The Issue The issue is whether Respondent committed the offenses alleged by the Administrative Complaint, and, if she did, the penalty that should be imposed.
Findings Of Fact Petitioner is a regulatory agency of the State of Florida charged with the responsibility of investigating and prosecuting complaints against real estate professionals, including licensed real estate salesmen. At all times pertinent to this case, Respondent, America Canizales, was licensed by Petitioner as a real estate salesman. At the time of the hearing, however, Respondent's license was on inactive status. Respondent was the real estate salesman who represented Elvira Martinez when Ms. Martinez bought her apartment in the middle of 1987. As a result of her professional dealings with Ms. Martinez, Respondent learned that Ms. Martinez was interested in investing in real estate. On December 4, 1987, Respondent persuaded Ms. Martinez to enter into a real estate transaction with her. Respondent intended to purchase a house for the sum of $34,000, but she did not have the funds necessary to close the transaction. Respondent needed an additional $5,000 to apply toward the purchase price and to pay the costs of closing. The house was to be purchased by Respondent in her individual capacity in a transaction that was independent of her status as a real estate salesman. The agreement executed by Respondent and Ms. Martinez on December 4, 1987, provided for Ms. Martinez to give to Respondent the sum of $5,000. In exchange for this money, Respondent agreed that she would convey to Ms. Martinez one-half interest in the $34,000 house after she had acquired title to the property. In the event the transaction did net close and Respondent did not obtain title to the house, Respondent was to return to Ms. Martinez the sum of $5,000 without the payment of interest. Between December 4, 1987, and December 8, 1987, Ms. Martinez gave to Respondent a check made payable to America Canizales in the amount of $5,000. This check, dated December 9, 1987, was to be held in trust by Respondent until the closing on the purchase of the $34,000 house. At no time did Respondent deposit the check in a bank account. There was no evidence that Respondent took any action to safeguard Ms. Martinez's check or the funds represented by the check. Although the check was dated December 9, 1987, the check was cashed on December 8, 1987, at the bank used by Ms. Martinez. The person who cashed the check endorsed it in the name of America Canizales. On or about December 10, 1987, Respondent told Ms. Martinez that Respondent's husband had stolen all of Respondent's money and that he had also stolen Ms. Martinez's check. Respondent also told Ms. Martinez that because of the theft, she would be unable to close their contemplated transaction and promised to repay the $5,000. Respondent offered no further explanation or accounting for the funds. Respondent made repeated promises to repay Ms. Martinez the sum of $5,000 on the occasions Ms. Martinez was able to contact her. Thereafter, Respondent moved from the State of Florida without letting Ms. Martinez know where she could be reached. When Ms. Martinez located Respondent in Chicago, Illinois, Respondent again promised to repay Ms. Martinez. As of the time of the formal hearing, Respondent had returned to Dade County, Florida, but she had made no effort to repay Ms. Martinez the sum of $5,000. Respondent repeatedly misled Ms. Martinez as to her intentions to repay her. The factual allegations of the Administrative Complaint filed by Petitioner to "initiate this case were denied by Respondent. The request for a formal hearing was timely filed by Respondent.
Recommendation Based on the foregoing Findings of `Fact and Conclusions of Law, it is: RECOMMENDED that the Department of Professional Regulation, Florida Real Estate Commission, enter a final order which finds that Respondent violated Section 475.25(1)(b), Florida Statutes, as alleged in Count I of the Administrative Complaint. It is further recommended that the final order revoke the real estate salesman's license issued to Respondent, America Canizales. DONE and ORDERED this 30th day of January, 1990, in Tallahassee, Florida. CLAUDE B. ARRINGTON Hearing Officer Division of Administrative Hearings The Desoto Building 1230 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 30th day of January, 1990. COPIES FURNISHED: John R. Alexander, Esquire Department of Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 America Canizales 158 West 10th Street Hialeah, Florida 33010 Kenneth E. Easley, General Counsel Department of Professional Regulation 1940 North Monroe Street, Suite 60 Tallahassee, Florida 32399-0792 Darlene Keller, Division Director Department of Professional Regulation Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802
Findings Of Fact Respondent, Carl A. Perry, is licensed by Petitioner as a real estate salesman. At all times material hereto, he was employed by F.E.C. Real Estate Corporation. On September 23, 1979, Respondent negotiated and procured a contract whereby Ronald Joeckel and his wife were to buy and Lynn C. Burdeshaw and his wife were to sell certain real property owned by the Burdeshaws and located in Pompano Beach, Florida. In order to secure that Deposit Receipt Contract, the Joeckels gave Respondent on that date a $100 deposit. The Deposit Receipt Contract required an additional deposit of $1,900, and on October 11, 1979, Respondent received a $1,900 check from the Joeckels. The check was dated October 20, 1979. Respondent did not give this check to his employer until November 23, 1979. When F.E.C. Real Estate Corporation deposited the check for $1,900 in its trust account, the check was dishonored by the bank upon which it was drawn for the reason that the Joeckels did not have sufficient funds to cover the check. Instead of advising the Burdeshaws that the Joeckels' $1,900 check was dishonored, Respondent contacted Ronald Joeckel on several occasions. Joeckel each time advised Respondent that he would cover the check, and Respondent relied upon that information and believed that the Joeckels would fulfill their contract for the purchase of the Burdeshaws' property. Respondent was in error; the Joeckels breached the Deposit Receipt Contract, and the Burdeshaws sold their property to another purchaser soon thereafter. Respondent's employer, F.E.C. Real Estate Corporation, was not the listing broker for the Burdeshaws' property. Shell Coast Realty held that listing. Other than this Administrative Complaint, Respondent has had no other complaint made against him.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is, therefore, RECOMMENDED THAT: A final order be entered reprimanding Respondent, Carl A. Perry, for his conduct, admonishing Respondent, Carl A. Perry, to abstain from similar conduct, and placing him on probation for a period of one year. RECOMMENDED this 21st day of December, 1981, in Tallahassee, Florida. LINDA M. RIGOT, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 21st day of December, 1981. COPIES FURNISHED: William R. Scherer, Esquire Grimmett, Conrad, Scherer & James, P.A. 707 Southwest. Third Avenue Post Office Box 14723 Fort Lauderdale, Florida 33302 Mr. Carl A. Perry c/o F.E.C. Real Estate Corporation 4634 North Federal Highway Lighthouse Point, Florida 33064 Mr. Samuel R. Shorstein Secretary, Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Frederick H. Wilsen, Esquire Assistant General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Mr. Carlos B. Stafford Executive Director Board of Real Estate Department of Professional Regulation Post Office Box 1900 Orlando, Florida 32802 =================================================================
The Issue The issues are whether Respondent, Deck King Corp., failed to secure workers’ compensation coverage for its employees, and, if so, whether the Department of Financial Services, Division of Workers’ Compensation (“Department”) correctly calculated the penalty assessment imposed against Respondent.
Findings Of Fact The Department is the state agency responsible for enforcing the statutory requirement that employers secure the payment of workers’ compensation for the benefit of its employees. Respondent was a business providing services in the construction industry with its principal office located at 2200 Northwest 22nd Court, Miami, Florida 33142. On June 29, 2015, Marilyn Victores, the Department’s compliance investigator, observed Ivan Lopez Avila and Robert Jordan performing construction work on a job site at 150 South Hibiscus Drive, Miami Beach, Florida 33139. She learned from the individuals working that they were performing the job on behalf of Respondent, Deck King Corp. After gathering the information at the job site, Ms. Victores spoke with her supervisor, Ms. Scarlett Aldana, and an investigation was performed. The Division of Corporations’ website was consulted to determine, among other things, the identity of Respondent’s corporate officers. Mses. Victores and Aldana learned that Respondent had three corporate officers and directors listed, Derek Barnick, Thomas Barnick, and Fausto Lopez. They also learned that the corporation was “active.” Ms. Victores consulted the Department’s Coverage and Compliance Automated System (“CCAS”) for proof of workers’ compensation coverage and for any exemptions associated with Respondent. An exemption is a method whereby a corporate officer can be relieved of the responsibility of the requirements of chapter 440, Florida Statutes, pursuant to section 440.05. CCAS is the Department’s internal database that contains workers’ compensation insurance policy and exemption information. Insurance providers are required to report insurance coverage information to the Department which is then inputted into CCAS. Ms. Victores’ CCAS search revealed that Respondent did not have a workers’ compensation policy or an employee leasing policy. Additionally, she discovered that no active exemptions were associated with Respondent. Based upon the information she gathered, Ms. Victores issued and served Respondent with a Stop-Work Order on June 29, 2015. Ms. King simultaneously issued and served Respondent a Request for Production of Business Records for Penalty Assessment Calculation (the “Request for Production”). The Request for Production sought documents to enable the Department to determine Respondent’s payroll for the time period of June 30, 2013, through June 29, 2015. In response to the Request for Production, Respondent provided the Department only bank statements. Ms. Eunika Jackson, a penalty auditor with the Department, was assigned to calculate the penalty to be assessed against Respondent. Ms. Jackson believed the business records produced by Respondent were insufficient to calculate a penalty for the entire audit period as they did not specify payroll or payments made to employees other than two specific checks, which were credited against the penalty ultimately assessed against Respondent. Based upon Ms. Jackson’s calculations, on October 9, 2015, the Department issued an Amended Order of Penalty Assessment to Respondent which was served on Respondent on that date. The Amended Order of Penalty Assessment imposed a penalty of $148,923.16. To make the penalty assessment determination, Ms. Jackson consulted the codes listed in the National Council on Compensation Insurance’s (NCCI) Scopes® Manual, which has been adopted by the Department through Florida Administrative Code Rules 69L-6.021 and 69L-6.031. Classification codes are assigned to various occupations to assist in the calculation of workers’ compensation insurance premiums. Based upon Ms. Victores’ description of the activities Respondent’s workers were performing and the descriptions listed in the NCCI Scopes® Manual, Ms. Jackson determined that the proper classification for employees of Respondent was 5403. Ms. Jackson then utilized the corresponding manual rates for that classification code and the related periods of the alleged non- compliance. Based upon the information provided to her by Mses. Victores and Aldana, Ms. Jackson utilized the appropriate methodology specified in section 440.107(7)(d)1. and rules 69L-6.027 and 69L-6.028, to determine the penalty of $148,923.16. The business records supplied by Respondent in response to the Department’s Request for Production consisted of two years’ worth of bank statements. No tax records, such as W-2s, W-4s, 1099s, or tax returns of Respondent, were provided to the Department to allow it to determine whether any of the workers were independent contractors, what salaries, if any, they were paid, or in any way to mitigate the penalty assessed by the Department. By not appearing at hearing or attempting to file any documents in explanation or mitigation of the penalty assessed against it, Respondent gave the Department nothing upon which to reach any conclusion of payroll other than through imputation. Using the Penalty Calculation Worksheet, Ms. Jackson determined the penalty to be assessed against Respondent. She imputed the income for Derek Barnick, Thomas Barnick, Ivan Lopez Avila, Robert Lopez, and Fausto Lopez, and used actual records provided by Respondent to determine the income of an individual identified only as “Mili” who received $105 in April 2014. Working through the calculations called for by the worksheet included the class code, period(s) of non-compliance, gross payroll, a divisor of 100 which was then multiplied by the approved manual rate, and then multiplied by two to calculate the penalty. The result was a penalty assessment of $148,923.16. By not appearing at hearing or offering any evidence to contradict the penalty assessed by the Department, Respondent waived its opportunity to prove the Department’s data used and calculations made were performed improperly. The Department properly determined the penalty using the worksheet prescribed by its statutes and rules.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department issue a final order imposing a penalty of $148,923.16 against Respondent. DONE AND ENTERED this 15th day of March, 2016, in Tallahassee, Leon County, Florida. S ROBERT S. COHEN 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 15th day of March, 2016. COPIES FURNISHED: Tabitha G. Harnage, Esquire Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399-4229 (eServed) Deck King Corp. 2200 Northwest 22nd Court Miami, Florida 33142 Julie Jones, CP, FRP, Agency Clerk Division of Legal Services Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399-0390 (eServed)
Findings Of Fact The Respondent, Gaspar Nagymihaly, who does business as Bay Air Apartments, is the holder of license No. 23-12970H-3234, held with the Petitioner, State of Florida, Department of Business Regulation, Division of Hotels and Restaurants. The location of the Bay Air Apartments is 665 N.E. 83rd Terrace, Miami, Florida. At all times pertinent to the notice to show cause, the Respondent has held such license for doing business as Bay Air Apartments. Bonnie Joyner, formerly known as Bonnie Pestcoe, rented an apartment from the Respondent beginning February 11, 1977. The contact that Mrs. Joyner had with the Respondent was through the intermediary M. Infante. Mr. Infante was the manager and agent for the Respondent in the apartment business known as Bay Air Apartments. There was a discussion between Mrs. Joyner and Infante to the effect that the tenant intended to stay in the aforementioned apartment for a period of one year; however, there was no written or verbal agreement which bound the parties to a lease which would last for a period of one year. In effect, the rent was paid on a monthly basis, thereby creating a tenancy of month to month. The amount of monthly rent was $190 and the parties had agreed to a security deposit of $190. Mrs. Joyner lived in the apartment for two months and paid the rent for that two-month period. Evidence of the rent payments for the two months and the security deposit may be found as Petitioner's Exhibits 2, 3, and 4 admitted into evidence. Two weeks before April 11, 1977, Mrs. Joyner contacted Mr. Infante to apprise him of the fact that she intended to vacate the premises. This contact was by an oral communication only. At that time, Infante advised Mrs. Joyner that he could not return the deposit and that he would not tell her who the owner of the apartment was. Mrs. Joyner then vacated the apartment on April 11, 1977, and sent a request to Mr. Nagymihaly for return of her security deposit. She learned of Mr. Nagymihaly's identity through a search of the tax records. The written request for the return of the security deposit is dated April 11, 1977 and is Respondent's Exhibit No. 1 admitted into evidence. Mr. Nagymihaly responded to the request by forwarding a $90.00 check to Mrs. Joyner, dated April 12, 1977. This check indicated that the basis of the return of that portion of the security deposit was premised upon the fact that Mrs. Joyner had a nice personality. A copy of the check may be found as Petitioner's Exhibit No. 5 admitted into evidence. Subsequent to the payment of the $90.00, Nagymihaly wrote a letter of April 14, 1977, addressed to, the then Mrs. Pestcoe in which he stated that the reason for returning only a portion of the security deposit, was due to the failure of Ms. Pestcoe to stay for a year and the necessary cost for preparing the apartment for reinspection, etc. A copy of the letter of April 14, 1977, is Petitioner's Exhibit No. 7 admitted into evidence. In response to a complaint which Mrs. Pestcoe made with the Petitioner, Mr. Nagymihaly wrote a letter of May 3, 1977, reiterating his comments about the necessity for Ms. Pestcoe, now Mrs. Joyner, to live in the apartment for a year and explaining why no certified letter had been sent to Ms. Pestcoe when the Respondent intended to keep the security deposit. The letter of May 3, 1977, may be found as Petitioner's Exhibit No. 7 admitted into evidence. It should be noted that in Petitioner's Exhibit 6, which is the April 14, 1977, letter to Mrs. Pestcoe, the monies are referred to as advance rent and not a security deposit. This is in contrast to the terminology used in the May 3, 1977, letter which referred to the money in controversy as being a security deposit. Moreover, the facts in the case demonstrated that the manger for the Respondent had inappropriately kept the security deposit which Mrs. Joyner had paid. The facts in this case are to be looked at in accordance with the provisions of Section 83.49(3)(a). This provision reads as follows: 83.49(3)(a) Upon the vacating of the premises for termination of the lease, the landlord shall have 15 days to return said security deposit to- gether with interest or in which to give the tenant written notice by certified mail to the tenant's last known mailing address of his in- tention to impose a claim thereon. The notice shall contain a statement in substantially the following form: This is a notice of my intention to impose a claim for damages in the amount of upon your security deposit. It is sent to you as required by s. 83.49(3), Florida Statutes. You are hereby notified that you must object in writing to this deduction from your security deposit within 15 days from the time you receive this notice or I will be authorized to deduct my claim from your security deposit. Your objection must be sent to (landlord's address). . . If the landlord fails to give the required notice within the 15-day period, he forfeits his right to impose a claim upon the security deposit. If this section were read without reference to any other provision within Chapter 83, Florida Statutes, it would appear that the Respondent, Mr. Nagymihaly has illegally retained a portion of Mrs. Joyner's security deposit. However, to truly understand the Respondent's obligation in this instance, it is necessary to look to the language of Section 83.49(5), Florida Statutes, which reads as follows: (5) Except when otherwise provided by the terms of a written lease, any tenant who vacates or aban- dons the premises prior to the expiration of the terms specified in the written lease, or any tenant who vacates or abandons premises which are subject of a tenancy from week to week, month to month, quarter to quarter, or year to year, shall give at least 7 days' notice by certified mail to the landlord prior to vacating or abandoning the the premises. Failure to give such notice shall relieve the landlord of the notice requirement of subsection (3)(a). The facts establish that Mrs. Joyner, then Mrs. Pestcoe, failed to make seven days' written notice by certified mail of her vacation and abandonment of the premises, thereby relieving Mr. Nagymihaly of any responsibility to give a written notice of the intent to claim damages against the security deposit and written notice of the rights of the tenant to object in writing to the deduction of the security deposit within 15 days of the receipt of the notice. Notwithstanding the lack of requirement on the part of the Respondent to notify Mrs. Joyner of his intent to claim against the security deposit, he did make such a notification by his comments to her in person on April 11 and by his letter of April 14 to Mrs. Joyner. She in turn made her objection known to the Petitioner. This action taken by Mrs. Joyner and the Respondent to protect their interests has set the stage for possible court action by either of the individuals in a civil proceeding. The sequence of events has not shown that there has been any violation of Section 83.49(3)(a), Florida Statutes, because the Respondent is contesting the return of the security deposit as he is entitled to do and he has been relieved of any necessity for written notice of his intention as required by that provision of the law, because Mrs. Joyner's failure to give 7 days notice by certified mail of her vacation or abandonment of the premises as required by Section 83.49(5), Florida Statutes, removed any obligation of Respondent to give such written notice. Therefore, there is no violation of Section 83.49, Florida Statutes, and there can be no penalties imposed under Section 509.261, Florida Statutes.
Recommendation It is recommended that the action taken under the notice to show cause against the Respondent, Gaspar Nagymihaly, be dismissed. DONE and ENTERED this 11th day of April, 1978, in Tallahassee, Florida. CHARLES C. ADAMS, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Lawrence D. Winson, Esquire Department of Business Regulation Johns Building 725 South Bronough Street Tallahassee, Florida 32304 Theresa N. Walsh-Hubbart, Esquire 3115 Brickell Avenue Miami, Florida 33129
The Issue The issues in this case are whether Respondent, Axiom Construction Design Corporation (Axiom), failed to provide workers' compensation coverage, and, if so, what penalty should be imposed.
Findings Of Fact The Department is the state agency responsible for enforcing the various requirements of chapter 440, Florida Statutes. Section 440.107(3) mandates, in relevant part, that employers in Florida must secure workers’ compensation insurance coverage for their employees. At all times relevant, Axiom was a small Florida corporation engaged in the construction industry, principally installing drywall. Axiom’s principal office is located at 1067 Walt Williams Road, Lakeland, Florida. Mr. Pratt is Axiom’s owner, sole corporate officer, and registered agent. On July 23, 2014, Randall Durham conducted a job site workers’ compensation compliance investigation (Compliance Investigation). Mr. Durham spoke with Mr. Pratt at a job site at 109 Cattleman Road, the new Sarasota mall. Mr. Pratt and Al Lappohn were working the job site at the new mall. Mr. Pratt had a workers’ compensation policy in place with Southeast Personnel Leasing. Mr. Lappohn did not have an exemption from workers’ compensation coverage, and he was not covered by Axiom’s Southeast Personnel Leasing policy. On July 23, 2014, Mr. Pratt, as Axiom’s representative, was hand-served a Stop-Work Order1/ and a Request for Production of Business Records for Penalty Assessment Calculation (Request). This Request encompassed all of Axiom’s payroll documents, account documents, disbursements, workers’ compensation coverage policies, and professional employer organization records from January 4, 2013, through July 23, 2014. Mr. Pratt provided the certificates of liabilities, payroll and tax records for 2013, and additional business records to the Department. These records were given to Mr. Knopke to calculate the penalty. In reviewing the records, Mr. Knopke determined that Mr. Pratt, Mr. Lappohn and Frank Cutts were employees of Axiom, and that Axiom did not provide workers’ compensation coverage for them. Mr. Cutts worked for Axiom at a Family Dollar Store build-out in Orlando in early 2014. Mr. Cutts swept up after the drywall was installed in the store, and was paid $125. Axiom conceded it owed the workers’ compensation penalty based on the work Mr. Lappohn and Mr. Cutts performed. The business records provided that during the audit period Mr. Pratt had dual employment, payment being paid outside of leasing. Dual employment is when a business has a leasing policy and there is extraneous payroll that is paid outside of the leasing policy. Payments received outside of a leasing policy are considered unsecured payroll for the purposes of calculating a penalty against an employer. Mr. Knopke included Mr. Pratt’s outside distributions in the penalty calculation. The “Scopes Manual” is published by the National Council on Compensation Insurance, Inc. (NCCI), the nation’s most authoritative data collecting and disseminating organization for workers’ compensation. The manual contains certain codes related to the construction industry and trades considered to be within that industry. The installation of drywall, wallboard, sheetrock, plasterboard or cement board is considered to be “construction” under the relevant codes in the manual. The manual, with its codes and classifications, is relied upon in the insurance industry and has been adopted by the Department in Florida Administrative Code Rule 69L-6.021. Mr. Knopke, using the manual, determined the appropriate classification code for Respondent’s employees was 5445. Mr. Knopke applied the correct rates and used the methodology found in section 440.107(7)(d)1., and Florida Administrative Code Rules 69L-6.027 and 69L-6.028 to calculate the penalty assessment. Based upon the testimony and exhibits, the 3rd Amended Penalty Assessment in the amount of $20,221.62 is accurate and correct.
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, issue a final order upholding the 3rd Amended Order of Penalty Assessment, and assess a penalty in the amount of $20,221.62. DONE AND ENTERED this 2nd day of June, 2015, in Tallahassee, Leon County, Florida. S LYNNE A. QUIMBY-PENNOCK 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 2nd day of June, 2015.
The Issue Whether Fantastic Construction of Daytona, Inc. (“Respondent”), failed to secure the payment of workers’ compensation coverage for its employees; and, if so, whether the Department of Financial Services, Division of Workers’ Compensation (“Petitioner” or “Department”), correctly calculated the penalty to be assessed against Respondent.
Findings Of Fact The Department is the state agency charged with enforcing the requirement of chapter 440, Florida Statutes, that employers in Florida secure workers’ compensation coverage for their employees. § 440.107(3), Fla. Stat. Respondent is a corporation engaged in the construction industry with headquarters in Daytona Beach, Florida. On November 19, 2015, the Department’s compliance investigator, Scott Mohan, observed five individuals framing a single-family house at 173 Botefuhr Avenue in Daytona, Florida. Mr. Mohan interviewed the individuals he observed working at the jobsite and found they were working for Respondent on lease from Convergence Leasing (“Convergence”). Mr. Mohan contacted Convergence and found that all of the workers on the jobsite were employees of Convergence, except Scott Barenfanger. Mr. Mohan also confirmed that the workers’ compensation policy for Convergence employees was in effect. Mr. Mohan reviewed information in the Coverage and Compliance Automated System, or CCAS, for Respondent. CCAS indicated Respondent’s workers were covered for workers’ compensation by Convergence and that Respondent’s contract with Convergence was active. Mr. Mohan also confirmed, through CCAS, that Foster Coleman, Respondent’s president, had previously obtained an exemption from the workers’ compensation requirement, but that his exemption expired on July 18, 2015. Mr. Mohan then contacted Mr. Coleman via telephone and informed him that one of the workers on the jobsite was not on the active employee roster for Convergence, thus Respondent was not in compliance with the requirement to obtain workers’ compensation insurance for its employees. Mr. Coleman reported to the jobsite in response to Mr. Mohan’s phone call. Mr. Coleman admitted that Mr. Barenfanger was not on the Convergence employee leasing roster. Mr. Coleman subsequently obtained an application from Convergence for Mr. Barenfanger and delivered it to his residence. Mr. Mohan served Mr. Coleman at the jobsite with a Stop-Work Order and a Request for Production of Business Records for Penalty Assessment Calculation (“BRR”). In response to the BRR, Respondent provided to the Department business bank statements, check stubs, copies of checks, certificates of liability insurance for various suppliers and subcontractors, and an employee leasing roster for most of the audit period from November 20, 2013, to November 19, 2015.1/ Respondent did not produce any check stubs for November and December 2013. Mr. Coleman testified, credibly, that his bookkeeper during that time period did not keep accurate records. Mr. Coleman did produce his business bank statements and other records for that time period. Based on the review of initial records received, the Department calculated a penalty of $17,119.80 and issued an Amended Order of Penalty Assessment in that amount on February 18, 2016. On March 17, 2016, Respondent supplied the Department with additional records. Altogether, Respondent submitted over 400 pages of records to the Department. The majority of the records are copies of check stubs for checks issued on Respondent’s business bank account. The check stubs are in numerical order from 1349 to 1879, and none are missing. The check stubs were hand written by Mr. Coleman, who is 78 years old. Some of his writing on the check stubs is difficult to discern. On April 4, 2016, following review of additional records received, the Department issued a Second Amended Order of Penalty Assessment in the amount of $9,629.36. The Department assigned penalty auditor Sarah Beal to calculate the penalty assessed against Respondent. Identification of Employees Ms. Beal reviewed the business records produced by Respondent and identified Respondent’s uninsured employees first by filtering out payments made to compliant individuals and businesses, and payments made for non-labor costs. However, the evidence demonstrated that the Department included on its penalty calculation worksheet (“worksheet”) payments made to individuals who were not Respondent’s employees. Neal Noonan is an automobile mechanic. Mr. Noonan was neither an employee of, nor a subcontractor for, Respondent for any work performed by Respondent during the audit period. Mr. Noonan performed repairs on Mr. Coleman’s personal vehicles during the audit period. Checks issued to Mr. Noonan during the audit period were for work performed on Mr. Coleman’s personal vehicles. The Department’s worksheet included a “David Locte” with a period of noncompliance from June 19, 2014, through December 31, 2014. The basis for including Mr. Locte as an employee was a check stub written on December 10, 2014, to a business name that is almost indiscernible, but closely resembles “Liete & Locke” in the amount of $100. The memo reflects that the check was written for “architect plans.” Mr. Coleman recognized the worksheet entry of David Locte as pertaining to David Leete, an architect in Daytona. Mr. Leete has provided architectural services to Respondent off and on for roughly five years. Mr. Leete signs and seals plans for, among others, a draftsman named Dan Langley. Mr. Langley provides drawings and plans for Respondent’s projects. When Respondent submits plans to a local governing body which requires architectural drawings to accompany permit applications, Mr. Leete reviews and signs the plans. Mr. Leete was neither an employee of, nor a subcontractor for, Respondent during the audit period. The single payment made to Mr. Leete by Respondent during the audit period was for professional architectural services rendered. Mr. Langley was neither an employee of, nor a subcontractor for, Respondent during the audit period. Payments made to Mr. Langley during the audit period were for professional drafting services rendered. Among the names on the Department’s worksheet is R.W. Kicklighter. Mr. Kicklighter is an energy consultant whose office is located in the same building with Mr. Leete. Mr. Kicklighter prepares energy calculations, based on construction plans, to determine the capacity of heating and air-conditioning systems needed to serve the planned construction. Mr. Kicklighter was neither an employee of, nor a subcontractor for, Respondent during the audit period. Payments made to Mr. Kicklighter during the audit period were for professional services rendered. Respondent made a payment of $125 on September 15, 2014, to an entity known as Set Material. Set Material is a company that rents dumpsters for collection of concrete at demolition and reconstruction sites. Removal and disposal of the concrete from the jobsite is included within the rental price of the dumpster. The Department included on the worksheet an entry for “Let Malereal.” The evidence revealed the correct name is Set Material and no evidence was introduced regarding the existence of a person or entity known as Let Malereal. Set Material was neither an employee of, nor a subcontractor for, Respondent during the audit period. The single payment made to Set Material during the audit period was for dumpster rental. The Department’s worksheet contains an entry for “CTC” for the penalty period of January 1, 2014, through May 1, 2014. Respondent made a payment to “CTC” on April 11, 2014, in connection with a job referred to as “964 clubhouse.” The records show Respondent made payments to Gulfeagle Supply, Vern’s Insulation, John Wood, Bruce Bennett, and Ron Whaley in connection with the same job. At final hearing, Mr. Coleman had no recollection what CTC referred to. Mr. Coleman’s testimony was the only evidence introduced regarding identification of CTC. CTC could have been a vendor of equipment or supplies for the job, just as easily as an employee. The evidence is insufficient to support a finding that CTC was an employee of, or a subcontractor for, Respondent during the audit period. The check stub for check 1685 does not indicate to whom the $60 payment was made. The stub reads “yo for Doug.” The Department listed “Doug” as an employee on its worksheet and included the $60 as wages to “Doug” for purposes of calculating workers’ compensation premiums owed. At hearing, Mr. Coleman was unable to recall ever having employed anyone named Doug, and had no recollection regarding the January 7, 2015, payment. The evidence was insufficient to establish that “Doug” was either Respondent’s employee or subcontractor during the audit period. Ken’s Heating and Air was not an employee of, nor a subcontractor to, Respondent for any work undertaken by Respondent during the audit period. Ken’s Heating and Air conducted repairs on, and maintenance of, Mr. Coleman’s personal residence during the audit period. Checks issued to Ken’s Heating and Air during the audit period were payments for work performed at Mr. Coleman’s personal residence. Barry Smith is an electrical contractor. Mr. Smith was neither an employee of, nor subcontractor to, Respondent for any work performed by Respondent during the audit period. Mr. Smith did make repairs to the electrical system at Mr. Coleman’s personal residence during the audit period. Checks issued to Mr. Smith during the audit period were payments for work performed at Mr. Coleman’s personal residence. The remaining names listed on the Department’s penalty calculation worksheet were accurately included as Respondent’s employees.2/ Calculation of Payroll Mr. Coleman’s exemption certificate expired on July 18, 2015, approximately four months shy of the end of the audit period. Payments made by Respondent to Mr. Coleman during the time period for which he did not have a valid exemption (the penalty period) were deemed by the Department as wages paid to Mr. Coleman by Respondent. Respondent’s business records show seven checks written either to Mr. Coleman or to cash during that time period in the total amount of $3,116.52. The Department included that amount on the worksheet as wages paid to Mr. Coleman. Check 1873 was written to cash, but the check stub notes that the payment of $1,035.69 was made to Compliance Matters, Respondent’s payroll company. Check 1875 was written to cash, but the check stub notes that the payment of $500 was made to Daytona Landscaping. The evidence does not support a finding that checks 1873 and 1875 represented wages paid to Mr. Coleman. The correct amount attributable as wages paid to Mr. Coleman during the penalty period is $1,796.52. Respondent’s employees Tyler Eubler, Brian Karchalla, Keith Walsh, and John Strobel, were periodically paid by Respondent during the audit period in addition to their paychecks from Convergence. Mr. Coleman testified that the payments were advances on their wages. He explained that when working on a job out of town, the crew would arrive after Convergence had closed for the day, and Mr. Coleman would pay them cash and allow them to reimburse him from their paychecks the following day. Unfortunately for Respondent, the evidence did not support a finding that these employees reimbursed Mr. Coleman for the advances made. The Department correctly determined the payroll amount attributable to these employees. The Department attributed $945 in payroll to “James Sharer.” The Department offered no evidence regarding how they arrived at the name of James Sharer as Respondent’s employee or the basis for the payroll amount. James Shores worked off-and-on for Respondent. Mr. Coleman recognized the worksheet entry of “James Sharer” as a misspelling of Mr. Shores’ name. Respondent’s records show payments totaling $535 to Mr. Shores during the audit period. The correct amount of payroll attributable to Mr. Shores from Respondent during the audit period is $535. The Department included wages totaling $10,098.84 to Mr. Barenfanger during the period of noncompliance from November 20, 2013, to December 31, 2013. The Department imputed the average weekly wage to Mr. Barenfanger for that period because, in the Department’s estimation, Respondent did not produce records sufficient to establish payroll for those two months in 2013. See § 440.107(7)(e), Fla. Stat. The voluminous records produced by Respondent evidenced not a single payment made to Mr. Barenfanger between January 2014, and November 19, 2015. Even if Mr. Coleman had not testified that he did not know or employ Mr. Barenfanger before November 19, 2015, it would be ludicrous to find that he worked weekly for Respondent during the last two months of 2013. Mr. Coleman testified, credibly, that Mr. Barenfanger worked the jobsite for Respondent on November 18 and 19, 2015, but not prior to those dates. The evidence does not support a finding that the worksheet entry for Mr. Barenfanger in the amount of $10,098.84 accurately represents wages attributable to Mr. Barenfanger during the period of noncompliance. The Department’s worksheet includes an employee by the name of Ren W. Raly for the period of noncompliance from January 1, 2014, through May 1, 2014, and a Ronnie Whaley for the period of noncompliance from June 19, 2014 through December 31, 2014. Mr. Coleman testified that he never had an employee by the name of Raly and he assumed the first entry was a misspelling of Ronnie Whaley’s name. Mr. Coleman testified that Ronnie Whaley was a concrete finisher and brick layer who did work for Respondent. Mr. Coleman testified that he submitted to the Department a copy of Mr. Whaley’s “workers’ comp exempt,” but that they must not have accepted it. The records submitted to the Department by Respondent do not contain any exemption certificate for Ronnie Whaley. However, in the records submitted to the Department from Respondent is a certificate of liability insurance dated February 25, 2014, showing workers’ compensation and liability coverage issued to Direct HR Services, Inc., from Alliance Insurance Solutions, LLC. The certificate plainly states that coverage is provided for “all leased employees, but not subcontractors, of Ronald Whaley Masonry.” The certificate shows coverage in effect from February 1, 2013, through February 1, 2015. Petitioner did not challenge the reliability of the certificate or otherwise object to its admissibility.3/ In fact, the document was moved into evidence as Petitioner’s Exhibit P1. Petitioner offered no testimony regarding whether the certificate was insufficient proof of coverage for Mr. Whaley during the periods of noncompliance listed on the worksheet. The evidence does not support a finding that Mr. Whaley was an uninsured individual during the periods of noncompliance. Thus, the wages attributed to Mr. Whaley by the Department were incorrect. Ms. Beal assigned the class code 5645—Carpentry to the individuals correctly identified as Respondent’s uninsured employees because this code matched the description of the job being performed by the workers on the jobsite the day of the inspection. Ms. Beal correctly utilized the corresponding approved manual rates for the carpentry classification code and the related periods of noncompliance to determine the gross payroll to the individuals correctly included as Respondent’s uninsured employees. Calculation of Penalty For the employees correctly included as uninsured employees, Ms. Beal applied the correct approved manual rates and correctly utilized the methodology specified in section 440.107(7)(d)1. and Florida Administrative Code Rules 69L-6.027 and 69L-6.028 to determine the penalty to be imposed. For the individuals correctly included as uninsured employees, and for whom the correct payroll was calculated, the correct penalty amount is $2,590.06. The correct penalty for payments made to Mr. Coleman during the penalty period is $571.81. The correct penalty for payments made to James Shores is $170.24. The correct total penalty to be assessed against Respondent is $3,332.11. The Department demonstrated by clear and convincing evidence that Respondent was engaged in the construction industry in Florida during the audit period and that Respondent failed to carry workers’ compensation insurance for its employees at times during the audit period as required by Florida’s workers’ compensation law. The Department demonstrated by clear and convincing evidence that Respondent employed the employees named on the Second Amended Order of Penalty Assessment, with the exception of Ken’s Heating and Air, CTC, Don Langly, Ren W. Raly, R.W. Kicklighter, Dave Locte, Let Malereal, Ronnie Whaley, and “Doug.” The Department did not demonstrate by clear and convincing evidence that it correctly calculated the gross payroll attributable to Mr. Coleman and Mr. Shores. The Department demonstrated by clear and convincing evidence that Ms. Beal correctly utilized the methodology specified in section 440.107(7)(d)1. to determine the appropriate penalty for each of Respondent’s uninsured employees. The Department did not demonstrate by clear and convincing evidence that the correct penalty is $9,629.36. The evidence demonstrated that the correct penalty to be assessed against Respondent for failure to provide workers’ compensation insurance for its employees during the audit period is $3,332.11.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Department of Financial Services, Division of Workers’ Compensation, finding that Fantastic Construction of Daytona, Inc., violated the workers’ compensation insurance law and assessing a penalty of $3,332.11. DONE AND ENTERED this 18th day of August, 2016, in Tallahassee, Leon County, Florida. S SUZANNE VAN WYK 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 18th day of August, 2016.
Findings Of Fact On 11 July 1977 Orestes Lopez moved into Apartment 102F at Fairview Villas (Fairview). He paid a $200 security deposit and the pro rata portion of the $280 per month rent for the balance of July. He did not sign a lease prior to moving in. Several attempts were made by Fairview to get Lopez to sign the year lease required from tenants, however he was allowed to remain in occupancy on a month-to-month basis during the months of August, September and October. By letter dated November 12, 1977 Lopez was notified by Fairview that he was occupying the apartment illegally without a signed lease that had been ready for his signature since he moved in; and that, unless he signed the lease by November 14, legal proceedings to evict him would be started. Lopez did riot sign the lease but no eviction proceedings were commenced. Lopez accepted the November 12 letter as notice to quit the apartment at Fairview and found another place in which to live. Without notifying Fairview that he was leaving Lopez moved out on 30 November. He left no forwarding address and turned in no keys. After the furniture was removed from the apartment, Mrs. Lopez, assisted by her two grown daughters, cleaned the apartment. Rugs were shampooed and vacuumed, stove was cleaned with oven cleaner, bathrooms were scrubbed, mirrors were cleaned and the icebox was cleaned. On 1 December the apartment was inspected by the manager of Fairview and the Move In/Move Out Inspection Checklist was completed. This checklist was introduced into evidence as Exhibit 2. In addition to listing bathrooms as not having been cleaned, range and refrigerator dirty, rugs and counter tops dirty and screen door torn, Exhibit 2 contained the following comments: Would not sign lease gave no notice had to file on. Attorney's fees too. No refund due to dirty apartment & no notice given & legal fees. In rebuttal Lopez testified that there had not been a screen door on the apartment since he moved in. No notice of intent to retain the security deposit was sent to Lopez by Fairview.
