|
15-1004-16914-2 |
STATE OF MINNESOTA
OFFICE OF ADMINISTRATIVE HEARINGS
FOR THE COMMISSIONER OF COMMERCE
|
In the Matter of the Insurance Agency License of Sun Surety Insurance Company, No. 20214291 and the Insurance Producer’s License and Notary Commission of Robert J. Mitchell, and the Insurance Producer’s License of FERCO, Inc. |
FINDINGS OF FACT, CONCLUSIONS AND RECOMMENDATION FOR DEFAULT OF ROBERT J. MITCHELL AND FERCO, INC. |
A Prehearing Conference was held before Administrative Law Judge Beverly Jones Heydinger (“ALJ”) on December 1, 2005 at the Office of Administrative Hearings, 100 Washington Avenue South, Suite 1700, Minneapolis, MN 55401. The prehearing conference was held pursuant to a Notice of and Order for Hearing and Notice of Prehearing Conference, dated October 26, 2005.
Michael J. Tostengard, Assistant Attorney General, 445 Minnesota Street, Suite 1200, St. Paul, MN 55101-2130, appeared on behalf of the Minnesota Department of Commerce (“Department”). Patrick J. Fugina, Attorney at Law, 229 Jackson Street, Suite 134, Anoka, MN 55303, appeared on behalf of the Respondent Sun Surety Insurance Company. Respondents Robert J. Mitchell, and FERCO, Inc., did not appear in person or by counsel. The record closed as to Robert J. Mitchell (Mitchell) and FERCO, Inc. (FERCO) on that date.
As more fully set forth below, it is hereby recommended that the Commissioner of the Commerce take adverse action against the licenses of Respondents Mitchell and FERCO, Inc., censure Mitchell and FERCO, and/or impose a civil penalty upon Mitchell and FERCO. A Consent Order was signed by the Commissioner on January 23, 2006, fully resolving the claims against Respondent Sun Surety Insurance Company.
This Report is a
recommendation, not a final decision. The Commissioner of Commerce will
make the final decision after reviewing the record and may adopt, reject or
modify these Findings of Fact, Conclusions, and Recommendations. Under Minn.
Stat. § 14.61, the Commissioner’s decision shall not be made until this Report
has been available to the parties to the proceeding for at least ten (10)
days. An opportunity must be afforded to each party adversely affected by this
Report to file exceptions and present argument to the Commissioner.
Parties should contact Kevin Murphy, Deputy Commissioner, Minnesota Department
of Commerce, 85 Seventh Place East, Suite 500,
St. Paul, Minnesota, 55101 to ascertain the procedure for filing exceptions
or presenting argument to the Commissioner.
If the Commissioner fails to issue a final decision within 90 days of the close of the record, this report will constitute the final agency decision under Minn. Stat. § 14.62, subd. 2a. The record closes upon the filing of exceptions to the report and the presentation of argument to the Commissioner, or upon the expiration of the deadline for doing so. The Commissioner must notify the parties and the Administrative Law Judge of the date on which the record closes.
Under Minn. Stat. § 14.62, subd. 1, the agency is required to serve its final decision upon each party and the Administrative Law Judge by first class mail or as otherwise provided by law. If the Commissioner fails to issue a final decision within 90 days of the close of the record under Minn. Stat. § 14.61, this report becomes a final decision. In order to comply with Minn. Stat. § 14.62, subd. 2a, the Commissioner must then return the record to the Administrative Law Judge within 10 working days to allow the Judge to determine the discipline to be imposed.
STATEMENT OF ISSUES
1. Did Respondents Mitchell and FERCO improperly convert monies owed bond clients and refuse to repay those amounts, in violation of Minn. Stat. §§ 45.027, subd. 7, and 72A.20, subd. 18?
2. Did Respondents Mitchell and FERCO engage in an unfair method of competition or an unfair or deceptive act or practice in the business of insurance, in violation of Minn. Stat. § 72A.19?
Based upon all of the files, records and proceedings herein, the Administrative Law Judge makes the following:
FINDINGS OF FACT
1. On October 26, 2005, a copy of the Notice of and Order for Hearing, Order for Prehearing Conference, Order to Show Cause, and Statement of Charges was sent by first class mail to Robert J. Mitchell, Route 1, Box 236, Sandstone, MN 55072 and FERCO, Inc., d/b/a/ Assured Bond Services, 506 Kenny Street, Saint Paul, MN 55101, the addresses on file with the Department, as appears by Affidavit of Service of First Class Mail on file herein.
2. The Respondents Mitchell and FERCO failed to appear at the prehearing conference, did not obtain the ALJ’s prior approval to be absent from the prehearing conference, did not file a Notice of Appearance, and did not request a continuance or any other relief.
3. The Notice of and Order for Hearing and Notice of Prehearing Conference contained the following informational warning:
Respondent’s failure to appear at the prehearing conference may result in a finding that the Respondent is in default, that the Department’s allegations contained in the Statement of Charges may be accepted as true, and its proposed disciplinary action may be upheld.
4. Because Respondents Mitchell and FERCO failed to appear, they are in default.
5. Pursuant to Minnesota Rules, part 1400.6000, the allegations contained in the Notice of and Order for Hearing, Order for Prehearing Conference, Order to Show Cause, and Statement of Charges against Mitchell and FERCO are taken as true and incorporated by reference into these Findings of Fact.
Based upon the foregoing Findings of Fact, the Administrative Law Judge makes the following:
CONCLUSIONS
1. The Administrative Law Judge and the Commissioner of Labor and Industry are authorized to consider the charges against Respondents Mitchell and FERCO under Minn. Stat. §§ 60K.43, subd. 2, 45.027, subd. 7, and 14.50.
2. Respondents Mitchell and FERCO received due, proper and timely notice of the charges against them, and of the time and place of the prehearing conference. This matter is, therefore, properly before the Commissioner and the Administrative Law Judge.
3. The Department has complied with all relevant substantive and procedural legal requirements.
4. Under Minn. R. 1400.6000, a contested case may be decided adversely to a party who defaults. On default, the allegations of and the issues set out in that Notice of and Order for Hearing or other pleading may be taken as true or deemed proved without further evidence.
5. The Respondents Mitchell and FERCO are in default herein as a result of their failure, without the ALJ’s prior consent, to appear at the prehearing conference.
6. Respondents Mitchell and FERCO improperly converted monies owed to bail bond clients and refused to repay those amounts in violation of Minn. Stat. §§ 45.027, subd. 7, and 72A.20, subd. 18.
7. Respondents Mitchell and FERCO engaged in a dishonest practice in connection with the business of insurance that is an unfair method of competition and an unfair act or practice in violation of Minn. Stat. § 72A.20, subd. 18(b).
8. Disciplinary action against Respondents Mitchell and FERCO is in the public interest.
Based upon the foregoing Conclusions, the Administrative Law Judge makes the following:
IT IS HEREBY RECOMMENDED: that the Commissioner of the Commerce take adverse action against Respondent Mitchell and Respondent FERCO’s licenses, censure Respondents, and/or impose a civil penalty upon Respondents.
Dated this 9th day of February, 2006.
|
/s/ Beverly Jones Heydinger |
|
BEVERLY JONES HEYDINGER |
|
Administrative Law Judge |
Reported: Default (no tapes)