Dyer v. Department of Ins. and Treasurer, 90-1465

• Decision Date: 21 August 1991
• Docket Number: No. 90-1465,90-1465
• Citation: 585 So.2d 1009
• Parties: Dale Joseph DYER, Appellant, v. DEPARTMENT OF INSURANCE AND TREASURER, a State Agency, Appellee. 585 So.2d 1009, 16 Fla. L. Week. D2235
• Court: Florida District Court of Appeals

Page 1009

585 So.2d 1009

Dale Joseph DYER, Appellant, v. DEPARTMENT OF INSURANCE AND TREASURER, a State Agency Appellee.

No. 90-1465.

585 So.2d 1009, 16 Fla. L. Week. D2235

District Court of Appeal of Florida First District.

Aug. 21, 1991.

Rehearing Denied Sept. 25, 1991.

J. Riley Davis of Taylor, Brion, Buker & Greene, Tallahassee, for appellant.

S. Marc Herskovitz, Div. of Legal Services, Dept. of Ins., Tallahassee, for appellee.

ZEHMER, Judge.

This is an appeal from a final order of the Department of Insurance that suspended Dale Joseph Dyer's license as a health insurance agent in Florida for a period of six months and imposed an administrative fine in the amount of $5,000. Dyer raises four points, arguing that: (1) the evidence is legally insufficient to support the findings of his guilt for violating several sections of the Florida Insurance Code; (2) the Department illegally imposed an administrative fine with the suspension of his license; (3) if a fine could be imposed, the fine in this case exceeds the amount allowed by the applicable statute; and (4) the Department increased the penalty beyond that recommended by the hearing officer without specifying the precise reasons for doing so and, thus, violated section 120.57(1)(b)10, Florida Statutes (1989). We affirm the findings of guilt, affirm the six-month suspension, but reverse the administrative fine as contrary to law, and remand to the Department for entry of an amended final order.

I.

The charges in the Department's administrative complaint arose out of two separate transactions involving the sale of health insurance policies, one to Mr. and Mrs. Laws, and three to Ms. Hendryx. In general, it was charged that the policies sold by Dyer duplicated coverage already owned by the insureds, that Dyer made certain willful misrepresentations to the insureds and fraudulently induced them to purchase the policies, and that Dyer was not fit and competent to engage in the insurance business. A formal evidentiary hearing was held, and the hearing officer entered a recommended order containing extensive findings of fact and conclusions of law. The order summarized the precise charges against Dyer as follows:

As to both counts I and II, Petitioner [Department of Insurance] specifically alleges that Respondent is guilty of: misrepresentation, (626.611(5) and 626.9541(1)(a); a demonstrated lack of fitness and trustworthiness to engage in the insurance business, (626.611(7); a demonstrated lack of general knowledge, (626.611(8); fraudulent or dishonest practices, (626.611(9); willful failure to comply with a rule or order of the department, (626.611(13) and 626.621(3); violation of the provision of the insurance code or other law, (626.621(2); violation of the rule against "twisting", 626.621(5); engaging in unfair or deceptive methodology of competition or being a source of loss or injury to the public, (626.621(6) and 626.9521: knowingly making an untrue, deceptive or misleading advertisement, (626.9541(1)(b) and (1)(e)1; and improperly comparing his policies with those of another company, (Rule 4-4.003(2) F.A.C.).

The recommended order concluded that Dyer was guilty of certain charges but innocent of others:

With regard to the allegations relating to both parties, the evidence clearly indicates that the policies sold to both the Laws and Ms. Hendrix by the Respondent, assisted by Mr. Chappuis, were, in many particulars, largely duplicative of their existing coverage. This constitutes a clear violation of Rule 4-46.003(2), F.A.C., and as such, is a violation of Section 626.621(3). When considered along with Respondent's representation or acquiesence in Mr. Chappuis' representation of dental, vision and hearing coverage when he knew Mrs. Laws already wore a hearing aid, it also constituted willful misrepresentation or deception in violation of Section 626.611(5) and an unfair or deceptive practice under Sections 626.9541(1)(b) and (1)(e)1.

It also casts doubt on his fitness and trustworthiness to engage in the business of insurance under Section 626.611(7). However, because both clients gave no indication of coercion or other pressure being applied in their relationship, because Mr. Chappuis indicated he had no knowledge or [sic] any prior or ongoing misconduct and placed much faith in Respondent's abilities, and because there is no evidence or [sic] prior disciplinary action against the Respondent, the doubt here is resolved in his favor. By the same token, the evidence of Respondent's lack of knowledge or competence, or the more egregious offenses of fraud or dishonest practice, outlined in subsections (8) and (9) of this section, have not been proven as well.

On the other hand, Respondent's conduct has been shown to be a clear violation of the proscription against "twisting" and, at least minimally, constitutes the use of unfair or deceptive methods of competition. However, the evidence does not show that, except for the resultant payment of unnecessary premiums for coverage duplicative of other coverage already in effect, Respondent's activities resulted in any loss or injury to his clients or the public. They got the coverage they paid for (and could be paid under both policies), albeit that coverage might not have been needed or appropriate under industry standards.

What is also clear is that Respondent unfairly and deceptively compared his company's policy with that of his competition, resulting in some replacement, which is also a violation of the aforementioned departmental rule.

Having concluded that Respondent's actions constituted at least some violations of the pertinent statutes and rule, the question next for resolution is the determination of an appropriate disciplinary action. At least some of Respondent's violations fall under the purview of Section 626.611, which calls for compulsory suspension or revocation. Others fall under the purview of Section 626.621, for which the imposition of suspension or revocation is within the discretion of the department.

For the reasons already cited, that is: the lack of aggravating circumstances surrounding the commission of the offenses, the fact that neither client suffered any appreciable loss due to Respondent's misconduct, and the lack of any evidence of prior misconduct, it is concluded that an actual suspension or revocation should not be implemented. However, it is imperative that sufficient action be taken to impress upon the Respondent the requirement to deal with his clients in an absolutely forthright and open manner so as to provide to them an opportunity to make a well informed decision regarding their bona fide insurance needs.

Based on these conclusions, the hearing officer recommended "that Respondent's license as a health insurance agent in Florida be suspended for a period of six months and that he pay an administrative fine of $5,000.00, but that in lieu of implementation of the suspension, Respondent be placed on probation for a period of two years under such terms and conditions as may be specified by the Department of Insurance.

Upon consideration of the recommended order, the Department of Insurance adopted the hearing officer's findings of fact and conclusions of law "in full," but modified the recommended penalty in two significant respects. The Department disapproved the hearing officer's recommendation not to implement the recommended six-month suspension and ordered the immediate suspension of Dyer's license for a period of six months. The final order also directed Dyer to pay an administrative fine in the amount of $5,000 within 30 days of the date of the order, and further provided that failure to pay the fine within the time prescribed would "result in the immediate revocation of the Respondent's license in this state without further proceedings." (Emphasis added.)

II.

Dyer argues that the record lacks competent, substantial evidence to support factual findings that he violated any provisions of the cited statutes. He emphasizes that the only charge of willful misconduct under section 626.611 found by the hearing officer related to subparagraph (5) of that section. He correctly points out that an essential element of this willful violation was the fact that he knew Mrs. Laws had a hearing aid at the time the Lawses purchased the insurance policy and that he knew the policy covered only an "initial" purchase of a hearing aid. Yet, Dyer argues, the record contains no competent, substantial evidence establishing his personal knowledge of this fact because it is undisputed that Mrs. Laws was not wearing the hearing aid at any time when he was present, she did not testify that she ever told him about the hearing aid, and he denied in his testimony that she ever mentioned to him that she had ever used a hearing aid. Dyer contends that the hearing officer simply assumed he knew about the hearing aid without having received any substantial evidence of this fact.

Our review of the record, however, reveals that Mr. Laws testified that both Dyer and Chappuis were told that Mrs. Laws had obtained and worn a hearing aid in the past, but that she had not worn it for at least two years because it was so uncomfortable. Mr. Laws also testified that they discussed with Dyer and Chappuis how to obtain a replacement hearing aid under the policy, and were told that if Mrs. Laws needed a hearing aid for both ears, she would have to wait a year after obtaining the first one before obtaining the second one. Mrs. Laws's testimony was unclear as to whether Dyer was present when these matters were discussed. As the policy covered the purchase of an "initial" hearing aid, when Mrs. Laws submitted a claim for a new one, the insurer turned her down because she already had one prior to purchasing this policy, and thus her claim was not for an "initial" hearing aid.

We recognize that the evidence of Dyer's knowledge of Mrs. Laws's prior use of a hearing aid is inconsistent,...