[Cite as Workman v. Ohio Dept. of Ins., 2012-Ohio-4809.]

COURT OF APPEALS 

RICHLAND COUNTY, OHIO 

FIFTH APPELLATE DISTRICT 

VAN A. WORKMAN 

 Plaintiff-Appellant 

-vsOHIO DEPARTMENT OF 

INSURANCE 

 Defendant-Appellee 

JUDGES: 

: Hon. Patricia A. Delaney, P.J. 

: Hon. W. Scott Gwin, J. 

: Hon. William B. Hoffman, J. 

: 

: 

: Case No. 2012-CA-21 

: 

: 

: O P I N I O N

CHARACTER OF PROCEEDING: Administrative appeal from the Richland 

County Court of Common Pleas, Case No. 

2011-CV-0972D 

JUDGMENT: Affirmed 

DATE OF JUDGMENT ENTRY: October 17, 2012 

APPEARANCES: 

For Plaintiff-Appellant For Defendant-Appellee 

 

TIMOTHY FITZGERALD MIKE DEWINE 

6th Floor, Bulkley Building SCOTT MYERS 

1501 Euclid Avenue 30 East Broad Street, 26th Floor 

Cleveland, OH 44115 Columbus, OH 43215
[Cite as Workman v. Ohio Dept. of Ins., 2012-Ohio-4809.]

Gwin, J., 

{¶1} Plaintiff Van A. Workman appeals a judgment of the Court of Common 

Pleas of Richland County, Ohio, entered in favor of defendant-appellee Ohio 

Department of Insurance on appellant’s administrative appeal from appellee’s 

revocation of the appellant’s Ohio Insurance Agent License. Appellant assigns a single 

error to the trial court:

{¶2} “THE TRIAL COURT ERRED AS A MATTER OF LAW AND ABUSED ITS 

DISCRETION IN AFFIRMING THE ORDER OF THE OHIO DEPARTMENT OF 

INSURANCE PERMANENTLY REVOKING PLAINTIFF-APPELLANT VAN A. 

WORKMAN'S INSURANCE LICENCE WHERE (1) THERE WAS A COMPLETE LACK OF 

RELIABLE, PROBATIVE, AND SUBSTANTIAL EVIDENCE ESTABLISHING A VIOLATION 

BY PLAINTIFF-APPELLANT VAN A. WORKMAN OF R.C. §3905.14(B)(9) AND (2) THE 

TRIAL COURT'S REFUSAL TO EXAMINE THE PERMANENT REVOCATION SANCTION 

WAS NOT IN ACCORDANCE WITH LAW.”

{¶3} The record demonstrates appellant unsuccessfully pursued his appeal 

through the administrative process and exhausted his administrative remedies. He then 

appealed the matter to the Richland County Common Pleas Court. 

{¶4} The Common Pleas Court correctly recited its standard of reviewing the 

appeal pursuant to R.C. 119.12. The court found it must consider the entire record and 

any additional evidence it may have admitted to determine whether the order is 

supported by reliable, probative, and substantial evidence and is in accordance with 

law. 

{¶5} Our standard of review is also set forth in R.C. 119.12. The statute directs 

us to review and determine the correctness of the judgment of the Court of Common 
Richland County, Case No. 2012-CA-21 3 

Pleas regarding whether the order of the agency is supported by any reliable, probative, 

and substantial evidence in the entire record. In doing so we apply the abuse of 

discretion standard. University of Cincinnati v. Conrad, 63 Ohio St. 2d 108, 407 N.E. 

2d 1265, citing Rossford Exempted Village School District Board of Education v. State 

Board of Education, 63 Ohio St. 3d 705, 707, 590 N.E. 2d 1240 (1992). The term 

“abuse of discretion” implies that the court's attitude was unreasonable, arbitrary or 

unconscionable. Blakemore v. Blakemore, 5 Ohio St.3d 217, 450 N.E.2d 1140 (1983). 

{¶6} The trial court discussed the facts in its judgment entry of February 17, 

2012. The court found appellee Ohio Department of Insurance (“ODI”) licensed 

Employer Benefit Services of Ohio, Inc. (“EBS”) as a third-party administrator in the 

health insurance field. EBS’s business was primarily to administer benefits for 

employers who had self-funded or partially self-funded health care plans. Its services 

included processing claims, paying claims, and servicing customers. In addition, EBS 

occasionally acted as a broker for clients looking for new or replacement stop-loss 

insurance for the health insurance plans. Stop-loss insurance covers claims which 

exceed the amount of self-insurance funds set aside by the employer to pay the medical 

claims of its employees. 

{¶7} Appellant was the primary agent of EBS and owned ninety percent of its 

common stock. The Superintendent of Insurance found he and his corporation engaged 

in two types of misconduct with regard to brokering stop-loss insurance. The 

Superintendent found appellant had convinced his clients to purchase a product which 

was not approved as stop-loss insurance and which did not adequately protect the 

clients from financial loss. Secondly, the Superintendent found appellant modified the 
Richland County, Case No. 2012-CA-21 4 

insurance quotes from the stop-loss provider to his clients and the applications from his 

clients back to the stop-loss provider without their knowledge or permission. 

{¶8} The court set out the names of three clients which ODI found appellant’s 

practices had injured: Brown Publishing, a newspaper publisher in Cincinnati employing 

600 people; OMNI Manufacturing, a metal stamping company in Marysville, employing 

110 people, and The Delaware County Board of Developmental Disabilities in 

Delaware, Ohio. 

{¶9} Appellant learned of a business in Texas called United Re. Although its 

name implied it was in the reinsurance business, United Re was actually a trust and did 

not insure risks. It accepted employer contributions, paid employee claims from the 

employer funds and at the end of the year either returned any excess of contributions to 

the employer or billed the employer for any short falls. The court found because of this, 

the employer who participated in the trust still remained its own stop-loss insurer. 

{¶10} The court found that at some point United Re added a type of stop-loss 

insurance feature to its basic trust product. The company United Re chose to provide 

stop-loss insurance to the trust was VADO, which was allegedly an insurer engaged in 

real estate investment in the Grand Caymans and trading actively in Dubai. Neither 

United Re nor VADO was licensed to sell insurance in Ohio. 

{¶11} Appellant placed all three of the above clients with the United Re Trust 

using VADO as reinsurer. All the clients eventually experienced problems with the 

payment of their employees’ claims. 

{¶12} When Brown Publishing experienced problems, appellant moved its 

account from United Re to HCC Life, an insurance company that is approved by the 
Richland County, Case No. 2012-CA-21 5 

ODI. When an administrative employee of Brown Publishing was speaking with HCC 

Life, the employee discovered appellant had been modifying the quoted rates in the 

insurer’s quote to Brown Publishing, and then modifying the accepted rates in Brown 

Publishing’s application to the insurer. HCC terminated its business relationship with 

EBS and appellant. 

{¶13} The ODI then investigated appellant and found that he, on behalf of EBS, 

had modified quotes and acceptances between United Re and each of the three clients 

listed above. In each case, appellant took low quotes from the insurer, added an 

additional amount as a commission to EBS, and then relayed the higher rates to its 

clients. When the client accepted the proposed rates and applied for coverage, 

appellant changed the rates back to the original number before returning the application 

to the insurer. The modifications in the premium rates ranged from a low of 52% to a 

high of 213% of the original insurer’s quotes. 

{¶14} The trial court found pursuant to R.C. 3905.14, the Superintendent of 

Insurance may suspend or revoke an insurance agent’s license for fraudulent, coercive, 

or dishonest practices, or if the agent demonstrates incompetence, untrustworthiness, 

or financial irresponsibility, in the conduct of business in Ohio or elsewhere. 

{¶15} The trial court found the Superintendent and her Hearing Officer 

concluded appellant had violated R.C. 3905.14 by failing to use diligence in selecting 

appropriate and adequate stop-loss insurance coverage for the partially self-funded 

employer health insurance programs of OMNI, Delaware and Brown, and secondly 

manipulating and altering the documents so as to conceal and deceive these clients so 
Richland County, Case No. 2012-CA-21 6 

they would not know the amount of commissions EBS was charging for the stop-loss 

coverage portion of their partially self-funded health insurance programs. 

{¶16} The Common Pleas Court found based upon the entire record that ODI’s 

findings and the suspension of appellant’s license are supported by reliable, probative, 

and substantial evidence, and are in accord with law. The court found the large EBS 

commissions of 52% to 213%, on top of the underlying premium, suggest appellant’s 

motive was to find an unconventional cheaper stop-loss product. Finding such a 

product and concealing its actual cost from a client would allow EBS to charge such 

large commissions without being found out either by its customers or its stop-loss 

provider. 

{¶17} The court also found the Superintendent’s conclusion that EBS’s conduct 

violated R.C. 3959.14 was supported by sufficient evidence in the record. R.C. 3959.14 

prohibits a third party administrator from failing to disclose in writing on an on-going 

basis to the plan sponsor client all fixed plan costs and the name of all insurance 

carriers providing coverage. The court found the record showed EBS did not tell the 

three clients the actual cost of United Re’s stop-loss coverage or that the name of the 

insurance carrier that provided overlay coverage for the United Re Trust stop-loss 

program was VADO. The court affirmed the Superintendent of Insurance’s order 

revoking appellant’s insurance license. 

{¶18} Appellant’s brief divides his assignment of error down into subparts. The 

first is whether the trial court abused its discretion in affirming ODI’s finding that 

appellant had violated R.C. 3905.14 by failing to use due diligence in selecting United 

Re to provide stop-loss coverage for partially self-funded employer health insurance 
Richland County, Case No. 2012-CA-21 7 

programs of EBS clients because the ODI presented no reliable, probative, and 

substantial evidence defining the legal standard of due diligence. 

{¶19} Appellant argues both he and his employee Frank V. Flaugher both 

testified about the investigation EBS conducted before selecting United Re to provide 

coverage for its clients. The investigation included going to United Re’s offices in Texas 

to personally meet with United Re’s officers. Appellant’s expert witness testified 

companies like EBS are often not in a position to know which re-insurance carriers are 

involved, although it is possible such companies could ask for the information. The 

expert testified the re-insurer often changes. 

{¶20} ODI responds appellant owed a fiduciary duty to his customers to exercise 

good faith and reasonable diligence in seeking the coverage they needed. Damon’s 

Missouri, Inc. v. Davis, 63 Ohio St. 3d 605, 590 N.E. 2d 254 (1992). ODI argues 

appellant’s clients indicated stop-loss coverage was essential to continue their business 

operations. Appellant represented to his clients he had secured stop-loss coverage, 

but, initially United Re did not provide stop-loss insurance nor did VADO. ODI argues 

any investigation EBI conducted came from sources with a financial interest in securing 

its business. United Re paid in part for a trip to its headquarters to meet with company 

officers. United Re selected a stop-loss carrier that was involved in off-shore and 

middle-eastern enterprises and kept the identities of their shareholders confidential, 

which ODI argues should have raised flags with any reasonable professional. Appellant 

did not check to see if United Re and VADO are licensed to do business in Ohio and 

they were in fact not licensed. 
Richland County, Case No. 2012-CA-21 8 

{¶21} We find the record contains probative and substantial evidence appellant 

did not use any diligence in procuring the insurers. The court did not abuse its 

discretion. 

{¶22} Appellant’s second argument is that the trial court erred in affirming ODI’s 

finding that he violated R.C. 3905.14 for concealing commissions from his clients. 

Appellant argues Brown Publishing’s representative testified it was understood that EBS 

would receive a commission. Appellant argues there is no duty to disclose the 

commissions paid to an insurance agent, and for this reason, the trial court should not 

have found appellant had acted fraudulently. ODI responds appellant was under no 

duty to disclose commissions, but he altered documents both from United Re’s side of 

the transaction and from his clients. 

{¶23} The Superintendent of Insurance did not find misappropriation or fraud, 

but found appellant’s actions demonstrated he was dishonest, incompetent, 

untrustworthy, or irresponsible. While it is true the clients believed EBS would be 

compensated for its efforts, the mere act of tampering with the contracts in an obvious 

attempt to conceal how much of the quote was for the insurance premium and how 

much represented EBS’s commission speaks for itself. 

{¶24} Finally, appellant argues the trial court erred in affirming the permanent 

revocation of his insurance license rather than suspending it for a definite period with 

the right to reapply for reinstatement within 180 days. The trial court found it had no 

authority to review the sanction ODI had imposed. 

{¶25} In State Medical Board of Ohio v. Murray, 66 Ohio St. 3d 527, 538, 613 

N.E. 2d 636, the Supreme Court found if the trial court determines the administrative 
Richland County, Case No. 2012-CA-21 9 

agency’s decision was supported by reliable, probative, and substantial evidence, then 

the court should not reverse or modify the order unless the penalty imposed by the 

agency was not in accord with law. 

{¶26} We conclude the Court of Common Pleas did not abuse its discretion in 

finding the administrative decision is supported by reliable, probative, and substantial 

evidence and is in accord with law. We find the trial court properly declined to modify 

the penalty imposed by ODI. 

{¶27} The assignment of error is overruled. 

{¶28} For the foregoing reasons, the judgment of the Court of Common Pleas of 

Richland County, Ohio, is affirmed. 

By Gwin, J., 

Delaney, P.J., and 

Hoffman, J., concur 

 _________________________________ 

 HON. W. SCOTT GWIN 

 _________________________________ 

 HON. PATRICIA A. DELANEY 

 _________________________________ 

 HON. WILLIAM B. HOFFMAN 

WSG:clw 0927
[Cite as Workman v. Ohio Dept. of Ins., 2012-Ohio-4809.]

IN THE COURT OF APPEALS FOR RICHLAND COUNTY, OHIO 

FIFTH APPELLATE DISTRICT 

VAN A. WORKMAN : 

 : 

 Plaintiff-Appellant : 

 : 

 : 

-vs- : JUDGMENT ENTRY 

 : 

OHIO DEPARTMENT OF INSURANCE : 

 : 

 : 

 Defendant-Appellee : CASE NO. 2012-CA-21 

 For the reasons stated in our accompanying Memorandum-Opinion, the judgment of 

the Court of Common Pleas of Richland County, Ohio, is affirmed. Costs to appellant. 

 _________________________________ 

 HON. W. SCOTT GWIN 

 _________________________________ 

 HON. PATRICIA A. DELANEY 

 _________________________________ 

 HON. WILLIAM B. HOFFMAN