10-000510PL Department Of Financial Services vs. Spencer William Cootware Status: Closed Recommended Order on Thursday, September 23, 2010.

Summary: Stuck ladder was fault of examinee and not equipment failure. Agency should deny exam challenge.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL )

SERVICES , )

)

Petitioner , )

)

vs. ) Case No. 10 - 0510PL

)

SPENCER WILLIAM COOTWARE , )

)

Respondent . )

)

RECOMMENDED ORDER

Administrative Law Judge (ALJ) Daniel Manry conducted the

final hearing of this case for the Division of Administrative

Hearings (DOAH) on August 3, 2010. The ALJ conducted the

hearing by video teleconference in Tallahassee and F ort Myers,

Florida.

APPEARANCES

For Petitioner: Thomas A. David, Esquire

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399 - 0333

For Respondent: Michelle Hill, Esquire

Law Office of Michelle Hill

2345 Stanford Court, Suite 602

Naples, Florida 34112

STATEMENT O F THE ISSUES

The issues are whether Respondent violated Chapter 648,

Florida Statutes (2007), 1 by charging more for a bail bond than

the statutorily allowed amount, withholding and failing to

return money to his principal or the principalÓs wife, and

sugge sting employment of a particular attorney to represent the

principal, and, if so, what, if any, penalty should be imposed

against RespondentÓs limited surety (bail bond) license.

PRELIMINARY STATEMENT

Petitioner filed an A dministrative C omplaint against

Re spondent on November 5, 2009. Respondent timely requested an

administrative hearing. Petitioner referred the request to DOAH

to assign an ALJ to conduct the hearing.

At the hearing, the parties submitted 14 joint exhibits and

a pre - hearing stipulation , a greeing on stipulated facts of

record. Petitioner presented the testimony of four witnesses

and submitted two exhibits for admission into evidence.

Respondent testified and presented the tes timony of two other

witnesses.

The identity of the witnesses and exhibits , and the rulings

regarding each , are reported in the one - volume Transcript of the

hearing filed with DOAH on August 19, 2010. Petitioner timely

filed its Proposed Recommended Order (PRO) on August 30, 2010.

Respondent did not file a PRO.

FINDIN GS OF FACT

1. Petitioner is the state agency responsible, in relevant

part, for regulating limited surety licensees (bail bond agents)

in Florida pursuant to Chapter 648. Respondent is licensed as a

bail bond agent in Florida pursu ant to license number A 054475.

2. Respondent conducts business as the sole owner of

Nickel American Bail Bonds (Nickel). Nickel is located at

2641 Airport Road, Naples, Florida 34112 - 4878. Respondent is

t he primary agent for Nickel.

3. Respondent employs Mr. Anthony Robert B ennett (Tony

Bennett) directly through Nickel and through SWFLGPS Monitoring

Solutions (GPS Solutions). GPS Solutions is a fictitious name

registered to Freedom 247, Inc. (Freedom), a Florida, for - profit

corporation, for which Respondent is a principal an d controlling

shareholder.

4. At the time of the events at issue in this proceeding,

Mr. Tony Bennett was licensed as a temporary bail bond agent

through Nickel. At the time of the hearing, Mr. Tony Bennett

was a licensed bail bond agent through Nickel.

5. At the time of the events at issue in this proceeding,

Respondent also employed Ms. Michelle Blake. Respondent

employed Ms. Blake directly and through Nickel. Ms. Blake

sometimes performed minor tasks for GPS Solutions.

6. Sometime in December 2007, the Sheriff for Collier

County, Florida (Collier County Sheriff), arrested Mr. Edel

Rodriguez and incarcerated Mr. Rodriguez in the Collier County

Jail. The court set bond in the amount o f $202,000.00 for all

charges.

7. During December 2007, Ms. Ana Cabrera, the wife of

Mr. Rodriguez, attempted to arrange bond for her husband with

Respondent , but was unsuccessful. She successfully obtained a

bond when she returned to RespondentÓs office on January 2,

2008, with two friends who were willing to secure the bond with

mortgages on their homes.

8. Bankers Insurance Company (Bankers) issued a bond in

the aggregate amount of $202,000.00 pursuant to what is

identified in the record as three separate identification

numbers. Bankers issued identification numbe rs 510505690 - 0 and

510505182 - 2, each for $100,000.00, and identification number

580036136 - 7 for $2,000.0 0.

9. The Collier County Sheriff released Mr. Rodriguez from

custody on January 2, 2008. Mr. Rodriguez enjoyed approximately

72 days of freedom until March 15, 2008, at 8:50 p.m., when

Respondent re - arrested Mr. Rodriguez, where Mr. Rodriguez

worked, and returned Mr. Rodriguez to the custody o f the Collier

County Sheriff.

10. The maximum amount that Respondent was permitted under

Florida law to charge Mr. Rodriguez for his 72 days of freedom

was 10 percent of $202,000.00, or $20,200.00. Respondent

charged Mr. Rodriguez $22,040.00 in violation of Section 648.33

and Florida Administra tive Code Rule 69B - 221.105(2).

11. Ms. Cabrera paid $20,200.00 on Janu ary 2, 2008, when

she signed the bond documents. 2 Mr. Rodriguez paid an additional

$1,840.00 in fees related to the use of the GPS device required

by Respondent.

12. The GPS device was a cost of the bail bond transaction

that was required by Respondent. Respondent paid a company

identified in the record as Secure Alert up to $9.00 a day to

monitor the GPS device and charged Mr. Rodriguez $12.00 a day

for a monthly profit of $90.00 , but at a gross monthly cost to

Mr. Rodriguez of $360.00. Respondent allo wed Mr. Rodriguez to

spend the first 24 hours of his release from jail without a

GPS device without fear that Mr. Rodriguez was a flight danger.

13. As will be discussed in greater detail, Mr. Rodriguez

eventually cut the GPS device from his leg. For rea sons

discussed hereinafter, the fact - finder finds that the act of

cutting the device from Mr. Rodriguez 's leg represented more of

a financial threat to Respondent than a threat of flight by

Mr. Rodriguez.

14. The court did not order Mr. Rodriguez to wear a

GPS device as a condition of his release. The Bankers bond

documents did not require a GPS device as a condition of the

bond documents. Florida Administrative Code Rule 69B - 221.100

does not require a GPS dev ice as a condition of release.

15. Florida A dministrative Code Rule 69B - 221.100 prohibits

Mr. Rodriguez from: departing the jurisdiction of the court,

which was Collier County, Florida; moving from one address to

another; demonstrating any intention to cause a forfeiture of

the bond; and being arre sted or incarcerated for any offense

while on bond. There is no credible and persuasive evidence

that any one of the foregoing factors were present in this case.

16. Respondent testified that the GPS device was not a

cost of the bail bond transaction. F or reasons previously

discussed in paragraphs 12 and 13, the fact - finder finds

RespondentÓs testimony to be less than credible and persuasive.

Other testimony by Respondent belies his disclaimer. For

example, Respondent testified, in substantial effect, that he

would not have participated without the GPS device and that he

did not intend to re - arrest Mr. Rodriguez until he discovered

that Mr. Rodriguez had cut the GPS strap from his leg. For

reasons discussed in paragraphs 12 and 13, the overwhelming

evi dence shows that RespondentÓs decision to re - arrest

Mr. Rodriguez had nothing to do with a threat of flight and had

everything to do with a financial threat to Respondent.

17. Mr. Rodriguez cut the GPS strap because the GPS strap

was malfunctioning while Mr. Rodriguez was at work at the Wal -

Mart located at 11748 Tamiami Trail, Naples, Florida, in Collier

County, Florida, within the jurisdiction of the court. The

malfunctioning device caused Mr. Rodriguez embarrassment,

irritation, and discomfort on the jo b. Mr. Rodriguez was a

plumber by trade, did not understand much English, and needed

his job to pay the $360.00 monthly fee Responde nt charged for

the GPS device.

18. Mr. Rodriguez placed the severed GPS device in his

personal vehicle. The severed devic e continued to accurately

disclose the location of Mr. Rodriguez at his job.

19. Mr. Rodriguez telephoned Mr. Tony Bennett for

instructions. While Mr. Tony Bennett had some difficulty

understanding Mr. Rodriguez, Mr. Tony Bennett understood enough

to ins truct Mr. Rodriguez to bring the defective device in on

Monday for repair or exchange. There was no attempt at flight

or to evade Respondent.

20. When Respondent arrived at the Wal - Mart, Mr. Rodriguez

continued to work. It was approximately 8:50 p.m. N one of this

activity violated any of the court ordered conditions of

release, applicable rules, or the conditions of the Bankers bond

instruments.

21. Respondent surrendered Mr. Rodriguez back to the

Collier County Sheriff 's office . On the statement of s urrender

form, Respondent indicated that Mr. Rodriguez had violated the

bail agreement. That assertion is incorrect.

22. Mr. Rodriguez acted in good faith to comply with the

bail agreement and was in material compliance with the terms of

the agreement at all times. Mr. Rodriguez did not violate the

terms of release ordered by the court, the Bankers bond

instruments, or applicable rules.

23. Respondent has not refunded any of the excess premium

to Mr. Rodriguez. Respondent is not entitled to retain the

excess premium.

24. At some point between December 2007 and January 2,

2008, Respondent recommended that Ms. Cabrera retain a specific

attorney identified in the record as Mr. Josh Faett. In doing

so, Respondent violated Subsection 648.44(1)(a). 3

25. Ne ither Mr. Rodriguez nor Ms. Cabrera speak s or read s

English. Ms. Blake filled in the blanks on the application for

bond for Ms. Cabrera and provided little, if an y, explanation to

Ms. Cabrera.

CONCLUSIONS OF LAW

26. DOAH has jurisdiction over the subject matter and

parties in this proceeding. §§ 120.569 and 120.57(1), Fla.

Stat. (2009). DOAH provided the parties with adequate notice of

the formal hearing.

27. The burden of proof is on Petitioner. Petitioner must

show by clear and convincing evidence t hat Respondent committed

the acts alleged in the Administrative Complaint and the

reasonableness of the proposed penalty. Department of Banking

and Finance, Division of Securities and Investor Protection v.

Osborne Stern and Company , 670 So. 2d 932 (Fla. 1996).

28. For the reasons stated in the Findings of Fact, the

evidence is clear and convincing that Respondent committed the

acts alleged in the Administrative Complaint. The fact - finder

finds the evidence submitted by Petitioner to be credible and

pers uasive. The evidence is of sufficient weight to convince

the fact - finder, without hesitancy, as to the truth of the

specific allegations against Respondent. Inquiry Concerning a

Judge No. 93 - 62 , 645 So. 2d 398, 404 (Fla. 1994); Lee County v.

Sunbelt Equi ties, II, Limited Partnership , 619 So. 2d 996, 1006

n. 13 (Fla. 2d DCA 1993); Slomowitz v. Walker , 429 So. 2d 797,

800 (Fla. 4t h DCA 1983).

29. Respondent enjoys the benefit of public trust and

stands in a fiduciary relationship with his customers. Natel son

v. Department of Insurance , 454 So. 2d 31, 32 (Fla. 1st DCA

1984). A person acting in a fiduciary capacity generally has a

duty to make a full and fair disclosure of material facts to the

person reposing confidence in the fiduciary. Federal Deposit

I nsurance Corporation v. Martin, et al. , 801 F. Supp. 617, 620

(M. D . Fla. 1992) (citations omitted).

30. The victims in this case speak little English. They

are economically dis - empowered and vulnerable. They are not in

an equal negotia ting position with Respondent.

31. It is clear and convincing to the trier of fact that

the acts committed by Respondent were willful. Willfulness is

an issue of fact to be determined by the trier of fact. Roche

Security and Casualty Company, Inc. v. Department of Financ ial

Services, Office of Insurance Regulation , 895 So. 2d 1139, 1141

(Fla. 2d DCA 2005).

32. The fact - finder is not persuaded by testimony from

Respondent that he was fearful that Mr. Rodriguez was a flight

risk. The GPS device was not required by Bankers , the court, or

applicable administrative rules. Only Respondent required the

GPS device, and the GPS device was, in the vernacular, a cash

cow for Respondent and Secure Alert, not a security device. The

bon d was secured by two mortgages.

33. The premiu m charged by Respondent includes any service

fee or similar fee or excess money in addition to the premium.

Respondent cannot circumvent the prohibition against excess fees

by classifying the fee as something else, including a GPS fee.

§§ 627.041 and 627 .043; Fla. Admin. Code R . 69B - 221.105(2).

34. Petitioner articulated technical reasons for deference

to agency expertise. Johnston, M.D. v. Department of

Professional Regulation, Board of Medical Examiners , 456 So. 2d

939, 943 - 944 (Fla. 1st DCA 1984). P rotection of the public is a

valid policy reason for the statutory interpretation adopted by

Petitioner. Cf. Liberty Care Plan , 710 So. 2d 202, 2 07

(Fla. 1st DCA 1998) (approving the cited principle but reversing

declaratory statement that home care plan was health insurance).

35. The acts committed by Respondent violate Subsections

648.33(2), 648.44(1)(a), 648.45(2)(d), 648.45(2)(e),

648.45(2)(g), 648.45(2)(h), 648.45(2)(j), 648.45(3)(c), and

648.45(3)(e). PetitionerÓs PRO seeks a suspension of

Responde ntÓs license for a period of seven months and an

administrative fine of $22,040.00 pursuant to Section 648.52.

The proposed penalty is reasonable under the facts and

circumstances evidenced in this proceeding.

RECOMMENDATION

Based on the foregoing Finding s of Fact and Conclusions of

Law, it is

RECOMMENDED that the Department of Financial Services enter

a final order finding Respondent guilty of violating the

statutory provisions cited in paragraph 3 5 , suspending

RespondentÓs license for seven months, and imposing an

administrative fine in the amount of $22,040.00.

DONE AND ENTERED this 2 3rd day of September , 2010 , in

Tallahassee, Leon County, Florida.

S

DANIEL MANRY

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 2 3 rd day of September , 2010 .

ENDNOTES

1/ References to chapters, sections, and subsections are to

Florida Statutes (2007) , unless otherwise stated. The specific

statutory subsections at issue in this proceeding are 648.33(2),

648.44(1)(a), 648.45(2)(d), 648.45(2)(e), 648.45(2)(g),

648.45(2) (h), 648.45(2)(j), 648.45(3)(c), and 648.45(3)(e).

2/ Ms. Cabrera may have paid $200.00 of the $20,200.00 at a

later time, but the timing is immaterial.

3/ The fact - finder finds the testimony of Ms. Cabrera to be

credible and persuasive.

COPIES FURNISHED :

Thomas A. David, Esquire

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399 - 0333

Michelle Hill, Esquire

Law Office of Michelle Hill

2345 Stanford Court, Suite 602

Naples, Florida 34112

Julie Jones, CP, FRP, Agency Clerk

Department of Financial Services

Division of Legal Services

200 East Gaines Street

Tallahassee, Florida 32399 - 0390

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

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.