vs.
Respondent.
Case No. 15-1766
Pursuant to notice, a final hearing was held in this case on August 21, 2015, in Tallahassee, Florida, before Suzanne Van Wyk, a duly-designated Administrative Law Judge.
For Petitioner: Trevor S. Suter, Esquire
G and G General Contracting, Inc.
Whether Respondent, G and G General Contracting, Inc., failed to comply with the coverage requirements of the Workers’ Compensation Law, chapter 440, Florida Statutes, by not
obtaining workers’ compensation insurance for its employees, and, if so, what penalty should be assessed against Respondent pursuant to section 440.107, Florida Statutes (2014).
Pursuant to the Workers’ Compensation Law, chapter 440, the Department of Financial Services, Division of Workers’ Compensation (Department), seeks to enforce the statutory requirement that employers secure the payment of workers’ compensation for their employees.
On December 8, 2014, the Department issued a “Stop-Work Order” alleging that Respondent failed to comply with the coverage requirements of the workers’ compensation law on that date. The Order directed Respondent to cease business operations and pay a penalty equal to two times the amount Respondent would have paid in premium to secure workers’ compensation during periods within the preceding two years when it failed to do so, or $1,000, whichever is greater, pursuant to section 440.107(7)(d). The Department also requested business records from Respondent in order to determine the exact amount of the penalty.
Respondent timely requested an administrative hearing to dispute the Department’s Stop-Work Order and the imposition of a penalty. On March 30, 2015, the Department forwarded Respondent’s request to the Division of Administrative Hearings
(Division). The hearing was scheduled for June 2, 2015, but was subsequently rescheduled to August 21, 2015, and was convened as rescheduled.
At the hearing, the Department presented the testimony of Aysia Elliott, an investigator for the Division of Workers’ Compensation. The Department’s Exhibits 1 through 10 were admitted into evidence. Respondent presented the testimony of its President, Gino Uli, but offered no exhibits.
The one-volume Transcript of the final hearing was filed with the Division on September 8, 2015. Both parties timely filed Proposed Recommended Orders which have been considered by the undersigned in preparing this Recommended Order.
Unless otherwise stated, all statutory references are to the 2014 edition of the Florida Statutes.
The Department is the state agency responsible for enforcing the requirement of the Workers’ Compensation Law that employers secure the payment of workers’ compensation coverage for their employees and corporate officers. § 440.107, Fla. Stat.
G and G General Contracting, Inc. (Respondent or G and G), is a domestic business corporation organized on
July 5, 2013, pursuant to the laws of the State of New York.
Respondent’s primary business address is 88 Lincoln Avenue, Ardsley, New York. Gino Uli is Respondent’s President.
Respondent is not a Florida corporation.
On December 4, 2014, the Department’s investigator, Aysia Elliott, conducted a random workers’ compensation compliance check at a worksite in Naples, Florida.
Ms. Elliott observed seven men at the worksite engaged in interior and exterior painting of a newly-constructed residence. The residence was but one in a large residential subdivision under construction.
The central issue in this case, and one that is fiercely contested, is whether the painters Ms. Elliott observed at the worksite were employees of G and G.
In response to her verbal inquiries to the painters on site, Ms. Elliott testified that the workers first identified Pacific Construction as their employer. Ms. Elliott attempted to contact Pacific Construction, but her calls to that company were not returned.
Ms. Elliott testified that upon her further inquiry, one of the painters, Leonardo Gudiel, stated he was an employee of G and G.
At this point, Ms. Elliott was unsure which company to investigate for workers’ compensation coverage for the painters at the worksite.
The permit sign at the worksite identified Minto Communities as the general contractor. Ms. Elliott contacted Minto Communities via telephone to determine the name of the company to which painting had been subcontracted. At hearing, Ms. Elliott was unable to recall the names of any of the companies identified by Minto Communities as subcontractors for the job. Ms. Elliott did recall that at least two subcontractors were identified by Minto.
Mr. Gudiel gave Ms. Elliott a telephone number for a man named “Edison,” alleged to be the foreman. Ms. Elliott called Edison, and testified that he informed her he was on another call and would have to call her back. Edison did not return Ms. Elliott’s call.
Ms. Elliott next received a phone call from Mr. Uli.
Ms. Elliott testified that, during that phone conversation,
Mr. Uli identified the painters at the worksite as employees of his company, G and G. Mr. Uli denied having ever told
Ms. Elliott the painters were his employees.
Mr. Uli provided Ms. Elliott with the certificate of insurance demonstrating workers’ compensation insurance coverage for employees of G and G. Mr. Uli told Ms. Elliott he would be in Florida in a few days and would meet with Ms. Elliott in person.
Ms. Elliott verified the existence of G and G through the State of New York Division of Corporations’ website.
Ms. Elliott then verified, through the Department’s Coverage and Compliance Automated System, that G and G had no workers’ compensation coverage in Florida, nor any exemption from coverage requirements for any of its corporate officers.
Ms. Elliott also contacted the New York insurance carrier identified by Mr. Uli and confirmed that the carrier did not cover any G and G employees in Florida.
On December 8, 2014, Ms. Elliott reviewed the results of her December 4, 2014, workers’ compensation investigation with Maria Seidler, the Ft. Myers district Supervisor. A determination was made that sufficient evidence and information existed to issue a Stop-Work Order against G and G for failure to provide workers’ compensation insurance, as required by chapter 440.
Ms. Elliott met with Mr. Uli on December 8, 2014.
Ms. Elliott personally served Mr. Uli with a Stop-Work Order for the construction site in Naples and a request for specified business records on which to base the penalty calculation.
Mr. Uli did not provide any records to the Department in response to the records request.
The Department’s penalty auditor, Lyna Ty, was assigned to calculate the penalty to be assessed against G and G
for failure to secure workers’ compensation insurance during the penalty period.
The penalty period was for the two years prior to the date the Stop-Work Order was issued: December 9, 2012 to December 8, 2014.
Having no employer records from G and G, Mr. Ty imputed the statewide average weekly wage as Respondent’s payroll for the seven painters at the worksite on December 4, 2014. Mr. Ty calculated a penalty of two times the workers’ compensation insurance premium that would have applied to the purchase of insurance for those specific employees during the penalty period. § 440.107(7)(e), Fla. Stat.
Mr. Ty assigned NCCI code 5474, which is the classification code for painting contractors according to the SCOPES manual adopted by the Department for imputing wages associated with various occupations.
On January 9, 2015, the Department issued an Amended Order of Penalty Assessment against G and G in the amount of
$254,697.38
However, because G and G was not formed until July 5, 2013, the original penalty calculation was based on an incorrect penalty period. Mr. Ty recalculated the penalty based on a penalty period from July 5, 2013 through December 8, 2014.
On May 26, 2015, the Department issued a Second Amended Order of Penalty Assessment against G and G in the amount of $185,354.68.
Mr. Uli’s testimony provided no more clarity than Ms. Elliott’s as to the identity of the employer for the painters at the worksite on December 4, 2014.
Mr. Uli previously lived in Florida for seven years and was engaged in “restaurant business.” Mr. Uli met Leonardo Gudiel, a contractor, while he was living in Florida. While living in Florida, Mr. Uli also met James Cartisano, the purported owner of Facility Construction.
When Mr. Uli relocated to New York, he stayed in touch with Mr. Gudiel. According to Mr. Uli, he planned to give to Mr. Gudiel any work G and G obtained in Florida and asked
Mr. Gudiel to “be registered as a vendor with [him].”
Mr. Uli testified that Mr. Cartisano contacted him in New York and told him that he had been engaged by Minto Communities (Minto) to paint a model home in a new residential neighborhood under construction in Naples, Florida. Presumably, if Mr. Cartisano’s work was satisfactory to Minto, Facility Construction would be hired for the larger job.
According to Mr. Uli, he referred Mr. Cartisano to Mr. Gudiel to supply painters for the job. Mr. Uli described himself as the “middle man.”
Upon inquiry from the undersigned as to how Mr. Uli or G and G construction would profit from his position as the middle man, Mr. Uli stated, “No arrangement as per se on paper, Judge, but this is on – on [Mr. Cartisano’s] word to me; that if you get me the right guys down there that can do this for me, I’ll take care of you.”1/
On December 4, 2014, when Ms. Elliott conducted her random worksite inspection, Mr. Uli received a telephone call from Mr. Gudiel informing him that Ms. Elliott was onsite asking questions about workers’ compensation insurance. According to Mr. Uli, he called Mr. Cartisano, who “did not want to deal with this.”2/
Mr. Uli explained that he telephoned Ms. Elliott on December 4, 2014, to explain that the guys onsite were painting a model home for Minto, and if Minto was satisfied, Facility Construction would get the overall job (estimated at
700 houses).
At hearing, Mr. Uli strongly denied that he told
Ms. Elliott the workers were his employees, either on the phone on December 4, 2014, or when he met with her in person on December 8, 2014.
The evidence, or lack thereof, leaves the undersigned with many unresolved questions: Why would Facility Construction contact a contractor in New York to provide painters for a job
in Florida? Why did Mr. Uli supply Ms. Elliott with a copy of his certificate of insurance for workers’ compensation insurance in New York? Moreover, if the painters were not his employees, why did Mr. Uli travel to Florida from New York and meet with Ms. Elliott?
From the evidence as a whole, it can be inferred that Mr. Uli had a significant interest in the work being done at the Naples worksite on December 4, 2014. However, it cannot be inferred that G and G was the employer of the painters at the worksite. That fact must be proven by the Department.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction of the subject matter of and the parties to this proceeding. §§ 120.569 and 120.57(1), Fla. Stat. (2015).
Employers are required to secure payment of workers’ compensation for their employees. §§ 440.10(1)(a) and 440.38(1), Fla. Stat.
“Employer” is defined, in part, as “every person carrying on any employment.” § 440.02(16), Fla. Stat.
“Employment” means “any service performed by an employee for the person employing him or her” and includes, “with respect to the construction industry, all private employment in which one or more employees are employed by the same employer.” §§ 440.02(17)(a) and (b)(2), Fla. Stat.
“Employee” is defined, in part, as “any 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.” § 440.02(15)(a), Fla. Stat. “Employee” also includes “any person who is an officer of a corporation and who performs services for remuneration for such corporation within this state.” § 440.02(15)(b), Fla. Stat.
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 under the law. See Dep’t of Banking
and Fin. v. Osborne Stern and Co., 670 So. 2d 932 (Fla. 1996); and Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987).
In Evans Packing Co. v. Department of Agriculture and Consumer Services, 550 So. 2d 112, 116, n.5 (Fla. 1st DCA 1989),
the Court defined clear and convincing evidence as follows:
[C]lear 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 or 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).
Section 440.02(8) defines “construction industry” as “for-profit activities involving any building, clearing, filling, excavation, or substantial improvement in the size or use of any structure or the appearance of any land.” Section 440.02(8) further provides “[t]he division may, by rule, establish standard industrial classification codes and definitions thereof which meet the criteria of the term ‘construction industry’ as set forth in this section.” If G and G was engaged in interior and exterior painting for remuneration at the Naples worksite,
G and G was engaged in the construction industry under the Department’s statutorily-authorized rules. See Fla. Admin.
Code R. 69L-6.021(2)(jj).
The Department failed to establish by clear and convincing evidence that G and G was an “employer” engaged in the construction industry in Florida during the penalty period, as amended, for purposes of workers’ compensation coverage.
The majority of the evidence produced at hearing was hearsay in nature.
Ms. Elliott’s testimony that Mr. Uli told her the painters at the worksite were his employees is admissible as an admission, a hearsay exception pursuant to section 90.803(18)(a), Florida Statutes (2015). However, an evidentiary admission is not conclusive. The party who made the out-of- court statement may offer evidence to dispute the truth of the
statement.3/ In the case at hand, the admission was contradicted by Mr. Uli’s sworn testimony that the painters were not his employees. The undersigned must examine the credibility and reliability of each witness and determine the weight to give each.
Mr. Uli’s credibility was not without question.
Mr. Uli had a significant interest in the outcome of the painting underway at the Naples worksite on December 4, 2014, but was not forthcoming with details as to the nature of his interest. Mr. Uli clearly had plans to profit from any future contract between Minto and Facility Construction to paint the entire subdivision. However, Mr. Uli’s reticence to disclose those plans did not render his testimony wholly unreliable.
Ms. Elliott’s testimony, while more credible, was somewhat unreliable. Ms. Elliott did not remember the names of the subcontractors identified by Minto, but testified that she relied upon that information, at least in part, in reaching the conclusion that G and G was the employer of the painters at the worksite. Ms. Elliott was frustrated at the worksite and unsure of which company to investigate. At hearing, she seemed all too eager to rely upon Mr. Uli’s statement.
On the issue of whether the painters were G and G employees, Ms. Elliott’s testimony is more credible on balance than Mr. Uli’s. If the standard of proof in this case were by a
preponderance (or “greater weight”) of the evidence, the Department would likely have proven its case. Unfortunately for the Department, the standard is a bit higher.
In support of its case, the Department offered hearsay evidence from Ms. Elliott that Mr. Gudiel told her he was a
G and G employee. Hearsay evidence is admissible in this proceeding to supplement or explain other evidence. See Fla.
Admin. Code R. 28-106.213(3). However, the weight to be afforded said evidence is within the discretion of the trier of fact. In the case at hand, Mr. Gudiel’s statement is not afforded much weight. It is noted that, according to
Ms. Elliott, Mr. Gudiel first identified himself and the other painters as employees of Pacific Construction. No evidence was presented on which to base a finding what, if any, role Pacific Construction played in the contracting hierarchy for the residential subdivision in Naples. The only evidence was
Ms. Elliott’s testimony that her attempts to contact that company were unsuccessful. Mr. Gudiel certainly had motive to point the finger at another contractor to deflect responsibility for workers’ compensation insurance from his own business.
Taken together, the evidence adduced at the final hearing did not produce a firm belief or conviction in the mind of the undersigned that the painters at the Naples worksite on December 4, 2014, were employees of G and G.
RECOMMENDED that the Department of Financial Services, Division of Workers’ Compensation, enter a final order dismissing the Stop-Work Order and Second Amended Penalty Assessment against Respondent, G and G Contracting, Inc., for its failure to secure and maintain required workers’ compensation insurance for its employees.
DONE AND ENTERED this 13th day of November, 2015, in Tallahassee, Leon County, Florida.
Filed with the Clerk of the Division of Administrative Hearings this 13th day of November, 2015.
1/ T.83:12-15.
2/ Mr. Cartisano has reportedly gone “off the grid,” and Mr. Uli has not been able to contact him by any means.
3/ See Charles W. Ehrhardt, Ehrhardt’s Florida Evidence § 803.18, p. 984 (2013 Ed.).
Trevor S. Suter, Esquire Department of Financial Services
Julie Jones, CP, FRP, Agency Clerk Division of Legal Services Department of Financial Services
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.
