ORDERS:
FINAL ORDER AND DECISION
This matter comes before me upon remand by Order of the Honorable Alexander S.
Macaulay, Circuit Court Judge, dated January 31, 1997, which was filed February 5, 1997 in the
Court of Common Pleas, Richland County in Civil Action No. 96-CP-40-2190. In that Order,
Judge Macaulay ruled that the Administrative Law Judge Division ("Division") has subject
matter jurisdiction to hear contested case hearings involving insurance agents licensing matters.
Judge Macaulay determined that the only limits on the Division's "broad grant of subject matter
jurisdiction, as set forth" in S.C. Code Ann. § 1-23-600 (B)(Supp. 1996) over contested cases
arising from departments within the executive branch of state government, are "for contested
cases arising under the Occupational Safety and Health Act, matters which are otherwise
provided for in Title 56, or those other cases which are prescribed for or mandated by federal law
or regulation."
Although Judge Macaulay noted that S.C. Code Ann. §§ 38-3-10 and 38-43-130 (Supp.
1996) provide that the Director of the Department of Insurance has the authority to hear and
decide cases involving insurance agents' licenses, he held that "when construing separate statutes
that deal with the same subject matter, the court should, wherever possible, construe those
statutes harmoniously unless they are totally inconsistent." Anderson v. Federal Deposit
Insurance Corporation, 918 F. 2d 1139 (4th Cir. 1990); Gordon v. Bell, 116 S.C. 466, 108
S.E.2d 186 (1921). In this case, he held that the harmonious construction which gives effect to
each of these statutes is that the Division has subject matter jurisdiction to hear contested cases
over insurance agent licensing matters.
Consistent with the Order remanding the case for a decision on the merits, the record has
been re-examined and this Final Order and Decision is rendered. Based upon the relevant and
probative evidence and applicable law, the insurance license of Curtis E. Grant ("Respondent or
insurance agent") is revoked.
STATEMENT OF THE CASE
This matter previously came before me as Docket No. 96-ALJ-09-0093-CC, pursuant to a
request by the South Carolina Department of Insurance to have the insurance agent's license of
Curtis E. Grant revoked for failure to transmit promptly or pay all or a portion of insurance
premiums collected by Mr. Grant from insureds of his employer, Capital Security Life Insurance
Company. The request by the Respondent for a hearing was transmitted to the Division by the
Department and after notice to the parties, a contested case hearing was held before me on April
2, 1996, at the Division offices in Columbia, South Carolina. The Department appeared at that
hearing and presented evidence and the testimony of Richard D. Parks, an employee of Capital
Security Life Insurance Company. Respondent did not appear at that hearing. See Order and
Decision dated May 21, 1996.
After lengthy review of the file, the evidence presented at the hearing and a thorough
review of the relevant statutory law, this tribunal issued its Order and Decision determining that
the action should be dismissed for lack of subject matter jurisdiction. That Order and Decision
was appealed by the Department wherein it argued that this Division had the requisite subject
matter jurisdiction to hear the case and issue a Final Decision in accordance with the
requirements of S.C. Code Ann. § 1-23-330. The Remand Order of Judge Macaulay was
subsequently issued and this Final Order and Decision is being issued on the merits pursuant to
that Order.
After this case was assigned to me upon remand, I issued an Order and Notice of Hearing
to both parties regarding the date, time and place for an additional contested case hearing. The
Order and Notice of Hearing was sent to the Respondent by certified mail, having been delivered
and signed for on April 2, 1997, with the certified card returned to the Division on April 3, 1997.
Subsequently, by letter dated April 7, 1997, the Department requested that an Order be issued
without the necessity of another hearing, stating that "a de novo hearing is not ordered" by Judge
Macaulay, only a final decision. Although a copy of that letter was not sent to the Respondent,
this tribunal has sent a copy to the Respondent by letter dated April 10, 1997, requesting
communication from the Respondent. No written correspondence was received from the
Respondent; however he did call the Division and leave a message with the Receptionist that he
would not be able to attend the hearing. Since the Respondent did not appear at the original
contested case hearing, which he had requested, and pursuant to his verbal communication that
he would not attend this hearing, the request of the Department to dispense with another hearing
and issue its Decision on the merits based upon the evidence presented at the prior hearing is
granted.
FINDING OF FACTS
Having observed the witnesses and exhibits presented at the hearing on April 2, 1997, 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 the evidence:
1. This Division has personal and subject matter jurisdiction.
2. Notice of the date, time, place and subject matter of the contested case hearing
was timely given to the parties and a hearing was held at the Division offices on April 2, 1996.
After the remand of the case from the circuit court, an additional notice of the time, place, date
and nature of an additional hearing was sent to the parties. Respondent communicated by
telephone that he would not attend the hearing. Based upon the review of the record made of the
first hearing and the order of the circuit court, this tribunal determined it was not necessary to
proceed with an additional hearing.
3. The Department issued resident license # 251-92-1141 to the Respondent for the
sale of life, health and accident insurance policies.
4. Respondent was employed as an insurance agent with Capital Security Life
Insurance Company ("Security Company") during the years 1994 and 1995. One of the duties of
the Respondent in this employment was to collect insurance premiums from the insureds,
remitting them to the office on a daily basis. If any insurance premiums were mailed in, he was
responsible for remitting them on a daily basis and mailing to the policy holders their receipt
books.
5. The Respondent sold debit life insurance, health insurance and hospitalization
insurance to individuals and families. Daily he went to residences of the insureds, collecting
premiums and selling insurance. Debit insurance premiums were collected from insureds on a
monthly basis by Respondent.
6. Richard Dwayne Parks is the sales manager of Capital Security Life Insurance
Company. Prior to its purchase of Public Savings Life Insurance Company ("Public Company"),
he was an assistant vice president for Public Company where he was in charge of the premium
accounting department. Acting in that position, he accounted to the company for all premium
income collected by its insurance agents.
7. Mr. Parks was promoted to the sales manager position in July 1994. Thereafter,
the Respondent was supervised directly by Mr. Parks.
8. During the year 1995, when the uncollected or unpaid premiums of those
insurance policies serviced by the Respondent reached an unacceptable level of thirty (30) to
forty (40) percent, Mr. Parks began to work with Respondent to assist him in collecting the
arrearages.
9. Mr. Parks made visits with the Respondent to various insureds and from
conversations with them and a review of their payment books, found that many premium
payments had been made by the insureds which had not been remitted to Security Company. 10. The account number assigned by Security Company to the Respondent which
reflected the premium payment history of his insureds was 0815011.
11. A review of the accounts assigned to the Respondent, as maintained by Security
Company in the regular course of its business, reflect a total amount of debit premium shortage
of Two Thousand, Eighty Five Dollars and Twelve Cents ($2,085.12) as of the last week of
February, 1995.
12. None of the arrearages of debit insurance premiums collected by the Respondent
have been paid or remitted to Security Company.
CONCLUSIONS OF LAW
Based upon the foregoing Findings of Fact, I conclude, as a matter of law, the following:
1. Pursuant to the broad grant of subject matter jurisdiction in S.C. Code Ann. § 1-23-600 (B) (Supp. 1996) and the grant of jurisdiction in S.C. Code Ann. § 38-43-130 (Supp.
1996), the Administrative Law Judge Division is empowered to conduct contested case hearings
and issue Final Decisions involving the revocation, suspension, or reissuance of insurance agent
licenses.
2. Chapter 43 of Title 38 of the 1976 Code, as amended, titled "Insurance Agents
and Agencies," provides for the licensing of agents for insurers. The statutes contained within
this chapter include, but are not limited to, the following provisions: (1) persons considered
agents; (2) their educational requirements; (3) fees for licenses; (4) application filings; (5)
duration of licenses; (6) responsibilities of agents; and (7) suspension and revocation of agent
licenses.
3. S.C. Code Ann. § 38-43-130 (Supp. 1996) provides that the Department may
revoke or suspend an agent's license after ten days' notice or refuse to reissue a license when it
appears that an agent has been convicted of a crime involving moral turpitude, has violated this
title or any regulation promulgated by the Department, or has wilfully deceived or dealt unjustly
with the citizens of this State.
4. The words "deceived or dealt unjustly with the citizens of this State" is defined in
S.C. Code Ann. § 38-43-130 as including, but not being limited to, action or inaction by the
agent as follows:
(3) failing to transmit promptly or pay all or a portion of the amount of an
insurance premium when the agent or one of his employees has received payment
from a customer or insured or someone on his behalf or when it has been financed
by the agent.
5. S.C. Code Ann. § 38-43-130 further provides that if one or more grounds exist for
the revocation or suspension of, or the refusal to issue or reissue a license, in lieu of a revocation
or suspension, may impose upon the agent an administrative penalty as provided in S.C. Code
Ann. § 38-2-10.
6. S.C. Code Ann. § 38-2-10 (Supp. 1996) provides that for each violation of the
insurance laws of this State by a person, other than an insurer or a health maintenance
organization, licensed by the Department, that person (1) shall be fined an amount not to exceed
two thousand five hundred dollars, or (2) his license must be suspended, or both. If the violation
is wilful, then the person shall (1) be fined in an amount not to exceed five thousand ($5,000.00)
dollars, or (2) the license shall be suspended or revoked, or both.
7. Although the Department did not set forth in the original Transmittal Form the
relief it sought in this case, in its written notice dated November 14, 1995 to the Respondent, it
informed him that it intended to "revoke your license to transact business within the State of
South Carolina as a resident insurance agent" if after ten days from receipt of the notice he did
not
request a hearing See Department's Exhibit # 2. Accordingly, I conclude that the relief sought
by the Department is the revocation of the insurance agent license of the Respondent.
8. The term "wilful" is often defined as "proceeding from a conscious motion of the
will; voluntary; knowingly; deliberate. Intending the result which actually comes to pass;
designed; intentional; purposeful; not accidental or involuntary." An act or omission is
"willfully" done, if done voluntarily and intentionally and with the specific intent to do
something the law forbids. Black's Law Dictionary 1103 (6th ed. 1990).
9. Acting as the fact-finder, it is the prerogative of the administrative law judge "to
impose the appropriate penalty based on the facts presented." Walker v. South Carolina ABC
Comm'n, 305 S.C. 209, 211 S.E. 2d 633, 634 (1991).
10. An administrative law judge possesses the same powers at chambers or in open
court as do circuit court judges and may issue such remedial writs as are necessary to give effect
to its jurisdiction. S.C. Code Ann. § 1-23-630 (Supp. 1996).
11. I conclude that the evidence is overwhelming that the Respondent collected
premiums from insureds of Capital Security Life Insurance Company, his employer, in the
amount of $2,085.12; and has failed to transmit them or pay them to Security Company.
Respondent admitted arrearages in his written note to his supervisor. See Department's Exhibit #
4. I conclude that Respondent's actions in failing to transmit collected premiums to his employer
as enumerated herein is in violation of the provisions of S.C. Code Ann. § 38-43-130 (3) (Supp.
1996), and that the Department's request for the revocation of Respondent's license as a resident
insurance agent in the State of South Carolina should be granted.
ORDER
Based upon the above statements, Findings of Fact and Conclusions of Law, it is hereby:
ORDERED that the license issued to the Respondent, Curtis E. Grant, by the Department
to transact business within the State of South Carolina as a resident insurance agent is revoked.
AND IT IS SO ORDERED.
_________________________________________
Marvin F. Kittrell
Chief Judge
Columbia, South Carolina
May 9, 1997 |
