STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. )

)

GMD CARPET, INC., )

)

Respondent. )

Case No. 04-2477

)

RECOMMENDED ORDER

A final hearing was conducted in this case on September 14, 2004, via video teleconference at sites in Tallahassee, and Fort Lauderdale, Florida, by Florence Snyder Rivas, an Administrative Law Judge of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Colin M. Roopnarine, Esquire

Department of Financial Services Division of Workers’ Compensation

200 East Gaines Street Tallahassee, Florida 32399-4229

For Respondent: Emmanuel Simone, Jr., pro se Debra Simone

GMD Carpet, Inc.

717 North 31st Avenue Hollywood, Florida 33021

STATEMENT OF THE ISSUE

Whether GMD Carpet, Inc., 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 Stop Work Order and Penalty Assessment dated May 21, 2004, the Department of Financial Services, Division of Workers’ Compensation (Petitioner) alleged that GMD Carpet, Inc., (Respondent or GMD) failed to secure workers’ compensation coverage for its workers. An Amended Order of Penalty Assessment (Amended Order) was issued on May 25, 2004, which changed the amount of the penalty assessment.

Respondent timely requested a hearing to contest the charge.

The identity of witnesses, exhibits and attendant rulings are set forth in the one-volume record of the proceedings which was filed on September 23, 2004.

The parties agreed to submit proposed recommended orders within ten days of the filing of the transcript. Petitioner requested and was granted an enlargement of time to October 7, 2004. Respondent has not filed a proposed recommended order.

References to sections are to the Florida Statutes (2004).

FINDINGS OF FACT

1. Petitioner is the state agency responsible for enforcing provisions of Florida law, specifically Chapter 440 of the Florida Statutes, which require that employers secure workers’ compensation coverage for their employees.

2. Respondent, whose principal is Emmanuel Simone, Jr. (Mr. Simone), is in the business of providing carpet installation services.

3. At all times material to this case, Respondent is an employer within the meaning of Section 440.02(16)(a), Florida Statutes.

4. At all times material to this case, Respondent was legally obligated to provide workers' compensation insurance in accordance with the provisions of Chapter 440, Florida Statutes, for Mr. Simone and four other individuals employed by GMD.

5. On or about May 21, 2004, Petitioner became aware that Mr. Simone and another GMD employee were working a carpet installation job in Broward County, Florida.

6. Upon inquiry, Petitioner accurately determined that GMD had not furnished the required coverage, and that there was no valid exemption from the coverage requirement.

7. Accordingly, on May 21, 2004, a Stop Work and Penalty Assessment Order was properly entered.

8. Thereafter, Petitioner reviewed Respondent's payroll records, which revealed that GMD employed three other individuals under circumstances which obliged Respondent to provide workers’ compensation for these employees.

9. Based upon Respondent's payroll records, Petitioner recalculated the penalty assessment to be imposed in accordance with the requirements of Chapter 440, and issued an Amended Order in the amount of $1,916.65 on May 25, 2004.

10. Respondent did not intend to violate the law. Rather, he mistakenly believed that he held a valid exemption; that his wife was not an employee, but rather a helper; and that the three other carpet installers were subcontractors to whom he had no insurance-related obligations.

11. It is undisputed that Petitioner correctly calculated the penalty prescribed by law in the amount of $1,916.65 based upon Respondent's records and applicable law.

    CONCLUSIONS OF LAW

    
    

12. The Division of Administrative Hearings has jurisdiction over the subject matter. §§ 120.569 and 120.57(1), Fla. Stat.

13. Section 440.10(1)(a), Florida Statutes, provides in relevant part:

    (1)(a) Every employer coming within the provisions of this chapter shall be liable for, and shall secure, the payment to his

    or her employees..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.

    
    

14. Pursuant to Sections 440.10 and 440.38, Florida Statutes, GMD was obliged to secure the payment of workers’ compensation for the benefit of its employees. At times relevant to this case, none of GMD's employees held valid workers’ compensation exemptions which would have relieved GMD of its obligation to provide workers’ compensation insurance.

15. GMD concedes and the record supports that the penalty set forth in the Amended Order was correctly calculated.

16. Petitioner has the burden of proving by a preponderance of the evidence that Respondent has violated the workers’ compensation law, and that the penalty assessment was 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).

17. The state has fulfilled its burden. Respondent's good faith but mistaken belief that it was not required to provide workers’ compensation insurance is not a legal defense, and cannot be considered in mitigation of the penalty to be assessed.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Petitioner enter a final order confirming the Stop Work Order and imposing a penalty in the amount of $1,916.65, as set forth in the Amended Order.

DONE AND ENTERED this 15th day of October, 2004, 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 15th day of October, 2004.

COPIES FURNISHED:

Colin M. Roopnarine, Esquire Department of Financial Services Division of Workers’ Compensation

200 East Gaines Street Tallahassee, Florida 32399-4229

Emmanuel Simone, Jr. Debra Simone

GMD Carpet, Inc.

717 North 31st Avenue Hollywood, Florida 33021

Honorable Tom Gallagher Chief Financial Officer

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

Pete Dunbar, 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: 04-002477

Orders for Case No: 04-002477