Beacon Finance, Inc. v. Department of Insurance, State of Florida

656 So. 2d 197, 1995 Fla. App. LEXIS 5343, 1995 WL 298948
CourtDistrict Court of Appeal of Florida
DecidedMay 18, 1995
DocketNo. 94-1437
StatusPublished
Cited by2 cases

This text of 656 So. 2d 197 (Beacon Finance, Inc. v. Department of Insurance, State of Florida) is published on Counsel Stack Legal Research, covering District Court of Appeal of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Beacon Finance, Inc. v. Department of Insurance, State of Florida, 656 So. 2d 197, 1995 Fla. App. LEXIS 5343, 1995 WL 298948 (Fla. Ct. App. 1995).

Opinion

WENTWORTH, Senior Judge.

Appellant, Beacon Finance, Inc. (Beacon), is an insurance premium finance company holding a license from the Department of Insurance pursuant to part XV of chapter 627, Florida Statutes.1 On or about September 20, 1993, the Department of Insurance (Department) filed an order to show cause setting forth three counts. Count I asserted that Beacon, “through its agent,” Seminole Marketing Corporation (Seminole), had provided rebates or inducements to the financing of an insurance policy with a premium finance company in violation of sections 627.837 and 627.832(l)(e), (l)(g), and (l)(h), Florida Statutes. Count II asserted that Beacon had failed to comply with the Department’s request that it produce certain records of Seminole, thereby violating sections 627.836(1) and (2), and 624.418(2)(b), Florida Statutes. Count III charged Beacon with using methods and practices in the conduct of its business so as to render further transactions of business in this state hazardous or injurious to its consumers or the public in violation of section 624.418(l)(b), Florida Statutes. These charges stemmed from factual allegations in the show cause order suggesting that Seminole was issuing $5 checks to insurance agents for each contract financed through Beacon.

Following a hearing before the Division of Administrative Hearings, the hearing officer entered her recommended order on March 11, 1994, recommending that Beacon’s “certificate of authority” be revoked by the Department. The hearing officer found that Beacon had essentially set up a contractual arrangement with Seminole by which Beacon was able to avoid the responsibilities and prohibitions set forth in chapter 627. More specifically, the hearing officer found that Beacon’s “practice of inducing, through Seminole, insurance agents in the state of Florida to violate the Insurance Code by accepting illegal payments is detrimental to the insurance industry and to the public. The only penalty which would assuredly protect the public from [Beacon’s] business practices is revocation.”

Beacon served its exceptions to the recommended order by mail and by facsimile transmission on March 21,1994. Nevertheless, in its final order entered on April 20, the Department of Insurance expressly ruled that Beacon’s exceptions were not timely under rule 4-121.072, Florida Administrative Code, because they were received by the Department on March 23, 1994, twelve days after the entry of the recommended order. Consequently, the Department did not specifically address the exceptions in its final order. However, the Department did adopt the hearing officer’s findings of fact and conclusions of law, as well as her recommendation that Beacon’s “certificate of authority” be revoked. On appeal, Beacon raises several points urging reversal of the final order. Because we find three of the points raised to be meritorious, we reverse and remand for further proceedings.

As a preliminary matter, we agree with Beacon’s argument under point one that the Department erred in failing to consider Beacon’s exceptions to the recommended order. Rule 4-121.072, Florida Administrative Code, provides that “[t]he Department shall allow ten (10) days in which any party of record may submit written exceptions to recommended orders.” Beacon’s exceptions to the recommended order were served by mail on March 21, 1994, the tenth day following the entry of the recommended order. The Department’s reliance on when the exceptions were received in its office is misplaced. Model rule 28-5.103, Florida Administrative Code, allows an additional five days to be [199]*199added to prescribed time limits when service is made by mail. This model rule applies to the Department under section 120.54(10), Florida Statutes, and we hold that Beacon’s exceptions were timely under the rule.2 Since it would be inappropriate for this court to pass on the merits of Beacon’s exceptions, Iturralde v. Department of Professional Regulation, 484 So.2d 1315, 1316 (Fla. 1st DCA 1986), on remand it will be incumbent upon the Department to consider them.

The Department’s final order must also be reversed to the extent that the Department’s application of the provisions of section 624.418, Florida Statutes, constituted error permeating the entire proceedings. As noted above, the hearing officer found that, in violation of section 624.418(2)(b), Beacon refused to provide the Department records relating to the conduct of its business, and used methods and practices in the conduct of its business so “as to render its further transaction of insurance in this state hazardous or injurious to its policyholders or the public” in violation of section 624.418(l)(b). The hearing officer expressly stated:

Although Sections 627.83[2](1) and 624.418(2) provide that the Department may suspend or revoke a certificate of authority for violations of those statutes, Section 624.418(l)(b), Florida Statutes, provides that the Department shall suspend or revoke a certificate of authority for violation of that statute_ [Beacon’s] practice of inducing, through Seminole, insurance agents in the State of Florida to violate the Insurance Code by accepting illegal payments is detrimental to the insurance industry and to the public. The only penalty which would assuredly protect the public from [Beacon’s] business practices is revocation.

We agree with Beacon that the foregoing portion of the recommended order makes clear that revocation was based on the mandatory provisions of section 624.418(l)(b). However, that statute is patently inapplicable to Beacon and applies only to an insurer as defined in chapter 624 under section 624.03, Florida Statutes. Beacon is not an insurer but, rather, a premium finance company separately regulated under chapter 627 and separately defined in section 627.826, Florida Statutes.

Further evidence of the hearing officer’s reliance on the provisions of chapter 624 is her consistent reference to revoking Beacon’s “certificate of authority.” However, only insurers are issued certificates of authority under sections 624.401, 624.402, and 624.413, Florida Statutes. In contrast, Beacon, as a premium finance company, is issued a “license” pursuant to sections 627.828 and 627.829.

In State Department of Environmental Regulation v. Puckett Oil Co., 577 So.2d 988 (Fla. 1st DCA 1991), this court observed

that article I, Section 18, of the Florida Constitution prohibits an administrative agency from imposing a sentence of imprisonment or any other penalties except as provided by law. Pertinent case law reveals that an agency possesses no inherent power to impose sanctions, and that any such power must be expressly delegated by statute.

The Legislature has in section 627.832 authorized the imposition of penalties against licensed insurance premium finance companies under certain enumerated circumstances. There is no statutory authority, however, which would allow the Department to apply to a premium finance company the provisions of subsections 624.418(l)(b) or (2)(b), the statute pursuant to which the hearing officer and the Department revoked Beacon’s license. Accordingly, we quash that portion of the final order which purports to revoke Beacon’s license pursuant to section 624.418 and remand for further proceedings pertain[200]*200ing to the remaining allegations of the show cause order properly charging violations under section 627.887.

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Bluebook (online)
656 So. 2d 197, 1995 Fla. App. LEXIS 5343, 1995 WL 298948, Counsel Stack Legal Research, https://law.counselstack.com/opinion/beacon-finance-inc-v-department-of-insurance-state-of-florida-fladistctapp-1995.