18-001656PL Department Of Financial Services vs. Vivian Santos Status: Closed Recommended Order on Friday, August 3, 2018.

Summary: DFS conceded it did not prove specific allegations in Count I. Count II charged violations for false oath. Adjusting for mitigating factors, one-year suspension was recommended.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL

SERVICES,

Petitioner,

vs. Case No. 18 - 1656PL

VIVIAN SANTOS,

Respondent.

_______________________________/

RECOMMENDED ORDER

On June 6, 2018, Administrati ve Law Judge (ALJ) J. Lawrence

Johnston of the Division of Administrative Hearings (DOAH)

conducted a disputed - fact hearing in this case by video

teleconference at sites in Fort Myers and Tallahassee.

APPEARANCES

For Petitioner: Robert Alan Fox, Esquire

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399

For Respondent: Christopher Brown , Esquire

Brown, Suarez, Rios & Weinberg, P.A.

3375 T amiami Trail East, Suite 400

Naples , Florida 3 4112

STATEMENT OF THE ISSUE S

Whether the Respondent, a licensed limited surety (bail

bond) agent, should be disciplined on charges stated in an

Amended Administrative Complaint, DFS case 2147 61 - 17 - AG; and, if

so, the appropriate discipline.

PRELIMINARY STATEMENT

On January 17, 2018, the Petitioner filed an Administrative

Complaint against the Respondent. The Administrative Complaint

charged the Respondent with violating various statutes by no t

remitting premiums and other monies, as required, to Lexington

National Insurance Company (Lexington). The Respondent admitted

some allegations but denied others and asked for a hearing. The

Petitioner forwarded the matter to DOAH to be heard by an ALJ .

At DOAH, the Administrative Complaint was amended to add a

charge (designated Count II) that the Respondent falsely swore on

a DFS Appointing Form that she owed no premium to any insurer,

when she actually owed premium s to Lexington.

At the outset of the hearing, the parties raised an issue

regarding the original charge in Count I, which alleged that,

between June and mid - November 2016, the Respondent Ðfailed to

timely forward . . . premium [s] due . . . on various surety

bondsÑ she wrote ; Ðfailed to p ay numerous bail bond forfeitures

that she was obligated to pay to various courtsÑ ; and Ðfailed to

comply with [certain provisions of her] AgentÓs Contract.Ñ

During a deposition taken the week before the hearing, it became

apparent that the Petitioner cou ld not prove which, if any,

surety bonds were written by the Respondent between June and

mid - November 2016. Amended Admin. Compl. ¶¶ 14, 16, 21. Counsel

for the Petitioner soliloquized about the various options the

Petitioner had upon discovering the li mitations of the proof,

including: move for a continuance and further amend the charges

to expand the June to mid - November 2016 timeframe; seek leave to

amend without a continuance (probably over objections by the

Respondent on due process and fairness gr ounds); or file a

separate administrative complaint addressing times other than

June to mid - November 2016 (which would initiate the litigation of

an additional administrative proceeding between the parties).

Ultimately, the Petitioner chose against all th ree options, and

the Respondent objected to having to try issues outside the June

to mid - November 2016 timeframe under Count I. The ruling on the

objection was to Ðexclude the evidence thatÓs outside the

timeframe of the Adminis trative Complaint.Ñ Tr. 14 .

At the final hearing, the Petitioner called three witnesses,

one being the Respondent. The PetitionerÓs Exhibits 1 through 3,

6, 7, 7 - A, 9, 16 through 18, and 18 - A through 18 - C were received

in evidence. The Respondent again testified briefly in her case -

in - chief and did not introdu ce any exhibits in evidence.

A Transcript of the final hearing was filed on June 18. The

Petitioner timely filed a proposed recommended order (PRO) on

June 28. The Respondent filed a motion to extend the time for

filing her PRO, which the Petitioner opposed. The motion was

granted, and the Petitioner was allowed to file a response to the

RespondentÓs PRO. The response was filed on July 16. The PROs

and the PetitionerÓs response have been considered.

In the section of the PetitionerÓs PRO addressing Count I

(which is entitled ÐClose But No CigarÑ), the Petitioner concedes

that it was unable to prove Count I, Ð[a]s none of the bonds at

issue can be tied directly to the June of 2016 to mid - November

2016 time frame.Ñ Pet. PRO at 21 - 22. For that reason, only the

charge in Count II of the Administrative Complaint is addressed.

FINDING S OF FACT

1. The Respondent holds Florida limited surety (bail bond)

agent license P166880. She has held the license since 2009 and

has not been disciplined for any violations before this case.

2. The Respondent entered into a contract with Braswell

Surety Services, Inc. (Braswell Surety), the Florida managing

general agent for Lexington on March 9, 2011, and wrote bail

bonds for Lexington through mid - November 2016. The Respondent

was the owner and primary bail bond agent for 1st Premier Bail

Bonds (1st Premier), and conducted her business with Braswell

Surety and Lexington through 1st Premier.

3. Under the RespondentÓs contract with Bra swell Surety and

Lexington, premiums for the Lexington bail bonds written by the

Respondent were to be turned over to Lexington promptly.

4. The Respondent also was obligated to submit a monthly

execution report to Braswell Surety. The execution report s were

supposed to detail all bonds executed by the RespondentÓs company

since the last report and include a remittance equal to 20

percent of the total amount of premium written since the last

report.

5. The Respondent also was obligated to submit a mo nthly

discharge report to Braswell Surety. The discharge reports were

supposed to list all bonds executed by the RespondentÓs company

that had been discharged by the court since the previous

discharge report, along with appropriate documentation evidencin g

the discharges.

6. The Respondent also was obligated to remit to Braswell

Surety, monthly, 10 percent of the total amount of premium s

written since the last execution report. This amount was to be

held or invested and maintained by Braswell Surety as the

RespondentÓs Ðbuild - up fundsÑ (BUF) account. The purpose of the

BUF account was to hold Lexington and Braswell Surety harmless

from any loss, cost or expenses or for the payment of losses

resulting from bail bonds written by the RespondentÓs company.

Braswell Surety and Lexington could use money from the BUF

account for those purposes at their discretion and could require

money used for that purpose to be replaced by the RespondentÓs

company if Braswell Surety and Lexington deemed the account to be

i nadequate to provide full protection to them.

7. In November 2016, it came to Braswell SuretyÓs attention

that the RespondentÓs company cashed a $9,690 check made out to

1 st Premier by the court clerk in reimbursement for a forfeiture

that had been remit ted. The Respondent testified that the check

was cashed before it was noticed that it should not have been

made out to the RespondentÓs company. Braswell Surety demanded

that the RespondentÓs company give Braswell Surety or Lexington a

check in that amou nt, which was done.

8. In November 2016, it also came to Braswell SuretyÓs

attention that the RespondentÓs company had several other

forfeitures paid by Lexington. Braswell Surety sent the

Respondent a list of them. The Respondent investigated and

det ermined that many had been set aside and others were expected

to be set aside. One still outstanding was in the amount of

$ 35,000. In a letter dated November 9, 2016, the Respondent

promised to resolve all issues involving forfeitures by the end

of 2017. In her letter, the Respondent complained: ÐCutting me

off isnÓt helping anyone. IÓm trying to have you and Lexington

all caught up by the end of 2017. IÓm working hard to make this

right. ItÓs all about money. I canÓt pay if I canÓt make money.

Plea se reply and let me know how we can resolve our differences

without taking this to a level that canÓt resolve any thing for

anybody.Ñ

9. In November 2016, it also came to Braswell SuretyÓs

attention that the Respondent was not reporting on its inventory

of Lexington powers of attorney (powers) sent to the RespondentÓs

company at the end of 2014 for use in 2015 and at the end of 2015

for use in 2016. (Powers are essentially blank bond forms that

can be used for one year.) Only one 2015 power was reported by

the RespondentÓs company as having been used. None of the other

powers for 2015 and 2016 were reported by the RespondentÓs

company. Braswell Surety and Lexington had information from

other sources about a few powers that were used in 2015 and 2016,

b ut it was unknown in late 2016 whether any of the numerous other

unreported powers were used or not, or if premium s w ere owed.

10. By the end of November, Braswell Surety and Lexington

decided not to provide the Respondent with powers for 2017.

Braswell Surety also reported to the Petitioner that the

Respondent owed premiums and forfeitures, and the Petitioner

initiated an investigation.

11. On January 9, 2017, Braswell Surety sent the Respondent

a letter with an inventory report on the information Br aswell

Surety and Lexington had about the RespondentÓs 2015 and 2016

powers. The letter acknowledged that the Respondent had no 2017

Lexington powers and was not authorized to write any more

Lexington bonds. However, the letter stated, the RespondentÓs

a ppointment was not terminated, and the Respondent was expected

to report all bonds in her inventory and pay all premiums owed to

Lexington.

12. During January 2017, the Respondent and Braswell Surety

determined that the Respondent owed $14,906 in premiu ms. There

was no evidence as to when any of the premiums owed became due

and payable.

13. The evidence was clear and convincing that all or

almost all of the $14,906 was due and payable between June and

November 2016, even if they might have first beco me due and

payable before June 2016. However, the Petitioner declined to

argue that this evidence proved the charges in Count I of the

Amended Administrative Complaint. To the contrary, the

Petitioner conceded in its PRO that those charges were not

prove n.

14. An attorney for Lexington wrote the Respondent a letter

on January 18, 2017, claiming that the Respondent still owed

Lexington for forfeitures. The evidence did not prove whether

forfeitures were still owed at that time.

15. At some point in t ime , the Respondent agreed to work

for Shamrock Bail Bonds (Shamrock). Shamrock was owned by a bail

bondsman named Brendan OÓNeal, who was its main agent. The

Respondent agreed to act as a sub - agent for Shamrock. Under this

arrangement, between the Resp ondent and Mr. OÓNeal, Mr. OÓNeal

was primarily responsible for any bail bonds written by the

Respondent for Shamrock.

16. In order to write bail bonds for Shamrock as a sub -

agent, the Respondent had to be appointed as a limited surety

agent. On Januar y 20, 2017, the Respondent filled out Form DFS -

H2 - 1544 to be appointed by Palmetto Surety Corporation. The form

is mandated and controlled by the Petitioner and is adopted by

rule. See § 648.382(1) , (2), Fla. Stat. (2016) 1/ ; Fla. Admin.

Code R. 69B - 221.1 55(3) (2016) . 2/ In signing the form, the

Respondent swore under oath that she owed no premium s to any

insurer. This was untrue, as she did not pay Lexington the

$14,906 she owed in premiums until February 20, 2017. The signed

form was filed with the Pet itioner, as required by statute. See

§ 648.382(1) , (2), Fla. Stat.

17. The Respondent claims not to have known that she was

swearing falsely when she signed the Form DFS - H2 - 1544 because she

did not read the form carefully and did not think a sub - agent

would be required to swear to owing no premium to any insurer.

She claims she would have waited to sign the form until after

paying the premium she owed to Lexington if she knew what the

form said. However, the evidence was clear that Braswell Surety

att empted to motivate the Respondent to pay the premiums owed to

Lexington by warning that she c ould not write bonds for any other

insurer until the debt to Lexington was paid. The Respondent

also admitted that she knew this from the time she learned it in

Ð bond schoolÑ prior to licensure as a bail bondsman and knew it

from experience ever since. Her testimony that her status as a

sub - agent of Mr. OÓNeal confused her is not credible. The

evidence, taken as a whole, was clear and convincing that the

Responde nt intended to misrepresent when she signed the form.

Her misrepresentation was relied on by Palmetto Surety and

Shamrock.

CONCLUSIONS OF LAW

18. Because the Petitioner seeks to impose license

discipline, it has the burden to prove the allegations by cle ar

and convincing evidence. See DepÓt of Banking & Fin. v. Osborne

Stern & Co., Inc. , 670 So. 2d 932 (Fla. 1996); Ferris v.

Turlington , 510 So. 2d 292 (Fla. 1987). This Ðentails both a

qualitative and quantitative standard. The evidence must be

credible ; the memories of the witnesses must be clear and without

confusion; and the sum total of the evidence must be of

sufficient weight to convince the trier of fact without

hesitancy.Ñ In re Davey , 645 So. 2d 398, 404 (Fla. 1994). See

also Slomowitz v. Walk er , 429 So. 2d 797, 800 (Fla. 4th DCA

1983). ÐAlthough this standard of proof may be met where the

evidence is in conflict, . . . it seems to preclude evidence that

is ambiguous.Ñ Westinghouse Elec. Corp. v. Shuler Bros., Inc. ,

590 So. 2d 986, 988 (Fla. 1st DCA 1991).

19. Disciplinary statutes and rules Ðmust be construed

strictly, in favor of the one against whom the penalty would be

imposed.Ñ Munch v. DepÓt of ProfÓl Reg., Div. of Real Estate ,

592 So. 2d 1136, 1143 (Fla. 1st DCA 1992); see Camejo v. D epÓt of

Bus.& ProfÓl Reg. , 812 So. 2d 583, 583 - 84 (Fla. 3d DCA 2002);

McClung v. Crim. Just. Stds. & Training CommÓn , 458 So. 2d 887,

888 (Fla. 5th DCA 1984)(Ð[W]here a statute provides for

revocation of a license the grounds must be strictly construed

bec ause the statute is penal in nature. No conduct is to be

regarded as included within a penal statute that is not

reasonably proscribed by it; if there are any ambiguities

included, they must be construed in favor of the licensee.Ñ

(citing State v. Pattis hall , 126 So. 147 (Fla. 1930)).

20. The grounds proven in support of the PetitionerÓs

assertion that the RespondentÓs license should be disciplined

must be those specifically alleged in the Amended Administrative

Complaint. See e.g. , Trevisani v. DepÓt o f Health, 908 So. 2d

1108 (Fla. 1st DCA 2005); Cottrill v. DepÓt of Ins. , 685 So. 2d

1371 (Fla. 1st DCA 1996); Kinney v. DepÓt of State , 501 So. 2d

129 (Fla. 5th DCA 1987); Hunter v. DepÓt of ProfÓl Reg. , 458

So. 2d 842 (Fla. 2d DCA 1984). Due process pro hibits the

Petitioner from taking disciplinary action against a licensee

based on matters not specifically alleged in the charging

instruments, unless those matters have been tried by consent.

See Shore Vill. Prop. OwnersÓ AssÓn, Inc. v. DepÓt of Envtl.

P rot. , 824 So. 2d 208, 210 (Fla. 4th DCA 2002); Delk v. DepÓt of

ProfÓl Reg. , 595 So. 2d 966, 967 (Fla. 5th DCA 1992).

21. The Petitioner conceded in its PRO that the specific

allegations in Count I of the Amended Administrative Complaint

were not proven b y clear and convincing evidence.

22. Count II charges several violations of section

648.45(2) based on the allegation that the Respondent swore

falsely that she owed no premium to any insurer on the Form DFS -

H2 - 1544 she filled out to be appointed by Pal metto Surety as a

limited surety agent. Specifically, Count II charges violations

of the following listed paragraphs of subsection (2) of the

statute because the Respondent: (b) Ð[h]as made a material

misstatement, misrepresentation, or fraud in obtainin g a license

or appointmentÑ; (e) Ð[h]as demonstrated lack of fitness or

trustworthiness to engage in the bail bond businessÑ; (o)1.

Ð[h]as signed and filed a report or record in the capacity of an

agent which the licensee knows to be false or misleadingÑ; and

(p) Ð[h]as demonstrated a course of conduct or practices which

indicate that the licensee is incompetent, negligent, or

dishonest or that property or rights of clients cannot safely be

entrusted to him or her.Ñ

23. The Respondent contends that the P etitioner failed to

prove the element of intent in the violations charged in

Count II. The post - hearing submittals by the parties argue about

the nature of the intent element under the various charged

paragraphs of section 648.45(2). It suffices to say that the

intent element for each violation was proven by clear and

convincing evidence, even if the strictest formulation proposed

by the Respondent applied.

24. Because only Count II was proven, the appropriate

penalty, before adjusting for any aggravat ing or mitigating

factors, is the highest single penalty for the proven violations.

See Fla. Admin. Code R. 69B - 241.040. The highest single penalty

for the proven violations is the penalty for the violation of

section 648.45(2)(b), which is revocation. See Fla. Admin. Code

R. 69B - 241.090(3)(b); compare Fla. Admin. Code

R. 69B - 241.090(6) , (16).

25. The Petitioner can increase or decrease the penalty

based on aggravating or mitigating factors. See Fla. Admin. Code

R. 69B - 241.160. The PetitionerÓs post - hearing submittals propose

that these factors warrant an adjustment of the calculated

penalty; the imposition of a suspe nsion, rather than revocation;

and a 25 percent reduction of the two - year maximum suspension

allowed under section 648.49(1) Ï i.e., an 1 8 - month suspension.

The RespondentÓs PRO does not address the rules on calculating

the penalty. It simply proposes no penalty and just a caution

based on the RespondentÓs supposedly credible testimony. While

the RespondentÓs proposal is rejected, the Pe titionerÓs proposal

does not adjust properly for the aggravating and mitigating

factors.

26. The Respondent was personally (and not just

vicariously) responsible for filling out and signing the Form

DFS - H2 - 1544 to be appointed by Palmetto Surety as a lim ited

surety agent. Fla. Admin. Code R. 69B - 241.160(2)(i). Her

conduct was willful. Fla. Admin. Code R. 69B - 241.160(2)(a). She

was motivated by the prospect of some potential financial gain

from writing bonds for Palmetto Surety a little sooner than she

would have if she had waited until she paid the premiums owed to

Lexington. Fla. Admin. Code R. 69B - 241.160(2)(f), (g), (h).

Nobody suffered actual injury or financial loss, and the

potential for injury was minimal. Fla. Admin. Code R. 69B -

241.160(2)(b ) , (c). There was no victim, and restitution was not

an issue. Fla. Admin. Code R. 69B - 241.160(2)(e). Although not

victims, the other parties involved were sophisticated insurers

who were able to protect themselves well, not vulnerable due to

age or cap acity. Fla. Admin. Code R. 69B - 241.160(2)(d) , (e).

There were Ðsecondary violationsÑ in Count II, but that just

means the same conduct violated more than one statute. Fla.

Admin. Code R. 69B - 241.160(2)(k). There were no previous

disciplinary orders or prior warnings. Fla. Admin. Code R. 69B -

241.160(2)(l). There was no evidence as to any related criminal

charges. Fla. Admi n. Code R. 69B - 241.160(2)(j).

27. A more appropriate balancing of the aggravating and

mitigating factors supports a one - year susp ension.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Department of Financial Services

enter a final order dismissing Count I of the Amended

Administrative Complaint, finding the Respondent gui lty under

Count II, and suspending her licenses and appointments for one

year.

DONE AND ENTERED this 3rd day of August , 2018 , in

Tallahassee, Leon County, Florida.

S

J. LAWRENCE JOHNSTON

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 3rd day of August , 20 18 .

ENDNOTE S

1/ Unless otherwise indicated, the cited Florida Statutes refer

to the 2016 codification, which contains the statutes that were

in effect in late 2016 and early 2017, when the alleged

violations occurred .

2/ All rule citations are to th e rules that were in effect in

late 2016 and early 2017, when the alleged violations occurred .

COPIES FURNISHED:

Robert Alan Fox, Esquire

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399

(eServed)

Rene Suarez, Esquire

Brown, Suarez, Rios & Weinberg, P.A.

1532 Jackson Street

Fort Myers, Florida 33901

(eServed)

Christopher Brown, Esquire

Brown, Suarez, Rios & Weinberg, P.A.

3375 Tamiami Trail East, Suite 400

Naples, Florida 34112

Julie Jones, CP, FRP, Agency Clerk

D ivision 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 thi s Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.