STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL SERVICES, DIVISION OF WORKERS' COMPENSATION,

Petitioner,

vs.

RAUL A. CORREA, M.D.,

Respondent.

/

Case No. 14-2598

RECOMMENDED ORDER

Pursuant to notice, a final hearing was held in this case on August 8, 2014, in Bradenton, Florida, before Administrative Law Judge Lynne A. Quimby-Pennock of the Division of Administrative Hearings (Division).

APPEARANCES

For Petitioner: Trevor S. Suter, Esquire

Hughens Dolisca, Esquire Department of Financial Services

200 East Gaines Street Tallahassee, Florida 32399

For Respondent: Raul A. Correa, M.D., pro se

2505 Manatee Avenue, West Bradenton, Florida 34205

STATEMENT OF THE ISSUES

The issues in this case are whether Respondent, Raul A. Correa, M.D. (Dr. Correa), failed to provide workers' compensation coverage, and if so, what penalty should be imposed.

PRELIMINARY STATEMENT

On April 7, 2014, Petitioner, Department of Financial Services, Division of Workers' Compensation (Department or Petitioner), issued an order of penalty assessment against

Dr. Correa. Dr. Correa disputed the order of penalty assessment and requested an administrative hearing. The case was forwarded to the Division on June 2, 2014, for the assignment of an administrative law judge.

Following one continuance, the final hearing was scheduled for and heard on August 8, 2014. At the final hearing, Petitioner presented the testimony of compliance investigator Germaine Green and penalty auditor Lynne Murcia from the Department. The Department offered eight exhibits, all of which were admitted into evidence without objection. Dr. Correa testified on his own behalf and presented the testimony of: his daughter, Antonia Alejandria Correa; his daughter-in-law, Valeria Correa; and his brother-in-law, Sebastian Collado. Dr. Correa did not offer any exhibits.

The one-volume Transcript was filed on August 28, 2014. To date, Dr. Correa has not filed any post-hearing documents. On September 5, 2014, Petitioner filed a Motion for Extension of Time for Submission of Proposed Recommended Orders.1/ The motion was granted to extend the filing deadline to September 12, 2014. On September 11, 2014, the Department filed its Proposed

Recommended Order, which has been considered in the preparation of this Recommended Order.

References to statutes are to Florida Statutes (2013),

unless otherwise noted.

FINDINGS OF FACT

1. The Department is the state agency responsible for enforcing section 440.107, Florida Statutes (2013). That section mandates, in relevant part, that employers in Florida secure workers’ compensation insurance coverage for their employees.

   § 440.107(3), Fla. Stat.

   
   

2. At all times relevant, Dr. Correa was a Florida small business engaged in the practice of medicine, with his principal office located at 2505 Manatee Avenue West, Bradenton, Florida. Dr. Correa is not incorporated.

3. On February 12, 2014, Ms. Green conducted an on-site workers’ compensation compliance investigation (compliance investigation) of Dr. Correa’s office. After identifying herself to the receptionist, Ms. Green met Dr. Correa and explained the reason for her presence, a compliance investigation.

   Dr. Correa telephoned his wife who handles his office management from their residence. Mrs. Correa immediately faxed a copy of the liability insurance policy to the office. However, that liability policy did not include workers’ compensation coverage.

   
   

4. After a telephonic consultation with her supervisor,

   
   

   Ms. Green served a Request for Production of Business Records (Request) on Dr. Correa at 11:50 a.m. on February 12, 2014. This Request encompassed records from October 1, 2013, through February 12, 2014, for all of Dr. Correa’s payroll documents, account documents, disbursements, and workers’ compensation coverage policies.

5. Ms. Green consulted the Department’s Coverage and Compliance Automated System (CCAS) database to determine whether Dr. Correa had secured workers’ compensation coverage or an exemption from the requirements for coverage for his employees. CCAS is a database Ms. Green consults during the course of her investigations. Ms. Green determined from CCAS that Dr. Correa did not have any current workers’ compensation coverage for his employees and he did not have an exemption from such coverage from the Department. The records reflected that Dr. Correa’s last active workers’ compensation coverage was in 2004.

6. Dr. Correa obtained workers’ compensation coverage on February 20, 2014.

7. Approximately one month later, Ms. Green served a Request for Production of Business Records for Penalty Assessment Calculation on Dr. Correa. Dr. Correa produced the requested records. These records were given to Lynne Murcia, one of the Department’s penalty auditors, to calculate the penalty.

   
   

8. Ms. Murcia determined that the appropriate classification code for Dr. Correa’s employees was 8832, which incorporates physicians and clerical workers. This code was derived from the Scopes Manual, which lists all of the various jobs that may be performed in the context of workers’ compensation. The manual is produced by the National Council on Compensation Insurance, Inc., the nation’s most authoritative data collecting and disseminating organization for workers’ compensation.

9. Dr. Correa listed seven employees on the Florida Department of Revenue Unemployment Compensation Tax (UCT-6) form for the time period of the non-compliance. The UCT-6 form lists those employees who are subject to Florida’s Unemployment Compensation Law. Ms. Murcia reasonably relied upon the UCT-6 filings for the relevant time period to calculate Dr. Correa’s gross payroll in Florida.

10. Using Dr. Correa’s payroll chart, the UCT reports, and the classification codes for each employee, Ms. Murcia calculated the penalty assessment for the three-year penalty period preceding the investigation. This three-year period is the allocated time for reviewing coverage for those who do not have the appropriate workers’ compensation coverage. On April 9, 2014, Ms. Murcia determined the penalty to be $4,287.12. However, upon receipt of additional information regarding a

    
    

    former employee of Dr. Correa, an Amended Order of Penalty Assessment of $3,898.77 was issued on July 28, 2014.

11. Dr. Correa’s position is that his practice is a small “mom and pop” operation. He employs members of his family to run the business side of his practice. His daughter, Antonia, works as Dr. Correa’s “doctor’s assistant.” She works at the various nursing homes that Dr. Correa services. Antonia believed that the nursing homes’ liability insurance would cover her, and she was not subject to workers’ compensation coverage. However, she was, in fact, paid by Dr. Correa.

12. Dr. Correa’s daughter-in-law, Valeria, works from her home computer completing the medical billing for her father-in- law. She has been working in this capacity for approximately 14-

    16 years, and it never occurred to her that she needed workers’ compensation coverage. She was paid by Dr. Correa.

13. Dr. Correa’s brother-in-law, Mr. Collado, runs all the errands for the practice. He may go to the bank, take care of car maintenance, buy office supplies or fix things, all in support of Dr. Correa’s practice. Mr. Collado receives regular pay checks from Dr. Correa.

14. Dr. Correa testified that his wife is his office manager and has been since he opened the practice in 1978. Mrs. Correa works from their home, in a small home office. She does all the paper work related to the practice.

    
    

15. Dr. Correa firmly believed that he did not require workers’ compensation coverage because some of his employees were “independent contractors” or never worked in his office, but at other locations (individual homes, nursing homes, or just outside the office). Dr. Correa believed his insurance agent who did not think Dr. Correa needed the workers’ compensation coverage.

16. Based upon the testimony and exhibits, the amended penalty assessment in the amount of $3,898.77 is accurate.

    CONCLUSIONS OF LAW

    
    

17. The Division has jurisdiction over the parties to and the subject matter of this proceeding. §§ 120.569 and 120.57, Fla. Stat.

18. Employers are required to secure workers' compensation coverage for their employees. Chapter 440 is known as the "Workers' Compensation Law." §§ 440.10(1)(a) and 440.38(1), Fla. Stat.

19. "Employer" is defined, in part, as "every person carrying on any employment." § 440.02(16)(a), Fla. Stat. "Employment . . . means any service performed by an employee for the person employing him or her" and includes, "[a]ll private employments in which four or more employees are employed by the same employer.” §§ 440.02(17)(a) and (b)2., Fla. Stat.

    
    

20. Section 440.02(15)(a) defines "employee" in part, as:

    
    

    1. ny person who receives remuneration from an employer for the performance of any work or service while engaged in any employment under any appointment or contract for hire or apprenticeship, express or implied, oral or written.

       
       

21. Section 440.107(2) provides in pertinent part:

    
    

    For the purposes of this section, “securing the payment of workers’ compensation” means obtaining coverage that meets the requirements of this chapter and the Florida Insurance Code.

22. Section 440.107(7)(d)1. provides in pertinent part: In addition to any penalty, stop-work order,

    or injunction, the department shall assess

    against any employer who has failed to secure the payment of compensation as required by this chapter a penalty equal to 2 times the amount the employer would have paid in premium when applying approved manual rates to the employer’s payroll during periods for which it failed to secure the payment of workers’ compensation required by this chapter within the preceding 2-year period or

    $1,000, whichever is greater.

    
    

    The method of penalty calculation described in section 440.107(7)(d) is mandatory.

23. The Department has the burden of proof in this case and must show by clear and convincing evidence that the employer violated the workers' compensation law and that the penalty assessments were correct. Dep't of Banking & Fin. v. Osborne Stern & Co., 670 So. 2d 932 (Fla. 1996).

    
    

24. In Evans Packing Co. v. Dep’t of Agric. & Consumer

    
    

    Servs., 550 So. 2d 112, 116, n.5 (Fla. 1st DCA 1989), the Court defined clear and convincing evidence as follows:

    Clear and convincing evidence requires that the evidence must be found to be credible; the facts to which the witnesses testify must be distinctly remembered; the evidence must be precise and explicit and the witnesses must be lacking in confusion as to the facts in issue. The evidence must be of such weight that it produces in the mind of the trier of fact the firm belief of conviction, without hesitancy, as to the truth of the allegations sought to be established.

    Slomowitz v. Walker, 429 So. 2d 797, 800 (Fla. 4th DCA 1983).

    
    

25. The Department has alleged that Dr. Correa failed to secure workers' compensation coverage for its employees. The evidence demonstrated no coverage existed for the three-year period immediately preceding the date of the investigation. The Department used the appropriate worksheet, classification code and remuneration information for calculating the appropriate penalty to be assessed against Dr. Correa for conducting business without the required workers’ compensation coverage. The total amount of the penalty to be imposed is $3,898.77.

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 upholding

the Amended Order of Penalty Assessment, and assessing a penalty in the amount of $3,898.77.

DONE AND ENTERED this 24th day of September, 2014, in Tallahassee, Leon County, Florida.

S

LYNNE A. QUIMBY-PENNOCK

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 24th day of September, 2014.

ENDNOTE

1/ Petitioner’s motion indicated that an attempt was made to contact Dr. Correa, however, the motion failed to comply with Florida Administrative Code Rule 28-106.204(3) and (4).

COPIES FURNISHED:

Trevor S. Suter, Esquire Department of Financial Services

200 East Gaines Street Tallahassee, Florida 32399 (eServed)

Raul A. Correa, M.D. 2505 Manatee Avenue, West Bradenton, Florida 34205

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

200 East Gaines Street Tallahassee, Florida 32399-0390 (eServed)

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: 14-002598

Orders for Case No: 14-002598