TENNESSEE INSURANCE DIVISION, Petitioner, vs. Docket No.: J JAMES MICHAEL FOLEY, Respondent

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1 University of Tennessee, Knoxville Trace: Tennessee Research and Creative Exchange Tennessee Department of State, Opinions from the Administrative Procedures Division Law TENNESSEE INSURANCE DIVISION, Petitioner, vs. Docket No.: J JAMES MICHAEL FOLEY, Respondent Follow this and additional works at: Part of the Administrative Law Commons This Initial Order by the Administrative Judges of the Administrative Procedures Division, Tennessee Department of State, is a public document made available by the College of Law Library, and the Tennessee Department of State, Administrative Procedures Division. For more information about this public document, please contact administrative.procedures@tn.gov

2 BEFORE THE COMMISSIONER OF COMMERCE AND INSURANCE FOR THE STATE OF TENNESSEE TENNESSEE INSURANCE DIVISION, ) Petitioner ) ) vs. ) Docket No.: J ) JAMES MICHAEL FOLEY, ) Respondent ) NOTICE OF DEFAULT AND INITIAL ORDER This matter was heard on December 4, 2008, before Mattielyn B. Williams, Administrative Judge assigned to the Secretary of State, Administrative Procedures Division, and sitting for the Commissioner of the Tennessee Department of Commerce and Insurance in Nashville, Tennessee. Ms. Dakasha K. Winton, Chief Counsel for Insurance, Department of Commerce and Insurance, represented the State. Respondent, James Michael Foley, was not present at the hearing, nor did an attorney appear on his behalf. Respondent had not moved for a continuance of the hearing. The State moved that Respondent be held in default. The State submitted Collective Exhibit 1, a certified mail return receipt, showing that a Notice of Proposed Action was delivered to Respondent s address on July 3, 2008, and signed for by Paul Harding, acknowledging its receipt. In addition, the State delivered the Notice of Proposed Action to Respondent s attorney of record, Mr. Kenneth Shermin, prior to this hearing, on February 20, 2008, which was signed for by A. Ferguson, acknowledging its receipt. The Notice of Hearing, as shown by Collective Exhibit 2, was delivered to Respondent s official address of record, and returned undeliverable. The State sent the Notice of Hearing to

3 Respondent s attorney and it was also returned as undeliverable. The Notice of Hearing was also sent to Respondent s address as provided by the United States Bureau of Prisons, and signed for by R. Blair, acknowledging its receipt. Respondent is incarcerated and the State served Respondent at that location. It is also NOTED that State s counsel talked with Mr. Shermin, the week of the hearing, and Mr. Shermin indicated that he (Mr. Shermin) would not be attending the hearing. It is DETERMINED that the State had made an adequate and reasonable effort to notify Respondent of the date and time for the hearing, consistent with the provisions of Tenn. Code Ann The State s Motion for Default was GRANTED. NOTICE OF DEFAULT NOTICE IS HEREBY GIVEN TO RESPONDENT THAT RESPONDENT HAS BEEN HELD IN DEFAULT FOR RESPONDENT S FAILURE TO APPEAR AT A HEARING ON THE MERITS AFTER RECEIVING ADEQUATE NOTICE. T.C.A RESPONDENT HAS FIFTEEN (15) DAYS FROM THE EFFECTIVE DATE OF THIS ORDER TO REQUEST THAT THIS FINDING OF DEFAULT BE SET ASIDE. THIS REQUEST MUST BE RECEIVED IN THE OFFICE OF THE SECRETARY OF STATE, ADMINISTRATIVE PROCEDURES DIVISION, SUITE 800, WILLIAM SNODGRASS BUILDING, 312 EIGHTH AVENUE NORTH, NASHVILLE, TENNESSEE 37243, WITHIN THAT 15-DAY PERIOD. THE REQUEST TO HAVE THE FINDING OF DEFAULT SET ASIDE SHOULD INCLUDE THE REASONS TO JUSTIFY RESPONDENT S FAILURE TO ATTEND. IF SUFFICIENT REASONS ARE GIVEN, THE ORDER MAY BE SET ASIDE AND A NEW HEARING SCHEDULED. IF RESPONDENT DOES NOT REQUEST THE DEFUALT TO BE SET ASIDE OR OTHERWISE APPEAL THE ACCOMPANYING INITIAL ORDER, THEN THE

4 INITIAL ORDER WILL BECOME A FINAL ORDER SUBJECT TO COURT REVIEW. ANY QUESTIONS REGARDING THIS NOTICE OF DEFAULT OR THE STEPS NECESSARY TO HAVE IT SET ASIDE SHOULD BE SUBMITTED TO THE ADMINISTRATIVE JUDGE SIGNING THIS ORDER BY LETTER OR BY TELEPHONING (615) Should good cause exist for Respondent s failure to appear/participate, Respondent may move to have the Default Set Aside within fifteen (15) days. INITIAL ORDER With Respondent James Michael Foley held in DEFAULT, the State moved to proceed in the absence of the Respondent. State/Petitioner s motion to proceed was GRANTED. The subject of this hearing was the proposed revocation of the Respondent s insurance producer license, in Tennessee. After consideration of the argument of counsel and the record in this matter, it is DETERMINED that Respondent s insurance producer license should be REVOKED and Respondent should be ordered to PAY Two Thousand Dollars ($2,000) in civil penalties. This decision is based upon the following findings of fact and conclusions of law. FINDINGS OF FACT 1. Respondent, James Michael Foley, is a citizen of Tennessee and a resident of Germantown, with his mailing address being 2528 Ingleside Farm East, Germantown, Tennessee Respondent s insurance producer license, numbered , was issued by the Commissioner on December 27, 1990.

5 3. On December 21, 2006, in the United States District Court for the Western District of Tennessee, Respondent plead guilty to the felony violations of making and causing to be made, false statements and representations of fact, knowing the same to be false, and did knowingly conceal, cover up and fail to disclose facts, the disclosure of which was required by ERISA in violation of Title 18 of the United States Code Sections 1027 and Respondent was also found to have committed mail fraud in violation of Title 18 of the United States Code Sections 1341 and On April 19, 2007, Respondent was sentenced to a prison term of fifty-one (51) months and was committed to the custody of the United States Bureau of Prisons. 6. Respondent was ordered, pursuant to the Mandatory Victims Restitution Act of 1996, to pay total restitution in the amount of Three Million, Four Hundred and Eighty-Eight Thousand, Four Hundred and Ninety-One Dollars and Forty One Cents ($3, 488, ). 7. Exhibit 3, the Redacted Judgment in a Criminal Case, shows the nature of the offenses, the counts, the prison term imposed, and the amount of restitution due. CONCLUSIONS OF LAW 1. Petitioner, as the entity/person seeking a change in Respondent s licensure status, has the burden of proof, under Rule (7) of the Official Compilation of Rules and Regulations of the State of Tennessee (O.C.R.R.S.T.), to prove that it is legally entitled to that result. 2. Tenn. Code. Ann (a)(6) provides, that the Commissioner may place on suspension, revoke, or refuse to renew any license under this part if she finds that an insurance producer has been convicted of a felony.

6 3. It is CONCLUDED that the State has met its burden of proof, by a preponderance of the evidence, in showing that Respondent has been convicted of a felony. 4. Tenn. Code. Ann (a)(8) provides, that the Commissioner may place on suspension, revoke, or refuse to renew any license under this part if she finds that an insurance producer used fraudulent, coercive, or dishonest practices, or demonstrated incompetence, untrustworthiness or financial irresponsibility in the conduct of doing business in this state or elsewhere. 5. It is CONCLUDED that the State has met its burden of proof by a preponderance of the evidence that Respondent used dishonest practices by making and causing to be made, false statements and representations of fact, knowing the same to be false, and did knowingly conceal, cover up and fail to disclose facts, the disclosure of which were required by ERISA in violation of Title 18 of the United States Code Sections 1027 and Based on the entirety of the record, and consistent with past practices in similar cases, it is hereby ORDERED that license number , issued to James Michael Foley, is REVOKED. 7. Based on the entirety of the record, and consistent with past practices in similar cases, it is further ORDERED that Respondent PAY A CIVIL PENALTY of One Thousand Dollars ($1000) for violation of Tenn. Code Ann (a)(6) and violation of T.C.A. Section (a)(8), for a total of Two Thousand Dollars ($2,000).

7 This Initial Order entered and effective this 5th day of December, Mattielyn B. Williams Administrative Judge Filed in the Administrative Procedures Division, this 5th day of December, Thomas G. Stovall, II, Director Administrative Procedures Division