency in Deerfield Beach. She was employed

1094to sell insurance and otherwise serve customers. Econo

1102Insurance Agency paid Respondent a salary, but she earned

1111commissions from the sales of ancillary products. This case

1120involves the sale of two products ancillary to personal injury

1130protection (PIP) coverage: an accidental medical supplement

1137(also known as an accidental medical protection plan) to pay the

1148$1000 deductible under the PIP policy commonly sold by the

1158agency and a motor club membership plan to pay for towing and a

1171rental car.

11733. On July 27, 2004, Denise Parker visited Econo Insurance

1183Agency to renew her PIP coverage. She had obtained her

1193insurance from Econo Insurance Agency for 17 years. Ms. Parker

1203initially testified that she did not meet with Respondent, but

1213instead met with another woman, Crystal Fowler. Ms. Parker

1222testified unequivocally that she dealt with Respondent on other

1231occasions, but did not on July 27 and that Ms. Parker did not

1244purchase insurance from Respondent "that year." At the hearing,

1253Ms. Parker looked at Respondent and stated that she was not the

1265woman with whom she had dealt on the day in question.

12764. After a short break, Ms. Parker testified that

1285Respondent, not Ms. Fowler, sold her the product in question, an

1296accidental medical supplement. The confusion may be

1303attributable to the fact that Ms. Parker made two visits to the

1315agency. The first was on July 27 to arrange for the renewal of

1328her PIP coverage, and the second was on August 2, 2004, to pay

1341for and obtain her policy. However, the testimony of Ms. Parker

1352precludes assigning responsibility to Respondent, rather than

1359Ms. Fowler, for any acts or omissions that may have taken place

1371during the July 27 and August 2 office visits. Although

1381documentation, described below, bears Respondent's signature,

1387this fact does not preclude a division of responsibilities

1396between Respondent and Ms. Fowler, who may nonetheless have

1405presented the coverage options to Ms. Parker.

14125. On July 27, Ms. Parker signed a number of documents at

1424the agency. One of the documents is an application to purchase

1435an accidental medical protection plan for up to $1000 in

1445benefits for a premium of $110. According to the application,

1455this coverage is administered by National Insurance

1462Underwriters, Inc., in Deerfield Beach and, according to the

1471policy, the coverage is underwritten by "certain Underwriters at

1480Lloyd's, London (not incorporated)." (The telephone number for

1488claims is the same as the telephone number shown in the motor

1500club membership plan, described below, administered by "National

1508Safe Drivers" or "Nation Safe Drivers," so Petitioner and

1517Respondent have tended to refer to National Safe Drivers as the

1528obligor, or its agent, under both ancillary products.)

15366. The application clearly discloses the optional nature

1544of the accidental medical supplement coverage. Immediately

1551above Ms. Parker's signature is a statement: "The purchase of

1561this plan is optional and is not required with your auto

1572insurance policy." Beside Ms. Parker's signature and bearing

1580the same date is the signature of Respondent, attesting that

1590three other carriers denied this coverage.

15967. The premium finance agreement and disclosure statement,

1604which is a single form signed by Ms. Parker on July 27, 2004,

1617shows a premium for PIP coverage and a $110 premium to Nations

1629Safe Drivers for accidental medical supplement coverage. The

1637renewal premium notice discloses, immediately above Ms. Parker's

1645signature, which is dated July 27, that she has elected the

1656$1000 deductible on her PIP coverage.

16628. On August 21, 2004, Luery Moreno visited the Econo

1672Insurance Agency to purchase automobile insurance. She met with

1681Respondent and agreed to purchase the insurance from her. On

1691this day, Ms. Moreno purchased an accidental medical supplement,

1700even though she testified that Respondent never mentioned the

1709accidental medical supplement that she purchased, or that this

1718coverage was not required under Florida law.

17259. Initially, Ms. Moreno stated that this was her first

1735visit to the Econo Insurance Agency, but, on cross-examination,

1744she admitted that her recollection of the events of August 21

1755was not "clear." Upon the presentation of coverage that she had

1766purchased in June 2003 from Econo Insurance Agency, Ms. Moreno

1776recalled that she had purchased automobile insurance from the

1785same agency in June 2003, that she had purchased the accidental

1796medical supplement at that time, and that she might have asked

1807Respondent for the same coverages when she visited the office in

1818August 2004. In fact, Ms. Moreno had submitted a claim under

1829the motor club membership plan that she had purchased in June

18402003.

184110. As in June 2003, Ms. Moreno completed an application

1851on August 21, 2004, for accidental medical supplement coverage.

1860The applications both state, above her signature: "The purchase

1869of this plan is optional and is not required with your auto

1881insurance policy." The premium finance agreement and disclosure

1889statement show the separate premiums for the PIP and accidental

1899medical supplement coverages and is signed by Ms. Moreno.

1908Because Ms. Moreno secured coverage with the Florida Automobile

1917Joint Underwriting Association (JUA), she obtained a summary of

1926coverages and premium, which clearly reveals that she was

1935purchasing PIP (as well as property damage), medical payments,

1944and towing and car rental reimbursement, although the summary of

1954coverages and premium form fails to itemize premiums for each

1964product, instead showing a gross premium for all coverages.

1973Although Ms. Moreno disputed her signature on one or more of the

1985documents, the evidence failed to establish that she did not

1995sign all of the relevant documents.

200111. On July 30, 2004, Megan McCartin visited Econo

2010Insurance Agency to obtain PIP coverage. She met with

2019Respondent and agreed to purchase insurance from her.

2027Ms. McCartin selected Econo because her family had purchased

2036insurance from this agency in the past. Initially, Ms. McCartin

2046testified that this was the first time that she had obtained

2057insurance, so she brought her mother with her to help with the

2069transaction. When presented with documents showing that she had

2078purchased insurance from Econo Insurance Agency in July 2003,

2087Ms. McCartin recalled that the July 2004 visit was for the

2098renewal of the coverage that she had purchased the prior year.

210912. Most of Ms. McCartin's testimony on direct concerned

2118the transaction in which her mother helped her, which was

2128probably the July 2003 transaction. The documentation from the

2137July 2003 transaction discloses that Ms. McCartin had purchased

2146the accidental medical supplement coverage and towing and car

2155rental reimbursement for the prior year. On July 30, 2004,

2165Ms. McCartin renewed these coverages for the year in question.

2175Both years, Ms. McCartin signed the applications for the

2184accidental medical supplement with the same disclosure noted

2192above. The premium finance agreement and disclosure statement

2200shows the separate premiums for the PIP and accidental medical

2210supplement coverages and the signature of Ms. McCartin. Because

2219Ms. McCartin was purchasing insurance from the JUA, she also

2229received a summary of coverages of premium, which clearly

2238discloses the existence of medical payments and towing and car

2248rental, in addition to PIP.

225313. On October 26, 2004, Ashley McCartin, Megan's sister,

2262visited the Econo Insurance Agency to renew her automobile

2271insurance. She met with Respondent and agreed to purchase

2280insurance from her. Ms. Ashley McCartin testified that she had

2290purchased automobile insurance previously from the agency and

2298wanted only the minimum coverage required by law. Ms. Ashley

2308McCartin recalls speaking with Respondent for nearly an hour and

2318listening to Respondent's description of the towing package, but

2327testified that Respondent said nothing about an accidental

2335medical supplement or accidental medical protection plan.

234214. Ms. Ashley McCartin testified that Respondent told her

2351that, with this insurance, she obtained towing coverage, which

2360Ms. McCartin thought would be useful because her car was

2370unreliable. At all times, though, Ms. McCartin intended to

2379purchase only what the law required due to her strained

2389financial circumstances.

239115. The documentation discloses that Ms. Ashley McCartin

2399purchased a motor club membership plan in 2003 and 2004 and that

2411she signed an application for an accidental medical supplement

2420with the same disclaimer as contained in the applications

2429described above. She also signed a JUA summary of coverages and

2440premium, which shows, as separate items, PIP, medical payments,

2449and towing and car rental. Likewise, Ms. McCartin signed a

2459premium finance agreement and disclosure statement, which shows

2467separate premiums for the PIP and accidental medical supplement

2476coverages. The PIP coverage cost her $1450, and the accidental

2486medical supplement cost her $110.

249116. On November 19, 2004, Alta Thayer visited Econo

2500Insurance Agency to purchase automobile insurance. She met with

2509Respondent and agreed to purchase insurance from her. Now 74

2519years old, Ms. Thayer admitted that she did not recall

2529purchasing insurance in 2004, but seemed to recall generally a

2539transaction with Respondent, subject to the limitations noted

2547below.

254817. Ms. Thayer drove to the agency in a 2002 Hyundai,

2559which was insured through the Marlin Insurance Agency, but she

2569wanted to insure another car, a Lincoln Continental. While

2578testifying, Ms. Thayer displayed irritation with many aspects of

2587her transaction with Respondent. Ms. Thayer testified that

2595other insurance agents all took photographs of the insured

2604vehicle and checked the odometer, but Respondent did not try--it

2614is unclear whether, when Respondent declined to photograph the

2623car, Ms. Thayer had already informed her that the vehicle to be

2635insured was not parked outside the office. At first, Ms. Thayer

2646testified that Respondent had been "nasty" from the start, but

2656then changed her testimony to say that Respondent became

2665irritable when, the next day, Ms. Thayer returned in connection

2675with some tag work. Ms. Thayer testified that the insurer

2685canceled her insurance on the day after she had obtained it, on

2697the ground that she had another car, presumably the Hyundai,

2707insured with another company. While Ms. Thayer sat and waited

2717to be taken care of, she complained that the receptionist and

2728Respondent chatted. When Ms. Thayer complained, she claimed

2736that Respondent told her to file a complaint, "you old bag."

274718. Ms. Thayer testified that she and Respondent never

2756discussed a motor club membership plan, nor did she need one.

2767Perhaps again confusing the two cars, Ms. Thayer "explained"

2776that the Hyundai was only two years old and had come with a

2789five-year roadside assistance program. When reminded that she

2797was insuring the Lincoln, Ms. Thayer testified that it had never

2808given her problems.

281119. On November 19, 2004, Ms. Thayer signed an automobile

2821service contract for a motor club membership plan for a "1990"

2832Lincoln Continental. The contract calls for the payment of a

2842$50 fee in return for towing and emergency road service and car

2854rental reimbursement. Unlike the application for the accidental

2862medical supplement, the application for the motor club

2870membership plan includes no disclaimer that this plan is

2879optional and not required with the PIP coverage. On the same

2890date, Ms. Thayer also signed a summary of coverages and premium,

2901which shows separate PIP and towing and car rental coverages.

291120. Four of these five transactions fail to present cases

2921of liability without regard to the testimony of Respondent.

2930Ms. Moreno's recollection of her transaction is impossible to

2939separate from her recollection of the prior year's transaction.

2948Ms. Moreno's admission that she may have asked merely for the

2959same coverage from the prior year undermines the remainder of

2969her testimony. Ms. Parker's recollection of her transaction is

2978flawed by her misidentification of Respondent and the resulting

2987possibility that Ms. Fowler, not Respondent, is guilty of the

2997acts and omissions of which Ms. Parker complains. Ms. Megan

3007McCartin's recollection of her transaction is impossible to

3015separate from her recollection of the prior year's transaction.

3024As is the case with Ms. Moreno's transaction, Ms. Megan

3034McCartin's transaction renewed the same accidental medical

3041supplement coverage that she had obtained the prior year with

3051the same documentation, so it is more difficult, on this ground

3062as well, to find Respondent guilty of any concealment or

3072misrepresentation as to the accidental medical supplement.

307921. Ms. Thayer displayed serious credibility problems--of

3086confusion, not prevarication. Ms. Thayer's testimony was

3093confused at several points, as in her "explanation" that her new

3104Hyundai did not require towing coverage when she was insuring a

311514-year-old Lincoln. Repeatedly, Ms. Thayer referred to her

3123Lincoln as a 1980 model, then a 1990 model, then a 1980 model,

3136even after inquiry by the Administrative Law Judge intended to

3146draw her attention to the issue and resolve it.

315522. Ms. Thayer was visibly angry at Respondent at the

3165hearing and was decidedly adversarial as a witness. Perhaps her

3175anger stemmed from the immediate cancelation and the agency's

3184mishandling of her transaction, as her application revealed, on

3193its face, that she owned another vehicle for which she was not

3205seeking insurance. But Ms. Thayer seemed to be looking for

3215things with which to fault Respondent, such as her failure to

3226get up out of her chair and walk outside to photograph and

3238inspect the car that Ms. Thayer had driven to the agency, even

3250though this was not the car to be insured. Still working four

3262days each week in the fitting room at Marshall's department

3272store, Ms. Thayer proved an energetic, though not always

3281responsive, witness, whose eagerness to bolster her own

3289credibility extended to the assertion, late in her testimony,

3298that she had a top secret clearance from the Korean War. After

3310observing Respondent's demeanor during testimony and at hearing

3318and comparing it to the demeanor of Ms. Thayer, it is highly

3330unlikely that Respondent called Ms. Thayer an "old bag"--a fact

3341that raises grave problems with the reliability of the rest of

3352Ms. Thayer's testimony.

335523. The transaction with Ms. Ashley McCartin presents the

3364only case of sliding undisclosed coverages carrying extra

3372premiums by Respondent. Seeming to bear no grudge against

3381Respondent, Ms. Ashley McCartin testified frankly that she told

3390Respondent that she wanted the minimum coverage, and Respondent

3399said nothing about an accidental medical supplement or

3407accidental medical protection plan. However, Ms. McCartin

3414clearly signed forms asking for this coverage and acknowledging

3423the fact that it was not included in her PIP premium.

343424. Respondent testified that she sold 100-150 policies

3442per month and was responsible for the tag and title work

3453associated with these sales. A typical customer never asked

3462just for PIP, but asked instead for minimum coverage.

3471Respondent would take 10-15 minutes per transaction to explain

3480bodily injury and underinsured motorist coverages and the

3488consequences of not purchasing these items, which also offered

3497Respondent commission income.

350025. Respondent offered accidental medical supplement and

3507the motor club membership plan to most of her customers.

3517Respondent testified that she told her customers that these

3526ancillary products were "included" with their coverages. She

3534recalled that one of the McCartins was "delighted" upon hearing

3544that such coverage was "included," clearly suggesting that

3552Respondent's "explanation" implied that the ancillary coverage

3559was at no additional expense, or at least that the customer so

3571inferred.

357226. There is some discrepancy between the versions of

3581Ms. Ashley McCartin and Respondent. Ms. McCartin testified that

3590Respondent never mentioned the accidental medical supplement,

3597and Respondent testified that she always assured the customer

3606that the ancillary coverage was "included" in the primary

3615coverage. However, Ms. McCartin's testimony reveals little

3622knowledge of insurance products and is consistent with her

"3631understanding" that the medical coverage of $1000 was just part

3641of PIP. Such a misunderstanding would be facilitated by

3650Respondent's misleading assurance--repeated more than once at

3657the hearing--that the accidental medical supplement is

"3664included" with the PIP.

366827. Respondent's testimony that she assured her customers

3676that ancillary products were "included" with the PIP coverage

3685does not override the deficiencies noted above as to the other

3696four customers. Ms. Parker essentially cannot say who said what

3706to her, so, even if Respondent were misleading her customers at

3717the time as to the relationship between ancillary products and

3727PIP, nothing establishes that she did so with Ms. Parker.

3737Ms. Moreno may well have told Respondent to give her the same

3749coverage as she had the prior year, during which she had filed a

3762claim under the motor club membership plan, so Respondent would

3772never have had the need to "explain" to Ms. Moreno the

3783relationship of the ancillary products to the PIP product.

379228. Ms. Thayer is the only customer who did not purchase

3803both ancillary products, which suggests either discernment on

3811her part or restraint on the part of Respondent--but, either

3821way, Ms. Thayer may have obtained what she wanted. She is also

3833the only customer for whom the alleged ancillary product is the

3844motor club membership plan, which might reasonably have

3852represented an attractive purchase to Ms. Thayer given the age

3862of her Lincoln.

386529. Ms. Megan McCartin presents the closest case among the

3875four remaining customers, but her inability to differentiate

3883between the 2003 and 2004 transactions precludes a finding of

3893sliding by the requisite standard of proof.

3900CONCLUSIONS OF LAW

390330. The Division of Administrative Hearings has

3910Fla. Stat. (2007).

391331. Section 626.611, Florida Statutes, provides:

3919The department shall deny an application

3925for, suspend, revoke, or refuse to renew or

3933continue the license or appointment of any

3940applicant, agent, title agency, adjuster,

3945customer representative, service

3948representative, or managing general agent,

3953and it shall suspend or revoke the

3960eligibility to hold a license or appointment

3967of any such person, if it finds that as to

3977the applicant, licensee, or appointee any

3983one or more of the following applicable

3990grounds exist:

3992* * *

3995(4) If the license or appointment is

4002willfully used, or to be used, to circumvent

4010any of the requirements or prohibitions of

4017this code.

4019* * *

4022(7) Demonstrated lack of fitness or

4028trustworthiness to engage in the business of

4035insurance.

4036* * *

4039(9) Fraudulent or dishonest practices in

4045the conduct of business under the license or

4053appointment.

4054* * *

4057(13) Willful failure to comply with, or

4064willful violation of, any proper order or

4071rule of the department or willful violation

4078of any provision of this code.

4084* * *

408732. Section 626.621, Florida Statutes, provides:

4093The department may, in its discretion, deny

4100an application for, suspend, revoke, or

4106refuse to renew or continue the license or

4114appointment of any applicant, agent,

4119adjuster, customer representative, service

4123representative, or managing general agent,

4128and it may suspend or revoke the eligibility

4136to hold a license or appointment of any such

4145person, if it finds that as to the

4153applicant, licensee, or appointee any one or

4160more of the following applicable grounds

4166exist under circumstances for which such

4172denial, suspension, revocation, or refusal

4177is not mandatory under s. 626.611:

4183* * *

4186(2) Violation of any provision of this code

4194or of any other law applicable to the

4202business of insurance in the course of

4209dealing under the license or appointment.

4215(3) Violation of any lawful order or rule

4223of the department, commission, or office.

4229* * *

4232(6) In the conduct of business under the

4240license or appointment, engaging in unfair

4246methods of competition or in unfair or

4253deceptive acts or practices, as prohibited

4259under part IX of this chapter, or having

4267otherwise shown himself or herself to be a

4275source of injury or loss to the public.

428333. Section 626.9541(1)(z), Florida Statutes, provides:

4289The following are defined as unfair methods

4296of competition and unfair or deceptive acts

4303or practices:

4305* * *

4308(z) Sliding. --Sliding is the act or

4315practice of:

43171. Representing to the applicant that a

4324specific ancillary coverage or product is

4330required by law in conjunction with the

4337purchase of insurance when such coverage or

4344product is not required;

43482. Representing to the applicant that a

4355specific ancillary coverage or product is

4361included in the policy applied for without

4368an additional charge when such charge is

4375required; or

43773. Charging an applicant for a specific

4384ancillary coverage or product, in addition

4390to the cost of the insurance coverage

4397applied for, without the informed consent of

4404the applicant.

440634. Petitioner must prove the material allegations by

4414clear and convincing evidence. Department of Banking and

4422Finance v. Osborne Stern and Company, Inc. , 670 So. 2d 932 (Fla.

44341996) and Ferris v. Turlington , 510 So. 2d 292 (Fla. 1987).

444535. In Mack v. Department of Financial Services , 914 So.

44552d 986, 989 (Fla. 1st DCA 2005), sliding violated Sections

4465and (12), Florida Statutes. In Thomas v. Department of

4474Insurance and Treasurer , 559 So. 2d 419, 421 (Fla. 2d DCA), rev.

4486denied , 570 So. 2d 1307 (1990), sliding violated Sections

4495626.611(5), (7), and (9) and 626.621(6), Florida Statutes.

450336. The efficacy of the documentation in this case is

4513partly addressed by Thomas , supra . In that case, the agency had

4525each customer sign, among multiple other forms, an "election of

4535accidental death and/or motor club towing coverage." Evidently,

4543the only language in the Thomas form that indicated that the

4554coverage was optional was in the use of "election" in the title.

4566In the present case, each application clearly discloses that the

4576accidental medical supplement is optional, although the motor

4584club membership plan application contains no such disclaimer.

4592The summary of coverages and premium forms, which are present in

4603all but the Parker transaction, show the PIP as distinct from

4614both ancillary coverages, but fail to state separate premiums

4623for each product, instead showing a single total at the bottom

4634of each form.

463737. Although the present documentation better discloses

4644the optional nature of the ancillary product, at least as to the

4656accidental medical supplement, it does not provide Respondent an

4665absolute defense against professional liability. As the Thomas

4673court warned, the principle that one is bound by what one signs-

4685applicable to relationships between an insured and an insurer--

4694does not insulate an insurance agent from the disciplinary

4703consequences of his wrongful acts and omissions with a customer.

4713Thomas , 559 So. 2d at 421.

471938. This case is unusual in two respects. First, the

4729complaints of all but Ms. Ashley McCartin fail without regard to

4740the testimony of Respondent. Second, the complaint of

4748Ms. Ashley McCartin is not a case of the testimony of a customer

4761against the testimony of the insurance agent and the force of

4772the exculpatory agency documents. In the case of Ms. Ashley

4782McCartin, it is the testimony of the customer and that of the

4794insurance agent opposed to the exculpatory agency documents. On

4803these facts, Petitioner has proved sliding in this transaction.

481239. The specific definitional statutes at issue are

4820Section 626.9541(1)(z)2. and 3., Florida Statutes. The statute

4828best defining the wrongful acts and omissions is Section

4837626.621(6), Florida Statutes, which references Section 626.9541.

4844It is the violation of these statutes that provides the ground

4855for discipline.

485740. Florida Administrative Code Rule 69B-231.100 provides

4864for a suspension of six months for a violation of Section

4875626.9541(1)(z), Florida Statutes. Florida Administrative Code

4881Rule 69B-231.160 recognizes aggravating and mitigating factors.

4888Relevant mitigating factors are the degree of actual and

4897potential injury to the victim, which is only $110 and a small

4909fraction of the actual cost of the required coverage (as

4919distinguished from the situation in Thomas ) and the lack of

4930previous discipline over 15 years. The only aggravating factor

4939is that Respondent earned a commission on the ancillary products

4949and only salary on the primary products. These factors suggest

4959that an appropriate penalty would be a 30-day suspension.

4968RECOMMENDATION

4969It is

4971RECOMMENDED that the Department of Financial Services enter

4979a final order finding Respondent guilty of one count of

4989violating Sectios 626.9541(1)(z)2. and 3., Florida Statutes,

4996and, thus, Section 626.621(6), Florida Statutes, and imposing a

5005thirty-day suspension.

5007DONE AND ENTERED this 30th day of April, 2008, in

5017Tallahassee, Leon County, Florida.

5021___________________________________

5022ROBERT E. MEALE

5025Administrative Law Judge

5028Division of Administrative Hearings

5032The DeSoto Building

50351230 Apalachee Parkway

5038Tallahassee, Florida 32399-3060

5041(850) 488-9675 SUNCOM 278-9675

5045Fax Filing (850) 921-6847

5049www.doah.state.fl.us

5050Filed with the Clerk of the

5056Division of Administrative Hearings

5060this 30th day of April, 2008.

5066COPIES FURNISHED:

5068Honorable Alex Sink

5071Chief Financial Officer

5074Department of Financial Services

5078The Capitol, Plaza Level 11

5083Tallahassee, Florida 32399-0300

5086Daniel Sumner, General Counsel

5090Department of Financial Services

5094The Capitol, Plaza Level 11

5099Tallahassee, Florida 32399-0307

5102William Gautier Kitchen, Esquire

5106Department of Financial Services

5110Division of Legal Services

5114200 East Gaines Street

5118Tallahassee, Florida 32399-0333

5121Jed Berman, Esquire

5124Infantino and Berman

5127Post Drawer 30

5130Winter Park, Florida 32790

5134NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

5140All parties have the right to submit written exceptions within

515015 days from the date of this Recommended Order. Any exceptions

5161to this Recommended Order should be filed with the agency that

5172will issue the Final Order in this case.

Select the PDF icon to view the document.
PDF
Date
Proceedings
PDF:
Date: 07/31/2008
Proceedings: (Agency) Final Order filed.
PDF:
Date: 07/29/2008
Proceedings: Agency Final Order
PDF:
Date: 04/30/2008
Proceedings: Recommended Order
PDF:
Date: 04/30/2008
Proceedings: Recommended Order (hearing held November 30, 2007, and January 28, 2008). CASE CLOSED.
PDF:
Date: 04/30/2008
Proceedings: Recommended Order cover letter identifying the hearing record referred to the Agency.
PDF:
Date: 03/17/2008
Proceedings: Letter to Judge Meale from J. Berman regarding the hearing transcript filed.
PDF:
Date: 03/17/2008
Proceedings: Respondent`s Proposed Recommended Order filed.
PDF:
Date: 03/06/2008
Proceedings: Petitioner`s Proposed Recommended Order filed.
Date: 02/15/2008
Proceedings: Transcript filed.
Date: 01/28/2008
Proceedings: CASE STATUS: Hearing Held.
PDF:
Date: 01/22/2008
Proceedings: Motion to Strike Testimony of Parker filed.
PDF:
Date: 12/19/2007
Proceedings: Notice of Hearing (hearing set for January 28, 2008; 9:00 a.m.; West Palm Beach, FL).
Date: 12/12/2007
Proceedings: Transcript filed.
Date: 11/30/2007
Proceedings: CASE STATUS: Hearing Partially Held; continued to date not certain.
Date: 11/29/2007
Proceedings: Exhibits (not available for viewing) filed.
PDF:
Date: 11/28/2007
Proceedings: Respondent`s exhibits (pre-filed exhibits not available for viewing) filed.
PDF:
Date: 11/26/2007
Proceedings: Respondent`s Pretrial Statement filed.
PDF:
Date: 10/12/2007
Proceedings: Order Granting Continuance and Re-scheduling Hearing by Video Teleconference (hearing set for November 30, 2007; 9:30 a.m.; West Palm Beach and Tallahassee, FL).
PDF:
Date: 10/11/2007
Proceedings: Unopposed Motion for Continuance filed.
PDF:
Date: 10/01/2007
Proceedings: Order Granting Motion to Compel Discovery.
PDF:
Date: 09/11/2007
Proceedings: Motion to Compel Discovery filed.
PDF:
Date: 09/05/2007
Proceedings: Order Granting Continuance and Re-scheduling Hearing by Video Teleconference (hearing set for October 17, 2007; 9:00 a.m.; West Palm Beach and Tallahassee, FL).
PDF:
Date: 09/04/2007
Proceedings: Motion for Continuance filed.
PDF:
Date: 08/14/2007
Proceedings: Petitioner`s Notice of Response to Interrogatories filed.
PDF:
Date: 08/07/2007
Proceedings: Respondent`s Response to Initial Order filed.
PDF:
Date: 08/06/2007
Proceedings: Order of Pre-hearing Instructions.
PDF:
Date: 08/06/2007
Proceedings: Notice of Hearing by Video Teleconference (hearing set for September 13, 2007; 9:00 a.m.; West Palm Beach and Tallahassee, FL).
PDF:
Date: 08/01/2007
Proceedings: Petitioner`s Response to Initial Order filed.
PDF:
Date: 07/30/2007
Proceedings: Request for Production filed.
PDF:
Date: 07/27/2007
Proceedings: Notice of Service of Interrogatories filed.
PDF:
Date: 07/25/2007
Proceedings: Administrative Complaint filed.
PDF:
Date: 07/25/2007
Proceedings: Motion to Strike filed.
PDF:
Date: 07/25/2007
Proceedings: Answer to Administrative Complaint filed.
PDF:
Date: 07/25/2007
Proceedings: DOAH Rule 28-106.2015 Request for Hearing filed.
PDF:
Date: 07/25/2007
Proceedings: Agency referral filed.
PDF:
Date: 07/25/2007
Proceedings: Initial Order.

Case Information

Judge:
ROBERT E. MEALE
Date Filed:
07/25/2007
Date Assignment:
11/26/2007
Last Docket Entry:
07/31/2008
Location:
West Palm Beach, Florida
District:
Southern
Agency:
ADOPTED IN PART OR MODIFIED
Suffix:
PL
 

Counsels

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