STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL SERVICES, DIVISION OF WORKERS' COMPENSATION,

Petitioner,

vs.

S AND M CONSTRUCTION SERVICES, LLC,

Case No. 18-4515

Respondent.

/

RECOMMENDED ORDER

Administrative Law Judge D. R. Alexander conducted a hearing in this case by video teleconference on November 20, 2018, at sites in Sarasota and Tallahassee, Florida.

APPEARANCES

For Petitioner: Taylor Anderson, Esquire1/

Department of Financial Services

200 East Gaines Street Tallahassee, Florida 32399-0333

For Respondent: Patricia Morales, pro se

S & M Construction Services, LLC 6005 11th Street East Bradenton, Florida 34203-6932

STATEMENT OF THE ISSUE

The issue is whether Respondent's untimely request for an administrative hearing is excused by the doctrine of equitable tolling.

PRELIMINARY STATEMENT

On January 16, 2018, the Department of Financial Services, Division of Workers' Compensation (Department), served Respondent with a Stop-Work Order for its failure to obtain workers' compensation coverage that meets the requirements of chapter 440, Florida Statutes. On May 21, 2018, the Department served Respondent with an Amended Order of Penalty Assessment (Penalty Assessment), which informed Respondent that if it wished to contest the Penalty Assessment, a request for a hearing must be filed within 21 calendar days. By letter (petition) filed with the Department on June 15, 2018, Respondent requested a hearing to contest this action. After an Order to Show Cause was entered by the Department requiring Respondent to show cause why the petition should not be dismissed as being untimely, Respondent filed a response alleging that the late filing was excused by circumstances that the Department determined may invoke the doctrine of equitable tolling. The matter then was referred by the Department to the Division of Administrative Hearings (DOAH) to conduct a hearing on that narrow issue.

At the hearing, the Department presented the testimony of two witnesses. Department Exhibits 1 through 11 were accepted in evidence. Exhibit 11 is the deposition testimony of Respondent's managing agent, Patricia Morales. At the hearing, Respondent was

represented by Ms. Morales, who testified on behalf of the company.

A one-volume Transcript of the hearing was prepared.

Proposed findings of fact and conclusions of law were filed by the Department on December 27, 2018, and they have been considered in the preparation of this Recommended Order.

FINDINGS OF FACT

1. The Department is the state agency responsible for enforcing the requirement of the Workers' Compensation Law that employers secure the payment of workers' compensation coverage for their employees and corporate officers. § 440.107, Fla. Stat.

2. To enforce this requirement, the Department performs random inspections of job sites and investigates complaints concerning potential violations of workers' compensation rules.

3. On January 16, 2018, Hemant Balgobin, a Department compliance inspector, conducted a compliance investigation at a job site in Bartow, Florida. The inspection resulted in a determination by Mr. Balgobin that Respondent was the responsible entity supervising the job site, and three individuals employed by Respondent did not have the required workers' compensation coverage.

4. On January 17, 2018, a Stop-Work Order and Request for Production of Business Records was served on Ms. Morales. After

   
   

   the business records produced by Ms. Morales were reviewed by the Department, on May 21, 2018, the Department served her with a Penalty Assessment proposing to assess the company a penalty in the amount of $55,187.12.

5. The Penalty Assessment contained a Notice of Rights, which stated that, if Ms. Morales wished to contest the penalty, she must file a "petition for hearing so that it is received by the Department within twenty-one (21) calendar days of your receipt of this agency action." It also stated that the petition "must be filed with Julie Jones, DFS Agency Clerk, Department of Financial Services, 612 Larson Building, 200 East Gaines Street, Tallahassee, Florida 32399-0300." Finally, the Notice of Rights stated in bold capital letters, "FAILURE TO FILE A PETITION WITHIN TWENTY-ONE (21) CALENDAR DAYS OF RECEIPT OF THIS AGENCY ACTION CONSTITUTES A WAIVER OF YOUR RIGHT TO ADMINISTRATIVE REVIEW OF THIS AGENCY ACTION." This meant that a petition had to be filed and in the hands of the Agency Clerk no later than

   June 11, 2018.

   
   

6. The petition was not filed until June 15, 2018. Because the petition was filed four days late, the Department issued an Order to Show Cause, which required Ms. Morales to show cause

   why her petition should not be dismissed. In her response,

   
   

   Ms. Morales asserted that she did not have a fax number for filing a petition, so she contacted Mr. Balgobin, who told her to

   
   

   fax it to him and "they would fax it to the right person." She essentially contends that this statement led her to believe that by filing the petition with Mr. Balgobin, it would be treated as a timely filing. The Department construed this conversation as possibly excusing the late filing and forwarded the matter to DOAH to resolve that narrow issue.

7. The record shows that on June 14, 2018, or after the filing deadline was missed, Ms. Morales telephoned Mr. Balgobin to ask "who to send it to," as there was no email or fax number in the Notice of Rights. She testified that he told her to fax the petition to the Fort Myers office and it would be forwarded to Tallahassee. After speaking with Mr. Balgobin, she prepared a petition and then faxed it to the Fort Myers office the following day, June 15, 2018.

8. In his testimony, Mr. Balgobin did not say whether he spoke with Ms. Morales on June 14, 2018, or if he told her to fax the petition to him. However, it is reasonable to find that he did, because she faxed a petition to the Fort Myers office on June 15, 2018, and it then was forwarded by that office to Tallahassee. However, all of these events occurred after the deadline for filing a petition.

9. There is no credible evidence that Mr. Balgobin gave Ms. Morales a specific date when the petition was due, and he made no statements that caused her to miss the deadline. In

   
   

   fact, on the few occasions that he spoke with Ms. Morales throughout this process, he always reminded her to read the Notice of Rights. It is not the practice of compliance inspectors (or any other employee in the Fort Myers district office) to tell persons when their petitions must be filed.

10. At hearing, Ms. Morales also contended that one reason for the delay in filing a petition was because the Notice of Rights listed only a street address in Tallahassee, and not a fax number or email address. She explained that she attempted to telephone the Agency Clerk in Tallahassee to secure that information, but was unsuccessful. She gave no explanation as to why the petition was not sent by mail to the Tallahassee address pursuant to the instructions in the Notice of Rights. The undersigned has not credited Ms. Morales' assertion that she was confused on where and how to send a petition, given the clear instructions in the Notice of Rights.

11. Ms. Morales also spoke by telephone with Ms. Almas, a Department regulatory consultant in the Fort Myers office. The record is confusing on the gist of those conversations because Ms. Morales was unclear about when the calls occurred, and whether the calls related to the deadline for filing business records to take advantage of a penalty discount, filing her request for a hearing, or filing a response to the Order to Show Cause.

    
    

12. The record is clear, however, that Ms. Almas telephoned Ms. Morales six days after the Stop-Work Order was issued in January 2018 to remind her that all business records must be filed within ten days in order to be eligible for a discount. According to Ms. Almas, a second telephone conversation took place on May 31, 2018, when Ms. Morales contacted her to ask why she did not receive a discount on the penalty. At hearing,

    Ms. Morales contended that during that call, Ms. Almas provided her with a specific date on which the petition must be filed, and that she timely filed her petition in accordance with those instructions. However, she could not recall the date allegedly given to her by Ms. Almas.

13. Ms. Almas denied giving Ms. Morales a specific due date for the petition and says she only referred her to the Notice of Rights. She also denied providing any misleading information that would cause Ms. Morales to late-file her petition. On this issue, Ms. Almas' testimony is credited.

14. Finally, Ms. Morales acknowledged that she read the Notice of Rights and she understood she had 21 calendar days in which to request a hearing. She admitted that nothing prevented her from filing a petition in a timely manner, but she "was just trying to see how [she] would do it," since this was the first time she was involved in an administrative proceeding.

    
    

    CONCLUSIONS OF LAW

    
    

15. The Department has the burden to show that the Penalty Assessment was received and that Respondent's request for hearing was untimely. As the party seeking to invoke the doctrine of equitable tolling, Respondent has the burden of proof on that issue. The standard of proof for each of the parties is a preponderance of the evidence. § 120.57(1)(j), Fla. Stat.

16. The filing of a request for hearing takes place when the request for hearing is received by the agency. Fla. Admin. Code R. 28-106.104(1).

17. By a preponderance of the evidence, the Department established that Ms. Morales was served with the Penalty Assessment on May 21, 2018, and her petition was not received by the Fort Myers office until June 15, 2018, which then forwarded the petition to the Tallahassee office on the same day. The request for hearing was therefore untimely.

18. In Machules v. Department of Administration, 523 So. 2d

    
    

    1132, 1134 (Fla. 1988), the Supreme Court held that the doctrine of equitable tolling "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." Thus, a party's failure to timely file a petition sometimes can be excused by application of the equitable tolling doctrine as a

    
    

    defense. The doctrine is used sparingly and only in extraordinary circumstances.

19. The issue presented here is whether any statements made by Department employees caused Ms. Morales to miss the deadline for filing her petition. As previously found, the evidence supports a conclusion that the late-filing was the result of

    Ms. Morales' own inattention and not the result of an agency misrepresentation.

20. In short, the statements described herein do not rise to the level of overcoming the effect of the clear language in the Notice of Rights. See, e.g., Xerox Corp. v. Fla. Dep’t of Prof’l Reg., 489 So. 2d 1230, 1231 (Fla. 1st DCA 1986) ("informal

    and imprecise oral communications" from agency are insufficient in form and substance to overcome the effect of a prior formal notice as to the necessity of a timely petition).

21. There is no evidence that the Notice of Rights is confusing or unclear regarding when and where to file a petition.

22. Application of the doctrine is not warranted to excuse the untimely filing of Respondent's petition. Therefore, Respondent has waived its right to an administrative hearing.

RECOMMENDATION

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

RECOMMENDED that the Department of Financial Services, Division of Workers' Compensation, enter a final order dismissing Respondent's request for a hearing as untimely.

DONE AND ENTERED this 7th day of January, 2019, 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 7th day of January, 2019.

ENDNOTE

1/ After the final hearing, substitute counsel identified below entered an appearance for the Department.

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)

Patricia Morales

S & M Construction Services, LLC 6005 11th Street E

Bradenton, Florida 34203-6932

Kyle Christopher, Esquire Department of Financial Services Office of the General Counsel

200 East Gaines Street Tallahassee, Florida 32399-0333 (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: 18-004515

Orders for Case No: 18-004515