STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

JUDITH ALLEN AND EARL YEARICKS, ) d/b/a UNDERWATER MAINTENANCE ) SERVICES, )

)

Petitioners, )

)

vs. )

)

DEPARTMENT OF FINANCIAL ) SERVICES, DIVISION OF WORKERS' ) COMPENSATION, )

)

Respondent. )

Case No. 03-1476

)

RECOMMENDED ORDER

A final hearing was held in this case on July 14, 2003, at sites in Tallahassee and West Palm Beach, Florida, by video teleconference before Florence Snyder Rivas, an Administrative Law Judge of the Division of Administrative Hearings.

APPEARANCES

For Petitioners: Richard W. Glenn, Esquire

4 Harvard Circle, Suite 600 West Palm Beach, Florida 33409

For Respondent: Colin M. Roopnarine, Esquire

Department of Financial Services Division of Legal Services

200 East Gaines Street Tallahassee, Florida 32399-4229

STATEMENT OF THE ISSUE

Whether Petitioner failed to comply with coverage requirements of the workers' compensation law, Chapter 440, Florida Statutes, and if so, what penalty should be imposed.

PRELIMINARY STATEMENT

By Amended Stop Work and Penalty Assessment Order dated March 12, 2003, Respondent, the Department of Financial Services, Division of Workers’ Compensation (Respondent), alleged Petitioners, Judith Allen and Earl Yearicks d/b/a Underwater Maintenance Services (Petitioners), failed to secure workers’ compensation coverage for their workers.

Petitioners timely requested a hearing to contest the charge. Joint Exhibits 1-12 were received into evidence. The identity of witnesses and attendant rulings are set forth in the record of the proceedings. The transcript of the final hearing was filed on August 3, 2003. The parties sought and were granted an enlargement of time to August 22, 2003, to file proposed recommended orders. Proposed Recommended Orders and related memorandums of law were timely submitted and have been carefully considered in the preparation of this recommended order.

All citations are to are to Florida Statutes (2003) unless otherwise indicated.

FINDINGS OF FACT

1. Respondent is the state agency responsible for enforcing provisions of Florida law which require that employers secure workers’ compensation insurance coverage for their employees.

2. At all times material to this case, Petitioners owned and operated a business which provides marine-based services, including general diving and bridge demolition services.

3. On or about February 28, 2003, Petitioners, in the course and scope of operating their marine service business, employed welders to perform welding and related services on a public construction project, specifically, the Jensen Beach Causeway Bridge in Jensen Beach, Florida.

4. Petitioners were legally obligated to provide workers' compensation insurance for these welders in accordance with the provisions of Chapter 440.

5. By way of defense, Petitioners argued that Chapter 440 is unconstitutional as applied to the facts and circumstances of this case. More specifically, Petitioners contend that this forum and the Respondent lack the authority to enforce Chapter

   440 against Petitioners because of federal preemption under the Longshoremen and Harbor Workers’ Compensation Act (LAHCA). The tribunal has carefully considered this argument and finds it contrary to controlling case law.

6. The parties have stipulated that if the Stop Work and Penalty Assessment Order is valid, the correct amount of the penalty to be imposed by law is $150,968.00, based upon appropriate supporting tax and payroll records.

   CONCLUSIONS OF LAW

   
   

7. The Division of Administrative Hearings has jurisdiction over the subject matter. Sections 120.569 and 120.57(1).

8. Section 440.10(1)(a) provides:

   
   

   (1)(a) Every employer coming within the provisions of this chapter, including any brought within the chapter by waiver of exclusion or of exemption, shall be liable for, and shall secure, the payment to his or her employees, or any physician, surgeon, pharmacist providing services under the provisions of s. 440.13, of the compensation payable under ss. 440.13, 440.15, and

   440.16. Any contractor or subcontractor who engages in any public or private construction in the state shall secure and maintain compensation for his or her employees under this chapter as provided in s. 440.38.

   
   

9. In this case, Respondent has the burden of proving by a preponderance of the evidence that Petitioners have violated the workers’ compensation law, and that the penalty assessments were correct under the law. Department of Labor and Employment Security, Division of Workers’ Compensation v. Genesis Plumbing, Inc., DOAH Case No. 00-3749 (Rec. Order, paragraph 32) (Final Order, May 24, 2001); Department of Labor and Employment

   Security, Divisions of Workers’ Compensation v. Bobby Cox, Sr., d/b/a CH Well Drilling, DOAH Case No. 99-3854 (Rec. Order, paragraph 34)(adopted in part by Final Order, June 8, 2000); Department of Labor and Employment Security, Division of Workers’ Compensation v. Eastern Personnel Servs., Inc., DOAH Case No. 99-2048 (Rec. Order, paragraph 24)(Final Order, November 30, 1999), appeal dismissed, Case No. 1D99-4839 (1st DCA April 10, 2000).

10. The state has fulfilled its burden of proof.

    
    

    Petitioners admit they failed to provide workers' compensation insurance for their welders on or about February 28, 2003, and their constitutional and jurisdictional claims are unpersuasive.

11. The parties have stipulated, and the record supports, the conclusion that the penalty appropriately imposed in this

case is $150,968.00.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Respondent enter a Final Order confirming the Amended Stop Work and Penalty Assessment Order in the amount of $150,968.00.

DONE AND ENTERED this 10th day of September, 2003, in Tallahassee, Leon County, Florida.

S

FLORENCE SNYDER RIVAS

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 10th day of September, 2003.

COPIES FURNISHED:

Richard W. Glenn, Esquire

4 Harvard Circle, Suite 600 West Palm Beach, Florida 33409

Colin M. Roopnarine, Esquire Department of Financial Services Division of Legal Services

200 East Gaines Street Tallahassee, Florida 32399-4229

Honorable Tom Gallagher Chief Financial Officer

Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300

Mark Casteel, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300

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: 03-001476

Orders for Case No: 03-001476