Findings Of Fact At all times pertinent to the allegations contained herein, the Petitioner was the state agency responsible for licensing and monitoring the real estate profession in Florida. Respondents, Gruhler and Wilson were licensed as a real estate broker and real estate salesman, respectively, in this state. In April, 1988, Respondent Wilson was a 50% owner of Wilson's Cavalier Motor Inn, Inc., located in Sarasota, Florida and, that same month, listed it for sale with his employer, Respondent Gruhler. In June, 1988, Maurice G. Andersen and his wife, who were in the market to buy a motel, looked at the Cavalier and, after discussion with the Respondents, agreed to buy it for $181,900.00. Prior to agreeing to purchase the property, the Andersens were shown several papers regarding it, including the listing sheet prepared and provided by Mr. Wilson which reflected gross sales of $62,769.00 in 1986 and $65,413.00 in 1987. Based on his analysis of the property, Mr. Andersen made an offer to purchase it by Purchase agreement dated June 28, 1988, with which he enclosed a deposit of $1,000.00. Mr. Andersen now claims that at the time he felt the income figures provided by Mr. Wilson were too high for a 9 unit motel but assumed they were accurate. He claims his decision to purchase the property was based on the income and expense figures provided by Mr. Wilson incident to the purchase. A statement of earnings for the property for the period March 5, 1986 to February 28, 1987 , a term of approximately 14 months, reflected gross income of $72,360.70, expenses of $37,904.51, with a net income of $34,456.19. This statement which Andersen admits is accurate, is only one of four that he received. The closing transferring ownership to the Andersens took place on September 30, 1988. At that time, the parties executed a stock purchase agreement by which the Andersens purchased not only the assets of the motel but also 100% of the stock in the corporation which owned the motel and its assets. The corporation had been owned by Mr. and Mrs. Wilson. During the first six months of Andersen's ownership of the property, the income was not up to his expectations. He claims he had been told he'd do a lot of business through advance reservations but, in fact, had only one and the six month gross income during that period was approximately the same amount the previous owner, Mr. Wilson, had done. In February, 1989, Mr. Wilson gave the Andersens a financial statement on the property and business for the period April 5 through September 30, 1988 which reflected gross income of $24,622.36 and expenses of $24,604.10, for a net income of $18.26. He also provided, sometime that year, a more detailed statement for the period from April 17, 1988 through June 30, 1988 which reflected, among other things, a gross income for that period of $9,956.00. In reality, the income for that period, as reflected on the Department of Revenue sales tax returns submitted by Mrs. Wilson, the bookkeeper, was $7,483.60, a difference of $2,472.40. This is a significant difference. All of the financial information provided to the Andersens by Mr. Wilson, except for that contained in the erroneous statement prepared by Mrs. Wilson, was provided by previous owners of the motel. Neither Mr. Gruhler nor Mr. Wilson was familiar in detail with the actual revenue and expense of the motel prior to the time Mr. Wilson took it over in 1988. Mr. Andersen's chief complaint lies with Mr. Wilson, who he believes intentionally misled him with false information to induce his purchase, and not with Mr. Gruhler. He is satisfied the latter did not intentionally try to trick him or commit fraud. Wilson purportedly advised him orally that the motel brought in approximately $3,000 per month when in reality it was only about two- thirds that figure. He admits to having an opportunity to examine the property thoroughly prior to the purchase and even had his accountant in Minnesota go over the listing sheet and the initially provided figures before agreeing to buy. The motel is a 9 unit operation with small rooms and one large efficiency apartment. There is no pool. The Andersens occupy one unit and their son occupies another. Mr. Andersen does not know if, even with this reduction from rental space, his operation is bringing in any less than Mr. Wilson did, and proudly claims that as an inexperienced operator, for the year past he did $2,000.00 more in business than did the experienced operator from whom Wilson took back the business. He asserts he had a good year even though the tourist activity for Sarasota County was down for the same period. Mr. Wilson was first contacted by Mr. Andersen in June, 1988, regarding several motels for sale advertised by Gruhler, for whom Wilson works. They met at one motel which Mr. Andersen did not like and then went to the Cavalier which Andersen liked because he could afford it. Andersen came back with his wife the following Monday and on the following day, met with Wilson at the Gruhler brokerage office where he made his offer on the property At the time they made the offer, the Andersens had had an opportunity to examine the property and had been given a copy of the listing sheet and the financial statement which, all agreed, was accurate and which were examined by Andersen's accountant before closing. This information was prepared by Mrs. Wilson from the business books which she kept. There is no evidence that Mr. Wilson knew, or had any reason to believe, that the information furnished to the Andersens at any time was incorrect. Though Mrs. Wilson admits that one document, that relating to the April 17 through June 30, 1988 income is in error, all other income information provided to the Andersens has been shown to be correct. The error was made when she incorrectly included in the income certain items which should not have been there. Even she did not know the report was incorrect at the time she presented it and first found out about her mistake when it was brought to her attention later by the Andersens after they checked the reported income against the sales tax forms. In light of the fact that she prepared those forms as well and that such forms are public records which are open for inspection, it is found to be unlikely she would have intentionally provided incorrect income figures to the Andersens who had already indicated their habit of having financial records checked by their accountant. In any case, there is no evidence she made Mr. Wilson or Mr. Gruhler aware of the mistake and that they thereafter acted on that information knowing it to be incorrect. The Reverend Robert Miller has known the Wilsons for 11 years and been their pastor for 9 years. Both are dedicated Christians and have a high reputation for truth and veracity in the community. In all the years he has known them there has never been a hint of dishonesty of the part of either.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that the Administrative Complaint as to both Respondents, Walter Gruhler and Calvin L. Wilson, be dismissed. RECOMMENDED this 3rd day of July, 1990, in Tallahassee, Florida. ARNOLD H. POLLOCK, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of July, 1990. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 89-6264 The following constitutes my specific rulings pursuant to S 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. FOR THE PETITIONER: 1. - 3. Accepted and incorporated herein. 4. - 6. Accepted and incorporated herein. Accepted. Accepted and incorporated herein. & 10. Accepted and incorporated herein. Rejected as not supported by the evidence of record. Not proven. The last sentence of this paragraph is rejected. FOR THE RESPONDENT: Accepted and incorporated herein. Accepted and incorporated herein. Accepted and incorporated herein. & 5. Accepted and incorporated herein. 6. & 7. Accepted and incorporated herein as to ultimate facts. Accepted and incorporated herein. - 11. Accepted and incorporated herein. 12. Not a Finding of Fact but a Conclusion of Law. COPIES FURNISHED: Steven W. Johnson, Esquire Division of Real Estate 400 West Robinson Street P.O. Box 1900 Orlando, Florida 32802 Thomas Fitzgibbons, Esquire 1800 Second Street, Suite 775 Sarasota, Florida 34236 Kenneth E. Easley General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Darlene F. Keller Division Director Division of Real Estate 400 West Robinson Street P.O. Box 1900 Orlando, Florida 32801
Findings Of Fact Having listened to the testimony and considered the evidence presented in this cause, it is found as follows: Dr. Melvin J. Hellinger is licensed to practice dentistry in the State of Florida by the State Board of Dentistry. Dr. Melvin J. Hellinger is currently practicing dentistry in Miami, Florida. Dr. Melvin J. Hellinger was indicted on three counts of income tax evasion in the United States District Court, District of Massachusetts. The indictment charged that Dr. Melvin J. Hellinger did willfully and knowingly attempt to evade and defeat a large part of the income taxes due and owing by him and his wife to the United States of America for the calendar years 1969, 1970 and 1971, by filing and causing to be filed with the District Director of Internal Revenue for the Internal Revenue District of Boston, in the District of Massachusetts, a false and fraudulent joint income tax return for the calendar years 1969, 1970 and 1971, each calendar year constituting a separate count. On March 10, 1975, Dr. Melvin J. Hellinger pled guilty to and was convicted of the offense of willfully and knowingly attempting to evade and defeat a large part of the income taxes due and owing by him and his wife to the United States of America by filing and causing to be filed with the Internal Revenue, a false and fraudulent joint income tax return, in violation of Section 7201, I.R.C., Title 26, U.S.C., Sec. 7201, as charged in Counts 2 and 3 of the aforementioned indictment. Count 2 charged that Dr. Hellinger did evade income taxes by filing an income tax return wherein it was stated that his and his wife's taxable income for calendar year 1970 was $47,883.08 and that the amount of tax due and owing thereon was $16,401.58, whereas, as he then and there well knew, their joint taxable income for said calendar year was $101,503.07, upon which said taxable income there was owing an income tax of $47,264.70. Count 3 charged that Dr. Hellinger did evade income taxes by filing an income tax return wherein it was stated that his and his wife's taxable income for calendar year 1971 was $50,877.52 and that the amount of tax due and owing thereon was $17,498.76, whereas, as he then and there well knew, their joint taxable income for said calendar year was $67,786.12, upon which said taxable income there was owing an income tax of $26,502.36. The United States District Court for the District of Massachusetts sentenced Dr. Melvin J. Hellinger to imprisonment for a period of three months, execution of prison sentence to be suspended and Dr. Hellinger placed on probation for a period of two years. As a special condition of his probation, he is to spend two days a month doing work at a charitable hospital or some similar institution under the supervision of the probation office. It was further ordered that Dr. Hellinger pay a fine in the amount of $10,000, payable on or before March 17, 1975. Dr. Melvin J. Hellinger is presently performing voluntary work one day a week at Jackson Memorial Hospital in Miami, Florida. Dr. Melvin J. Hellinger is a competent oral surgeon. Dr. Melvin J. Hellinger currently holds a valid license to practice dentistry in the state of Massachusetts, which license was renewed after his conviction for income-tax evasion. By his own statement, Dr. Hellinger can return to Massachusetts to practice dentistry. Dr. Melvin J. Hellinger was removed from the staff at Miami-Dade General Hospital because of the subject conviction for income tax evasion and omissions he made from his application to Miami-Dade General Hospital, which omissions reflected upon his character. Dr. Melvin J. Hellinger's membership in the American Dental Association and the American Society of Oral Surgeons has been revoked as a result of accusations by Blue Cross-Blue Shield concerning duplicate claims filed by Dr. Hellinger, which accusations have now been settled between Dr. Hellinger and Blue Cross-Blue Shield. Dr. Melvin J. Hellinger became a diplomate of the American Board of Oral Surgery in 1965, when in his late 20's. He has published in dental journals and taught at Tuft's University in oral pathology and Boston University in oral surgery. Dr. Melvin J. Hellinger came to Florida in December of 1974 from Wakefield, Massachusetts. In Wakefield, Massachusetts, Dr. Melvin J. Hellinger was very active in civic and religious affairs, contributing a substantial amount of time to community service. During the time within which Dr. Hellinger committed the subject felonies, his wife discovered that she had a cancer malignancy, which is presently being treated by a specialist in Miami. Also at that time, Dr. Hellinger's father-in-law, of whom he thought highly, suffered several strokes. Further, during that time, Dr. Hellinger suffered large stock-losses, putting a severe financial burden on him. Dr. Hellinger and his wife have four children, ages seven to twelve. Since moving to Florida, Dr. Hellinger has been active in his temple and coaches children's league football. Dr. Hellinger has no other criminal record. Dr. Melvin J. Hellinger pled guilty to and was adjudged guilty of a felony under the laws of the United States involving income tax evasion as set forth in Counts and 2 of the Accusation filed herein by the Florida State Board of Dentistry.
Findings Of Fact Respondent Starla K. Rose, was at all times material hereto a licensed real estate broker in the State of Florida, having been issued license number 0046404. On February 25, 1985, an Information was filed in the Circuit Court of the Seventh Judicial Circuit, Broward County, Florida, charging Respondent with one count of grand theft, Sections 512.014(1)a and b and 512.014(2)b, Florida Statutes, two counts of insurance fraud by false or fraudulent claims Section 517.234(1)(a)1, Florida Statutes; and, one count of false report of the commission of a crime, Section 817.49, Florida Statutes. Respondent pled not guilty to the Information. On June 6, 1985, a verdict was rendered which found Respondent guilty of one count of grand theft, one count of insurance fraud by false or fraudulent claims and one count of false report of the commission of a crime. The court adjudged Respondent guilty of issuing a false report of the commission of a crime, withheld adjudication of guilt on the remaining counts, placed Respondent on probation for 3 years, and ordered her to pay costs. Respondent filed a timely motion for new trial following rendition of the verdict. At the time of final hearing in this case, no disposition had been made of Respondent's motion for new trial.
The Issue Whether Respondent, Florida Physician Medical Group (Respondent or FPMG), violated Florida law by engaging in discriminatory, disparate treatment of Petitioner, Dr. Phillip St. Louis (Petitioner). Petitioner maintains that Respondent refusal to employ him constitutes discrimination based upon his race or national origin.
Findings Of Fact Petitioner is a black male born in Trinidad. He is fully educated and qualified to practice medicine in the State of Florida, and has done so for a number of years. Petitioner specialty is neurosurgery. He has practiced at a number of hospitals in the greater Orlando area for over ten years. The instant case arose when Petitioner was denied employment with Respondent. Petitioner maintains he is fully competent and qualified to become employed by Respondent and that the company has denied him employment based upon his race (black) and national origin. Prior to March 2009, Respondent considered hiring Petitioner for employment. With that end as the objective, Petitioner submitted an application for malpractice coverage through an entity that insures Respondent's physicians. That entity, described in the record as (the Trust), reviews applications for coverage and considers whether it can provide malpractice coverage for a physician based upon a number of factors, including but not limited to, past work history, education and training, and past malpractice claims made against and paid by the subject physician. Approval for medical malpractice coverage by Adventist Health System (AHS) through the Risk Management Department (Risk Management) was a prerequisite to employment with Respondent. The requirement to obtain professional liability coverage was pursuant to the company-wide policy CW RM 220. At all times material to his application, Petitioner knew or should have known that Respondent required medical malpractice coverage. As of the time of the hearing and for at least nine years prior thereto, Petitioner has performed neurosurgery without malpractice coverage. This practice, known in the record as working "bare," is disfavored by Respondent. All physicians who seek to be employed by Respondent must submit an application for review and approval for professional liability coverage under the self-insured Trust. Personnel employed with AHS's Risk Management review applications and recommend disposition of the requests for coverage. Stacy Prince joined AHS as a director of Risk Management in 2005. Stacy Prince and Sandra Johnson were responsible for deciding whether Petitioner would qualify for medical malpractice coverage. The decision to deny coverage for Petitioner was reached without regard for Petitioner's race or national background. At the time that Petitioner was being considered for medical malpractice coverage with the Trust, Stacy Prince and his supervisor (Sandra Johnson) did not know the Petitioner’s race or national origin. The Risk Management decision was based on Petitioner's malpractice claims history, as is more fully explained below. Neurosurgery is a high-risk medical practice. It is possible that this specialty group of physicians are exposed to more claims and more serious claims than other specialty physicians. Nevertheless, in determining whether a physician can be covered, Risk Management must look at the totality of the circumstances to evaluate whether a candidate can be covered by the Trust. Most physicians covered by the Trust do not have any malpractice claims. Of those who do have malpractice claims, the vast majority have had only one or two incidents of alleged malpractice. Because each candidate's application for coverage was reviewed on a case-by-case basis, the factual circumstances surrounding a malpractice claim may be pertinent to the decision of whether a physician may be covered. An example of a malpractice claim that would not be given much gravity would be one that occurred while a physician was in training under the supervision of a licensed physician. In such instances, the training physician is named incidentally to the primary supervising physician. Such "shotgun" claims typically name everyone who provided care for the patient, regardless of the personal interaction or level of care actually rendered. None of Petitioner’s claims fell within this category. A second type of malpractice claim that might be discredited would be one that did not result in any monetary award or damages to the patient. None of Petitioner’s claims fell within this category. Based upon Stacy Prince's review of Petitioner's history of claims, Petitioner was deemed too great a risk to provide medical malpractice coverage. The malpractice history reviewed included four claims disclosed by Petitioner and a fifth claim that was not reported by Petitioner, but was discovered by Risk Management. The fact that the fifth claim was not disclosed to Risk Management in the application process was also a concern to Mr. Prince and influenced his decision. No physician, regardless of specialty, with claims similar to Petitioner’s has been insured by the Trust. Additionally, although unknown to Petitioner at the time of application, a sixth medical malpractice claim was made against Petitioner. The potential for additional claims (that could be also unknown to Petitioner) was a concern in determining whether to provide coverage for Petitioner. With regard to Petitioner's claims, at least two of the claims were unresolved, as of the time of review of Petitioner's application. Additionally, a parallel investigation and administrative action by the Florida Department of Health regarding one claim was also a concern for Risk Management. Whether or not Petitioner practices within the standard of care expected of physicians in Florida is of significant importance to Respondent. No other candidate for employment presented to Respondent with similarly-serious claims. Petitioner's lack of candor regarding the number of claims against him and the severity of claims was also a concern to the undersigned. No physician was given preferential treatment by Respondent who was similarly situated, as no other physician reviewed in this record had similar claims. The factors resulting in the denial of coverage were: the number of claims, the open claims, the history of damages awarded, the unknown amount of future damages based upon unresolved claims, the lack of malpractice coverage, and Petitioner's failure to fully and accurately disclose information needed to review his application. None of the physicians who Petitioner identified as comparably situated, and who allegedly received more favorable treatment, had the number or severity of claims, the level of damages associated with the claims, or were practicing "bare" for the period of time Petitioner has chosen to practice. All of the doctors were eligible for medical malpractice coverage at all times material to this case or during employment with Respondent. In contrast, Petitioner practiced "bare" for almost nine years since his insurer canceled his insurance coverage due to the “Nature of Claim” in July of 2000. Petitioner was cancelled by his insurer after the insurer had to pay its policy limits of $500,000. An example of a malpractice claim associated with Petitioner was his operation on the wrong side of a patient’s head. That surgery resulted in a $1.75 million dollar settlement. Petitioner presented no evidence to establish that any of Respondent's actions or inactions were based upon his race or national origin. Respondent articulated bona fide business reasons for why the Trust denied medical malpractice coverage for Petitioner. More important, had Risk Management agreed to provide coverage for Petitioner, then Bryan Stiltz, Respondent's CEO, would have hired Petitioner. The decision not to hire Petitioner due to his failure to qualify for medical malpractice coverage was not based on Petitioner’s race or national origin and was consistent with Respondent’s employment policy.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Commission on Human Relations issue a final order finding no cause for an unlawful employment practice as alleged by Petitioner, and dismissing his employment discrimination complaint. DONE AND ENTERED this 3rd day of August, 2011, in Tallahassee, Leon County, Florida. S J. D. PARRISH 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 July, 2011. COPIES FURNISHED: Jerry Girley, Esquire The Girley Law Firm 125 East Marks Street Orlando, Florida 32803 Alan M. Gerlach, Esquire Adventist Health System-Legal Services 111 North Orlando Avenue Winter Park, Florida 32789-3675 Denise Crawford, Agency Clerk Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301 Mark H. Jamieson, Esquire Moran, Kidd, Lyons, Johnson & Berkson, P.A. 111 North Orange Avenue, Suite 1200 Orlando, Florida 32801-2361 Larry Kranert, General Counsel Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301
The Issue Whether Respondent violated section 70-54, Pinellas County Code, which prohibits retaliation against a person who has opposed a discriminatory employment practice, by terminating the Petitioner's employment, and, if so, the appropriate penalty.
Findings Of Fact Ms. Menz was hired by Dr. Weisel as a receptionist for his dental office located in Tarpon Springs, Pinellas County, Florida, on October 6, 2007. Ms. Menz's job responsibilities included answering the phone, checking patients in and out of the office, collecting co-payments, and entering treatment plans in the record. According to Dr. Weisel, Ms. Menz was a good employee because she was eager to learn, and she was very people orientated. Respondent is a professional association located in Tarpon Springs, Pinellas County, Florida. Respondent employees less than 15 employees and is in the business of providing dentistry services. Respondent is subject to the Pinellas County Code concerning human relations. In June 2008, Dr. Weisel sold his Tarpon Springs dental practice to Dr. Kontos. Dr. Kontos had graduated from dental school in May 2007 and had worked for another dentist office. By January 2008, Dr. Kontos wanted to purchase a dental practice in his hometown, Tarpon Springs. When Dr. Kontos purchased the practice from Dr. Weisel, Dr. Kontos had no experience in owning a business or managing employees. According to Dr. Kontos, he decided to keep all of Dr. Weisel's employees for continuity. Dr. Kontos described Ms. Menz's job duties as opening the practice in the morning, "in-putting insurance," collecting co-payments, and "doing treatment plans." By July 2008, Dr. Kontos had promoted one of the dental assistants, Daniel Mauzerolle (Mr. Mauzerolle), to office manager. During the time that Mr. Mauzerolle worked for Dr. Kontos, they became friends and would socialize together. Ms. Menz testified that she had complained to Dr. Kontos in the past about Mr. Mauzerolle about issues from work. Ms. Sholtes, a former dental hygienist for Dr. Kontos, also testified on Ms. Menz's behalf. She testified that Ms. Menz was a good employee and courteous to patients. By November 2008, Dr. Kontos hired Ms. Marchese to collect aging insurance claims and account receivables, as well as review his office procedures. According to Dr. Kontos, the dental practice had a "phenomenal" amount of outstanding insurance claims, in excess of $20,000.00, which had been denied. Ms. Marchese had worked in the dental field since 1991 and was familiar with software systems used to run dental offices. Further, she was familiar with the submission of insurance forms for dental reimbursement. On May 11, 2009, Ms. Menz opened the office at 7:00 a.m. As she turned on her computer, Ms. Menz noticed the internet web history showed that someone had used her computer the night before. Ms. Menz found that one site had been visited 28 times. Upon visiting the site, Ms. Menz found that the website contained pornographic images. Further, because Mr. Mauzerolle was the only person that worked in the evening in the office, Ms. Menz assumed that Mr. Mauzerolle was the person who had accessed the pornographic site. Ms. Menz credibly testified that she informed Dr. Kontos and told him that Mr. Mauzerolle's actions were unacceptable to her. Ms. Menz credibly testified that she told Dr. Kontos that she could not work under the conditions that she considered to be a hostile workplace environment. Dr. Kontos informed Ms. Menz that he would "take care of it." Dr. Kontos credibly testified that Mr. Mauzerolle, in addition to being the office manager, was his friend and that he was not happy with Ms. Menz reporting the issues concerning the pornography in his office. Two days later, on May 13, 2009, Dr. Kontos terminated Ms. Menz's employment. Ms. Menz credibly testified that at the time of her termination, Dr. Kontos did not provide her a reason for her termination, only stating "nothing personal, but I'm going to have to let you go." Dr. Kontos testified that he had already decided to terminate Ms. Menz's employment before May 11, 2009, when Ms. Menz complained about the pornography. According to Dr. Kontos, Ms. Marchese had informed him since the end of 2008 about errors that Ms. Menz had been making at work that cost the dental practice money. Dr. Kontos indicated that Ms. Menz made errors such as failing to collect co-payments or collecting improper co-payments and failing to fill out the insurance forms correctly. The result was that insurance claims would be denied and the dental office would lose money. According to Dr. Kontos and Ms. Marchese, on or before April 8, 2009, Ms. Menz made an error that almost cost the dental practice $2,000.00. The alleged error involved putting the wrong information concerning an insurance plan for a patient. Based on this error, Dr. Kontos testified that he made a decision with Mr. Mauzerolle and Ms. Marchese to place an advertisement for a receptionist with Craigslist to replace Ms. Menz. Later that day, Mr. Mauzerolle placed the advertisement with Craigslist. On April 9, 2009, potential job applicants began calling Dr. Kontos' office about the receptionist position. Ms. Menz took the phone messages from the applicants, including Ms. Kristen Chase. Ms. Menz credibly testified that based on phone calls that she asked Dr. Kontos about the job advertisement and whether or not she was doing a good job. Ms. Menz credibly testified that Dr. Kontos stated that she was doing a good job and not to worry about the advertisement. Further, Ms. Menz credibly testified that she asked Ms. Marchese about the advertisement. Ms. Menz testified that Ms. Marchese stated that Dr. Kontos was seeking to replace Christina Benzel (Ms. Benzel), a co-worker who worked the front desk with Ms. Menz. Ms. Menz believed Ms. Marchese because Ms. Menz had observed that Ms. Benzel's job responsibilities had been reduced. According to Dr. Kontos, sometime at the beginning of May 2009, he and Mr. Mauzerolle interviewed Ms. Chase for the receptionist job. According to Dr. Kontos, he offered Ms. Chase the job after the interview, and he had decided to replace Ms. Menz. Dr. Kontos's testimony on the point that he offered Ms. Chase the job in early May and had decided to replace Ms. Menz is not credible. Ms. Chase credibly testified that she did not receive the job offer from Dr. Kontos at the interview in early May. Further, Ms. Chase credibly testified that, because she did not hear anything from Dr. Kontos, she had assumed that she had not gotten the job. Further, Ms. Chase credibly testified that she was offered the job on May 14, 2009. Dr. Kontos testified that he had decided to terminate Ms. Menz on April 8, 2009, but that he did not tell her before May 13, 2009, because he "had to build up the nerve to do it." He testified that he felt bad having to terminate her and that he let her go because she made too many mistakes. For support concerning the number of errors made by Ms. Menz, Respondent offered the testimony of Ms. Marchese and numerous exhibits. Ms. Marchese testified that because of the number of errors occurring in the office that she moved her work space to be next to Ms. Menz. According to Ms. Marchese, she was monitoring Ms. Menz and providing "one-on-one training." Further, Ms. Marchese offered testimony that each day she would conduct an "audit trail" of the office and bring errors to Dr. Kontos's attention daily. Ms. Marchese testified that Ms. Menz failed to collect co-payments; entered insurance information incorrectly, resulting in insurance reimbursements being denied; failed to provide adequate information to support insurance billings; and gave patients incorrect estimates on the amount that the patient would owe for different treatments based on the patient's insurance plan. Ms. Marchese testified that she estimated that Ms. Menz had cost the dental office approximately $100,000.00 in lost revenue and made 90 percent of the office errors. Ms. Marchese identified a number of exhibits that supported Respondent's claim that Ms. Menz was terminated for numerous errors. Ms. Marchese further testified that in March 2009 that she told Dr. Kontos and Mr. Mauzerolle that Ms. Menz was "untrainable" and that she should be terminated. According to Ms. Marchese, in April 2009, she discussed with Dr. Kontos and Mr. Mauzerolle the error that nearly cost the practice $2,000.00 and the decision to advertise for the new receptionist. After the advertisement was taken out in Craigslist for the new receptionist, Ms. Marchese remembered being asked by Ms. Menz about the advertisement and about whether or not Dr. Kontos was seeking to replace her. Ms. Marchese testified that she told Ms. Menz that she did not know if Dr. Kontos was seeking to replace her. Ms. Marchese denied telling Ms. Menz that Dr. Kontos was seeking to replace Ms. Benzel. Ms. Marchese, however, admitted that Dr. Kontos had been unhappy with Ms. Benzel based on her internet usage at the office. Ms. Marchese testified that she informed Dr. Kontos about each of these errors daily and testified about a group of exhibits. A review of the exhibits identified by Ms. Marchese, Exhibits 25, 27, 29, 30, 31, 34, 35, 36, 41, and 44 shows that the documents are dated December 18 and 21, 2009. When questioned about the dates on the exhibits, Ms. Marchese testified that these exhibits were documentation from the "daily sheets" and that she had "minimized the amount of discovery." Also, she explained that the documents were "printed to condense the information into one page instead of, for instance, on exhibit 25, it would have been over 30 pages." Further, she testified that she had added the notes explaining Ms. Menz's errors to the sheets on or after December 18, 2009. The "daily sheets" were not admitted into evidence. At best, the offered exhibits may be considered summaries. Even considering the documents, the record shows that the offered exhibits show that the documents were compiled to support Ms. Menz's termination after May 13, 2009, and in response to the investigation by Pinellas County. Thus, the exhibits carry little weight in the consideration. Similarly, Exhibits 10, 11, 18, 23, and 24 are all dated after Ms. Menz's termination date of May 13, 2009. A review of Exhibit 10 shows a "Single Patient Ledger" printed up on September 8, 2009. Based on Ms. Marchese's testimony, the document shows that on April 8, 2009, the patient received two dental procedures that cost $1,050.00. According to Ms. Marchese, the patient was told to pay $215.00 for two treatments. Presumably, the balance of the dental bill would be paid by insurance. However, Ms. Marchese testified that the patient did not have dental coverage for the two procedures. Consequently, the dental office lost money on the two procedures because the patient refused to pay, and there was no insurance to bill. Although the testimony shows this event occurred before the termination, the "Single Payer Ledger" is dated after the termination. Further, a hand-written notation from the patient's chart, which is part of Exhibit 10, stating that "Valerie dropped the ball on the correct fee twice" is dated May 14, 2009, the day after her termination. Similarly, a review of Exhibits 23 and 24 shows that they are insurance claims that were denied before May 13, 2009. Ms. Marchese testified that Dr. Kontos was aware of these errors. However, Exhibits 23 and 24 only show that insurance claims were re- submitted after the date of Ms. Menz's termination. The exhibits do not support the finding that the claims were denied because of Ms. Menz or that these errors were considered before terminating her employment. These exhibits were prepared after the termination as a justification for the action as opposed to contemporaneous proof of Ms. Menz's performance. In contrast to the above listed exhibits, Exhibits 6, 7, 8, and 9 are examples of errors and notes that were documented before Ms. Menz's termination. A review of these exhibits shows that the complained of errors occurred on January 22, 2009; February 3, 2009; March 2, 2009; and April 27, 2009. Respondent also offered the testimony of other employees from the dental office. Ms. Little, a dental hygienist, testified that she was aware that Ms. Menz made errors in entering codes for different treatment plans. She had spoken to Ms. Menz about the error, and Ms. Menz indicated that she would try to correct the problem. According to Ms. Little, the errors continued, but were not as bad. Finally, Ms. Little testified that Ms. Marchese was responsible for insurance claims with the office. Similarly, Ms. O'Leary, a dental hygienist, testified that she knew that Ms. Menz had some issues with insurance, but that she had a good working relationship with Ms. Menz. Ms. Menz candidly admitted that she made mistakes at her work and credibly testified that she was never told of the many errors that Respondent was claiming she had made or that she had cost Respondent money. Dr. Kontos admitted that that he did not individually counsel Ms. Menz about her errors. Rather than counsel individual employees, Dr. Kontos testified that it was his practice to speak to his employees as a group about errors because he wanted to avoid similar errors. Ms. Menz testified that she earned $10.75 an hour and that she had been out of work for 87 weeks. Ms. Menz agreed with her counsel's question that her calculated damages were $37,410.00. The record also shows that Ms. Menz filed for unemployment compensation, but was unclear about whether or not she received any compensation.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered: Finding that Respondent violated section 70-54, Pinellas County Code. Ordering Respondent to pay Ms. Menz the sum of $37,410.00 and interest at the prevailing statutory rate; and Ordering Respondent to pay Ms. Menz reasonable costs and attorney's fees. Jurisdiction is retained to determine the amount of costs and attorney's fees, if the parties are unable to agree to the amount. DONE AND ENTERED this 12th day of May, 2011, in Tallahassee, Leon County, Florida. S THOMAS P. CRAPPS 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 12th day of May, 2011. COPIES FURNISHED: William C. Faulkner, Esquire Pinellas County Attorney's Office 315 Court Street Clearwater, Florida 33756 Jeremy W. Rodgers, Esquire Spector Gadon and Rosen, LLP 390 Central Avenue, Suite 1550 St. Petersburg, Florida 33701 Matthew K. Fenton, Esquire Wenzel, Fenton, and Cabassa, P.A. 1110 North Florida Avenue, Suite 300 Tampa, Florida 33602 Leon W. Russell, Director/EEO Officer Pinellas County Office of Human Rights 400 South Fort Harrison Avenue, 5th Floor Clearwater, Florida 33756 Peter J. Genova, Jr., EEO Coordinator Pinellas County Office of Human Rights 400 South Fort Harrison Avenue, 5th Floor Clearwater, Florida 33756
The Issue Whether Royal Roofing and Restoration, Inc. (Respondent or Royal Roofing), failed to secure workers’ compensation insurance 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 Petitioner is the state agency charged with enforcing the requirement of chapter 440, that Florida employers secure workers’ compensation coverage for their employees. § 440.107(3), Fla. Stat. Respondent is a Florida for-profit corporation organized on July 28, 2015, and engaged in the business of roofing and storm damage restoration. The company was formed, and initially conducted business, in Tallahassee, Florida, but expanded to the Panama City area in 2016. Traci Fisher is Respondent’s President and Registered Agent, with a mailing address of 1004 Kenilworth, Tallahassee, Florida 32312. DOAH Case No. 17-0879 On May 4, 2016, Department Compliance Investigator Jesse Holman, conducted a routine workers’ compensation compliance inspection at 374 Brown Place in Crestview, Florida. Mr. Holman observed four men removing shingles from the roof of a residential structure at that address. Mr. Holman first interviewed a worker who identified himself as Dustin Hansel and reported that he and the other three workers on site were a new crew for Respondent, the permit for the job had not yet been pulled, and the workers were not aware of the rate of pay for the job. Mr. Hansel telephoned Respondent’s sales manager, Dillon Robinson, who then spoke directly with Mr. Holman via telephone. Mr. Robinson informed Mr. Holman that Respondent obtained workers’ compensation coverage through Payroll Management Inc. (PMI), an employee-leasing company. Mr. Holman identified the three remaining workers at the jobsite as Milton Trice, Winston Perrotta, and Kerrigan Ireland. Mr. Holman contacted PMI and secured a copy of Respondent’s then-active employee roster. None of the workers at the jobsite, including Mr. Hansel, were included on Respondent’s employee roster. Upon inquiry, Mr. Holman was informed that PMI had no pending employee applications for Respondent. Mr. Holman consulted the Department’s Coverage Compliance Automated System (CCAS) and found Respondent had no workers’ compensation insurance policy and no active exemptions. During Mr. Holman’s onsite investigation, the workers left the jobsite. Mr. Holman could not immediately reach Ms. Fisher, but did speak with her husband, Tim Fisher. Mr. Fisher informed Mr. Holman that the crew was on their way to the PMI Fort Walton office to be enrolled on Respondent’s employee roster. On May 5, 2016, based on his investigation, and after consultation with his supervisor, Mr. Holman issued Respondent Stop-Work Order (SWO) 16-148-1A, along with a Business Records Request (BRR) for records covering the audit period of July 27, 2015 through May 4, 2016. Later that day, Mr. Holman spoke to Ms. Fisher, who informed him the crew did not have permission to begin the work on that date, as she had not yet pulled the permit for the reroof. Ms. Fisher further explained that the crewmembers had been instructed to complete applications with PMI prior to departing Tallahassee for Crestview. Ms. Fisher confirmed the crewmembers were completing applications at PMI Fort Walton that same day. Mr. Holman met with Ms. Fisher the following day and personally served SWO 16-148-1A. Ms. Fisher delivered to Mr. Holman an updated employee roster from PMI which included Mr. Hansel, Mr. Perrotta, and Mr. Ireland; a letter documenting Mr. Trice was not employed by Respondent; and a $1000 check as downpayment on the penalty. Respondent initially submitted business records in response to the BRR on May 23 and 25, 2017. DOAH Case No. 17-1558 On June 8, 2016, Mr. Holman conducted a random workers’ compensation compliance inspection at 532 Rising Star Drive in Crestview. The single-family home at that address was undergoing renovations and Mr. Holman observed three men on the roof removing shingles. None of the men on the roof spoke English, but a fourth man, who identified himself as Jose Manuel Mejia, appeared and stated he worked for Respondent, and that all the workers onsite were paid through PMI at a rate of $10.00 per hour. Mr. Mejia admitted that one of the worker’s onsite, Emelio Lopez, was not enrolled with PMI and explained that Mr. Mejia brought him to the worksite that day because he knew Mr. Lopez to be a good worker. The remaining workers onsite were identified as Juan Mencho and Ramon Gonzalez, both from Atlanta, Georgia. Mr. Mejia produced some PMI paystubs for himself and Mr. Mencho. Mr. Mejia stated that he and his crews also received reimbursement checks directly from Respondent for gas, rentals, materials, and the like. Mr. Holman contacted PMI, who produced Respondent’s then-active employee roster. Mr. Mejia and Mr. Mencho were on the roster, but neither Mr. Gonzalez nor Mr. Lopez was included. Mr. Holman next contacted Ms. Fisher, who identified Mr. Mejia as a subcontractor, but was not familiar with any of the other men Mr. Holman encountered at the worksite. Mr. Holman consulted via telephone with his supervisor, who instructed him to issue an SWO to Respondent for failing to secure workers’ compensation coverage for its employees. Mr. Holman issued SWO 16-198-1A by posting the worksite on June 8, 2016. Department Facilitator Don Hurst, personally served Ms. Fisher with SWO 16-198-1A in Tallahassee that same day. SWO 16-148-1A Penalty Calculation1/ Department Penalty Auditor Eunika Jackson, was assigned to calculate the penalties associated with the SWOs issued to Respondent. On June 8, 2016, Ms. Jackson began calculating the penalty associated with SWO 16-148-1A. Ms. Jackson reviewed the documents submitted by Respondent in response to the BRR. The documents included Respondent’s Wells Fargo bank statements, check images, and PMI payroll register for the audit period.2/ Based on a review of the records, Ms. Jackson identified the following individuals as Respondent’s employees because they received direct payment from Respondent at times during the audit period: David Rosinsky, Dylan Robinson, Jarod Bell, Tommy Miller, and David Shields. Ms. Jackson determined periods of non-compliance for these employees based on the dates they received payments from Respondent and were not covered for workers’ compensation via PMI employment roster, separate policy, or corporate officer exemption. Ms. Jackson deemed payments to each of the individuals as gross payroll for purposes of calculating the penalty. Based upon Ms. Fisher’s deposition testimony, Ms. Jackson assigned National Council on Compensation Insurance (NCCI) class code 5551, Roofing, to Mr. Miller; NCCI class code 5474, Painting, to Mr. Rosinsky; NCCI class code 8742, Sales, to Mr. Bell and Mr. Robinson; and NCCI class code 8810, clerical office employee, to Mr. Shields. Utilizing the statutory formula for penalty calculation, Ms. Jackson calculated a total penalty of $191.28 associated with these five “employees.” Ms. Jackson next calculated the penalty for Dustin Hansel, Kerrigan Ireland, Milton Trice, and Winston Perrotta, the workers identified at the jobsite as employees on May 4, 2016. The Department maintains that the business records submitted by Respondent were insufficient to determine Respondent’s payroll to these “employees,” thus, Ms. Jackson used the statutory formula to impute payroll to these workers. Ms. Jackson calculated a penalty of $14,970.12 against Respondent for failure to secure payment of workers’ compensation insurance for each of these four “employees” during the audit period. The total penalty associated with these four “employees” is $59,880.48. Ms. Jackson calculated a total penalty of $60,072.96 to be imposed against Respondent in connection with SWO 16-148- 1A. Business Records In compliance with the Department’s BRR, Respondent submitted additional business records on several occasions-- March 21, May 3 and 31, June 7, and August 15 and 24, 2017--in order to establish its complete payroll for the audit period. While the Department admits that the final documents submitted do establish Respondent’s complete payroll, the Department did not issue amended penalty assessment based on those records in either case. The Department maintains Respondent did not timely submit records, pursuant to Florida Administrative Code Rule 69L-6.028(4), which allows an employer 20 business days after service of the first amended order of penalty assessment to submit sufficient records to establish payroll. All business records submitted by Respondent were admitted in evidence and included as part of the record. The undersigned is not limited to the record before the Department at the time the amended penalty assessments were imposed, but must determine a recommendation in a de novo proceeding. The undersigned has relied upon the complete record in arriving at the decision in this case. Penalty Calculation for Ireland, Trice, and Perrotta For purposes of workers’ compensation insurance coverage, an “employee” is “any person who receives remuneration from an employer” for work or services performed under a contract. § 440.02(15)(a), Fla. Stat. Respondent did not issue a single check to Mr. Ireland, Mr. Trice, or Mr. Perrotta during the audit period. Mr. Ireland, Mr. Trice, and Mr. Perrotta are not included on any PMI leasing roster included in the record for the audit period. The uncontroverted evidence, including the credible and unrefuted testimony of each person with knowledge, established that Mr. Ireland, Mr. Trice, and Mr. Perrotta were newly hired for the job in Crestview on May 4, 2016, and began working that day prior to submitting applications at PMI, despite Ms. Fisher’s directions otherwise. Petitioner did not prove that either Mr. Ireland, Mr. Trice, or Mr. Perrotta was Respondent’s employee at any time during the audit period. Petitioner did not correctly calculate the penalty of $44,911.26 against Respondent for failure to secure workers’ compensation insurance for Mr. Ireland, Mr. Trice, and Mr. Perrotta during the audit period. Penalty Calculation for Hansel Ms. Fisher testified that Mr. Hansel has owned several businesses with which Respondent has conducted business over the years. Originally, Mr. Hansel owned a dumpster rental business, now owned by his father. Mr. Hansel also owned an independent landscaping company with which Respondent occasionally transacted business. When Respondent expanded business into the Panama City area, Ms. Fisher hired Mr. Hansel as a crew chief to supervise new crews in the area. The job on May 4, 2016, was his first roofing job. A review of Respondent’s records reveals Respondent issued the following checks to Mr. Hansel during the audit period: December 4, 2015, in the amount of $360, $300 of which was for “dumpster rental” and the remaining $60 for “sod”; May 4, 2016, in the amount of $200 for “sod repair”; May 6, 2016, in the amount of $925 as reimbursement for travel expenses; May 9, 2016, in the amount of $1,011.50 (with no memo); and May 21, 2016, in the amount of $100 for “7845 Preservation.” Mr. Hansel was included on Respondent’s PMI leasing roster beginning on May 13, 2016. Petitioner proved that Mr. Hansel was Respondent’s employee at times during the audit period. Petitioner did not prove that Respondent’s records were insufficient to determine payroll to Mr. Hansel during the audit period, which would have required an imputed penalty. Petitioner did not correctly calculate the penalty of $14,970.42 against Respondent for failure to secure workers’ compensation insurance coverage for Mr. Hansel during the audit period. Sod repair by Mr. Hansel is a service performed for Respondent during the audit period. Reimbursement of travel expenses is specifically included in the definition of payroll for purposes of calculating the penalty. See Fla. Admin. Code R. 69L- 6.035(1)(f) (“Expense reimbursements, including reimbursements for travel” are included as remuneration to employees “to the extent that the employer’s business records and receipts do not confirm that the expense incurred as a valid business expense.”). Dumpster rental is neither work performed on behalf of, nor service provided to, Respondent during the audit period. The correct uninsured payroll amount attributable to Mr. Hansel is $2,296.50. Petitioner correctly applied NCCI class code 5551, Roofing, to work performed by Mr. Hansel based on the observation of Mr. Holman at the worksite on May 4, 2016. With respect to Mr. Hansel’s services for sod and sod repair, Petitioner did not correctly apply NCCI class code 5551. Petitioner did not introduce competent substantial evidence of the applicable NCCI class code and premium amount for landscaping services performed during the audit period.3/ Uninsured payroll attributable to Mr. Hansel for roofing services during the audit period is $2,036.50. The approved manual rate for workers’ compensation insurance for NCCI class code 5551 during the period of non- compliance--May 9 and 21, 2016--is $18.60. The premium amount Respondent would have paid to provide workers’ compensation insurance for Mr. Hansel is $378.79 (One percent of Mr. Hansel’s gross payroll during the non-compliance period--$20.36--multiplied by $18.60). The penalty for Respondent’s failure to secure worker’s compensation coverage insurance for Mr. Hansel during the period of non-compliance is calculated as two times the amount Respondent would have paid in premium for the non- compliance period. The correct penalty for Respondent’s failure to maintain workers’ compensation coverage for Mr. Hansel during the period of non-compliance is $757.58. Penalty Calculation for Salesmen Independent contractors not engaged in the construction industry are not employees for purposes of enforcing workers’ compensation insurance requirements. See § 440.02(15)(d)1., Fla. Stat. Sales is a non-construction industry occupation. The Department calculated a penalty associated with payroll attributable to the following persons identified by Ms. Fisher as independent salesmen: Dylan Robinson, Kevin Miller, Marc Medley, Mike Rucker, Colby Fisher, David Jones, Jarod Bell, Matt Flynn, and Todd Zulauf. Section 440.02(15)(d)1. provides that an individual may be an independent contractor, rather than an employee, as follows: In order to meet the definition of independent contractor, at least four of the following criteria must be met: The independent contractor maintains a separate business with his or her own work facility, truck, equipment, materials, or similar accommodations; The independent contractor holds or has applied for a federal employer identification number, unless the independent contractor is a sole proprietor who is not required to obtain a federal employer identification number under state or federal regulations; The independent contractor receives compensation for services rendered or work performed and such compensation is paid to a business rather than to an individual; The independent contractor holds one or more bank accounts in the name of the business entity for purposes of paying business expenses or other expenses related to services rendered or work performed for compensation; The independent contractor performs work or is able to perform work for any entity in addition to or besides the employer at his or her own election without the necessity of completing an employment application or process; or The independent contractor receives compensation for work or services rendered on a competitive-bid basis or completion of a task or a set of tasks as defined by a contractual agreement, unless such contractual agreement expressly states that an employment relationship exists. If four of the criteria listed in sub- subparagraph a. do not exist, an individual may still be presumed to be an independent contractor and not an employee based on full consideration of the nature of the individual situation with regard to satisfying any of the following conditions: The independent contractor performs or agrees to perform specific services or work for a specific amount of money and controls the means of performing the services or work. The independent contractor incurs the principal expenses related to the service or work that he or she performs or agrees to perform. The independent contractor is responsible for the satisfactory completion of the work or services that he or she performs or agrees to perform. The independent contractor receives compensation for work or services performed for a commission or on a per-job basis and not on any other basis. The independent contractor may realize a profit or suffer a loss in connection with performing work or services. The independent contractor has continuing or recurring business liabilities or obligations. The success or failure of the independent contractor’s business depends on the relationship of business receipts to expenditures. Ms. Fisher testified that each of the above-named salesmen sold roofing jobs for her at various times during the audit period on a commission-only basis. The contractors inspect homeowner roofs, draft schematics, use their own equipment (e.g., drones), incur all of their own expenses, and handle the insurance filing for the homeowner’s insurance to pay on the claim. Ms. Fisher further testified that each of the salesmen also sells for other roofing contractors in the Tallahassee area. She pays the salesmen on a per-job basis. Ms. Fisher does not compensate the salesmen for the time involved in inspecting a roof, preparing schematics, or making the sale. Nor does Ms. Fisher reimburse the salesmen for travel to sales jobsites. Ms. Fisher’s testimony was credible, persuasive, and uncontroverted. Respondent introduced in evidence four “Independent Contractor Checklists” allegedly completed by Mr. Robinson, Mr. Medley, Mr. Fisher, and Mr. Flynn. Each form checklist follows the format of section 440.02(15)(d)1., listing the criteria set forth in subparagraphs a. and b. The forms indicate that they each meet all the criteria listed in subparagraph b.: they perform, or agree to perform services for a specific amount of money and control the means of performing the service; they incur the principal expenses related to the service performed; they are responsible for satisfactory completion of the services performed; they receive compensation for the services performed on a per-job or commission basis; they may realize a profit or suffer a loss in connection with performing the services; they have continuing and recurring business liabilities or obligations; and the success or failure of their business depends on the relationship of business receipts to expenditures.4/ In its Proposed Recommended Order, Petitioner conceded the nine men identified by Respondent as independent sales contractors “would not be considered employees of Respondent” because the “salesmen would seem to meet the majority of [the] requirements [of section 440.02(15)(d)1.b.].” Respondent issued Dylan Robinson, Mark Medley, Colby Fisher, Matt Flynn, Kevin Miller, Mike Rucker, Jarod Bell, David Jones, and Todd Zulauf an IRS FORM 1099-MISC for income paid during the 2016 tax year. Respondent did not prove by clear and convincing evidence that the above-named salesmen were Respondent’s employees during the audit period. For SWO 16-148-1A, Respondent did not correctly calculate the penalty because Respondent included a penalty associated with Petitioner’s failure to provide workers’ compensation insurance coverage for Dylan Robinson and Jarod Bell. Penalty in the amount of $20.70 associated with Dylan Robinson and Jarod Bell should not be included in the total penalty. The correct penalty amount for SWO 16-148-1A, based on records submitted by Respondent on or before March 20, 2016, is $929.16. Draft Revised Second Amended Order of Penalty Assessment The additional records submitted by Respondent revealed payments made to persons during the audit period who were not included in the Department’s Second Amended Order of Penalty Assessment. The Department and Respondent disagreed at hearing whether the payments qualified as payroll. At hearing, Petitioner submitted a draft revised second amended penalty calculation for SWO 16-148-1A based on all records received from Respondent. The revised penalty is in the amount of $61,453.50. Ms. Jackson populated the spreadsheet with the name of every individual to whom a check was written on Respondent’s business bank account during the audit period, removing only those payments to individuals and entities which, to Petitioner’s knowledge, were not Respondent’s employees. Respondent’s calculations in the revised penalty suffer from some of the same errors as in the second amended penalty calculation--they include individuals Petitioner did not prove were Respondent’s employees, as well as payments which were not uninsured payroll. For the reasons explained herein, Petitioner did not prove that salesmen David Jones, Dylan Robinson, Jarod Bell, Kevin Miller, Mark Medley, Matt Flynn, Mike Rucker, Tim Fischer, and Colby Fisher were Respondent’s employees during the audit period. Respondent did not accurately calculate the penalty associated with those persons. Respondent made payments to David Shields during the audit period, which the Department argues should be included as payroll. The Department included payments to Mr. Shields in its draft revised second amended order of penalty assessment and assigned NCCI class code “8810” for clerical work. Mr. Shields is a licensed professional roofing contractor who acts as “qualifier” for Respondent’s business. A qualifier is a licensed professional who certifies plans for permit applications submitted by another business. Respondent pays Mr. Shields a flat fee per permit application qualified by him. The record evidence does not support a finding that Mr. Shields provides clerical services to Respondent. Mr. Shields provides some sort of professional services to Respondent, and is likely an independent contractor providing his own materials and supplies, maintaining his own business accounts, and liable for his own business success. Assuming Mr. Shields were Respondent’s employee, the Department introduced no evidence of an appropriate NCCI class code for Mr. Shields’ services. The Department did not prove that payments to Mr. Shields should be included as Respondent’s uninsured payroll during the audit period. Respondent paid Susan Swain a total of $258 during the audit period for clerical work. Ms. Fisher maintained Ms. Swain’s work was casual at first, and the payments reflect a time when she worked on-again, off-again, handling the paperwork for restoration insurance claims. Later, Ms. Swain came to work for Respondent full-time and was added to the PMI leasing roster. Section 440.02(15)(d)5. provides that a person “whose employment is both casual and not in the course of the trade, business, profession or occupation of the employer” is not an employee. The statute defines “casual” employment as work that is anticipated to be completed in 10 working days or less and at a total labor cost of less than $500. See § 440.02(5), Fla. Stat. In its Proposed Recommended Order, the Department argues Ms. Swain’s wages should be included as payroll because the “testimony regarding Ms. Swain does not suggest that she was employed for less than 10 days[.]” However, it was the Department’s burden to prove that Ms. Swain was a statutory employee. The Department did not prove that Ms. Swain’s wages should be included within Respondent’s uninsured payroll. The largest portion of the penalty assessed by the Department, as well as in the draft revised second amended penalty assessment, against Respondent is in connection with various roofers who were employed by Respondent at times during the audit period. Each of the roofers was included on Respondent’s PMI leasing roster, but received checks directly from Respondent in addition to PMI payroll checks. The Department included all the direct payments to those roofers as payroll for purposes of calculating a penalty in this case. As Ms. Fisher explained, the company bids a reroof on a per job basis--usually a per square foot price. Ms. Fisher adds each roofing contractor’s name to the PMI leasing roster to ensure that each roofer is covered by workers’ compensation insurance for the duration of the job. When the job is completed (which is a matter of just a few days), the contractor reports to Ms. Fisher what amount of the contract price was spent on materials, supplies, or other non-labor costs. Ms. Fisher cuts a check to the contractor for that amount and authorizes PMI to issue payroll checks for the “labor cost” (the difference between the contract price and the non-labor costs). Ms. Fisher refers to this process as “back-charging” the contractors for their materials, maintenance, tools, and other non-labor costs. The Department is correct that the direct payments are payroll to the roofing contractors. See Fla. Admin. Code R. 69L-6.035(1)(b) and (h) (remuneration includes “payments, including cash payments, made to employees by or on behalf of the employer” and “payments or allowances made by or on behalf of the employer for tools or equipment used by employees in their work or operations for the employer.”). The Department would be correct to include these payments in the penalty calculation if they represented uninsured payroll. However, the evidence supports a finding that the direct payments to the roofing contractors were made for the same jobs on which Respondent secured workers’ compensation coverage through PMI. The roofing contractors were covered for workers’ compensation throughout the job, even though they may have received partial payment for the job outside of the PMI payroll checks.5/ The direct payments were not for separate reroofs on which the roofers were not otherwise insured. The Department did not correctly calculate penalties associated with the following roofing contractors: Donald Tontigh, Joseph Howard, Keith Mills, Aaron Kilpatrick, Gustavo Tobias, Jose Mejia, and Tommy Miller. Ms. Fisher also received cash payments from Respondent during the audit period. These payments were made in addition to her payroll through PMI. Ms. Fisher described these payments as “cash tickets,” which were paid outside of her PMI payroll to reimburse her for investments made in the company. For purposes of calculating the penalty in this case, these “cash tickets” are clearly payroll, as that term is to be calculated pursuant to rule 69L-6.035. Similar to the issue with the roofing contractors, the question is whether the payments represent uninsured payroll. Ms. Fisher did not hold a corporate officer exemption at any time relevant hereto. Ms. Fisher testified that she was covered through PMI payroll leasing. In contrast to the roofing contractors, Ms. Fisher’s direct payments do not directly coincide with any particular job or specific time frame during which Ms. Fisher was covered for workers’ compensation insurance through PMI. The evidence was insufficient to determine that the amounts were insured payroll. The Department properly calculated a penalty associated with payroll attributable to Ms. Fisher. Respondent made one payment of $75 to Donald Martin during the audit period. The Department calculated a penalty of $27.90 associated with this payment to Mr. Martin. Ms. Fisher explained that Mr. Martin was a down-on-his-luck guy who came by the office one day complaining that Mr. Hansel owed him some money. Ms. Fisher offered to put him on a roofing crew and wrote him the $75 check to help him out. Ms. Fisher’s testimony was both credible and unrefuted. Mr. Martin was never hired by Respondent, put on any roofing crew, or added to the PMI leasing roster. Mr. Martin was not Respondent’s employee because he did not receive remuneration for the “performance of any work or service while engaged in any employment under any appointment or contract for hire” with Respondent. § 440.02(15)(a), Fla. Stat. Cale Dierking works for Respondent full-time in a clerical position. During the audit period, Respondent paid Mr. Dierking directly by check for $1,306.14. This payment was made outside of Mr. Dierking’s PMI payroll checks. Ms. Fisher testified that she paid Mr. Dierking directly on one occasion when “PMI’s payroll got stuck in Memphis, I believe it was a snow-in situation where payroll checks didn’t come.” Rather than ask her employee to go without a timely paycheck, she advanced his payroll. Ms. Fisher’s testimony was both credible and unrefuted. The payment to Mr. Dierking is clearly payroll. However, Mr. Dierking was covered for workers’ compensation through PMI for the period during which the check was issued. Thus, there is no evidence that it was uninsured payroll. The Department did not correctly calculate a penalty associated with payments to Mr. Dierking. The correct penalty to be assessed against Respondent for failure to secure workers’ compensation coverage for its employees during the audit period in connection with SWO 16-148- 1A is $770.60. Penalty Calculation for SWO 16-198-1A Ms. Jackson calculated a total penalty against Respondent in connection with SWO 16-198-1A in the amount of $19,115.84, as reflected in the Second Amended Order of Penalty Assessment. The Department correctly imputed penalty against Respondent in the amount of $91.68 each for uninsured payroll to Mr. Gonzalez and Mr. Lopez. The evidence supported a finding that these workers were Respondent’s statutory employees on June 8, 2016, and were not enrolled on the PMI leasing roster. The Department did not correctly calculate the penalty associated with salesmen Dylan Robinson, Jarod Bell, Kevin Miller, Mark Medley, Matt Flynn, and Todd Zulauf. The Department did not correctly calculate the penalty associated with roofing contractors Abraham Martinez- Antonio, Edwin Kinsey, Dustin Hansel, Efrian Molina-Agustin, Jose Mejia, Joseph Howard, Keith Mills, Samuel Pedro, and Tommy Miller. The Department did not correctly calculate the penalty against Respondent associated with Mr. Shields, Respondent’s qualifier. Based on a review of Respondent’s complete “untimely” records, the Department discovered direct payments made to additional employees not included on the Second Amended Order of Penalty Assessment. Respondent made a direct payment to Ethan Burch in the amount of $602.50 during the audit period. Ethan Burch is one of Respondent’s full-time clerical employees. The evidence is insufficient to determine whether the payment of $602.50 was insured or uninsured payroll. As such, the Department did not prove it correctly calculated the penalty associated with Mr. Burch. Respondent also made a direct payment to Chelsea Hansel in the amount of $965 during the audit period. Ms. Hansel is another clerical employee. Ms. Hansel’s PMI enrollment was delayed due to some background investigation. Respondent paid Ms. Hansel for work she completed prior to enrollment. The direct payment to Ms. Hansel constitutes uninsured payroll. The Department correctly calculated the penalty associated with the payment to Chelsea Hansel. The correct penalty amount to be imposed against Respondent for failure to secure payment of workers’ compensation coverage for its employees (Gonzalez, Lopez, and Chelsea Hansel) during the audit period in connection with SWO 16-198-1A is $187.80.
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 Royal Roofing and Restoration, Inc., violated the workers’ compensation insurance law and, in DOAH Case No. 17-0879, assessing a penalty of $770.60; and in DOAH Case No. 17-1558, assessing a penalty of $187.80. DONE AND ENTERED this 24th day of January, 2018, 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 24th day of January, 2018.
Findings Of Fact Respondent is the state agency authorized to administer and enforce provisions of Chapter 520, Florida Statutes, regulating the granting or denial of applications for Home Improvement Contractor Licenses. On November 30, 1988, Petitioner submitted an application on behalf of a corporation known as "The Durocoat Company" (Durocoat) to Respondent for licensure as a home improvement contractor. On that application, Petitioner disclosed the identity of the two principals of the corporation and the position held by those two individuals. Petitioner listed himself as the president of the corporation and another individual, Russell W. Black, as the corporation's vice-president. Each principal owns 50 percent of the corporation. Following the section of the application providing for the disclosure of the identities and addresses of business principals, a number of questions are listed and the person executing the form is required to provide an "X" in a block to indicate a "yes" or "no" answer to each of those questions. Question number four reads as follows: Are there unpaid judgments against the applicant or any of the persons listed above? If "yes" attach a copy of the complaint and judgment(s). Petitioner placed an "X" in the space allotted for a "yes" answer to the inquiry regarding unpaid judgments against the persons listed as business principals, namely himself and Mr. Black. Petitioner then attached a copy of a document entitled "Notice of Levy" issued by the Internal Revenue Service (IRS) of the United States Department of the Treasury. In sum, the notice certifies the existence of a tax lien against Mr. Black, Durocoat's vice-president, in the amount of $27,546.25. It is undisputed by the parties that creditors held unpaid judgments against Petitioner at the time he submitted the application on November 30, 1988, and that he failed to attach copies of those judgments to the application. Further, Petitioner acknowledged at the final hearing that he was aware at the time of submittal of the application of the existence of one of these judgments. That judgement, entered in favor of The American Express Company (American Express) for $7,602, has existed since September of 1987. In mitigation of his failure to disclose the American Express judgement, Petitioner testified at hearing that he didn't have a copy of the judgement at the time he filed the application and was unaware of the requirement that he should attach a copy. In view of his action in attaching a copy of the existing tax lien against Mr. Black to the application, Petitioner's testimony that he was unaware that he should attach copies of unpaid judgments is not credited. A copy of Petitioner's credit report, introduced at final hearing by Petitioner, discloses that a business known as "Speeler Marine" obtained a judgement against him in the amount of $250 in March of 1986. Petitioner testified at hearing that he was unaware of the existence of this judgement. No settlement discussions have been initiated by him with the creditor. Petitioner's credit report further discloses that an outstanding loan to Petitioner in 1985 in the amount of $36,000 by a financial institution identified as "Sun Bank" is classified as a "bad debt, placed for collection." Petitioner testified that this debt represents loan funds obtained in a previous business venture and is the subject of settlement negotiations and that he has repaid $4,000 of the amount at the present time. Petitioner's testimony also establishes that the credit report's disclosure of a 1987 foreclosure certificate of title to real estate represented real property located in Gainesville, Florida, which Petitioner had taken in trade for money owed to him. In view of the distance to that city, Petitioner testified that he simply chose not to pay off the existing mortgage on the property or oppose foreclosure action by the mortgage holder. A representative of Nationwide Chemical Coating Company (Nationwide) testified at the final hearing regarding that company's business relationship with Petitioner's corporation. Since February of 1988, Nationwide has sold supplies valued at $250,000 to Durocoat. The company has always paid charges within the 30 day required time limit and is considered to be a "class A" customer. In regard to the federal tax lien which Petitioner attached to the application, Russell W. Black testified that the lien resulted from the disallowance by IRS of a tax shelter investment of $34,000 made by Black in 1977 or 1978. Black was notified by IRS in 1981 that the tax shelter was not considered to be a valid deduction for tax purposes. The amount owed by Black to IRS in 1981 was $20,630.64. The amount is now $27,546.25 and, according to Black, is still unpaid because he doesn't have the money. On advice of counsel, he has not contacted IRS to schedule payments on the debt. Respondent denied Petitioner's application by letter dated January 13, 1989, stating that Petitioner's failure to attach copies of the unpaid judgments against himself constituted a material misstatement of fact sufficient to authorize the denial. The letter further stated that the unpaid judgments, along with the federal tax lien against Mr. Black, demonstrated a lack of financial responsibility by both individuals and constituted an additional ground for denial of the application.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that a Final Order be entered denying Petitioner's application for licensure. DONE AND ENTERED this 24th day of August, 1989, in Tallahassee, Leon County, Florida. DON W. DAVIS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 24th day of August, 1989. APPENDIX The following constitutes my specific rulings, in accordance with Section 120.59, Florida Statutes, on findings of fact submitted by the parties. Petitioner's Proposed Findings. Petitioner's proposed findings consisted of 10 unnumbered paragraphs which have been numbered 1-10 and are treated as follows: 1-8. Addressed in part, remainder rejected as unnecessary. Rejected, unsupported by direct admissible evidence. Rejected, unnecessary to result reached. Respondent's Proposed Findings. 1-2. Addressed. 3-4. Rejected, unnecessary. 5-11. Addressed in substance. COPIES FURNISHED: John L. Riley, Esq. 2325 Fifth Avenue North St. Petersburg, FL 33713 William W. Byrd, Esq. Assistant General Counsel Office Of The Comptroller 1313 Tampa Street, Suite 615 Tampa, FL 33602-3394 Hon. Gerald Lewis Comptroller, State of Florida Department of Banking and Finance The Capitol Tallahassee, FL 32399-0350 Charles Stutts, Esq. General Counsel Department of Banking and Finance The Capitol Plaza Level, Room 1302 Tallahassee, FL 32399-0350
The Issue The central issue in this case is whether Petitioner's employment with the Respondent was terminated in violation of Chapter 760, Florida Statutes.
Findings Of Fact Based upon the documentary evidence received at the hearing, the following findings of fact are made: At all times material to the allegations of this case, Petitioner was an employee of FRSA. On or about September 26, 1989, Petitioner's employment with FRSA was terminated and the charges of discrimination were filed. Prior to termination, Petitioner's work performance with the company had been acceptable. In fact, for the performance review issued on January 31, 1989, Petitioner received a superior rating in eight of the eleven categories, a good rating in two categories, and an outstanding rating in one category. At the time of her termination with FRSA, Petitioner earned an annual salary of $35,000. Petitioner claims a total of $83,568 for the lost wages and benefits resulting from her termination with FRSA. At the time of her termination, Petitioner was pregnant.
Recommendation Based on the foregoing, it is RECOMMENDED: That the Florida Commission on Human Relations enter a final order dismissing the charge of discrimination filed by the Petitioner in this cause against the Respondent. DONE and ENTERED this 4th day of September, 1992, in Tallahassee, Leon County, Florida. JOYOUS D. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32301 (904)488-9675 COPIES FURNISHED: Elizabeth Rubeis Reno Rubeis 4350 Wyndcliff Circle Orlando, Florida 32817 Susan McKenna Garwood & McKenna, P.A. 322 East Pine Street Orlando, Florida 32801 Filed with the Clerk of the Division of Administrative Hearings this 4th day of September, 1992. Dana Baird, General Counsel Human Relations Commission 325 John Knox Road Building F, Suite 240 Tallahassee, Florida 32399-1570 Margaret Jones, Clerk Human Relations Commission 325 John Knox Road Building F, Suite 240 Tallahassee, Florida 32399-1570
The Issue The issue is whether Section 11B(3) of the Florida Workers' Compensation Reimbursement Manual for Hospitals, 2004 Second Edition, is an invalid exercise of delegated legislative authority.
Findings Of Fact The petitions filed by FFVA and TIC challenge the validity of Section 11B(3) of the 2004 Manual,4/ which prior to October 1, 2007, was adopted by reference as part of Florida Administrative Code Rule 69L-7.501(1). Florida Administrative Code Rule 69L-7.501(1) was amended effective October 1, 2007, to adopt by reference the Florida Workers' Compensation Reimbursement Manual for Hospitals, 2006 Edition ("the 2006 Manual"). Florida Administrative Code Rule 69L-7.501(1), as it existed when the petitions were filed and as it currently exists, adopts by reference the 2006 Manual, not the 2004 Manual. The 2004 Manual is no longer adopted by reference as part of Florida Administrative Code Rule 69L-7.501, or any other rule. AHCA applied the 2004 Manual in the reimbursement dispute initiated by HRMC against FFVA under Section 440.13, Florida Statutes, as reflected in the determination letter issued by AHCA on October 24, 2007, which was attached to FFVA's petition. The reimbursement dispute is the subject of the pending DOAH Case No. 07-5414. AHCA applied the 2004 Manual in a reimbursement dispute involving TIC under Section 440.13, Florida Statutes, as reflected in the determination letter issued by AHCA on January 9, 2008, which was attached to TIC's petition. The reimbursement dispute is the subject of the pending DOAH Case No. 08-0703.
Recommendation Based on the foregoing Finding of Fact and Conclusion of Law, it is recommended that the Florida Commission on Human Relations enter a final order dismissing the Petition for Relief in this case. RECOMMENDED this 28th day of February, 1990, in Tallahassee, Florida. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 28th day of February, 1990.
