STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. )

) ALL CUSTOM HURRICANE SHUTTERS ) AND SECURITY, INC., )

)

Respondent. )

Case No. 03-2472

)

RECOMMENDED ORDER

Administrative Law Judge (ALJ) Daniel Manry conducted the administrative hearing in this proceeding on November 21, 2003, in Fort Myers, Florida, on behalf of the Division of Administrative Hearings (DOAH).

APPEARANCES

For Petitioner: Andrea L. Reino, Esquire

Department of Financial Services

200 East Gaines Street Tallahassee, Florida 32399-4229

For Respondent: Marshall L. Cohen, Esquire

Marshall L. Cohen, P.A. Post Office Box 60292

Fort Myers, Florida 33906-0292

STATEMENT OF THE ISSUES

The issues are whether Respondent maintained workers' compensation coverage for certain employees, and, if not, what penalty, if any, should be imposed.

PRELIMINARY STATEMENT

On June 3, 2003, Petitioner issued Stop Work and Penalty Assessment Order Number 03-081-D7 (the Order), alleging that Respondent failed to abide by the requirements of the Workers' Compensation Law on that date. The Order required Respondent to cease business operations and assessed separate penalties of

$100.00 and $1,000.00, pursuant to Section 440.107(5) and (7), Florida Statutes (2002), respectively. Petitioner subsequently amended the amount of the fine to $11,547.56 pursuant to Amended Stop Work and Penalty Assessment Order Number 03-081-D7-3 (the Amended Order). Respondent timely requested an administrative hearing.

At the hearing, Petitioner presented the testimony of one witness, and submitted three exhibits for admission into evidence. Respondent presented the testimony of its president and sole shareholder, and submitted no exhibits for admission into evidence. The identity of the witnesses and exhibits and any rulings regarding each are reported in the one-volume Transcript of the hearing filed with DOAH on February 10, 2004.

Petitioner timely filed its proposed recommended order (PRO) on March 10, 2004. Respondent did not file a PRO.

FINDINGS OF FACT

1. Petitioner is the state agency responsible for enforcing the statutory requirement that employers secure the payment of workers' compensation for the benefit of their employees. § 440.107, Fla. Stat. (2002). Respondent is a corporation domiciled in Florida and engaged in the business of installing motorized aluminum hurricane shutters and security systems.

2. On June 3, 2003, four of Respondent's workers installed aluminum shutters on a single-family residence located at

   20799 Wheelock Drive, No. 909, Heron's Glen, North Fort Myers, Florida. Respondent did not have workers' compensation insurance for the four employees. In addition, Respondent failed to maintain workers' compensation coverage for the benefit of ten employees from June 21, 2002, through June 27, 2003 (the relevant period).

3. Respondent stipulated that Respondent was an employer during the relevant period, and that Respondent failed to maintain workers' compensation coverage for five employees identified in the record as Ricardo Mendez, Pedro Rojas, Willie Marrow, Eric Mendez, and Izarate Cartas. Respondent further

   stipulated that Petitioner correctly assessed the penalty amounts for those employees.

4. The remaining five individuals that Respondent contends were not employees are identified in the record as Jessica Mendez, Gelacio Zarate, Manual Mendez, Jesus Espinoza, and David Mobley. Respondent asserts, in relevant part, that these individuals were "casual labor" and not "employees" within the meaning of Section 440.02(15)(d)5, Florida Statutes (2002).

5. Under the Workers' Compensation Law in effect on June 21, 2002, an "employee" did not include a person if the

   employment satisfied the conjunctive requirements of being casual and not in the course of the trade, business, profession, or occupation of the employer. § 440.02(15)(d)5, Fla. Stat. (2002). Section 440.02(5), Florida Statutes (2002), defined the term "casual," in relevant part, to be work that satisfied the conjunctive requirements of being completed in ten working days or less, without regard to the number of persons employed, and at a total labor cost of less than $500.

6. Ms. Mendez and Mr. Zarate were Respondent's employees during the relevant period. Respondent paid each more than

   $500, and each individual performed services that were in the course of the trade, business, profession, or occupation of Respondent.

7. Ms. Mendez worked as an assistant to the wife of the president and sole shareholder of Respondent. The wife maintained accounts and pulled permits for Respondent.

   Ms. Mendez assisted the wife by answering telephone calls and accompanying the wife when the wife pulled permits for Respondent. Respondent paid Ms. Mendez $760 during the relevant period.

8. Respondent paid Mr. Zarate $800 during the relevant period to help build large roll-down, accordion, or panel shutters. Building shutters is an activity required in the course of Respondent's business.

9. Mr. M. Mendez and Mr. Espinoza were Respondent's employees during the relevant period. Although Respondent paid each person less than $500, Mr. M. Mendez and Mr. Espinoza each performed cleanup work for Respondent. The amount of cleanup required depended on the number of roll-down shutter installations Respondent had at a given time. Constructing roll-down shutters produces a lot of paper and scraps that must be cleaned up to keep the shop clean. Mr. M. Mendez and

   Mr. Espinoza each performed services directly related to the construction of shutters by Respondent.

10. Respondent argues that Mr. Mobley was either casual labor or an independent contractor. Mr. Mobley did not satisfy the statutory requirements for either classification.

11. Mr. Mobley did not satisfy the requirements for casual labor. Mr. Mobley was an electrician who installed motorized shutters for Respondent. Mr. Mobley secured electrical permits needed for Respondent to do the electrical work essential to Respondent's business. Mr. Mobley accompanied Respondent's president to the construction site, ran the electrical, and wired the motor for the shutter that Respondent was assembling. Although Mr. Mobley worked for Respondent for only three days, Respondent paid Mr. Mobley approximately $1,200.

12. Under the Workers' Compensation Law in effect during the relevant period, Section 440.02(15)(c), Florida Statutes (2002), required an "independent contractor" to satisfy all of the following requirements in Section 440.02(15)(d)1, Florida Statutes:

    1. The independent contractor maintains a separate business with his or her own work facility, truck, equipment, materials, or similar accommodations;

       
       

    2. The independent contractor holds or has applied for a federal employer identification number, unless the independent contractor is a sole proprietor who is not required to obtain a federal employer identification number under state or federal requirements;

       
       

    3. The independent contractor performs or agrees to perform specific services or work for specific amounts of money and controls the means of performing the services or work;

    4. The independent contractor incurs the principal expenses related to the service or work that he or she performs or agrees to perform;

       
       

    5. The independent contractor is responsible for the satisfactory completion of work or services that he or she performs or agrees to perform and is or could be held liable for a failure to complete the work or services;

       
       

    6. The independent contractor receives compensation for work or services performed for a commission or on a per-job or competitive-bid basis and not on any other basis;

       
       

    7. The independent contractor may realize a profit or suffer a loss in connection with performing work or services;

       
       

    8. The independent contractor has continuing or recurring business liabilities or obligations; and

       
       

    9. The success or failure of the independent contractor's business depends on the relationship of business receipts to expenditures.

       
       

13. Mr. Mobley satisfied some of the definitional elements of an independent contractor. He maintained a separate business as a sole proprietor not required to obtain a federal identification number, and incurred principal expenses related to the service or work he performed for Respondent.

14. There is insufficient evidence to find that Mr. Mobley satisfied the remaining requirements for an independent contractor. The evidence was insufficient to show that

    Mr. Mobley could be held liable for failure to complete the work or services he performed for Respondent, had continuing or recurring business obligations, or that the success or failure of his business depended on the relationship of receipts to expenditures. The evidence is clear that Mr. Mobley would not have performed work for Respondent if he were to have suffered a loss.

15. Mr. Mobley was Respondent's employee during the relevant period. Mr. Mobley failed to satisfy the definition of either casual labor or an independent contractor.

    CONCLUSIONS OF LAW

    
    

16. DOAH has jurisdiction pursuant to Sections 120.57(1) and 120.569, Florida Statutes (2003). The parties received adequate notice of the administrative hearing.

17. Petitioner has the burden of proof in this case.

    
    

    Petitioner must show by a preponderance of the evidence that Respondent violated the Workers' Compensation Law during the relevant period and that the penalty assessments are correct. Department of Labor and Employment Security, Division of Workers' Compensation v. Bobby Cox, Sr., d/b/a C H Well Drilling, DOAH Case No. 99-3854 (Recommended Order para.

    34)(adopted in part by Final Order June 8, 2000); Department of

    
    

    Labor and Employment Security, Division of Workers' Compensation v. Eastern Personnel Services, Inc., DOAH Case No. 99-2048

    (Recommended Order para. 24)(adopted by Final Order Nov. 30, 1999), appeal dismissed, Case No. 1D99-4839 (Fla. 1st DCA April 10, 2000); § 120.57(1)(j), Fla. Stat. (2002).

18. Petitioner satisfied its burden of proof. During the relevant period, Respondent was an "employer" engaged in the construction industry and failed to maintain workers' compensation coverage for ten employees. The assessed penalties are correct.

RECOMMENDATION

Based on the Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order that

affirms, approves, and adopts the Amended Stop Work and Penalty Assessment Order.

DONE AND ENTERED this 9th day of April, 2004, in Tallahassee, Leon County, Florida.

S

DANIEL MANRY

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 9th day of April, 2004.

COPIES FURNISHED:

Marshall L. Cohen, Esquire Marshall L. Cohen, P.A. Post Office Box 60292

Fort Myers, Florida 33906-0292

Andrea L. Reino, Esquire Department of Financial 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: 03-002472

Orders for Case No: 03-002472