STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

RECOMMENDED ORDER

Administrative Law Judge (ALJ) Carolyn S. Holifield conducted the final hearing of this case for the Division of Administrative Hearings (DOAH) on November 19, 2009. The ALJ conducted the hearing by video teleconference in Tallahassee and Fort Myers, Florida.

APPEARANCES

For Petitioner: Douglas D. Dolan, Esquire

Department of Financial Services

200 East Gaines Street Tallahassee, Florida 32399-4229

For Respondent: Jesus Prieto, pro se

Westside Masonry Contractors, Inc. 3405 19th Street Southwest

Lehigh Acres, Florida 33976

STATEMENT OF THE ISSUE

The issue is whether Respondent is liable for a penalty of

$286,400.01 for the alleged failure to maintain workers’ compensation insurance for its employees in violation of Subsection 440.107(7)(d), Florida Statutes (2008).1

PRELIMINARY STATEMENT

On May 19, 2009, Petitioner issued a Request for Production of Business Records. On June 1, 2009, Petitioner issued a

Stop-Work Order and Order of Penalty Assessment. On June 17, 2009, Petitioner issued an Amended Order of Penalty Assessment in the amount of $286,401.01.

Respondent timely requested an administrative hearing. On September 10, 2009, Petitioner referred the request to DOAH to conduct the hearing.

At the hearing, Petitioner presented the testimony of three witnesses and submitted 15 exhibits for admission into evidence. Respondent presented the testimony of one witness and submitted no exhibits for admission into evidence.

The identity of the witnesses and exhibits and the rulings regarding each are reported in the one-volume Transcript of the hearing, which was filed with DOAH on December 14, 2009. Judge Holifield granted a motion to extend the time for filing proposed recommended orders (PROs), and Petitioner timely filed its PRO on March 29, 2010. Respondent did not file a PRO.

Pursuant to Subsection 120.57(1)(a), DOAH transferred this matter to ALJ Daniel Manry due to the retirement of ALJ Carolyn S. Holifield.

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 in accordance with the requirements of

   Section 440.107. Respondent is a Florida corporation engaged in the construction business.

2. On May 19, 2009, Petitioner's investigator inspected one of Respondent's job sites located at 6665 Mirabella Lane, Naples, Florida. The purpose of the inspection was to determine whether Respondent was in compliance with workers' compensation requirements.

3. The investigator observed workers laying concrete block in a residential development under construction. The investigator interviewed the workers and learned the identity of the individual owner of Respondent.

4. The investigator determined through the Coverage and Compliance Automated System (CCAS) that Respondent had secured workers' compensation coverage. However, Respondent maintained minimum coverage identified in the record as an "if any" policy. An "if any" policy imposes a premium based on zero employees and

   zero payroll and requires Respondent to notify the insurer of any new employees within three days of being hired.

5. Respondent had reported no workers to his workers' compensation carrier, but had reported 54 employees for purposes of unemployment compensation taxes.2 None of the individuals reported for unemployment compensation taxes had secured workers' compensation coverage for themselves.

6. Respondent is liable for workers' compensation for the

   
   

   54 workers described in the preceding paragraph, which the trier of fact finds are employees of Respondent. None of the workers has an exemption from workers' compensation coverage.

   Petitioner correctly calculated the amount owed by Respondent,

   
   

   which is $286,400.01.

   
   

   CONCLUSIONS OF LAW

   
   

7. DOAH has jurisdiction over the parties and subject matter in this proceeding. §§ 120.569 and 120.57(1), Fla. Stat. (2009). DOAH provided the parties with adequate notice of the final hearing.

8. Petitioner has the burden of proving by clear and convincing evidence that Respondent violated the Workers’ Compensation Law during the relevant period and that the penalty assessment is correct. See Department of Banking and Finance Division of Securities and Investor Protection v. Osborne Stern

   and Co., 670 So. 2d 932 (Fla. 1996). For the reasons stated in the Findings of Fact, Petitioner satisfied its burden of proof.

9. Pursuant to Sections 440.10 and 440.38, every employer is required to secure the payment of workers’ compensation for the benefit of its employees unless exempted or excluded under Chapter 440. Strict compliance with the Workers’ Compensation Law is required by each employer. See C&L Trucking v. Corbitt,

   546 So. 2d 1185, 1187 (Fla. 5th DCA 1989). There is no evidence that Respondent or the 54 workers at issue are exempt or excluded from the statutory requirements for workers' compensation coverage.

10. The penalty amount of $286,400.01 is correctly assessed based upon the statutorily-mandated method. Respondent did not provide records to substantiate its claim that the workers were exempt or excluded from coverage.

RECOMMENDATION

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

RECOMMENDED that Petitioner enter a final order imposing a penalty assessment in the amount of $286,400.01.

DONE AND ENTERED this 13th day of July, 2010, in Tallahassee, Leon County, Florida.

S

DANIEL MANRY

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675

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

Filed with the Clerk of the Division of Administrative Hearings this 13th day of July, 2010.

ENDNOTES

1/ References to chapters, sections, and subsections are to Florida Statutes (2008), unless otherwise stated.

2/ At the hearing, Respondent presented the testimony of its owner that the employees were, in fact, subcontractors.

However, Respondent presented no contracts or other documentation to support that testimony, and the trier of fact finds the testimony to be less than credible and persuasive.

COPIES FURNISHED:

Honorable Alex Sink Chief Financial Officer

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

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

Julie Jones, Agency Clerk Department of Financial Services Division of Legal Services

200 East Gaines Street Tallahassee, Florida 32399-0390

Jesus Prieto

Westside Masonry Contractors, Inc. 3405 19th Street Southwest

Lehigh Acres, Florida 33976

Timothy L. Newhall, Esquire Department of Financial Services

200 East Gaines Street Tallahassee, Florida 32399

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: 09-004936

Orders for Case No: 09-004936