South Carolina              
Administrative Law Court
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SC Administrative Law Court Decisions

CAPTION:
Carlondo Brown vs. SCDOI

AGENCY:
South Carolina Department of Insurance

PARTIES:
Appellant:
Carlondo Brown

Respondents:
South Carolina Department of Insurance
 
DOCKET NUMBER:
07-ALJ-09-0101-CC

APPEARANCES:
n/a
 

ORDERS:

FINAL ORDER

STATEMENT OF THE CASE

This matter is before me pursuant to Carlondo Brown’s (“Petitioner”) appeal of the South Carolina Department of Insurance’s (“Department”) decision to revoke his resident insurance producer license (“license”) as a result of his conviction by the York County General Sessions Court for breach of trust with fraudulent intent of more than $5,000.00. The issue is whether the Department’s revocation of Petitioner’s license is an appropriate sanction pursuant to S. C. Code Ann. §§38-43-247, and 38-43-130 (Supp. 2006). A hearing was held before the Administrative Law Court (“ALC” or “Court”) on September 13, 2007.

FINDINGS OF FACT

Having observed the witnesses and exhibits presented at the hearing and closely passed upon their credibility, taking into consideration the burden of persuasion by the parties, I make the following Findings of Fact by a preponderance of evidence:

1. The Department is the state agency responsible for licensing insurance agents under the insurance laws.

2. Petitioner began working at New Horizon Home Healthcare (“Horizon”) on March of 2003 and continued working there until March of 2005.

3. Petitioner received his resident insurance producer’s license on September 2, 2005. He began working with Monumental Life Insurance Company as an insurance agent in October of 2005 and continued working there until December of 2006.

4. Petitioner was indicted on criminal charges relating to his employment with Horizon. The Court found that from January 9, 2004 through December 31, 2004, the Petitioner, after being entrusted with the care, keeping and possession of certain items of a value of more than Five Thousand dollars by Horizon, feloniously converted and appropriated items to his own use and purpose, with the intent to deprive Horizon of the items. The Petitioner pled guilty to the charges and was ordered to pay restitution in the amount of $13,720. The court found that the Petitioner made forty-two unauthorized withdrawals from Horizon’s business account. As a result, Petitioner was convicted of Breach of Trust with Fraudulent Intent, in violation of S.C. Code Ann. §16-13-230, by the York County Court On March 23, 2006.

5. Petitioner applied to work as an agent at American General Insurance Company (“AIG”) in November of 2006. During the course of Petitioner’s application process with AIG, the Department of Insurance received information that Petitioner had been convicted of a crime.

6. Ray Ferrer, an investigator with the Department of Insurance, testified that this matter was assigned to him on October 23, 2006. He began the investigation on November 2, 2006. In the course of his investigation, he notified Petitioner of his finding that Petitioner violated the reporting statute by failing to report his conviction to the Department; he gave Petitioner approximately ten-fifteen days to respond to his finding.

7. The Petitioner does not dispute the assertion that he failed to report the conviction to the Department within thirty days as required by S.C. Code Ann. §38-43-247. He does however argue that the sanction for his noncompliance is too stringent. He also contends that the money that he was entrusted with was actually his paycheck for his work at New Horizon Homecare as an independent contractor and that he only pled “guilty” to the charges because his attorney instructed him to do so. While I find that Petitioner is a credible witness, Petitioner did plead guilty to the charges and therefore was not in compliance with the reporting statute. As such, this Court’s only recourse is to uphold the revocation of Petitioner’s license.

8. Respondent’s counsel asserts and this court agrees that Petitioner’s actions particularly warrant a revocation of his insurance license because Petitioner will be entrusted with the money of insureds during his course of employment as an insurance agent. While it is true that Petitioner never mishandled money in his course of dealings as an insurance agent with Monumental Life, his failure to respond to the investigation letter of the insurance investigator raises concerns regarding his ability to comply with the applicable statutes.

9. The Petitioner did not comply with the reporting requirement and therefore should not be entitled to an insurance agent's license. In addition, the Petitioner was convicted of a crime of moral turpitude, which is a statutory ground for revocation, suspension, or refusal to renew an agent's license. Therefore, the decision to revoke the Petitioner's resident agent's license was proper.

CONCLUSIONS OF LAW

Based upon the foregoing Findings of Fact, I conclude, as a matter of law, the following:

1. Jurisdiction is vested in the Court pursuant to S. C. Code Ann. §1-23-380(B) (Supp. 2006).

2. “No person may act as agent for an insurer or for a fraternal benefit association unless an agent's license has been issued to him by the director or his designee.” S. C. Code Ann. § 38-43-20 (Supp. 2006)

3. The South Carolina Department of Insurance requests that its decision to revoke Petitioner’s Insurance producer license be affirmed. It bases its request in part on S.C. Code Section 38-43-130(A), which states that the director …may …revoke, …a producer's license after ten days' notice or refuse to issue or reissue a license when it appears that a producer has been convicted of a crime involving moral turpitude, has violated this title or any regulation promulgated by the department, or has willfully deceived or dealt unjustly with the citizens of this State. Since Petitioner was convicted of Breach of Trust and Breach of Trust is a crime of moral turpitude, the decision of the Department must be affirmed. See Thomas v. Southern Grocery Stores, 177 SC 411, 181 S.E. 565 (1935).

4. In determining whether an individual is eligible to be licensed as an insurance agent, the Commissioner must, among other things, consider whether the individual has been convicted of, or pleaded guilty or nolo contendere to, a crime involving moral turpitude. See S.C. Code Ann. § 38-43-130 (Supp. 2006) and 25A S.C. Code Ann. Reg. 69-23(6)(g) (2006). Similarly, the Commissioner must be satisfied that a person applying for an adjuster's license is of good moral character, has not violated any of the insurance laws of the State, and is a fit and proper person for a license. See S.C. Code Ann. §38-47-10. It appearing that the Commissioner has wide discretion in issuing licenses to agents, the Department was well within its rights to revoke Petitioner’s license for a crime of moral turpitude.

5. The Petitioner argues that he is innocent of the charges against him and that he only pled guilty under the advisement of his counsel. Whether or not Petitioner actually committed a crime, he pled guilty to it and S.C. Code Ann. §38-43-130 (B) states that "convicted" includes a plea of guilty or a plea of nolo contendere; further, the record of conviction, or a copy of it, certified by the clerk of court or by the judge in whose court the conviction occurred constitutes conclusive evidence of the conviction. Because Petitioner pled guilty, and a copy of his conviction record was made a part of this record, his plea is a valid reason for the Department to revoke the license under the statute.

6. In addition to committing a crime of moral turpitude, it appears that Petitioner "deceived or dealt unjustly with the citizens of this State" in violation S.C. Code Ann. §§38-43-130(C)(6)&(8). That statute describes deceiving or dealing unjustly as committing acts which “include, but are not limited to, action or inaction by the producer as … having been convicted of a felony and…using fraudulent, coercive, or dishonest practices, or demonstrating incompetence, untrustworthiness, or financial irresponsibility in the conduct of business in this State or elsewhere.” The Circuit Court found that the Petitioner feloniously converted and appropriated items to his own use and purpose, with the intent to deprive Horizon of the items. As a result, S.C. Code Ann. §38-43-130 bolsters the Department’s decision to revoke the Petitioner’s license.

7. Further, it appears that Petitioner did not comply with the reporting statutes. Under S.C. Code Ann. §38-43-247(B), a producer shall report to the insurance director any criminal prosecution of the producer taken in any jurisdiction within thirty days of the initial pretrial hearing date. Petitioner not only failed to report the conviction, but he also failed to answer the investigator’s letter.

ORDER

While this is an unfortunate situation for the Petitioner, the law is clear that Petitioner’s license must be revoked under these circumstances. Based upon the Findings of Fact and Conclusions of Law,

IT IS HEREBY ORDERED that Carlondo Brown’s resident insurance producer’s license is revoked.

AND IT IS SO ORDERED. ___________________________________

CAROLYN C. MATTHEWS

Administrative Law Judge

November 30, 2007

Columbia, South Carolina


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