The Issue The issues for determination are whether Petitioner, Paul F. Meloy (Meloy), is an employee of Petitioner, Alva Fire Protection and Rescue District (District), and is entitled to participate in the Florida Retirement System (FRS) pursuant to Section 121.051, Florida Statutes (2001). (All references to statutes are to Florida Statutes (2001) unless otherwise stated.)
Findings Of Fact Section 121.051 requires participation in the FRS by all employees hired after December 1, 1970. The District hired Meloy after 1970. Meloy has worked for the District as the fire chief and administrator since the District's inception in 1976. Meloy was instrumental in establishing the District. The other requirement imposed by Section 121.051 for participation in the FRS is that Meloy must be an employee. Section 121.021(11), in relevant part, defines an employee as any person receiving salary payments for work performed in a regularly established position. Respondent denies that the payments Meloy receives from the District are salary payments. Respondent asserts that the payments are reimbursement for expenses. Respondent denies that the payments to Meloy are compensation. Section 121.021(22) defines the term "compensation" to mean: . . . the monthly salary paid a member by his or her employer for work performed arising from that employment. The payments from the District to Meloy since October 1990 have been compensation. In October 1990, the District began paying Meloy a monthly salary "for work performed arising from his employment with the District." Before October 1990, the District reimbursed Meloy for expenses he incurred in housing fire trucks in the garage at Meloy's auto service business. The District also reimbursed Meloy for the maintenance and repair of District vehicles. In 1988, the District began reporting the payments made to Meloy as salary for purposes of the federal income tax. Each year from 1988 to the present, the District has reported the payments to Meloy on a W2 Wage and Tax Statement. Between 1988 and October 1990, the District stopped housing vehicles in Meloy's garage, and Meloy stopped servicing vehicles for the District. In October 1990, the amount of the monthly payment to Meloy increased substantially. Thereafter, the District provided annual cost of living increases to Meloy. The payments to Meloy from October 1990 to the present have been unrelated to expenses incurred by Meloy. Those payments have been regular monthly salary payments for work performed to implement the policy of the District and to administer the day-to-day operations of the District. Even if the payments are salary payments, Respondent argues that Meloy did not receive those payments for work performed in a regularly established position. Section 121.021(52)(b) defines a regularly established position as one that will be in existence for six months. Meloy's position has been in existence since 1976. It will be in existence for six months. Respondent asserts that the position occupied by Meloy is a temporary position defined in Section 121.021(53)(b). Section 121.021(53)(b) defines a temporary position as one that will exist for less than six months or as defined by rule, regardless of its duration. Respondent claims that the position occupied by Meloy is a temporary position because it is an "on call position" defined in Florida Administrative Code Rule 60S- 1.004(5)(d)5. The rule defines an on call position as one filled by employees who are called to work unexpectedly for brief periods and whose employment ceases when the purpose for being called is satisfied. (All references to rules are to rules promulgated in the Florida Administrative Code in effect on the date of this Recommended Order.) Meloy performs some of his duties unexpectedly when called anytime 24 hours a day. He performs his other duties in the normal course of business. Meloy does not maintain any time sheets, and the District does not require Meloy to perform his duties within an established work schedule. Meloy does not occupy an "on call position" within the meaning of Rule 60S-1.004(5)(d)5. Meloy's employment does not cease when the purpose of his being called is satisfied. Meloy has been performing his on-call duties and his other duties for approximately 25 years. In 1994, Mr. William D. Wilkinson became the Chairman of the District (Wilkinson). Wilkinson is also the Court Administrator for the Circuit Court in the Twentieth Judicial Circuit of Florida, in which the District is located. After Wilkinson became Chairman, he determined that Meloy receives compensation in a regularly established position and is entitled to membership in the FRS. Wilkinson testified at the hearing. Meloy has sole responsibility for implementing the District's policy and administering the day-to-day operation of the District. Relevant portions of Wilkinson's testimony are instructive. Q. And whose job is it to carry out that policy? A. Mr. Meloy. Q. When you came on board in 1994, Mr. Meloy, was he employed by the district? A. That's correct. Q. How many other administrators does the district employ? A. None. Q. Who runs the day-to-day affairs of the fire district? A. Mr. Meloy. Q. He is required to work a certain work schedule? A. No, sir. Q. What is he required to do as far as hours go? A. Once we set the policy, then we expect, you know, the chief to carry that out. And for however many hours it takes during the week, you know, the month to see it is fulfilled. Q. Do you know if he is on call? A. He is on call 24/7. Q. And what does that mean? A. 24 hours a day, seven days a week. Q. Is that 365 days a year? A. That's correct. * * * Q. Let me ask you to put your other hat on as the court administrator for the 20th Judicial Circuit. Are you involved with the Florida Retirement System? A. Yes, I am. Q. And you are a participant? A. Yes, I am. Q. Your duties as the court administrator, how would you compare that to Mr. Meloy's duties as the fire chief administrator of the Alva Fire District? A. Well, with the exception that I certainly make a lot more than he does for the duties that he has, it is similar. You know, I'm paid an annual salary and expected to get the job done. If you have to work 60 hours, you have to work 60 hours. If you get through sooner, hopefully you do. But that never happens. The District requires Meloy to spend as much time as is needed to implement the policy of the District and to administer the day-to-day business of the District. The hours vary, and there are no set hours. Some days, Meloy's day begins at 6:00 a.m. Other days, Meloy does not get to work until 9:00 a.m. or noon. Some days, Meloy leaves work at 5:00 p.m. and then must return immediately to the office. "It is whatever is needed." The District employs four individuals. One is Meloy. Two are certified firefighters. The other is a part- time bookkeeper. The bookkeeper and the two certified firefighters are members of the FRS. The two full-time firefighters maintain time sheets, and the District pays them for overtime. The District compensation of its full-time firefighters is consistent with compensation on an hourly basis. Meloy is not a certified firefighter, and the District does not compensate Meloy on an hourly basis. Meloy does not maintain or submit time sheets. The District does not pay Meloy for overtime. Like the certified firefighters, Meloy performs some of his duties when called anytime, 24 hours a day. However, neither the certified firefighters nor Meloy has the option to refuse to work when called. The employment positions of the certified firefighters and Meloy do not cease when the purpose for being called is satisfied. Although the bookkeeper for the District is never on call, she maintains a schedule similar to that of Meloy. She works those hours necessary to perform her duties. Like Meloy, the bookkeeper's position does not cease when she completes her work. The District pays compensation to Meloy in accordance with an annual salary rather than an hourly rate. Meloy does not have an established schedule during which he must implement the board's policy and administer the day-to- day operations of the District. Meloy occupies a regularly established position within the meaning of Section 121.021(52)(b). Meloy is the District administrator. The position has been in existence since 1988 and is not a temporary position within the meaning of Section 121.021(53)(b) or Rule 60S-1.004(5). Respondent's final argument is that a determination of Petitioners' request to enroll Meloy in the FRS is barred by the judicial doctrines of res judicata or collateral estoppel. Respondent argues that final agency action determined that the payments received by Meloy through June 29, 1992, are reimbursement for expenses. Respondent argues that nothing has changed since that time, and Meloy cannot now revisit the issue of his compensation. Findings regarding Respondent's final argument require some historical perspective. The District joined the FRS in 1988. At that time, the District purchased past service credit for a number of employees, including Meloy. Meloy enrolled as a member of the Special Risk Class. When Meloy enrolled as a member of the Special Risk Class, a question in the enrollment form asked Meloy if the applicant was certified as a firefighter or required to be certified as a firefighter. Meloy answered in the affirmative. Meloy has always been required to be certified as a firefighter in order to receive retirement benefits as a member of the Special Risk Class. However, Meloy has never been certified as a firefighter pursuant to Section 633.35. Meloy has never completed an essential firefighting course that is a statutory prerequisite to certification. By letter dated June 29, 1992, Respondent notified Meloy that Respondent was terminating Meloy's membership in the FRS. The letter stated two grounds for termination. One ground was that Meloy had not completed the firefighting course required for membership in the Special Risk Class. The second ground was that the payments Meloy received from his employer are reimbursement for expenses rather than compensation. Meloy did not appeal either ground stated by Respondent on June 29, 1992, for the termination of benefits. Meloy does not contest the first ground and is not now seeking enrollment in the FRS as a member of the Special Risk Class. Rather, Meloy now seeks benefits as a member in a regularly established position defined in Section 121.021(52)(b). Meloy does contest the second ground stated by Respondent on June 29, 1992, for terminating Meloy's membership in the FRS. Respondent determined that Meloy did not receive compensation from 1988 through June 29, 1992. The time for appealing that determination has expired, and Meloy cannot now amend the scope of this proceeding to include any payments he received on or before June 29, 1992. Respondent asserts that its determination on June 29, 1992, also establishes that payments received by Meloy after June 29, 1992, are not compensation. Respondent argues that Meloy's duties have not changed, and the payments Meloy receives are reimbursement for expenses. On June 1, 1999, Respondent sent a letter to Wilkinson explaining Respondent's denial of Meloy's application for enrollment in the FRS. In relevant part, the letter stated: By certified letter dated June 29, 1992 (copy enclosed), the State Retirement Director, Mr. A.J. McMullian III, advised Mr. Meloy that he was inelligible for Florida Retirement System (FRS) participation since the monthly payments he received were for "expenses" and not compensation. Subsequent to Mr. McMullian's letter, a hearing was conducted by the Division of Administrative Hearings and Mr. Meloy's payments were defined as expenses as a statement [sic] of fact (copy enclosed). In light of this, the Division has already made a determination that Mr. Meloy is ineligible for FRS participation from 1979 through 1992. Since your letter indicates that Mr. Meloy's duties and payments he has received have not changed since 1988, he remains ineligible for FRS participation. Respondent's Exhibit 10. The DOAH hearing referred to in the letter on June 1, 1999, involved allegations that Meloy had violated state ethics laws when he first attempted to enroll in the FRS in 1988. In 1992, the Florida Commission on Ethics (Commission) investigated Meloy's participation in the FRS. The Commission entered an order finding probable cause that Meloy violated Section 112.313(6) when he submitted his enrollment form for retirement benefits by corruptly using or attempting to use his official position to retain retirement benefits for himself and his assistant fire chief when neither was qualified to receive benefits. The findings concerning the assistant fire chief are neither relevant nor material to this proceeding. Meloy requested an administrative hearing, and the Commission referred the matter to DOAH to conduct the hearing. ALJ Susan B. Kirkland conducted the administrative hearing and entered a Recommended Order on July 8, 1994. The Recommended Order found that Meloy misrepresented his entitlement to membership in the Special Risk Class and did so with wrongful intent. The Order concluded that Meloy violated the relevant statute because Meloy attempted to use his position, or the property and resources entrusted to him, to secure a benefit. The Order recommended a civil penalty, public censure, and a reprimand. The Final Order of the Commission adopted the Recommended Order. The Recommended Order contains three paragraphs that discuss the payments received by Meloy. Those three paragraphs state: 3. In 1976, the . . . District was established. The firefighting equipment and vehicles were originally located in Meloy's garage, where he maintained an automotive repair shop. Meloy received a fixed reimbursement from the District each month for the use of his garage and for repair services which he rendered for the District. * * * 5. In 1988, the District joined the . . . (FRS). At that time the District employed four full-time firefighters and a part-time secretary. Meloy worked part-time as the administrator of the District but did not draw a salary and continued to receive remuneration in the form of the monthly reimbursement for expenses. . . . * * * 18. By letter dated June 29, 1992, [Respondent] notified Meloy that his membership in the FRS . . . was being terminated. The grounds for termination were that Meloy had been receiving payments for expenses and not compensation. . . . The Recommended Order does not operate under the judicial doctrines of res judicata or collateral estoppel to preclude a determination of whether the payments received by Meloy after 1988 are compensation. The Recommended Order limits the finding that Meloy received payments for expenses to those received in 1988. Paragraph 5 expressly states, "At that time. . . Meloy . . . continued to receive . . . reimbursement for expenses. . . ." The findings in paragraph 18 merely recite the grounds stated by Respondent but do not make findings on the merits of the stated grounds. The findings in paragraph 3 are not probative. The Recommended Order made no findings concerning the payments Meloy received after 1988. Respondent determined that the payments between 1988 and June 29, 1992, were payments for expenses rather than compensation. Irrespective of whether Respondent's determination was legally and factually correct, Meloy did not appeal Respondent's determination. The determination by Respondent on June 29, 1992, involved a separate and distinct application from the application at issue in this case. No determination has been made that the payments since June 29, 1992, either are or are not compensation. The application at issue in this case is a new application for different benefits. Meloy is not applying for benefits to which he would be entitled if he were a member of the Special Risk Class. Nor can Meloy apply for benefits related to the payments received on or before June 29, 1992. Respondent argues that nothing has changed in the course of Meloy's tenure with the District. Payments that were reimbursement for expenses before 1992 arguably have not now been transformed into compensation. Respondent is incorrect. Something has changed in the course of Meloy's tenure with the District. Sometime after September 1990, the payments to Meloy changed from reimbursement for expenses to monthly salary payments. The District no longer housed equipment at Meloy's garage, Meloy no longer serviced the equipment at the garage, and the amount of the monthly payments to Meloy increased from $540 to $833. Relevant portions of the transcript of the administrative hearing in the ethics case are instructive. Meloy asserted in the ethics case that in 1988, he was a volunteer fireman. As a volunteer, rather than a salaried employee, Meloy argued that he was not required to be certified as a firefighter. The attorney who represented the Commission sought to show that Meloy was not a volunteer after 1990 but was a salaried employee of the District. As long as I'm volunteering, I don't have to have it. Q. Okay. You are also the administrator for the full-time firemen, is that right? A. Yes. Q. You have the power to hire and fire them? A. Yes. Q. You set their hours? A. Yes. Q. The district also has a part-time secretary, is that right? A. Yes. Q. And currently that's Ms. Connie Bull? A. Correct. Q. She handles payroll matters? A. Yes. Q. She writes checks? A. Yes. Q. Pays bills? A. Yes. Q. She and you both answer questions that the full-time firemen might have about vacation or sick leave or retirement, is that right? A. To the best of our ability, yes. Q. Okay. Now, before 1990 you were not an employee of the fire district, is that right? A. According to how you define it, I guess. I was paid more as an expense type arrangement up until sometime around '90. I don't remember the exact date. Q. Okay, you received the expense reimbursement prior to 1990 for working on the fire equipment; is that right? A. It covered a lot of things. We worked on the fire equipment there in my business, we housed a lot of equipment there, used my facilities for -- well, we have used my facilities as a station for awhile. Q. When you say your facilities, you mean the Alva garage that you used to own? A. Right. Q. When you got the expense reimbursement, you would get the same amount every month, is that right? A. Yes. Q. It changed some over time, though, didn't it from '73 to 1990? A. Yes. Q. You got that same reimbursement amount regardless of the number of hours that you worked for the district? A. Yes. Q. And regardless of what any actual expenses might be? A. Correct. Q. Now, sometime in 1990 you became an employee of the district on a part-time basis; is that right? A. That's when they started taking out taxes and all and that reverted to more of a salary type reimbursement rather than expense. In other words, I was paying income tax and Social Security and everything and at that time it was considered more of a salary. Q. And they started doing that in 1990 sometime? A. I don't remember the date. It was approximately then. Q. When you started receiving a salary, you stopped getting the reimbursement; is that right? A. Right. Q. Isn't it true that when you first started getting the salary that the amount of the salary was several hundred dollars a month more than what the reimbursement had been? A. I couldn't tell you. Q. Isn't it a fact that the last-- A. I don't believe that would be right, though, because it didn't go up very much any one time, I don't think. I would have to see the figures to tell for sure. Q. All right. Isn't it a fact that the last time you received a monthly reimbursement you were receiving about $540 a month? A. I don't have those figures in front of me. Q. You don't remember? A. No. Q. Isn't it a fact that when you first got a salary in October 1990, you got $833 a month? A. I still couldn't tell you. I don't have those figures in front of me. I have them wrote down if I can get my papers. Q. All right. You don't know how much you get now? A. Yeah, but this ain't 1990. Respondent's Exhibit 3 at 29-32. The state argued in the ethics case that Meloy has been salaried since October 1990 and was required to be certified as a firefighter before enrolling in the FRS as a member of the Special Risk Class. The state now argues that Meloy has never been salaried and cannot enroll in the FRS as member of the regular class. The state cannot have it both ways. Meloy is entitled to membership in the FRS for the period after June 29, 1992. During that time, the District has paid a salary to Meloy that is compensation for duties performed in a regularly established position.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a Final Order granting Petitioners' request for Meloy to participate in the FRS. DONE AND ENTERED this 7th day of January, 2002, in Tallahassee, Leon County, Florida. _________ ________________ DANIEL MANRY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 7th day of January, 2002. COPIES FURNISHED: J. Frank Porter, Esquire Porter & Jessell, P.A. 1424 Dean Street Ft. Myers, Florida 33901 Thomas E. Wright, Esquire Division of Retirement P.O. Box 3900 Tallahassee, Florida 32315-3900 Erin B. Sjostrom, Director Division of Retirement Cedars Executive Center, Building C 2639 North Monroe Street Tallahassee, Florida 32399-1560 Mallory Harrell, General Counsel Department of Management Services 4050 Esplanade Way Tallahassee, Florida 32399-0950
Findings Of Fact Based upon the testimony and evidence received at the hearing, the following facts are found: The Largo Fire Department is comprised of approximately 70 employees and maintain three stations, with a fourth station apparently in the planning stage. The chief administrative officer in full command of the entire Department is the fire chief, who is directly responsible to the City Manager. In descending order of command are two assistant chiefs, three fire captains and twelve fire lieutenants. There are also two fire inspectors, forty-six fire fighters, three or four dispatchers and one secretary. (Exhibit No. 6). Assistant Fire Chiefs - Second in the line of command are the two assistant fire chiefs. They work a standard forty-hour week, 8:00 a.m. to 5:00 p.m., five days a week. Their office is one half block away from the main fire station. If the chief is out of town or unavailable, one of the assistant chiefs assumes command. When the chief and both assistant chiefs are unavailable, either a captain or a lieutenant is designated to be in command. With regard to the personnel evaluations made by either captains or lieutenants, assistant chiefs normally accept the recommendations made by them. On occasion an assistant chief will attach an additional memo to a recommendation submitted by an inferior officer. Assistant chiefs have no authority to fire Department personnel or to prevent merit pay increases. Only the chief has these powers, subject to review by the City Manager. There was testimony that after an applicant goes through certain testing procedures with the City's personnel department, the chief and assistant chiefs make the ultimate decision as to who is hired. Assistant chiefs receive input from captains and lieutenants with regard to purchasing new equipment and personnel transfers. With regard to the budget, assistant chiefs may purchase items within the guidelines of the budget. They make recommendations respecting the formulation of the budget, but the chief makes the ultimate decision as to what will be submitted to the City for the budget. If everything is going well at a fire scene, assistant chiefs stand back and observe rather than assume control. Equipment placements and transfers are made by the assistant chiefs. With regard to collective bargaining, assistant chiefs would directly assisting administering the outcome of the negotiations. Fire Captains - Like fire fighters, captains work a 24-hour shift and then are off 48 hours. They wear the same work uniform as fire fighters, but their dress uniform includes a white, rather than a blue, shirt. The captains eat their meals with and sleep in the same quarters as fire fighters. Each captain is responsible for a third of the combat portion of the Fire and directs the operations of the officers and men on their particular shift. On the fire scene, captains are the working supervisor and perform the normal functions of search and rescue. Around the station, captains participate in the minimal domestic and maintenance duties and tasks as part of a team effort. In the event that both the chief and assistant chief are absent, a captain designated by the chief assumed the duties and responsibilities of an assistant chief. With regard to authority to transfer men, discipline men and make policy, there was testimony that such authority is solely in the form of making recommendations in those areas. A lower grade officer or fire fighter can also submit written reports or charges concerning disciplinary action. While the job description for captain's requires them to make thorough weekly inspections of each station, apparatus and personnel the chief has been personally making such inspections for the past several months. While captains are required to keep records of sick leave, the the administrative secretary actually handles all leave records. Captains do have the authority to visit persons on sick leave if there is reason to believe a sick leave is not legitimate. The job description requires captains to forward to headquarters every six months a written personnel evaluation report on all personnel under their command. This is done by a standardized form sent to the captains by City's personnel department. Captains also have the authority to give mutual aid assistance when requested by a neighboring unit by sending men and equipment. While captains have the authority to make changes within their subordinates' command, in emergency situations, most changes in command come out in the form of memos from the administrative chief. In the captain's absence, his duties are assumed by a lieutenant. If a lieutenant is not present the lieutenant's duties are assumed by what is known as a lead fire fighter - a senior fire fighter by virtue of tenure and training. Captains do not formulate policies applicable to the Fire Department nor do they prepare of administer the budget. They can make recommendations with regard to the budget, as can lieutenants and other officers. They cannot buy equipment, nor can they move equipment between stations without written permission. Changes in the organizational structure are not discussed with captains. Any type of procedural recommendation which is made is discussed among the three captains and is then presented to the assistant chiefs and chief for final action. It was opined by Captain Lambert that captains would have no duties or responsibilities to management with respect to collective bargaining and that, as a member of a union, there would be no conflict of interest between the performance of their duties and the possibility of grievances filed within the union. It was Captain Lambert's opinion that policy' decisions were implemented, rather than formulated, by him. Fire Lieutenants - There is one lieutenant assigned to work each of three shifts at each of the stations. Lieutenants report to and perform under the general direction of the captain, also known as the shift commander, who reviews the decisions of the lieutenants. In addition to the job description contained in Exhibit No. 6, there was testimony that lieutenants and fire fighters work on the same time schedule, sleep in the same quarters, eat at the same table, prepare meals jointly and perform fire fighting duties jointly. Lieutenants are in charge at the scene of a fire until a senior officer arrives. There was testimony that although lieutenants participate in the normal evaluation procedure which is used as a basis for merit pay increases and they supervise the duties of the men in the station to which they are assigned, their basic duties are fighting fires. Lieutenants do not have anything to do with preparing or administering the budget nor would they work in the City's behalf with regard to collective bargaining negotiations. They have no authority in actually formulating the policy of the Largo Fire Department. If a fire fighter wants to change his schedule or get time off, he would submit a request to a lieutenant or a captain, depending on who was on duty that day. If both were on duty, he would go to a lieutenant. Fire Inspectors - With respect to inspectors, the petitioner simply submitted the job classification contained in Exhibit No. 6 and suggested that none of the tasks enumerated therein meet the statutory criteria of management employees of F.S. Ch. 447. As noted above, it was the City's position that inspectors do not share a community of interest with line personnel that are responsible for fire suppression in that they do not work the same shift and their duties are primarily fire code enforcement rather than fire combat. Dispatchers - The primary duties of dispatchers are to receive and dispatch fire and emergency calls. They dispatch calls solely for the fire department and do not dispatch for the police department or any other city agency. Another of their duties is to maintain files on equipment usage. Dispatchers work eight-hour shifts and eat with the fire fighters when a meal is served during their eight-hour shift. Their uniform is the same as the fire fighters. When a dispatcher is absent from work, a fire fighter fills in for him; although a dispatcher would never fill in for a fire fighter. Dispatchers have nothing to do with formulating policies of the department nor with preparing or administering the budget. They would not assist management in collective bargaining negotiations. Dispatchers are immediately responsible to the lieutenant, then the captain and on up the line of command. One of the four dispatchers of the Largo Fire Department is presently a member of and is represented by the Largo Employees Association, which presently has a collective bargaining agreement with the City. (Exhibit No. 5) This agreement includes public safety dispatchers in the unit. At the time of the hearing the LEA had not yet been certified by PERC. The one dispatcher who testified would prefer to be represented by petitioner, rather than the LEA. Fire Fighters and Chief - As noted above in the introduction, the parties stipulated that fire fighters were properly included in the proposed unit and that the chief is properly excluded from the unit. Recognition history - In the first letter from petitioner's president to the City Manager, recognition was requested for a unit consisting of captains, lieutenants and fire fighters. After the petitioner first spoke to representatives of the City regarding the bargaining unit, the staff assistant to the City Manager first recommended to the Manager that a unit consisting of fire fighters and lieutenants be approved. The City Commission questioned the inclusion of lieutenants. At that point, communications apparently broke down and unfair labor practice charges were filed by both the petitioner and the City. Their charges were subsequently dismissed. After that the petitioner filed its petition for Certification of Representation requesting inclusion of assistant chiefs, captains, inspectors and dispatchers, in addition to lieutenants and fire fighters, since the issue would then be before PERC and PERC could then rule on everybody once and for all. Although petitioner's constitution and by-laws speaks of a unit consisting of the ranks of captain, lieutenant and fire fighter, the same is in the process of being amended. In accordance with F.S. Section 447.307(3)(a) and F.A.C. Rule 8H-3.23, no recommendations are submitted. DONE and ENTERED this 18th day of November, 1975, in Tallahassee, Florida. DIANE D. TREMOR, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: G.R. McClelland, Esquire City Attorney City Hall Largo, Florida 33540 Mr. Robert Jewell City Hall Largo, Florida 33540 Terry A. Furnell 501 South Fort Harrison Clearwater, Florida 33516 Mr. Barry Burkhart 2320 East Bay Drive, No. 135 Clearwater, Florida 33516 Mrs. Lawrence C. Black 152 8th Avenue Southwest Largo, Florida 33540
Findings Of Fact The Cocoa Fire Department consists of 32 employees including a Chief, 3 captains, 3 lieutenants, 24 firefighters, and a secretary to the chief. All personnel except the Chief and the secretary are on three shifts of 24 hours on duty and 48 hours off duty. During each shift, a captain is in charge and the second in command is a lieutenant. Ten employees are on each shift and are located at either Station 1 or Station 2. Normally, at Station 1 there is a captain and a maximum of 7 firefighters. At Station 2, there is normally a lieutenant and 1 firefighter. The bulk of the firefighting equipment is located at Station 1, which includes 2 pumpers, a rescue truck, and an aerial truck. Station 2 is a residential station at which two pumpers are located. The shift or duty-captain is in charge of both stations and normally goes to fires handled by Station 2 unless they are of a minor nature. The Department averages about 3 runs a day, either for fires or on rescue calls. The bulk of their activity is rescue operations which are attended normally by two firemen. However, these calls can be handled by an officer and one firefighter if the officer is an emergency medical technician. The employees of the fire department and the city of Cocoa entered into an agreement on March 12, 1974, concerning their relationship (Exhibit 11). The agreement states that it is to provide, where not otherwise mandated by statute or ordinance, for the salary structure, fringe benefits, and conditions of employment of the firemen covered by the agreement. This agreement in Article 1C is referred to as a collective bargaining agreement and deals with those matters that customarily would be included in such a document. Although it does not specifically mention specific classifications of fire department employees as being included thereunder except by the term "employees of the City of Cocoa Fire Department", in the first paragraph of the agreement, Article 16, dealing with wages, lists the titles of recruit firemen, fire lieutenant and fire captain and their pay plan with annual step increments. Accordingly, it is concluded that the intent of the agreement was to cover all employees of the fire department other than the Chief and his secretary. The agreement generally provides uniform provisions applicable to all members of the department concerning transfer rights, time off for jury duty, provision of counsel for defense of civil actions, overtime pay, education leave, bereavement leave, sick leave, holidays, vacations based on time with the department, uniform maintenance, terminations and wages. There is no distinction by rank other than by years of service drawn as to different classifications of personnel. Testimony presented at the hearing established that the majority of captains and lieutenants participated on the side of labor in discussions leading to the agreement and that they presently desire to be included in the proposed bargaining unit under consideration. It further established that the agreement was formulated because the employees wanted financial conditions applicable to them spelled out clearly rather than remain in the existing city pay plan which was not as specific as desired. The firemen viewed their situation as differing from that of other city employees because of the nature of their functions and the shift work involving extended hours on duty. In the agreement, they were provided certain benefits that other city employees do not enjoy, some of which were requested by the group and some of which were voluntarily offered by the city. The department is governed by rules and regulations proposed by the Chief and approved by the public employer which include provisions that the department operates in paramilitary fashion with a chain of command extending from the Chief through the duty captain, duty lieutenant and senior firemen to the remainder of the employees. It also indicates that insubordination will not be tolerated with penalties of verbal reprimand, permanent written reprimand, suspension, loss of pay and termination. They further provide that violations of the rules, regulations, directives, and memos, generally should be' handled by the captain or duty officer of the shift, but that if, in his opinion, the violation warrants further action he should give the Chief a written statement of the facts. It states that the captain or duty officer of the shift will be held accountable by the Chief to run the shift in accordance with the rules and regulations of the department, and that violations will consist of penalties including verbal reprimand by the captain or duty officer, permanent written reprimand by the captain or duty officer, written reprimand by the Chief, suspension without pay by the Chief, or termination by order of the Chief (Exhibit 12). In this connection, testimony at the hearing established that the hiring, firing and suspending of employees by the Chief must be approved by the city manager. As to discipline, minor infractions are taken by a lieutenant to the captain and, depending on the severity of the matter, the captain is authorized to handle it himself. This includes minor infractions, with sanctions of oral or written reprimands, or recommendations for suspension or other adverse actions. The budget of the department is submitted by the Chief to the city manager for approval. Ultimate approval is given by the city counsel. Although the Chief inquires of the captains as to the need for and condition of the department equipment, they are not consulted as to actual preparation of the proposed budget. The Chief holds staff meetings approximately monthly whenever he deems it necessary. Normally, these are attended by himself, the captains, and lieutenants. At the meetings, personnel problems, operations and training matters, and current programs are discussed with input from the officers. However, all major policy decisions are formulated by the Chief. The job descriptions and duties performed by the officers and men of the department are as follows: Captains - The official job description for this position (Exhibit 8) describes the major function of a fire captain as being responsible supervisory work in directing the activities in fire fighting and in the maintenance of fire department property and equipment. It provides that the first captain at the scene of a fire has complete charge of all operations until the arrival of an officer of superior rank. It further provides that under departmental general regulations, a captain may be assigned as a company officer and has direct responsibility for discipline and the proper maintenance of apparatus, equipment, and the station. His duties may include training functions or supervising a special activity or unit within the department. As illustrative duties, he assumes complete charge of the station and the fire company on route to alarms and at the scene of the fire until the arrival of a superior officer. He directs the work of the firefighters in house duties, testing and maintaining equipment, and inspecting the station house grounds and apparatus. He acts as the department training officer and may conduct company drills or instruction periods. He conducts roll call, inspects personnel and maintains discipline, and transmits order and information to the men. Testimony at the hearing established that each of the shift captains would assume command of the fire department in the absence of the Chief. When the Chief is present, the captain in charge of the shift acts as his assistant and has total command of both fire stations, subject to the approval of the Chief. Captains can set vacation schedules of the men and also change them. He can give time off in an emergency situation and makes effective recommendations concerning bereavement leave. To move a man from one shift to another, the captain would be obliged to consult the Chief. If an employee reported in sick, he notifies the captain who then, if the department is understaffed, calls in off-duty personnel for overtime work, using an established list which must be exhausted in fairness to all. A captain performs combat roles and responds on the department trucks or will proceed in a rescue vehicle or pickup truck to the scene of the fire or rescue operation. He works the same hours as the other men and receives the same sick leave, vacation, and overtime pay. Occasionally, he will perform maintenance and housekeeping duties voluntarily at the station. He normally goes to the suppression of fires handled by Station 2 unless they are of a minor nature. LIEUTENANTS - The job description for this position provides that a lieutenant has direct command over firemen in a fire company on an assigned shift, subject to general regulations of the department and the direction of a superior officer. In the absence of the captain, the lieutenant assumes his duties and responsibilities and is responsible for the discipline of the men on his shift and the maintenance of apparatus and equipment at a fire station. At a fire, he is responsible for the effective combatting of the fire until relieved of command by a superior fire officer. H enters burning buildings with his men to direct their work, and at major fires he is under the command of the superior officer. Illustrative duties are responding to fire alarms that are within an assigned district, driving apparatus or directing the route to be taken to the fire and determine what equipment and apparatus are necessary. He makes decisions as to the best methods of extinguishing fires and directs the use of equipment until relieved of command by a Superior officer. He supervises the laying of hose lines, directing of water streams, placing of ladders, ventilation of buildings, rescuing of persons and placing of salvage covers. He conducts company drills and instruction periods as directed by his superior officer. He sees that all station equipment is returned to the proper place after a fire has been extinguished and that the equipment is in good working order at all times. He supervises the cleaning of quarters, equipment and apparatus at the fire house, conducts roll call, inspects personnel and maintains discipline, and transmits orders and information to men (Exhibit 9). Testimony at the hearing establishes that the lieutenants are in charge of Station 2 during shift at which there is himself and one firefighter. A1though he is not required to perform maintenance and housekeeping duties, the lieutenants usually help to clean hoses and to keep the quarters clean because of limited manpower and because that has been the practice in the past. On unusual occasions, a lieutenant might exercise disciplinary power with respect to the one firefighter at Station 2, or under circumstances where he is in charge of a shift in the absence of a captain. If a man came in late for duty, the lieutenant could handle it himself or report to the Chief. He has little or no meaningful participation in personnel matters dealing with promotion, suspension, hiring or firing of employees. If he is on a rescue call, he is not necessarily in charge of the operation. The individual who is not driving is the one who is in charge, and rescue operations are a team endeavor. A lieutenant is interchangeable with a firefighter and his activities vary depending on the situation. Sometimes he serves as a hydrant man, sometimes on the truck, and overall performs essentially the same firefighting functions as that of the firefighters. FIREFIGHTER - The job description provides that this is general duty work in the prevention of fire damage and that, although the work involves combatting, extinguishing and preventing fires, and operation of equipment, a large part of the time is spent in study and in cleaning fire department equipment, apparatus, and quarters. Work is performed by a member of a team and a superior officer is usually available to assign definite duties. The standard firefighting duties are set forth in the job description (Exhibit 10). Testimony at the hearing established that the firefighter looks upon the captain as his primary supervisor, although he acknowledges the lieutenant to be his superior officer. The duties of officers and men of the department have not changed since the inception of the collective bargaining agreement.
Findings Of Fact Petitioner is employed as a full-time professional firefighter by the City of Tampa Fire Department. His primary responsibility is the prevention and extinguishment of fires, the protection and saving of life and property, and the enforcement of municipal, county and state fire prevention codes, as well as of any law pertaining to the prevention and control of fires. Petitioner received an associate in arts degree in Business Administration in May 1989 from Hillsborough Community College. In addition, he has earned 90 hours credit towards an associate in science degree from the same accredited post secondary institution. Petitioner's permanent academic record at Hillsborough Community College reveals he has successfully completed the following fire-related courses: SUMMER 1983 SEMESTER CREDITS ENS 1119 EMT AMBULANCE 5 EMS 1119 EMT AMBULANCE LAB 1 FALL 1986 SEMESTER CREDITS FFP 2601 FIRE APPARATUS PRA 3 FFP 1600 FIRE APPARATUS EQ 3 FALL 1990 SEMESTER CREDITS FFP 2420 F/F TACTICS & STRA 3 FFP 2660 RESCUE PRACTICES 3 FFP 2110 FIRE COMPANY MAN AG 3 Although Petitioner has 21 semester hours that the Department has agreed are fire related courses, 9 of these hours were credited to him after his associate in arts degree was conferred upon him in May of 1989. In order for a firefighter to be eligible for supplemental compensation related to an associate degree, he or she must have at least 18 semester hours that are fire related and are part of the firefighter's studies for the degree. Petitioner had only 12 semesters of fire related studies prior to the award of his degree. In order for Petitioner to receive eligibility credits for the full 21 semester hours in the Firefighter's Supplemental Compensation Program, he would have to acquire his second associate degree from Hillsborough Community College.
Recommendation Accordingly, it is RECOMMENDED: That Petitioner should be denied eligibility for the Firefighters Supplemental Compensation Program as he did not complete at least 18 semester hours of fire related courses prior to receiving his award of an associate of arts degree. DONE and ENTERED this 6th day of October, 1992, at Tallahassee, Florida. VERONICA E. DONNELLY 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 6th day of October, 1992. APPENDIX The Respondent's proposed findings of fact are addressed as follows: Accepted. See HO #1. Accepted. See HO #2. Accepted. See Preliminary Statement. Accepted. See HO #4 and #5. COPIES FURNISHED: Mark B. Maxey 6909 N. Glen Avenue Tampa, FL 33614 William C. Childers, Esquire Division of Legal Services 412 Larson Building Tallahassee, FL 32399-0300 Bill O'Neil Deputy General Counsel Department of Legal Affairs The Capitol, Plaza Level Tallahassee, FL 32399-0300 Tom Gallagher State Treasurer and Insurance Commissioner Department of Insurance and Treasurer The Capitol, Plaza Level Tallahassee, FL 32399-0300
The Issue The issues to be determined in this case are whether Respondent Lockhart Builders, Inc., violated state laws applicable to workers’ compensation insurance coverage by failing to secure coverage for three employees and failing to produce records requested by Petitioner Department of Financial Services, Division of Workers’ Compensation (Department) and, if so, what penalty should be assessed for the violations.
Findings Of Fact Petitioner is the state agency responsible for the enforcement of the workers’ compensation insurance coverage requirements established in Chapter 440, Florida Statutes (2007).1 Respondent is a Florida corporation with its office in Bradenton. William Lockhart is Respondent’s president. Respondent is licensed to engage in construction activity in Florida. Respondent was engaged to construct a two-story duplex at 2315 Gulf Drive in Bradenton. Respondent began work at the job site on or about February 21, 2007. On August 22, 2007, Lockhart received a proposal from Burak Yavalar, owner of BY Construction, to do the exterior stucco work on the duplex building for a flat fee of $10,750. The proposal was accepted by Respondent on August 23, 2007. Yavalar presented Lockhart with a certificate of liability insurance which indicated that he had obtained workers’ compensation coverage for his employees. The certificate was issued by Employee Leasing Solutions, Inc. (ELS), a professional leasing company in Bradenton. ELS provides mainly payroll services and workers’ compensation insurance coverage for its clients. Lockhart did not ask for, and Yavalar did not provide Lockhart with, a list of the names of the BY Construction employees who were covered by the insurance. Lockhart made a call to ELS to verify that BY Construction had workers’ compensation insurance coverage, but he did not ask for a list of BY Construction employees covered by its insurance policy. BY Construction began work at Respondent’s job site on or about September 10 or 11, 2007. On September 12, 2007, BY Construction had eight employees at the job site. One employee, Justin Ormes, had previously worked for BY Construction, had quit for a while, and had just returned. Two other employees, Carlos Lopez and Jaime Alcatar, had been working on a nearby job site and were asked by Yavalar to come to work at Respondent’s job site. Yavalar claims that on the morning of September 12, 2007, Ormes, Lopez, and Alcatar had not yet been employed or authorized to start work for BY Construction. On September 12, 2007, Petitioner’s investigators Germaine Green and Colleen Wharton performed a random compliance check at Respondent’s job site. Without being specific about what particular work was being performed at the site by Ormes, Lopez, and Alcatar, the investigators testified that when they arrived at the job site they observed all eight men performing stucco work. The investigators spoke to Yavalar, Lockhart and the workers at the job site to determine their identities and employment status. Yavalar told the investigators his eight employees had workers’ compensation insurance coverage through ELS. However, upon checking relevant records, the investigators determined that insurance coverage for Ormes, Lopez, and Alcatar had not been secured by either BY Construction or Respondent. Wharton issued a statewide stop-work order to BY Construction for its failure to obtain workers’ compensation coverage for the three employees. After the stop work order was issued, Yavalar left the job site with Lopez and Alcatar to complete their paperwork to obtain insurance coverage through ELS. Yavalar’s wife was able to re-activate Ormes’ insurance coverage with ELS over the telephone. By the end of the day on September 12, 2007, insurance coverage was secured by BY Construction for Ormes, Lopez, and Alcatar. The business records of BY Construction produced for the Department indicated that Ormes had been paid by BY Construction in the period from March to July 2007, and then on September 12, 2007; Lopez had been paid on August 24, 2007, and then on September 12, 2007; Alcatar had been paid on September 12, 2007. All three men were paid only $28 on September 12, 2007. This evidence supports the testimony of Yavalar that these three had arrived at Respondent’s job site for the first time on September 12, 2008. BY Construction was later served with an amended order of penalty for its failure to obtain workers’ compensation coverage for the three employees. It arranged with the Department to pay the penalty through installments and was conditionally released from the stop-work order. When the Department's investigators were at the job site on September 12, 2007, they informed Lockhart about the stop-work order being issued to BY Construction and gave Lockhart a Request for Production of Business Records for the purpose of determining whether Respondent had obtained proof of workers’ compensation insurance coverage from BY Construction before BY Construction commenced work at Respondent’s job site. Respondent produced the requested records. As discussed in the Conclusions of Law, Florida law charges a contractor with the duty to secure workers’ compensation insurance coverage for any uninsured employees of its subcontractors. On this basis, the Department served Respondent with a Stop-Work Order and an Order of Penalty Assessment on September 21, 2007, for failing to secure coverage for Ormes, Lopez, and Alcatar. On September 21, 2007, the Department served a Request for Production of Business Records for Penalty Assessment Calculation to Respondent. The Department’s request asked Respondent to produce records for the preceding three years, including payroll records, tax returns, and proof of insurance. Respondent produced some records in response to this second request, which the Department deemed insufficient to calculate a penalty. However, the evidence shows Respondent produced the only records that it possessed regarding its association with BY Construction. The Department’s proposed penalty does not include an assessment based solely on Respondent’s failure to produce requested records. When an employer fails to provide requested business records within 15 days of the request, the Department is authorized to assess a penalty by imputing the employer's payroll using "the statewide average weekly wage as defined in Section 440.12(2), multiplied by l.5." § 440.107(7)(e), Fla. Stat., and Fla. Admin. Code R. 69L-6.028. Imputing the gross payroll for Ormes, Lopez and Alcatar for the years 2004, 2005, 2006, and 2007, by using the average weekly wage for the type of work, the Department assessed Respondent with a penalty of $138,596.67 and issued an Order of Penalty Assessment to Respondent on October 31, 2007. Petitioner later amended the penalty to $70,272.51, based on the fact that BY Construction was not incorporated until January 1, 2006, and issued a Second Amended Order of Penalty Assessment on December 20, 2007.
Recommendation Based on the Findings of Fact and Conclusions of Law, it is recommended that the Department enter a final order that amends its penalty assessment to reflect one day of non-compliance by Respondent. DONE AND ENTERED this 31st day of March, 2008, in Tallahassee, Leon County, Florida. BRAM D. E. CANTER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 31st day of March, 2008.
Findings Of Fact Based upon the documentary evidence received, the following findings of fact are made: At all times material to the issue in this case, Petitioner, Jorge L. Barreto, has been employed as a firefighter with the City of Miami, Fire, Rescue & Inspection Services Department (City). Petitioner has attained the rank of Fire Lieutenant with the City. Petitioner's primary function with the City is that of firefighter. During the period March 10, 1986 until January 31, 1987, Petitioner was assigned to Rescue 2B. For that same period, a firefighter named George T. Gross was also assigned to Rescue 2B. Mr. Gross' request for supplemental compensation was approved by the Department on April 17, 1986. Mr. Gross' entry into the Firefighter Supplemental Compensation Program was deemed appropriate under the requirements of Section 633.382, Florida Statutes, and Rule 4A-37.76, Florida Administrative Code. Mr. Gross' field of major study as specified in his transcript indicated the degree, bachelor of business administration major- finance" from Florida Atlantic University. On September 30, 1988, Patrick J. Regan, a member of the City's fire department, was approved for supplemental compensation. On August 12, 1988, Mr. Regan was awarded a bachelor of business administration with a major in finance. On April 10, 1987, Robert D. Martinez, a firefighter with the City, was approved for entry into the Firefighter Supplemental Compensation Program. Pursuant to Statute 633.382, Florida Statutes, and Rule 4A-37.76, Florida Administrative Code, Mr. Martinez was deemed to have qualified. Mr. Martinez' transcript from the University of South Florida indicated "Latest college: Business Administration Latest Major: Finance." On April 17, 1986, Andrew L. Huntington, a firefighter with the City's department, was approved for entry into the Firefighter Supplemental Compensation Program. Mr. Huntington possessed a bachelor of business administration degree with a major field of study in accounting. On August 29, 1986, Edward Pidermann, a firefighter with the City's department, was approved for entry into the Firefighter Supplemental Compensation Program. Mr. Pidermann's notification letter specified he had qualified under the requirements "for possession of a/an B/A degree of Accounting." On June 27, 1986, Daniel G. Meadows, a firefighter with the City's department, was approved for entry into the Firefighter Supplemental Compensation Program. Mr. Meadows' transcript specified that he had been awarded "Bachelor of Business Administration Major: Marketing School of Business and Organization Sci" from Florida International University. Effective July 1, 1981, Donald P. Pilger was accepted foil entry into the Firefighter Educational Incentive Program established by Section 633.382, Florida Statutes. Mr. Pilger's transcript from St. Edward's University provided: "College ARTS and SCIENCES Major Subject Accounting Degree B.B.A." On April 16, 1986, Bruce A. Oestreich, a member of the City's fire department, was authorized to receive supplemental compensation. Mr. Oestreich was awarded a bachelor of arts in political science on December 17, 1977. Mr. Oestreich's duties with the City are not a part of the record in this case. On or about May 11, 1989, Petitioner executed a form entitled "Bureau of Fire Standards and Training Firefighter Educational Incentive Program Transcript Request." The purpose of the form was to secure a transcript which would verify Petitioner's eligibility for entrance into the Educational Incentive Program. On June 19, 1989, the transcript was received by the Department. On or about April 21, 1989, Petitioner was awarded a bachelor's degree in business administration from Florida International University, College of Business Administration. His major field of study was finance. Prior to the award of this degree, Petitioner had received an associate in arts degree (A.A.) in general education on July 30, 1982. The A.A. degree course of study had included 46 semester hours in fire-related subjects. On June 27, 1989, the Department advised Petitioner that it had determined that he did not possess an appropriate major study concentration to qualify for the firefighters supplemental compensation program. Thereafter, on July 18, 1989, Petitioner filed a letter requesting a formal proceeding regarding the denial of eligibility. The Department did not contest the accuracy of Petitioner' s transcripts.
Recommendation Based on the foregoing, it is RECOMMENDED: That the Office of the Treasurer, Department of Insurance, Division of State Fire Marshal, enter a final order granting the application of Petitioner for the Firefighter Supplemental Compensation Program. DONE and ENTERED this 29 day of January, 1990, in Tallahassee, Leon County, Florida. Joyous D. Parrish Hearing Officer Division of Administrative Hearings 1230 Apalachee Parkway Tallahassee, Florida 32301 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of January, 1990. APPENDIX RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE PETITIONER: The Petitioner in this case submitted a narrative which was not in a form sufficient to address rulings; consequently, the narrative as been deemed argument or comment not requiring specific rulings. RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE DEPARTMENT: Paragraphs 1 through 3 are accepted. While finance is not listed specifically among the areas, business administration (which Petitioner received a degree in) is listed. Apparently, the subarea of specialty is finance but the degree is business administration. The first sentence of paragraph 4 is accepted. The second sentence of paragraph 4 is rejected as irrelevant. COPIES FURNISHED: Lisa S. Santucci Office of Legal Services 412 Larson Building Tallahassee, Florida 32399-0300 Jorge L. Barreto 1717 North Bayshore Drive #2737 Miami, Florida 33132 Hon. Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Don Dowdell General Counsel Department of Insurance The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Frederick C. Stark Bureau Chief Bureau of Fire Standards & Training 1501 W. Silver Springs Boulevard Ocala, Florida 32675-6499 =================================================================
The Issue The issues are whether Respondent had workers' compensation insurance coverage for the relevant time period as required by Sections 440.10(1)(a) and 440.38(1), Florida Statutes, and if not, what penalty should be imposed.
Findings Of Fact Petitioner is the agency responsible for enforcing the requirement that employers secure the payment of workers' compensation insurance for their employees. Respondent is a Florida corporation, incorporated on October 3, 2001. Paul Gilbert is Respondent's only officer and the corporation's managing member. Zurich-American Insurance Group (Zurich) issued a workers' compensation and employer's liability insurance policy (Policy No. WC 3617144) to Mitchell Construction Company (Mitchell) in October 1999. Zurich also provided Mitchell with general liability and business automobile insurance. At that time, Paul Gilbert was the risk manager for Mitchell, which was a large commercial contractor doing business in several states. Mitchell's offices were located in Vidalia, Georgia. In October 2000, Zurich renewed Mitchell's workers' compensation policy (Policy No. WC 3617144-01) for the period October 1, 2000 through October 1, 2001. The original and renewed policies listed other combinable entities as named insureds. Mitchell owned at least 51 percent of its combinable companies, one of which was Wood-Hopkins Contracting Company of Georgia, LLC. The company was also registered in Florida as Wood-Hopkins Contracting Company, LLC. The company was located in Jacksonville, Florida, with a mailing address in Vidalia, Georgia. The type of workers' compensation insurance that Zurich provided to Mitchell was known as a rolling contractor- controlled insurance policy (CCIP). It had endorsements for large deductible reimbursements for paid losses and a set monthly premium based in part on the projected payroll and experience rating modifiers for Mitchell and its combinable entities. The CCIP also covered subcontractors that had a contract with Mitchell for such coverage. The CCIP was renewable on an annual basis. Zurich did not need to re-underwrite the policy each year because the policy was created using three-year parameters. Additionally, Zurich had the option of auditing Mitchell's operations to determine whether there was a substantial change in the business. Palmer and Cay of Georgia (Palmer and Cay) was the producer and the broker of record for Mitchell's original and renewed CCIP. Stephen McMillan, an associate with Palmer and Cay at its offices in Savannah, Georgia, was the insurance agent that helped Mr. Gilbert negotiate and service Mitchell's CCIP with Zurich. In the Fall of 2001, Mr. Gilbert and Mr. McMillan contacted Zurich about renewing Mitchell's CCIP for the period October 1, 2001 through October 1, 2002. In a meeting with Zurich's representatives at its offices in Atlanta, Georgia, Mr. Gilbert advised Zurich that a company bearing the Wood-Hopkins name was going to complete Mitchell's then on-going projects. Zurich's employees believed Mr. Gilbert was referring to Wood- Hopkins Contracting Company, LLC. During the trip to Atlanta, Mr. Gilbert told Mr. McMillan that he was attempting to form a new company. However, Mr. Gilbert did not make it clear in the meeting with the Zurich representatives that he intended to incorporate Respondent, an independent company with a similar name to Wood- Hopkins Contracting Company, LLC, but unrelated to Mitchell. After the meeting in the Fall of 2001, Zurich was unaware that Mitchell and its combinable entities were or soon would be out of business as a general contracting group. Zurich's employees mistakenly believed that Mr. Gilbert continued to work for Mitchell. Mr. Gilbert resigned his position with Mitchell on September 1, 2001. After he incorporated Respondent, it purchased the assets of Mitchell and Wood-Hopkins Contracting Company, LLC, and hired about 100 of Mitchell's employees. Respondent planned to complete Mitchell's on-going projects and then operate primarily as a marine and civil contractor. Respondent was a new company, smaller than Mitchell, with a different risk exposure. Mr. Gilbert provided Zurich's underwriters with the payroll projections and other information necessary to renew Mitchell's CCIP. The data related to Mitchell's on-going projects and loss history as well as Respondent's planned projects. Zurich subsequently issued Policy No. WC 3617144-02 for the period October 1, 2001 through October 1, 2002. The policy designated Mitchell as the primary named insured and Wood-Hopkins Contracting Company, LLC, as one of the combinable entities and an additional named insured. The policy listed Palmer and Cay as the broker of record. The policy did not list Respondent as a named insured. Mr. Gilbert did not receive a copy of the policy until March 2002. However, Mr. Gilbert learned that Zurich had not added Respondent as a named insured to Mitchell's CCIP at least by February 2002. After learning that Zurich had not named Respondent as an insured, Mr. Gilbert continued to operate Respondent as if it had workers' compensation insurance. He was convinced that Respondent's assumption of Mitchell's business presented no additional risk exposure to Zurich. In fact, Mr. Gilbert had a history of spending sufficient funds on safety to reduce a company's loss ratio by half. Additionally, Respondent had suffered no workers' compensation losses. For these reasons, Mr. Gilbert hoped to persuade Zurich to add Respondent retrospectively as a named insured on Mitchell's CCIP policy. Towards the end of 2001 or the beginning of 2002, Zurich learned that Mitchell was going out of business or was no longer in business. Michael Esposito, Mitchell's account manager at Zurich, began to realize that something was wrong when Zurich received a premium payment for Mitchell's CCIP drawn on Respondent's bank account. At that time, Mitchell was behind in making deductible and premium payments to Zurich. Mitchell also was behind in paying Palmer and Cay its fees. On or about January 2, 2002, Mr. Gilbert signed one of Respondent's checks made payable to Palmer and Cay in the amount of $28,740.23. The check included a premium payment in the amount of $3,818.00 for October 2001 workers' compensation insurance. Mr. Gilbert wrote the check pursuant to a Palmer and Cay invoice addressed to The Mitchell Group. The record indicates that Respondent sent its check to Palmer and Cay's lockbox in Atlanta, Georgia, and that it was cashed. By letter dated February 7, 2002, Palmer and Cay advised Mitchell that it resigned as broker of record for The Mitchell Group. The most persuasive evidence indicates that Palmer and Cay resigned due to a dispute with Respondent over fees, not premium payments. By the end of February 2002, Mr. Esposito became aware that Mr. Gilbert wanted Zurich to continue Mitchell's CCIP with Respondent, a totally new company, listed as a named insured. Mr. Esposito then told Mr. Gilbert that Respondent would have to pay Mitchell's past-due premiums and provide Zurich with the necessary information to re-underwrite the policy, reflecting the change in ownership and operations. There is no persuasive evidence that Palmer and Cay or Mr. Gilbert ever provided Zurich with this information. Despite its resignation as broker of record for Mitchell's CCIP, Palmer and Cay agreed to continue servicing the policies until Zurich advised otherwise. For example, on or about February 22, 2002, Mr. Gilbert asked Palmer and Cay to add Respondent as a named insured, along with Wood-Hopkins Contracting Company, LLC, to Mitchell's railroad protection policies. Palmer and Cay referred this request to Zurich. Effective February 26, 2002, Zurich issued a Notice of Cancellation for Mitchell's Policy No. WC 3617144-02. The notice indicates that the policy was cancelled due to nonpayment of premium. About that time, Mr. Gilbert began trying to find a replacement for Palmer and Cay as broker of record. Willis of Florida, an affiliate of Willis of North America, Inc. (Willis), is an insurance broker with offices located in Tampa, Florida. Robert Allen is an insurance agent associated with Willis of Florida. Mr. Allen and Mr. Gilbert had a social and business relationship for many years prior to the time frame at issue here. Toward the end of February 2002, Mr. Allen and Mr. Gilbert had a telephone conference with Mr. Esposito. During that conversation, Mr. Allen indicated that his company was not interested in becoming the broker of record for Mitchell. However, Mr. Allen agreed that, in order to assist Zurich, Willis would issue Certificates of Liability Insurance for Respondent. At that time, Mr. Allen was under the impression that Respondent was a named insured under the Mitchell CCIP. As authorized by Zurich, Palmer and Cay issued three Certificates of Liability Insurance to the Florida Department of Transportation on March 4, 2002. The certificates indicate that Zurich provided commercial general liability and railroad protection insurance for CSX Transportation, Inc., Norfolk Southern Corporation, and Florida East Coast Railway as the named insureds. The certificates state that Wood-Hopkins Contracting Company, LLC, and Respondent were the contractors. Palmer and Cay issued these certificates for the Beaver Street viaduct bridge replacement in Jacksonville, Florida, a project begun by Wood-Hopkins Contracting Company, LLC, during the time that Palmer and Cay was acting as Mitchell's broker of record. On or about March 6, 2002, Mr. Gilbert signed one of Respondent's checks made payable directly to Zurich in the amount of $24,848.00. The check included premium payments in the amount of $3,818.00 for Policy No. WC 3617144-02 for the months of February and March 2002. The record indicates that this check was sent to Zurich's lockbox in Chicago, Illinois, and that it was cashed. On or about March 7, 2002, Zurich reinstated Policy No. WC 3617144-02 without lapse of coverage. The Notice of Reinstatement indicates that Mitchell was the named insured and that Palmer and Cay was the broker of record. On or about March 20, 2002, Zurich sent Mitchell a Notice of Cancellation. The notice states that Mitchell's Policy No. WC 3617144-02 would be cancelled effective June 8, 2002, due to a material change in exposures. Mr. Gilbert did not receive a copy of this cancellation notice. Mr. Gilbert and Mr. Allen did not learn about the cancellation until November 2002. On or about April 17, 2002, Mr. Gilbert signed one of Respondent's checks made payable directly to Zurich in the amount of $12,424.00. The check included a premium payment in the amount of $3,818.00 for Policy No. WC 3617144-02 for the month of April 2002. The record indicates that this check was sent to Zurich's Illinois lockbox and cashed. On April 25, 2002, Willis issued a Certificate of Liability Insurance to American Home Assurance with Respondent as the named insured. The certificate indicates that Zurich provided commercial general liability, automobile liability, and workers' compensation insurance for Respondent on the Beaver Street viaduct bridge replacement project with American Home Assurance and the Florida Department of Transportation as additional named insureds with respect to the general liability coverage. Mr. Allen signed this certificate. On May 6, 2002, Willis issued a Certificate of Liability Insurance to the University of Georgia Athletic Association with Respondent as the named insured. The certificate indicates that Zurich provided commercial general liability, automobile liability, and workers' compensation insurance for Respondent on an academic achievement center project. Mr. Allen signed this certificate. On or about June 13, 2002, Mr. Gilbert signed one of Respondent's checks made payable directly to Zurich in the amount of $12,424.00. The check included a premium payment in the amount of $3,818.00 for Policy No. WC 3617144-02 for the month of May 2002. The record indicates that this check was sent to Zurich's Illinois lockbox and cashed. On July 18, 2002, Willis issued a Certificate of Liability Insurance to Crowley Maritime Corporation with Respondent as the named insured. The certificate indicates that Zurich provided general liability, automobile liability, and workers' compensation insurance to Respondent for a barge loading ramp concrete removal and replacement in Jacksonville, Florida, and that Crowley Maritime Corporation was an additional named insured with respect to general liability coverage. Mr. Allen did not know the policy was cancelled when he signed this certificate. On August 12, 2002, Willis issued a Certificate of Liability Insurance to Martin K. Eby Construction Company with Respondent as the named insured. The certificate indicates that Zurich provided general liability, automobile liability, and workers' compensation insurance for Respondent on the Wonderwood Expressway channel excavation with the Jacksonville Transit Authority and J. E. Sverdrup (Engineer) as additional named insureds as to general liability coverage. Mr. Allen did not know the policy was cancelled when he signed this certificate. On or about August 15, 2002, Mr. Gilbert signed one of Respondent's checks made payable directly to Zurich in the amount of $12,424.00. The check included a premium payment in the amount of $3,818.00 for Policy No. WC 3617144-02 for the month of June 2002. The record indicates that this check was sent to Zurich's Illinois lockbox and cashed. On or about October 1, 2002, Mr. Gilbert signed one of Respondent's checks made payable directly to Zurich in the amount of $12,424.00. The check included a premium payment in the amount of $3,818.00 for Policy No. WC 3617144-02 for the month of September 2002. The record indicates that this check was sent to Zurich's lockbox in Illinois and cashed. In November 2002, Petitioner issued a Stop Work and Penalty Assessment Order for failing to secure workers' compensation insurance. In November and December 2002, Mr. Gilbert and Mr. Allen attempted to persuade Seth Hausman, Zurich's regional manager, to provide retroactive coverage for Respondent under the Mitchell workers' compensation policy, to reinstate the coverage, and to let the policy continue until it lapsed at expiration. Mr. Hausman concluded that Zurich could not assume the exposure without an underwriting evaluation. Mr. Hausman told Mr. Gilbert what information he had to provide in order for Zurich to conduct such an evaluation. In January 2003, Mr. Hausman advised Mr. Gilbert that Zurich had been unable to collect on a surety bond and that Mitchell owed Zurich approximately $750,000.00 in uncollected deductible payments. Mr. Hausman stated that in order to amend the workers' compensation policy to include Respondent as a named insured and to rescind the cancellation retroactively to allow the policy to run full term, Zurich would have to be paid for all outstanding balances. In that event, Zurich was willing to talk about extending workers' compensation coverage to Respondent as requested. When Petitioner issued the Stop Work and Penalty Assessment Order in November 2002, Respondent had about 20 employees. For the period October 1, 2001 through December 31, 2001, Respondent had the following amounts of payroll by class code: Class Code Payroll 5213 $126,739.96 5606 $170,615.31 5610 $5,391.51 6003 $5,777.00 6217 $62,691.54 7335 $73,434.08 8227 $135,572.71 8810 $27,503.88 41. For the period October 1, 2001 through December 31, 2001, the workers' compensation premium rates per $100.00 of payroll for each relevant Class Code class code were as follows: Premium Rates 5213 $33.02 5606 $4.76 5610 $18.08 6003 $62.53 6217 $14.27 7335 $25.97 8227 $9.80 8810 $0.59 For the period October 1, 2001 through December 31, 2001, the premium Respondent would have paid for workers' compensation coverage Class Code by class codes was as follows: Premium 5213 $41,849.53 5606 $8,121.29 5610 $974.79 6003 $3,612.36 6217 $8,946.08 7335 $19,070.83 8227 $13,286.13 8810 $162.27 For the period January 1, 2002 through November 5, 2002, Respondent had the following amounts of payroll by class code: Class Code Payroll 5213 $360,825.22 5403 $7,969.23 5606 $355,253.16 5610 $93,981.09 6003 $17,977.19 6217 $237,889.32 7335 $212,654.00 8227 $261,091.70 8810 $162,068.41 For the period January 1, 2002 through November 5, 2002, the workers' compensation premium rates per $100.00 of payroll for each relevant Class Code class code were as follows: Premium Rates 5213 $32.31 5403 $30.39 5606 $4.91 5610 $17.91 6003 $57.57 6217 $13.52 7335 $29.60 8227 $10.80 8810 $0.65 For the period January 1, 2002 through November 5, 2002, the premium Respondent would have paid for workers' compensation coverage by class codes was as follows: Class Code Premium 5213 $116,582.63 5403 $2,421.85 5606 $17,442.93 5610 $16,832.01 6003 $10,349.46 6217 $32,162.64 7335 $62,945.58 8227 $28,197.90 8810 $1,053.44 Respondent was out of compliance with the workers' compensation law for 398 calendar days between October 1, 2001 and November 5, 2002. Petitioner properly assessed penalty of $100.00 per day, totaling $39,800.00. Respondent would have paid a premium of $384,011.72 to secure workers' compensation insurance for its employees and owes a $39,800.00 penalty for the days it operated without coverage during the period October 1, 2001 through November 5, 2002. Accordingly, Respondent owes a total penalty in the amount of $423,811.72.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That Petitioner enter a final order affirming the Amended Stop Work Penalty Assessment Order and directing Respondent to pay a penalty in the amount of $423,811.72. DONE AND ENTERED this 10th day of November, 2003, in Tallahassee, Leon County, Florida. S SUZANNE F. HOOD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 10th day of November, 2003.
The Issue The issue in this case is whether the Petitioner is entitled to supplemental compensation pursuant to Section 633.382(2)(a)2, Florida Statutes.
Findings Of Fact The Petitioner is certified as a firefighter. She has been so certified at all material times. The Petitioner is presently employed as a "firefighter-paramedic" with the City of Rivera Beach Fire Department. She has been so employed at all material times. In her present position the Petitioner performs the "essential job functions" described in her job description. Those functions are: Lays, connects and places hose line in operation. Raises and climbs ladders. Enters building and other fire involved areas. Uses extinguishers, bars, hooks, lines, and axes and other hand equipment. Ventilates burning buildings and structures. Throws salvage covers and removes debris. Makes regular inspections of apparatus and equipment and notifies supervisor of defects. Assists Driver-Engineer routine maintenance and apparatus check-out as required. Makes visual and physical inspections of buildings to locate fire hazards. Rescues and removes individuals from danger. Administers Advanced Life Support medical treatment to sick, injured or afflicted persons. Makes periodic inspections of buildings to locate fire hazards. Performs physical cleaning and maintenance tasks on department buildings and equipment using brooms, mops, vacuum cleaners, etc. Performs hydrant maintenance. Attends training and drill sessions in such subjects as firefighting and inspection methods, equipment operations and emergency medical treatment. In her present position the Petitioner is required to have and use the "knowledge, skills, and abilities" described in her job description. The required knowledge, skills, and abilities set forth in the job description are: Knowledge of the street locations, geography and takes of construction in the City. Knowledge of advanced Life Support Emergency Medical procedures, practices and techniques. Knowledge of various types of fire hazards of the City. Knowledge and skill in the use of Advanced Life Support (ALS) emergency medical treatment, practices, and procedures. Knowledge of firefighting techniques, policies, procedures and practices. Ability to learn and perform many and varied fighting techniques and procedures. Ability to understand and follow oral and written instructions. Ability to perform prolonged and arduous work under adverse conditions. Ability to work at heights. Ability to drive fire apparatus over the road safely under emergency conditions. Skill in the use and maintenance of firefighting equipment. In 1987 the Petitioner was awarded a Bachelor of Liberal Studies degree, with a major in Liberal Studies, by Barry University. Review of the Petitioner's transcript from Barry University does not reveal any course that appears to be "readily identifiable as applicable to fire department duties" performed by the Petitioner in her present position.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered denying the Petitioner's application for Firefighters' Supplemental Compensation. DONE AND ENTERED this 26th of March, 1999, in Tallahassee, Leon County, Florida. MICHAEL M. PARRISH Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us. Filed with the Clerk of the Division of Administrative Hearings this 26th of March, 1999. COPIES FURNISHED: Maria Fonzi-Gonzalez 212 Southwest 12th Avenue Boynton Beach, Florida 33435 Maria Fonzi-Gonzalez 14915 78th Place, North Loxahatchee, Florida 33470 Elenita Gomez, Esquire Department of Insurance 612 Larson Building 200 East Gaines Street Tallahassee, Florida 32399-0333 Honorable Bill Nelson State Treasurer and Insurance Commissioner Department of Insurance The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Daniel Y. Sumner, General Counsel Department of Insurance The Capital, Lower Level 26 Tallahassee, Florida 32399-0300
The Issue Did Respondent, John McCary General Contractor, Inc. (McCary), fail to secure workers’ compensation insurance for employees as required by chapter 440, Florida Statutes (2016)?1/ If so, what is the appropriate penalty?
Findings Of Fact The Division is the state agency responsible for enforcing the statutory requirement that employers secure workers’ compensation insurance for the benefit of their employees. § 440.107(3), Fla. Stat. McCary is a roofing contractor owned and operated by John McCary. It is in the construction industry. On November 18, 2016, Mr. Howe, a compliance investigator for the Division, visited a house where McCary was tearing off the roof. Mr. Howe recorded the names of each employee. He conducted an investigation that included speaking to Mr. McCary, re-interviewing the employees, checking with the employee leasing company that McCary used, and checking the Davison database of insured individuals. Mr. Howe could not find a record of workers’ compensation coverage for at least one employee. This triggered further investigation that resulted in Mr. Howe issuing a Stop-Work Order to McCary on November 18, 2016, for failure to secure workers’ compensation insurance in violation of sections 440.10(1), 440.38(1) and 440.107(2). After that, the Division followed its usual practice of requesting documents, reviewing its databases, soliciting information and explanations from the employer, and analyzing the information and documents obtained. Division Exhibit 9 shows that the Division asked McCary for business records on November 21, 2016, and that McCary did not provide them until December 12, 2016. The Division’s investigation and analysis resulted in the evidence admitted in this proceeding. The evidence proved the allegations of the Division’s Third Amended Order of Penalty Assessment, including its attached Penalty Calculation Worksheet. McCary did not comply with workers’ compensation insurance coverage requirements for the period May 1 through November 18, 2016. During that period, McCary employed Arcenio Rosado, Domingo Esteves, Javier Restrepo, Jose Alfredo Fuentes, Carlos Toledo, Edwin Valle, Kelly Alvarez, Kyle Shiro, Claudia Florez, and Nelson Geovany Melgar Rodenzo and that they performed work for it. McCary would have paid $4,744.06 in insurance premiums to provide workers’ compensation coverage for these employees during that period. During that period, McCary also used the services of two subcontractors, Star Debris Removal and E C Roofing, LLC. These subcontractors did not have workers’ compensation insurance for their employees during the May 1 through November 18, 2016, period. Premiums to provide coverage to the employees of the two subcontractors who worked on McCary’s projects would have totaled $100,771.09. From May 1 to November 18, 2016, McCary made cash payments of $195,856.02 that its documents could not confirm to be for a valid business expense. Florida Administrative Code Rule 69L-6.035(1)(k) requires that 80 percent of that amount be deemed wages or salaries paid employees when calculating the premiums used to determine the ultimate penalty. Eighty percent of McCary’s unaccounted-for cash payments is $156,684.82. That amount is legally deemed to be a payroll expense. McCary would have paid $29,143.38 to provide coverage for the employees represented by the cash payments. Altogether, McCary would have paid $134,658.53 to provide workers’ compensation coverage to the uncovered employees represented by the actual and deemed payroll during the May 1 to November 18, 2016, period.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Financial Services, Division of Workers’ Compensation, enter a final order finding that John McCary General Contractor, Inc., failed to secure payment of required workers’ compensation insurance coverage from May 1 to November 18, 2016, in violation of section 440.107, Florida Statutes, and imposing a penalty of $269,317.06, reduced by $1,000.00. DONE AND ENTERED this 17th day of July, 2018, in Tallahassee, Leon County, Florida. S JOHN D. C. NEWTON, II 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 17th day of July, 2018.
