South Carolina              
Administrative Law Court
Edgar A. Brown building 1205 Pendleton St., Suite 224 Columbia, SC 29201 Voice: (803) 734-0550 Fax: (803) 734-6400

SC Administrative Law Court Decisions

CAPTION:
Wallace L. Blackmon, Jr. vs. SCDOI

AGENCY:
South Carolina Department of Insurance

PARTIES:
Petitioners:
Wallace L. Blackmon, Jr.

Respondents:
South Carolina Department of Insurance
 
DOCKET NUMBER:
95-ALJ-09-0696-CC

APPEARANCES:
W. Carole Holloway, Esq., for Petitioner

Alicia K. Clawson, Esq., for Respondent
 

ORDERS:

ORDER

I. Statement of the Case

Wallace L. Blackmon, Jr. (Blackmon) sought a contested case hearing due to the denial by the South Carolina Department of Insurance (Department) of Blackmon's application for a renewal of his license as a State of South Carolina bail bondsman. Jurisdiction is vested in the Administrative Law Judge by S.C. Code Ann. § 38-53-160 and S.C. Code Ann. § 1-23-600(B) (Supp. 1995), with the hearing in this matter held on January 30, 1996.

After considering all of the testimony and evidence, I conclude the license must be issued. Any issues raised in the proceedings or hearing of this case but not addressed in this Order are deemed denied. ALJD Rule 29(B). Further, the filing of a motion for reconsideration is not a prerequisite to any party filing a notice of appeal of this Order. ALJD Rule 29(C).

II. Issues

1. Does Blackmon's wife hold either directly or indirectly an interest in the financial affairs of Blackmon's bail bondsman business within the meaning of S.C. Code Ann. § 38-53-190 (Supp. 1995)?

2. In seeking a license, did Blackmon make a misrepresentation within the meaning of S.C. Code Ann. § 38-53-150(a)(3) (Supp. 1995)?

III. Analysis

A. Wife's Interest

1. Positions of Parties:

The Department asserts it is prohibited from granting a renewal of the bail bondsman's license to Blackmon due to the restrictions of S.C. Code Ann. § 38-53-190 (Supp. 1995). The Department reaches this conclusion since Blackmon listed in his application for a bail bondsman's license an asset owned jointly with his wife, an attorney. The Department asserts that since an attorney is prohibited from having a direct or an indirect interest in the financial affairs of the bail bondsman business, the identification of an asset owned jointly with an attorney creates an indirect interest in the financial affairs of Blackmon's bail bondsman business. Blackmon asserts the mere joint ownership of property listed on the financial statements attached to the application does not grant an interest, either direct or indirect, to the joint owner.

2. Findings of Fact:

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

1. Blackmon became licensed by the Department as a professional bail bondsman on July 1,1994, and established Blackmon Bail Bonding, Inc.

2. Blackmon capitalized his bail bondsman's business with $10,000 in cash.

3. The source of the $10,000 in cash was a withdrawal of funds by Blackmon from Blackmon's personal Individual Retirement Account (IRA).

4. The IRA funds were in the sole name of Blackmon.

5. Blackmon's wife is an attorney employed part-time as a public defender in Darlington County, where she also is in private practice.

6. Blackmon and his wife are the joint owners of property located at 1801 Swift Creek Road in Darlington, South Carolina.

7. The property at 1801 Swift Creek Road is the residence of Blackmon and his wife.

8. Blackmon listed the residence as a jointly owned asset in Blackmon's bail bondsman's application in response to a question asking for the financial condition of the applicant on May 26, 1994.

9. The wife did not consent or acquiescence to the listing of her portion of jointly owned assets on Blackmon's application.

10. The wife has not previously referred clients to Blackmon and does not intend to refer clients to Blackmon in the future.

11. The wife is not an officer, employee or agent in the bail bondsman's business.

12. The wife has no duties, privileges, or responsibilities in relation to the bail bondsman's business.

13. The wife does not have a direct or indirect interest in the financial affairs of Blackmon Bail Bonding Company, Inc.

3. Discussion

The issue here is whether the listing on a financial statement by the applicant of an asset jointly owned with a non-applicant, creates in the non-applicant an indirect interest in the financial affairs of the bondsman's business. I find that the wife's share of the joint asset was listed in error, and thus, under the facts here the wife has no interest, either direct or indirect, in the financial affairs of the business.

One of the forbidden activities under S.C. Code Ann. § 38-53-190 is that of allowing an attorney to have an interest in the financial affairs of the bail bondsman's business. An "interest" is best understood here to mean a right, title, or share which may be shown by demonstrating the party has obtained an advantage, profit, or responsibility. May v. McGowan, 97 F. Supp. 326 (D.C. N.Y. 1950). There is insufficient persuasive evidence demonstrating the wife obtained any right, title or share in any activity associated with the bail bondsman's financial affairs. The evidence demonstrates the wife has no involvement in the business. She is not an officer, employee or agent. She does not profit from the business and makes no referrals to the business.

The only evidence of a connection of the wife to the business is the listing of a joint asset by the husband in accordance with a question on the application asking for the financial condition of the applicant. Nothing in the evidence persuades me that the wife consented or even acquiesced to the use of her assets on the financial statement. The wife testified she did not know the joint asset had been listed and her signature on the application was solely in her capacity as a notary acknowledging the authenticity of her husband's signature. The wife testified she did not place any of her assets in the business, and in fact, did not approve of the husband entering the bail bondman business. I find her testimony credible and supported by the fact that the renewal application does not list the wife's joint property, and is thus, a further indication the wife sought no interest, direct or indirect, in the financial affairs. Accordingly, I find the wife's assets were listed in error and do not provide an interest in the bondsman's financial affairs.

4. Conclusions of Law:

1. An attorney may not have either a direct or an indirect interest in the financial affairs of a bail bondsman's business. S.C. Code Ann. § 38-53-190 (Revised 1989)

2. An interest within the meaning of § 38-53-190 is a right, title, or share in the financial affairs which may be shown by demonstrating the party has obtained an advantage, profit, or responsibility. May v. McGowan, 97 F. Supp. 326 (D.C. N.Y. 1950).

3. No attorney obtained any right, title or share in the bondsman's financial affairs.



B. Misrepresentation

1. Positions of Parties:

The Department asserts that Blackmon, in his efforts to obtain a bail bondsman's license, made a misrepresentation by stating he agreed not to allow an attorney to have an interest in the financial affairs of the bail bondsman's business, while at the same time listing assets jointly owned by an attorney. Blackmon asserts such statements are not misrepresentations since the listing of the assets did not grant an interest in the financial affairs.

2. Findings of Fact:

1. The family residence is owned jointly by Blackmon and his wife.

2. Blackmon did not conceal from the Department the joint ownership of the residence and the wife's status as an attorney.

3. Blackmon's application expressed his opinion that the joint ownership of the family residence did not create a direct or an indirect interest in the financial affairs of the bail bondsman's business.

3. Discussion

My finding that the wife did not have an interest in the bail bondsman's financial affairs effectively moots the misrepresentation issue. Even if the wife held an interest, there is still no misrepresentation within the meaning of S.C. Code Ann. § 38-53-150. A misrepresentation involves, to some degree, an element of concealment of the truth. See Grant v. Metropolitan Life Ins. Co., 194 S.C. 25, 9 S.E.2d 41 (1940). Further, a party who expresses an opinion is generally not held to have made a misrepresentation, even if the opinion later proves to be groundless. Central States Life Ins. v. Bloom 137 S.W.2d 517 (Mo. 1940). Here, on the renewal application, Blackmon fully disclosed his wife's position as an attorney, and on the original application had already identified the residence as being jointly owned with the spouse. Thus, there was no concealment but rather a full disclosure. Additionally, Blackmon's disclosure on the application amounted to an opinion that his wife's assets and her status as an attorney did not create in her an interest in the financial affairs of the business. Such an opinion should not be held as a misrepresentation.

4. Conclusions of Law

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

1. No person may act as a bail bondsman unless that person is licensed under the bail bondsman provisions of Chapter 53 of Title 38. S.C. Code Ann. § 38-53-80 (Supp. 1995).

2. To become licensed, the applicant must apply on forms prepared by the Department, and the Department may ask any questions which in the opinion of the Department serve to protect the public. Ibid.

3. Specifically, questions of an applicant for a professional bail bondsman's license must address the financial condition of the applicant by requiring the applicant to furnish a detailed financial statement under oath in the form required by the Department. S.C. Code Ann. § 38-53-110 (Supp. 1995).

4. The Department may refuse to renew a bail bondsman's license if the applicant makes a misrepresentation in obtaining the license. S.C. Code Ann. § 38-53-150(a)(3) (Supp. 1995).

5. A misrepresentation involves, to some degree, an element of concealment of the truth. SeeGrant v. Metropolitan Life Ins. Co., 194 S.C. 25, 9 S.E.2d 41 (1940).

6. A party who expresses an opinion is generally not held to have made a misrepresentation, even when the opinion later proves to be groundless. Central States Life Ins. v. Bloom 137 S.W.2d 517 (Mo. 1940).

7. Blackmon made no misrepresentations related to assets owned by an attorney, nor to an attorney having a direct or indirect interest in the financial affairs of the bail bondsman's business.

IV. ORDER

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

The Department is directed to approve the renewal application filed by Blackmon and to issue the requested bail bondsman's license.

IT IS SO ORDERED.



____________________________

RAY N. STEVENS

Administrative Law Judge

This 7th day of February, 1996


Brown Bldg.

 

 

 

 

 

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