STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL SERVICES, DIVISION OF WORKERS' COMPENSATION,

Petitioner,

vs.

CORTES PRE CAST STONE AND FOAM CORP,

Respondent.

/

Case No. 15-6482

RECOMMENDED ORDER

Pursuant to notice, a final hearing in this cause was held by video teleconference between sites in Tampa and Tallahassee, Florida, on January 20, 2016, before Linzie F. Bogan, Administrative Law Judge of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Tabitha G. Harnage, Esquire

Department of Financial Services

200 East Gaines Street Tallahassee, Florida 32399

For Respondent: Jose Cortez, pro se

Cortes Pre Cast Stone and Foam Corp 6835 Oakdale Drive

Tampa, Florida 33610

STATEMENT OF THE ISSUE

Whether Respondent violated the provisions of chapter 440, Florida Statutes (2014),1/ by failing to secure the payment of workers’ compensation as alleged in the Stop-Work Order and 2nd Amended Order of Penalty Assessment, and, if so, what penalty is

appropriate.

PRELIMINARY STATEMENT

On June 1, 2015, the Department of Financial Services, Division of Workers’ Compensation (Department), served a Stop- Work Order and Order of Penalty Assessment on “Cortes Pre Cast Stone and Foam Corp”2/ [sic] (Respondent), due to an alleged failure to secure workers’ compensation insurance coverage for its employees. On August 17, 2015, the Department issued to Respondent a 2nd Amended Order of Penalty Assessment, and alleged therein that Respondent owed a total penalty of $17,274.30.

Respondent disputed the amount set forth in the 2nd Amended Order of Penalty Assessment and the matter was initially referred for an informal hearing pursuant to section 120.57(2), Florida Statutes. During the informal hearing it was determined that a dispute of material fact exists, and on November 17, 2015, the Department referred the case to the Division of Administrative Hearings (DOAH) and requested the appointment of an Administrative Law Judge.

At the final hearing, the Department presented the testimony of compliance investigator Munal Abedrabbo (Investigator Abedrabbo) and penalty auditor Cassie Hamilton. Department Exhibits 1 through 10 were admitted into evidence. Jorge L. Cortez is the president of Cortes Pre Cast Stone and Foam Corp and testified on behalf of the corporation. Mr. Cortez’ only point of contention during the disputed-fact hearing was that the proposed fine is “too high” and the company cannot afford to pay the same. No exhibits were received into evidence on behalf of Respondent. A Transcript of the disputed-fact hearing was filed

on February 16, 2016.

FINDINGS OF FACT

1. The Department is the state agency responsible for the enforcement of the workers’ compensation insurance coverage requirements established in chapter 440.

2. On June 1, 2015, Investigator Abedrabbo conducted a random workers' compensation compliance check at 11422 North 56th Street, Tampa, Florida 33617. During the course of the compliance check, Investigator Abedrabbo observed two individuals installing a stone façade on a building that was under construction at the identified address. It is undisputed that the two individuals observed by Investigator Abedrabbo were, at the time of observation, employed by Respondent.

   
   

3. In support of its 2nd Amended Order of Penalty Assessment, the Department prepared a penalty calculation worksheet showing a total penalty owed of $17,274.30.3/ Respondent does not challenge the accuracy or method of calculating the assessed penalty, but only asserts that the penalty is “too high” and the company cannot afford to pay it.

   CONCLUSIONS OF LAW

   
   

4. The Division of Administrative Hearings has jurisdiction over the subject matter and parties pursuant to sections 120.569 and 120.57(1), Florida Statutes (2015).

5. The Department is the agency of the State of Florida charged, pursuant to section 440.107(3), with the duty to:

   [E]nforce workers' compensation coverage requirements, including the requirement that the employer secure the payment of workers' compensation, and the requirement that the employer provide the carrier with information to accurately determine payroll and correctly assign classification codes. In addition to any other powers under this chapter, the department shall have the power to:

   
   

   1. Conduct investigations for the purpose of ensuring employer compliance.

      
      

   2. Enter and inspect any place of business at any reasonable time for the purpose of investigating employer compliance.

      
      

   3. Examine and copy business records.

   
   

   * * *

   
   

   1. Issue stop-work orders, penalty assessment orders, and any other orders

      
      

      necessary for the administration of this section.

      
      

   2. Enforce the terms of a stop-work order.

      
      

   3. Levy and pursue actions to recover penalties.

      
      

   4. Seek injunctions and other appropriate relief.

   
   

6. The Department has the burden of proof in this case and must show by clear and convincing evidence that Respondent violated the Workers' Compensation Law during the relevant period and that the penalty assessments are correct. § 120.57(1)(j), Fla. Stat.; Dep’t of Banking & Fin., Div. of Sec. & Inv. Prot. v.

   Osborne Stern & Co., 670 So. 2d 932 (Fla. 1996); Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987); Pou v. Dep’t of Ins., 707

   So. 2d 941 (Fla. 3d DCA 1998). Clear and convincing evidence “requires more proof than a ‘preponderance of the evidence’ but less than ‘beyond and to the exclusion of a reasonable doubt.’” In re Graziano, 696 So. 2d 744, 753 (Fla. 1997).

7. It is well established that the Department has “broad powers to investigate employers, to halt any work where employers are not complying, and to assess penalties on those who do not comply.” Twin City Roofing Constr. Specialists, Inc. v. Dep't of

   Fin. Servs., 969 So. 2d 563, 566 (Fla. 1st DCA 2007).

   
   

8. 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 by the employer is, therefore, required. See, e.g., Summit Claims Mgmt. v. Lawyers Express

   Trucking, Inc., 913 So. 2d 1182, 1185 (Fla. 4th DCA 2005); C&L

   
   

   Trucking v. Corbitt, 546 So. 2d 1185, 1186 (Fla. 5th DCA 1989).

   
   

9. Section 440.02(16)(a) defines “employer” to include “every person carrying on any employment.”

10. Section 440.02(15)(a) defines “employee” to include “any person who receives remuneration from an employer for the performance of any work or service while engaged in any employment.”

11. Section 440.02(17) defines “employment” to include “any service performed by an employee for the person employing him or her,” and includes, for construction employers, “[a]ll private employments in which one or more employees are employed by the same employer.”

12. Section 440.02(8) defines “construction industry” to mean “for-profit activities involving any building, clearing, filling, excavation, or a substantial improvement in the size or use of any structure or the appearance of any land.” It is undisputed that Respondent performed work in the “construction industry” during the period of non-compliance.

    
    

13. Section 440.107(7)(a) provides, in part, as follows:

    
    

    [W]henever the department determines that an employer who is required to secure the payment to his or her employees of the compensation provided for by this chapter has failed to secure the payment of workers' compensation required by this chapter . . . such failure shall be deemed an immediate serious danger to public health, safety, or welfare sufficient to justify service by the department of a stop-work order on the employer, requiring the cessation of all business operations. If the department makes such a determination, the department shall issue a stop-work order within 72 hours.

    
    

    The Stop-Work Order issued herein was not only justified, it was required.

14. As for the penalty assessed against Respondent, section 440.107(7)(d)(1) provides, in part, that:

    [I]n 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.

    
    

15. The Department established by clear and convincing evidence that Respondent failed to secure the payment of workers' compensation as required by chapter 440 and that it was justified in the issuance of the Stop-Work Order.

    
    

16. The “shall” language found in section 440.107(7)(d)1. prevents the Department from reducing the legislatively mandated penalty, and therefore, it matters not, for purposes of assessing the penalty, that Respondent believes that the amount of the penalty is too high. Accordingly, the $17,274.30 penalty is lawful and shall be assessed against Respondent.

RECOMMENDATION

Based on the Findings of Fact and Conclusions of Law set forth herein, it is

RECOMMENDED that the Department of Financial Services, Division of Workers’ Compensation, enter a final order finding that Respondent, Cortes Pre Cast Stone and Foam Corp, violated the provisions of chapter 440 by failing to secure the payment of workers’ compensation and assessing against Respondent a penalty in the amount of $17,274.30.

DONE AND ENTERED this 18th day of February, 2016, in Tallahassee, Leon County, Florida.

S

LINZIE F. BOGAN

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 18th day of February, 2016.

ENDNOTES

1/ All statutory references are to 2014 Florida Statutes, unless otherwise indicated.

2/ Neither the Articles of Incorporation nor the Certificate of Incorporation issued by the State of Florida, Department of State, show punctuation following the word “Corp” and therefore the punctuation that would normally appear following the word “Corp” is omitted herein.

3/ The Department served upon Respondent a Request for Admission, which Respondent did not answer. Both the Request for Admission and the Department’s evidence of record, clearly and convincingly establish that the penalty of $17,274.30 was properly calculated.

COPIES FURNISHED:

Jose Cortez

Cortes Pre Cast Stone and Foam Corp 6835 Oakdale Drive

Tampa, Florida 33610

Tabitha G. Harnage, Esquire Department of Financial Services

200 East Gaines Street Tallahassee, Florida 32399 (eServed)

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: 15-006482

Orders for Case No: 15-006482