17-003188PL Department Of Financial Services vs. Pamela Williams Denson Status: Closed Recommended Order on Wednesday, November 22, 2017.

Summary: Three-month suspension for bail bond agent who endorsed bail bonds after surety on bail bond failed to pay a judgment following forfeiture of the surety bond. Substantive due process militates against suspending license of agent until she or surety pays.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL

SERVICES,

Petitioner,

vs. Case No. 17 - 3188PL

PAMELA WILLIAMS DENSON,

Respondent.

_______________________________/

RECOMMENDED ORDER

On September 29 , 2017 , Robert E. Meale, Administrative Law

Judge of the Division of Administrative Hearings (DOAH),

conducted the final hearing by videoconference in Miami and

Tallahassee, Florida.

APPEARANCES

For Petitioner: Matthew R. Daley, Esquire

Departm ent of Financial Services

Office of the General Counsel

200 East Gaines Street

Tallahassee, Florida 32399

For Respondent : Frank E duardo Gil, Esquire

The Law Office of Frank E. Gil, P.A.

10689 North Kendall Drive, Suite 208

Miami, Florida 33176

STATEMENT OF THE ISSUE S

The issue s are whether , in violation of section

648.45(3)(c), Florida Statutes , Respondent executed a bond after

a judgment had been entered on a bail bond that she had executed

and the judgment had remained unpaid or unsecured for at least

35 days ; and, if so, what penalty should be imposed.

PRELIMINARY STATEMENT

An Administrative Complaint dated February 24 , 2017 ,

alleges that Respondent is currently licensed as a limited

surety (bail bond) agent, holding license number A097887. At

all material times, Respondent allegedly was the primary bail

bond agent, owner, and sole managing member of V .I.P. Bailbonds,

LLC, located at 20401 Northwest Second Avenue, Suite 216, Miami

Gardens, Florida. At all material times, V.I.P. Bailbonds, LLC,

was allegedly an agent for Lumbermens Mutual Insurance, a surety

company licensed to do business in Florida.

The Administrative Complaint alleges that, on August 3,

2007, in criminal case number 0713631CF10A, Respondent executed

a bond for Richard Banton in the amount of $75,000, on which

Lumbermens Mutual Insurance was the surety. On July 17, 2009,

the Clerk o f Circuit Court in and for Broward County, Florida,

allegedly entered a judgment ordering the forfeiture of bond

power number US100781910 and ordering Lumbermens Mutual

Insurance to pay $75,000 by August 21, 2009. On August 21,

2009, the Clerk of Circuit Court allegedly entered a Certificate

of Unsatisfied Judgment. At the hearing, the Administrative Law

Judge granted Petitioner's oral motion to take official notice

of the civil action resulting in the $75,000 judgmen t, which may

be found online at http s://www.browardclerk.org/Web2/CaseSearch/

Details/?caseid=Nzg1OTY3 - l76xuNTkM88%3d&caseNum=CACE09039681&

category=CV.

On December 28, 2010, Petitioner allegedly informed

Respondent that she was prohibited from executing bail bonds

until the judgment of July 17, 2009, was paid. Respondent has

allegedly failed to pay the judgment.

The Administrative Complaint alleges tha t Respondent has

violated section 648.44(1)(m) by executing bail bonds after a

judgment had been entered on a bail bond that she had executed

and, within 35 days of its entry, the judgment had not been paid

or payment of the judgment had not been secured b y bond; section

648.45(2)(f), by demonstrating a lack of reasonably adequate

knowledge and competence to engage in the licensed business;

section 648.45(2)(j), by willfully failing to comply with or

willfully violating any proper rule or order of Petitione r or

willfully violati ng any provision of chapter 648 or the Florida

Insurance Code; and section 648.45(3)(c), by failing to comply

with any law relating to the business of bail bond insurance or

violating any provision of the Florida Insurance Code.

Respo ndent timely requested a formal administrative

hearing.

At the hearing, Petitioner called two witnesses and offered

into evidence seven exhibits : Petitioner Exhibits 1 - 7 .

Respondent called no witness es , but offered one exhibit:

Respondent Exhibit 1. All exhibits were adm itted except

Petitioner Exhibit 4, which was proffered.

The court reporter filed the transcript on October 19 ,

2017. The parties filed proposed recommended order s by

November 20 , 2017 .

FINDINGS OF FACT

1. At all material times, Re spondent has been licensed

as a limited surety ( bail bond ) agent, holding license

number A097887. She has not been previously disciplined.

2. From March 2004 through August 2010, Respondent was

appointed as a bail bond agent to represent Indiana Lumb ermens

Mutual Insurance Company (Lumbermens). On August 3, 2007,

Respondent, as a bail bond agent, issued a bond on behalf of her

principal, Lumbermens, in the amount of $75,000 for defendant

Richard Benton .

3. Almost two years later, Mr. Benton failed to appear at

a mandatory court appearance on May 15, 2009, in Broward Circuit

Court Case 07 - 13631CF10A. On May 15, 2009, a circuit judge

entered an Order Estreating Bond, which ordered Lumbermens to

pay $75,000 to the Broward County Clerk of Courts.

4 . On July 17, 2009, the Broward County Clerk of Courts

entered a judgment in the amount of $75,000 against Lumbermens

based on the Order Estreating Bond (Judgment) . Aft er "Ordered

and Adjudged," the J udgment reads: "Judgment in the amount of

$75,000 be a nd the same is hereby entered against Indiana

Lumbermens Mutual Ins as surety" plus interest. On July 17,

2009, t he Clerk's office served a copy of the Judgment to the

bail bond agency at which Respondent worked.

5. By Clerk's Certificate of Unsatisfied Judgment dated

August 21, 2009, the Broward County Clerk of Cou rts certified

that the $75,000 J udgment had not been satisfied as of the date

of the certificate. The certificate , which, on its face, was

not served on Respondent or her bail bond agency, sta tes

erroneously that the J udgment was against Lumbermens and

Respondent. This flawed certificate does not establish by clear

and convincing evidence that the Judgment was unpaid, nor do the

confusing docket remarks that the civil action against

Lumbermens was "Disposed by Other," as indicated under the

column marked "Statistical Closure(s)." However, Petitioner

introduced into evidence Petitioner Exhibit 7, which is another

Clerk's certificate certifying that the Judgment remained unpaid

as of September 2 8, 2017. This establishes by clear and

convincing evidence that the Judgment remains outstanding.

6. After the expiration of 35 days following the entry of

the Judgment, Respondent continued to execute surety bonds as a

bail bond age nt for one or more surety companies . In 2015, an

investigator employed by Petitioner called Respondent and

informed her about the Judgment against Lumbermens. The

investigator told Respondent that the Judgment was outstanding

and "could affect her license."

CONCLUSIONS OF LAW

7 . DOAH has jurisdiction of the sub ject matter.

§§ 120.569 and 120.57(1), Fla. Stat. (2015).

8 . Petitioner bears the burden of proving the material

allegations by clear and convincing evidence . § 120.57(1)(j) .

9 . A "bail bond agent" is either a " limited surety agent"

or a "professional bail bond agent." § 648.25(2). Respondent

is a bail bond agent who is a limited surety agent and may be

referred to by either statutory term.

1 0 . A criminal surety bail bond encompasses an undertaking

by the ba il bond agent who endorsed the bond to "ensure that the

defendant appears at all criminal proceedings for which the

surety bond is posted." § 903.045 . The undertaking by the

surety company arises under the conditions and term of the

surety bond. Assumin g liability under the surety bond , if the

defendant fails to appear as required, the court shall declare

the bond forfeited, and the clerk of court shall, within five

days, transmit notice of the forfeiture to the surety agent and

the surety company. § 903.26(2)(a).

1 1 . If the forfeiture is not paid or discharged by the

court within 60 days, the clerk of the court enters judgment on

the forfeiture "against the surety . " § 903.27(1). Within ten

days, the clerk shall furnish Petitioner and the Office o f

Insurance Regulation a certified copy of the "judgment docket"

and the " surety company" a copy of the judgment, including the

power of attorney number and the name of the " executing agent. "

Id. If the judgment is not paid within 35 days, the clerk shal l

furnish copies of the judgment and a certificate of

nonsatisfaction to Petitioner, the Office of Insurance

Regulation, and the sheriff of the county in which the bond was

executed. Id.

1 2 . Section 903.27(3) provides:

Surety bail bonds may not be execut ed by a

bail bond agent against whom a judgment

has been entered which has remained unpaid

for 35 days and may not be executed for a

company against whom a judgment has been

entered which has remained unpaid for

50 days. No sheriff or other official who

is empowered to accept or approve surety

bail bonds shall accept or approve such a

bond executed by such a bail bond agent or

executed for such a company until such

judgment has been paid.

1 3 . The precondition to the nonacceptance of a bail bond

from a bail bond agent or a surety is the entry o f a judgment

against the party. Thus, in this case , where the judgment was

not entered against Respondent, public officials could lawfully

continue to accept bail bonds that she had executed as a bail

bond agent , although the bail bond agent herself is prohibited

from executing bail bonds by section 648.44(1)(m), which is

triggered by an unpaid "judgment [that] has been entered on a

bond executed by a bail bond agent," rather than a judgment

against a bail bond agent.

1 4 . It is the duty of Petitioner to prove the Judgment and

that the Judg ment remained outstanding at the time that

Respondent executed additional bail bonds. See , e.g. , State v.

Robarge , 450 So. 2d 855 (Fla. 1984) (state must p rove both

elements of crime of "possession of a firearm without a license"

because "without a license" is within the enacting clause of the

statute, not a subsequent clause). Petitioner has proved both

elements in this case.

15 . Respondent raises the defense of equitable estoppel,

which requires Petitioner to represent a material fact that is

contrary to a later - asserted position, Respondent to rely on the

representation, and Respondent to suffer a detrimental change in

position in reliance on the repr esentation. See , e.g. , Hamilton

Downs Horsetrack, LLC v. State , 226 So. 3d 1046 (Fla. 1st DCA

2017) (equitable estoppel where an investigator witnessed an

invalid race due to common ownership of both horses, but, in a

post - race meeting when the race, if u nofficial, could have been

rerun , assured the operator that the race was official). The

above - described comments by Petitioner's investigator do not

rise to a representation of anything, except the fact that

Respondent's license could be affected by the o utstanding

Judgment against Lumbermens -- an assertion that Petitioner

continues to make in this case. Nor is Respondent able to prove

detrimental reliance. Respondent seems to imply that the

investigator's comment lulled Respondent into a false sense of

s ecurity, so that she did not investigate whether Lumbermens had

paid the 2009 Judgment in 2015. Regardless of whether an

investigation in 2015 would have uncovered anything that an

investigation in 2017 failed to uncover, Respondent is really

inviting the Administrative Law Judge to speculate, against the

clear and convincing evidence of the Clerk's second certificate,

that the Judgment was actually paid. But the fact is the

Judgment was never paid, so any reliance by Respondent could

never be detrimental .

1 6 . Florida Administrative Code R ule 69B - 241.080(13)

provides that the penalty range for a violation of

sect i on 648.44(1)(m) is suspension for not more than three

months for the initial violation. In its proposed recommended

order, Petitioner reques ts a six months' suspension based on the

willfulness of Respondent's violation. However, the evidence

fails to support Petitioner's assertion that the violation was

willful and , thus , fails to support the aggravated penalty.

1 7 . In its proposed recomme nded order, Petitioner also

requests that post - suspension reinstatement be conditioned on

Respondent's payment of the Judgment. Petitioner's request does

not cite any authority, but section 648.49(1) provides that

Petitioner "may not grant . . . reinstate ment if it finds that

the circumstances for which the license . . . was suspended

still exist or are likely to recur." The Administrative

Complaint sought revocation, so Petitioner has provi ded

Respondent notice of the possibility that the penalty in this

proceeding could effectively deprive her permanently of her

license as a bail bond agent.

18 . In her proposed recommended order, Respondent contends

that discipline in this case would violate her procedural due

process rights, citing Mathews v. Eldridge , 424 U.S. 319 (1976).

The argument appears to supplement her equitable - estoppel

argument by focusing on the long delay of Petitioner in bring

this case. Perhaps, the argument is that her proc edural due

process rights are violated by a lack of an administrative

statute of limitations. Neither the government nor private

interest is paramount, so the focus turns to the risk of error

of the lack of statute of limitations in the context of the

amp le procedural safeguards that attach in a chapter 120

administrative proceeding. See Rivera v. Minnich , 483 U.S. 574

(1987); Addington v. Texas , 441 U.S. 41 8 (1979); Santosky v.

Kramer , 455 U.S. 745 (1982) (Rehnquist, J., dissenting) . The

flaw in this ar gument is that nothing suggests that the outcome

of this prosecution would have been any different if it had been

filed one day after Respondent had executed the first bail bond

after the time had run for Lumbermens to pay the Judgment.

T hus, a court's ad dition of a limitations period, on the ground

of procedural due process, would not alter the outcome of this

case.

19 . This is not to imply that Respondent may not have a

substantive due process argument -- a prospect that Petitioner may

wish to consider in assessing the penalty . The facts of this

ca se establish a clear violation based on the bail bond agent's

strict liability for endorsing surety bonds after the failure of

the surety company that she represents to pay a Judgment arising

out of a surety bon d that the agent has endorsed on behalf of

her principal. The facts of this case fail to establish a

single act or omission on Respondent's part in connection with

this breach of contract by Lumbermens. Neither the allegations

nor the evidence suggests t hat Petitioner somehow knew that

Lumbermens might not pay the surety bond at issue in this case

or that she endorsed bail bonds on behalf of Lumbermens after

the forfeiture order entered by the Clerk.

2 0 . Petitioner may not deprive Respondent of her lic ense,

which is a property interest , without due process:

Substantive due process refers to certain

actions that the government may not engage

in, no matter how many procedural safeguards

it employs." Blaylock v. Schwinden , 862

F.2d 135 2, 1354 (9th Cir. 1988).

Substantive due process "protects a liberty

or property interest in pursuing the 'common

occupations or professions of life.'"

Benigni v. City of Hemet , 868 F.2d 307, 312

(9th Cir. 1988) (quoting Schware v. Board of

Bar Examiners , 353 U.S. 232, 238 - 39,

1 L. Ed. 2d 796, 77 S. Ct. 752 (1957)); see

also Chalmers v. City of Los Angeles , 762

F.2d 753, 757 (9th Cir. 1985). In order to

prove a substantive due process claim,

appellants must plead that the government's

action was "clearly arbitrary and

unre asonable, having no substantial relation

to the public health, safety, morals, or

general welfare." Village of Euclid v.

Ambler Realty Co. , 272 U.S. 365, 395, 71 L.

Ed. 303, 47 S. Ct. 114 (1926). Betsey

Lebbos's allegations that appellees' actions

depriv ed her of the ability to practice law

thus states a substantive due process claim.

Lebbos v. Judges of Superior Court, 883 F.2d 810, 818 (9th Cir.

1989). If, on the present facts, Petitioner can determine that

suspending Respondent's license until she pays a $75,000

Judgment bears a substantial relation to the public health,

safety, morals, or general welfare, it may impose the relief

sought in its propos ed recommended order; otherwise, Petitioner

may prefer to confine itself to the penalty recommended in its

rule.

RECOMMENDATION

It is

RECOMMENDED that Petitioner enter a final order finding

Respondent guilty of violating section 448.44(1)( m), Florida

Statutes; suspending her limited surety license for three

months ; and reinstating the license at the end of three months

without regard to whether the Judgment remains outstanding.

DONE AND ENTERED this 22nd day of November , 2017 , in

Tallahass ee, Leon County, Florida.

S

ROBERT E. MEALE

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 22nd day of November , 2017 .

COPIES FURNISHED:

Matthew R. Daley, Esquire

Department of Financial Services

Office of the General Counsel

200 East Gaines Street

Tallahassee, Florida 32399

(eServed)

Frank Eduardo Gil, Esquire

The Law Office of Frank E. Gil, P.A.

10689 North Kendall Drive, Suite 208

Miami, Florida 33176

(eServed)

Julie Jones, CP, FRP, Agency Clerk

Division of Legal Services

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399 - 0390

(eServed)

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.