STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

RECOMMENDED ORDER

A formal hearing was conducted in this case on October 8, 2009, by video teleconference, with hearing sites located in Tallahassee, Florida, and Jacksonville, Florida, before Suzanne F. Hood, Administrative Law Judge with the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Paige B. Shoemaker, Esquire

Department of Financial Services

200 East Gaines Street Tallahassee, Florida 32399-4229

For Respondent: (no appearance)

STATEMENT OF THE ISSUES

The issues are whether Respondent violated Chapter 440, Florida Statutes, by failing to obtain workers' compensation insurance, and if so, what penalty should be imposed.

PRELIMINARY STATEMENT

On May 15, 2009, Petitioner Department of Financial Services, Division of Workers' Compensation (Petitioner) issued a Stop-work Order and Order of Penalty Assessment to Respondent Abner, Inc. (Respondent). According to the Stop-work Order, Respondent failed to secure the payment of workers' compensation insurance in violation of Sections 440.10(1), 440.38(1), and 440.107(2), Florida Statutes (2008).

On or about June 11, 2009, Petitioner issued an Amended Order of Penalty Assessment. The Amended Order advised Respondent that it would be assessed a penalty in the amount of

$26,180.24.

In a letter dated June 18, 2009, Respondent requested an administrative hearing to contest the Stop-work Order and Order of Penalty Assessment. Petitioner referred the case to the Division of Administrative Hearings on July 21, 2009.

In a Notice of Hearing by Video Teleconference, the undersigned scheduled the hearing for October 8, 2009.

On September 30, 2009, Petitioner filed an unopposed Motion to Amend Charging Document. The Second Amended Order of Penalty Assessment advised Respondent that it would be assessed a penalty in the amount of $7,641.14. An Order Granting Motion to Amend Charging Document was issued on October 1, 2009.

Respondent did not make an appearance at the hearing.

Petitioner presented the testimony of two witnesses and offered ten exhibits that were accepted as evidence.

A copy of the hearing transcript was not filed with the Division of Administrative Hearings. Petitioner filed a Proposed Recommended Order on October 13, 2009.

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 as required by Section 440.107, Florida Statutes (2008).

2. Respondent is a Florida Corporation that engages in the painting business. Abner Gonzalez is Respondent's President.

3. Painting is a workplace operation that satisfies the criteria of the term "construction industry" as set forth in the Basic Manual of the National Council on Compensation Insurance, Inc. (NCCI).

4. On May 15, 2009, Petitioner's investigator, Allen DiMaria conducted an investigation at the intersection of Normandy Boulevard and Guardian Drive in Jacksonville, Florida. Mr. DiMaria observed one worker on a ladder and another worker on the ground painting a block and masonry entrance to a development.

5. The workers at the site identified themselves to

   
   

   Mr. DiMaria as Abner Gonzalez and César Silvestre. Mr. Gonzalez stated that Respondent had a contract to paint the wall and that he and Mr. Silvestre were Respondent's employees.

6. Mr. Gonzalez stated that, as a corporate officer, he had an exemption for workers' compensation. Mr. Gonzalez admitted that Respondent had not secured workers' compensation for Mr. Silvestre.

7. Mr. DiMaria was able to confirm that Mr. Gonzalez had a current valid construction exemption, specifically for painting. However, Mr. Gonzalez did not have a painting exemption for the entirety of the prior three years.

8. On May 15, 2009, Mr. DiMaria issued and personally served on Respondent a Stop-Work Order and Order of Penalty Assessment for failure to comply with statutory requirements. Mr. DiMaria also issued Respondent a Request for Production of Business Records for Penalty Assessment Calculation.

9. Because Respondent did not promptly provide Petitioner with the requested business records, Petitioner's staff imputed Respondent's payroll and calculated the penalty as the average weekly wage rate multiplied by 1.5. pursuant to Section 440.107, Florida Statutes. Petitioner then issued the Amended Order of Penalty Assessment in the amount of $26,180.24 on June 11, 2009.

10. Respondent subsequently provided Petitioner with business records. The records included Respondent's bank statements for the prior three years and Respondent's 2007 Employer's Quarterly Federal Tax Returns. The records also showed that Respondent provided employment without workers' compensation insurance to persons other than Mr. Gonzalez and Mr. Silvestre during the prior three years.

11. On June 26, 2009, Petitioner issued the Second Amended Order of Penalty Assessment based upon Respondent's business records in the amount of $7,641.14. The Second Amended Order of Penalty Assessment, showing the reduced penalty, was served on Respondent by certified mail.

    CONCLUSIONS OF LAW

    
    

12. DOAH has jurisdiction over the parties and the subject matter of this proceeding pursuant to Sections 120.569 and 120.57(1), Florida Statutes (2008).

13. Chapter 440, Florida Statutes (2008), is known as the "Workers’ Compensation Law." See § 440.01, Fla. Stat. (2008).

14. Petitioner has the burden of proving by clear and convincing evidence that that Respondent violated the Workers’ Compensation Law during the relevant period and that the penalty assessments are correct. See Department of Banking and Finance Division of Securities and Investor Protection v. Osborne Stern and Co., 670 So. 2d 932 (Fla. 1996).

15. Pursuant to Sections 440.10 and 440.38, Florida Statutes (2008), every “employer” is required to secure the payment of workers’ compensation insurance for the benefit of its employees unless exempted or excluded under Chapter 440, Florida Statutes (2008). Strict compliance with the Workers’ Compensation Law is required by the employer. See C&L Trucking v. Corbitt, 546 So. 2d 1185, 1187 (Fla. 5th DCA 1989).

16. Under Section 440.107(2), Florida Statutes (2008), "'securing the payment of workers’ compensation' means obtaining coverage that meets the requirements of this chapter and the Florida Insurance Code."

17. Section 440.107(7)(d), Florida Statutes (2008), states as follows:

    (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 this chapter a penalty equal to

    1.5 times the amount the employer would have paid in premium when applying the 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 of $1,000, whichever is greater.

    
    

18. Based on Respondent's business records, Respondent's total payroll for the three years prior to May 15, 2009, was

    $72,362.19. The total workers' compensation premium that Respondent should have paid for its employees during the

    relevant time period was $5,094.05. Multiplying that amount by the statutory factor of 1.5 results in a penalty assessment in the amount of $7,641.14.

19. Petitioner correctly issued the Stop-work Order and Second Amended Penalty Assessment prescribed in Section 440.107(7)(d), Florida Statutes (2008). The evidence here clearly indicates that Respondent owes $7,641.14 as a penalty for not "securing the payment of workers' compensation." There is no evidence to the contrary.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is

RECOMMENDED:

That Respondent issue a final order affirming the Stop-Work Order and Second Amended Order of Penalty Assessment in the amount of $7,641.14.

DONE AND ENTERED this 14th day of October, 2009, in Tallahassee, Leon County, Florida.

S

SUZANNE F. HOOD

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675

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

Filed with the Clerk of the Division of Administrative Hearings this 14th day of October, 2009.

COPIES FURNISHED:

Paige Billings Shoemaker, Esquire Department of Financial Services

200 East Gaines Street Tallahassee, Florida 32399-4229

Abner Gonzales 1924 Firefly Drive

Green Cove Springs, Florida 32043

Tracy Beal, Agency Clerk Department of Financial Services

200 East Gaines Street Tallahassee, Florida 32399-0390

Benjamin Diamond, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0307

Honorable Alex Sink Chief Financial Officer

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: 09-003858

Orders for Case No: 09-003858