Purnell v. Department of Insurance

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

JOHN PURNELL, )
Appellant, §
v. § C.A. No. Nl6A-10-0()1 JRJ
DEPARTMENT OF INSURANCE, §
Appellee. §
OPINION

Date Submitted: July 13, 2017
Date Decided: September 7, 2017

Upon Appealfrom the Delaware Insurance Commissioner ’s Final Decl`sl'on and
Om’er: AFFIRMED in part and REVERSED in part.

John Purnell, pro se, P.O. Box 1456, Bear, DE, Appellant.

Jessica M. Willey, Esquire, Deputy Attorney General, Delaware Department Of
Justice, 841 Silver Lake Boulevard, Dover, DE, Attorney for Appellee.

Jurden, P.J.

The Delaware Department of Insurance (“Department”), under the authority
of the Delaware Insurance Commissioner (“Commissioner”), administers and
enforces Title 18, Chapter 43, Subchapter ll of the Delaware Code relating to the
regulation of bail bond agents. The Department filed a Complaint against John
Purnell before the Commissioner alleging that Purnell and his bail bond company,
Bail Bond Agency, Inc., violated certain provisions of the Delaware Insurance Code
and no longer meet the criteria for issuance of a license. A Hearing Officer held a
hearing and issued Recommended Findings, recommending that the Commissioner
find that Purnell violated the Insurance Code and recommending that the
Commissioner revoke Purnell’s license. Ultimately, the Commissioner adopted the
Hearing Officer’s Recommended Findings. The Commissioner then revoked
Purnell’s license and imposed a fine.

Pumell now appeals the Commissioner’s September 26, 2016 Final Decision
and Order.l For the reasons set forth below, the Commissioner’s Final Decision and

Order is AFFIRMED in part and REVERSED in part.

l Record on Appeal (“R. on Appeal”), Ex. 10, Final Decision and Order (“Final Decision”) (Trans.
ID. 60007799); Notice of Appeal (Trans. ID. 59682368). Neither Bail Bond Agency, Inc. nor
Purnell on the company’s behalf filed an appeal of the Commissioner’s Final Decision. Therefore,
this appeal only concerns the Final Decision as it relates to Purnell.

2

I. BACKGROUND

Purnell Was a licensed bail agent in Delaware.2 In June 2015, the Department
examined a Website, WWW.delawarebailbonds.com, that advertised an entity called
“Delaware Bail Bonds.”3 The Department determined that the entity advertised on
the Website Was related to Purnell and noticed that the Website appeared to violate
several provisions of the Insurance Code.4

Additionally, during 2014-15, in a separate investigation of multiple bail
agents, the Department identified Purnell as the general agent of the bail agents
under investigation5 Bankers Insurance Company (“Bankers”) forwarded
documentation to the Department indicating that Purnell and his sub-agents caused
losses of more than $300,000 to Bankers.6 By contract, Pumell Was liable for those
losses, but failed to pay.7 The Department also determined that Bankers had
obtained a $281,911.89 final judgment against Purnell.8

Following its investigation, the Department filed a Complaint against Purnell
With the Commissioner.9 The Complaint sets forth four counts: (1) Purnell violated

18 Del. C. § 4350(e) by using the firm or trade name “Delaware Bail Bonds,” Which

: R. on Appeal, Ex. 1, Hearing Officer’s Recommended Findings (“Recommended Findings”) 11 1.
[d. 11 8.

4 Id. 1111 9-10.

5 Id. 11 11.

6 Ia'. 11 12.

7 Ia’. ‘[H] 11-12.

8 Ia'. 11 12.

9 R. on Appeal, Ex. 1A.3, Complaint (“Complaint”).

3

Was not registered, licensed, or approved by the Department; (2) Purnell violated 18
Del. C. § 4350(e) by failing to display his registered name and license number on
the Website WWW.delaWarebailbonds.com; (3) Pumell violated 18 Del. C. § 2304(2)
by advertising the posting of bonds for as low as one percent down and by
advertising attorney referral services; and (4) Pumell cannot fulfill all the criteria for
issuance of a bail agent license under 18 Del. C. § 4333(c)(c)h because he has
demonstrated incompetence, untrustworthiness, and financial irresponsibility in the
conduct of business in this State or elsewhere, specifically through his failure to
supervise his sub-agents and indemnify Bankers for its losses.10

Deputy Attorney General Jessica M. Willey (“DAG Willey”) sent Purnell a
copy of the Complaint as Well as a Notice of Hearing. The Notice of Hearing states:

[P]ursuant to 18 Del. C. §§ 2308 and 4345 and 29 Del. C. Ch. 101, [a

hearing] Will commence on February 17, 2016, at 10:00 a.m., at the

DelaWare Department of Insurance . . . . The purpose of the hearing is

to determine Whether the Respondents have committed acts in violation

of the DelaWare Insurance Code, 18 Del. C. §§ 2304(2), 4333(c)(3)h.

and 43 50(e). The hearing may result in the revocation of Respondents’

licenses and/or the levying of a fine pursuant to 18 Del. C. §§ 329(a)

and 43 54(d).ll
With regard to the due process rights afforded to a respondent in an administrative

hearing, the Notice of Hearing specifies:

You have the right to appear in person at the hearing, to be represented
by counsel or by other representatives as permitted by law, to be present

10 Ia'
" R. on Appeal, Ex. lA.l, Notice of Hearing.

during the giving of evidence, to have reasonable opportunity to inspect

all documentary and other evidence, to examine and cross-examine all

witnesses, to present evidence in support of the Respondents’ interest

and to have subpoenas issued by the Commissioner or her duly-

appointed representative to compel attendance of witnesses and

production of evidence on your behalf . . . . The decision of the

Commissioner or her duly-appointed representative will be reached

based upon the evidence received12
Additionally, in her cover letter, DAG Willey informed Purnell: “If you elect to
contest the complaint and do not elect to have an attorney represent you, you can
contact me with any questions about the hearing.”l3 Purnell did not contact DAG
Willey with any questions about the hearing, although his assistant did.l4

A Deputy Commissioner appointed a Hearing Officer, and the Hearing
Officer held a hearing on February 17, 2016.15 Purnell represented himself at the
hearing. With regard to the Department’s allegation that Purnell’s website
www.delawarebailbonds.com violates several provisions of the Insurance Code,
Purnell’s only defense was that the website was not supposed to be accessible to the
public. In short, Dean Banks testified on behalf of Pumell that Purnell hired him to

create the Delaware Bail Bonds website.16 Purnell recognized that the website was

not, or would not be, compliant with the law, so Purnell asked Banks to create a new

12 101

13 R. on Appeal, Ex. 1A.4, Complaint Cover Letter.

14 R. on Appeal, Ex. 6, Supplemental Recommended Findings of the Hearing Officer dated July
19, 2016 (“Supplemental Recommended Findings”) 1111 9-10.

15 R. on Appeal, Ex. 1A.6, Appointment of Hearing Officer.

16 R. on Appeal, Ex. lD, Transcript of February 17, 2016 Hearing (“Tr.”) at 100:15-101:5.

5

website in 2012.'7 However, Purnell wanted keep the benefits of Delaware Bail
Bonds’ relatively high position on search engines.18 Accordingly, Banks put a
“redirect on Delaware Bail Bonds” with the intention that anyone attempting to
access www.delawarebailbonds.com would be automatically redirected to the new
website.19 When questioned as to how the Department was able to access the
website, Banks put forward a few hypotheses, but admitted that the website was
maintained at Purnell’s direction, rather than being shut down or updated to be
compliant with Delaware law.ZO

Following the hearing, the Hearing Officer issued his Recommended
Findings, recommending that the Commissioner: (1) find Purnell in violation of the
18 Del. C. §§ 2304(2) and 4350(e); (2) find that Purnell no longer meets the criteria
for issuance of a license under 18 Del. C. § 4333(c)(3)h; and (3) immediately revoke
Purnell’s license.Z' The Hearing Officer did not recommend imposition of a
financial penalty.22

Pumell timely filed Exceptions to the Hearing Officer’s Recommended

Findings, asserting that DAG Willey misled him as to the nature of the hearing and

17 Ia'.

18 Id. at lOlZ5-13.

'9 Ia'. at 101213-21.

20 ld. at 106112-24.

21 Recommended Findings 1111 30-31.
22 ld. 11 32.

accusing the Department of discovery and due process violations.23 On May 26,
2016, the Commissioner issued an Interim Order remanding the case with respect to
several factual and legal issues raised in Purnell’s Exceptions.24

The Hearing Officer gave the Department until June 24, 2016, to provide an
additional written submission addressing Purnell’s allegations25 On June 22, 2016,
Pumell called the Hearing Officer, claiming to have just received the Hearing
Officer’ s letter directing the Department to respond26 The Hearing Officer informed
Pumell that he could not engage in a substantive discussion regarding the case in the
absence of DAG Willey.27 Purnell asked whether he would be permitted to respond,
and the Hearing Officer informed Purnell that if he wished to respond, it must be in
writing.28 Purnell did not respond.29

On July 19, 2016, the Hearing Officer issued Supplemental Recommended

Findings and concluded that the issues raised in Purnell’s Exceptions were without

merit.30 Purnell did not file exceptions to the Hearing Officer’s Supplemental

23 R. on Appeal, Ex. 2, Appellant’s Exceptions to the Hearing Officer’s March 28, 2016
Recommended Findings (“Exceptions”).

24 R. on Appeal, Ex. 3, Interim Order of Commissioner Stewart dated May 26, 2016 (“Interim
Order”).

25 R. on Appeal, Ex. 4 Order of the Hearing Officer dated May 31, 2016 requiring a Department
Response to Specified Portions of Appellant’s Exceptions.

26 Supplemental Recommended Findings 11 19.

Recommended Findings within the twenty day time period set forth in
29 Del. C. § 10126.31 Rather, Purnell sent an untimely letter directly to the
Commissioner requesting an audio recording of the hearing.32 In a second untimely
letter, Purnell renewed his request for an audio recording of the hearing and
attempted to raise purported deficiencies with the hearing transcript.33

On September 26, 2016, the Commissioner issued a Final Decision and Order,
adopting all but one of the Hearing Officer’s recommended findings and
conclusions.34 Contrary to the Hearing Officer’s recommendation, the
Commissioner concluded that a financial penalty should be imposed because “[t]he
type of conduct demonstrated in this case does impact Delaware consumers by virtue
of the intentional and direct disregard of the Delaware Insurance Code and this
office’s regulatory authority.”35 Accordingly, the Commissioner imposed a $4,000
joint and several fine on Purnell and Bail Bond Agency, Inc.36

With respect to Purnell’s letters, the Commissioner refused to address the
substance of the allegations because “[the letters] were submitted out of time and

more significantly, inappropriately directed only to me during a time when this

31 Final Decision at 2.

32 R. on Appeal, Ex. 7, August 16, 2016 Correspondence from Appellant to Commissioner Stewart.
33 R. on Appeal, Ex. 8, Appellant’s Exceptions to Hearing Officer’s July 19, 2016 Supplemental
Recommended Findings.

34 Final Decision at 2-3.

35 Ia’. at 3.

36 Ia’. at 5.

matter was pending before me.”37 Nevertheless, the Commissioner explained that
an audio recording of the hearing was not available because, although the court
reporting service engaged by the Department to transcribe the hearing records audio
in the process of court reporting, the audio tapes are deleted once the final transcript
is issued.38

Pumell filed a timely appeal of the Commissioner’s Final Decision and Order
to this Court.39

II. STANDARD OF REVIEW

On an appeal from a decision of an administrative agency, the Court’s review
is limited to determining whether the agency “exercised its power arbitrarily or
committed an error of law, or made findings of fact unsupportable by substantial
evidence.”40 Substantial evidence means relevant evidence that a “reasonable person
might find adequate to support a conclusion.”41 The Court will not “weigh the
evidence, determine questions of credibility, or make its own factual findings.”42

Moreover, the Court must “take due account of the experience and specialized

competence of the agency and the purposes of the basic law under which the agency

37 Ia'. at 3.

33 Id. at 3-4.

39 R. on Appeal, Ex. 11, Notice of Appeal.

40 Gregg v. State, 2016 WL 4530614, at *4 (Del. Super. Aug. 29, 2016) (quoting ()lney v. Cooch,
425 A.Zd 61(), 613 (Del. 1981)).

41 Id. (citing Oceanport Ina’us. Inc. v. Wilmington Stevedores, Inc., 636 A.2d 892, 899 (Del. 1994)).
42 Ia’. (quoting Mathis v. DelaWare River & BayAuth., 2012 WL 5288757, at *2 (Del. Super. Aug.
22, 2012)).

has acted.”43
III. DISCUSSION

Purnell raises the following five issues on appeal: (1) the record is statutorily
insufficient for appellate review; 44 (2) Purnell’s due process rights were violated
because he was misled by the Department as to the nature of the hearing, not given
the Department’s evidence prior to the hearing, and denied a recess during the
hearing to examine the evidence;45 (3) the Hearing Officer erroneously considered
the “incomplete website” and the alleged losses to Bankers;46 (4) the
Commissioner’s decision to impose a fine for violating 18 Del. C. § 4333(c)(3)h for
“demonstrated incompetence, untrustworthiness, and financial irresponsibility in the
conduct of business in Delaware and elsewhere” is not supported by substantial
evidence;47 and (5) the Hearing Officer issued his Recommended Findings and
Supplemental Recommended Findings with a closed mind.48
A. Record on Appeal

Purnell’s argument regarding the sufficiency of the record on appeal has two

components First, Purnell argues that the hearing transcript is incomplete because

43 29 Del. C. § 10142(d).

44 Appellant’s Opening Brief(“Purnell Op. Br.”) at 3~4 (Trans. ID. 60136554). Purnell’s Opening
Brief does not contain page numbers. Therefore, the Court’s citations to the Opening Brief are
based on the “Nature of Proceedings” section in the Opening Brief being page 1.

45 Id. at 4-6.

46 Ia'. at 7-8

47 101

48 Ia'. at 8-9.

10

it does not contain certain statements made by Purnell.49 Second, Purnell argues that
the record is statutorily insufficient for appellate review.50 As to the first component,
Purnell alleges that hearing transcript is not accurate and “devoid of his objections
and statements on at least nine (9) occasions.”51 Purnell does not allege that the
transcript omits the testimony of any witness.

When acting in its appellate capacity on an appeal from an administrative
decision, the Court will not consider issues raised for the first time on appeal.52 The
court reporter issued a certified final transcript on February 24, 2016. Purnell could
have_but did not_raise purported issues with the transcript either in his first set of
Exceptions or in response to the Hearing Officer’s Supplemental Recommended
Findings. Notably, in rejecting Purnell’s allegation that DAG Willey “ambushed”
him at the hearing with a binder of exhibits, the Hearing Officer cited multiple times
to the transcript in support of his recommended finding that Purnell’s due process
rights were not violated.53 Rather than file timely exceptions to the Supplemental
Recommended Findings, highlighting the purported discrepancies between the

transcript and Purnell’s recollection of the hearing, Purnell sent two untimely letters

49 Id. at 3-4.

50 Ia'.

51 Id. at 3.

52 See, e.g., Mazen v. City of Dover Bd. of Assessment Appeals, 2016 WL 520996, at *4 (citing
Tatlen Parmers, L.P. v. New Castle Cty. Bd. ofAssessment Review, 642 A.2d 1251, 1262 (Del.
Super. Ct. 1993), a]jf’d sub nom New Castle Cty. v. Talten Partners, L.P., 647 A.2d 382 (Del.
1994)).

53 Supplemental Recommended Findings at 4-6.

11

directly to the Commissioner. The Commissioner refused to address the substance
of the allegations made in those letters because they were ex parte communications
submitted beyond the statutory time limitation.54 Since the issue was not properly
raised before the Commissioner, the Court will not address it on appeal.
Furthermore, for this reason, to the extent Purnell’s other arguments are based on
alleged omissions from the transcript, the Court will not consider them.

As to Purnell’s ancillary contention that the Commissioner effectively
considered his allegations regarding the accuracy of the transcript, and therefore the
Court should consider them, this contention is without merit. The Commissioner
did not consider the substance of Purnell’s allegations regarding the transcript. The
Commissioner determined whether Purnell’s request for an audio recording could
be accommodated It could not.

As to the second component of Purnell’s argument, that the record is
statutorily insufficient for appellate review, Purnell argues that the lack of an audio
recording violates the Administrative Procedures Act (“APA”).55 To the extent it
does not conflict with Chapter 3, Title 18 of the Delaware Code, the APA governs
administrative proceedings before the Commissioner.56 Specifically, the APA

provides that “[a] record from which a verbatim transcript can be prepared shall be

54 Final Decision at 3.
55 Chapter 101, Title 29 of the Delaware Code.
56 18 Del. C. § 323(1).

12

made of all hearings in all contested cases,”57 and the record of the case shall include
“all notices, correspondence between the agency and the parties, all exhibits,
documents and testimony admitted into evidence and all recommended orders,
summaries of evidence and findings and all interlocutory and final orders of the
agency.”58 Similarly, the Insurance Code provides that on an appeal from a decision
of the Commissioner, “the Commissioner shall cause to be prepared an official
record. ..which shall contain a copy of all proceedings and orders of the
Commissioner appealed from and the transcript of testimony and evidence or
summary record thereof.”59

Purnell cites Rl`chardson v. Board of Cosmetology and Barberz`ng60 and
highlights the APA’s requirement that “[a] record from which a verbatim transcript
can be prepared”61 in support of his argument that the APA requires the Department
to preserve an audio recording of the hearing. In Richardson, a cosmetologist
contested a hearing officer’s findings in a meeting before the Board of Cosmetology

and Barbering.62 On appeal, the record contained only minutes of the meeting rather

than a verbatim transcript.63 The Delaware Supreme Court held that the Board of

67 29 Del. C. § 10125(d).
58161/.§10127.

69 18 Del. C. § 328(@).

66 69 A.3d 353 (De1.2013).
6‘ 29 Del. C. § 10125(d).

62 69 A.3d ar 355.

63 Id

13

Cosmetology and Barbering violated the APA by failing to retain a record of the
meeting from which a verbatim transcript could be prepared.64

Contrary to Purnell’s argument, neither the relevant statutory provisions nor
Richardson requires an audio recording of the proceedings to perfect the record for
appeal. In this case, a professional court reporter was present at the February 17,
2016 hearing. On February 24, 2016, the court reporter issued a final transcript and
certified that the final transcript is a true and accurate transcript of her stenographic
notes taken at the hearing.65 Therefore, on its face, the transcript is complete and
sufficient for appellate review. There being no timely objection before the
Commissioner to the sufficiency of the transcript, the Court finds the transcript, and
the Record in this case, sufficient for appellate review.
B. Alleged Due Process Violations

Purnell argues that the Commissioner erred in denying his due process
arguments. Specifically, Purnell maintains: (1) the Department misled him as to the
nature of the hearing; (2) the Department was required to provide him with its
evidence before the hearing; and (3) the Hearing Officer abused his discretion by
refusing Purnell’s request for a recess during the hearing to examine the

Department’s evidence.66

64 Ia'. at 357-58.
65 Tr. at 272.
66 Purnell Op. Br. at 4-6.

14

1. Alleged Misrepresentations Made by the Department

In his timely Exceptions to the Hearing Officer’s Recommended Findings,
Purnell alleged that prior to the hearing his office assistant called DAG Willey and
DAG Willey told his assistant that the hearing was “informal” and “not like court.”67
The Commissioner remanded the matter to the Hearing Officer for further
consideration of this issue.68 In response to Purnell’s allegations, the Department
submitted an affidavit from a Department paralegal who participated in the disputed
telephone call.69 The paralegal averred that DAG Willey did not indicate the hearing
was informal, expressly told Purnell’s assistant that the hearing would be a formal
administrative hearing, and expressly told the assistant that the hearing would
proceed similar to a court hearing in that both parties would present evidence and
have an opportunity to cross-examine witnesses.70 This recitation is consistent with
the Department’s Notice of Hearing sent to Purnell along with the Complaint.71

In his Supplemental Recommended Findings, which the Commissioner

adopted in her Final Decision, the Hearing Officer found that DAG Willey did not

mislead Purnell as to the nature of the hearing.72 In support of this factual finding,

67 Exceptions 11 3.

68 Interim Order at 2.

69 Both DAG Willey and the paralegal were on the call. R. on Appeal, Ex 5, Department of
Insurance’s Response to Appellant’s Exceptions Dated June 1, 2016, Ex. A, Affidavit of Nicole
V. Holecek.

70 Ia'. 11 5.

71 See supra pp. 4-5.

72 Supplemental Recommended Findings 1111 8-11.

15

the Hearing Officer accepted the representations of DAG Willey and the Department
paralegal, who were parties to the disputed phone call, over Purnell’s
representations73 Moreover, the Hearing Officer noted that, if Purnell was truly
misled by the Department, Purnell would have objected in some fashion at the
hearing.74

The Court finds that the Commissioner’s factual finding that DAG Willey did
not mislead Purnell regarding the nature of the hearing is supported by substantial
evidence.

2. The Department’s Alleged Failure to Provide Its Evidence to Purnell
Before Hearing

In his timely Exceptions to the Hearing Officer’s Recommended Findings,
Purnell also contended that DAG Willey failed to provide him with the Department’s
evidence prior to the hearing and, therefore, the Department’s evidence should not
have been admitted at the hearing.75 In his Supplemental Recommended Findings,

the Hearing Officer recommended that the Commissioner find that Purnell never

73 Ia'. 11 3 (“The Hearing Officer is satisfied from the sworn statements of Ms. Holocek, and from
the representations by Ms. Willey as a member of the Delaware Bar, that Respondents were not
misled by any statements of Ms. Willey to ‘Malakai’ during the pre-hearing conversation.”)
Purnell, in one of his untimely letters to the Commissioner, claimed that this phone call was put
“on speaker” in his office and he “heard every word” of it. R. on Appeal, Ex. 8, Appellant’s
Exceptions to Hearing Officer’s July 19, 2016 Supplemental Recommended F indings at 1.
However, in his timely Exceptions, Purnell did not assert that he was a party to the call. Exceptions
11 3.

74 Supplemental Recommended Findings 11 11.

75 Exceptions 1111 8-12.

16

requested the Department’s evidence prior to the hearing and that, even if Purnell
had made such a request, there could be no discovery violation because in a civil
administrative proceeding the Department would not be under an obligation to
produce it.76

The APA does not provide for formal discovery, and it is well-settled under
Delaware law that, “[i]n an administrative hearing, due process does not require
formal discovery.”77 Rather, “[d]ue process requires [only] that the notice inform
the party of the time, place, and date of the hearing and the subject matter of the
proceedings.”78 Therefore, the Court finds that the Commissioner did not make an
error of law or abuse her discretion in adopting the Hearing Officer’s recommended
finding that Purnell’s due process rights were not violated when the Department did
not supply him with copies of its exhibits prior to the hearing.

Purnell also argues that his due process rights were violated because he was
not truly aware of the subject matter of the hearing.79 To the extent this objection
was raised at the hearing and rejected by the Hearing Officer, the Court finds that

Purnell’s argument is meritless and no error of law was made in rejecting the

76 Supplemental Recommended F indings 11 17.

77 Eastburn v. Del. Harness Racz'ng Comm ’n, 2006 WL 2900768, at *4 (Del. Super. Aug. 22, 2006)
(citing Matter ofGresick, 1988 WL 116411, at *6 (Del. Super. Nov. 2, 1988)); Gresl`ck, 1988 WL
116411, at *6 (“[F]ormal discovery is not necessary for due process to be satisfied in an
administrative proceeding.”).

78 Gresick, 1988 WL 116411, at ’1‘6 (citations omitted).

79 Purnell Op. Br. at 4.

17

objection. Prior to the hearing, the Department sent Purnell a cover letter, a Notice
of Hearing, and a copy of the Complaint. The Notice expressly indicated the time,
date, and place of the hearing, and the Complaint set forth the statutory provisions
the Department alleges Purnell violated and set forth in detail the factual allegations
the Department believed would establish those violations.80 Furthermore, the
Complaint specifically requests that the Commissioner revoke Purnell’s license and
impose a financial penalty. As previously explained, DAG Willey did not mislead
Purnell regarding the nature of the hearing. Therefore, any difficulties Purnell
experienced in presenting his case to the Hearing Officer are of his own making and
do not constitute a denial of due process.81

3. The Hearing Officer’s Refusal to Grant Purnell a Recess to Examine
Evidence

Finally, with respect to due process, Purnell argues that the Hearing Officer
erred and violated Purnell’s due process rights by denying Purnell’s request for a
recess to review the Department’s evidence during the hearing.82 Purnell’s argument

concerns the Department’s Exhibit 11. Exhibit 1 1 consists of a two page cover letter

30 See supra pp. 3-5.

81 Significantly, Purnell could have reached out to DAG Willey in advance of the hearing with any
questions that he had. DAG Willey’s cover letter, included with the Notice of Hearing and the
Complaint, expressly invited Purnell to do so if he was not represented by counsel. R. on Appeal,
Ex. lA.4 Complaint Cover Letter. See Gresick, 1988 WL 116411, at *7 (“They cannot claim injury
When the injury is the result of their own failure to exercise procedures available to them.” (citing
C00k v. Oberly, 459 A.2d 535, 540 (1983))).

82 Purnell Op. Br. at 4.

18

from Bankers to the Department with attached documentation: (1) Bankers’
Supervising Producer Agreement with Pumell; (2) Bankers’ Sub Producer
Agreements with the sub-agents supervised by Purnell; and (3) the Notice of
Termination Letters Bankers sent to Purnell and his sub-agents when it terminated
their respective contracts.33 Bankers terminated Purnell’s contract for cause as of
March 7, 2014.84

At the hearing, the Department’s witness, a Department market conduct
examiner, explained that Exhibit 11 is Banker’s letter response to her inquiries
regarding Purnell’s status as a general agent.85 The witness testified regarding the
materials attached to Banker’s letter, clarifying that the attachments consisted of the
aforementioned agreements and correspondence between Bankers and Purnell or his
sub-agents and that the termination letters included calculations of outstanding
liabilities.86 When the Department sought admission of Exhibit 11 into evidence,
Purnell stated that it was “too long,” and the Hearing Officer offered him the
opportunity to review it.37 In response, Purnell stated it would take him two to three

days to review.88 The Hearing Officer stated that three days were not allotted for the

63 R. on Appeal, Ex. lA.ll Correspondence from Lisa A. Basta, Esq., Senior Vice President of
§ankers Insurance Company regarding John Purnell’s status as a general agent.
Id.
85 Tr. at 42:6-17.
36 Ia’. at 42:18-44:2.
37 Ia’. at 46:16-24.
38 Ia’. at 471 1-7.

19

hearing, but Purnell could take time to review it to determine whether he had an
objection to this exhibit. The Hearing Officer added, “[w]e have all day.”39 Purnell
did not take the opportunity to review the exhibit.90 Rather, he indicated that he had
no objection to its admission into evidence.91

On this point, Purnell argues that the case is substantially similar to Matter of
Gresick.92 In Gresick, the Consumer Affairs Board denied Edward Gresick’s request
for a continuance to review evidence,93 The Court found the Board did not abuse its
discretion when, inter alia: (1) the Division of Consumer Affairs had given Gresick
ample and timely notice as to the hearing schedule and the charges against him; (2)
the Division arranged two pre-hearing meetings to discuss the evidence with Gresick
that Gresick failed to appear at; (3) Gresick consulted an attorney before the hearing;
and (4) the State might suffer prejudice if rescheduled because its witness came to
the hearing voluntarily, and the Board had no subpoena power over the witness.94

Purnell argues that since several of the factors present in Gresick are absent

in the instant case, the Hearing Officer must have abused his discretion in refusing

to grant a recess.95 This argument is meritless. In this case, as in Gresick, the

39 Ia'. at 47:3-16.

99 Id. at47;20418;4.

91 Id

92 1988 WL 116411 (Del. Super. Nov. 2, 1988).
93 Id. at *4.

94 Ia'. at *7~8.

95 Purnell Op. Br. at 6.

20

respondent was given ample and timely notice as to the hearing schedule and the
charges against him. The presence or absence in this case of the other factors
highlighted Gresick is not dispositive.

Here, DAG Willey sent Purnell a Notice of Hearing, a detailed Complaint,
and invited Purnell to call her if he had questions regarding the hearing.
Additionally, although it is lengthy, the bulk of Exhibit 11 consists of the
Supervising Producer and Sub-Producer Agreements, documents Purnell should
have been familiar with. Had Purnell taken the opportunity offered to him to review
Exhibit 11 during the hearing, he would have realized that most, if not all, of the
attached documents were known to him. Tellingly, Purnell does not identify what
objection he would have offered to the admissibility of Exhibit 11 if given the
requested two to three day recess to examine it. The Court finds that the Hearing
Officer did not abuse his discretion in refusing to continue the hearing based on
Purnell’s bare bones objection that the Department’s Exhibit 11 was “too long.”

C. Whether the Hearing Officer Abused his Discretion in Considering the
Department’s Screenshots of www.delawarebailbonds.com and Banker’s
Alleged Losses

Next, Purnell raises three arguments under the heading “[the Department] did
not provide sufficient evidence regarding the complaint(s)”: (1) the Commissioner’s
decision is not supported by substantial evidence due to the alleged “spoliation” of

evidence, i.e. the court reporter’s non-retention of an audio recording; (2) the

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Hearing Officer should not have admitted into evidence screenshots of
www.delawarebailbonds.com because they were an “incomplete re-production of
the purported[] ‘deceptive’ website”; and (3) the Hearing Officer should not have
considered the Department’s evidence of Purnell’s liability to Bankers due to
litigation between Bankers and Purnell in Florida.96

As to Purnell’s first argument, styled as a matter of “spoliation” of evidence
to a large extent this accusation stems from Purnell’s allegations regarding the
completeness of the transcript, and the Court will not consider those aspects of the
argument for the reasons previously discussed Nevertheless, the Court notes that
Purnell has never alleged that the transcript omits any testimony given before the
Hearing Officer, nor has Purnell ever alleged that an exhibit admitted into evidence
was not preserved97 Therefore, the Court finds Purnell’s argument that “spoliation”
of evidence renders the Commissioner’s Final Decision unsupported by substantial
evidence is meritless.

As to Purnell’s second argument, that the Hearing Officer erred in admitting
screenshots of www.delawarebailbonds.com, and therefore, the violations based on
the Delaware Bail Bonds website must fail for lack of substantial evidence, this

argument is also without merit for the following reasons.

96 Purnell Op. Br. at 7-8.
97 See R. on Appeal, Ex. 8, Appellant’s Exceptions to Hearing Officer’s July 19, 2016
Supplemental Recommended Findings at 2.

22

At the hearing, a market conduct examiner for the Department, Keith
O’Connell, testified that he examined the website advertising Delaware Bail
Bonds.93 Through Mr. O’Connell, the Department introduced screenshots of the
Delaware Bail Bonds website.99 Mr. O’Connell testified that he personally accessed
the website and determined that it was related to Purnell and his company because
the address and telephone number listed on the website were identical to those listed
in the Department’s files.100 When the Department requested that the screenshots be
admitted into evidence, Purnell stated “I have no objection to it.”101 Furthermore, in
his testimony, Purnell admitted that www.delawarebailbonds.com is his website and
that he is responsible for ensuring that the information on the website is correct. 102

Purnell’s only specific argument regarding the screenshots of Delaware Bail
Bonds’ website is his allegation that the Department’s exhibit is somehow
incomplete and deceptive. Purnell implies that the omitted pages must have
contained information favorable to him and concludes that “it can be surmised that
evidence was created.103 However, Purnell does not explain what information

appeared on the allegedly omitted pages that would have cured the violations alleged

by the Department. The Court finds that the Hearing Officer did not abuse his

93 Recommended F indings 11 8.
99 Id

'66 Id. 1111 8_9.

191 Tr. at 19:19-20:5.

192 Ia'. 31251113-17.

103 Purnell Op. Br. at 7.

23

discretion by admitting screenshots of the Delaware Bail Bonds website into
evidence,

The legal basis for Purnell’s third argument, that the Commissioner should
not have considered evidence of Purnell’s liability to Bankers because “the alleged
loss caused by [Purnell] has not been proven by the Florida courts,”104 is unclear. In
his reply brief, Purnell restyles this argument as a matter of res judicata and argues
the Commissioner “lacked subject matter jurisdiction with respect to the forfeitures”
due to the prior civil litigation initiated by Bankers against Purnell in Florida.105 In
support of this argument, Purnell argues that the Department “came into privity of
Bankers’ legal action against the appellant in Florida” and, therefore, the doctrine of
res judicata bars the Department from seeking revocation of Purnell’s license and
financial penalties in an administrative proceeding before the Commissioner. 106

Under the doctrine of res judicata, a party is foreclosed from “bringing a
second suit based on the same cause of action after a judgment has been entered in
a prior suit involving the same parties.”107 While the precise contours of Purnell’s

res judicata argument are unclear, it is clear that the doctrine is not implicated in this

case. The Department is not a party to Bankers’ action against Purnell in Florida,

104 Id_
105 Amended Reply Brief at 9 (Trans. ID. 60370257).

199 Ia'. at ll.

107 Betls v. Townsena’s, Inc., 765 A.2d 531, 534 (Del. 2000).

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and the Department is not seeking a judgment against Purnell for the losses caused
to Bankers. This case is an administrative proceeding brought by the Department
against Purnell and his company for violations of the Insurance Code. Therefore,
the doctrine of res judicata is not applicable here.

D. Whether the Commissioner’s Decision to Impose a Fine is Supported by
Substantial Evidence

“The choice of penalty by an administrative agency is a matter of discretion
to be exercised solely by the agency, as long as it is based on substantial evidence
and not outside of its statutory authority.”103 Substantial evidence is evidence that
“a reasonable mind might accept as adequate to support a conclusion” or, stated
differently, “more than a scintilla, but less than a preponderance of the evidence,”'09
ln determining whether substantial evidence exists to support the Commissioner’s
Final Decision, “the Court will consider the record in the light most favorable to the
party prevailing below.”1 10

In its Complaint, the Department sought the imposition of a financial penalty

pursuant to 18 Del. C. § 329(a). Section 329(a) authorizes the Commissioner to

impose a financial penalty on any person who has violated any provision of the

103 Villabona v. Ba'. of Mea'. Practl'ce of State, 2004 WL 2827918, at *7 (Del. Super. Apr. 28, 2004)
(citations omitted).

109 Rooney v. Delaware Ba'. of Chiropractic, 2011 WL 2088111, at *3 (Del. Super. Apr. 27, 2011)
(first quoting ()lney, 425 A.2d at 61; and then citing Breea’ing v. Contractors-One-Inc. , 549 A.2d
1102, 1104 (Del. 1988)).

110 Mum'r v. Delaware Examining Ba'. of Physical Therapy, 1999 WL 517412, at *l (Del. Super.
Apr. 26, 1999),¢1]7’¢1, 737 A.2d 531 (Del. 1999).

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Insurance Code.111 In her Final Decision and Order, the Commissioner imposed
three $500 fines against Purnell for violations of 18 Del. C. § 4350(e) and
§ 2304(2).112 Among other things, § 4350(e) prohibits advertising under a trade
name that is not registered, licensed, and approved by the Department, and § 23 04(2)
prohibits advertisements which are untrue, deceptive, or misleading. It is undisputed
that Purnell never registered the trade name Delaware Bail Bonds, that
www.delawarebailbonds.com does not display Purnell’s registered name and license
number, and that www.delawarebailbonds.com, which Purnell maintained as an
active website, contains statements which do not comply with Delaware law.113
Therefore, the Court finds that the Commissioner’s imposition of three $500 fines
against Purnell for violations of` 18 Del. C. § 4350(e) and § 23 04(2) is both supported
by substantial evidence and is within the Commissioner’s statutory authority under
18 Del. C. § 329(a).

While the aforementioned $500 fines are plainly within the Commissioner’s

statutory authority to impose financial penalties for violations of the Insurance Code,

the same is not true of the Commissioner’s imposition of a $2,500 fine against

111 18 Del. C. § 329(a) (“[T]he Commissioner, upon a finding after notice and hearing conducted
in accordance with the provisions of this chapter, that any person, insurer or insurance holding
company has violated any provision of this title or any regulation implementing said title, may
impose or order an administrative penalty in an amount of money that is reasonable and appropriate
in view of the facts and circumstances surrounding the violation.”).

112 Final Decision at 5.

113 Tr. at 252:7_20.

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Purnell “for violating 18 Del. C. § 4333(c)(3)h” by demonstrating “incompetence,
untrustworthiness, and financial irresponsibility in the conduct of business in
Delaware and elsewhere.”114 Unlike §§ 4350(e) and § 2304(2), which prohibit
certain kinds of advertising, § 4333 lays out the requirements for individuals seeking
a bail agent license (including the requirement that they have not demonstrated
incompetence, untrustworthiness or financial irresponsibility in the conduct of
business in Delaware or elsewhere). Pursuant to 18 Del. C§4354(d),115 the
Commissioner was within her statutory authority to revoke Purnell’s license based
on the factual finding that he violated the Insurance Code and that he demonstrated
incompetence, untrustworthiness, or financial irresponsibility in the conduct of
business. However, § 4333 does not authorize the imposition of a financial penalty
for previously licensed bail agents who are found to no longer meet the requirements
of § 4333.

Because neither § 4333 nor the other statutory provisions cited in the
Commissioner’s Final Decision and Order clearly authorize the imposition of a
financial penalty for failing to meet the requirements for bail agent licensure, the

Court requested that the Department identity the statutory provision authorizing the

114 Final Decision at 5.

115 18 Del C. § 4354(d) (“The Commissioner may deny, suspend, revoke, or refuse to renew any
license . . . [for] any violation of the insurance code or if the person at any time fails to meet all
of the criteria for issuance or renewal of a license as enumerated in this subchapter.”).

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Commissioner to impose a financial penalty “for violating 18 Del. C. § 4333(c)(3)h”
In response to the Court’s inquiry, the Department affirmed that, while the
Commissioner does have general authority under § 329(a) to impose financial
penalties for violations of the Insurance Code, the Department does not take the
position that a failure to satisfy the eligibility requirements of § 4333 constitutes a
violation of the Insurance Code for which a financial penalty is appropriate. The
Department highlighted the fact that it never sought the imposition of a financial
penalty for Purnell’s alleged failure to meet the requirements of § 4333, only
revocation of Purnell’s license, and the Department affirmed that it would not be
seeking to enforce the portion of the Final Decision and order purporting to impose
a $2,500 fine for “violating 18 Del. C. § 4333(c)(3)h” In light of the foregoing, the
Court finds that the $2,500 fine imposed for “violating 18 Del. C. § 4333(c)(3)h” is
not within the Commissioner’s statutory authority and, therefore, the portion of the
Commissioner’s Final Decision and Order imposing the $2,500 penalty is
REVERSED. However, with respect to the Commissioner’s revocation of Purnell’s
license, the Department introduced into evidence a general agent contract between
Purnell and Bankers, which provided that Purnell should supervise his sub-agents’
conduct and was liable for the actions of his sub-agents, including any forfeitures

caused by them.116 Attached to that contract is documentation showing that Purnell

116 R. on Appeal, Ex. 1A.11 Correspondence from Lisa A. Basta, Esq., Senior Vice President of
28

and his sub-agents have caused more than $300,000 in losses to Bankers due to
forfeitures resulting from their business practices.117 Moreover, in his testimony,
Purnell admitted that he contracted with Bankers as a general agent, that he entered
into contracts with various sub-agents, that he would be liable for his sub-agents’
actions in connection with the bonds they post, and that those agents had forfeitures
(as a result of defendants failing to appear) “probably...in the millions.”118
Viewing the record in a light most favorable to the Department, there is substantial
evidence to support the Commissioner’s finding that Purnell demonstrated
“incompetence, untrustworthiness, and financial irresponsibility” in the course of

doing business with Bankers.

E. Whether the Hearing Officer Issued his Recommended Findings and
Supplemental Recommended Findings With a Closed Mind

Finally, Purnell argues that the Hearing Officer was not fair and impartial, and
“[Purnell] was assumed guilty before ever having set foot in the hearing.”119 In
support of this contention, Purnell argues that the Hearing Officer rejected Purnell’s
various objections “without batting any eye” and displayed “blind partiality to [the
»120

Department].

These accusations of partiality are not supported by the Record For example,

Bankers Insurance Company regarding John Purnell’s status as a general agent.
117 Id_

113 Tr. at 228:10-229:12, 230:3-8.

119 Purnell Op. Br. at 8.

120 Id

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the Hearing Officer overruled the Department’s objections to Purnell’s exhibits
several times. 121 Further, when Purnell was not prepared with paper copies of
evidence he intended to have admitted, the Hearing Officer attempted to allow
Purnell an opportunity to obtain documentation suitable for admission into evidence
either by utilizing a computer and printer owned by the Department or by taking a
recess so that Purnell might obtain copies himself.122 DAG Willey did not object to
Purnell’s potential use of the Department’s technology, except to request that Purnell
first establish the relevance of what Purnell intended to print out. 123 Purnell declined,
stating, “I have to go through my exhibits to show that. 1 can’t just blurt it out. That
would just devalue everything I’m going to say.”124 As to a potential recess, Purnell
indicated that he could not take a recess to better prepare his exhibits because “I
really didn’t think it would be this long,” and he had a prior commitment to pick up
his son at 3100 p.m.125 As a final example, when Purnell’s self-created time
constraints came to light, the Hearing Officer cautioned Purnell that he had not yet
presented evidence to rebut the second half of the Department’s case.126

In light of the foregoing, the Court finds Purnell’s accusation that the Hearing

Officer was not fair and impartial is meritless.

'Z'E.g.,id.a1121:13_23,129;15-22.
'99 Tr. 3172;23-80;22.

123 Ia'. at 76:18-77:2.

‘24 Id. 3179:24_80;3.

125 Id. 31133;11-24.

1261¢1. at160;24_161:22.

30

IV. CONCLUSION
The Court finds that the record on appeal is complete, the Department has
complied with due process in conducting the proceedings below, and except for the
imposition of a fine for “violating” 18 Del. C. § 4333(c)(3)h, the Commissioner’s
decision is supported by substantial evidence, free from legal error, and not arbitrary.
For the reasons stated above, the Commissioner’s September 26, 2016 Final
Decision and Order is AFFIRMED in part and REVERSED in part.

IT IS SO ORDERED.

resident Judge

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