South Carolina              
Administrative Law Court
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SC Administrative Law Court Decisions

CAPTION:
Grover W. White, Jr. vs. SCDOI

AGENCY:
South Carolina Department of Insurance

PARTIES:
Petitioners:
Grover W. White, Jr.

Respondents:
South Carolina Department of Insurance
 
DOCKET NUMBER:
95-ALJ-09-0569-CC

APPEARANCES:
Grover W. White, Jr., Pro se, for Petitioner

Alicia Clawson, Esq., for Respondent
 

ORDERS:

ORDER

I. Statement of the Case

Grover W. White, Jr. (White) sought a contested case hearing due to the denial by the South Carolina Department of Insurance (Department) of White's application for a license as a State of South Carolina resident insurance adjuster. Jurisdiction is vested in the Administrative Law Judge by S.C. Code Ann. § 1-23-600(B) (Supp. 1994) as the result of a denial of a license by a department of the executive branch in which a single hearing officer is permitted by law to decide such cases. I find the Department is required to grant the license.

II. Issues

Do sufficient grounds exist to deny White a State of South Carolina resident insurance adjuster's license?

III. Analysis

1. Positions of Parties:

White does not dispute the fact that he has previously violated the insurance laws, but he does deny that he lacks good moral character and asserts he should receive an adjuster's license. The Department asserts White lacks good moral character and that his prior violation of the insurance laws of South Carolina is sufficient cause to deny the requested license.

2. Findings of Fact:

I find, by a preponderance of the evidence, the following facts:

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

2. On January 27, 1995, White filed an application with the Department to be licensed as a State of South Carolina resident insurance adjuster.

3. White's application was denied by the Department on the grounds that White lacks good moral character and White has previously violated the insurance laws of South Carolina, as demonstrated by a revocation of an earlier license granted to White.

4. On December 4, 1992, the Department entered an order revoking White's previously granted non-resident insurance agent's license.

5. The violation is now five years old and the revocation is almost three years old.

6. The current application was filed with the Department more than two years after the revocation.

7. Due to White's not attending the December 4, 1992 hearing, counsel for the Department submitted to the Commissioner an "affidavit of default" by White.

8. The Commissioner issued a summary decision in which he found as facts all of the allegations submitted by counsel for the Department in a letter denoted as "Letter of Allegation."

9. The Commissioner's order found White violated S.C. Code Ann. § 38-43-20 (Supp. 1994) in that he performed the acts of an insurance agent without first being licensed as an insurance agent.

10. The Commissioner's order found White violated S.C. Code Ann. § 38-43-245 (1989) in that he submitted, aided, or abetted or conspired with another to present an insurance application to a carrier transacting business within South Carolina while knowing the application contained false, fraudulent or misleading information regarding a fact or thing material to the underwriting of the insurance for which the application was submitted.

11. The Commissioner's order found White willfully deceived or dealt unjustly with the citizens of this State within the meaning of S.C. Code Ann. § 38-43-130 (1989) since White misstated the facts in an application for insurance or aided in the misstatement of the facts.

12. The Commissioner's order of December 4, 1992 was not appealed.

13. White has no criminal record.

14. White is dependable in his business dealings, exhibits fairness, exhibits honesty and avoids deception.

15. White possesses good moral character sufficient to obtain an adjuster's license.

16. White possesses sufficient knowledge of both the insurance business and his duties as an adjuster to obtain an adjuster's license.

17. White is a fit and proper individual for receiving an adjuster's license.

3. Discussion

The basis for the Department's denial of White's application is that White does not have good moral character and that he has violated the insurance laws. See S.C. Code Ann. § 38-47-10 (Supp. 1994). I find White has good moral character sufficient to obtain an adjuster's license and that the prior violations of insurance laws under the facts of this case do not warrant the denial of an adjuster's license.

a. Good Moral Character

In South Carolina, there is no single criterion by which to determine whether or not one is possessed of good moral character. 1969 Op. S.C. Att'y. Gen. No. 2709 at 159. Generally, good moral character means that one should possess all elements essential to make up that character, such as honesty and veracity . Id.; See also Zemour, Inc. v. State Division of Beverage, 347 So.2d 1102 (Fla. Dist. Ct. App. 1977); Broers v. Montana Dept. of Revenue, 773 P.2d 320 (Mont. 1989).

Except for the prior factual findings of the Commissioner in the December 4, 1992 order, in the instant case there is no evidence of a lack of good moral character. In the December 4, 1992 order, the Commissioner found White willfully deceived or dealt unjustly with the citizens of this State, since White misstated the facts in an application for insurance or aided in the misstatement of the facts.

In short, under the December 4, 1992 order, White was found to have committed an act of deception. Acts involving deception are acts of moral turpitude. See e.g. Daniel v. Hazel, 242 S.C. 443, 131 S.E. 2d 260 (1963). Moral turpitude is "an act of baseness, evilness, or depravity in the private and social duties which man owes to his fellow man or society in general, contrary to the customary and accepted rule of right and duty between man and man." State v. Perry, 294 S.C. 311, 364 S.E.2d 201 (1988). Acts of moral turpitude are antithetical to what is considered good moral character. 1989 Op. S.C. Att'y. Gen. No. 89-89. Moreover, acts of moral turpitude imply the absence of good moral character. Id.

Thus, the prior adjudicated facts are evidence that White lacks good moral character. A prior finding of lack of good moral character, however, is not binding for all future determinations. White has admitted his mistake and recognized his error in judgment. Further, White did not attempt to hide the prior violation but fully disclosed the incident on his application and thus expresses honesty. Through a character witness, White demonstrated he is fair in his dealings with others, is dependable in his business affairs, and, rather than deceptive, is "straight forward." While White's and the character witness' testimonies were somewhat conclusory, there was no persuasive countervailing evidence presented by the Department, other than the order of December 2, 1992, demonstrating a lack of good moral character. Additionally, White has no criminal record. Considering the evidence as a whole and having observed the witnesses, I find that White has good moral character sufficient to hold an adjuster's license.

b. Violation of Insurance Laws

White violated the insurance laws of South Carolina. The December 4, 1992 decision of the Department is a final unappealed order identifying the specific laws violated. Under § 38-47-10 the applicant must be a person who "has not violated the insurance laws of the state." I find this language may not be taken literally since to do so leads to absurd results, gives a meaning that is inconsistent with other related language of the insurance laws, and does not conform with the existing administrative practice of the Department.

A court will interpret a statute so as to promote legislative intent and to escape absurd results. SeeKiriakides v. United Artists Communications, Inc., ___ S.C. ___, 440 S.E. 2d 364 (1994). Further, statutes which deal with the same subject matter are in pari materia and must be construed together, if possible, to produce a single, harmonious result. See Home Health Services, Inc. v. DHEC , 298 S.C. 258, 379 S.E. 2d 734 (Ct. App. 1989). The literal application of the statute would result in denying a license to a party violating the insurance laws without regard to the nature of the violation (trivial to major), without regard to how distant in time the violation is, and without regard to the circumstances of the applicant at the time of the application. Such a literal reading defeats the intent of the statute by creating absurd results. Further, S.C. Code Ann. § 38-43-130 (Supp. 1994) is in pari materia since it covers the reissuance of an agent's license (as opposed to an adjuster's license) after a revocation. Under the statutes governing agents, agents must also not have violated the insurance laws. Yet, under § 38-43-130 an agent who has violated the insurance laws resulting in a revocation may reapply for a license two years after the revocation. Thus, the General Assembly intended that a subsequent application for a license was allowable. Finally, where an agency has been designated as the single state agency for implementation of an area, great deference must be accorded its interpretations of its laws and regulations. See Hampton Nursing Ctr. v. Health Services, 303 S.C. 143, S.E.2d 434 (Ct. App. 1990). In the instant case, the Department stated that it does in fact allow reapplications after a revocation. Accordingly, in order to avoid absurd results, to read the insurance statutes consistently, and to give due consideration to the Department's administrative practices, I cannot conclude that a violation of the insurance laws results in a permanent denial of a license.

In the instant case, a pertinent consideration is that the violation is now five years old and the revocation is almost three years old. Further, the current application was filed more than two years after the revocation. An agent, who exercises extensive authority under an agent's license, is required to wait two years before reapplying for an agent's license. § 38-43-130. I find that the violation of the insurance laws by White is sufficiently removed in time from the current application so as to prevent the denial of the license by the Department on the grounds of a prior violation of the insurance laws.

4. Conclusions of Law

Based on the foregoing Findings of Fact and Discussion, I conclude the following as a matter of law:

1. An individual who determines the extent of insured losses and assists in settling or attempts to settle claims is an adjuster. S.C. Code Ann. §38-1-20(3) (Supp. 1994).

2. An adjuster must be licensed by the Department of Insurance. S.C. Code Ann. §38-47-10 (Supp. 1994).

3. To obtain a license as an adjuster, the individual must have good moral character, sufficient knowledge of both the insurance business and his duties as an adjuster, not have violated the insurance laws of the state, and be a fit and proper individual for the position. S.C. Code Ann. §38-47-10.

4. Good moral character means that one should possess all elements essential to make up that character, such as honesty and veracity. 1969 Op. S.C. Att'y. Gen. No. 2709 at 159; See alsoZemour, Inc. v. State Division of Beverage, 347 So.2d 1102 (Fla. Dist. Ct. App. 1977); Broers v. Montana Dept. of Revenue, 773 P.2d 320 (Mont. 1989).

5. A court will interpret a statute so as to promote legislative intent and to escape absurd results. See Kiriakides v. United Artists Communications, Inc., ___ S.C. ___, 440 S.E.2d 364 (1994).

6. Interpreting § 38-47-10 to mean that any previous violation of the insurance laws is an absolute ground preventing the subsequent granting of a license leads to absurd results since such an interpretation disregards the nature of the violation (trivial to major), disregards how distant in time the violation is, and disregards the circumstances of the applicant at the time of the application.

7. Statutes which deal with the same subject matter are in pari materia and must be construed together, if possible, to produce a single, harmonious result. See Home Health Services, Inc. v. DHEC , 298 S.C. 258, 379 S.E. 2d 734 (Ct. App. 1989).

8. S.C. Code Ann. §§ 38-43-130 and 38-47-10 are in pari materia as they relate to subsequent applications of a party previously having violated the insurance laws of South Carolina.

9. An agent (as opposed to an adjuster) is required to wait two years before reapplying for an agent's license. § 38-43-130.

10. Where an agency has been designated as the single state agency for implementation of an area, great deference must be accorded its interpretations of its laws and regulations. SeeHampton Nursing Ctr. v. Health Services, 303 S.C. 143, S.E.2d 434 (Ct. App. 1990).

11. A violation of the insurance laws does not result in a permanent denial of an adjuster's license.

12. White is entitled to a State of South Carolina resident insurance adjuster's license.

IV. ORDER

Based upon the foregoing Findings of Fact, Discussion, and Conclusions of Law, the following ORDER is issued:

The Department is ordered to issue to Grover W. White, Jr. a State of South Carolina resident insurance adjuster's license.

IT IS SO ORDERED.

____________________________

RAY N. STEVENS

Administrative Law Judge

This 31st day of October, 1995


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