Comm'r of the Ind. Dep't of Ins. v. Schumaker
Decision Date | 31 December 2018 |
Docket Number | Court of Appeals Case No. 18A-MI-864 |
Citation | 118 N.E.3d 11 |
Parties | The COMMISSIONER OF the INDIANA DEPARTMENT OF INSURANCE, Appellant, v. Jeffrey A. SCHUMAKER, Appellee. |
Court | Indiana Appellate Court |
Attorneys for Appellant: Curtis T. Hill, Jr., Attorney General of Indiana, Frances Barrow, Deputy Attorney General, Indianapolis, Indiana
Attorney for Appellee: Arend J. Abel, Cohen & Malad, LLP, Indianapolis, Indiana
[1] The Commissioner (the "Commissioner") for the Indiana Department of Insurance (the "Department") appeals the trial court's order vacating its decision to not renew Jeffrey A. Schumaker's insurance producer license. We affirm.
[2] Schumaker has held an insurance producer license since 1990 and concentrates his business in life, health, disability, and Medicare supplement insurance. He also held a license with the Financial Industry Regulatory Authority ("FINRA") permitting him to sell securities. In 2011, Mr. Schumaker experienced financial difficulties1 and took $8,300 from his homeowners association, for which he volunteered as the treasurer. In March 2014, Schumaker repaid the money he had taken from the homeowners association along with two years of dues he owed and one year of future dues. He disclosed his actions to the homeowners association and resigned as treasurer, and the association elected not to pursue charges. Schumaker reported his actions to his broker-dealer, the broker-dealer in turn communicated with FINRA, and Schumaker elected not to challenge the suspension issued by FINRA. Schumaker believed FINRA communicated with the Commissioner, and when completing his license renewal application, he disclosed his FINRA bar.2
[3] On August 12, 2016, the Commissioner issued an Administrative Order Notice of Nonrenewal of License which stated the enforcement division of the Department received untimely notification of Schumaker's securities license suspension and permanent bar, stated Schumaker had disclosed that he misappropriated funds for personal use as treasurer of his homeowners association, cited Ind. Code § 27-1-15.6-17(a)3 and Ind. Code § 27-1-15.6-12(b)(8),4 and stated that Schumaker's producer license would not be renewed. At Schumaker's request, a hearing was scheduled before an administrative law judge (the "ALJ").
[4] On September 14, 2016, the ALJ held a hearing. In November 2016, the ALJ issued Findings of Fact, Conclusions of Law and Order. The ALJ found, "[i]n response to Question 2, of his application for renewal to [the Department] Schumaker made a full and complete disclosure of the FINRA bar and the circumstances leading thereto."5 Appellant's Appendix Volume II at 35. The ALJ found that no evidence was presented that Schumaker has ever committed any conduct that is fraudulent, coercive, dishonest, incompetent, untrustworthy, or financially irresponsible in the conduct of his insurance business or any other business venture. The ALJ also found "the evidence in this case demonstrates that Schumaker took $8300 from the homeowners' association bank account with the intent to repay it" and "[w]hile dishonest, all evidence presented at the hearing was that this was a singular issue, out of character for Schumaker, and not part of a pattern of deceit or a series of ‘practices’ in either his personal or professional life." Id. at 37. The ALJ recommended that the order of nonrenewal be reversed on the conditions that Schumaker's license be granted on a two-year probationary basis and that he pay a civil penalty of $1,000.
[5] On February 20, 2017, the Commissioner issued Findings of Fact, Conclusions of Law, and Final Order. The Commissioner stated that the Department filed an objection to the ALJ's recommended order and challenged, in relevant part, the ALJ's conclusions relating to Ind. Code § 27-1-15.6-12(b)(8). The Commissioner found that Schumaker violated subsections (1) and (8) of Ind. Code § 27-1-15.6-12(b) and ordered that his insurance producer license not be renewed.
[6] On March 22, 2017, Schumaker filed a petition for judicial review with the trial court. The parties submitted briefs6 and on February 1, 2018, the court held argument. On March 19, 2018, it issued its Findings of Fact,7 Conclusions of Law and Order which vacated the Commissioner's February 20, 2017 order and provided:
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