ORDERS:
FINAL ORDER AND DECISION
STATEMENT OF THE CASE
This matter comes before this tribunal pursuant to S.C. Code Ann. §§ 1-23-600(B) and 38-43-130 (Supp. 1997) upon Respondent's request for a contested case hearing regarding Petitioner's
decision to revoke Respondent's resident insurance agent's license. The South Carolina Department
of Insurance seeks revocation of Respondent's license for allegedly violating South Carolina's
insurance laws by wilfully deceiving or dealing unjustly with the citizens of the State in failing to
transmit promptly or pay all or a portion of collected premiums. A contested case hearing was held
Friday, July 31, 1998 at the Administrative Law Judge Division.
Petitioner failed to establish by a preponderance of the evidence that Respondent violated the
insurance laws. Thus, Petitioner's request that Respondent's license be revoked is denied.
FINDINGS OF FACT
Having carefully considered all testimony, exhibits, and arguments presented at the hearing
of this matter, and taking into account the credibility and accuracy of the evidence, I make the
following findings of fact by a preponderance of the evidence.
Beginning on April 5, 1995, Respondent was employed with Capitol Security Insurance
Company (Capitol), as a sales manager until he was demoted to agent in June of 1997. The
following events, which are not in dispute, precipitated his termination from employment and the
Department's decision to seek revocation of his license. On Friday, October 3, 1997, Respondent
transmitted collected premiums totaling $2,681.60 to Capitol's home office in Louisville, Kentucky
using his laptop computer. Pursuant to Capitol's policy that agents set the deposit date within two
days of the transmission date, Respondent set the deposit date of his transmission for Sunday,
October 5, 1997. However, because night deposit boxes were unavailable to Capitol's agents, it was
impossible for Respondent to make the deposit on Sunday. Even so, Respondent failed to deposit
the premiums in a banking institution on Monday, October 6, or Tuesday, October 7. On
Wednesday, October 8, 1997, Respondent ran several errands with the premiums stored inside the
glove compartment of his unlocked car. After the third stop, Respondent discovered that the
premiums were missing. Respondent immediately reported the theft to his District Manager Roger
Graham and followed all necessary company policies regarding the robbery. Respondent informed
Mr. Graham that he did not make the deposits on Monday or Tuesday because he forgot to take the
premiums with him when he left home on those days. Respondent's employment with Capitol
terminated on November 20, 1997. On November 25, 1997, Capitol notified Respondent by letter,
that he was responsible for the portion of the stolen premiums not covered by insurance($949.68),
and required him to reimburse Capitol within 30 days of the notification.
At the time of this incident, Capitol had internal written policies regarding the collection of
insurance premiums by its agents, and the methods to be used for depositing premiums. All agents
and managers were trained on company policies and procedures, including a policy requiring
transmission of collected premiums via laptop computers prior to actually depositing the premiums
in a designated business account. This policy dictated that agents should not set the actual deposit
date out farther than two days from the date of the transmission. Capitol also required all agents to
transmit every Friday any premiums collected during the week.
The issues for presented for determination are: (1) whether a preponderance of the evidence
exists to support a finding by the Director that the Respondent wilfully deceived or dealt unjustly
with the citizens of the State by failing to forward premiums to Capitol Security Insurance Company,
and (2) whether the Director abused his discretion when he elected to revoke Respondent's license
to conduct the business of insurance in the State of South Carolina.
CONCLUSIONS OF LAW
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); Alex Sanders, et al., South Carolina Trial
Handbook § 9:3 Party With Burden, Civil Cases (1994). The Department is the party asserting the
affirmative in this case; therefore, the Department must prove by a preponderance of the evidence
that Respondent wilfully deceived or dealt unjustly with the citizens of the state in violation of S.C.
Code Ann. § 38-43-130(3) (Supp. 1997). The preponderance of the evidence "is evidence which is
of the greater weight or more convincing than the evidence which is offered in opposition to
it . . . ." Black's Law Dictionary 1182 (6th ed. 1990). "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 (1994), (citing Frazier v. Frazier,
228 S.C. 149, 89 S.E.2d 225 (1955)). The weight and credibility assigned to evidence presented at
the hearing of a matter is within the province of the trier of fact. See South Carolina Cable
Television Ass'n v. Southern Bell Tel. and Tel. Co., 308 S.C. 216, 417 S.E.2d 586 (1992).
S.C. Code Ann. § 38-43-130 grants the Director the authority to revoke or suspend an agent's
license if that agent has "wilfully deceived or dealt unjustly with the citizens of this State." S.C.
Code Ann. § 38-43-130 (Supp. 1997) (Emphasis added). "Deceived or dealt unjustly" includes, for
purposes of the statute, "failure to transmit promptly or pay all or a portion of the amount of an
insurance premium when the agent . . . received payment from a customer. . . ." S.C. Code Ann. §
38-43-130(3) (Supp. 1997). To warrant a finding of a violation under § 38-43-130(3), the evidence
must establish that an agent not only deceived or dealt unjustly with the citizens of the state, but also
that he did so wilfully. A wilful act is "done with the specific intent to fail to do something the law
requires to be done. . . . A wilful act differs essentially from a negligent act." Black's Law
Dictionary 1599 (6th ed. 1990) (Emphasis added). The letter from Respondent's District Manager
notifying him of his monetary responsibility advises that his failure to deposit the premiums was a
negligent act. By its very definition, a wilful act is not a negligent one. No evidence was presented
to show Respondent acted wilfully when he failed to deposit the premiums. For this tribunal to order
the sanction of revocation of Respondent's license, it must find that his action, or lack thereof, was
wilful. The Department failed to prove by a preponderance of the evidence that Respondent wilfully
deceived or dealt unjustly with Capitol or the citizens of this State.
As the matter has already been determined based on the lack of evidence that Respondent
acted wilfully, the issue of whether Respondent failed to transmit promptly or pay collected
premiums does not require discussion by this tribunal.
ORDER
IT IS THEREFORE ORDERED that Petitioner's request that Respondent's insurance
agent's license be revoked for violating S.C. Code Ann. § 38-43-130(3) is denied.
AND IT IS SO ORDERED.
______________________________________
John D. Geathers
Administrative Law Judge
August 26, 1998
Columbia, South Carolina |