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EDWARD J. TAYLOR v. CONSTANCE B. FOSTER (06/28/89)

decided: June 28, 1989.

EDWARD J. TAYLOR, PETITIONER,
v.
CONSTANCE B. FOSTER, INSURANCE COMMISSIONER OF THE COMMONWEALTH OF PENNSYLVANIA, RESPONDENT



Appeal from PETITION FOR REVIEW Court, (INSURANCE COMMISSIONER)

COUNSEL

Foster A. Stewart, Pittsburgh, for petitioner.

Jean M. Callihan, Asst. Counsel, Theodie L. Peterson, III, Chief of Litigation Linda J. Wells, Chief Counsel, Insurance Dept., Harrisburg, for respondent.

Crumlish, Jr., President Judge, Colins, J., and F. Barbieri, Senior Judge.

Author: Colins

[ 127 Pa. Commw. Page 141]

Edward J. Taylor (Taylor) petitions for review of an order and adjudication of Constance B. Foster, Insurance Commissioner of the Commonwealth of Pennsylvania (Commissioner) dated March 28, 1988.*fn1

The Commissioner found the following facts to be true. Taylor is a licensed insurance agent doing business as E.J. Taylor & Associates. During 1978, Taylor acquired Greensburg X-Ray Associates (Greensburg) as a client, handling their pension and profit sharing plan. From 1978 to mid-1984, Taylor, under authority of Greensburg, invested monies collected from Greensburg in flexible annuity plans with various companies, including Fortune National Life Insurance Company (Fortune). However, between 1984 and 1986, Taylor without knowledge or consent of Greensburg, wrongfully diverted nearly two million dollars of its funds from Fortune to real estate development corporations in which Taylor had a financial interest. Taylor accomplished this by superimposing the signatures of either Walter D. Foster or John F. Wilson, both trustees of Greensburg, on to the withdrawal requests directing Fortune to transfer

[ 127 Pa. Commw. Page 142]

    monies to the unauthorized accounts. Taylor further concealed his wrongful activity by submitting financial reports to Greensburg falsely indicating that the funds received from Greensburg were properly deposited in the Fortune account.

The Commissioner issued an order to show cause against Taylor on July 31, 1987, charging him with numerous serious violations of the insurance laws based on his improper diversion of Greensburg's money. A hearing was scheduled for November 4, 1987 to be held in Pittsburgh. On October 26, 1987, a prehearing conference was held in Harrisburg at which time Taylor's counsel advised him that it intended to withdraw if certain attorney/client matters were not resolved. Specifically, if they did not receive a $5,000 retainer by Friday, October 30, 1987, they would withdraw from the case. Taylor failed to pay the retainer and, on November 2, 1987, counsel filed a motion to withdraw which was granted by the Commissioner the same day.

Taylor failed to secure new counsel and did not inform the Insurance Department Hearing Officer of the situation until 9:30 P.M. November 3, 1987, the night before the scheduled hearing. Further, he waited until the start of the hearing on November 4, 1987 to request a continuance to provide him with additional time to raise funds to obtain new counsel and prepare his case. The presiding officer objected to Taylor's request, asserting that he had an opportunity to request a continuance days before the hearing and that several witnesses traveled considerable distances to be at the Pittsburgh hearing.*fn2 Taylor's request was denied and the hearing commenced. Taylor presented no evidence on his behalf and asked few questions when given the opportunity to cross examine the Insurance Department's witnesses.

[ 127 Pa. Commw. Page 143]

The Commissioner in her order and adjudication dated March 28, 1988, concluded that the presiding officer did not abuse his discretion by denying petitioner's eleventh hour request to ...


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