STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

LIBERTY MUTUAL INSURANCE CO., )

)

Petitioner, )

)

vs. ) CASE NO. 96-1586

)

DEPARTMENT OF INSURANCE, )

)

Respondent. )

and )

) HALE INTERMODAL TRANSPORT CO., )

)

Intervenor. )

)

RECOMMENDED ORDER

This cause is determined upon the pleadings filed and oral argument by telephonic conference.

APPEARANCES

For Petitioner: Brian D. Solomon, Esquire

Glenda L. Thornton, Esquire Post Office Box 1454 Tallahassee, Florida 32301

For Respondent: John Swyers, Esquire

DEPARTMENT OF INSURANCE

200 East Gaines Street Tallahassee, Florida 32399-0333

For Intervenor: Edward J. Kiley, Esquire

GROVE, JASKIEWICZ & COBERT, P.A.

1730 "M" Street, Northwest, Suite 400

Washington, D.C. 20036-4579 STATEMENT OF THE ISSUES

Does the Division of Administrative Hearings have jurisdiction of this cause in its current posture?

PRELIMINARY STATEMENT

This cause came on for consideration pursuant to the terms of the July 17, 1996 Order Cancelling Hearing, Providing for Future Filings.

By that Order, the parties were given time in which to file additional documents supporting their respective positions; copies of statutes; any motion to dismiss upon allegations that the joint prehearing stipulation had eliminated

all disputed issues of material fact; any motion to amend the petition herein together with an integrated amended petition; and any memoranda addressing jurisdiction and the scope of formal hearing herein pursuant to Section 120.57(1) F.S.

Those pleadings have been received and considered.

No amended petition or motion therefor has been filed by Liberty Mutual Insurance Co.

Respondent Department of Insurance's Motion to Relinquish Jurisdiction and Motion to Dismiss Party and Respondent-Intervenor Hale Intermodal Transport Co.'s Renewed Motion to Dismiss are ready for disposition at this time.

FINDINGS OF FACT

1. On November 13, 1992, Hale Intermodal Transport Co., a motor carrier, requested that the Department of Insurance review the decision of Hale's workers' compensation insurance carrier, Liberty Mutual Insurance Co., to include the payroll of Hale's Florida owner/operators in calculating the workers' compensation insurance premium due from Hale to Liberty Mutual.

   
   

2. On May 17, 1993, the Department stated it was removing itself from the dispute and recommended that the dispute be "addressed through the appeals process." Accordingly, Hale sought a review by the Board of Governors of the Florida Workers' Compensation Insurance Plan (hereinafter referred to as "Board of Governors"). On July 23, 1993, the Board of Governors, by a vote of three in favor, one against, and one abstention, decided that Hale's Florida owner/operators should be considered independent contractors and that their payroll should not be considered by Liberty Mutual in determining the workers' compensation insurance premium owed to Liberty Mutual by Hale.

   
   

3. Thereafter, as provided in Section 627.291(2), F.S., Liberty Mutual requested that the Department review the Board of Governors' decision. On August 30, 1993, Liberty Mutual sought a formal hearing pursuant to Section 120.57(1) F.S.

   
   

4. The dispute was initially referred to the Division of Administrative Hearings (DOAH) by the Department of Insurance which requested that DOAH conduct a formal hearing pursuant to Section 627.291, F.S. In its referral letter, the agency noted that Liberty Mutual had not waived its right to a Section 120.57(1)

   F.S. proceeding.

   
   

5. By a Recommended Order of Dismissal entered January 11, 1994, Hearing Officer Larry J. Sartin concluded that DOAH did not have jurisdiction over the matter because the Department of Insurance had not taken any "agency action" in the case. Apparently, no final order was ever entered in response to the January 11, 1994 recommendation of dismissal.

   
   

6. Rather, The Florida Department of Insurance's internal hearing officer reviewed the case and, on June 13, 1995, issued a "Report, Findings Conclusions and Recommendations of the Hearing Examiner." In his report, the agency's internal informal hearing officer concluded that as an insurer, Liberty Mutual did not have standing under Section 627.291 F.S. to appeal the Board of Governors' decision regarding whether Hale's Florida drivers were "employees" or "independent contractors." The agency's hearing officer's ruling was based upon his interpretation of the legislative intent of Section 627.291(2) F.S., which

   interpretation was made without the hearing officer having the benefit of legislative history.

   
   

7. On February 22, 1996, the agency issued its "Order Affirming the Report, Finding, Conclusions and Recommendation of the Hearing Examiner." Appended to that order was an election of rights statement form which set forth Liberty Mutual's options should it wish to appeal the Department's order which constituted the agency's "proposed agency action" as that term is used in Chapter 120 F.S. and which, in effect, affirmed the agency's internal hearing officer's report/order.

   
   

8. Liberty Mutual elected to have the matter referred to DOAH for a Section 120.57(1) F.S. proceeding upon the disputed issues of material fact. The dispute was then referred to DOAH and became the instant DOAH Case No. 96- 1586.

   
   

9. Following Hale Intermodal Transport Co.'s intervention herein, the case was set for formal hearing. Eventually, the parties filed a Joint Prehearing Stipulation.

   
   

10. That Joint Prehearing Stipulation specified that there were only two disputed facts raised by Liberty Mutual's petition in the instant case, and that these two disputed facts had since been resolved among the parties, to the effect that:

    
    

    1. Liberty Mutual was and is not a "member" of NCCI.

    2. Liberty Mutual was and is a member of the assigned risk pool and was a member of the Board of Governors' panel to which the

       issue of Hale's independent contractor drivers was first present. (sic) Liberty Mutual's representative on the Board of Governors'

       panel abstained and did not vote in the decision.

       
       

11. The Joint Prehearing Stipulation also specified that none of the parties would call witnesses or offer exhibits at formal hearing before DOAH.

    
    

12. The parties further stipulated that the only issue remaining was whether or not Petitioner Liberty Mutual had "standing" pursuant to Section 627.291(2) F.S. to request a review of the Board of Governors' decision.

    
    

13. Respondent Department of Insurance then moved to dismiss itself as a party, claiming that it was not a real party in interest and that under Section

    627.291 F.S., it must act as arbitrator/judge and therefore should not be required to appear as an adversarial Respondent in the instant Section 120.57(1)

    F.S. proceeding before DOAH.

    
    

14. Oral argument was required on the pending motion. During that hearing, the undersigned requested that the parties explain how DOAH could have jurisdiction of a cause with no disputed issues of material fact. The undersigned further suggested that the issue of "standing" is only a part of the larger issue of "jurisdiction" which is a mixed question of law and fact; that perhaps there was a flaw in the agency's determination in its proposed final agency action to the effect that only Hale (the employer) had standing to request a due process hearing whereas Liberty Mutual (the insurer) did not have standing to request a due process hearing for the purpose of determining the

    employer and insurance carrier's respective rights under Section 627.291(2) F.S. and, therefore, perhaps Liberty Mutual's petition could be interpreted to be seeking a hearing on the merits to consider the parties' respective rights on the rating issue; and that in a Section 120.57(1) F.S. proceeding the agency must always be a litigant when the agency proposes any final agency action, i.e. in this instance, the implementation by a final order of the whole of its internal hearing officer's recommended order.

    
    

15. Subsequent to oral argument, the scheduled Section 120.57(1) F.S. formal hearing was cancelled so that the parties could supplement the record by filing additional documents, copies of any statutes and rules they wished to be considered, any motion to dismiss upon allegations the joint prehearing stipulation had eliminated all disputed issues of material fact, any motion to amend the petition herein, and any memoranda addressing jurisdiction and the scope of formal hearing pursuant to Section 120.57(1) F.S.

    
    

16. The undersigned has reviewed all filings and the record and is fully advised in the premises, including but not limited to Liberty Mutual's failure to amend its petition and Hale's renewed motion to dismiss.

    
    

17. It clearly appears that the parties have stipulated that the issue of "standing" in this instant case is purely a legal issue and that there remain no disputed issues of material fact.

    
    

    CONCLUSIONS OF LAW

    
    

18. In order for a case to proceed before DOAH pursuant to Section 120.57(1) F.S., there must be at least one disputed issue of material fact. Alternatively, upon an agreement by all the parties and consent of a DOAH Hearing Officer, the Hearing Officer may consider the parties' legal dispute. Here, there are no disputed issues of material fact and no clear agreement to proceed. Moreover, although the issue of "standing" is most often a mixed issue of fact and law, here the parties have stipulated that "standing" is purely a legal issue.

    
    

19. Section 627.291(2) provides:

    
    

    (2) As to workers' compensation and employer's liability insurances, every rating organization and every insurer which makes its own rates shall provide within this state reasonable means whereby any person aggrieved by the application of its rating system may be heard, in person or by his authorized representative, on his written request to review the manner in which such rating system has been applied in connection with the insurance afforded him.

    If the rating organization or insurer fails

    to grant or rejects such request within 30 days after it is made, the applicant may proceed in the same manner as if his application had been rejected. Any party affected by the action of such rating organization or insurer on such request may, within 30 days after written notice of such action, appeal to the department which may affirm or reverse such action.

20. Without comment upon the agency's interpretation of the foregoing statute to the effect that only one party (the employer Hale Intermodal) is entitled to a due process hearing on the merits, the agency's legal interpretation is both clear in the record and for this case. With regard to any statute or rule it is charged with administering, the agency's interpretation is entitled to great weight and deference. See, Griffith v. Department of Business and Professional Regulation, 613 So.2d 930 (Fla. 3d DCA 1993); Maclen Rehabilitative Services v. Department of Health and Rehabilitative Services, 588 So.2d 12 (Fla. 1st DCA 1991); Department of Business and Professional Regulation v. Martin County Liquors, Inc., 574 So.2d 170 (Fla. 1st DCA 1991); Island Harbor Beach Club v. Department of Natural Resources, 405 So.2d 209 (Florida 1st DCA 1986); Shell Harbor Group, Inc. v. Department of Business Regulation, 487 So.2d 1141 (Fla. 1st DCA 1986); Goldring v. Department of Environmental Regulation, 477 So.2d 532 (Fla. 1985); Public Employees Relations Commission v. Dade County Police Benevolent Association, 467 So.2d 987 (Fla. 1985). Cf -- Florida Board of Optometry v. Florida Society of Opthalmology, 538 So.2d 878 (Fla. 1st DCA 1988).

    
    

21. The structure of Section 120.57(1) F.S. is that, while the agency may substitute its conclusions of law for those of an independent DOAH hearing officer, the converse is not permitted.

    
    

22. In the posture of this case, a dismissal of the petition is the only possible course of action.

    
    

23. Upon the foregoing, no ruling is necessary on the incongruity of the agency's motion to dismiss itself as a party.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Insurance enter a Final Order dismissing

the petition herein.

DONE AND ENTERED this 19th day of August, 1996, in Tallahassee, Florida.

ELLA JANE P. DAVIS, Hearing Officer Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 19th day of August, 1996.

COPIES FURNISHED:

Brian D. Solomon, Esquire Glenda L. Thornton, Esquire Post Office Box 1454 Tallahassee, Florida 32301

John Swyers, Esquire DEPARTMENT OF INSURANCE

200 East Gaines Street Tallahassee, Florida 32399-0333

Edward J. Kiley, Esquire

GROVE, JASKIEWICZ & COBERT, P.A.

1730 "M" Street, Northwest Suite 400

Washington, D.C. 20036-4579

Bill Nelson, State Treasurer and Insurance Commissioner

DEPARTMENT OF INSURANCE

The Capitol, Plaza Level Tallahassee, Florida 32399-0300

Dan Sumner, Esquire DEPARTMENT OF INSURANCE

The Capitol, PL-11

Tallahassee, Florida 32399-0300

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit to the agency written exceptions to this Recommended Order. All agencies allow each party at least ten days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the Final Order in this case concerning agency rules on the deadline for filing exceptions to 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: 96-001586

Orders for Case No: 96-001586