COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA No. 85507 GARY PETERSON : Plaintiff-Appellant : JOURNAL ENTRY vs. : AND OHIO DEPARTMENT OF INSURANCE : OPINION Defendant-Appellee : : DATE OF ANNOUNCEMENT AUGUST 4, 2005 OF DECISION : : CHARACTER OF PROCEEDING : Civil appeal from Common Pleas Court : Case No. CV-528200 JUDGMENT : AFFIRMED DATE OF JOURNALIZATION : APPEARANCES: For Plaintiff-Appellant: GEORGE GLAVINOS, JR. National City East 6th Bldg. Suite 507 1965 East 6th Street Cleveland, Ohio 44114 For Defendant-Appellee: JIM PETRO Attorney General of Ohio SCOTT MYERS Assistant Attorney General Health and Human Services 30 East Broad St.-26th Floor Columbus, Ohio 43215-3400 -2- JAMES J. SWEENEY, P.J.: Gary Peterson ("Peterson") appeals from the decision of the common pleas court affirming the decision of the Ohio Department of Insurance ("Department"). Peterson argues that the common pleas court's decision was not supported by a preponderance of reliable, probative, and substantial evidence, and that the court erred as a matter of law when it affirmed the department's order imposing two penalties for a single violation of R.C. 3945.14(B) 1. For the following reasons, we affirm. In the early 1990's, Peterson met Florence Cherrison ("Cherrison") when she became a client of the bank where Peterson worked. Peterson helped Cherrison transfer her bank accounts from her previous bank in Florida. Shortly thereafter, Peterson began providing Cherrison with investment advice and even sold her a Ford Life Annuity. Later in 1999, Peterson persuaded Cherrison to exchange her original annuity for a Jackson Life annuity. The life annuity designated Cherrison's stepdaughter, Regina Lastoria, as the beneficiary. Peterson received a commission for both annuity sales. From 1992 until Cherrison's death at age 90, she and Peterson 1 The Ohio State legislature recodified and renumbered R.C. 3905.49(B)(14) as R.C. 3905.14(B)(18) and recodified and renumbered R.C. 3905.49(E) as R.C. 3905.14(E). Both the previous and newly recodified statutes are identical in all respects. Because the conduct involved in this appeal occurred prior to the recodification, this court will refer to the former versions of the statute. -3- developed a close friendship. Peterson stated that he ran errands, did shopping, and paid and organized bills for Cherrison. Peterson described his relationship with Cherrison as a friend, confidante, and trusted advisor and admitted that he was well aware of her financial condition. Once Cherrison and Peterson established a friendship, Peterson claimed that Cherrison wanted to change the beneficiary designation on her Jackson Life annuity from her stepdaughter to Peterson. In response, Peterson called the legal department of Jackson National Life Insurance in Michigan to determine whether he could be appointed the beneficiary, since he had sold the annuity to Cherrison. After speaking with the legal department, Peterson believed that he could be named the beneficiary of the annuity. He then submitted a change of beneficiary form designating himself as the beneficiary and also had Cherrison execute a Producer Trustee or Beneficiary Indemnification Form, acknowledging that she had designated Peterson as her beneficiary on an annuity that she purchased from him. Peterson admitted that he did not review Ohio licensure law prior to submitting the change of beneficiary form nor did he consult with an attorney licensed in Ohio. Shortly thereafter, Peterson recommended an estate planner to draft Cherrison's will. During the drafting process, Cherrison informed the estate planner that she wanted Peterson to be the executor of her will and then designated Peterson as the principal -4- beneficiary of her estate. Cherrison also granted durable power of attorney to Peterson. At the time of her death, Peterson held almost complete control over the financial affairs and assets of Cherrison. Cherrison named him as the beneficiary of her annuity, named him the executor and principal beneficiary of her estate, and granted him a durable power of attorney giving Peterson control of all major decisions in her life. Upon her death, Cherrison 's total estate was worth $779,836, of which Peterson received approximately $450,000. Three hundred and fifty thousand dollars of that amount came from the Jackson Life annuity that Peterson sold to Cherrison. Following Cherrison's death, Cherrison's stepdaughter sued Peterson, among others, in common pleas court. In response to that litigation, the Ohio Department of Insurance served Peterson with a Notice of Opportunity for Hearing. The Notice informed Peterson that the Department proposed to take disciplinary action against his license based upon a violation of R.C. 3905.49(B)(14). The Department conducted a hearing and both sides presented evidence. At the close of the evidence, the hearing officer issued a report finding that Peterson did violate R.C. 3905.49(B)(14) when he sold Cherrison the Life annuity and later became the beneficiary of the annuity. The officer recommended the revocation of Peterson 's license as well as a $25,000 civil forfeiture. The Superintendent of Insurance adopted the hearing officer 's report and -5- recommendation. Peterson sought review by the Cuyahoga County Court of Common Pleas pursuant to R.C. 119.12. The Common Pleas Court affirmed the Department's revocation and forfeiture. Peterson appeals, raising the two assignments of error contained in the appendix to this opinion. In his first assignment of error, Peterson argues that the Common Pleas Court's order was not supported by reliable, probative, and substantial evidence because the Ohio Department of Insurance failed to apply the mitigating factors of R.C. 3905.49(E). We disagree. When reviewing an order entered by an administrative agency, the Court of Common Pleas applies the limited standard of review set forth in R.C. 119.12 and determines whether the order is supported by reliable, probative, and substantial evidence and is in accordance with law. Young v. Cuyahoga Work & Training Agency (July 19, 2001), Cuyahoga App. No. 79123, 2001 Ohio App. LEXIS 3222, citing Univ. of Cincinnati v. Conrad (1980), 63 Ohio St.2d 108, 110. When reviewing the Common Pleas Court's determination, the appellate court determines only whether the court abused its discretion in finding whether the agency 's order is supported by such evidence. Young, supra, citing Rossford Exempted Village School District Bd. Of Edn. v. State Bd. Of Edn. (1992), 63 Ohio St.3d 705, 707. "The term `abuse of discretion' connotes more than an error of law or judgment; it implies that the court's attitude -6- was unreasonable, arbitrary, or unconscionable. " Blakemore v. Blakemore (1983), 5 Ohio St.3d 217, 219. "Absent an abuse of discretion on the part of the trial court, a court of appeals must affirm the trial court's judgment." Rossford, 63 Ohio St.3d at 707. R.C. 3905.49(B)(14) provides in pertinent part: "The superintendent may suspend, revoke, or refuse to issue or renew any license as an agent, surplus line broker, or limited insurance representative, or impose any other sanction authorized under this chapter, for ***. *** (14) Causing or permitting a policyholder or applicant for insurance to designate the person or the person's spouse, parent, child, or sibling as the beneficiary of a policy or annuity sold by the person, unless the person or a relative of the person is the insured or applicant." Neither party disputes that Peterson violated R.C. 3905.49(B)(14) when he sold Cherrison the annuity and later became the beneficiary on the annuity. Peterson's argument is that the Superintendent of Insurance did not apply the mitigation factors contained in R.C. 3905.49(E) and, therefore, the Common Pleas Court's judgment is not supported by reliable, probative, and substantial evidence. Peterson's argument is misplaced. If a violation of R.C. 3905.49(B) is proven, the superintendent has the discretion to weigh mitigating evidence. R.C. 3905.49(E) provides in pertinent part, "[t]he superintendent may consider the following factors in denying a license, imposing suspensions, revocations, fines, or other penalties and issuing -7- orders under this section ***. " By using the term "may," the General Assembly has given the superintendent discretion to apply mitigating factors. If the General Assembly wanted to require the superintendent to consider mitigating factors before imposing an order, the statute would have been drafted to reflect that desire. R.C. 3905.49(E) is clear and does not require the superintendent to consider mitigating factors before imposing an order. Furthermore, the superintendent's order states that she did consider the factors set forth in R.C. 3905.49(E). Accordingly, we cannot say that the trial court abused its discretion in finding that the Department's decision was supported by reliable, probative, and substantial evidence. Peterson's first assignment of error is overruled. In his second assignment of error, Peterson argues that the trial court erred as a matter of law by affirming the Department's order imposing two penalties for a single violation of R.C. 3905.49(B). We disagree. Peterson's argument is that the General Assembly's use of the word "or"in R.C. 3905.49(B) limits the superintendent to only one punishment for a single violation of the statute. Peterson then cites to the cases of Wesco Ohio LTD v. Ohio State Bd. Of Pharmacy (1988), 55 Ohio St.3d 94, and Distributors Pharmacy, Inc v. Ohio State Bd. Of Pharmacy (1987), 41 Ohio App.3d 116, in support of his argument. -8- Peterson's focus on the language of R.C. 3905.49(B) is misplaced. R.C. 3905.49(D) is the subsection that deals with punishment for violations of the statute. Subsection D provides in pertinent part, "[i]f the superintendent determines that a violation described in this section has occurred, the superintendent may do any of the following." The statute then lists nine possible punishments including a civil forfeiture not exceeding twenty-five thousand dollars per violation and permanent revocation of all insurance licenses. There is no language that limits the superintendent to a single punishment. Moreover, Wesco and Distributors Pharmacy dealt with violations of R.C. 4729.56 and R.C. 4729.57 and, therefore, do not apply to the issues in this case. Therefore, we find that the trial court did not abuse its discretion in affirming the Department's punishment order. Peterson's second assignment of error is overruled. Judgment affirmed. -9- It is ordered that appellee shall recover of appellant costs herein taxed. The court finds that there were reasonable grounds for this appeal. It is ordered that a special mandate issue out of this court directing the Cuyahoga County Common Pleas Court to carry this judgment into execution. A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure. JAMES J. SWEENEY PRESIDING JUDGE ANTHONY O. CALABRESE JR., J., And MICHAEL J. CORRIGAN, J., CONCUR N.B. This entry is an announcement of the court's decision. See App.R. 22(B), 22(D) and 26(A); Loc. App.R.22. This decision will be journalized and will become the judgment and order of the court pursuant to App.R. 22(E), unless a motion for reconsideration with supporting brief, per App.R. 26(A) is filed within ten (10) days of the announcement of the court's decision. The time period for review by the Supreme Court of Ohio shall begin to run upon the journalization of this court's announcement of decision by the clerk per App.R. 22(E). See, also, S.Ct.Prac.R. II, Section 2(A)(1). -10- Appendix Assignment of Errors: "I. The trial court erred as a matter of law by affirming the Ohio Department of Insurance order revoking the insurance license of appellant which order was not supported by reliable, probative, and substantial evidence by its failure to apply the factors of mitigation as set forth in Ohio Revised Code 3905.49(E). II. The trial court erred as a matter of law by affirming the department of insurance order imposing two penalties for a single violation of former Ohio Revised Code 3905.14(B)." .