STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

In the matter of: )

FLORIDA PLUMBING AND ) CASE NOS. 76-196 through

MECHANICAL CONTRACTORS ) 76-207

SELF-INSURERS FUND ) 76-222

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated hearing officer, K. N. Ayers, held a public hearing in the above styled cause on April 5, 1976 at Winter Park, Florida.

APPEARANCES

Dan Turnbull, Esquire, Staff Attorney, Division of Labor, Collins building, Tallahassee, Florida, representing the Division of Labor.

Eugene W. Harris, Esquire, 215 E. Lime Street, Lakeland, Florida, 33821, representing the Trustees of the Florida Plumbing and Mechanical Contractors Self-Insurers Fund.

Leonard J. Kalish, Esquire, CANTERA & KALISH, 1040 S. W. First Street, Miami, Florida, representing Adelman Pipe & Steel, Yell for Pennell, and State Supply Company.

Norman D. Zimmerman, Esquire, 737 E. Atlantic Blvd. Pompano Beach, Florida 33060, representing L & M Metals.

C J. Keel, Jr., Esquire, Suite 102-04, 1501 1/2 South Dale Mabry Highway, Tampa, Florida 33609, representing Lynn Green Plumbing.

William C. Armstrong, 1225 9th Street West, Bradenton, Florida 33505, representing Armstrong Bros. Plumbing.

Herbert Rostorer, Post Office Box 695, Crystal River, Florida 32629, representing Herb's Septic Tanks, Inc.

C. B. Rogers, Post Office Box 22845, Tampa, Florida 33622

representing Easy Way Products.

A. V. Ouinta, 316 North McDill Avenue, Tampa, Florida 33609

representing A. V. Guinta Plumbing.

Vincent Guinta, 913 24th Avenue, Tampa, Florida 33605, representing Jimmy Guinta Plumbing.

RECOMMENDED ORDER

By Petition dated November 6, 1975, the Trustees, Plumbing and Mechanical Contractors Self-Insurers Fund (hereinafter referred to as Trustees) petitioned the Division of Labor, Bureau of worker's Compensation (hereinafter referred to as State) for order of assessment requiring each member of the fund who was a member during the 1967 fund year to pay to the State an assessment equal to 100 percent of each member's 1967 earned standard premium to restore the fund to solvency for the 1967 fund year.

Notice of the proposed assessment was submitted to all members and some 13 members petitioned for a hearing pursuant to Section 120.57(1) F.S.

At a pre-hearing conference March 21, 1976 at Winter Park, Florida it was agreed by the parties present that the sole factual issue to be resolved at the hearing on April 5; 1976 is whether or not the proposed assessment is necessary. Two legal issues reserved for consideration at the hearing were:

1. Whether a member of the fund that withdrew from the fund and obtained coverage elsewhere prior to August 24, 1967 is liable for the proposed assessment; and

   
   

2. Whether liability to fund by sole proprietor of a fund member transfers to the successor sole proprietor.

At the beginning of the hearing the Trustees stipulated to dismiss Lynn Greed Plumbing and Easy-Way Products from 1967 fund assessments as they had withdrawn from the fund and secured coverage elsewhere prior to August 24, 1967. Thereafter four witnesses were called and four exhibits were admitted into evidence.

FINDINGS OF FACT

1. On August 24, 1967 Thomas York, an employee of Yell for Pennell, one of the fund members, was injured while so employed and, as a result of the injury, is a paraplegic. A judge of industrial claims has entered an order requiring the payment of $42.00 per week compensation plus medical and nursing expenses for York. Nursing care has recently been running $91.00 per week.

   
   

2. York is the only outstanding claim for the 1967 fund year.

   
   

3. The average medical expenses for York over the past several years has averaged $8,800 per year. For the 1975 year the medical costs for York were

   $17,14O.

   
   

4. Thomas York is 57 years old. Because of his physical condition aggravated by a drinking problem his life expectancy is approximately five years.

   
   

5. The proposed assessment, if each fund amber pays the full amount of time assessment, will produce less than $50,000 income to the fund.

   
   

6. The medical payments on behalf of York have materially increased during the past three years. If this trend continues the assessment herein requested will be used up in less than two years.

7. Each fund member is individually and collectively liable for the compensation and medical expenses for York. In the event the fund fails to make payments when due and suit is brought on behalf of York the Trustees or individual embers will be liable for the payments as well as attorney's fees.

   
   

8. The fund is current on weekly compensation payments to York, but has deferred payments of medical expenses with the concurrence of the doctor. The present assets remaining in the fund to make payments is less than $1,000.

   
   

9. The primary insurance carrier for the fund, State Fire & casualty Company, went into receivership and no payments can be anticipated from this source. The Trustees brought legal action against various parties to recoup expenses to the fund resulting from the default of the primary carrier, but to date those actions have not been marked with success.

   
   

   CONCLUSIONS OF LAW

   
   

10. Section 440.58 F.S. provides in pertinent part:

    
    

    "Upon petition of the Trustees of the following self-insurance group: . . . Florida Plumbing and Mechanical Contractors, . . who entered into agreement with Robert F. Coleman of Florida, Inc., a servicing agent, or any other self-insurers groups similarly situated, the division shall enter its order requiring the employer members

    and former members of said groups liable therefor to pay all delinquent premiums and all necessary assessments, such payments to be paid to the division and by it disbursed to said Trustees

    to be used for the payment of workmen's compensa- tion claims and related compensation expenses."

    
    

11. Here the evidence is uncontradicted that the payments to cover workmens compensation claims on behalf of Thomas York approximated $20,000 for the 1975 year and York's condition is expected to deteriorate rather than improve. If so the assessment will have to be repeated before five years have passed.

    
    

12. With respect to the issue of liability of a sole proprietor fund member continuing to a successor sole proprietor, no legal arguments were presented. Basic contract law would indicate that, absent a novation or an assumption of liabilities and assets by the successor, the liability of a sole proprietor fund member is personal to that individual and does not follow the business when sold.

    
    

13. With respect to the liability of a member who withdrew from the fund and obtained coverage elsewhere prior to the injury to York, such member is dismissed from further liability. The stipulations respecting Lynn Green Plumbing and Easy-Way Products would be applicable to others so situated.

From the foregoing it is concluded that an assessment equal to 100 percent of each 1967 fund member's earned standard premium is necessary for the fund to meet the legal obligations it has incurred because of the injury to Thomas York. It is therefore,

RECOMMENDED that each 1967 meter of the Plumbers and Mechanical Contractors Self-Insurers Fund, who had not withdrawn from the fund and obtained coverage elsewhere prior to August 24, 1967, be assessed 100 percent of said member's earned standard premium for 1967.

DONE and ENTERED this 27 day of April, 1976, in Tallahassee, Florida.

K. N. AYERS, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304

(904) 488-9675

Docket for Case No: 76-000196

Orders for Case No: 76-000196