07-003951PL Department Of Financial Services vs. Monica L. Jones Status: Closed Recommended Order on Monday, January 7, 2008.

Summary: Respondent is guilty of knowingly and willfully enabling unlicensed agency personnel to engage in insurance activities in their dealings with three customers of the agency.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL SERVICES, )

)

Petitioner, )

)

vs. ) Case No. 07-3951PL

)

MONICA L. JONES, )

)

Respondent. )

__________________________________)

RECOMMENDED ORDER

Pursuant to notice, a hearing was conducted in this case

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

before Stuart M. Lerner, a duly-designated Administrative Law

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

October 26, 2007, by video teleconference at sites in Lauderdale

Lakes and Tallahassee, Florida.

APPEARANCES

For Petitioner: David J. Busch, Esquire

Department of Financial Services

Division of Legal Services

612 Larson Building

200 East Gaines Street

Tallahassee, Florida 32399-0333

For Respondent: James O. Walker, III, Esquire

1339 Northeast Fourth Avenue

Fort Lauderdale, Florida 33304

STATEMENT OF THE ISSUE

Whether Respondent committed the violations alleged in the

Administrative Complaint issued against her and, if so, what

penalty should be imposed.

PRELIMINARY STATEMENT

On August 2, 2007, the Department of Financial Services

(Department) issued a three-count Administrative Complaint

against Respondent, notifying her that, based on the allegations

of wrongdoing made therein, it "intend[ed] to enter an Order

suspending or revoking [her] licenses and appointments as an

insurance agent or impose such penalties as may be provided

under [the law]." In the Administrative Complaint's "General

Allegations," the Department asserted that, while "operating out

of an agency known as A Maples Insurance Agency, Inc.," in

Pompano Beach, Florida, Respondent "employed unlicensed

individuals named Claudia Smith and Gus Jones, Jr., to describe

the benefits or terms of insurance coverage, invite consumers to

enter into insurance contracts, make recommendations as to

insurance products, complete insurance applications, and

otherwise advise as to insurance matters." Count I of the

Administrative Complaint alleged that Respondent "knowingly and

willfully provided Claudia Smith with the means to engage

in . . . insurance transactions and insurance code violations"

in connection with Ms. Smith's dealings with Sarah Harrington.

Count II of the of the Administrative Complaint alleged that

Respondent "knowingly and willfully provided Claudia Smith and

Gus Jones with the means to engage in . . . insurance

transactions and insurance code violations" in connection with

Ms. Smith's and Mr. Jones' dealings with Alton Barroso and

Monica Barranco. Count III of the Administrative Complaint

alleged that Respondent "knowingly and willfully provided

Claudia Smith with the means to engage in . . . insurance

transactions and insurance code violations" in connection with

her dealings with Marvin Mercier.

On or about August 16, 2007, Respondent filed a written

request for "a hearing pursuant to Section 120.57(1), Florida

Statutes, to be held before the Division of Administrative

Hearings." On August 29, 2007, the matter was referred to DOAH.

Among the documents the Department transmitted to DOAH was a

Motion to Dismiss and/or to Strike that it had received from

Respondent. This motion was ultimately denied by the

undersigned. See Wright-Simpson v. Department of Corrections ,

891 So. 2d 1122, 1126 (Fla. 4th DCA 2004)("Notices of this sort

[alleging misconduct] in administrative proceedings are not

required to meet technical niceties or formal exactness as

required of pleadings in the courts. The notice filed herein

was specific enough to inform the employee with reasonable

certainty of the nature of the charges against her.")(citation

omitted); Seminole County Board of County Commissioners v. Long ,

422 So. 2d 938, 940 (Fla. 5th DCA 1982)("A complaint filed by an

administrative agency is not required to fulfill the technical

niceties of a pleading filed in a court of law. Such an

administrative complaint must only be specific enough to inform

the accused with reasonable certainty of the nature of the

charge. The charge in this instance met that requirement. The

administrative complaint was not so vague, indistinct and

indefinite as to mislead the appellee or to embarrass her in the

preparation of her defense."); and Florida Board of Massage v.

Thrall , 164 So. 2d 20, 22 (Fla. 3d DCA 1964)("[I]n [licensure

disciplinary] administrative proceedings of this nature it is

not necessary that the information or accusation be cast with

that degree of technical nicety required in a criminal

prosecution.").

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

October 26, 2007. Five witnesses testified at the hearing:

Monica Barranco, Marvin Mercier, Sarah Harrington, Raphael

Montero, and Claudia Smith. In addition to these five witnesses'

testimony, 14 exhibits (Petitioner's Exhibits 1 through 14) were

offered and received into evidence. 2

Upon the unopposed request of Respondent's attorney, the

deadline for the filing of proposed recommended orders was set at

45 days from the date of the filing with DOAH of the hearing

transcript.

The hearing Transcript (consisting of one volume) was filed

with DOAH on November 9, 2007.

The Department filed its Proposed Recommended Order on

December 21, 2007. To date, Respondent has not filed any post-

hearing submittal.

FINDINGS OF FACT

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

a whole, the following findings of fact are made:

Facts Relating to All Counts

1. Respondent has held a Florida (2-20) general lines

(property and casualty) insurance agent license since March 4,

2000. She had been licensed as a (4-40) customer representative

in Florida for approximately one year before obtaining her 2-20

license. At no time as a licensee has she had any disciplinary

action taken against her.

2. At all times material to the instant case, Respondent

was employed by A Maples Insurance Agency, Inc., in Pompano

Beach, Florida (Agency).

3. Respondent was one of four individuals involved in the

operation of the Agency. The other three individuals were

Respondent's sister, Mary Terrell (who had an ownership interest

in the Agency); Respondent's brother, Gus Jones, Jr. (who was

also a co-owner of the Agency), and Claudia Smith, a 25-year

Agency employee. As Respondent was aware, neither Ms. Terrell,

Mr. Jones, nor Ms. Smith possessed any Florida insurance

license.

4. At one time, prior to Respondent's coming to work for

the Agency, Mr. Jones had been licensed in Florida as a 2-20

insurance agent, but his license was taken away by the

Department's predecessor, the Department of Insurance, in 2002,

and it has not been reinstated. The Department of Insurance's

Final Order suspending Mr. Jones' license read, in pertinent

part, as follows:

Pursuant to Section 626.641, Florida

Statutes, the Respondent shall not engage in

or attempt to profess to engage in any

transaction or business for which a license

or appointment is required under the

Insurance Code or directly or indirectly

own, control, or be employed in any manner

by any insurance agent or agency or adjuster

or adjusting firm, during the period of

suspension.

Further, pursuant to Section 626.641,

Florida Statutes, the licenses, appointment,

or eligibility, which has been suspended

shall not be reinstated except upon request

for such reinstatement; but the Department

shall not grant such reinstatement if it

finds that the circumstance or circumstances

for which the license, appointment or

eligibility was suspended still exist or are

likely to recur.

5. Respondent knew, when she began working at the Agency,

that Mr. Jones' 2-20 license had been taken away and not been

reinstated.

6. It was Mr. Jones' being stripped of his license that

prompted the Agency to hire Respondent. The Agency needed a

licensed agent to replace Mr. Jones so that there would be

someone at the Agency able to generate commission revenues.

Upon being hired, Respondent filled this role as the Agency's

lone licensed producing agent.

7. Respondent's employment at the Agency was her only

source of income. She was paid on a commission-only basis,

receiving her commission payments in cash from Mr. Jones.

8. The business hours of the Agency were 9:00 a.m. to

5:00 p.m. Monday through Thursday and 9:00 a.m. to 6:00 p.m. on

Friday. The Agency closed an hour for lunch each day.

9. Although she was the only one working at the Agency who

held an insurance license, Respondent ordinarily worked just

nine hours a week (three hours on Mondays, three hours on

Wednesdays, and three hours on Fridays).

10. Respondent authorized Ms. Terrell, Mr. Jones, and

Ms. Smith to sign Respondent's name on insurance-related

documents and otherwise act in her stead so that these

unlicensed individuals would be able to transact business and

produce commissions for the Agency when she was out of the

office. Respondent "g[o]t credit for the[se] sale[s]" made by

these three unlicensed individuals and was compensated

accordingly, notwithstanding her lack of personal involvement in

the transactions.

Facts Relating to Count I

11. In August 2004, Sarah Harrington went to the Agency to

shop for insurance for a manufactured home she was purchasing

(through financing provided by Bank of America).

12. At the Agency, Ms. Harrington dealt exclusively with

Ms. Smith, whom Ms. Harrington reasonably believed was an

insurance agent.

13. Based on the information Ms. Harrington provided her,

Ms. Smith recommended obtaining coverage through Citizens

Property Insurance Corporation (Citizens), the state-created

entity that services homeowners unable to find insurance in the

private market.

14. Ms. Smith told Ms. Harrington what the premiums were

for this coverage, and Ms. Harrington wrote a check to the

Agency for the total amount ($1,540.00) and gave it to

Ms. Smith.

15. Ms. Harrington left the Agency with a two-page

insurance binder (with an effective date of August 25, 2004, and

an expiration date of August 25, 2005) that Ms. Smith gave her.

The binder contained what purported to be Respondent's signature

in two different places. The signatures, however, were not

Respondent's. They were placed there by Ms. Smith, pursuant to

the grant of authority Respondent had previously given her.

16. In September 2005, Ms. Harrington received a letter

from her mortgage lender, Bank of America, advising her that her

"hazard insurance policy ha[d] potentially lapsed, effective

08/25/2005" and that the bank was "unable to pay the premium for

[her] new hazard insurance coverage because [it had] not

received a bill from [her] insurance agent/company."

17. Ms. Harrington reacted to this advisement by

telephoning the Agency and speaking with Ms. Smith. Ms. Smith

told Ms. Harrington that the Agency was a "little behind in

processing [the paperwork for the renewal of Ms. Harrington's

insurance coverage]" and would be sending Bank of America a bill

shortly.

18. Approximately a month later, Ms. Harrington received a

second letter from Bank of America. In the letter, the bank

informed her that it had still not received anything concerning

the renewal of her insurance coverage.

19. Ms. Harrington again telephoned the Agency and spoke

with Ms. Smith. Ms. Smith told Ms. Harrington that the Agency

"had already billed Bank of America" and that "everything was

fine."

20. On October 24, 2005, Hurricane Wilma made landfall in

South Florida and "took off two sides of [Ms. Harrington's]

home." The home was a total loss.

21. When Ms. Harrington telephoned Citizens to initiate

the claim process, she was told that there was no record of her

being insured.

22. Ms. Harrington thereafter went to the Agency to

inquire about the matter and met with Ms. Smith. Ms. Harrington

demanded to see proof of her insurance. Ms. Smith was unable to

provide such proof.

23. Ms. Harrington returned to the Agency for a follow-up

visit. This time she met with Mr. Jones, as well as Ms. Smith.

24. Mr. Jones gave Ms. Harrington the first two pages of

an application for insurance he said he had mailed, on her

behalf, to Citizens on October 19, 2005. Mr. Jones told

Ms. Harrington that the payment for this insurance "was being

processed" and that Ms. Harrington's "house was going be

covered" inasmuch as she "had insurance."

25. Upon examining the two pages that Mr. Jones had given

her, Ms. Harrington noticed that it contained erroneous

information concerning her occupation, her date of birth, and

the age of her home. She pointed out these errors to Mr. Jones

and Ms. Smith. Ms. Smith subsequently wrote, and signed

Respondent's name to, a memorandum to Citizens, dated

November 7, 2005, correcting the information that Ms. Harrington

had identified as being erroneous.

26. After this follow-up visit to the Agency,

Ms. Harrington requested, and later received from Citizens, the

entire application package that the Agency had submitted to

Citizens on October 19, 2005, on her behalf. There were

initials and signatures on the documents in this package that

purported to be Ms. Harrington's, but were actually forgeries.

These documents also contained signatures purporting to be

Respondent's that were placed there by Ms. Terrell, Mr. Jones,

and/or Ms. Smith, pursuant to the grant of authority Respondent

had previously given them.

27. Ms. Harrington's claim for the destruction of her home

was ultimately paid by Citizens, as Mr. Jones and Ms. Smith said

it would be. Ms. Harrington received $74,000.00.

28. At no time did Respondent have any dealings or

interaction with Ms. Harrington.

Facts Relating to Count II

29. Alton Barroso is the owner of Barroso Pools, Inc.

(Company).

30. In March of 2005, the Company, through the Agency,

obtained insurance from Grenada Insurance Company (Grenada) for

three Company vehicles.

31. Ms. Terrell had signed Respondent's name on the

application for this insurance, pursuant to the grant of

authority Respondent had previously given her. Respondent had

no personal involvement in this insurance transaction.

32. After the effective date of the Company's policy with

Grenada, a Company vehicle was involved in an accident resulting

in damages to the vehicle costing approximately $7,500.00 to

repair.

33. The Company submitted a claim requesting that Grenada

cover these damages under the Company's insurance policy with

Grenada.

34. Grenada refused to pay the claim, advising the Company

that the Company vehicle "which was involved in [the]

accident . . . was not listed as a covered vehicle under [its]

auto policy at the time of the loss."

35. Mr. Barroso, who does not "speak or write English very

well," had a friend of his, Monica Barranco, go to the Agency to

inquire about the matter.

36. Ms. Barranco made several trips to the Agency. She

dealt primarily with Ms. Smith, but met once with Mr. Jones, who

gave her a copy of the Company's policy. She had no contact at

all with Respondent.

37. Despite Ms. Barranco's efforts, the Company never

received any payment for the damages to the Company vehicle that

was involved in the accident.

Facts Relating to Count III

38. Marvin Mercier is Ms. Smith's brother. He has

obtained automobile insurance through the Agency for the past

five or six years.

39. In February 2006, Mr. Mercier was informed that the

insurance policy he had on his 1990 Ford Aerostar van would not

be renewed because of an at-fault accident in which he had been

involved.

40. Mr. Mercier thereafter spoke with Ms. Smith, who

offered to "get [him] a [new] policy" with another insurer.

Mr. Mercier accepted his sister's offer of assistance.

41. Approximately a week later, on or about March 11,

2006, in accordance with Ms. Smith's instructions, Mr. Mercier

met with Ms. Smith at the Agency "to sign the application [for

the new policy] and to give a down payment."

42. In obtaining this new policy for his van, Mr. Mercier

dealt exclusively with Ms. Smith. Respondent had no involvement

whatsoever in the transaction.

CONCLUSIONS OF LAW

43. DOAH has jurisdiction over the subject matter of this

proceeding and of the parties hereto pursuant to Chapter 120,

Florida Statutes.

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

651 constitute the 'Florida Insurance Code.'" § 624.01, Fla.

Stat.

45. It is the Department's responsibility to "enforce the

provisions of this code." § 624.307(1), Fla. Stat.

46. Among the Department's duties is to license and

discipline insurance agents.

47. The Department is authorized to suspend 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 disciplinary

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

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

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

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

Statutes; to place agents on probation for up to two years,

pursuant to Section 626.691, Florida Statutes 3 ; and to order

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

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

withholding of moneys belonging to insurers, insureds,

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

Statutes.

48. The Department may take such disciplinary action

against an agent only after the agent has been given reasonable

written notice of the charges and an adequate opportunity to

request a proceeding pursuant to Sections 120.569 and 120.57,

Florida Statutes. See § 120.60(5), Fla. Stat.

49. An evidentiary hearing must be held if requested by

the agent when there are disputed issues of material fact.

§§ 120.569 and 120.57(1), Fla. Stat.

50. At the hearing, the Department bears the burden of

proving that the agent engaged in the conduct, and thereby

committed the violations, alleged in the charging instrument.

Proof greater than a mere preponderance of the evidence must be

presented for the Department to meet its burden of proof. Clear

and convincing evidence of the agent's guilt is required. See

Department of Banking and Finance, Division of Securities and

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

935 (Fla. 1996); Beshore v. Department of Financial Services ,

928 So. 2d 411, 413 (Fla. 1st DCA 2006); Pou v. Department of

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

120.57(1)(j), Fla. Stat. ("Findings of fact shall be based upon a

preponderance of the evidence, except in penal or licensure

disciplinary proceedings or except as otherwise provided by

statute . . . .").

51. Clear and convincing evidence is an "intermediate

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

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

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

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

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

the witnesses testify must be distinctly remembered; the

testimony must be 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 a firm belief or conviction, without hesitancy, as to

the truth of the allegations sought to be established." In re

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

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

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

967 (Fla. 1995)("The evidence [in order to be clear and

convincing] must be sufficient to convince the trier of fact

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

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

preclude evidence that is ambiguous." Westinghouse Electric

Corporation, Inc. v. Shuler Bros., Inc. , 590 So. 2d 986, 988

(Fla. 1st DCA 1991).

52. In determining whether the Department 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 the

Department from taking disciplinary action against an agent

based on matters not specifically alleged in the charging

instrument, unless those matters have been tried by consent.

See Shore Village Property Owners' Association, Inc. v.

Department of Environmental Protection , 824 So. 2d 208, 210

(Fla. 4th DCA 2002); Cottrill v. Department of Insurance , 685

So. 2d 1371, 1372 (Fla. 1st DCA 1996); and Delk v. Department of

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

1992).

53. The Administrative Complaint in the instant case

charges Respondent with three counts of violating Section

626.611(13), Florida Statutes, and Section 626.621.621(12),

Florida Statutes, by knowingly and willfully enabling unlicensed

Agency personnel to engage in activities requiring an insurance

license.

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

626.611(13), Florida Statutes, has provided, in pertinent part,

as follows:

The department shall . . . suspend [or]

revoke . . . the license . . . of

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

or revoke the eligibility to hold a

license . . . of any such person, if it

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

any one or more of the following applicable

grounds exist:

* * *

Willful failure to comply with, or willful

violation of, any proper order or rule of

the department or willful violation of any

provision of this code.

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

626.621(12), Florida Statutes has provided, in pertinent part,

as follows:

The department may, in its discretion, . . .

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

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

suspend or revoke the eligibility to hold a

license . . . of any such person, if it

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

any one or more of the following applicable

grounds exist under circumstances for which

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

is not mandatory under s. 626.611:

* * *

Knowingly aiding, assisting, procuring,

advising, or abetting any person in the

violation of or to violate a provision of

the insurance code or any order or rule of

the department, commission, or office.

56. Engaging in insurance activities without a license is

prohibited by the following "provision[s] of the insurance code"

and "rule of the [D]epartment" (which were cited in the

Administrative Complaint):

§ 626.112. License and appointment

required; agents, customer representatives,

adjusters, insurance agencies, service

representatives, managing general agents

(1)(a) No person may be, act as, or

advertise or hold himself or herself out to

be an insurance agent, insurance adjuster,

or customer representative unless he or she

is currently licensed by the department[ 4 ]

and appointed by an appropriate appointing

entity or person.

(b) Except as provided in subsection (6) or

in applicable department rules, and in

addition to other conduct described in this

chapter with respect to particular types of

agents, a license as an insurance agent,

service representative, customer

representative, or limited customer

representative is required in order to

engage in the solicitation of insurance.

For purposes of this requirement, as

applicable to any of the license types

described in this section, the solicitation

of insurance is the attempt to persuade any

person to purchase an insurance product by:

1. Describing the benefits or terms of

insurance coverage, including premiums or

rates of return;

2. Distributing an invitation to contract

to prospective purchasers;

3. Making general or specific

recommendations as to insurance products;

4. Completing orders or applications for

insurance products;

5. Comparing insurance products, advising

as to insurance matters, or interpreting

policies or coverages; or

6. Offering or attempting to negotiate on

behalf of another person a viatical

settlement contract as defined in s.

626.9911.

* * *

(9) Any person who knowingly transacts

insurance or otherwise engages in insurance

activities in this state without a license

in violation of this section commits a

felony of the third degree, punishable as

provided in s. 775.082, s. 775.083, or s.

775.084.

§ 626.0428. Agency personnel powers,

duties, and limitations

* * *

(2) No employee of an agent or agency may

bind insurance coverage unless licensed and

appointed as a general lines agent or

customer representative.

(3) No employee of an agent or agency may

initiate contact with any person for the

purpose of soliciting insurance unless

licensed and appointed as a general lines

agent or customer representative.[ 5 ]

69B-222.060. Unlawful Activities by

Unlicensed Insurance Agency Personnel.

The following actions are never allowable by

unlicensed personnel.

(1) Comparing insurance products; advising

as to insurance needs or insurance matters;

or interpreting policies or coverages.

(2) Binding new, additional, or replacement

coverage for new or existing customers; or

binding coverage on or recording additional

property under existing policies.

(3) Soliciting the sale of insurance by

telephone, in person, or by other

communication. However, the unlicensed

person may telephone persons to set

appointments for licensed and appointed

agents, customer representatives, or

solicitors, or to obtain basic policy

information as to existing insurance

coverage. The unlicensed person may not

engage in a substantive discussion of

insurance products.

57. 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 Corporation v.

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

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

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

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

strict construction so that those covered by the statute have

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

58. An examination of the evidentiary record in this case

reveals that the Department clearly and convincingly proved

that, as alleged in Counts I through III of the Administrative

Complaint, Respondent knowingly and willfully enabled unlicensed

Agency personnel to engage in insurance activities in connection

with their dealings with Ms. Harrington (Count I), Mr. Barroso

and Ms. Barranco (Count II), and Mr. Mercier (Count III), in

violation of Section 626.611(13), Florida Statutes, and Section

626.621(12), Florida Statutes, by giving these unlicensed

persons, in effect, a carte blanche to use her 2-20 license and

act in her stead to generate business and commission revenue for

the Agency. 6

59. To determine the penalty the Department should impose

on Respondent for the commission of these violations, it is

necessary to consult the Department's "penalty guidelines" set

forth in Florida Administrative Code Rule Chapter 69B-231, which

impose restrictions and limitations on the exercise of the

Department's disciplinary authority. See Parrot Heads, Inc. v.

Department of Business and Professional Regulation , 741 So. 2d

1231, 1233 (Fla. 5th DCA 1999)("An administrative agency is

bound by its own rules . . . creat[ing] guidelines for

disciplinary penalties."); cf . State v. Jenkins , 469 So. 2d 733,

734 (Fla. 1985)("[A]gency rules and regulations, duly

promulgated under the authority of law, have the effect of

law."); Buffa v. Singletary , 652 So. 2d 885, 886 (Fla. 1st DCA

1995)("An agency must comply with its own rules."); Decarion v.

Martinez , 537 So. 2d 1083, 1084 (Fla. 1st 1989)("Until amended

or abrogated, an agency must honor its rules."); and Williams v.

Department of Transportation , 531 So. 2d 994, 996 (Fla. 1st DCA

1988)(agency is required to comply with its disciplinary

guidelines in taking disciplinary action against its employees).

60. Florida Administrative Code Rule 69B-231.040 explains

how Petitioner goes about "[c]alculating [a] penalty." It

provides as follows:

(1) Penalty Per Count.

(a) The Department is authorized to find

that multiple grounds exist under Sections

626.611 and 626.621, F.S., for disciplinary

action against the licensee based upon a

single count in an administrative complaint

based upon a single act of misconduct by a

licensee. However, for the purpose of this

rule chapter, only the violation specifying

the highest stated penalty will be

considered for that count. The highest

stated penalty thus established for each

count is referred to as the "penalty per

count".

(b) The requirement for a single highest

stated penalty for each count in an

administrative complaint shall be applicable

regardless of the number or nature of the

violations established in a single count of

an administrative complaint.

(2) Total Penalty. Each penalty per count

shall be added together and the sum shall be

referred to as the "total penalty".

(3) Final Penalty.

(a) The final penalty which will be imposed

against a licensee under these rules shall

be the total penalty, as adjusted to take

into consideration any aggravating or

mitigating factors;

(b) The Department may convert the total

penalty to an administrative fine and

probation if the licensee has not previously

been subjected to an administrative penalty

and the current action does not involve a

violation of Section 626.611, F.S.;

(c) The Department will consider the

factors set forth in rule subsection 69B-

231.160(1), F.A.C., in determining whether

to convert the total penalty to an

administrative fine and probation.

(d) In the event that the final penalty

would exceed a suspension of twenty-four

(24) months, the final penalty shall be

revocation.

61. Florida Administrative Code Rule 69B-231.080 is

entitled, "Penalties for Violation of Section 626.611." It

provides, in pertinent part, as follows:

If it is found that the licensee has

violated any of the following subsections of

Section 626.611, F.S., for which compulsory

suspension or revocation . . . is required,

the following stated penalty shall apply:

* * *

(13) Section 626.611(13), F.S. - suspension

6 months

62. Florida Administrative Code Rule 69B-231.090 is

entitled, "Penalties for Violation of Section 626.621." It

provides, in pertinent part, as follows:

If it is found that the licensee has

violated any of the following subsections of

Section 626.621, F.S., for which suspension

or revocation of license(s) and

appointment(s) is discretionary, the

following stated penalty shall apply:

* * *

(12) Section 626.621(12), F.S. - suspension

6 months

63. In the instant case, the "penalty per count" for each

of the three counts of the Administrative Complaint is a six-

month suspension, making the "total penalty" an 18-month

suspension.

64. The "aggravating/mitigating factors" that must be

considered to determine whether any "adjust[ment]" should be

made to this "total penalty" are set forth in Florida

Administrative Code Rule 69B-231.160, which provides, in

pertinent part, as follows:

The Department shall consider the following

aggravating and mitigating factors and apply

them to the total penalty in reaching the

final penalty assessed against a licensee

under this rule chapter. After

consideration and application of these

factors, the Department shall, if warranted

by the Department's consideration of the

factors, either decrease or increase the

penalty to any penalty authorized by law.

(1) For penalties other than those assessed

under Rule 69B-231.150, F.A.C.:

(a) Willfulness of licensee's conduct;

(b) Degree of actual injury to victim;

(c) Degree of potential injury to victim;

(d) Age or capacity of victim;

(e) Timely restitution;

(f) Motivation of licensee;

(g) Financial gain or loss to licensee;

(h) Cooperation with the Department;

(i) Vicarious or personal responsibility;

(j) Related criminal charge; disposition;

(k) Existence of secondary violations in

counts;

(l) Previous disciplinary orders or prior

warning by the Department; and

(m) Other relevant factors.

65. In its Proposed Recommended Order, the Department

takes the position that "the appropriate final penalty [in this

case] is revocation of Respondent's license," arguing as

follows:

76. . . . . The evidence at hearing

demonstrated that Respondent's conduct was

willful; that there was a substantial degree

of actual and potential injury to the

victims; that the agent was motivated by

financial gain; and that Respondent was

responsible for all of the unlicensed

business practices at the agency, including

those that served to allow a suspended

licensee to flaunt a Department order

suspending his license and thus continue to

engage illegally in the insurance business.

77. It is this latter aggravating factor

that alone serves as justification for the

revocation of Respondent's license. By

allowing her license to be abused by a

suspended licensee, she provided the means

to enable him to continue in the insurance

business from which he had been banned, and

she compounded this wrongdoing by allowing

two other unlicensed individuals to also

prey upon an unsuspecting public. Even the

appointed insurance carriers had no reason

to suspect the agency's essentially

unlicensed operation, so long as

Respondent's falsified signatures appeared

on the appropriate documents. It was a

deliberate and deceitful scam, rather like

hav[ing] a surgeon popping into the

operating room on occasion, while an

unlicensed nurse removes a healthy kidney,

leaves the diseased one, and then signs the

doctor's name to the medical notes.

78. There is no mitigating factor to offset

these aggravating factors.

66. The undersigned does not agree entirely with the

Department's analysis. He takes issue with the Department's

suggestion that the proof submitted at hearing is sufficient to

establish that Respondent's violations caused "a substantial

degree of actual . . . injury to the victims." Furthermore, he

disagrees that there are "no mitigating factor[s]" in this case.

One mitigating factor is Respondent's unblemished disciplinary

record (which does not contain any "[p]revious disciplinary

orders or prior warning by the Department"). Another mitigating

factor is Respondent's "[c]ooperation with the Department."

Although she could have invoked her right to remain silent, 7

Respondent gave incriminating answers to questions posed by the

Department's counsel during her deposition, and this deposition

testimony of hers was the linchpin of the Department's proof

against her at hearing.

67. The foregoing mitigating factors offset the

aggravating factors present in the instant case, but only

partially. Inasmuch as the aggravating factors predominate, an

increase in the "total penalty" is warranted. An additional six

months should be added to the period her license is suspended.

68. Accordingly, the "final penalty" that the Department

should impose in the instant case is a 24-month suspension of

Respondent's license.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions

of Law, it is hereby

RECOMMENDED that the Department issue a Final Order finding

Respondent guilty of the violations alleged in Counts I through

III of the Administrative Complaint and suspending her license

for a total of 24 months for having committed these violations.

DONE AND ENTERED this 7th day of January, 2008, in

Tallahassee, Leon County, Florida.

S

___________________________________

STUART M. LERNER

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 7th day of January, 2008.

ENDNOTES

1 Unless otherwise noted, all references in this Recommended

Order to Florida Statutes are to Florida Statutes (2007).

2 Petitioner's Exhibit 14 was a transcript of a deposition given

by Respondent on October 17, 2007. The statements Respondent

made during her deposition testimony constitute party admissions

(within the meaning of Section 90.803(18)(d), Florida Statutes)

that would be admissible over a hearsay objection in a civil

proceeding in Florida and therefore are, in and of themselves,

sufficient to support a finding of fact in this administrative

proceeding. See § 120.57(1)(c), Fla. Stat. ("Hearsay evidence

may be used for the purpose of supplementing or explaining other

evidence, but it shall not be sufficient in itself to support a

finding unless it would be admissible over objection in civil

actions."); and Castaneda v. Redlands Christian Migrant

Association , 884 So. 2d 1087, 1091 (Fla. 4th DCA 2004)("[T]he

statements of the Redlands employees are admissions within the

meaning of section 90.803(18)(d) as the statements concerned

matters regarding this specific accident arising from their

employment and were made while the deponents were still

employees of Redlands.").

3 The Department may impose a fine or place an agent on

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

license "except on a second offense or when . . . suspension

[or] revocation . . . is mandatory." §§ 626.681 and 626.691,

Fla. Stat.

4 This prohibition extends to all persons not holding a current

license, including those, like Mr. Jones, whose license has been

suspended or revoked by the Department. See also § 626.641(4),

Fla. Stat. ("During the period of suspension or revocation of

the license or appointment, the former licensee or appointee

shall not engage in or attempt or profess to engage in any

transaction or business for which a license or appointment is

required under this code or directly or indirectly own, control,

or be employed in any manner by any insurance agent or agency or

adjuster or adjusting firm.").

5 Subsection (1) of Section 626.0428, Florida Statutes, provides

as follows:

An individual employed by an agent or agency

on salary who devotes full time to clerical

work, with incidental taking of insurance

applications or quoting or receiving

premiums on incoming inquiries in the office

of the agent or agency, is not deemed to be

an agent or customer representative if his

or her compensation does not include in

whole or in part any commissions on such

business and is not related to the

production of applications, insurance, or

premiums.

6 In her deposition testimony (the transcript of which was

offered into evidence by the Department and received as

Petitioner's Exhibit 14), Respondent claimed that the Department

had entered into an agreement allowing Ms. Terrell, Mr. Jones,

and Ms. Smith to "work as customer service reps,"

notwithstanding that they were not licensed by the Department to

do so. This testimony, which was not corroborated by any

evidence adduced at hearing, has been rejected as incredible and

unworthy of belief.

7 See Kozerowitz v. Florida Real Estate Commission , 289 So. 2d

391, 392 (Fla. 1974)("In Vining , we explained that Kozerowitz

was based upon the premise that the self-incrimination clause of

the Fifth Amendment extended only to proceedings criminal in

nature. Our Vining opinion, however, concluded that the

proscription against self-incrimination also applies to any

administrative proceeding of a 'penal' character. We held that

a revocation or suspension hearing before the Florida Real

Estate Commission is a proceeding of this nature, and we

specifically held that Florida Statutes, Section 475.30(1),

F.S.A., was unconstitutional to the extent that it required a

defendant in a discipline proceeding before the Real Estate

Commission to respond to the charges against him."); State ex

rel. Vining v. Florida Real Estate Commission , 281 So. 2d 487,

491 (Fla. 1973)("[I]t is our view that the right to remain

silent applies not only to the traditional criminal case, but

also to proceedings 'penal' in nature in that they tend to

degrade the individual's professional standing, professional

reputation or livelihood."); Best Pool and Spa Service Co., Inc.

v. Romanik , 622 So. 2d 65, 66 (Fla. 4th DCA 1993)("We agree that

requiring Kassover to answer these questions does violate his

right against self-incrimination which applies not only to

criminal matters but also administrative proceedings such as

licensing."); and McDonald v. Department of Professional

Regulation, Board of Pilot Commissioners , 582 So. 2d 660, 663

n.2 (Fla. 1st DCA 1991)("Because license revocation or

suspension proceedings are penal in nature, the fifth amendment

right to remain silent applies.").

COPIES FURNISHED :

David J. Busch, Esquire

Department of Financial Services

Division of Legal Services

612 Larson Building

200 East Gaines Street

Tallahassee, Florida 32399-0333

James O. Walker, III, Esquire

1339 Northeast Fourth Avenue

Fort Lauderdale, Florida 33304

Honorable Alex Sink

Chief Financial Officer

Department of Financial Services

The Capitol, Plaza Level 11

Tallahassee, Florida 32399-0300

Daniel Sumner, 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

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

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.