CHISTATE OF FLORIDA “We 0 66 2009 . Chief Financial Offi IN THE MATTER OF: Docketed by: PERFECTION PLUS SERVICES, INC. Case Number: 100739-08-WC FINAL ORDER THIS PROCEEDING came on for final agency action and Alex Sink, Chief Financial _ Officer of the State of Florida, or her designee, having considered the record in this case, including the Amended Orders of Penalty Assessment served in Division of Workers’ Compensation Case No. 07-018-D1, and being otherwise fully advised in the premises, hereby finds that: 1. On February 19, 2007, the Department of Financial Services, Division of Workers’ Compensation (hereinafter “Department”) issued an Order of Penalty Assessment in Division of Workers’ Compensation Case No. 07-018-D1-OPA to PERFECTION PLUS SERVICES, INC. The Order of Penalty Assessment assessed a total penalty of $854,941.30 against PERFECTION PLUS SERVICES, INC. The Order of Penalty Assessment included a Notice of Rights wherein PERFECTION PLUS SERVICES, INC. was advised that any request for an administrative proceeding to challenge or contest the Order of Penalty Assessment must be filed within twenty-one (21) days of receipt of the Order of Penalty Assessment in accordance with Sections 120.569 and 120.57, Florida Statutes. 2. On February 23, 2007, the Order of Penalty Assessment was served by certified mail on PERFECTION PLUS SERVICES, INC. A copy of the Order of Penalty Assessment is attached hereto as “Exhibit A” and incorporated herein by reference. * 3. PERFECTION PLUS SERVICES, INC. timely served a petition for hearing on the Department on February 28, 2007. 4. On March 6, 2007, the Department issued a second Amended Order of Penalty Assessment in Case No. 07-018-D1-AOPA to PERFECTION PLUS SERVICES, INC. The second Amended Order of Penalty Assessment assessed a total penalty of $577,692.74 against PERFECTION PLUS SERVICES, INC. 5. On March 8, 2007, the Amended Order of Penalty Assessment was served on PERFECTION PLUS SERVICES, INC. by certified mail. A copy of the second Amended Order of Penalty Assessment is attached hereto as “Exhibit B” and incorporated herein by reference. 6. The petition for hearing was forwarded to the Division of Administrative Hearings on March 15, 2007, where it was assigned Division of Administrative Hearings Case Number 07-1252. 7. On August 24, 2007, the Department issued an Amended Order of Penalty Assessment in the amount of $567,100.19 in Case No. 07-018-D1-AOPA-B. The Amended Order of Penalty Assessment assessed a total penalty of $567,100.19 against PERFECTION PLUS SERVICES, INC. A copy of the Amended Order of Penalty Assessment is attached hereto as “Exhibit C” and incorporated herein by reference. 8. On October 8, 2007, the Division of Administrative Hearings entered an Order Granting Motion to Amend Order of Penalty Assessment, amending Petitioner’s penalty to $567,100.19. A copy of the Order Granting Motion to Amend Order of Penalty Assessment is attached hereto as “Exhibit D” and incorporated herein by reference. 9. On January 14, 2008, PERFECTION PLUS SERVICES, INC. filed a memorandum with the Division of Administrative Hearings, requesting that the proceedings involving Division of Administrative Hearings Case Number 07-1252 be terminated, and that proceedings pursuant to section 120.57(2), Florida Statutes, be initiated. 15. On November 24, 2008, PERFECTION PLUS SERVICES, INC. submitted a petition for formal hearing to the Department, citing disputed issues of material fact with regards to the Amended Order of Penalty Assessment and requesting a formal hearing. The petition for hearing was forwarded to the Division of Administrative Hearings on December 4, 2008, where it was assigned Division of Administrative Hearings Case Number 08-6022. A copy of the petition for formal hearing is attached hereto as “Exhibit J” and incorporated herein by reference. 16. On January 12, 2009, PERFECTION PLUS SERVICES, INC. submitted a Withdrawal of Request for Hearing to the Division of Administrative Hearings. The Withdrawal of Request for Hearing withdrew Petitioner’s request for hearing from the Division of Administrative Hearings. A copy of the Withdrawal of Request for Hearing is attached hereto as “Exhibit K” and incorporated herein by reference. 17. On January 13, 2009, the Division of Administrative Hearings issued an Order Closing File, closing the file in Division of Administrative Hearings Case Number 08-6022 and relinquishing jurisdiction to the Department. A copy of the Order Closing File is attached hereto as “Exhibit L” and incorporated herein by reference. FINDINGS OF FACT 18. The factual allegations contained in the 4" Amended Order of Penalty Assessment issued on October 14, 2008, which is fully incorporated herein by reference, are hereby adopted as the Department’s Findings of Fact in this case. CONCLUSIONS OF LAW 19. Based upon the Findings of Fact adopted herein, the Department concludes that PERFECTION PLUS SERVICES, INC. violated the specific statutes and rules alleged in the 4a Amended Order of Penalty Assessment and hereby adopts the violation(s) charged in the 4a Amended Order of Penalty Assessment as the Conclusions of Law in this case. PENALTY IMPOSED 20. The dismissal of the petition for hearing submitted in reference to the 4 Amended Order of Penalty Assessment, taken together with the Findings of Fact and Conclusions of Law adopted herein, constitute grounds for the Chief Financial Officer to impose the penalty and order the cessation of business operations as set forth herein. IT IS THEREFORE ORDERED that: PERFECTION PLUS SERVICES, INC. shall immediately pay the total penalty of $553,382. 16 in full to the Department of Financial Services for deposit into the Workers’ Compensation Administration Trust Fund. DONE and ORDERED this __@ _ day of Wad , 2009. BRIAN LO! DEPUTY CHIEF FINANCIAL OFFICER NOTICE OF RIGHTS Any party to these proceedings adversely affected by this Order is entitled to seek review of this Order pursuant to Section 120.68, Florida Statutes, and Rule 9.110, Florida Rules of Appellate Procedure. Review proceedings must be instituted by filing a Notice of Appeal with the General Counsel, acting as the agency clerk, at 612 Larson Building, Tallahassee, Florida 32399-0333, and a copy of the same and filing fee with the appropriate District Court of Appeal within thirty (30) days of rendition of this Order. COPIES FURNISHED TO: WILLIAM PANGRASS FLORIDA DEPARTMENT OF FINANCIAL SERVICES BUREAU OF COMPLIANCE 111 NE 25™ AVENUE SUITE 403 OCALA, FLORIDA 34470 PERFECTION PLUS SERVICES, INC. 833 CR 466A FRUITLAND PARK, FLORIDA 34731 THE HONORABLE HARRY L. HOOPER ADMINISTRATIVE LAW JUDGE DIVISION OF ADMINISTRATIVE HEARINGS THE DESOTO BUILDING 1230 APALACHEE PARKWAY TALLAHASSEE, FLORIDA 32399-3060 STATE OF FLORIDA, DEPARTMENT OF FINANCIAL SERVICES DIVISION OF WORKERS' COMPENSATION >| ORDER OF PENALTY ASSESSMENT NO.: 07-018-D1-OPA - OPA EMPLOYER NAME: PERFECTION PLUS SERVICES INC ISSUANCE DATE: FEIN: 59-3751585 2/19/200' EMPLOYER ADDRESS: 833 CR 466A CITY: FRUITLAND PARK STATE: FL ZIP: 34731 INDUSTRY OF EMPLOYER: fw Construction {_] Non-construction Agriculture ORDER OF PENALTY ASSESSMENT On 10/16/2006 , the Division of Workers’ Compensation commenced an investigation of the above-referenced Employer pursuant to section 440.107, F.S. and Rule 69L-6.030, Florida Administrative Code, by [im] conducting an on- site inspection of the empioyer’s worksite or business location, or by [_] the Employer's receipt of a written request to produce business records from the Division. On the date the investigation commenced, the Employer was not in compliance with the coverage requirements of section 440, F.S. Specifically, the Employer was committing the following violation(s) as described in section 440.107(2), F.S.: fi] failing to obtain coverage that meets the requirements of Chapter 440, F.S., and the Insurance Code; (] materially understating or concealing payroll; LJ materially misrepresenting or. concealing employee duties so as to avoid proper classification for premium calculations; (1 materially misrepresenting or concealing information pertinent to the computation and application of an experience tating modification factor. Prior to the Division's issuing a Stop-Work Order against the Employer with regard to the above violation(s), the Employer came into compliance with the coverage requirements of Chapter 440, F.S. Pursuant to Rule 69L-6.030, Florida Administrative Code, when an investigation commenced by the department pursuant to section 440.107, F.S., reflects that, on the date the investigation commences, the employer is failing to secure the payment of workers’ compensation, is materially understating or concealing payroll, is materially understating or concealing employee duties-so as to avoid proper classification for premium calculations, or is materially misrepresenting or concealing information pertinent to the computation and application of an experience rating modification factor, but the employer comes into compliance with the workers’ compensation coverage requirements prior to the issuance of a stop work order; the employer shall be assessed a penaity pursuant to section 440.107(7)(d)1, F.S. The Division of Workers’ Compensation hereby assesses the penaity(s) as specified in the Penalty Worksheet, which is attached hereto and made a part hereof. itis hereby ORDERED that the Employer is assessed a TOTAL PENALTY of $ 854,941.30 “The Employer shall pay the TOTAL PENALTY by money order or cashier's check, made payable to the DFS-Workers’ Compensation Administration Trust Fund. Pursuant to section 440.107(11), F.S, the Department may initiate lien proceedings to collect any penalty due that has not been paid. In addition, the Department may refer any unpaid penalty that is due to a collection agency for the initiation of proceedings to collect the unpaid penaity. CERTIFICATE OF SERVICE Pursuant to section 440.107(4), F.S., William L Pangrass, Workers' Compensation Investigator (print name and tile Gf Server) served a true copy of this Order of Penalty Assessment: oO By personal service: Date: ; Time: ; Server: w By certified mail: Date: Yt /e 7 - Time: Article: 706 OF10 Duk 770 bre EXHIBIT / 1A pout NOTICE OF RIGHTS You, the Employer, have a right under sections 120.569 and 120.57, F.S., to initiate proceedings by filing a written petition for hearing. If you dispute a material fact contained in this Order of Penalty Assessment, you are entitled to a hearing under section 120.57(1), F.S., at which you may be represented by counsel, present evidence and argument on the issue(s), examine witnesses, submit a proposed recommended order, and file exceptions to the recommended order of the administrative law judge. if you do not dispute a material fact contained in this Order of Penalty Assessment, you are entitled to a hearing under section 120.57(2), F.S., at which you may be represented by counsel, present documentary evidence, and present a written statement in opposition to this Order of Penalty Assessment. A petition for a hearing under section 120.57 F.S., must conform to rules 28-106.201(2) and 28-106.301(2), Florida Administrative Code. The petition shall contain a) the name and address of each agency affected and each agency's file or identification number, if known; b) the name, address, and telephone number of the petitioner; the name, address, and telephone number of the petitioner's representative, if any, and an explanation of how the petitioner's substantial interests will be affected by the agency determination; c) a statement of when and how the petitioner received notice of the agency decision; d) if you dispute a material fact, a statement of all disputed issues of material fact (if there are none, then the petition must so indicate), and if you do not dispute a material fact, a concise statement of ultimate facts alleged, including the specific facts the petitioner contends warrant reversal or modification of the agency's proposed action; e) a concise statement of the ultimate facts alleged, including the specific facts the petitioner contends warrant reversal or modification of the agency's proposed action; f) a statement of the specific rules or statutes the petitioner contends require a reversal or modification of the agency's proposed action; and g) a statement of the relief sought by the petition with respect to the agency's proposed action. You must file a petition for hearing so that it is received by the Division at the address identified below, within twenty-one (21) days of receipt of this Order of Penalty Assessment. FAILURE TO FILE A PETITION FOR HEARING WITHIN THE TWENTY-ONE (21) DAYS OF RECEIPT OF THIS ORDER OF PENALTY ASSESSMENT CONSTITUTES A WAIVER OF YOUR RIGHT TO REQUEST A HEARING. Mediation under section 120.573, F.S., is not available. ISSUING AGENCY NAME AND ADDRESS Division of Workers’ Compensation, Bureau of Compliance: 921N Davis St. Bldg. B, suite 250 Jacksonville, Fl. 32209 Attn: Robert Lambert, Workers’ Compensation District Supervisor Telephone: (904) 798-5806 January 3, 2006 Sth _ =v . 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BEB ey ey 2 ra Ale as > BOs E Re 3 oA Soe | ale = Eee a Bus a\s Mm Seees| wR TS 8ls ounve-14'290 z ae 2 = 2 = & < % 5 * EOP-OUNS "BAY “AST “AN TUT & 224 Re 5 = — & va 8 E rc aourijdiod Jo Neaingy 5 2 are 5 oe é hs} 2 PN iN — & 2 uonesusdu0) SIDA JO uOISIAIC] Ol © Ebees i Oo 25 msGe isl) SER E ale c eer 2+ 3 —E 4 ; By cee as|§ adc ER|E sioiuas WIDNYNA We S8E825\2 |e we he : varuols i STATE“ -ORIDA, DEPARTMENT OF FINANC’ IRVICES DIVISION OF WORKERS' COMPENSA\ UN ORDER OF PENALTY ASSESSMENT NO.: 07-018-D1-AOPA EMPLOYER NAME: Perfection Plus Services, Inc. ISSUANCE DATE: 03/06/07 FEIN: 59-3751585 BUSINESS ADDRESS: 833 CR-466A CITY: Fruitland Park : STATE: Fl. AMENDED ORDER OF PENALTY ASSESSMENT The Division of Workers’ Compensation issued an Order of Penalty Assessment against the above-referenced Employer on 02/19/07. Pursuant to Rule 69L-6.030, Florida Administrative Code, the Order of Penalty Assessment assessed a penalty against the employer pursuant to section 440.107(7)(d)1, F.S. Based ‘upon To correct clerical errors & incorporate subsequently received information, the Division hereby amends the Order of Penalty Assessment issued on 02/19/07 and assesses the penaity(s) as specified in the Penalty Worksheet, which is attached hereto and made a part hereof. It is ORDERED that the Employer is hereby assessed a TOTAL PENALTY of $ 577,692.74. The penalty(s) assessed herein supersedes any penalty(s) previously assessed in this case. The Employer shall pay the TOTAL PENALTY by money order or cashier's check, made payable to the DFS-Workers' Compensation Administration Trust Fund, or enter into a Payment Agreement Schedule for Periodic Payment of Penalty with the Division of Workers’ Compensation. If the total penalty assessed in this Amended Order of Penalty Assessment is less than the total penalty assessed in the Order of Penalty Assessment issued on 02/19/07, the Division will mail a refund in the amount of the difference to the Employer. Pursuant to section 440.107(11), F.S, the Department may initiate lien proceedings to collect any penalty due that has not been paid. In addition, the Department may refer any unpaid penalty that is due to a collection agency for the initiation of proceedings to collect the unpaid penalty. CERTIFICATE OF SERVICE |. ed t Pursuant to section 440.107(4), F.S., William Pangrass Workers’ Compensation Investigator. print name and title of server) served a true copy of this Amended Order of Penalty Assessment: (1 By personal service: Date: _- ; Time: ; Server: of = ; 9) [A By certified mail: Date: hk Ko ; Time: 5 Article: WEP G/e . 2? aapnl 7Hes Jo? 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ESS se, Ej 21 wey way wareysP SseuppE LANTEP I “Od \ \ \ i \ Ee ae i +s é 8 3 o€ é ws 8 Os Wg ms oals o iy ese o 2 no § rs g pus & 88 88 & mou 3 Be BE g org ae 2 mo 8 ° ge ge ef Hed Puen abe ze 38 voor £8 DOs & tg Pigg sng uoroa}10d Burpy eined eumeusig VW eyojdwioo osiy “e pue ‘g ‘b SUE} OF NOILOZS SIHL ALATdWOO AYZAIIAG NO NOILOZS SIHL aLAIdNOD pasojous juswssassy Ayjeuad JO JoplO papustuy . vonesuados SIs JO "AIM ~ panied parunse OLbbe Td ‘8120 EOP-aUNS “SAY ACZ “GN ILIT souetjduso; jo neang uonesuadiiod ,S19x04 JO UOIS}AIT SIOIAMAS TVIDNYNIA aA dO IN3W1Lvd30 vaiuol USPS - Track & Confirm Page 1 of 1 got UNITED STATES POSTAL SERVICE» Home | Help Track & Confirm Search Results Label/Receipt Number: 7006 0810 0006 7401 7023 Status: Delivered Track & Confirm Enter Label/Receipt Number. Your item was delivered at 1:38 pm on March 08, 2007 in FRUITLAND PARK, FL 34731. A proof of delivery record may be available through your local Post Office for a fee. . é Additional information for this item is stored in files offline. "Restore Oitfine Detaits>) (3) {Return ta USPS.com Hame > Site Map. Contact. Us Forms. Gov't Services, dabs. Privacy. Policy. Terms of Use National & Premier Accounts Sel | Sopyright® 1399-2007 USPS. All Rights Reserved. http://trkenfrm1 smi.usps.com/PTSInternet Web/InterLabellnquiry.do 2/17/2009 STATE OF Ff ‘IDA, DEPARTMENT OF FINANCIAL SE_ ICES DivislION OF WORKERS' COMPENSATION EMPLOYER NAME: Perfection Plus Services, Inc. ORDER OF PENALTY ASSESSMENT NO:: 07-018-D1-AOPA-B FEIN: 59-3751585 ISSUANCE DATE: 08/24/2007 BUSINESS ADDRESS: 833 CR-466A CITY: Fruitland Park ; STATE: Fl. ZIP: 34731 AMENDED ORDER OF PENALTY ASSESSMENT The Division of Workers' Compensation issued an Order of Penalty Assessment against the above-referenced Employer on 03/06/2007. Pursuant to Rule 69L-6.030, Florida Administrative Code, the Order of Penalty Assessment assessed a penalty against the employer pursuant to section 440.107(7)(d)1, F.S. Based upon recalculation of penalty due to_subsequently received _ information, the Division hereby amends the Order of Penalty Assessment issued on 03/06/07 and assesses the penaity(s) as specified in the Penalty Worksheet, which is attached hereto and made a part hereof. it is ORDERED that the Employer is hereby assessed a TOTAL PENALTY of $ 567,100.19. The penalty(s) assessed herein supersedes any penalty(s) previously assessed in this case. The Employer shall pay the TOTAL PENALTY by money order or cashier's check, made payable to the DFS-Workers' Compensation Administration Trust Fund, or enter into a Payment Agreement Schedule for Periodic Payment of Penalty with the Division of Workers’ Compensation. : If the total penalty assessed in this Amended Order of Penalty Assessment is less than the total penalty assessed in the Order of Penalty Assessment issued on 03/06/07, the Division will mail a refund in the amount of the difference to the Employer. Pursuant to section 440.107(11), F.S, the Department may initiate lien proceedings to collect any penalty due that has not been paid. In addition, the Department may refer any unpaid penalty that is due to a collection agency for the initiation of proceedings to collect the unpaid penalty. CERTIFICATE OF SERVICE Pursuant to section 440.107(4), F.S., William Pangrass Workers’ Compensation vestgatr, “jl Lon an Print name and title of server) served a true copy of this Amended Order of Penalty Assessment: CI By personal service: Date: ; Time: ; Server: C1 By certified mail: Date: ; Time: ; Article: EXHIBIT “ January 3, 2006 i CC. (4)(P)204 ObPS ‘000L$ Jo (5) ULUNjOD JapuN AljeUad JO J8}B8I9) ayn G"} Jo s0}92) A1oynyeys Aq por “(92201 Ort) ‘SL Aq pandninw's’3 (z)zLOvp's Ul pauyap se aBem Apjaom aBeiane apmaje}s ay) aq 0} payndui 8q NeYs Worked ‘oiAed sohojduia at) SULWUA}ap 0} JUaWLedeq au) ajqeus oO} jUB|DIYNS spiodeJ ssouIsNq eplAoid OF payiey sey taAojdwa ous} y oo'ove | eoozerer | coor] coos |. 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ORDER GRANTING MOTION TO AMEND ORDER OF PENALTY ASSESSMENT On September 28, 2007, Respondent filed a Motion to Amend Order of Penalty Assessment. On October 1, 2007, Petitioner filed a response in opposition to the motion. On October 5, 2007, Respondent filed a second copy of the motion, together with a copy of the proposed Amended Order of Penalty Assessment. Upon review of the file, it is ORDERED: The Motion to Amend Order of Penalty Assessment is hereby granted. DONE AND ORDERED this 8th day of October, 2007, in Tallahassee, Leon County, Florida. SUZANNE F. HOOD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Fiorida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us EXHIBIT i Dp Filed with the Clerk of the Division of Administrative Hearings this 8th day of October, 2007. COPIES FURNISHED: Douglas D. Dolan, Esquire Department of Financial Services Division of Legal Services 200 East Gaines Street Tallahassee, Florida 32399 Darrin J. Kling Perfection Plus Services, 833 County Road 466A Fruitland Park, Florida Inc. 34731 TIO AMIE 5? % , 07 OC STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS PERFECTION PLUS SERVICES, INC., Petitioner, Case No. 07-1252 Vs. DEPARTMENT OF FINANCIAL SERVICES, DIVISION OF WORKERS’ COMPENSATION, : Respondent. ORDER CLOSING FILE This cause having come before the undersigned on Petitioner’s Memo filed on January 14, 2008, and the undersigned being fully advised, it is, therefore, ORDERED that the file of the Division of Administrative Hearings in the above-captioned matter is hereby closed. Jurisdiction is hereby relinquished to the Department of Financial Services, Division of Workers’ Compensation. DONE AND ORDERED this 14th day of January, 2008, in Tallahassee, Leon County, Florida. =. oan SUZANNE F. HOOD 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 14th day of January, 2008. EXHIBIT E tabbies COPIES FURNISHED: Douglas D. Dolan, Esquire Department of Financial Services Division of Legal Services 200 East Gaines Street Tallahassee, Florida 32399 Darrin J. Kling Perfection Plus Services, Inc. 833 County Road 466A Fruitland Park, Florida 34731 CHIEF FINANCIAL OFFICER STATE OF FLORIDA IN THE MATTER OF: CASE NO. 07-018-D1-AOPA-B Perfection Plus Services, Inc. / WRITTEN REPORT AND RECOMMENDED ORDER This cause came on to be heard pursuant to the provisions of Sections 120.569 and 120.57(2), Florida Statutes, via written submissions. This is a proceeding to enforce the requirement under the Workers’ Compensation Law that employers secure workers’ compensation coverage for their employees that complies with the Workers’ Compensation Law and the Florida Insurance Code. The purpose of the proceeding was to receive documentary evidence and testimony as to whether Perfection Plus Services, Inc., a Florida corporation (hereinafter “Employer”), is entitled to mitigation of the agency action taken by the Department of Financial Services, Division of Workers’ Compensation (hereinafter “Division”), wherein the Division issued a Stop-Work Order, Order of Penalty Assessment, and an Amended Order of Penalty Assessment charging Employer with failure to abide by that requirement and assessed statutory penalties in the amount of five hundred sixty-seven thousand one hundred dollars and nineteen cents ($567,100.19). APPEARANCES W. S. Kling 3 Perfection Plus Services, Inc. = 833 CR 466A 2 ae Fruitland Park, Florida 34731 3 a a : Sun = Petitioner, Pro Se es a an2 EXHIBIT Case No.: 07-018-D1-AOPA-B 3 WRITTEN REPORT AND RECOMMENDED ORDER 3 Ee Page 1 of 10 Douglas D. Dolan, Esq. Department of Financial Services Division of Legal Services 200 East Gaines Street Tallahassee, Florida 32399-4229 Attorney for Division | BACKGROUND On October 16, 2006, after a preliminary investigation involving individuals working at 17 Dogwood Drive Course, Florida, the Division issued a Stop-Work Order upon a determination that the.Employer was not in compliance with the coverage requirements of the Workers’ Compensation Law (Chapter 440, Florida Statutes) and the Florida Insurance Code (Chapters 624-632, 634, 635, 636, 641, 642, 648, and 651, Florida Statutes). Employer was subsequently released from the Stop- Work Order of October 16" upon determination that Employer came into compliance prior to its issuance. On October 16, 2006, the Division issued a Request for Production of Business Records for Penalty Assessment Calculation to the Employer. Employer did not produce the requested records within the time required by law. On November 6, 2006, the Division issued Stop- Work Order Number 06-377-D1 requiring Employer to cease business operations for failure to produce the required records. This Stop-Work Order was released upon the production of the records by the Employer to the Division. Following a review of the records and a determination by the Division of past periods of non-compliance within the previous three years, the Division issued Order of Penalty Assessment Number 07-018-D1-OPA assessing a penalty of eight hundred fifty-four thousand nine hundred forty-one dollars and thirty cents ($854,941.30) for Employer's failure to abide by the coverage requirements. On February 28, 2007, the Employer filed an untitled document (hereinafter “Petition for Hearing”) requesting a hearing under section 120.57(1), Florida Statutes, disputing Case No.: 07-018-D1-AOPA-B WRITTEN REPORT AND RECOMMENDED ORDER Page 2 of 10 a issues of material fact. The matter was referred to the Division of Administrative Hearings for proceedings pursuant to sections 120.569 and 120.57(1), Florida Statutes. Following an Order Granting Motion to Amend Order of Penalty Assessment, the Division issued Amended Order of Penalty Assessment Number 07-01 8-D1-AOPA-B assessing a penalty of five hundred sixty-seven thousand one hundred dollars and nineteen cents ($567,100.19) on August 24, 2007. On January 14, 2008, the Employer filed its Request to Terminate Hearing Under Section 120.57(1), F.S. and Request for Hearing Under Section 120.57(2), FS. The Request asserted that the disputed issues of material fact in the matter had been resolved. On January 14, 2008, the ‘presiding officer at the Division of Administrative Hearings issued an Order Closing File relinquishing jurisdiction over the matter to the Department of Financial Services. Thereafter, the matter was referred to the undersigned Hearing Officer, who issued a Notice of Assignment and Order. The referral to the undersigned included documents that are statutorily part of the record pursuant to section 120.57(2)(), Florida Statutes. Record evidence received at the time of referral included the charging documents, penalty calculation worksheet, Petition for Hearing, written statements, and the decisions of the presiding officer at the Division of Administrative Hearings. Pursuant to election by the parties, the hearing in this matter was conducted via written submissions. The Division and the Employer timely filed their written submittals. EXHIBITS AND WITNESSES The Employer filed the following Exhibits: Attachment 1 — Copies of Notes from a Meeting with William Pangrass on November 20, 2007 at 10:00 AM Attachment 2 — Page Number 5 of the Penalty Calculation Worksheet for DWC Case Number 07-018-D1-OPA Case No.: 07-018-D1-AOPA-B WRITTEN REPORT AND RECOMMENDED ORDER Page 3 of 10 The Department filed a Proposed Recommended Order and the following Exhibits: Exhibit A — Initial Investigative Reports in Case Number 07-018-D1-OPA and Case Number 06-377-D1 Exhibit B — Request for Production of Business Records for Penalty Assessment Calculation Exhibit C — Employer Payroll Records Exhibit D — Coverage and Compliance Automated System (CCAS) screen prints Exhibit E — Order of Penalty Assessment Number 07-018-D1-OPA, with calculation worksheet Exhibit F — Petition for Hearing, with attachments Exhibit G— Amended Order of Penalty Assessment Number 07-018-D1-AOPA-B, with calculation worksheet Exhibit H - Order Granting Motion to Amend Order of Penalty Assessment Exhibit I - Request to Terminate Hearing Under Section 120.57(1), F.S. and Request for Hearing Under Section 120.57(2), F.S. Exhibit J — Order Closing File Via several filings, the Employer objected to the evidence filed by the Division as non- compliant with the timelines established in the Scheduling Order issued in this matter and requesting the exclusion of the Division’s evidence. On April 29, 2008, the undersigned issued an Order denying the relief requested by the Employer. FINDINGS OF FACT 1. The material facts are not in dispute and include those summarized as follows: Case No.: 07-018-D1-AOPA-B WRITTEN REPORT AND RECOMMENDED ORDER Page 4 of 10 2. The Division is the state agency responsible for enforcing the statutory requirement that employers secure the payment of workers' compensation for the benefit of their employees. 3. Employer is Perfection Plus Services, Inc., a Florida corporation, located in Fruitland Park, Florida engaged in the construction industry. 4. On October 16, 2006, the Division’s Investigator, Mr. William Pangrass, performed a site visit at 17 Dogwood Drive Course, Florida. Mr. Pangrass encountered one individual. Mr. Pangrass determined that this individual was associated with the Employer and issued a Stop- Work Order requiring Employer to cease business operations. [Division Exhibit A] 5. The Stop-Work Order of October 16, 2006, was revoked because evidence was received that the Employer came into compliance prior to its issuance. [Division Exhibit A] 6. On October 16, 2006, the Division issued a Request for Production of Business Records for Penalty Assessment Calculation. [Division Exhibit B] 7. On November 6, 2006, the Division issued Stop-Work Order Number 06-377-D1 requiring Employer to cease business operations for failure to produce the required records. This Stop-Work Order was released upon the production of the records by the Employer to the Division. [Division Exhibits A] 8. On February 19, 2007, the Division issued Amended Order of Penalty Assessment " Number 07-018-D2-OPA assessing a penalty of eight hundred fifty-four thousand nine hundred forty-one dollars and thirty cents ($854,941.30). [Division Exhibit E] 9. On August 24, 2007, the Division issued Amended Order of Penalty Assessment Number 07-018-D1-AOPA-B assessing a penalty of five hundred sixty-seven thousand one hundred dollars and nineteen cents ($567,100.19). [Division Exhibit G] 10. For all relevant periods, the Employer had one or more employees. Case No.: 07-018-D1-AOPA-B WRITTEN REPORT AND RECOMMENDED ORDER Page 5 of 10 11. As of the date of this Written Report and Recommended Order, Employer has not made payment of the penalty and the Amended Order of Penalty Assessment has not been released. CONCLUSIONS OF LAW 1. The Division has jurisdiction over the parties and subject matter of this proceeding pursuant to sections 120.569 and 120.57(2), Florida Statutes. 2. The Division is required to prove by clear and convincing evidence that the Employer was required and failed to secure the payment of workers’ compensation for its employees and that the penalty assessed was correct under the Florida Workers’ Compensation Law. Department of Banking and Fin. Div. of Sec. & Investor Prot. v. Osborne Stern and Co., 670 So. 2d 932 (Fla. 1996). 3. Every employer is required to secure the payment of workers’ compensation for the benefit of its employees pursuant to sections 440.10 and 440.38, Florida Statutes, unless exempted or excluded under Chapter 440, Florida Statutes. 4, The law defines “employer” in part as “every person carrying on any employment . . _.” Section 440.02(16), Florida Statutes. “Employment . . . is any service performed by an employee for the purpose of employing him or her” and “with respect to the construction industry, [includes] all private employment in which one or more employees are employed by the same employer.” Section 440.02(17(a) and (b), Florida Statues. Employer was an “employer” for the purposes of Chapter 440, Florida Statutes, during all relevant periods. 5. In relation to employments in the construction industry, an independent contractor is an employee for purposes of workers’ compensation coverage requirements. Section 440.02(15)(c), Florida Statutes. Case No.: 07-018-D1-AOPA-B WRITTEN REPORT AND RECOMMENDED ORDER Page 6 of 10 6. Every employer in the construction industry with one or more employees is required to comply with the coverage requirements of sections 440.10 and 440.38, Florida Statutes. Section 440.02(17)(b)2., Florida Statutes. Employer was engaged in the construction industry and had one or more employees for all relevant periods. 7. The definition of “employee” for the purposes of Chapter 440, classifies workers’ according to their job responsibilities and classifications. Employer did not dispute the Division’s determination of employee classifications. 8. Section 440.107(2), Florida Statutes, states: (2) For the purposes of this section, "securing the payment of workers’ compensation" means obtaining coverage that meets the requirements of this chapter and the Florida Insurance Code. However, if at any time an employer materially understates or conceals payroll, materially misrepresents or conceals employee duties so as to avoid proper classification for premium calculations, or materially misrepresents or conceals information pertinent to the computation and application of an experience rating modification factor, such employer shall be deemed to have failed to secure payment of workers’ compensation and shall be subject to the sanctions set forth in this section. A stop-work order issued because an employer is deemed to have failed to secure the payment of workers’ compensation required under this chapter because the employer has materially understated or concealed payroll, materially misrepresented or concealed employee duties so as to avoid proper classification for premium calculations, or materially misrepresented or concealed information pertinent to the computation and application of an experience rating modification factor shall have no effect upon an employer's or carrier's duty to provide benefits under this chapter or upon any of the employer's or carrier's rights and defenses under this chapter, including exclusive remedy. 9. Employers are required to secure coverage that complies with the requirements of Chapter 440, Florida Statutes, and the Florida Insurance Code. Section 440.107(2), Florida Statutes. 10. | Employer was neither exempted nor excluded from compliance; rather, Employer was required to comply with the Workers’ Compensation Law by obtaining compliant coverage pursuant to statute. Case No.: 07-018-D1-AOPA-B WRITTEN REPORT AND RECOMMENDED ORDER Page 7 of 10 11. Employer did not comply with the workers’ compensation coverage requirements from October 16, 2003, through October 16, 2006. 12. The Division is charged with enforcing employer compliance with workers’ compensation coverage requirements pursuant to section 440.107, Florida Statutes. Section 440.107(7)(a), Florida Statutes, states: (7)(a) Whenever the department determines that an employer who is required to secure the payment to his or her employees of the compensation provided for by this chapter has failed to secure the payment of workers' compensation required by this chapter or to produce the required business records under subsection (5) within 5 business days after receipt of the written request of the department, such failure shall be deemed an immediate serious danger to public health, safety, or welfare sufficient to justify service by the department of a stop- work order on the employer, requiring the cessation of all business operations. If the department makes such a determination, the department shall issue a stop-work order within 72 hours. The order shall take effect when served upon the employer or, for a particular employer worksite, when served at that worksite. In addition to serving a stop-work order at a particular worksite which shall be effective immediately, the department shall immediately proceed with service upon the employer which shall be effective upon all employer worksites in the state for which the employer is not in compliance. A stop-work order may be served with regard to an employer's worksite by posting a copy of the stop-work order in a conspicuous location at the worksite. The order shall remain in effect until the department issues an order releasing the stop-work order upon a finding that the employer has come into compliance with the coverage requirements of this chapter and has paid any penalty assessed under this section. The department may issue an order of conditional release from a stop-work order to an employer upon a finding that the employer has complied with coverage requirements of this chapter and has agreed to remit periodic payments of the penalty pursuant to a payment agreement schedule with the department. If an order of conditional release is issued, failure by the employer to meet any term or condition of such penalty payment agreement shall result in the immediate reinstatement of the stop-work order and the entire unpaid balance of the penalty shall become immediately due. The department may require an employer who is found to have failed to comply with the coverage requirements of s. 440.38 to file with the department, as a condition of release from a stop-work order, periodic reports for a probationary period that shall not exceed 2 years that demonstrate the employer's continued compliance with this chapter. The department shall by rule specify the reports required and the time for filing under this subsection. Section 440.107(7)(d)1., Florida Statutes, states: (d)1. In addition to any penalty, stop-work order, or injunction, the department shall assess against any employer who has failed to secure the payment of compensation as required by Case No.: 07-018-D1-AOPA-B WRITTEN REPORT AND RECOMMENDED ORDER Page 8 of 10 this chapter a penalty equal to 1.5 times the amount the employer would have paid in premium when applying approved manual rates to the employer's payroll during periods for which it failed to secure the payment of workers’ compensation required by this chapter within the preceding 3-year period or $1,000, whichever is greater. 13. The Division is required to issue stop-work orders and assess penalties against any employer that is required to secure the payment of workers’ compensation benefits to its employees and fails to secure the required coverage. | 14. The Division correctly issued the Amended Order of Penalty Assessment under section 440.107, Florida Statutes. 15. The penalty was correctly assessed, under section 440.107(7)(d)1., Florida Statutes, in the amount of five hundred sixty-seven thousand one hundred dollars and nineteen cents ($567,100.19). 16. The Division has met its burden of proof. 17. To the extent that Employer states issues of law not otherwise resolved herein, they are without merit. 18. The Department of Financial Services, Division of Workers’ Compensation, interprets Chapter 440, Florida Statutes, as being devoid of any provision authorizing exceptions to the prescribed penalty or a reduction of penalty based on mitigation evidence, in fact the Department has stated that “subsections 440.107(5) and (7), Florida Statutes, express no legislative intent that would permit a reduction in the penalty on account of mitigating evidence nor do those subsections articulate criteria to guide the agency’s exercise of discretion in its administration of the penalty policy.” In the Matter of C & J Kent Construction, Inc, case number 02-206-D7 (Final Order, March 30, 2004, page '4.). Case No.: 07-018-D1-AOPA-B WRITTEN REPORT AND RECOMMENDED ORDER Page 9 of 10 RECOMMENDATION Based upon the foregoing Findings of Fact, and Conclusions of Law, it is: RECOMMENDED that a Final Order be entered affirming Amended Order of Penalty Assessment Number 07-018-D2-AOPA-B and requiring the payment of the assessed penalty by the Employer. Respectfully submitted this 16th day of July 2008, Tallahassee, Florida. Leth ©. Eric Lloyd Hearing Officer Department of Financial Services 200 East Gaines Street Tallahassee, FL 32399-4223 850-413-1604 850-488-8043 (Fax) CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the above and foregoing Written Report and Recommended Order has been provided by U.S. Mail to Mr. W. S. Kling, Perfection Plus Services, Inc., 833 CR 466A, Fruitland Park, Florida 34731, and by hand delivery to Mr. Douglas D. Dolan, Department of Financial Services, Division of Legal Services, 200 East Gaines Street, Tallahassee, Florida 32399-4229, this 16th day of July 2008.: Eric Lloyd Hearing Officer Department of Financial Services 200 East Gaines Street Tallahassee, FL 32399-4223 850-413-1604 850-488-8043 (Fax) Case No.: 07-018-D1-AOPA-B . WRITTEN REPORT AND RECOMMENDED ORDER Page 10 of 10 FILED 5 000571 se PRESENTING AUG 12 2008 ALEX SINK cog Bimanni . CHIEF FINANCIAL OFFICER Chief Financial red - “STATE OF FLORIDA Docketed by: IN THE MATTER OF: Case Number: 89516-07-WC PERFECTION PLUS SERVICES, INC. / FINAL ORDER THIS CAUSE came on before the Department of Financial Services (hereinafter “Department”), for consideration and final agency action. On October 16, 2006, following a preliminary investigation, the Division of Workers” Compensation (hereinafter “Division”) issued a Request for Production of Business Records to PERFECTION PLUS SERVICES, INC. (hereinafter “Employer”). After analyzing the records, the Department issued a Order of Penalty Assessment on November 6, 2006, in the amount of $854,941.30. The Employer timely requested a formal administrative hearing, and the matter was referred to the Division of Administrative Hearings for a formal hearing. On August 14, 2007, the Department issued an Amended Order of Penalty Assessment in the amount of $567,100.19. On January 14, 2008, Employer withdrew its petition for a formal administrative hearing, acknowledging that there were no disputed issues of material fact to be litigated. The Division of Administrative Hearings relinquished jurisdiction to the Department. Thereafter, the matter was referred to Eric Lloyd, Hearing Officer for the Division, to conduct an informal proceeding under section 120.57(2), Florida Statutes. The hearing was conducted by written submissions, which included evidence and arguments. On July 16, 2008, after consideration of the evidence and written submissions of the parties, the Hearing Officer issued his EXHIBIT 1G Written Report and Recommended Order. The Written Report and Recommended Order, attached hereto as Exhibit A, is fully incorporated herein by reference. The Hearing Officer recommended that a Final Order be entered affirming the Second Amended Order of Penalty Assessment Number 07-018-AOPA-B and requiring the Employer to pay the assessed penalty. Neither party filed exceptions to the Written Report and Recommended Order. THEREFORE, upon careful consideration of the entire record, the submissions of the parties, and being otherwise fully advised in the material premises, IT IS HEREBY ORDERED that the Findings of Fact made by the Hearing Officer are adopted as the Department’s Findings of Fact, and that the Conclusions of Law reached by the Hearing Officer are adopted as the Department’s Conclusions of Law. IT IS HEREBY FURTHER ORDERED that the Recommendation made by the Hearing Officer is adopted by the Department, and that the Employer, PERFECTION PLUS SERVICES, INC., is assessed the penalty of $567,100.19. Within thirty days of the date of this Final Order, the Employer is ordered to pay this sum to the Department or enter into a Payment Agreement Schedule for Periodic Payment of Penalty with the Department in accordance with the assessed amount. DONE and ORDERED this _“e_ day of (Ext Seen 4, 2008. NOTICE OF RIGHTS Any party to this proceeding adversely affected by this Order is entitled to seek review of this Order pursuant to Section 120.68, Florida Statutes, and Rule 9.110, Florida Rules of Appellate Procedure. Review proceedings must be instituted by filing a Notice of Appeal with the General Counsel, acting as the agency clerk, at 612 Larson Building, Tallahassee, Florida 32399-0333, and a copy of the same and the filing fee with the appropriate District Court of Appeal within thirty (30) days of rendition of this Order. Copies Furnished To: Eric R. Lloyd, Esquire Hearing Officer Department of Financial Services 200 E. Gaines Street Tallahassee, Florida 32399-4223 Douglas D. Dolan, Esquire Assistant General Counsel Department of Financial Services 200 E. Gaines Street Tallahassee, Florida 32399-4223 W. S. Kling . Perfection Plus Services, Inc. 833 CR 466A Fruitland Park, FL 34731 REPRESENTING ALEX SINK CHIEF FINANCIAL OFFICER STATE OF FLORIDA IN THE MATTER OF: CASE NO. 07-018-D1-AOPA-B Perfection Plus Services, Inc. / WRITTEN REPORT AND RECOMMENDED ORDER This cause came on to be heard pursuant to the provisions of Sections 120.569 and ~ 120.57(2), Florida Statutes, via written submissions. This is a proceeding to enforce the requirement under the Workers’ Compensation Law that employers secure workers’ compensation coverage for their employees that complies with the Workers’ Compensation Law and the Florida Insurance Code. The purpose of the proceeding was to receive documentary evidence and testimony as to whether Perfection Plus Services, Inc., a Florida corporation (hereinafter “Employer”), is entitled to mitigation of the agency action taken by the Department of Financial Services, Division of Workers’ Compensation (hereinafter “Division”), wherein the Division issued a Stop-Work Order, Order of Penalty Assessment, and an Amended Order of Penalty Assessment charging Employer with failure to abide by that requirement and assessed statutory penalties in the amount of five hundred sixty-seven thousand one hundred dollars and nineteen cents ($567,100.19). APPEARANCES W. S. Kling Perfection Plus Services, Inc. 833 CR 466A Fruitland Park, Florida 34731 Petitioner, Pro Se i Case No.: 07-018-D1-AOPA-B —_ “1! WRITTEN REPORT AND RECOMMENDED ORDER Ee x Wi ly i+ A Page | of 10 Douglas D. Dolan, Esq. Department of Financial Services Division of Legal Services 200 East Gaines Street Tallahassee, Florida 32399-4229 Attomey for Division BACKGROUND On October 16, 2006, after a preliminary investigation involving individuals working at 17 Dogwood Drive Course, Florida, the Division issued a Stop-Work Order upon a determination that the Employer was not in compliance with the coverage requirements of the Workers’ Compensation Law (Chapter 440, Florida Statutes) and the Florida Insurance Code (Chapters 624-632, 634, 635, 636, 641, 642, 648, and 651, Florida Statutes). Employer was subsequently released from the Stop- Work Order of October 16" upon determination that Employer came into compliance prior to its _ issuance. On October 16, 2006, the Division issued a Request for Production of Business Records for Penalty Assessment Calculation to the Employer. Employer did not produce the requested records within the time required by law. On November 6, 2006, the Division issued Stop-Work Order Number 06-377-D1 requiring Employer to cease business operations for failure to produce the required records. This Stop-Work Order was released upon the production of the records by the Employer to the Division. Following a review of the records and a determination by the Division of past periods of non-compliance within the previous three years, the Division issued Order of Penalty Assessment Number 07-018-D1-OPA assessing a penalty of eight hundred fifty-four thousand nine hundred forty-one dollars and thirty cents ($854,941.30) for Employer’s failure to abide by the coverage requirements. On February 28, 2007, the Employer filed an untitled document (hereinafter “Petition for Hearing”) requesting a hearing under section 120.57(1), Florida Statutes, disputing ee Case No.: 07-018-D1-AOPA-B WRITTEN REPORT AND RECOMMENDED ORDER Page 2 of 10 issues of material fact. The matter was referred to the Division of Administrative Hearings for proceedings pursuant to sections 120.569 and 120.57(1), Florida Statutes. Following an Order Granting Motion to Amend Order of Penalty Assessment, the Division issued Amended Order of Penalty Assessment Number 07-018-D1-AOPA-B assessing a penalty of five hundred sixty-seven thousand one hundred dollars and nineteen cents ($567,100.19) on August 24, 2007. On January 14, 2008, the Employer filed its Request to Terminate Hearing Under Section 120.57(1), F.S. and Request for Hearing Under Section 120.57(2), F.S. The Request asserted that the disputed issues of material fact in the matter had been resolved. On January 14, 2008, the ‘presiding officer at the Division of Administrative Hearings issued an Order Closing File relinquishing jurisdiction over the matter to the Department of Financial Services. Thereafter, the matter was referred to the undersigned Hearing Officer, who issued a Notice of Assignment and Order. The referral to the undersigned included documents that are statutorily part of the record pursuant to section 120.57(2)(b), Florida Statutes. Record evidence received at the time of referral included the charging documents, penalty calculation worksheet, Petition for Hearing, written statements, and the decisions of the presiding officer at the Division of Administrative Hearings. Pursuant to election by the parties, the hearing in this matter was conducted via written submissions. The Division and the Employer timely filed their written submittals. EXHIBITS AND WITNESSES The Employer filed the following Exhibits: Attachment 1 — Copies of Notes from a Meeting with William Pangrass on November 20, 2007 at 10:00 AM Attachment 2 — Page Number 5 of the Penalty Calculation Worksheet for DWC Case Number 07-018-D1-OPA Case No.: 07-018-D1-AOPA-B WRITTEN REPORT AND RECOMMENDED ORDER Page 3 of 10 The Department filed a Proposed Recommended Order and the following Exhibits: Exhibit A — Initial Investigative Reports in Case Number 07-018-D1-OPA and Case Number 06-377-D1 Exhibit B — Request for Production of Business Records for Penalty Assessment Calculation Exhibit C — Employer Payroll Records Exhibit D — Coverage and Compliance Automated System (CCAS) screen prints Exhibit E — Order of Penalty Assessment Number 07-01 8-D1-OPA, with calculation worksheet Exhibit F — Petition for Hearing, with attachments Exhibit G _ Amended Order of Penalty Assessment Number 07-018-D1-AOPA-B, with calculation worksheet Exhibit H — Order Granting Motion to Amend Order of Penalty Assessment Exhibit I — Request to Terminate Hearing Under Section 120.57(1), F.S. and Request for Hearing Under Section 120.57(2), F.S. Exhibit J — Order Closing File . Via several filings, the Employer objected to the evidence filed by the Division as non- compliant with the timelines established in the Scheduling Order issued in this matter and requesting the exclusion of the Division’s evidence. On April 29, 2008, the undersigned issued an Order denying the relief requested by the Employer. FINDINGS OF FACT 1. The material facts are not in dispute and include those summarized as follows: oe Case No.: 07-018-D1-AOPA-B WRITTEN REPORT AND RECOMMENDED ORDER Page 4 of 10 2. The Division is the state agency responsible for enforcing the statutory requirement that employers secure the payment of workers’ compensation for the benefit of their employees. 3. Employer is Perfection Plus Services, Inc., a Florida corporation, located in Fruitland Park, Florida engaged in the construction industry. 4, On October 16, 2006, the Division’s Investigator, Mr. William Pangrass, performed a site visit at 17 Dogwood Drive Course, Florida. Mr. Pangrass encountered one individual. Mr. Pangrass determined that this individual was associated with the Employer and issued a Stop- Work Order requiring Employer to cease business operations. [Division Exhibit A] 5. The Stop-Work Order of October 16, 2006, was revoked because evidence was received that the Employer came into compliance prior to its issuance. [Division Exhibit A] 6. On October 16, 2006, the Division issued a Request for Production of Business Records for Penalty Assessment Calculation. [Division Exhibit B] 7. On November 6, 2006, the Division issued Stop-Work Order Number 06-377-D1 requiring Employer to cease business operations for failure to produce the required records. This Stop-Work Order was released upon the production of the records by the Employer to the Division. [Division Exhibits A] 8. On February 19, 2007, the Division issued Amended Order of Penalty Assessment Number 07-018-D2-OPA assessing a penalty of eight hundred fifty-four thousand nine hundred forty-one dollars and thirty cents ($854,941.30). [Division Exhibit E] 9. On August 24, 2007, the Division issued Amended Order of Penalty Assessment Number 07-018-D1-AOPA-B assessing a penalty of five hundred sixty-seven thousand one hundred dollars and nineteen cents ($567,100.19). [Division Exhibit G] 10. For all relevant periods, the Employer had one or more employees. Case No.: 07-018-D1-AOPA-B WRITTEN REPORT AND RECOMMENDED ORDER Page 5 of 10 Ll. As of the date of this Written Report and Recommended Order, Employer has not made payment of the penalty and the Amended Order of Penalty Assessment has not been released. CONCLUSIONS OF LAW 1. The Division has jurisdiction over the parties and subject matter of this proceeding pursuant to sections 120.569 and 120.57(2), Florida Statutes. 2. The Division is required to prove by clear and convincing evidence that the Employer was required and failed to secure the payment of workers’ compensation for its employees and that the penalty assessed was correct under the Florida Workers’ Compensation Law. Department of Banking and Fin, Div. of Sec. & Investor Prot. v. Osborne Stern and Co., 670 So. 2d 932 (Fla. 1996). 3. Every employer is required to secure the payment of workers’ compensation for the benefit of its employees pursuant to sections 440.10 and 440.38, Florida Statutes, unless exempted or excluded under Chapter 440, Florida Statutes. 4. The law defines “employer” in part as “every person carrying on any employment . . _.” Section 440.02(16), Florida Statutes. “Employment... is any service performed by an employee for the purpose of employing him or her” and “with respect to the construction industry, [includes] all private employment in which one or more employees are employed by the same employer.” Section 440.02(17(a) and (0), Florida Statues. Employer was an “employer” for the purposes of Chapter 440, Florida Statutes, during all relevant periods. 5. In relation to employments in the construction industry, an independent contractor is an employee for purposes of workers’ compensation coverage requirements. Section 440.02(15)(c), Florida Statutes. Case No.: 07-018-D1-AOPA-B WRITTEN REPORT AND RECOMMENDED ORDER Page 6 of 10 6. Every employer in the construction industry with one or more employees is required to comply with the coverage requirements of sections 440.10 and 440.38, Florida Statutes. Section 440.02(17)(b)2., Florida Statutes. Employer was engaged in the construction industry and had one or more employees for all relevant periods. 7. The definition of “employee” for the purposes of Chapter 440, classifies workers’ according to their job responsibilities and classifications. Employer did not dispute the Division’s determination of employee classifications. 8. Section 440.107(2), Florida Statutes, states: (2) For the purposes of this section, "securing the payment of workers’ compensation” means obtaining coverage that meets the requirements of this chapter and the Florida Insurance Code. However, if at any time an employer materially understates or conceals payroll, materially misrepresents ot conceals employee duties so as to avoid proper. classification for premium calculations, or materially misrepresents or conceals information pertinent to the computation and application of an experience rating modification factor, such employer shall be deemed to have failed to secure payment of workers’ compensation and shall be subject to the sanctions set forth in this section. A stop-work order issued because an employer is deemed to have failed to secure the payment of workers' compensation required under this chapter because the employer has materially understated or concealed payroll, materially misrepresented or concealed employee duties so as to avoid proper classification for premium calculations, or materially misrepresented or concealed information pertinent to the computation and application of an experience rating modification factor shall have no effect upon an employer's or carrier's duty to provide benefits under this chapter or upon any of the employer's or carrier's rights and defenses under this chapter, including exclusive remedy. 9. Employers are required to secure coverage that complies with the requirements of Chapter 440, Florida Statutes, and the Florida Insurance Code. Section 440.107(2), Florida Statutes. 10. Employer was neither exempted nor excluded from compliance; rather, Employer was required to comply with the Workers’ Compensation Law by obtaining compliant coverage pursuant to statute. Case No.: 07-018-D1-AOPA-B WRITTEN REPORT AND RECOMMENDED ORDER Page 7 of 10 11. Employer did not comply with the workers’ compensation coverage requirements from October 16, 2003, through October 16, 2006. 12. The Division is charged with enforcing employer compliance with workers’ compensation coverage requirements pursuant to section 440,107, Florida Statutes. Section 440.107(7)(a), Florida Statutes, states: (7)(a) Whenever the department determines that an employer who is required to secure the payment to his or her employees of the compensation provided for by this chapter has failed to secure the payment of workers’ compensation required by this chapter or to produce the required business records under subsection (5) within 5 business days after receipt of the written request of the department, such failure shall be deemed an immediate serious danger to public health, safety, or welfare sufficient to justify service by the department of a stop- work order on the employer, requiring the cessation of all business operations. If the department makes such a determination, the department shall issue a stop-work order within 72 hours. The order shal! take effect when served upon the employer or, for a particular employer worksite, when served at that worksite. In addition to serving a stop-work order at a particular worksite which shall be effective immediately, the department shall immediately proceed with service upon the employer which shall be effective upon all employer worksites in the state for which the employer is not in compliance. A stop-work order may be served with regard to an employer's worksite by posting a copy of the stop-work order in a conspicuous location at the worksite. The order shall remain in effect until the department issues an order releasing the stop-work order upon a finding that the employer has come into compliance with the coverage requirements of this chapter and has paid any penalty assessed under this section. The department may issue an order of conditional release from a stop-work order to an employer upon @ finding that the employer has complied with coverage requirements of this chapter and has agreed to remit periodic payments of the penalty pursuant to a payment agreement schedule with the department. If an order of conditional release is issued, failure by the employer to meet any term or condition of such penalty payment agreement shall result in the immediate reinstatement of the stop-work order and the entire unpaid balance of the penalty shall become immediately due. The department may require an employer who is found to have failed to comply with the coverage requirements of s. 440,38 to file with the department, as a condition of release from a stop-work order, periodic reports for a probationary period that shall not exceed 2 years that demonstrate the employer's continued compliance with this chapter. The department shall by rule specify the reports required and the time for filing under this subsection. Section 440.107(7)(d)1., Florida Statutes, states: (d)1. In addition to any penalty, stop-work order, or injunction, the department shall assess against any employer who has failed to secure the payment of compensation as required by _ Case No.: 07-018-D1-AOPA-B WRITTEN REPORT AND RECOMMENDED ORDER Page 8 of 10 this chapter a penalty equal to 1.5 times the amount the employer would have paid in premium when applying approved manual rates to the employer's payroll during periods for which it failed to secure the payment of workers’ compensation required by this chapter within the preceding 3-year period or $1,000, whichever is greater. 13. The Division is required to issue stop-work orders and assess penalties against any employer that is required to secure the payment of workers’ compensation benefits to its employees and fails to secure the required coverage. 14, The Division correctly issued the Amended Order of Penalty Assessment under section 440.107, Florida Statutes. 15. The penalty was correctly assessed, under section 440.107(7)(d)1., Florida Statutes, in the amount of five hundred sixty-seven thousand one hundred dollars and nineteen cents ($567,100.19). 16. The Division has met its burden of proof. 17. To the extent that Employer states issues of law not otherwise resolved herein, they are without merit. 18. The Department of Financial Services, Division of Workers’ Compensation, interprets Chapter 440, Florida Statutes, as being devoid of any provision authorizing exceptions to the prescribed penalty or a reduction of penalty based on mitigation evidence, in fact the Department has stated that “subsections 440.107(5) and (7), Florida Statutes, express no legislative intent that would permit a reduction in the penalty on account of mitigating evidence nor do those subsections articulate criteria to guide the agency’s exercise of discretion in its administration of the penalty policy.” In the Matter of C & J Kent Construction Inc. case number 02-206-D7 (Final Order, March 30, 2004, page 4.). _ Case No.: 07-018-D1-AOPA-B WRITTEN REPORT AND RECOMMENDED ORDER Page 9 of 10 RECOMMENDATION Based upon the foregoing Findings of Fact, and Conclusions of Law, it is: RECOMMENDED that a Final Order be entered affirming Amended Order of Penalty Assessment Number 07-018-D2-AOPA-B and requiring the payment of the assessed penalty by the Employer. Respectfully submitted this 16th day of July 2008, Tallahassee, Florida. Eric Lloyd Hearing Officer Department of Financial Services 200 East Gaines Street Tallahassee, FL 32399-4223 $50-413-1604 850-488-8043 (Fax) CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the above and foregoing Written Report and Recommended Order has been provided by U.S. Mail to Mr. W. S. Kling, Perfection Plus Services, Inc., 833 CR 466A, Fruitland Park, Florida 34731, and by hand delivery to Mr. Douglas D. Dolan, Department of Financial Services, Division of Legal Services, 200 East Gaines Street, Tallahassee, Florida 32399-4229, this 16th day of July 2008. Eric Lloyd ; Hearing Officer - Department of Financial Services 200 East Gaines Street Tallahassee, FL 32399-4223 850-413-1604 850-488-8043 (Fax) ee Case No.: 07-018-D1-AOPA-B WRITTEN REPORT AND RECOMMENDED ORDER Page 10 of 10 STATE OF FLORIDA, DEPARTMENT OF FINANCIAL SERVICES DIVISION OF WORKERS’ COMPENSATION EMPLOYER NAME: PERFECTION PLUS SERVICES, INC. ORDER OF PENALTY ASSESSMENT NO.: 07-018-D1 - AOPA FEIN: 59-3751585 ISSUANCE DATE: 10-14-08 BUSINESS ADDRESS: 833 CR 466 A CITY: Fruitland Park STATE: FL ZIP: 34734 4th AMENDED ORDER OF PENALTY ASSESSMENT (Penalty Only) The Division of Workers’ Compensation issued an Order of Penalty Assessment against the above-referenced Employer on 8-24-07. Pursuant to Rule 69L-6.030, Florida Administrative Code, the Order of Penalty Assessment assessed a penalty against the employer pursuant to section 440.107(7)(d)1, F.S. Based upon records reviewed, the Division hereby amends the Order of Penalty Assessment issued on 8-24-07 and assesses the penalty(s) as specified in the Penalty Worksheet, which is attached hereto and made a part hereof. It is ORDERED that the Employer is hereby assessed a TOTAL PENALTY of $553,382.16. The penalty(s) assessed herein supersedes any penalty(s) previously assessed in this case. The Employer shall pay the TOTAL PENALTY by money order or cashier's check, made payable to the DFS-Workers' Compensation Administration Trust Fund, or enter into a Payment Agreement Schedule for Periodic Payment of Penalty with the Division of Workers’ Compensation. lf the total penalty assessed in this Amended Order of Penalty Assessment is less than the total penalty assessed in the. Order of Penalty Assessment issued on 8-24-07, the Division will mail a refund in the amount of the difference to the Employer. Pursuant to section 440.107(11), F.S, the Department may initiate lien proceedings to coilect any penalty due that has not been paid. In addition, the Department may refer any unpaid penalty that is due to a collection agency for the initiation of proceedings to collect the unpaid penalty. Please see the Notice of Rights on the reserve side that pertains to your rights regarding this action. CERTIFICATE OF SERVICE * Pursuant to section 440.107(4), F.S., OOS BSS ES OF served a true copy of this Amended Order of Penalty Assessment: [1] By personal service: Date: ; Time: ; Server: (I By certified mail: Date: ; Time: ; Article: EXHIBIT January 3, 2006 . Notice of Rights updated 10/12/2007 3 NOTICE OF RIGHTS You have a right to administrative review of this action by the Department under sections 120.569 and 120.57, Florida Statutes. ‘ To obtain review, you must file a written petition requesting review. If you dispute a material fact contained in this action, you are entitled to a hearing under Sections 120.569 and 120.57(1), Florida Statutes, at which you may be represented by counsel, present evidence and argument on the issue(s), examine witnesses, submit a proposed recommended order, and file exceptions to the recommended order of the Administrative Law Judge. If you do not dispute a material fact contained in this action, you are entitled to a hearing under section 120.57(2), Florida Statutes, at which you may be represented by counsel, present — documentary evidence, and present a written statement in opposition to this action. A petition for a hearing under sections 120.569 and 120.57, Florida Statutes, must conform to Rule 28-106.2015, Florida Administrative Code. The petition shall contain a) the name, address, and telephone number, and facsimile number (if any) of the petitioner; b) the name, address, and telephone number, and facsimile number of the attorney or qualified representative of the petitioner (if any) upon whom service of pleadings and other papers shall be made; c) a statement requesting an administrative hearing identifying those material facts that are in dispute. If there are none, the petition must so indicate; d) a statement of when the petitioner received notice of the agency action; and e) a statement including the file number to the agency action. You must file the petition for hearing so that it is received by the Department within twenty- one (21) days of your receipt of this agency action. The petition must be filed with the General Counsel acting as the Agency Clerk, Department of Financial Services, 612 Larson Building, 200 East Gaines Street, Tallahassee, Florida 32399-0333. FAILURE TO FILE A PETITION WITHIN THE TWENTY-ONE (21) DAYS CONSTITUTES A WAIVER OF YOUR RIGHT TO ADMINISTRATIVE REVIEW OF THE AGENCY ACTION. Mediation under section 120.573, Florida Statutes, is not available. 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IN THE MATTER OF: Case No. 89516-07-WC PERFECTION PLUS SERVICES, INC. / ORDER SETTING ASIDE FINAL ORDER In November of 2006, the Department of Financial Services, Division of Workers' Compensation (Department) assessed a penalty in the amount of $854,941.30 against Perfection Plus Services, inc. (Perfection Plus), for alleged violations of the workers’ compensation statutes. Perfection Plus requested a formal administrative proceeding on the penalty assessment, and the matter was duly referred to the Division of Administrative Proceedings for such a hearing. In August of 2007, the Department issued an Amended Order of Penalty Assessment reducing the penalty to $567,100. 19. On January 14, 2008, Perfection Plus withdrew its request for a formal administrative hearing, conceding that there were no disputed issues of material fact. Accordingly, the Division of Administrative Hearings relinquished jurisdiction to the Department for the purpose of conducting an informal administrative proceeding. Perfection Plus thereafter elected to proceed by written submissions. At all times, Perfection Plus was represented by Mr. W.S. Kling; Mr. Kling is not an attorney. Pursuant to the written submission procedure, a Written Report and Recommendation was issued on July 16, 2008, concluding that Perfection Plus should pay a $567,100.19 penalty. On July 25 and 28, 2008, Mr. Kling wrote to the presiding EXHIBIT i= hearing officer protesting various aspects of the written submission procedure, including alleged evidentiary and fact discrepancies, and indicating his pro se misunderstanding as to the nature of the informal proceeding. On August 11 and 12, 2008, Mr. Kling wrote letters to the Department protesting the informal hearing procedures. It is not clear whether those letters were received in time to be considered prior to the issuance of the Final Order on August 12, 2008. Those letters raised factual and evidentiary issues not suitable for resolution in an informal hearing, and they have been augmented by similar letters from Mr. Kling received in subsequent months in which Mr. Kling has raised disputed issues of material fact. After re-consideration of the matter it appears that Mr. Kling’s pro se representation of Perfection Plus significantly contributed to his misunderstanding of the nature of the informal hearing process, and that the better course of action would have been to recognize that misunderstanding, terminate those proceedings and refer the matter back to the Division of Administrative Hearings for resolution of the evidentiary and factual disputes raised in his correspondence: Meller v. Florida Real Estate Com'n, 902 So.2d 325 (Fla. 5th DCA 2005); Village Saloon, Inc. v. Division of Alcoholic Beverages and Tobacco, 463 So.2d 278 (Fla. ist DCA 1984); E.M. Watkins & Co. v. Board of Regents, 414 So. 2d 583 (Fla. 1st DCA) rev. den., 421 So. 2d 67 (Fla. 1982). Additionally, that procedure would have allowed Perfection Plus the opportunity to consider retaining counsel before proceeding further. Therefore, in the interests of justice: IT IS HEREBY ORDERED: a) that the administrative proceedings leading to the entry of the August 12, 2008 Final Order, are set aside and held for naught; b) that the Stop Work Order and Amended Order of Penaity Assessment are affirmed and remain in force and effect, c) that Perfection Plus may elect to proceed to either a formal hearing or an informal hearing on this matter as provided by law, and d) that such an election must be made in writing delivered to the Department's clerk no later than twenty one (21) days from the date of this Order. It is the express intent of this Set Aside Order to restore this matter to the status it occupied after entry of the Stop Work Order and the Amended Order of Penalty Assessment, but prior to the time Perfection Plus initially elected its administrative remedy. DONE AND ORDERED this Sm day of November, 2008. cA . Cassady, NOTICE OF RIGHTS : Any party to these proceedings adversely affected by this Order is entitled to seek review of this Order pursuant to Section 120.68, Florida Statutes, and Rule 9.110, Fla. R. App. P. Review proceedings must be instituted by filing a petition or notice of appeal with. the General Counsel, acting as the agency clerk, at 612 Larson Building, Tallahassee, Florida, and a copy of the same with the appropriate district court of appeal within thirty (30) days of rendition of this Order. Copies to: W.S. Kling Doug Dolan Nov 24 08 03:11p p.2 AX NO. 1-850-488-0697 November 24, 2008 ROM: Perfection Plus Services, Inc., 833 CR 466A, Fruitland Park, Fl 34731 » Case No. 89516-07-WC UBJECT: Petition for a Formal Hearing ‘O: Agency Clerk 612 Larson Building Tallahassee, F1 32399-0333 uant to ORDER SETTING ASIDE FINAL ORDER, dated November 5, 2008 and igned by James R.Cassady, Chief of Staff. His Order stating “that Perfection Plus may lect to proceed to either a formal hearing or an informal hearing on this matter as wided by law and that such election must be made in writing delivered to the artment clerk no later than twenty one (21) days from the date of this Order. Perfection Pius Services elects to proceed with a formal hearing and states that the IORDER OF PENALTY ASSESSMENT, dated February 19, 2007, since amended, is FALSE, MISLEADING AND MATERIALLY INCORRECT. 1. The Order of Penalty Assessment (OPA), dated February 19, 2007, which is the i) gz g a g = a » g S i Q Fh Q a B i B fe] Bh @ _ This OPA stated the reason inspection of the employer’s worksite or business location. The Investigative Report, dated January 25, 2007, of the Investigative Officer, Mr, William Pangrass, states, “Case converted to OPA only from BRR-S case.” 3. This OPA further states that the Employer was committing the following violations as described in section 440.107(2), F.S. by failing to obtain coverage that meets the requirements of Chapter 440, F. S. and the Insurance Code. There is no mention of the specific Insurance Code that is being violated. 4. The Department of Finance has provided no evidence that each individual name on the OPA was in violation of 440 FS. or either investigated by the Investigating Officer or the nares placed into the Department’s CCAS with evidence indicating non-compliance or compliance. 5. Names remain on the OPA, as amended, that are known to be covered under workman’s compensation thru and employer leasing program. 6. The OPA dated February 19, 2009, contained excessive errors in the amount of $287,841.11 and later amended by two amendments. The Investigating Officer is reluctant to make further adjustments. 7. The Order of Penalty Assessment, dated February 19, 2007 has no integrity. EXHIBIT J tabbles" Nov 24 08 03:12p (2) Iq God I Trust. lespectfully submitted, . S. KLING presenting Perfection Plus Services, Inc 33 CR 466A ruitland Park, F1 34731 ‘elephone: 1-352-516-0489 Fax: 1-352-365-6684 ‘opies sent via Fax to: 1. Mr. James R. Cassady, Chief of Staff 2. Mr. John Hale, Director of Legal Services 3. Mr. Colin M Roopnarine, Managing Attorney p.3 Jan 12 09 04:24p Paul Drozdowski. 3523656684 p.2 STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS DEPARTMENT OF FINANCIAL SERVICESD DIVISION OF WORKERS’ COMPENSATION Vs DOAH Case No. 08-6022 PERFECTION PLUS SERVICES, INC, Respondent | WITHDRAWAL OF REQUEST FOR HEARING 1, W. S. Kling, representing Perfection Plus Services, Incorporated hereby withdraws our Request for this Administrative Hearing effective immediately. Perfection Plus Services Incorporated cannot afford an attorney and I have attempted to present our case as fairly and truthfully as humanly possible. Respectfully, W. S. KLING Perfection Plus Services, Inc. 833 CR. 466A Fruitland Park, Fl 34731 Telephone: 1-352-516-0489 Fax: 1-352-365-6684 I certify that a copy has been forwarded to Mr. Douglas Dolan via facsimile on this 12" day of January 2009. W.S. KL Copy to: Mr. Colin Roopnarine EXHIBIT j kK.

Docket for Case No: 07-001252