STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

RECOMMENDED ORDER

A formal hearing was conducted in this case on June 26, 2009, by video teleconference at sites in Tallahassee, Florida, and Jacksonville, Florida, before Suzanne F. Hood, Administrative Law Judge with the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Paige Shoemaker, Esquire

Department of Financial Services

200 East Gaines Street Tallahassee, Florida 32399-4229

For Respondent: Fernanda Dice, pro se

Dice Construction, Inc.

12256 Cobblefield Circle, South Jacksonville, Florida 32224

STATEMENT OF THIS ISSUES

The issues are whether Respondent failed to secure the payment of workers' compensation insurance, and if so, what penalty should be imposed.

PRELIMINARY STATEMENT

On December 17, 2008, Petitioner Department of Financial Services, Division of Workers' Compensation (Petitioner) issued, and personally served, a Stop-Work Order and Order of Penalty Assessment to Respondent Dice Construction, Inc. (Respondent).

That same day, Petitioner also issued a Request for Production of Business Records for Penalty Assessment Calculation.

Petitioner issued and served by certified mail an Amended Order of Penalty Assessment on January 14, 2009, in the amount of

$96,094.44.

Respondent timely requested an administrative hearing. On February 20, 2009, Petitioner referred the request to the Division of Administrative Hearings.

The undersigned issued a Notice of Hearing by Video Teleconference on March 9, 2009. The notice scheduled the case for hearing on May 15, 2009.

Petitioner filed an unopposed Motion to Continue Hearing on April 30, 2009. The undersigned issued an Order Granting Continuance and Re-scheduling Hearing by Video Teleconference on

May 1, 2009. The Order rescheduled the case for hearing on June 29, 2009.

At the hearing, Petitioner presented the testimony of two witnesses and offered five exhibits that were accepted as evidence. Respondent testified on his own behalf, presented no other witnesses, and offered no exhibits.

The Transcript of the hearing was filed with DOAH on July 14, 2009.

Petitioner filed a Proposed Recommended Order on July 24, 2009. Respondent filed a proposed order on August 13, 2009.

FINDINGS OF FACT

1. Petitioner is the state agency responsible for enforcing the statutory requirement that employers secure the payment of workers' compensation for the benefit of their employees as required by Section 440.107, Florida Statutes (2008).

2. Respondent is a Florida Corporation engaged in the construction business. Respondent was incorporated on

   February 21, 2008. Jose Garcia, John Jones and Jamar Armstrong are corporate officers of Dice Construction, Inc. and have been since its’ inception.

3. On December 16, 2008, Petitioner's investigator, Michael Robinson, conducted an investigation at 5524 Marathon Parkway, Jacksonville, Florida. Mr. Robinson observed one

   worker on the roof removing shingles and another worker on the ground cleaning up the shingles.

4. The workers at the site identified themselves to Mr. Robinson as James Sutton and Derrick Sutton. The workers stated they were employees of Dice Construction, Inc.

5. Mr. Robinson then spoke with Fernanda Dice, Respondent's president. Mr. Dice stated that he had an exemption from workers’ compensation insurance.

6. Mr. Robinson was able to confirm that Mr. Dice had a current valid construction exemption, specifically for carpentry and remodeling. However, Mr. Dice did not have a roofing exemption that would apply to the type of work being performed on December 17, 2008. Additionally, neither worker at the site had a workers’ compensation insurance policy nor an exemption.

7. On December 17, 2008, Mr. Robinson issued and personally served on Respondent a Stop-Work Order and Order of Penalty Assessment for failure to comply with statutory requirements. Mr. Robinson also issued a Request for Production of Business Records for Penalty Assessment Calculation. The specific records requested were enumerated and described on the request.

8. In response to the request, Respondent only provided bank statements for a two-month period. Mr. Dice subsequently told Mr. Robinson, “I didn’t have any bank statements because I

   cash the checks to pay bills right there, and I didn’t have no circulation in my bank account.” Mr. Dice never produced documentation sufficient to calculate Respondent’s payroll.

9. Since Respondent’s actual payroll could not be determined, Petitioner imputed the payroll as the average weekly wage rate multiplied by 1.5. pursuant to Section 440.107, Florida Statutes (2008).

10. Respondent provided no documentation showing that the three corporate officers listed with the Florida Division of Corporations were not working for the corporation.

11. Petitioner issued an Amended Order of Penalty Assessment based upon the imputed payroll on January 14, 2009, in the amount of $96,094.44.

    CONCLUSIONS OF LAW

    
    

12. DOAH has jurisdiction over the parties and the subject matter of this proceeding pursuant to Sections 120.569 and 120.57(1), Florida Statutes (2008).

13. Chapter 440, Florida Statutes (2008), is known as the "Workers' Compensation Law." See § 440.01, Fla. Stat. (2008).

14. Petitioner has the burden of proving by clear and convincing evidence that that Respondent violated the Workers' Compensation Law during the relevant period and that the penalty assessments are correct. See Department of Banking and Finance

    Division of Securities and Investor Protection v. Osborne Stern and Co., 670 So. 2d 932 (Fla. 1996).

15. Pursuant to Sections 440.10 and 440.38, Florida Statutes (2008), every “employer” is required to secure the payment of workers’ compensation insurance for the benefit of its employees unless exempted or excluded under Chapter 440, Florida Statutes (2008). Strict compliance with the Workers' Compensation Law is required by the employer. See C&L Trucking v. Corbitt, 546 So. 2d 1185, 1187 (Fla. 5th DCA 1989).

16. The most persuasive evidence indicates that Respondent employed James Sutton and Derrick Sutton. Therefore, Respondent was required to secure workers’ compensation insurance on their behalf.

17. Florida Administrative Code Rule 69L-6.015(1) states that “[e]mployers must at all times maintain the records required by this rule and must produce the records when requested by the division pursuant to Section 440.107, F.S.”

18. Records required to be maintained are described with particularity in Florida Administrative Code Rule 69L-6.015 and contain documents such as employment records, tax records, and account records.

19. Florida Administrative Code Rule 69L-6.028 states as follows regarding imputed payrolls:

    1. In the event an employer fails to provide business records sufficient for the department to determine the employer’s payroll for the period requested for the calculation of the penalty pursuant to Section 440.107(7)(e), F.S., the department shall impute payroll at any time after the expiration of fifteen business days after receipt by the employer of a written request to produce such business records.

       
       

    2. When an employer fails to provide business records sufficient to enable the department to determine the employer’s payroll for the period requested for purposes of calculating the penalty provided for in Section 440.107(7)(d), F.S., the imputed weekly payroll for each employee, corporate officer, sole proprietor or partner for the portion of the period of the employer’s non-compliance occurring on or after October 1, 2003 shall be calculated as follows:

       1. For employees other than corporate officers, for each employee identified by the department as an employee of such employer at any time during the period of the employer’s non-compliance, the imputed weekly payroll for each week of the employer’s non-compliance for each such employee shall be the statewide average weekly wage as defined in Section 440.12(2), F.S., that is in effect at the time the stop work order was issued to the employer, multiplied by 1.5. Employees include sole proprietors and partners in a partnership.

       2. If the employer is a corporation, for each corporate officer of such employer identified as such on the records of the Division of Corporations at the time of issuance of the stop-work order, the imputed weekly payroll for each week of the employer’s non-compliance for each such corporate officer shall be the statewide average weekly wage as defined in Section 440.12(2), F.S., that is in effect at the

          time the stop-work order was issued to the employer, multiplied by 1.5.

          
          

20. Petitioner satisfied its burden of proving clearly and convincingly, that Respondent failed to secure the payment of workers’ compensation as that term is defined in Section 440.107(7)(2), Florida Statutes (2008), and Petitioner correctly issued the order and assessed the penalty prescribed in Sections 440.107(7)(d) and (e), Florida Statutes (2008), for such failure.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is

RECOMMENDED:

That Respondent issue a final order affirming the Stop-Work Order and Amended Order of Penalty Assessment in the amount of

$96,094.44.

DONE AND ENTERED this 14th day of August, 2009, in Tallahassee, Leon County, Florida.

S

SUZANNE F. HOOD

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 14th day of August, 2009

COPIES FURNISHED:

Fernanda Dice

Dice Construction, Inc.

12256 Cobblefield Circle, South Jacksonville, Florida 32224

Paige Billings Shoemaker, Esquire Department of Financial Services

200 East Gaines Street Tallahassee, Florida 32399-4229

Tracey Beal, Agency Clerk Department of Financial Services

200 East Gaines Street Tallahassee, Florida 32399-0390

Benjamin Diamond, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0307

Honorable Alex Sink Chief Financial Officer

Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0307

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the Final Order in this case.

Docket for Case No: 09-001000

Orders for Case No: 09-001000