STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL SERVICES, DIVISION OF WORKERS' COMPENSATION,

Petitioner,

vs.

W.D. HUTCHINSON CONSTRUCTION, LLC,

Case No. 15-5086

Respondent.

/

RECOMMENDED ORDER

On December 1, 2015, a hearing in this case was held by video teleconferencing at sites in Tallahassee and Lakeland, Florida, before D. R. Alexander, Administrative Law Judge, Division of Administrative Hearings (DOAH).

APPEARANCES

For Petitioner: Trevor Suter, Esquire

Department of Financial Services

200 East Gaines Street Tallahassee, Florida 32399-4229

For Respondent: Jamison Jessup, Qualified Representative

557 Noremac Avenue

Deltona, Florida 32738-7313 STATEMENT OF THE ISSUE

The issue is whether Respondent's request for a hearing to contest a Stop-Work Order and Amended Order of Penalty Assessment (Amended Assessment) issued by Petitioner, Department

of Financial Services, Division of Workers' Compensation (Division), was timely filed by virtue of the doctrine of equitable tolling.

PRELIMINARY STATEMENT

After the Division issued Respondent a Stop-Work Order and Amended Assessment for failing to obtain coverage that meets the requirements of chapter 440, Florida Statutes (2015), Respondent requested a hearing to contest this action. Although the request was filed after the deadline specified in the Amended Assessment, the matter was referred by the Division to DOAH to resolve the dispute. Respondent was later authorized to file an Amended Request for Hearing, which asserted that the doctrine of equitable tolling applies because its owner was misled by a Division employee on the deadline for filing business records.

A bifurcated hearing on the timeliness issue was conducted. At the hearing, the Division presented three witnesses.

Division Exhibits 1 through 6 were accepted in evidence. Respondent's owner testified on behalf of the corporation. Also, Respondent's Exhibits 1 through 23 were accepted in evidence.

A one-volume Transcript of the hearing has been prepared. The parties submitted proposed recommended orders, which have been considered in the preparation of this Recommended Order.

FINDINGS OF FACT

1. The Division is the state agency responsible for enforcing the various requirements of chapter 440.

2. Respondent is a Florida limited liability company engaged in the construction business. Its offices are located at 1717 West Memorial Drive, Lakeland, Florida.

3. On April 6, 2015, while driving in Spring Hill, Florida, Dale Russell, a Division compliance inspector, observed three individuals reroofing a single-family residence located at 1006 Chastile Drive. The three individuals confirmed that they were employed by Respondent's construction firm.

4. Mr. Russell contacted Mr. Hutchinson, the owner of the corporation, who confirmed that the three individuals were employed by his firm and that the three were not covered by workers' compensation insurance. Because Mr. Hutchinson was in Lakeland that day, a Stop-Work Order was not served. However, the two agreed to meet at a later date in the Division's Tampa District Office. A Stop-Work Order and request for business records was served on Mr. Hutchinson by another investigator on April 8, 2015. The Stop-Work Order contained an Order of Penalty Assessment, which explained how a penalty is calculated, but gave no specific amount pending a review of Respondent's financial records.

   
   

5. On May 20, 2015, an Amended Assessment was prepared indicating that Respondent was being assessed a total penalty of

   $96,364.78 for failing to secure the payment of workers' compensation insurance.

6. The Amended Assessment was personally served on Respondent by Mr. Russell on May 26, 2015, when Mr. Hutchinson visited the Tampa District Office. The standard assessment form contains two important deadlines that must be met by the employer. On the first page, the form states that pursuant to Florida Administrative Code Rule 69L-6.028, "if the Division imputes the employer's payroll, the employer shall have twenty business days after service of the first amended order of penalty assessment to provide business records sufficient for the Division to determine the employer's payroll for the period requested in the business records request for the calculation of the penalty." It goes on to state that these records may be used to recalculate the employer's penalty "only if the employer provides all such business records within the twenty days after service of the first amended order of penalty assessment. Otherwise, the first amended order of penalty assessment will remain in effect." This means that Respondent had until

   June 23, 2015, in which to provide business records to the District Office.

   
   

7. On the second page of the Amended Assessment is a section entitled Notice of Rights (Notice). Among other things, it states that if the employer requests a hearing, he "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." Notably, this timeframe is measured in calendar days, not business days, and means that if Respondent decided to request a hearing rather than providing additional financial records, the request had to be filed with, and received by, the Division no later than June 15, 2015.

8. During his meeting with Mr. Hutchinson, the investigator explained the Amended Assessment, section by section. He specifically told Mr. Hutchinson that he had

   20 business days in which to produce additional business records. He also told him that he had 21 calendar days in which to request a hearing. Mr. Russell is an experienced investigator, having worked as a deputy sheriff for 28 years before working as a Division inspector. He has issued numerous notices and is very familiar with the deadlines. Although

   Mr. Hutchinson testified that he asked Mr. Russell to confirm that he had 21 business days in which to file his business records, and was told that this was correct, which differs from Mr. Russell's version of the conversation, the testimony of the experienced investigator is accepted as being the most credible

   
   

   on this issue. The undersigned finds that Mr. Russell correctly explained the ramifications of the two deadlines and he did not mislead Mr. Hutchinson. The facts here do not demonstrate equitable tolling.

9. Even though he was given accurate information regarding the two deadlines, it is evident that Mr. Hutchinson, a lay person, either misunderstood what he was told or was just plain confused. Obviously, he did not read the instructions on the Amended Assessment before submitting his records. Faced with a potential $96,364.78 assessment, it is somewhat surprising that Mr. Hutchinson did not contact the Tampa District Office after the May 26 meeting to reconfirm the precise date on which the records (or request for a hearing) were due. Even at hearing, he admitted that he did not know the difference between submitting business records and requesting a hearing.

10. Believing that he had 21 business days to provide business records, Mr. Hutchinson carried his records to the Tampa District Office on June 24, 2015, or one day past the deadline established in the Amended Assessment. He was told by a Division supervisor that the submission was untimely and he had waived his right to produce them. Even though it was now too late, she recommended that Mr. Hutchinson prepare a request for a hearing, which would be submitted to Tallahassee for legal counsel to review. Pursuant to her instructions, that same

    
    

    morning, Mr. Hutchinson prepared a handwritten, one-page letter requesting a hearing.

11. According to Respondent, the assessment is based on missing checks that, if produced, would establish that no penalty assessment is warranted. At hearing, over the Division's objection, Respondent was allowed to introduce into evidence bank records and copies of checks. See Resp. Ex. 6-23.

    Although the Division has not yet reviewed them, it acknowledged that they may substantially reduce the assessment.

12. Throughout this proceeding, Respondent's qualified representative has contended that the Amended Assessment is defective because it does not inform the employer that a qualified representative can represent its interests. The first paragraph of the Notice in both the Amended Assessment and the Stop-Work Order states that "you may be represented by counsel," but it makes no reference to a qualified representative. However, in the second paragraph, which provides information regarding the filing of a petition requesting a hearing, it states that the petition must contain "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." While more clarity in the first paragraph of the Notice would be appropriate, there is sufficient information in the Notice, if

    
    

    read, to alert the employer that alternative representation is

    
    

    allowed.

    
    

    CONCLUSIONS OF LAW

    
    

13. The Division is responsible for enforcing the requirement that employers subject to chapter 440 secure the payment of workers' compensation by obtaining workers' compensation coverage for their employees "that meets the requirements of [chapter 440] and the Florida Insurance Code."

    § 440.107(1), Fla. Stat.

    
    

14. Respondent contends that it was misled by statements of the Division investigator when he served the Amended Assessment on Mr. Hutchinson on May 26, 2015. It bears the burden of proving by a preponderance of evidence that the doctrine of equitable tolling applies.

15. The federal doctrine of "equitable tolling" was incorporated into Florida's administrative jurisprudence by the Florida Supreme Court in Machules v. Department of

    Administration, 523 So. 2d 1132, 1134 (Fla. 1988). There, the Court considered and applied the doctrine of "equitable tolling." "Generally, the tolling doctrine has been applied when the plaintiff has been misled or lulled into inaction, has in some extraordinary way been prevented from asserting his rights, or has timely asserted his rights mistakenly in the wrong forum." Id. The doctrine has always been applied

    
    

    sparingly. It requires more than a showing of mere garden variety negligence or excusable neglect. One who fails to act diligently cannot invoke equitable principles to excuse lack of diligence. Baldwin Cnty. Welcome Ctr. v. Brown, 466 U.S. 147,

    151 (1984). Based upon a review of the entire record and consideration of Machules in light of allegations made by Respondent, it is concluded that, as a matter of law, "equitable tolling" does not apply in this case. While Mr. Hutchinson may have been confused, or he simply failed to comprehend the investigator's explanation of the deadlines, the evidence does not support a conclusion that he was misled by the Division.

16. Respondent also contends that the Amended Assessment is defective because the Notice does not inform the employer that a qualified representative may be used. But the omission of this information in the first paragraph of the Notice is no more than a technical error. It did not affect the substantive or procedural rights of the employer. Cf. Dep't of Nat. Res. v.

    Sheffield, 420 So. 2d 892, 894 (Fla. 1st DCA 1982)(lack of authorized signature on original notice of intent was a purely technical error). Moreover, the second paragraph contains this information, and had the Notice been read, the employer would be aware of this alternative form of representation. More importantly, the Amended Assessment spells out with clarity the specific charges being lodged against the employer and the steps

    
    

    that an employer must take to contest them. It is noteworthy that the entire Amended Assessment, section by section, was explained to Respondent when it was served.

17. Finally, although the financial records were rejected by the Tampa District Office because they were one day late, it would be patently unfair to disregard that information and require Mr. Hutchinson to incur a $96,364.78 assessment (plus interest and penalties that may have accrued) due to his confusion, especially when the record suggests that the information may either zero out, or substantially reduce, the penalty. The undersigned urges that the Division consider this information and adjust the Amended Assessment, if appropriate.

RECOMMENDATION

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

RECOMMENDED that the Department of Financial Services enter a final order determining that Respondent's request for a hearing was untimely. However, it is recommended that the business records provided by Respondent at hearing be reviewed and considered to determine the correct amount owed, if any.

DONE AND ENTERED this 3rd day of February, 2016, in Tallahassee, Leon County, Florida.

S

D. R. ALEXANDER 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 3rd day of February, 2016.

COPIES FURNISHED:

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

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

Trevor Sutor, Esquire

Department of Financial Services

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

Jamison Jessup, Qualified Representative

557 Noremac Avenue

Deltona, Florida 32738-7313 (eServed)

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days of the date of this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will render a final order in this matter.

Docket for Case No: 15-005086

Orders for Case No: 15-005086