STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL SERVICES, DIVISION OF WORKERS’ COMPENSATION,

Petitioner,

vs.

THE FORD COMPANY CONSTRUCTION, INC.,

Respondent.

/

Case No. 15-2561

RECOMMENDED ORDER

This case was heard on August 3, 2015, by video teleconference at sites in Tallahassee, Florida, and Jacksonville, Florida, before E. Gary Early, an Administrative Law Judge assigned by the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Trevor S. Suter, Esquire

Department of Financial Services Division of Legal Services Workers’ Compensation Section

200 East Gaines Street Tallahassee, Florida 32399-4229

For Respondent: No appearance

STATEMENT OF THE ISSUE

Whether Petitioner proved that Respondent failed to obtain workers' compensation insurance that met the requirements of

chapter 440, Florida Statutes, thus warranting issuance of a Stop-Work Order and Penalty Assessment against Respondent.

PRELIMINARY STATEMENT

On September 12, 2011, Petitioner, the Department of Financial Services, Division of Workers’ Compensation (Petitioner or Division), issued and served a Stop-Work Order and Order of Penalty Assessment (Order), and a Request for Production of Business Records for Penalty Assessment Calculation (Request for Production) on Respondent, The Ford Company Construction, Inc. (Respondent). The Order alleged that Respondent was not in compliance with the workers’ compensation coverage requirements of chapter 440, Florida Statutes, and set the penalty amount at 1.5 times the amount that the employer would have paid in premiums had workers’ compensation insurance been procured.

On October 7, 2011, Petitioner issued an Amended Order of Penalty Assessment (Amended Order). The Amended Order, which was served on Respondent on April 3, 2012, established a monetary penalty of $82,891.16.

On April 25, 2012, Respondent filed an Election of Proceeding by which it disputed the allegations that it failed to obtain workers’ compensation coverage that met the requirements of chapter 440. On April 26, 2012, Respondent followed up with a letter explaining the basis for certain

actions taken and statements made by the Respondent’s representative during the job-site inspection.

On November 1, 2012, Petitioner issued a 2nd Amended Order of Penalty Assessment (2nd Amended Order) which established a monetary penalty of $69,089.47.

On May 11, 2015 -- more than three years after the Election of Proceeding was filed with Petitioner -- the Order, Amended Order, 2nd Amended Order, and Election of Proceeding were transmitted to the Division of Administrative Hearings for a formal administrative hearing, and assigned to the undersigned.

Despite the time lapse between the issuance of the Order and the filing of the Election of Proceeding, no suggestion was made that the Election of Proceeding was untimely, and no objection to the delay in referral was raised by Respondent.

The hearing was set for August 3, 2015, by video teleconference at sites in Tallahassee, Florida, and Jacksonville, Florida, and was convened as scheduled. Respondent did not appear at the final hearing.

Petitioner presented the testimony of Charles Mason, a lead auditor and penalty calculator for the Division. Petitioner introduced Exhibits 1, 2 (consisting only of page 0004), 3, 4, and 7-12. Exhibit 7 was a 3rd Amended Order of Penalty Assessment, by which Petitioner reduced the penalty from

$69,089.47 to $52,124.34. The 3rd Amended Order of Penalty Assessment forms the basis for this proceeding.

The one-volume Transcript was filed on September 1, 2015. Petitioner timely filed its Proposed Recommended Order, which has been considered in the preparation of this Recommended Order.

This proceeding is governed by the law in effect at the time of the commission of the acts alleged to warrant imposition of a penalty. See McCloskey v. Dep’t of Fin. Servs., 115 So. 3d

441 (Fla. 5th DCA 2013). Thus, references to statutes are to Florida Statutes (2011), unless otherwise noted.

FINDINGS OF FACT

1. Petitioner is the state agency responsible for enforcing the Florida Workers' Compensation Law, chapter 440, Florida Statutes, including those provisions that employers shall be liable for, and shall secure and maintain payment of compensation for their employees who suffer work-related injuries.

2. Respondent was, on September 12, 2011, an active Florida for-profit corporation.

3. On September 12, 2011, Petitioner's investigator, Daniel G. Pfaff, conducted an inspection of a worksite at

   333 Pablo Road, Ponte Vedra Beach, Florida. Mr. Pfaff did not testify at the hearing, and neither the Order nor the Request

   
   

   for Production provide a description of who Mr. Pfaff observed at the site or what they were doing, if anything.

4. The record is silent as to the process by which

   
   

   Mr. Pfaff performed his investigation to determine Respondent’s status in the workers’ compensation system, or by which he received authorization to issue the Order and Request for Production.

5. The Order required Respondent to cease all business operations statewide, and assessed a penalty equal to 1.5 times the amount the employer would have paid in premiums when applying the approved manual rates to the employer's payroll for the preceding three-year period, pursuant to section 440.107(7)(d).

6. The Request for Production required Respondent to produce business records for the period from September 13, 2008, through September 12, 2011.

7. At the hearing, Petitioner offered into evidence more than 1,200 pages of documents that were alleged to have been produced by Respondent in response to the Request for Production, consisting of, among other things, information provided by subcontractors and vendors, insurance certificates, tax forms, and bank records. The record contains no information regarding the date on which the documents were produced, the identity of the recipient of the documents, or the path the

   
   

   documents traveled before coming to rest on the desk of

   
   

   Mr. Mason two weeks prior to the final hearing. Although the pages are consecutively numbered, from page 0091 through page 1307, there was no indication of who numbered the pages, or when they were numbered.1/

8. The documents were used by Petitioner to prove the truth of the matters asserted therein, e.g., identity of employees, dates of employment, salaries, and workers’ compensation coverage. As will be discussed in the Conclusions of Law to follow, the documents are hearsay.

9. The documents were received in evidence because they were reviewed by Mr. Mason in the performance of his duty as a penalty calculator. Mr. Mason, the only witness testifying, was not identified as Petitioner’s records custodian, and offered no testimony to suggest that he served in that capacity. The 1,200+ pages of documents were unaccompanied by any form of certification or declaration that might have substantiated their authenticity.

10. Since Respondent did not appear at the final hearing, the documents were not authenticated, nor is there a foundation for determining that the records meet any exception to the hearsay rule.

11. The undersigned has no doubt that Mr. Mason diligently performed his duty in reviewing the records that were provided

    
    

    to him and applying the various manuals and class codes that are routinely used by the Division in imputing income and calculating penalties for an employer’s failure to secure the payment of workers' compensation. However, given the lack of any contemporaneous or documented evidence as to the manner in which those documents were produced, or how they were stored, kept, and maintained by Petitioner, it is found that the documents introduced in evidence, without more, do not provide clear and convincing evidence that Respondent violated the Workers' Compensation Law during the period of September 13, 2008, through September 12, 2011, as alleged in the 3rd Amended Order. See Hunter v. Aurora Loan Servs., LLC, 137 So. 3d 570

    (Fla. 1st DCA 2014); Mazine v. M&I Bank, 67 So. 3d 1129 (Fla. 1st DCA 2011); Scott v. Dep’t of Prof’l Reg., 603 So. 2d 519

    (Fla. 1st DCA 1992); Doran v. Dep’t of HRS, 558 So. 2d 87 (Fla. 1st DCA 1990); Juste v. Dep’t HRS, 520 So. 2d 69 (Fla. 1st DCA

    1988).

    
    

12. Finally, the records introduced by Petitioner include a document entitled “Answer,” which contains a number of hearsay statements that, if proven to be from Respondent, could be construed as an admission of liability for penalties in the amount of $7,324.98. However, the document does not bear a signature and, as with the other records described herein, has

    
    

    an insufficient evidentiary foundation upon which to base a finding that the document is authentic.

    CONCLUSIONS OF LAW

    
    

13. The Division of Administrative Hearings has jurisdiction over the subject matter and parties pursuant to sections 120.569 and 120.57(1), Florida Statutes (2015).

14. Petitioner is the agency of the State of Florida charged, pursuant to section 440.107(3), with the duty to:

    enforce workers' compensation coverage requirements, including the requirement that the employer secure the payment of workers' compensation . . . . In addition to any other powers under this chapter, the department shall have the power to:

    
    

    1. Conduct investigations for the purpose of ensuring employer compliance.

       
       

    2. Enter and inspect any place of business at any reasonable time for the purpose of investigating employer compliance.

       
       

    3. Examine and copy business records.

       
       

    4. Administer oaths and affirmations.

       
       

    5. Certify to official acts.

       
       

    6. Issue and serve subpoenas for attendance of witnesses or production of business records, books, papers, correspondence, memoranda, and other records.

       
       

    7. Issue stop-work orders, penalty assessment orders, and any other orders necessary for the administration of this section.

       
       

    8. Enforce the terms of a stop-work order.

       
       

    9. Levy and pursue actions to recover penalties.

       
       

    10. Seek injunctions and other appropriate relief.

        
        

        Burden of Proof

        
        

15. Petitioner has the burden of proof in this case and must show by clear and convincing evidence that Respondent violated the Workers' Compensation Law during the relevant period and that the penalty assessments are correct.

    § 120.57(1)(j), Fla. Stat.; Dep’t of Banking & Fin., Div. of

    
    

    Sec. & Inv. Prot. v. Osborne Stern & Co., 670 So. 2d 932 (Fla. 1996); Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987); Pou v.

    Dep’t of Ins., 707 So. 2d 941 (Fla. 3d DCA 1998).

    
    

16. Clear and convincing evidence “requires more proof than a ‘preponderance of the evidence’ but less than ‘beyond and to the exclusion of a reasonable doubt.’” In re Graziano,

    696 So. 2d 744, 753 (Fla. 1997). The clear and convincing evidence level of proof

    entails both a qualitative and quantitative standard. The evidence must be credible; the memories of the witnesses must be clear and without confusion; and the sum total of the evidence must be of sufficient weight to convince the trier of fact without hesitancy.

    
    

    Clear and convincing evidence requires that the evidence must be found to be credible; the facts to which the witnesses testify must

    
    

    be distinctly remembered; the testimony must be precise and explicit and the witnesses must be lacking in confusion as to the facts in issue. The evidence must be of such weight that it produces in the mind of the trier of fact a firm belief or conviction, without hesitancy, as to the truth of the allegations sought to be established.

    
    

    In re Davey, 645 So. 2d 398, 404 (Fla. 1994) (quoting, with

    
    

    approval, Slomowitz v. Walker, 429 So. 2d 797, 800 (Fla. 4th DCA

    
    

    1983)); see also In re Henson, 913 So. 2d 579, 590 (Fla. 2005). "Although [the clear and convincing] standard of proof may be met where the evidence is in conflict, it seems to preclude evidence that is ambiguous." Westinghouse Electric Corp. v.

    Shuler Bros., 590 So. 2d 986, 989 (Fla. 1st DCA 1991). Regulatory Standards

17. It is well-established that the Division has “broad powers to investigate employers, to halt any work where employers are not complying, and to assess penalties on those who do not comply.” Twin City Roofing Constr. Specialists, Inc. v. Dep't of Fin. Servs., 969 So. 2d 563, 566 (Fla. 1st DCA

    2007).

    
    

18. 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, therefore, required by the employer. See,

    
    

    e.g., Summit Claims Mgmt. v. Lawyers Express Trucking, Inc., 913 So. 2d 1182, 1185 (Fla. 4th DCA 2005); C&L Trucking v.

    Corbitt, 546 So. 2d 1185, 1186 (Fla. 5th DCA 1989).

    
    

19. Evidence in the form of certified copies of the Order and the Request for Production, both of which indicate that they were personally served, along with the Respondent’s corporate record, was sufficient to establish that Respondent was an "employer" for workers' compensation purposes because it was doing business in the construction industry as a building contractor.

20. In order to be liable for the provision of workers’ compensation to its employees, Respondent must have engaged one or more employees to perform services on its behalf.

    § 440.02(17), Fla. Stat.

    
    

21. The basis for the determination that Respondent failed to secure workers’ compensation insurance for its employees was the employer’s alleged business records produced at the hearing. For example, Mr. Mason determined the identities of Respondent’s employees from “the general ledger that the employer provided that were noted as paid by check.”

    Business Records - Hearsay

    
    

22. Section 440.107 creates an affirmative statutory obligation on the part of the employer to maintain and produce

    
    

    “business records.” Pursuant to its rulemaking authority, the Division promulgated Florida Administrative Code Rule 69L-6.015 to identify the class of records that must be produced.

23. The records identified by Petitioner as having been produced by Respondent are out-of-court “statements” that have been used by Petitioner to prove the truth of the matters asserted therein. As such, the evidence is hearsay (§ 90.801, Fla. Stat.) and is not “sufficient in itself to support a finding unless it would be admissible over objections in civil actions.” § 120.57(1)(c), Fla. Stat.

24. Hearsay evidence is admissible over objection in a civil action when it falls within an exception to the hearsay rule. Of relevance to the records relied upon by Petitioner in this case is the “business records” exception to the hearsay rule, established in section 90.803(6), which provides, in pertinent part, for the admissibility of the following as evidence:

    A memorandum, report, record, or data compilation, in any form, of acts, events, conditions, opinion, or diagnosis, made at or near the time by, or from information transmitted by, a person with knowledge, if kept in the course of a regularly conducted business activity and if it was the regular practice of that business activity to make such memorandum, report, record, or data compilation, all as shown by the testimony of the custodian or other qualified witness, or as shown by a certification or declaration that complies with paragraph (c)

    
    

    and s. 90.902(11), unless the sources of information or other circumstances show lack of trustworthiness.

    
    

25. The “business records” exception to the hearsay rule allows for the introduction of records of regularly conducted business activities without the necessity of producing the persons responsible for producing the records. The basis for the exemption is that such records are “reliable because [they] are of a type that [are] relied upon by a business in the conduct of its daily affairs and the records are customarily checked for correctness during the course of the business activities.” Charles W. Ehrhardt, Ehrhardt’s Florida Evidence

    § 803.6, at 876 (2010 ed.).

    
    

26. The fact that documents required to be maintained and produced by employers are designated as “business records” in section 440.107 does not mean that they come within the business records exception to the hearsay rule in section 90.803(6).2/ Thus, an analysis of the extent to which such records may meet an exception to the hearsay rule so as to render them “admissible over objection in civil actions” is warranted.

27. Pursuant to rule 69L-6.015, an employers’ business records may consist not only of records produced by the employer, but may also include documents and records produced by third parties including, but not limited to, insurance companies, banks, employee leasing companies, and third-party

    
    

    sub-contractors that are provided to the employer in the normal course of their business and contractual relationship.

28. In recognition of the close relationships that can exist between business entities, the Fifth District Court of Appeal has recognized that there are circumstances in which hearsay records provided by third parties may be attributable to the first party as the first party’s business records.

29. As applied to the ability of an employer to produce, authenticate, and be bound by statutorily-required business records provided to it by third parties, the undersigned accepts the comprehensive analysis set forth by the Fifth District Court of Appeal in Bank of N.Y. v. Callaway, 157 So. 3d 1064 (Fla 5th

    DCA 2015), in which the Court held that:

    
    

    "The rationale behind the business records exception is that such documents have a high degree of reliability because businesses have incentives to keep accurate records." Timberlake Constr. Co. v. U.S. Fid. & Guar. Co., 71 F.3d 335, 341 (10th Cir. 1995); see

    also United States v. Veytia-Bravo, 603 F.2d 1187, 1189 (5th Cir. 1979) (explaining that the justification for the business records exception lies in "the reliability or trustworthiness of the records sought to be introduced"). Businesses rely upon their records "in the conduct of [their] daily affairs" and "customarily check [them] for correctness during the course of the business activities." Charles W. Ehrhardt, Florida Evidence § 803.6 (2014 ed.); see also Bean v. Montana Bd. of Labor Appeals, 1998 MT 222, 290 Mont. 496, 965 P.2d 256,

    262 (Mont. 1998). Thus, courts view the "material contained in those records [a]s

    
    

    more likely to be truthful than the average hearsay." United States v. Santos, 201 F.3d 953, 963 (7th Cir. 2000).

    
    

    Where a business takes custody of another business's records and integrates them within its own records, the acquired records are treated as having been “made” by the successor business, such that both records constitute the successor business's singular “business record.” United States v.

    Adefehinti, 510 F.3d 319, 326, 379 U.S. App.

    D.C. 91 (D.C. Cir. 2007), as amended (Feb. 13, 2008). However, since records crafted by a separate business lack the hallmarks of reliability inherent in a business's self-generated records, proponents must demonstrate not only that "the other requirements of [the business records exception rule] are met" but also that the successor business relies upon those records and "the circumstances indicate the records are trustworthy."

    United States v. Childs, 5 F.3d 1328, 1333 (9th Cir.1993); see also Brawner v. Allstate Indem. Co., 591 F.3d 984, 987 (8th Cir.

    2010) ("[A] record created by a third party and integrated into another entity's records is admissible as the record of the custodian entity, so long as the custodian entity relied upon the accuracy of the record and the other requirements of Rule 803(6) are satisfied."); United States v. Duncan,

    919 F.2d 981, 986-87 (5th Cir. 1990); Air

    Land Forwarders, Inc. v. United States, 172 F.3d 1338, 1342-44 (Fed. Cir.1999);

    United States v. Bueno-Sierra, 99 F.3d 375 (11th Cir. 1996). This principle is codified within section 90.803(6) itself, which provides trial courts the ability to exclude documents otherwise fitting the business records exception where "the sources of information or other circumstances show lack of trustworthiness."

    § 90.803(6)(a), Fla. Stat. (2008).

    
    

    Given this trustworthiness threshold, mere “‘reliance by the [incorporating business] on records created by others, although an important part of establishing trustworthiness, without more is’” insufficient. State v. Fitzwater,

    122 Hawai'i 354, 227 P.3d 520, 532 (2010)

    (quoting 2 Kenneth S. Broun et al., McCormick on Evidence § 292, at 318 (6th ed. 2006)). In most instances, a proponent will clear this hurdle by providing evidence of a business relationship or contractual obligation between the parties that ensures a substantial incentive for accuracy. See, e.g., Matter of Ollag Constr. Equip. Corp., 665 F.2d 43, 46 (2d Cir. 1981) (“[B]usiness records are admissible if witnesses testify that the records are integrated into a company's records and relied upon in its

    day-to-day operations.” (citations omitted)); White Indus., Inc. v. Cessna Aircraft Co., 611 F. Supp. 1049, 1061 (W.D. Mo. 1985) (finding the “indicia of trustworthiness” apparent “where the reporting duty arises by way of a continuing business relationship between two independent business entities”).

    
    

    Id. at 1070-1071.

    
    

30. In the case of third-party records maintained by employers, the hurdle of trustworthiness of the documents has been cleared by act of the Legislature, which establishes a “substantial incentive for accuracy” by not only requiring that the records be maintained, but by determining the failure to produce business records, in itself, to be a sufficient danger to the public health, safety, or welfare so as to merit a stop- work order on the employer. § 440.107(7)(a), Fla. Stat.

    
    

31. In light of the statutory obligation that the employer maintain business records sufficient to establish payroll and demonstrate compliance with workers’ compensation coverage requirements, the undersigned accepts that those records defined by rule, including those provided to the employer by various third parties in furtherance of their business and contractual relationships, meet the test of reliability that underlies the business records exception to the hearsay rule described by Professor Ehrhardt.

32. Given the public policy that the Workers’ Compensation Law be administered as “an efficient and self-executing system

    . . . which is not an economic or administrative burden”

    
    

    (§ 440.015, Fla. Stat.) and applying the rationale set forth in Callaway, treating records provided to an employer by entities

    providing it with labor, materials, and services as having been “made” by the employer serves the legislative purpose of both the Workers’ Compensation Law and the Evidence Code.

33. As long as the third-party records “made” and produced by the employer meet the standards for authentication set forth in section 90.803(6), they are admissible as records of the employer under the business records exception to the hearsay rule.

34. Once business records have been properly authenticated, they become sufficient in themselves to support a

    
    

    finding of fact. § 120.57(1)(c), Fla. Stat. Conversely, once it is established that an employer must, as part of its statutory obligation, maintain and produce the classes of records identified in rule 69L-6.015 as non-hearsay business records, then the absence of those records becomes admissible “to prove the nonoccurrence or nonexistence of the matter.”

    § 90.803(7), Fla. Stat. Business Records - Authenticity

35. Section 90.803(6)(a) requires that evidence being admitted under the business records exception to the hearsay rule be authenticated by the testimony of the records custodian or other qualified witness, or by a qualifying certification or declaration.

36. Section 90.901 provides that:

    
    

    Authentication or identification of evidence is required as a condition precedent to its admissibility. The requirements of this section are satisfied by evidence sufficient to support a finding that the matter in question is what its proponent claims.

    
    

    The requirement of authentication may be met by direct or circumstantial evidence sufficient to support a finding that the document is what it is claimed to be, and “occurs in a situation where the offered item, considered in light of the circumstances, logically indicates the personal connection

    
    

    sought to be proved.” Sunbelt Health Care & Subacute Center-

    
    

    Apopka v. Galva, 7 So. 3d 556, 559 (Fla. 1st DCA 2009).

    
    

37. Section 90.902, entitled “Self-authentication,” provides, in pertinent part, that:

    Extrinsic evidence of authenticity as a condition precedent to admissibility is not required for:

    
    

    * * *

    
    

    (11) An original or a duplicate of evidence that would be admissible under s. 90.803(6), which is maintained in a foreign country or domestic location and is accompanied by a certification or declaration from the custodian of the records or another qualified person certifying or declaring that the record:

    
    

    1. Was made at or near the time of the occurrence of the matters set forth by, or from information transmitted by, a person having knowledge of those matters;

       
       

    2. Was kept in the course of the regularly conducted activity; and

       
       

    3. Was made as a regular practice in the course of the regularly conducted activity, provided that falsely making such a certification or declaration would subject the maker to criminal penalty under the laws of the foreign or domestic location in which the certification or declaration was signed.

    
    

38. Chapter 837 describes those crimes that constitute perjury under Florida law and, in section 837.06, provides that “[w]hoever knowingly makes a false statement in writing with the intent to mislead a public servant in the performance of his or

    
    

    her official duty shall be guilty of a misdemeanor of the second degree, punishable as provided in s. 775.082 or s. 775.083.”

39. A certification or declaration that complies with sections 90.803(6)(c) and 90.902(11) is made under penalty of perjury. Yisrael v. State, 993 So. 2d 952, 957 (Fla. 2008).

40. In this case, no evidence meeting the authentication requirements for business records was provided by Petitioner. There was no testimony of a records custodian and no self- authenticating certification or declaration.3/ Therefore, the business records relied upon by Mr. Mason for his calculations, having not been authenticated by any of the allowable means of doing so, do not qualify for an exception to the hearsay rule and, without more, cannot support Petitioner’s Stop-Work Order and 3rd Amended Order of Penalty Assessment.4/

    Conclusion

    
    

41. Due to the hearsay and authentication issues regarding the evidence relied upon to support Petitioner’s allegation that Respondent engaged one or more employees to perform services on its behalf from September 13, 2008, through September 12, 2011, the evidence was not clear and convincing that Respondent was required to secure and maintain compensation for its employees pursuant to section 440.10.

42. Based on the foregoing, Petitioner did not prove, by clear and convincing evidence, that Respondent is liable for

payment of a penalty in the amount of $52,124.34 for its failure to secure and maintain compensation for its employees as set forth in the 3rd Amended Order of Penalty Assessment.

RECOMMENDATION

Based on the Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a final order dismissing

the Stop-Work Order and 3rd Amended Order of Penalty Assessment against Respondent, The Ford Company Construction, Inc., for its failure to secure and maintain required workers’ compensation insurance for its employees.

DONE AND ENTERED this 23rd day of September, 2015, in Tallahassee, Leon County, Florida.

S

E. GARY EARLY 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 23rd day of September, 2015.

ENDNOTES

1/ Petitioner also introduced Exhibit 11, which included a September 13, 2011, letter to the Division from Robert Ford, explaining the circumstances of the September 12, 2011, worksite inspection; affidavits from two “employees,” purportedly those on the worksite on September 12, 2011; and an insurance certificate covering employees leased to Respondent that facially shows workers’ compensation coverage from July 1, 2010 through July 1, 2012. The letter, affidavits, and certificate each bore a dated stamp indicating their receipt by the Division on September 19, 2013.

Exhibit 11 also included interspersed pages and records that, by appearance, were made well after September 19, 2011, and did not bear dated stamps of receipt. A page with the heading “Addendum to letter” appears to be a page from an April 23, 2012, letter filed by Respondent with the Election of Proceeding. Two pages of what appear to be employee records were provided, though they are otherwise unidentified. Thus, Exhibit 11 appears to be a “mash-up” of documents submitted at various times.

The evidentiary value of Exhibit 11 shall be measured against the standards applied to the 1,200+ pages of records (Exhibit 12) as described herein.

2/ The relationship between the section 440.107 description of “business records” and the section 90.803(6) business records exception is similar to the relationship between the section

119.011 definition of “public records” and the section 90.803(8) public records exception, described as follows:

Records and reports from a city, county, state, or federal governmental office or agency may be admissible under section 90.803(8), but not all records of a public agency are included within this exception. The definition of “public record” under this exception is much narrower than is the definition of “public record” under chapter

119 of the Florida Statutes, Florida’s Public Records Act.

Charles W. Ehrhardt, Ehrhardt’s Florida Evidence § 803.8, at 903 (2010 Edition). Based on the criteria for classification of a document as a business record under each statute, the

undersigned concludes that the fact that a document is a business record for purposes of section 440.107, does not mean that the same document is a business record for purposes of section 90.803(6). Thus, a section 440.107 business record must be independently proven to fall within the exception to the hearsay rule.

3/ The undersigned is cognizant of, and sympathetic with the difficulties that face the Division in obtaining and authenticating records from employers exhibiting varying degrees of cooperation. When, as here, the employer has produced records but does not appear at the hearing, the records must, nonetheless, be authenticated in order for those records to support any finding of fact, including that of their insufficiency for determining payroll.

Authentication may be by stipulation, deposition, admission, or affidavit, if possible. Another means of authentication could be performed at the front-end of the process by certification or declaration, as provided in section 90.803(6)(c) and section 90.902(11). In implementing that process, the Division could include, as an attachment to its Request for Production of Business Records, a certification to be notarized and submitted with the records, by which the employer would be required to identify the records being produced and attest that the records are kept in the course of the employer’s regularly conducted business activity and that it was the regular practice of the employer to “make” and maintain such records. As long as the documents were adequately identified, they would then be self-authenticating.

4/ Even when records are produced in such a manner as to demonstrate that they are the section 90.803(6) business records of the employer, it is incumbent upon the Division to produce evidence as to the manner in which they were received, kept, stored, and maintained to demonstrate that they remain complete. See Dep’t of Bus. & Prof’l Reg. v. Jose Davila-Delgado, D.V.M., Case No. 11-0912PL (Fla. DOAH June 16, 2011; DBPR Sept. 27,

2011). Otherwise, the records may lose their evidentiary value and thereby offer little support to Petitioner in meeting the burden of proof of proving its allegations by clear and convincing evidence. See State v. Hampton, 44 So. 3d 661, 664 (Fla. 2d DCA 2010). When, as here, the case has languished for years, the necessity of producing evidence as to the genuineness of the records produced may be more difficult, but is also more critical.

COPIES FURNISHED:

Trevor S. Suter, Esquire Department of Financial Services Division of Legal Services Workers’ Compensation Section

200 East Gaines Street Tallahassee, Florida 32399-4229 (eServed)

Robert Ford

The Ford Company Construction, Inc. Post Office Box 51169

Jacksonville Beach, Florida 32240

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

200 East Gaines Street Tallahassee, Florida 32399-0390 (eServed)

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: 15-002561

Orders for Case No: 15-002561