Vincent Alexander v. Louisiana Department of Insurance

NOT DESIGNATED FOR PUBLICATION

STATE OF LOUISIANA

COURT OF APPEAL

FIRST CIRCUIT

2022 CA 0769

VINCENT ALEXANDER
r
p VERSUS

LOUISIANA DEPARTMENT OF INSURANCE

Judgment Rendered.
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FEB 2 4 2023

Appealed from the 19th Judicial District Court
In and for the Parish of East Baton Rouge
State of Louisiana
Case No. C706938

The Honorable Timothy E. Kelley, Judge Presiding

Robert E. Torian Counsel for Plaintiff/Appellant
James L. Pate Vincent Alexander

Lafayette, Louisiana

Dominique Jones Counsel for Defendant/Appellee
Sonceree Smith Clark Louisiana Department of Insurance
Baton Rouge, Louisiana

BEFORE: WELCH, PENZATO AND LANIER, JJ.

LANIER, J.

The appellant, Vincent Alexander, appeals the judgment of the Nineteenth

Judicial District Court, which affirmed the March 23, 2021 decision of the

Louisiana Division of Administrative Law. For the following reasons, we affirm

the judgment of the district court.

FACTS AND PROCEDURAL HISTORY

Mr. Alexander was an insurance agent licensed by the State of Louisiana,

doing business as Vincent Alexander Insurance Agency ( the agency). He was

married to Tacey Ann Tolliver, who was also an insurance agent licensed at one

time by the State of Louisiana and worked with him at the agency. Ms. Tolliver' s

insurance license expired on August 31, 2018. On August 28, 2019, she attempted

to reinstate her license, but the check she wrote to pay the reinstatement fee was

returned for non -sufficient funds. Ms. Tolliver' s insurance license was suspended

on December 10, 2019.

In June of 2019, the Louisiana Department of Insurance ( LDI) received a

complaint from Kendall Lewis, one of the agency' s customers, that was filed

against Progressive Insurance Company ( Progressive). In the complaint, Mr.

Lewis stated he had paid premiums to the agency on a policy that went into effect

December 7, 2018, but the policy was cancelled on January 22, 2019. Mr. Lewis

provided premium receipts as proof of payment, dated from January 2019 to May

2019, of which were signed " T. Alexander." Progressive informed Mr. Lewis that

the policy was cancelled due to non- payment, but he was not made aware of the

cancellation until he was involved in a motor vehicle accident.

On June 1, 2019, LD1 directed Mr. Alexander to respond to Mr. Lewis' s

complaint and to explain why Mr. Lewis' s policy was cancelled despite his

payment of premiums, but Mr. Alexander failed to respond. On July 8, 2019, LDI

again directed Mr. Alexander to respond via certified mail, but Mr. Alexander

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failed to respond. On July 19, 2020, LDI sent notice to Mr. Alexander that he was

fined $ 250 for his failure to respond, and he was directed to remit both the fine

payment and his response to LDI immediately. Mr. Alexander responded on July

21, 20191 but LDI alleged the response was inadequate and requested additional

information and documentation regarding the complaint. LDI alleged that Mr.

Alexander did not comply with the order.

On August 16, 2019, representatives from Progressive met Ms. Tolliver at

the agency, but Mr. Alexander was not present. Ms. Tolliver explained to the

representatives that she began working there in 1997, and that she and Mr.

Alexander were the only two employees of the agency. When the Progressive

representatives asked Ms. Tolliver about her expired insurance license, she stated

she was not aware that it had expired.

On August 23, 2019, a representative from Progressive spoke to Mr.

Alexander via telephone. Mr. Alexander explained that he was generally in the

office four to five hours a day and that he was undergoing physical therapy for a

recent surgery. He confirmed that he and Ms. Tolliver were Alexander' s only

employees. He stated that he was not aware of the previous visit by the

Progressive employees to his office or of the issues with Mr. Lewis' s premium

payments. Mr. Alexander also stated that he was not aware that Ms. Tolliver' s

insurance license had expired. He also admitted that the activities of the agency

were ultimately his responsibility since he was the business owner. On September

17, 2019, Progressive terminated its producer' s agreement with the agency, and the

agency refunded to Mr. Lewis his premium payments and paid his reinstatement

fees to the Office of Motor Vehicles ( OMV) for not having vehicle insurance.

On September 27, 2019, LDI informed Mr. Alexander that the $ 250 fine

remained unpaid. On February 19, 2020, LDI mailed a Notice of Proposed

Regulatory Action and Wrongful Conduct via certified mail to Mr. Alexander

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regarding Mr. Lewis" s complaint and the failure to pay the fine. On the same date,

LDI mailed its intent to suspend and revoke Mr. Alexander' s license.

In a letter dated February 28, 2020 written to LDI, Mr. Alexander claimed

that he did not receive LDI' s requests for responses to Mr. Lewis' s complaint or

LDI' s notice of the fine but enclosed payment of the fine along with his request.

Mr. Alexander also stated in his request that he questioned Ms. Tolliver about the

complaint and the fine and that she explained that she had made a mistake and

attempted to cover it up.

On May 8, 2020, LDI received a complaint from Tawna Casey, another of

the agency' s customers, in which she alleged she had made a premium payment on

February 7, 2020 on her homeowner' s policy to Ms. Tolliver. Despite her repeated

requests between February and April of that year for a copy of her policy, Ms.

Casey never received one. Ms. Casey then contacted the underwriting company

and discovered that her policy has been cancelled on March 31, 2019 for non-

payment. Notice of cancellation was mailed to both Mr. Alexander and Ms.

Tolliver on March 1, 2019. Mr. Alexander called the underwriter on May 27, 2020

concerning Ms. Casey' s policy, and during their conversation, Mr. Alexander

admitted that he had not been working in the office for quite some time and that

Ms. Tolliver was running the office. LDI mailed notice of Ms. Casey' s complaint

to Mr. Alexander on July 9, 2020. Although Mr. Alexander responded to the

complaint, LDI found the response to be inadequate.

On June 11, 2020, LDI received a consumer complaint from contracting

company Tara O Design, alleging that Ms. Tolliver had provided fraudulent

certificates of insurance ( COI) on behalf of sub -contractor Tony' s Electric, who

was one of the agency' s customers. The COI indicated that Tony' s Electric had

general liability and workers' compensation insurance coverage. As a result of the

fraudulent COI, Tara O Design alleged it was assessed $ 1, 373 in adjusted workers'

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compensation premiums because of the lack of coverage for Tony' s Electric. In a

sworn statement dated September 10, 2020, given to LDI, Mr. Alexander claimed

that he had no knowledge of the COI, that he never personally dealt with Tony' s

Electric, and that Tony' s Electric had only done business with Ms. Tolliver.

On August 31, 2020, LDI received a consumer complaint from Rachel

Dugas, one of the agency' s customers. Ms. Dugas alleged that she had submitted

premium payments to Ms. Tolliver for a Progressive vehicle insurance policy, but

that the policy had been cancelled for non-payment. Ms. Dugas claimed that she

was assessed $ 1, 060 in fines by the Office of Motor Vehicles for not having

vehicle insurance. Ms. Dugas alleged that she brought to Ms. Tolliver every notice

she received from Progressive stating that she did not have insurance, but Ms.

Tolliver would tell her that the notices were incorrect. Ms. Dugas claimed that she

and her husband did not have insurance on their vehicles from September 2019

through May 2020. Mr. Dugas went to Mr. Alexander' s home to inform him that

he and Ms. Dugas did not have coverage. Mr. Alexander allegedly purchased

another policy for Mr. Dugas and paid the premium, but Mr. Dugas claimed that

policy was cancelled the following week.

On September 16, 2020, LDI notified Mr. Alexander of violations pursuant

to La. R.S. 22: 1554( A)(4), which provides for the suspension or revocation of an

insurance license for "[ ulsing fraudulent, coercive, or dishonest practices or

misrepresentation, or demonstrating incompetence, untrustworthiness, or financial

irresponsibility in the conduct of business such as might endanger the public."

LDI' s proposed actions were to immediately suspend Mr. Alexander' s license, to

revoke his license 30 days from the date of the notice, and to order Mr. Alexander

to cease and desist in conducting insurance business in the State of Louisiana.

The Louisiana Division of Administrative Law ( LDA) reviewed LDI' s

decision, and, on March 23, 2021, signed an order affirming the revocation of Mr.

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Alexander' s insurance license. LDA stated in its reasons that Mr. Alexander did

not prove that LDI acted arbitrarily or capriciously, or abused its discretion in

revoking his license. Rather, LDA found that LD1 proved that Mr. Alexander

committed a violation of La. R. S. 22: 1554( A)(4) by demonstrating

untrustworthiness and financial irresponsibility in the conduct of business such as

might endanger the public." Specifically, LDA found that Mr. Alexander was

particularly irresponsible in allowing Ms. Tolliver to run the business after he had

been made aware of Mr. Lewis' s complaint, which then led to other consumer

complaints being filed against the agency.

On April 20, 2021, Mr. Alexander filed a petition for judicial review of

LDA' s adjudication. In the petition, Mr. Alexander alleged that all the violations

committed by his business were committed solely by Ms. Tolliver, that he took no

part in her actions, and that he immediately took actions to resolve the problems

Ms. Tolliver created. Mr. Alexander further alleged that on January 22, 2021, he

filed for divorce from Ms. Tolliver. He also forbade her from returning to the

office and changed the locks, apparently so that Ms. Tolliver would be separated

from the business and could do no further harm.

After a hearing, and after considering briefs submitted by Mr. Alexander and

LDI, the district court signed a judgment on November 16, 2021, affirming LDA' s

decision. Mr. Alexander has appealed this judgment.

ASSIGNMENTS OF ERROR

Mr. Alexander has submitted two assignments of error:

1. The district court erred in affirming the decision of LDA, which upheld
the revocation of Mr. Alexander' s insurance agent' s license, when the
alleged underlying acts leading to the revocation were all committed by
Ms. Tolliver, without Mr. Alexander' s knowledge or approval.

2. The district court erred in not ruling a punishment less than a revocation
of Mr. Alexander' s insurance license, such as suspension, probation, or
fine, was warranted under the facts established at the administrative
hearing.

G

STANDARD OF REVIEW

The Louisiana Administrative Procedure Act provides for judicial review

over administrative adjudications. At the pertinent time herein, La. R.S.

49: 964( G)` provided:

The court may reverse or modify the decision if substantial rights of
the appellant have been prejudiced because the administrative

findings, inferences, conclusions, or decisions are:

1) In violation of constitutional or statutory provisions;

2) In excess of the statutory authority of the agency;

3) Made upon unlawful procedure;

4) Affected by other error of law;

5) Arbitrary or capricious or characterized by abuse of discretion or
clearly unwarranted exercise of discretion; or

6) Not supported and sustainable by a preponderance of evidence as
determined by the reviewing court. In the application of this rule,
the court shall make its own determination and conclusions of fact
by a preponderance of evidence based upon its own evaluation of
the record reviewed in its entirety upon judicial review. In the
application of the rule, where the agency has the opportunity to
judge the credibility of witnesses by first-hand observation of
demeanor on the witness stand and the reviewing court does not,
due regard shall be given to the agency' s determination of
credibility issues.

Carpenter v. State, Dept. of Health and Hospitals, 2005- 1904 ( La. App. 1 Cir.

9/ 20/ 06), 944 So. 2d 604, 607- 608, writ denied, 2006- 2804 ( La. 1126/ 07), 948

So. 2d 174.

When reviewing an administrative final decision, the district court functions

as an appellate court. Mid -City Automotive, LLC v. Louisiana Department of

Public Safety, 2019- 1219 ( La. App. 1 Cir. 5/ 11/ 20), 304 So. 3d 457, 461. Once a

final judgment is rendered by the district court, an aggrieved party may seek

1 Louisiana Revised Statutes 49:964 was re -designated La. R.S. 49: 975. 1, without any
substantive change, pursuant to 2022 La. Acts, No. 663 § 1, eff. Aug. 1, 2022.

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review by appeal to the appropriate appellate court. La. R.S. 49: 979. On review of

the district court' s judgment, no deference is owed by the court of appeal to the

factual findings or legal conclusions of the district court, just as no deference is

owed by the Louisiana Supreme Court to factual findings or legal conclusions of

the court of appeal. Mid -City Automotive, LLC, 304 So. 3d at 461. Thus, an

appellate court sitting in review of an administrative agency reviews findings and

decisions of the administrative agency and not the decision of the district court. Id.

Consequently, this Court will conduct its own independent review of the record in

accordance with the standards provided in La. R.S. 49: 964( G).

DISCUSSION

In his first assignment of error, Mr. Alexander argues that the decision to

revoke his insurance license should be reversed because all the violating actions

were committed by Ms. Tolliver without his knowledge or approval. After a

complete review of the appellate record, we disagree with Mr. Alexander' s

argument. Extensive evidence was submitted to LDA not only by LDI, but also by

Mr. Alexander himself which has shown he was in violation of La. R.S.

22: 1554( A)(4).

The record indicated that Mr. Alexander was made aware that Ms. Tolliver

was conducting business without an insurance license on August 23, 2019, when

Progressive informed him of such. Progressive alleged that Mr. Alexander

admitted in their discussion that he, and not Ms. Tolliver, was responsible for the

insurance agency. In his live testimony before LDA, Mr. Alexander stated he was

first informed about Ms. Tolliver' s expired license by LDI. LDI' s February 19,

2020 letter to Mr. Alexander indicated that he was contacted by LD1 about Mr.

Lewis' s complaint on June 1, 2019. Despite these notices, Mr. Alexander

continued to conduct insurance business with Ms. Tolliver as his employee,

without his supervision.

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Consequently, LDI received consumer complaints from Ms. Casey on May

8, 2020, from Tara O Design on June 11, 2020, and from Ms. Dugas on August 31,

2020. These complaints were filed while Ms. Tolliver was employed by Mr.

Alexander and while she conducted insurance business without an insurance

license. According to the petition for divorce filed by Mr. Alexander, he and Ms.

Tolliver separated on July 15, 2020. While Ms. Dugas' s complaint was filed after

the date of separation, she alleges in her complaint that she gave premium

payments to Ms. Tolliver. LDI submitted evidence of a money order signed by

Ms. Dugas payable to Progressive dated June 9, 2020.

From our review of the record, we find that LDA was not arbitrary,

capricious, or abusive in its discretion in finding that Mr. Alexander was in

violation of La. R.S. 22: 1554( A)(4). Specifically, we find that Mr. Alexander' s

actions have demonstrated " incompetence, untrustworthiness, or financial

irresponsibility in the conduct of business such as might endanger the public."

Thus, Mr. Alexander' s first assignment of error is without merit.

In his second assignment of error, Mr. Alexander argues that should LDI' s

finding that he violated La. R. S. 22: 1554( A)(4) be affirmed, the penalty of

revoking his license was not supported by the facts of the case, and a lesser penalty

would be more suitable under those facts. Again, we disagree with Mr.

Alexander' s argument. Pursuant to the facts, revocation of licensure is

commensurate with Mr. Alexander' s actions.

If the evidence, as reasonably interpreted, supports the determination of the

administrative agency, its orders will be accorded great weight and will not be

reversed or modified in the absence of a clear showing that the administrative

action is arbitrary and capricious. The test for determining whether the action is

arbitrary and capricious is " whether the action taken is reasonable under the

circumstances." Stated differently, the question is whether the action taken was

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without reason." Matter of Supplemental Fuels, Inc., 94- 1. 596 ( La. App. I Cir.

519195), 656 So. 2d 29, 39.

Mr. Alexander pointed to the district court characterizing the revocation of

his license as " harsh." The district court went on to state that:

under these factual circumstances I find that [ LDI] could have found
Mr. Alexander' s actions] so unsettling that they would determine that
a fine in an[ d] of itself was insufficient to meet the hazard to the
public in this particular case. Irrespective to whether I would have
found differently I do not find that their decision was arbitrary and
capricious or overextending their authority in any way[.]

We agree with the district court. Louisiana Revised Statutes 22: 1554( A)

authorizes LDI to take a number of actions, including revocation of license, upon

anyone who holds an insurance license issued by LDI, who commits any of a

number of enumerated actions, which include " demonstrating incompetence,

untrustworthiness, or financial irresponsibility in conduct of such business as might

endanger the public." LDI characterized Mr. Alexander' s actions as such, and we

must give great weight to LDI' s findings. See Matter ofSupplemental Fuels, Inc.,

656 So. 2d at 39. Since the facts support the finding that Mr. Alexander violated

La. R.S. 22: 1554( A)( 4), a penalty authorized by La. A.S. 22: 1554 is, therefore, not

without reason and is not arbitrary or capricious. Mr. Alexander' s second

assignment of error is without merit.

DECREE

The judgment of the Nineteenth Judicial District Court, which affirmed the

March 23, 2021 decision of the Louisiana Division of Administrative Law, thereby

revoking the insurance license of the appellant, Vincent Alexander, is affirmed.

All costs of this appeal are assessed to the appellant, Vincent Alexander.

AFFIRMED.

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