11-003278PL Department Of Financial Services, Division Of Insurance Agents And Agency Services vs. Freddie Wilson Status: Closed Recommended Order on Tuesday, November 29, 2011.

Summary: Bail Bond agent charged credit card fee on premium, charged unlawful amount for credit card fee on collateral, and failed to give receipt for collateral.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL )

SERVICES, DIVISION OF INSURANCE )

AGENTS AND AGENCY SERVICES , )

)

Petitioner , )

)

vs. ) Case No. 11 - 3278PL

)

FREDDIE WILSON , )

)

Respondent . )

)

RECOMMENDED ORDER

Pursuant to notice, a final hearing was held in this case

on October 28, 2011, by video teleconference with sites in Tampa

and Tallahassee, Florida, before Susan Belyeu Kirkland, an

Administrative Law Judge of the Division of Administrative

Hearings.

APPEARANCES

For Petitioner: Douglas D. Dolan, Esquire

Department of Financial Services

Division of Legal Services

200 East Gaines Street

Tallahassee, Florida 32399

For Respondent: Curtis B. Lee, Esquire

Post Office Box 3412

Orlando, Florida 32802

STATEMENT OF THE ISSUES

The issues in this case are whether Respondent v iolated

sections 648.442(1), 648.442(2), 648.442(4), 648.571(1),

648.45(2)(e), 648.45(2)(h), 648.45(2)(j), 648.571(3)(b)1., and

648.571(3)(b)2., Florida Statutes (2007), 1 / and Florida

Administrative Code Rules 69B - 221.145(4)(a) and 69B -

221.145(4)(b), and, if so, what discipline should be imposed.

PRELIMINARY STATEMENT

On April 8, 2011, Petitioner, Department of Financial

Services, Division of Insurance Agents and Agency Services

(Department), filed a two - count Administrative Complaint against

Respondent, Fr eddie Wilson (Mr. Wilson), alleging that he

violated sections 648.442(1), 648.442(2), 648.442(4),

648.571(1), 648.45(2)(e), 648.45(2)(h), 648.45(2)(j),

648.571(3)(b)1., and 648.571(3)(b)2. and r ules 69B - 221.145(4)(a)

and 69B - 221.145(4)(b) . Mr. Wilson requ ested an administrative

hearing, and the case was forwarded to the Division of

Administrative Hearings on June 28, 2011, for assignment to an

Administrative Law Judge to conduct the final hearing.

The final hearing was scheduled for August 17, 2011, but

wa s continued. On September 12, 2011, the Department filed an

unopposed Motion to Amend Administrative Complaint. The motion

was granted by Order dated September 13, 2011. The Amended

Administrative Complaint deleted the allegations which were

contained i n Count One of the original Administrative Complaint.

At the final hearing, the Department called the following

witnesses: Mr. Wilson, Nicole Cunningham, Michael Wisher, and

Ray Wenger. Petitioner ' s Exhibits A, B, D, G, H, I, J, K, and O

were admitted in evidence. Mr. Wilson testified in his own

behalf. Respondent ' s Exhibit F was admitted in evidence.

The one - volume Transcript of the final hearing was filed on

November 3, 2011. The parties agreed to file their proposed

recommended orders within ten day s of the filing of the

Transcript. Mr. Wilson filed his Proposed Recommended Order on

November 3, 2011, and the Department filed its Proposed

Recommended Order on November 15, 2011. The parties ' p roposed

r ecommended o rders have been considered in the pre paration of

this Recommended Order.

FINDINGS OF FACT

1. The Department is the state agency responsible for

regulating insurance and insurance - related activities, including

limited surety (bail bond) licensees in Florida.

2. At all times relevant to this proceeding, Mr. Wilson

has been licensed in this state as a limited surety (bail bond)

(2 - 34) agent, license number D012026. Mr. Wilson is the owner

of Against All Odds Bail Bonds (Against All Odds), which is

located in Tampa, Florida.

3. As a bail bond agent, Mr. Wilson ' s duties include

writing bail bonds for defendants who are incarcerated; ensuring

the defendants appear for court dates; arresting defendants who

fail to appear in court and returning them to jail; and

returning collateral to defendants w hen requested.

4. In 2007, Mr. Wilson was the only limited surety agent

working at Against All Odds. In May 2007, Michael Wisher

(Mr. Wisher) was arrested for driving under the influence, and

his bond was set at $2,000. Mr. Wilson was contacted to post a

suret y bond on Mr. Wisher ' s behalf.

5. On May 12 or 13, 2007, Mr. Wilson met Mr. Wisher at the

Hillsborough County Jail, where Mr. Wisher was being held.

Mr. Wilson advised Mr. Wisher that the premium for the bail bond

was $200 and that an additional $1 ,800 for collateral was

required . Mr. Wisher agreed to the arrangement and gave Mr.

Wilson permission to use his credit card for the payment. Mr.

Wilson used Mr. Wisher ' s credit card at the jail to pay for the

premium and collateral for a total of $2,000 .

6. Mr. Wilson secured an appearance bond with United

States Fire Insurance Company on May 13, 2007. Mr. Wilson was

released and accompanied Mr. Wilson to the office of Against All

Odds, where he executed an Indemnitor/Guarantor Check List dated

May 12, 2007. Two of the provisions of the checklist provide:

I understand that my collateral cannot be

released until all bonds posted on my behalf

for defendant have been exonerated and

written notice form the court received by

the bail agency.

I understand t hat it is my [Mr. Wisher ' s]

responsibility to request return of any

collateral provided. There may be a delay

of return of collateral until the bail

agency has researched the exoneration date

and verified the bail bond status with the

appropriate courts. The process may be done

faster if I obtain written verification of

the bond exoneration from the court and

provide it to the bail agency.

7. Mr. Wilson did not issue a receipt to Mr. Wisher,

showing that Mr. Wisher had paid $2,000. Based on Mr. Wilson ' s

testimony, the Indemnitor/Guarantor Check List is not the

receipt. Mr. Wilson claims that he did issue a collateral

receipt , but that receipt did not show the credit card fee that

was being imposed. According to Mr. Wilson, the copy of the

receipt was destroyed in a fire. Mr. Wisher ' s testimony is

credited that he did not receive a receipt.

8. Computer records of the Clerk of Hillsborough Circuit

Court show that on September 18, 2007, the bond was deactivated

and a certificate of discharge of bond wa s issued in

Mr. Wisher ' s case. Mr. Wilson claims not to have received the

certificate of discharge , and no certificate of discharge was

entered in evidence .

9. Mr. Wisher contacted Mr. Wilson on December 17, 2007,

requesting that his collateral be return ed. Mr. Wisher advised

Mr. Wilson that the bond had been discharged . Mr. Wilson was

aware that the bond had been discharged because he had checked

the computer records of the Clerk of the Hillsborough Circuit

Court and saw the record showing the discharg e of the bond.

10. Mr. Wilson sent Mr. Wisher a money order for $500 on

January 3, 2008. He sent Mr. Wisher another money order dated

January 31, 2008, for another $500. Mr. Wisher did not agree to

have his collateral returned in installments. By the e nd of

January 2008, Mr. Wilson still owed Mr. Wisher $800.

11. Mr. Wisher made numerous telephone calls to Mr. Wilson

in an attempt to get the remaining amount of his collateral. In

June 2008, Mr. Wisher wrote Mr. Wilson two times in an attempt

to get hi s collateral returned. Both letters were returned by

the United States Postal Service as unclaimed. Mr. Wisher did

not receive any additional money from Mr. Wilson.

12. Mr. Wilson claims that he mailed Mr. Wisher an

additional $400, but the evidence doe s not support his claim.

He submitted a copy of an envelope addressed to Mr. Wisher with

a first class stamp on it. The envelope did not bear a post

mark. The exhibit also had a portion of a customer receipt from

the United States Postal Service, which states return of

collateral in the section entitled "Pay To" and Michael Wisher

in the section labeled "C.O.D. or Used For." The receipt

contains no date and does not specify what service or goods for

which the receipt was issued. Additionally, it appear s that the

receipt is not complete based on the wording at the bottom which

states serial number ; year, month, day; post office; and amount.

Such wording would suggest that additional information would be

part of the receipt, but the receipt provided by M r. Wilson did

not contain the additional information.

13. In addition to the premium of $200, Mr. Wilson charged

Mr. Wisher $400 for a credit card fee. This amount represented

20 percent of the total bond amount, not just the collateral

amount. The cred it card fee which Mr. Wilson charged was more

than the fee which the credit card company charged h im for use

of the credit card.

14. Mr. Wilson claims that he was taught at the bail bond

school held in Fort Lauderdale that up to 20 percent of the

total bo nd amount could be charged to the client for the use of

a credit card.

15. The Department di d not establish that Mr. Wilson

failed to have a sign in his office posting the credit card fee

schedule when Mr. Wisher visited his office. However,

Mr. Wisher w as not provided a copy of the credit card fee

schedule.

CONCLUSIONS OF LAW

16. The Division of Administrative Hearings has

jurisdiction over the parties to and the subject matter of this

proceeding. §§ 120.569 & 120.57, Fla. Stat. (2011).

17. The Depar tment has the burden to establish the

allegations in the Administrative Complaint by clear and

convincing evidence. Dep ' t of Banking & Fin. v. Osborne Stern &

Co. , 670 So. 2d 932 (Fla. 1996).

18. The Department alleges that Mr. Wilson violated

sections 6 48.442(1), 648.442(2), and 648.442(4), which provide :

( 1) Collateral security or other indemnity

accepted by a bail bond agent, except a

promissory note or an indemnity agreement,

shall be returned upon final termination of

liability on the bond. Such co llateral

security or other indemnity required by the

bail bond agent must be reasonable in

relation to the amount of the bond.

Collateral security may not be used by the

bail bond agent for personal benefit or gain

and must be returned in the same conditi on

as received. . . .

(2) When a bail bond agent accepts

collateral, a written, numbered receipt

shall be given, and this receipt shall give

in detail a full account of the collateral

received. The bail bond agent shall also

give copies of documents ren dered under

su bsection (1) to the indemnitor.

* * *

(4) When the obligation of the surety on

the bond or bonds has been released in

writing by the court, the collateral shall

be returned to the rightful owner named in

the collateral receipt unle ss another

disposition is provided for by legal

assignment of the right to receive the

collateral to another person.

19. The Department alleges that Mr. Wilson violated

sections 648.571(1), 648.571(3)(b)1., and 648.571(3)(b)2. , which

provide:

(1) A bai l bond agent who has taken

collateral or an insurer or managing general

agent who holds collateral as security for a

bail bond shall, upon demand, make a written

request for a discharge of the bond to be

delivered to the surety or the surety ' s

agent. A co py of the written request for

discharge must be given to the indemnitor or

the person making the request for the

collateral, and a copy must be maintained in

the agent ' s file. If a discharge is

provided to the surety or the surety ' s agent

pursuant to chap ter 903, the collateral

shall be returned to the indemnitor within

21 days after the discharge is provided.

* * *

(3)( b)1. The bail bond agent may charge the

credit card fee imposed in connection with

the use of the credit card for payment of

co llateral if the fee is clearly shown on

the collateral receipt and is acknowledged

by the person tendering the credit card.

2. The prevailing schedule of credit card

fees must be conspicuously posted in the

lobby of the bail bond agency, and a copy

must be provided to the person tendering the

credit card.

20. Rule 69B - 221.245(4)(c) provides: "The credit card fee

referenced in Section 648.571(3)(b)1., F.S., is the fee charged

by the credit card issuer."

21. The Department alleges that Mr. Wilson vio lated

sections 648.45(2)(e), 648.45(2)(h), and 648.45(2)(j) , which

provide:

(2) The department shall deny, suspend,

revoke, or refuse to renew any license or

appointment issued under this chapter or the

insurance code, and it shall suspend or

revoke the e ligibility of any person to hold

a license or appointment under this chapter

or the insurance code, for any violation of

the laws of this state relating to bail or

any violation of the i nsurance code or if

the person:

* * *

(e) Has demonstrated lack of fitness or

trustworthiness to en gage in the bail bond

business.

* * *

(h) Is guilty of misappropriation,

conversion, or unlawful withholding of

moneys belonging to a surety, a principal,

or others and received in the conduct of

business under a license.

* * *

(j) Has willfully failed to comply with or

willfully violated any proper order or rule

of the department or willfully violated any

provision of this chapter or the insurance

code.

22. The Department alleges that Mr. Wil son violated

rules 69B - 221.145(4)(a) and 69B - 221.145(4)(b) , which provide:

(4) A bail bond agent may directly enter

into an arrangement with a credit card

facility i n order to charge a credit card

holder ' s account for the issuance of a bail

bond.

(a) A bail bond agent may not charge or

receive a transfer fee, or any other

additional fee, surcharge or commission, for

the use of a credit card if the bail bond

agent accepts payment by credit card. Any

fee or discount points which may be charged

to the bai l bond agent by the credit card

facility or organization shall be borne by

the bail bond agent and shall not be passed

on to any person involved in the bail bond

transaction. This paragraph does not

prohibit a bail bond agent from charging a

fee on a tran sfer bond in accordance with

Rule 69B - 221.105, F.A.C.

(b) A bail bond agent may not deduct a

transfer fee, or other additional fee,

surcharge or commission, from the amount of

collateral charged, except as provided in

Section 648.571(3)(b), F.S., at the time the

collateral is returned.

23. The Department has established by clear and convincing

evidence that Mr. Wilson violated rule 69B - 221.145(4)(a) by

charging a credit card fee on the premium amount of $200.

Mr. Wilson charged a credit card fee on $2,0 00, which included

the $200 premium charge.

24. The Department has established by clear and convincing

evidence that Mr. Wilson violated section 648.45(2)(j) by

violating rule 69B - 221.145(4)(b) and section 648.571(3)(b) by

charging a credit card fee on th e collateral which was more than

the credit card fee charg ed by the credit card company.

25. The Department did not establish that no sign was

posted in the office of Against All Odds, which contained the

credit card fee schedule at the time Mr. Wisher c ame to the

office to transact business. The Department did establish that

Mr. Wilson failed to give Mr. Wisher a copy of the credit card

fee schedule in violation of section 648.571(3)(b)2 . and, thus,

in violation of section 648.45(2)(j).

26. The Departm ent has established by clear and convincing

evidence that Mr. Wilson violated section 648.571(3)(b)1. by

failing to give Mr. Wisher a collateral receipt that showed the

credit card fee.

27. The Department has failed to establish by clear and

convincing ev idence that Mr. Wilson violated sections 648.442(1)

and 648.442(4) , because the evidence did not establish that the

court had released the liability on the bond in writing.

28. The Department has established that Mr. Wilson

violated section 648.571(1) by failing to make a written request

for a discharge of the bond, when Mr. Wisher advised him that

the bond had been discharged and that he wanted his collateral

returned. Mr. Wilson was aware that the bond had been

discharged by checking the clerk of the co urt ' s computer

records, which showed that the bond had been discharged on

September 18, 2007. Mr. Wilson argues that he had no obligation

to return the collateral because he had not received a

certificate of discharge from the court clerk. However, he

re turned portions of the collateral in January 2008 because he

knew that the bond had been discharged. Once Mr. Wilson became

aware that the bond had been discharged , he should have

requested a copy of the discharge certificate, but , rather than

making the request, he kept part of Mr. Wisher ' s collateral and,

as of the day of the final hearing, had still not returned

Mr. Wisher ' s collateral in full. By not requesting the

certificate of discharge and then claiming that he did not have

to return the collatera l because he did not have a certificate,

Mr. Wilson was unlawfully holding Mr. Wisher ' s money, which is a

violation of section 648.45(2)(h).

29. The Department established by clear and convincing

evidence that Mr. Wilson violated section 648.45(2)(e). Th e

failure to request a certificate of discharge, the failure to

give Mr. Wisher a collateral receipt, and the charging of

20 percent of the total bond as a credit card fee demonstrate

lack of fitness or trustworthiness to engage in the bail bond

business.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that a final order be entered finding

that Mr. Wilson did not violate sections 648.442(1), 648.442(4),

and 648.57 1 (3)(b)2.; finding that Mr. Wilson violated se ctions

648.442(2), 648.571(1), 648. 571 (3)(b)1., 648.45(2)(e),

648.45(2)(h), and 648.45(2)(j) and rules 69B - 221.145(4)(a) and

69B - 221.145(4)(b); suspending Mr. Wilson ' s license for six

month s; imposing an administrative fine of $5,000; and requiring

Mr. Wil son to return the remainder of Mr. Wisher ' s collateral to

him.

DONE AND ENTERED this 29th day of November, 2011 , in

Tallahassee, Leon County, Florida.

S

SUSAN BELYEU KIRKLAND

Administrative Law Judge

Division of Administr ative 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 29th day of November, 2011 .

END NOTE

1/ Unless otherwise indicated, all references to the Florida

Statutes are to the 2007 version.

COPIES FURNISHED :

Douglas D. Dolan, Esquire

Department of Financial Services

Division of Legal Services

200 East Gaines Street

Tallahassee, Florida 323 99

Curtis B. Lee, Esquire

Post Office Box 3412

Orlando, Florida 32802

Julie Jones, CP, FRP, Agency Clerk

Department of Financial Services

Division of Legal Services

200 East Gaines Street

Tallahassee, Florida 32399 - 0390

NOTICE OF RIGHT TO SUBMIT EXCE PTIONS

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.