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

SC Administrative Law Court Decisions

CAPTION:
SCDOI vs. Fast Freddie's Bail Bonds, Inc., et al

AGENCY:
South Carolina Department of Insurance

PARTIES:
Petitioners:
South Carolina Department of Insurance

Respondents:
Fast Freddie's Bail Bonds, Inc., John Michael Coutsos, and Randy A. Marti
 
DOCKET NUMBER:
01-ALJ-09-0035-CC

APPEARANCES:
T. Douglas Concannon, Attorney for Petitioner

Harry C. DePew, Attorney for Respondents
 

ORDERS:

FINAL ORDER AND DECISION

STATEMENT OF THE CASE

This matter comes before the Administrative Law Judge Division pursuant to S.C. Code Ann. §§ 38-43-130 and 38-53-160 and §§1-23-310 and 1-23-600(B) (Supp. 2000). Petitioner South Carolina Department of Insurance (Department) seeks the revocation of Respondents' professional bail bondsman's and runner's licenses, respectively, based on their failure to accurately report bail bond transactions to the Richland County and Lexington County Clerks of Court and their failure to maintain adequate security deposits with the Richland County Clerk of Court.

S.C. Code Ann. § 38-53-310 (Supp. 2000) requires a professional bondsman to file written reports by the 15th of each month with his home county and all other counties in which bonds are outstanding, setting forth the individuals bonded, amounts, and dates, as well as total bonds written.

S.C. Code Ann. § 38-53-270 (Supp. 2000) requires a professional bondsman to maintain security deposits with the clerk of court of his home county equal to one-fourth of the amount of all outstanding bonds. The total amount of bonds written in all counties must not exceed the amount allowable against the collateral held by the home county. Upon notice of deficiency between the amount of bonds outstanding and the amount allowable against collateral pledged, S.C. Code Ann. § 38-53-300 (Supp. 2000) requires a professional bondsman to immediately pledge additional collateral with the clerk of court to bring the outstanding bonds into compliance. The clerk of court of each county has authority to suspend the bondsman from writing bonds until he has sufficient collateral pledged in the home county. Fast Freddie's has been suspended by the Clerks of Court for both Richland and Lexington Counties. The Department now seeks revocation of the licenses of the principals in the business based on violations of these statutory provisions.

After notice to all parties, a hearing was conducted on March 29, 2001. Based on the evidence presented and the applicable law, I find that Respondent Coutsos committed the violations charged but that revocation of his license is not warranted in light of the circumstances of this case. I find the appropriate penalty to be an administrative fine of $5,000 and the suspension of Respondent John Michael Coutsos' professional bail bondsman license. Randy A. Martin shall have no disciplinary action imposed against him personally, as the Department did not present evidence to support revocation of his runner's license.

FINDINGS OF FACT

Having carefully considered all testimony, exhibits, and arguments presented at the hearing in this case and taking into account the credibility and accuracy of the evidence, I find the following by the preponderance of the evidence.

1. Respondents John Michael Coutsos (Coutsos) and Randy Martin (Martin) are two of the owners of Fast Freddie's Bail Bonds, Inc. (Fast Freddie's), a licensed professional bonding company. Respondent Coutsos is licensed as a professional bail bondsman, and Respondent Martin is licensed as a runner.

2. Richland County is the "home county" (1) for Fast Freddie's. Accordingly, its collateral is maintained with the Richland County Clerk of Court, but it is authorized to write bonds in other counties as well.

3. In substantial compliance with the law, Fast Freddie's filed monthly reports on July 17, August 16, August 23 (amended report), and September 11, 2000, of its outstanding bail bonds with the Richland County Clerk of Court and provided a certified copy to all counties in which it has bonds outstanding, including in this case Lexington County. These reports show the individuals bonded, the dates the bonds were written, and their amounts, as well as the total amount of all bonds written through the previous month; for example, the July 14 report should reflect activity through June.

4. On July 17, August 16, August 23, and September 11, 2000, Fast Freddie's filed reports with the Richland County Clerk of Court purporting to detail all bail bonds on which Fast Freddie's was liable at the time of filing. Before the reports were filed, Coutsos, as the only bondsman working at Fast Freddie's, verified and signed each of the reports. Martin notarized Coutsos' signature, thus verifying that the reports were not forged or submitted by another party. Martin did not check for discrepancies within the reports. The Lexington County Clerk of Court's Office also received copies of the reports, though it is unclear from the record whether they initially received the reports from Richland County or directly from Fast Freddie's.

5. In early September, Hope Frick of the Lexington County Clerk of Court's office received a tip which prompted her to audit the August 16 report. Ms. Frick discovered several instances in that report where bonds were under reported by a factor of ten. For example, the "sum[s] of bond" reported for Tanya James, George Jones, Tavares Jones, and Justin Parish were reported as $4,500, $3,000, $6,000, and $2,200, respectively, when the bonds were actually issued for $45,000, $35,000, $60,000, and $22,000, respectively.

6. The errors discovered in the August 16 report prompted Ms. Frick to audit the July 14 report, in which she found several bonds missing. A total of 38 active bonds from June were not reported on the July 14 report. For example, outstanding bonds for Arnold Jacobs, Tanya James, Tavares Jones, Derrick Osby, Byron Reed, Clinton Seawright, and Darrell Woodruff did not appear on the July 14 report, as they should have. They were, however, reported on the August 16 report. None of the outstanding bonds in Lexington County that Fast Freddie's had written in June appeared on the July 14 report, though they were listed on the August 16 report. The July 14 report was not in alphabetical order.

7. Ms. Frick reported her findings of under reported and missing bonds to the Richland County Clerk of Court, which in turn performed its own audit on the reports and found similar discrepancies in the outstanding Richland County bonds reported. For example, in the July 14 report, the "sum[s] of bond" for Vega Brown and Sondtell Williams are listed as $50,000 and $150,000. Those same bonds are listed in the August 16 and August 23 reports as $5,000 and $15,000; then again in the September 11 report, these same bonds are listed as $50,000 and $150,000. An outstanding bond issued to Cornelius Washington is listed in the July 14 and August 16 reports for $50,000, but is listed as only $5,000 in the August 23 report, and reverts back in the September report to $50,000. Bonds for John Corbett, Anthony Henderson, Phillip Leggette, and Bobby Lockhart appear in the August report for $50,000, $40,000, $25,000, and $20,000, respectively, but these are listed as $5,000, $4,000, $2,500, and $2,000, respectively, in the August 23 report. Like the others, they revert back to the higher amounts in the September 11 report. From these examples, it is clear that the errors or misrepresentations are not isolated to one report. There are errors in the reports of July 17, August 16, August 23, and September 11.

8. The above referenced bonds are only a small sampling of the errors and misreported sums of bonds in the reports. The August 23 report referenced above was a revised report submitted as a substitute for the August 16 report. Nonetheless, even the revised report still contained substantial errors. Mr. Sandy Baldwin, one of the co-owners of and a bounty hunter for Fast Freddie's, testified that bonds would not show up on a report where the bonded person is rearrested and recommitted in the interim because the company is no longer liable for the bond. If the bonded individual never gets out of jail but is instead recommitted, that individual may not show up on any monthly reports, and the bonding company is instructed by the Department to refund the bond. Fast Freddie's provided documentation that some bonds listed in the aforementioned reports were no longer outstanding due to recommitment. These instances, however, represent only a few of the missing bonds on the reports. The fact that many of the missing bonds are not addressed by the documentation indicates that many of the missing bonds should have been appropriately reported. While recommitment is a valid reason why bonds written in the previous month would not show up on the next month's report, the omissions in this case are too numerous to be thus attributed.

9. On the August 23 report, Fast Freddie's own totals represented that it had $419,820 appraised value in real estate pledged with the home county; this surety resulted in an approved bond limit of $1,679,280. Based on the numbers in the August 23 report, Fast Freddie's further represented that it had outstanding bonds totaling $2,288,614. Significantly, Fast Freddie's did not disclose on a cover sheet to the reports that it was beyond its authorized bonding limit, as should have been noted. Because discrepancies tend to arise in reconciling reports, Jackie Pendergrass of the Richland County Clerk of Court's office recalculated the numbers. As of August 23, 2000, her independent audit revealed that Fast Freddie's total value in pledged real estate was $370,020; this surety resulted in an approved bond limit of $1,480,080. The Richland County Clerk of Court determined that Fast Freddie's had outstanding bonds totaling $2,212,114, based on the numbers in the August 23 report and the court's records of bonds written. The outstanding bond total reflected some bonds missing on the reports and included only those bonds on which Fast Freddie's was liable as of the date of the report. Jackie Pendergrass of the Richland County Clerk's office testified that it is unusual for a bondsman to have one or two reports over the authorized limit during the course of the year. By Fast Freddie's own representations, the outstanding bonds exceeded their bonding authority by $609,334. The Richland County Clerk's audit revealed that Fast Freddie's had actually exceeded its bonding authority by $732,034.

10. Based on spot checks, the Lexington County Clerk of Court will often call the home county to determine if new property has been posted to increase the authorized bonding limit. Based on testimony of Hope Frick, professional bail bondsmen often post additional security but forget to forward copies to all counties in which they have outstanding bonds. Thus, it is Lexington's usual practice to monitor the security pledged in the home county. Fast Freddie's did post additional property as security in August, but not nearly enough to bring its outstanding bonds within the authorized bonding limit.

11. By letter dated September 11, 2000, Fast Freddie's notified the clerk in its home county of the cause of the discrepancies, with copies sent to all other counties in which it conducted business, including Lexington. Further, the amounts submitted on the October 16, 2000, report appear to be accurate, according to both the Richland and Lexington County Clerks of Court.

12. Although there is a conflict of testimony, I find that some of the erroneous reports in question flow from misrepresentations generated by Katherine Follette and Boyd Jones. Both employees were hired by Randy Martin. Ms. Follette was hired as an office manager, and Mr. Jones was hired as an experienced bail bondsman to handle hearings.

13. Ms. Follette testified she only worked for Fast Freddie's for a few months and was uncertain why she was fired. She further testified that she was responsible for inputting data on bonds but not for compiling the reports. Rather, she testified that Randy Martin and Boyd Jones discussed how the actual bond information could be altered in a report to give the impression that Fast Freddie's was still within its authorized bonding limits. In light of the rest of the evidence, I find that Ms. Follette's testimony is not credible.

14. Ms. Follette's background check by SLED revealed convictions for fraudulent checks. Ms. Follette was fired from Fast Freddie's after a few months of employment. Ms. Follette was obviously disgruntled and threatened Fast Freddie's that she would make trouble unless they paid her money which was in dispute. Ashley Hunt is currently the office manager and prepares the clerk of court reports for Fast Freddie's. She testified, contrary to Ms. Follette's testimony, that one of Ms. Follette's primary responsibilities was to assist in compiling reports. Katherine Follette and Boyd Jones put together at least one report on their own when Martin and Coutsos were out of town.

15. Mr. Boyd Jones was told by Martin that Fast Freddie's could no longer use his services, and he is now employed with Mr. Holcombe, who owns a competing bail bonds agency. In fact, according to Hope Frick, the tip that Fast Freddie's reports contained errors came from Mr. Holcombe's office.

16. The computer system utilized by Fast Freddie's was designed to lock in numbers inputted, such as the amount of the bonds. In preparing at least one report, Ms. Follette and Mr. Jones called Don Dunson, the software developer, to override the system and allow them to change some numbers in the report, stating that Ms. Follette had made some errors in inputting numbers. Mr. Jones authorized Mr. Dunson to make the changes.

17. After Ms. Follette and Mr. Jones were terminated, Fast Freddie's has found misplaced checks for payment, undiscovered files, and bonds that Coutsos and Martin did not know were outstanding. The evidence as a whole indicates that Ms. Follette and Mr. Jones were attempting to sabotage Fast Freddie's, as alleged by Respondents.

18. Mr. Martin and Mr. Coutsos did not discover the reporting problems and that bonds had been written in excess of Fast Freddie's collateral until they were unable to sign a bond in Camden and called Willie Seawright at the Department to find out the reason. Initially, the principals of Fast Freddie's were not notified of its suspension by the clerks of court. Since the discovery of these problems, Fast Freddie's has been cooperative with the clerks of court and has filed amended reports, which also contained errors. Fast Freddie's is still in the process of finding missing files, unreported bonds, and correcting discrepancies in their reports filed with the clerks of court. Fast Freddie's is suspended in both counties and hence has not written any new bonds.

19. The misrepresentations and errors in the reports to the Clerks of Court are only partially attributable to the attempted sabotage. The errors clearly also arise from ineptitude in running a professional bail bond company, as reports and amended reports containing errors were filed both before and after Ms. Follette's and Mr. Jones' brief term of employment. Based on the numerous errors in the reports, Fast Freddie's did not fulfill its reporting obligations under the law. The result was that the bonds written were seriously under reported compared to the total collateral held as surety.

20. The facts suggest that Mr. Coutsos, as the principal and licensed professional bail bondsman in Fast Freddie's, failed to supervise its employees and demonstrated incompetence in running a professional bail bonds business. After less than a year of doing business, Fast Freddie's had written bonds in an amount at least $600,000 in excess of its authorized limit.

21. Mr. Martin testified that he knew almost nothing about running a bail bonds business or about the internal workings of the office. As a runner, Martin wrote bonds for Fast Freddie's under Coutsos' authority, but there is insufficient evidence that he either personally compiled the Reports or altered them in any way before they were filed.

22. Both deputy clerks testified to the importance of maintaining sufficient collateral to support the outstanding bonds. When the collateral is deficient, the risk to the State of defendants' flight is increased. Without sufficient collateral, the State would have nothing to seize through the estreatment process, so the defendant would essentially be released without bond.

23. Both deputy clerks of court testified that Fast Freddie's was suspended based on the clerks offices' independent reviews of the reports and comparison with outstanding bonds. This came to their attention based on a tip from Mr. Holcombe's office that the reports had been "fudged" by a person just fired from Fast Freddie's. It is not unusual for bondsmen to request copies of the reports of other bondsmen. Both deputy clerks testified that the errors on the reports were too large to be the result of mistake, inadvertence, or oversight. Ultimately, the Richland County Clerk of Court's office found that Fast Freddie's had been writing bonds in excess of the amount it had been approved to write based on the collateral maintained. As a result of this deficiency, the discrepancies, and the failure to timely submit accurate monthly reports to all counties where it transacted business, Fast Freddie's was suspended from writing any further bonds by both the Richland and Lexington County Clerks of Court in September 2000.

24. Jackie Pendergrass, Richland County Deputy Clerk of Court, testified that the suspension in Richland County would be lifted once Fast Freddie's had sufficient collateral pledged to be in compliance. Hope Frick, Lexington County Deputy Clerk of Court, testified that Fast Freddie's would not be reinstated to write bonds in Lexington County ever again under any terms.

25. To date, Fast Freddie's still has outstanding bonds in excess of its collateral and has not posted additional collateral with its home county. Mr. Martin testified that the Respondents were awaiting the outcome of this case before deciding whether to post additional collateral.

26. At the time of its suspension in Richland and Lexington Counties, Fast Freddie's had been in business for only 8½ months. The Department alleges that Fast Freddie's knowingly submitted fraudulent reports and intentionally wrote bonds beyond the limit of its collateral. The facts suggest, however, that the inaccurate amounts in some of the reports were fraudulent and were knowingly submitted by Ms. Follette and Mr. Jones. The remainder of the erroneous reports is the result of ineptitude by Coutsos as the principal of Fast Freddie's and slow recovery from the sabotage.

CONCLUSIONS OF LAW

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

1. In civil cases, generally, the burden of proof rests upon the party who asserts the affirmative of an issue. 29 Am. Jur.2d Evidence § 127 (1994); 2 Am. Jur.2d Administrative Law § 360 (1994); Alex Sanders, et al., Trial Handbook for S.C. Lawyers § 9:3 Party with Burden, Civil Cases (2000). In the present case, Petitioner asserts the affirmative of the issue. Accordingly, Petitioner must prove, by a preponderance of the evidence, that Respondents submitted erroneous reports to the clerks of court and failed to maintain adequate collateral. See Anonymous v. State Board of Medical Examiners, 329 S.C. 371, 769 S.E.2d 17 (1998) (setting forth standard of proof as a preponderance of the evidence). The preponderance of the evidence is "[t]he greater weight of the evidence; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other." Black's Law Dictionary 1201 (7th ed. 1999). "The preponderance of the evidence means such evidence as, when considered and compared with that opposed to it, has more convincing force and produces in the mind the belief that what is sought to be proved is more likely true than not true." Sanders, supra, § 9:5 Quantum of Evidence in Civil Cases (2000) (citing Frazier v. Frazier, 228 S.C. 149, 89 S.E.2d 225 (1955)).

2. The Administrative Law Judge Division now hears and decides all contested cases from the Department of Insurance. See S.C. Code Ann. § 1-23-600(B) (Supp. 2000). Consequently, as a state-wide administrative tribunal authorized to hear evidence and adjudicate contested case hearings, the Administrative Law Judge Division is the fact finder in this matter for purposes of administrative and judicial review. See Lindsey v. S.C. Tax Comm'n, 302 S.C. 504, 397 S.E.2d 95 (1990). The weight and credibility assigned to evidence presented at the hearing of a matter is within the province of the trier of fact. See S.C. Cable Television Ass'n v. Southern Bell Telephone and Telegraph Co., 308 S.C. 216, 417 S.E.2d 586 (1992). It is also the fact finder's responsibility to judge the demeanor and credibility of the witnesses and determine the relevance and weight of any testimony offered. Furthermore, a trial judge, who observes a witness, is in the better position to judge the witness's demeanor and veracity and evaluate his or her testimony. See Mann v. Walker, 285 S.C. 194, 328 S.E.2d 659 (Ct. App. 1985); Marshall v. Marshall, 282 S.C. 534, 320 S.E.2d 44 (Ct. App. 1984); McAlister v. Patterson, 278 S.C. 481, 299 S.E.2d 322 (1982); Peay v. Peay, 260 S.C. 108, 194 S.E.2d 392 (1973).

3. S.C. Code Ann. § 38-53-10 (9) (Supp. 2000) defines a "professional bondsman" as:

any person who is approved and licensed under the provisions of this chapter and who pledges cash or approved securities with the clerk of court as security for bail bonds written in connection with a judicial proceeding and receives or is promised money or other things of value for the pledge.



S.C. Code Ann. § 38-53-10(10) (Supp. 2000) defines a "runner" as:

a person employed by a bail bondsman for the purpose of assisting the bail bondsman in presenting the defendant in court when required, assisting in the apprehension and surrender of the defendant to the court, keeping the defendant under necessary surveillance, and executing bonds on behalf of the licensed bondsman when the power of attorney has been recorded.



The statutory provisions of this chapter specify that the professional bail bondsman is responsible for maintaining adequate collateral and filing reports with the clerk of court. See S.C. Code Ann. §§ 38-53-270, -310 (Supp. 2000). A runner has no supervisory duties under the statute and is not responsible for the filing or contents of the reports. Rather, the runner acts solely on the authority of and under the supervision of the licensed professional bail bondsman, who is then responsible for the runner's work and any bonds written pursuant to this delegation of authority. See S.C. Code Ann. §§ 38-53-10(10) & -120 (Supp. 2000).

4. S.C. Code Ann. § 38-53-310 (Supp. 2000) requires a professional bondsman to file written reports by the 15th of each month with his home county and all other counties in which bonds are outstanding, setting forth the individuals bonded, amounts, and dates, as well as total bonds written. The reports were filed on July 17, August 16 as amended by the report filed August 23, and September 11. These reports misreported the amounts of several bonds, failed to report other bonds, and severely under reported the total amounts of bonds written.

5. S.C. Code Ann. § 38-53-270 (Supp. 2000) requires a professional bondsman to maintain security deposits in cash and real estate with the clerk of court of his home county equal to one-fourth of the amount of all outstanding bonds. The total amount of bonds written in all counties must not exceed the amount allowable against the collateral held by the home county. The total bonds written by Fast Freddie's exceeded the authorized limit, based on collateral maintained with the Richland County Clerk of Court, by over $600,000.

6. Upon notice of deficiency between the amount of bonds outstanding and the amount allowable against collateral pledged, S.C. Code Ann. § 38-53-300 (Supp. 2000) requires a professional bondsman to immediately pledge additional collateral with the clerk of court to bring the outstanding bonds into compliance. The clerk of court of each county has authority to suspend the bondsman from writing bonds until he has sufficient collateral pledged in the home county. The decision of the home county to suspend or not is not binding on other counties; each county clerk of court makes an independent determination whether to suspend the bondsman. In September 2000, both Richland and Lexington County Clerks of Court suspended Fast Freddie's from writing bonds. Since then, Fast Freddie's has not posted any additional collateral to bring its outstanding bonds within statutory compliance. Fast Freddie's remained suspended in both counties as of the date of the hearing.

7. By providing that the clerk of court may suspend a bondsman who writes bonds in excess of the amount allowable against collateral pledged, the statutory scheme appears to anticipate this situation and allows some latitude for a bondsman to come back into compliance. Simultaneously, the statute provides a limited measure of protection to the State by barring a bondsman from writing any additional bonds until he has posted sufficient collateral to meet the deficiency.

8. The purpose of a professional licensing action is to protect the public rather than to punish the licensee. See Wilson v. State Bd. of Medical Examiners, 305 S.C. 194, 406 S.E.2d 345 (1991). Thus, "an essential element of the legislatively designed administrative regulatory scheme [is] that the [finder of fact] . . . scrupulously consider all factors relevant to continued licensure. It must, therefore, meticulously weigh the public interest and the need for the continued services. . . against the countervailing concern that society be protected from professional ineptitude." Wilson v. State Bd. of Medical Examiners, 305 S.C. 194, 197, 406 S.E.2d 345, 346 (1991).

9. Fast Freddie's argues that the misrepresentations and omissions in the reports to the clerks of court were not administrative violations of the statute because they were not knowingly submitted by the principals in the business or Coutsos as the licensed professional bail bondsman. Because the acts of Ms. Follette and Mr. Jones were not in furtherance of the business, these actions are not within the scope of employment and thus not attributable to Fast Freddie's or Coutsos. Nonetheless, Coutsos as the principal and licensed professional bail bondsman in Fast Freddie's failed to properly supervise Ms. Follette and Mr. Jones and is liable for his own failure to supervise his employees and to verify the accuracy of the contents of the reports, which resulted in the misreporting of bonds. Other jurisdictions have determined that the regulation of a profession in the interest of the public welfare must be evaluated without regard to the licensee's knowledge where the statute omits any reference to knowledge. "The legislature may deem certain acts, although not ordinarily criminal in themselves, harmful to public safety, health, morals, and the general welfare, and by virtue of its police power, may absolutely prohibit them, either expressly or impliedly by omitting all references to such terms as 'knowingly', 'willfully', 'intentionally', and the like. Such statutes are in the nature of police regulations, and it is well established that the legislature may for the protection of all the people, punish their violations without regard to the question of guilty knowledge." State v. Hill, 31 N.C. App. 733, 735, 230 S.E.2d 579 (1976), disc. review denied 292 N.C. 267, 233 S.E.2d 394 (1977).

10. Here, S.C. Code Ann. §38-53-150 (Supp. 2000) does not require that violations be willful or with knowledge. Rather, the purpose of the statutory scheme is to protect the State's enforcement powers by providing collateral to be seized during the estreatment process. This collateral and potential for its forfeiture reduces the flight risk by giving professional bonding companies a strong incentive to ensure through the use of bounty hunters that those out on bail do not flee the jurisdiction. Without this collateral, the individuals are, in essence, free without any bond. Thus, the statute does not require knowledge but is solely a mechanism to protect the State's enforcement powers.

11. S.C. Code Ann. § 38-53-150(7) & (8) (2000) provides that the Department has authority to suspend or revoke a license for violation of any of the relevant laws or regulations or when the licensee demonstrates incompetency. This general penalty provision accords the finder of fact wide latitude in determining the proper sanction. Thus, it is within this tribunal's discretion to determine whether revocation is warranted under the facts, in light of the offsetting sabotage.

12. S.C. Code Ann. § 38-53-150(B) (Supp. 2000) provides that monetary penalties may be imposed "as provided in Section 38-2-10(2) for each offense." S.C. Code Ann. § 38-3-10 (Supp. 2000) provides in turn that a person shall be fined not more than $2,500 or have his license revoked or suspended or both; for willful violations, a person shall be fined not more than $5,000. The separate penalty provisions for willful and nonwillful violations conclusively indicates that the submission of erroneous reports without actual knowledge is a violation of the statute. While I find that the violations were not proven to be willful on Coutsos' part, nonetheless, three reports and one amended report containing numerous errors and omissions were submitted under his authority as a licensed professional bail bondsman.

13. It is a generally recognized principle of administrative law that the fact-finder has the authority to impose an administrative penalty after the parties have had an opportunity to have a hearing and be heard on the issues. Walker v. S.C. ABC Comm'n, 305 S.C. 209, 407 S.E.2d 633 (1991). Inherent in and fundamental to the quasi-judicial powers of Administrative Law Judge, as the trier of fact in contested cases under the Administrative Procedures Act, is the authority to decide the appropriate penalty, where such is disputed and is not statutorily mandated. Walker v. S.C. ABC Comm'n, supra. Although the Department asserted that Fast Freddie's intentionally falsified the reports, it did not present sufficient evidence that the errors and omissions in the reports were intentional. Nonetheless, the evidence clearly indicates numerous discrepancies in the reports and serious under reporting of the total bonds written.

14. In this instance, Respondent Coutsos did submit inaccurate reports and wrote bonds in excess of the amount authorized based on the collateral posted with the Richland County Clerk of Court. The record demonstrates that these violations arose from Coutsos' failure to adequately supervise Fast Freddie's employees operating under the authority of his professional bail bondsman's license, as demonstrated by the sheer volume of unauthorized bonds written in excess of collateral limits. These shortfalls clearly amount to ineptitude. It is fundamental that the Department has compelling reasons for insuring that professional bonding companies are capably run and are in compliance with the statute.

15. Respondent Coutsos clearly violated S.C. Code Ann. § 38-53-310 (Supp. 2000), which requires accurate reports of outstanding bonds to be filed by the 15th of each month, S.C. Code Ann. § 38-53-270 (Supp. 2000), which requires a professional bondsman to maintain adequate security deposits with his home county, and S.C. Code Ann. § 38-53-300 (Supp. 2000), which requires a professional bondsman to immediately pledge additional collateral to bring outstanding bonds into compliance. Writing bonds in excess of half a million dollars over the authorized limit is a serious administrative violation, which warrants a commensurately serious penalty. Under S.C. Code Ann. § 38-53-150(7) & (8) (Supp. 2000) and the analysis of Walker, I find the appropriate penalty to be a $5,000 administrative penalty imposed on Coutsos and the suspension of his professional bail bondsman's license for a period of one year. Walker v. S.C. ABC Comm'n, supra.

ORDER

Based upon the foregoing Findings of Fact and Conclusions of Law, IT IS HEREBY ORDERED that the Department's request to revoke the Respondents' licenses is DENIED.

IT IS FURTHER ORDERED that John Michael Coutsos shall pay an administrative penalty of $5,000 to the Department.

IT IS FURTHER ORDERED that Coutsos' license to transact business as a professional bail bondsman is hereby suspended until June 1, 2002, when he shall be allowed to re-apply for licensure. FINALLY, IT IS HEREBY ORDERED that Martin is dismissed entirely from this matter with no disciplinary action imposed personally against him.

AND IT IS SO ORDERED.



___________________________________

JOHN D. GEATHERS

Administrative Law Judge

Post Office Box 11667

Columbia, SC 29211

June 8, 2001

Columbia, South Carolina

1. The home county is the colloquial term used by bail bondsmen and the Department to indicate "the county in which the bondsman has his primary place of business," referenced in S.C. Code Ann. §38-53-270 (Supp. 2000).


Brown Bldg.

 

 

 

 

 

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