08-006223PL Department Of Financial Services vs. David Randall Woodard Status: Closed Recommended Order on Wednesday, April 15, 2009.

Summary: Petitioner met its burden of proof. Respondent`s license should be revoked.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL )

SERVICES, )

)

Petitioner, )

)

vs. ) Case No. 08-6223PL

)

DAVID RANDALL WOODARD, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a final hearing was conducted in this

case on March 11, 2009, in Tampa, Florida, before Administrative

Law Judge R. Bruce McKibben of the Division of Administrative

Hearings.

APPEARANCES

For Petitioner: William Gautier Kitchen, Esquire

Division of Legal Services

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399-0333

For Respondent: David R. Woodard, pro se

9712 White Barn Way

Riverview, Florida 33569

STATEMENT OF THE ISSUE

The issue in this case is whether Respondent, David Randall

Woodard ("Woodard"), violated provisions of Chapter 626, Florida

Statutes (2008), 1 and, if so, what penalty or sanction should be

imposed.

PRELIMINARY STATEMENT

On November 5, 2008, Petitioner, Department of Financial

Services (the "Department"), issued a four-count Administrative

Complaint alleging certain violations of the statutes and rules

governing general lines insurance agents. Woodard timely

requested a formal administrative hearing to contest the

allegations in the Administrative Complaint. The request for

hearing was duly forwarded to the Division of Administrative

Hearings ("DOAH") on December 15, 2008, and assigned to the

undersigned Administrative Law Judge. At the final hearing, the

Department relied upon the testimony of Cynthia Ann Bundy,

Joseph Perez, and Woodard. The Department offered two exhibits

into evidence, each of which was admitted without objection.

Woodard testified on his own behalf and offered one exhibit into

evidence (which was admitted).

The parties advised the undersigned that a transcript would

be ordered of the final hearing. They were given ten days from

the date the transcript was filed at DOAH to submit proposed

recommended orders. The Transcript was filed on April 2, 2009,

and the Department filed a Proposed Recommended Order on

April 7, 2009. As of the date of this Recommended Order,

Respondent has not filed a post-hearing submission.

FINDINGS OF FACT

1. The Department is the government agency responsible for

enforcing the statutory provisions of Chapter 626, Florida

Statutes, relating to general lines insurance agents.

2. Woodard, at all times relevant to this proceeding, was

a general lines insurance agent and was operating an insurance

business known as Trinity Insurance, Inc. ("Trinity"). Woodard

was the responsible agent for Trinity.

3. On April 26, 2006, Joseph Perez purchased a workers'

compensation insurance policy (through Trinity) from Summit

Insurance Company. Perez paid Trinity a down payment of

$3,327.20 by way of a check. Woodard remitted a check from

Trinity to Summit Insurance Company in connection with Perez'

workers' compensation insurance. The check from Trinity was

returned for insufficient funds. As a result, Perez did not

have the workers' compensation coverage he believed he had

purchased.

4. Thereafter, Woodard repaid Perez the premium that Perez

had initially paid to Trinity. However, the first repayment

check sent from Woodard to Perez was also returned for

insufficient funds. Ultimately, Woodard repaid all of Perez'

premium down payment.

5. On May 14, 2007, Senia Lewis purchased homeowners'

insurance (through Trinity) from Citizens Property Insurance

Corporation ("Citizens"). The insurance premium invoice

received by Lewis included a processing fee of $60. The

processing fee was a charge, by Woodard, of $20 per page for

notarizing Lewis' signature on three forms. The processing fee

was retained by Woodard and was not made part of the premium

payment made to Citizens.

6. In October 2006, Denise and Steven Russell obtained a

mortgage from Wells Fargo Financial. A Wells Fargo employee,

Matt Jackson, arranged for the purchase of homeowners' and flood

insurance from Citizens (through Trinity). Wells Fargo gave

Trinity a check in the amount of $3,178 as payment of the

premium for the insurance. However, in December 2006, the

Russells were notified that their insurance had been rescinded

because Citizens had not received a premium payment from

Trinity.

7. Woodard was arrested and plead nolo contendere to a

misdemeanor charge relating to the transaction with the

Russells. As part of his plea, Woodard repaid the Russells the

amount of their premium.

8. In July 2006, Lance and Cindy Bundy paid $1,576 to

Trinity to acquire homeowners' insurance on their new home.

Woodard sent Citizens a check in the sum of $1,226 to secure the

desired insurance.

9. In October 2006, the Bundys were notified that their

insurance policy was being cancelled for non-payment of the

premiuminity had not paid Citizens on a timely basis,

resulting in cancellation of the policy.

10. Woodard made restitution to the Bundys, but not for

the entire amount of their premiums. However, inasmuch as the

Bundys had insurance for a short period of time, they were

generally satisfied with the amount of the reimbursement from

Woodard.

11. Woodard does not dispute the basic facts surrounding

each of the above-described transactions. He says none of the

cancellations or rescissions of insurance policies was intended.

Rather, Woodard failed to properly manage the accounts of

Trinity and allowed checking accounts to be overdrawn. However,

when a check was drawn on an overdrawn account, the result would

be detrimental to clients who had placed their trust in Woodard.

12. Woodard says that out of 350 clients handled by his

company, these four are the only complaints that have been made.

Nonetheless, each of the complaints is legitimate.

13. Woodard has a fiduciary responsibility to his clients

and is bound by law to provide all services for which the

clients pay. It is not acceptable to violate the fiduciary

relationship by failing to procure insurance coverage as

contracted for by a client.

14. Woodard is not currently engaged in the practice of

insurance sales. His license is active, but is currently in a

pending status awaiting payment of fees or completion of

continuing education courses. Woodard is presently not using

his license actively in the sale of insurance, but uses the

license in order to access certain information he may not

otherwise be able to obtain. At this time, Woodard is working

for a company as a software developer.

15. Trinity Insurance, Inc., is no longer engaged in

business.

CONCLUSIONS OF LAW

16. The Division of Administrative Hearings has

jurisdiction over the parties to and the subject matter of this

proceeding pursuant to Section 120.569 and Subsection 120.57(1),

Florida Statutes.

17. Petitioner has the burden of proof in this matter.

Ferris v. Turlington , 510 So. 2d 292 (Fla. 1987). The standard

of proof for a licensure revocation case is clear and convincing

evidence. Osborne Stern and Co., Inc. v. Department of Banking

and Finance , 647 So. 2d 245, 248 (Fla. 1st DCA 1994).

18. Clear and convincing evidence is an intermediate

standard of proof, which is more than the "preponderance of the

evidence" standard used in most civil cases, but less than the

"beyond a reasonable doubt" standard used in criminal cases.

See State v. Graham , 240 So. 2d 486 (Fla. 2nd DCA 1970). Clear

and convincing evidence has been defined as evidence which:

[R]equires that 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.

Slomowitz v. Walker , 429 So. 2d 797, 800 (Fla. 4th DCA 1983)

(citations omitted).

19. Section 626.611, Florida Statutes, states in relevant

part:

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, adjuster,

customer representative, service

representative, or managing general agent,

and it shall suspend or revoke the

eligibility to hold a license or appointment

of any such person, if it finds that as to

the applicant, licensee, or appointee any

one or more of the following applicable

grounds exist:

* * *

(2) Material misstatement,

misrepresentation, or fraud in obtaining the

license or appointment or in attempting to

obtain the license or appointment.

* * *

(7) Demonstrated lack of fitness or

trustworthiness to engage in the business of

insurance.

(8) Demonstrated lack of reasonably

adequate knowledge and technical competence

to engage in the transactions authorized by

the license or appointment.

* * *

(13) Willful failure to comply with, or

willful violation of, any proper order or

rule of the department or willful violation

of any provision of this code. . . .

20. Section 626.561, Florida Statutes, is entitled

Reporting and Accounting for Funds and states in pertinent part:

(1) All premiums, return premiums, or

other funds belonging to insurers or others

received by an agent, insurance agency,

customer representative, or adjuster in

transactions under the license are trust

funds received by the licensee in a

fiduciary capacity. An agent or insurance

agency shall keep the funds belonging to

each insurer for which an agent is not

appointed, other than a surplus lines

insurer, in a separate account so as to

allow the department or office to properly

audit such funds. The licensee in the

applicable regular course of business shall

account for and pay the same to the insurer,

insured, or other person entitled thereto.

21. Petitioner has proven by clear and convincing evidence

that Woodard failed to maintain the integrity of premiums or

funds entrusted to him by clients. The funds were commingled

with Woodard's business account and, albeit unintentionally,

when the business account was overdrawn, the clients' funds were

affected.

22. Petitioner has, therefore, met its burden of proof in

this matter to show that Woodard demonstrated a lack of fiscal

fitness to engage in the business of insurance sales. Whether

Woodard has, as he claims, made changes to insure against such

financial failures in the future, is not relevant. Petitioner

has proven that for the time period in question Woodard's

business skills were lacking.

23. Woodard's shortcomings resulted in a failure to

provide the services for which his clients contracted in good

faith.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that a final order be entered by Petitioner,

Department of Financial Services, revoking the general lines

insurance agent's license of Respondent, David Randall Woodard.

DONE AND ENTERED this 15th day of April, 2009, in

Tallahassee, Leon County, Florida.

R. BRUCE MCKIBBEN

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone]

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 15th day of April, 2009.

ENDNOTE

1/ Unless specifically stated otherwise herein, all references

to the Florida Statutes shall be to the 2008 version.

COPIES FURNISHED :

Honorable Alex Sink

Chief Financial Officer

Department of Financial Services

The Capitol, Plaza Level 11

Tallahassee, Florida 32399-0300

Benjamin Diamond, General Counsel

Department of Financial Services

The Capitol, Plaza Level 11

Tallahassee, Florida 32399-0307

William Gautier Kitchen, Esquire

Division of Legal Services

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399-0333

David R. Woodard

9712 White Barn Way

Riverview, Florida 33569

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.