South Carolina              
Administrative Law Court
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SC Administrative Law Court Decisions

CAPTION:
SCDOI vs. Curtis E. Grant

AGENCY:
South Carolina Department of Insurance

PARTIES:
Petitioners:
South Carolina Department of Insurance

Respondents:
Curtis E. Grant
 
DOCKET NUMBER:
96-ALJ-09-0093-A-CC

APPEARANCES:
n/a
 

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


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