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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