STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

RECOMMENDED ORDER

Administrative Law Judge (ALJ) Daniel Manry conducted the final hearing of this case for the Division of Administrative Hearings (DOAH) on February 15, 2010, by video teleconference in Tampa and Tallahassee, Florida.

APPEARANCES

For Petitioner: Paige Billings Shoemaker, Esquire

Department of Financial Services

200 East Gaines Street Tallahassee, Florida 32399-4229

For Respondent: Julie Magill, pro se

Rick’s Air Conditioning, Inc. 6731 North Armenia Avenue Tampa, Florida 33604

STATEMENT OF THE ISSUE

The issue is whether Respondent is liable for a penalty of

$4,741.76 for the alleged failure to maintain workers’

compensation insurance for its employees in violation of Chapter 440, Florida Statutes (2008).1

PRELIMINARY STATEMENT

On October 16, 2009, Petitioner issued a Request for Production of Business Records. On November 10, 2009, Petitioner issued a Stop-Work Order and Order of Penalty Assessment. On December 10, 2009, Petitioner issued an Amended Order of Penalty Assessment in the amount of $41,981.88.

Respondent timely requested an administrative hearing. On December 16, 2009, Petitioner referred the request to DOAH.

On February 12, 2010, the parties filed a stipulated Motion to Amend Charging Documents that reduced the proposed penalty assessment to $4,741.76, which is the amount at issue in this proceeding. The ALJ granted the motion.

At the final hearing, Petitioner presented the testimony of three witnesses and submitted eight exhibits for admission into evidence. Respondent presented the testimony of one witness and submitted eight exhibits for admission into evidence. The parties submitted one joint exhibit. The identity of the witnesses and exhibits and the rulings regarding each are reported in the one-volume Transcript of the hearing, which was filed with DOAH on March 19, 2010.

Petitioner filed its Proposed Recommended Order (PRO) on March 29, 2010. Respondent did not file a PRO.

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 in accordance with the requirements of

   Section 440.107. Respondent is a Florida corporation engaged in the construction business.

2. The corporate officers of Respondent in 2007 were: Julie Magill, Glen Magill, Jamie Guerrero, and Richard Magill. The corporate officers after amendment on June 12, 2008, were: Julie Magill, Albert Farradaz, and Farid O’Campo.

3. Corporate officers are eligible to obtain exemption from the requirements of workers’ compensation through the process described in Section 440.05. Construction exemptions are valid for a period of two years. The expiration date of each exemption is printed on an exemption card issued to each card holder.

4. Julie Magill, Glen Magill, and Jaime Guererro obtained construction exemptions as officers of Respondent, pursuant to Section 440.05. Julie Magill acknowledged receiving a card for each exemption with the expiration date printed on each exemption card.

5. The exemption for Julie Magill expired on June 2, 2008.

   
   

   The exemption for Glen Magill expired on May 29, 2008, and the exemption for Jaime Guererro expired on May 29, 2008.

6. Petitioner notifies exemption holders at least 60 days prior to the expiration date. Petitioner sent the Notice of Expiration to Julie Magill at Respondent's current mailing address.

7. On October 5, 2009, an investigator for Petitioner interviewed Mr. Cliff Chavaria, an installer and repairer of air-conditioner units. Mr. Chavaria was an employee of Respondent.

8. Respondent did not maintain workers’ compensation insurance coverage for Mr. Chavaria in violation of Chapter 440. It is undisputed that Mr. Chavaria did not have any type of coverage for workers’ compensation insurance. Mr. Jaime Guererro and Mr. Glen Magill also had no exemptions and no workers’ compensation insurance coverage.

9. Respondent offered tax records for 2007 as Exhibit 8 at the hearing to show gross payroll for Julie and Richard Magill. The offered exhibit was an attempt to re-create tax information from an internet website. Respondent was given 10 days following the date of the hearing to produce an authenticated version of this document. No documentation was received.

   CONCLUSIONS OF LAW

   
   

10. DOAH has jurisdiction over the parties to and the subject matter of this proceeding. §§ 120.569 and 120.57(1), Fla. Stat. (2009). DOAH provided the parties with adequate notice of the final hearing.

11. Petitioner has the burden of proving by clear and convincing evidence that Respondent violated the Workers’ Compensation Law during the relevant period and that the penalty assessment is correct. See Department of Banking and Finance Division of Securities and Investor Protection v. Osborne Stern and Co., 670 So. 2d 932 (Fla. 1996). For the reasons stated in the Findings of Fact, Petitioner satisfied its burden of proof.

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

13. Petitioner provided proper Notice of Expiration of exemptions to Respondent. It is Respondent’s duty to maintain its exemptions in a current status. If no valid exemptions were in place for Respondent’s employees, Respondent was required to maintain compliance through another method of coverage, which Respondent failed to do.

    “[T]hat exemption, however, must be affirmatively requested and the seeker of the exemption, the corporate officer and the corporation he represents, have an affirmative duty to apply for the exemption and furnish the necessary information showing that it is justifiable. While the Department, by practice, notifies holders of the exemptions when an exemption is about to expire, it is still the responsibility and duty of the person seeking to hold an exemption to timely affect its renewal.”

    
    

    Department of Financial Services v. L and I Consolidated Services, Inc., Case No. 08-5911 (DOAH May 28, 2009)(Final Order July 6, 2009).

14. The penalty amount of $4,741.76 is correctly assessed based upon the statutorily mandated method. Respondent did not provide records for certain periods, and the tax documents supplied can not be validated. The Department is required to impute gross payroll for Julie and Richard Magill for those periods.

RECOMMENDATION

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

RECOMMENDED that the Department of Financial Services, Division of Workers’ Compensation, issue a final order imposing a penalty assessment in the amount of $4,741.76.

DONE AND ENTERED this 15th day of April, 2010, in Tallahassee, Leon County, Florida.

S

DANIEL MANRY

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 15th day of April, 2010.

ENDNOTE

1/ References to chapters, sections, and subsections are to Florida Statutes (2008), unless otherwise stated.

COPIES FURNISHED:

Paige Billings Shoemaker, Esquire Department of Financial Services

200 East Gaines Street Tallahassee, Florida 32399-4229

Julie Magill

Rick’s Air Conditioning, Inc. 6731 North Armenia Avenue Tampa, Florida 33604

Julie Jones, CP, FRP, Agency Clerk Department of Financial Services

200 East Gaines Street Tallahassee, Florida 32399-0390

Honorable Alex Sink Chief Financial Officer

Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300

Benjamin Diamond, General Counsel 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: 09-006776

Orders for Case No: 09-006776