The Issue The issues to be resolved in this proceeding concern whether the Respondent failed to abide by the coverage requirements of the Florida Workers' Compensation Law embodied in Chapter 440, Florida Statutes, by not obtaining a workers' compensation insurance policy and whether the Petitioner properly assessed a penalty against the Respondent pursuant to Section 440.107, Florida Statutes.
Findings Of Fact Investigator Pangrass conducted a random inspection of a construction site at 9 Pecan Drive Pass, Ocala, Florida, on December 18, 2002. On that occasion he observed several people working, hanging drywall. Investigator Pangrass spoke to one of the workers, Daniel Maloney, and asked him, to identify his employer. Daniel Maloney identified the Respondent as his employer. When Maloney identified him the Respondent was only 10 feet away and the noise level at the site was such that the Respondent could hear himself being identified as the employer. The Respondent did not then deny that he was Daniel Maloney's employer. Daniel Maloney stated he had worked for the Respondent full-time for two months and was paid by the hour. The Respondent told Mr. Pangrass he was unable to complete the work at the job without additional labor. Mr. Maloney assisted the Respondent by "hanging the ceiling." The Respondent offered a hearsay statement of Mr. Maloney, wherein he stated, "I am the employee." The Respondent confirmed that he had a prior employment relationship with Daniel Maloney and that Daniel Maloney wanted to work with the Respondent. Another worker observed by Mr. Pangrass, Desmond Neil, told Investigator Pangrass that he worked for the Respondent part-time and was paid by the hour. The Respondent had used the services of Desmond Neil on prior occasions and stated "we do a job for Holiday the day before." The Respondent told Mr. Pangrass that he was trying to get workers' compensation for Desmond Neil. The Respondent made a statement against his own interest and said he "re-hired" Desmond Neil because Neil could not get a workers' compensation exemption. The Respondent's use of the word "re-hired" is significant because in a prior compliance matter the Respondent had employed Desmond Neil and agreed to terminate Desmond Neil's employment. The Respondent in testimony, changed his version of the facts and said that he re-hired Desmond Neil, but that Neil worked for Charles Brandon. Investigator Pangrass interviewed the Respondent. During this interview the Respondent stated he had labor expenses connected with his business. He testified he was paid by Holiday Builders and then in turn paid Desmond Neil and Daniel Maloney. Charles Brandon did not employ or was not the sole employer of Desmond Neil or Daniel Maloney on December 18, 2002. Investigator Pangrass contacted Mr. Brandon, who stated he knew the Respondent was going to hire helpers. Mr. Brandon was not at the job-site to direct Desmond Neil or Daniel Maloney and could only be reached by phone. The Petitioner's evidence that the Respondent was the employer of Desmond Neil and Daniel Maloney on December 18, 2002, instead of Mr. Brandon or some other person or entity, is the most persuasive and is accepted. The Respondent offered conflicting evidence regarding who provided money to Desmond Neil and Daniel Maloney. The Respondent offered a hearsay statement of Daniel Maloney that Holiday Builders was Daniel Maloney's employer. The Respondent said that when Holiday Builders pays him (the Respondent) he then pays his employees. The Respondent changed his testimony, however, and then said Charles Brandon gave him checks to give to the employees. (Implying that they were Brandon's employees in this version of his story.) The Respondent submitted a signed statement to the Petitioner indicating that he had no employees between 1999 and 2002, in evidence as Petitioner's Exhibit 10-B. The Respondent recognized the signature on that statement as being his own, but professed not to remember who wrote it or what it said. The Respondent, however, did admit to having at least one employee in 2001, directly contradicting his own statement. The Respondent also testified that the only times he used Desmond Neil's services were the two times Investigator Pangrass stopped by the Respondent's job sites. It is a trifle too coincidental that the only two times the investigator visited the job sites were the only times when the Respondent purportedly used the services of Desmond Neil. This is especially the case since Desmond Neil's testimony and even that of the Respondent himself tend to contradict that statement. Finally, the Respondent admitted that he did not have a workers' compensation policy for any employees. In summary, the evidence adduced by the Petitioner is deemed more consistent and credible and is accepted. It was thus demonstrated that the Respondent had one or more employees at the times pertinent hereto.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties it is, therefore, RECOMMENDED that a Final Order be entered by the Department of Financial Services, Division of Workers' Compensation directing that the Respondent stop work and cease his operations until such time as he secures workers' compensation coverage for employees and directing that the Respondent pay a penalty in the amount of $1,100.00. DONE AND ENTERED this 4th day of December, 2003, in Tallahassee, Leon County, Florida. S P. MICHAEL RUFF 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 Clerk of the Division of Administrative Hearings this 4th day of December, 2003. COPIES FURNISHED: John M. Iriye, Esquire Department of Financial Services Division of Workers' Compensation 200 East Gaines Street Tallahassee, Florida 32399-4229 Berisford Champagnie 15508 Southwest 34th Avenue Ocala, Florida 34473 Honorable Tom Gallagher Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Mark Casteel, General Counsel Department of Financial Services The Capitol, Level 11 Tallahassee, Florida 32399-0300
The Issue Whether Petitioner failed to comply with coverage requirements of the workers' compensation law, Chapter 440, Florida Statutes, and if so, what penalty should be imposed.
Findings Of Fact Respondent is the state agency responsible for enforcing provisions of Florida law which require that employers secure workers’ compensation insurance coverage for their employees. At all times material to this case, Petitioners owned and operated a business which provides marine-based services, including general diving and bridge demolition services. On or about February 28, 2003, Petitioners, in the course and scope of operating their marine service business, employed welders to perform welding and related services on a public construction project, specifically, the Jensen Beach Causeway Bridge in Jensen Beach, Florida. Petitioners were legally obligated to provide workers' compensation insurance for these welders in accordance with the provisions of Chapter 440. By way of defense, Petitioners argued that Chapter 440 is unconstitutional as applied to the facts and circumstances of this case. More specifically, Petitioners contend that this forum and the Respondent lack the authority to enforce Chapter 440 against Petitioners because of federal preemption under the Longshoremen and Harbor Workers’ Compensation Act (LAHCA). The tribunal has carefully considered this argument and finds it contrary to controlling case law. The parties have stipulated that if the Stop Work and Penalty Assessment Order is valid, the correct amount of the penalty to be imposed by law is $150,968.00, based upon appropriate supporting tax and payroll records.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Respondent enter a Final Order confirming the Amended Stop Work and Penalty Assessment Order in the amount of $150,968.00. DONE AND ENTERED this 10th day of September, 2003, in Tallahassee, Leon County, Florida. S FLORENCE SNYDER RIVAS 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 September, 2003. COPIES FURNISHED: Richard W. Glenn, Esquire 4 Harvard Circle, Suite 600 West Palm Beach, Florida 33409 Colin M. Roopnarine, Esquire Department of Financial Services Division of Legal Services 200 East Gaines Street Tallahassee, Florida 32399-4229 Honorable Tom Gallagher Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Mark Casteel, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
Findings Of Fact The Petitioner, Auburn D. Hood (hereafter Hood), began teaching in the Florida school system in 1930. From 1937 to 1938, he took a leave of absence to attend the University of Florida. In 1940, he joined the Teachers' Retirement System (hereafter TRS) with coverage under Plan A of that system. He continued to teach in the Florida school system, taking a two year military leave from 1940 to 1942, until 1945, when he became disabled. Hood secured annual health leaves of absence and continued to make retirement contributions until 1951, when the Board of Trustees decided that no further leaves of absence would be approved. At this time, Hood's retirement contributions for 1951-52 were returned. In 1947, acting on the advice of K. D. Farris, the auditor of TRS, Hood changed from Plan A to Plan B. Plan B provided for a 9.66 percent contribution rate as opposed to the 4.51 percent rate under Plan A. In May 1951, Hood applied for disability retirement on the basis of his physician's certification that his condition consisted of (1) Hypotension, (2) psycotic [sic], (3) dizziness, (4) generalized weakness, (5) occasional blackout and (6) insomnia. Hood's disability retirement was approved by the TRS medical board on September 7, 1951, and became effective August 31, 1951. In the fall of 1967, Hood obtained certification from his physician that he was capable of returning to teaching. He was subsequently removed from disability retirement by the TRS Medical Board and reenrolled in TRS under Plan A. On or about December 1, 1970, Hood signed an application to transfer from TRS to the new Florida Retirement System (hereafter FRS). Hood began receiving FRS service credit and participating in Social Security at that time. Social Security coverage is not extended to members of TRS and must be provided in conjunction with FRS membership. TRS Plan A is not a fixed benefit plan. Benefits under this plan consist of an annuity equivalent to the members' actuarial contributions plus a pension equivalent to 1/140 of the member's average final compensation multiplied by each year of membership service. On the other hand, FRS is a fixed benefit of service. Therefore, the Division of Retirement makes TRS TRS service credit compatible with FRS credit for those transferring into the new system by bringing them into FRS through TRS Plan E, which is the only fixed benefit plan in TRS. This resulted in the need to upgrade Hood's TRS Plan A credit to the more costly TRS Plan E. Hood was given until the date he chose to retire to balance his account in this respect. On June 27, 1971, Chapter 71-347, Laws of Florida, became effective and amended Section 238.07, Florida Statutes, entitled "Retirement System for School Teachers" as follows: Any person who was a member of the Teachers' Retirement System prior to December 1, 1970, and who has collected a disability retirement allowance from the Teachers' Retirement System and has returned to active teaching service, shall be deemed to have been on health leave of absence each year between the date of his disability retirement and his return to service and may elect to receive service credit for each year upon payment of the required contributions plus regular interest. Commencing July 27, 1971, Hood received communications from K. D. Farris, at that time Administrator of TRS, informing Hood of the amount he would have to contribute to TRS to take advantage of the quoted portion of Chapter 238, Florida Statutes. Hood's first payment was returned by the current Director of the Division of Retirement, Robert Kennedy, who informed Hood that the new law was inapplicable to him because he was now a member of FRS. During the 1977 session of the Florida Legislature, a claims bill was passed in favor of Hood appropriating the sum of $4,350.93 as compensation for damages incurred by him. The preamble to the bill recites among other things, that Hood had transferred from the TRS to the FRS prior to the enactment of Chapter 71-347, Laws of Florida, cited previously in this order. Hood subsequently accepted the benefits of the claims bill passed in his favor and endorsed the proceeds over to the FRS. As a condition precedent to passage of the claims bill, flood declared in a notarized statement that he would retire from the teaching profession as of June 30, 1977, and endorse the funds over to FRS to insure to his personal retirement account. The funds were subsequently endorsed over to FRS. The funds received by Hood from the claims bill equal the amount necessary to balance his account by upgrading his former TRS Plan A service to the fixed benefit Plan E service of TRS. In September, 1977, Hood attempted to purchase service credit for the sixteen (16) years he was on disability retirement pursuant to Chapter 71-347, Laws of Florida. On or about September 13, 1977, the Division of Retirement declared that Hood could not purchase such service credit at which time Hood instituted the instant proceeding.
Conclusions Petitioner became a member of FRS and began participating in social security (which is not available to members of TRS) in December, 1970. Petitioner withdrew from TRS prior to the enactment of Section 238.07(1513) making the section inapplicable to him; Section 238.07(15B) of the Teacher's Retirement System Act applies only to members of TRS and does not extend benefits to members of other retirement systems; The $4,350.93 appropriated by HB-40 equaled the amount necessary to balance Petitioner's retirement account (without regard to Petitioner's claim for sixteen years of service credit representing the period he was drawing TRS disability retirement benefits); and HB-40 appropriated the aunt necessary to balance Petitioner's retirement account in recognition of the fact that a dispute existed over the amount necessary to accomplish the same, and the fact the Petitioner could not take advantage of Section 238.07(15B). Petitioner urged passage of the claims bill and executed a notarized statement that, if the bill passed, he would endorse the funds over to his retirement account and retire. Therefore, Petitioner is estopped from accepting the benefits of HB-40 and then renewing his claim that he owes less than $4,350.93 to balance his retirement account and that he remains eligible to take advantage of Section 238.07(15B).
The Issue Whether the Department's proposed amendment of Rule 38F- 7.020, Florida Administrative Code, constitutes an invalid exercise of its delegated legislative authority under Section 120.52(8), Florida Statutes, [1996 Supp.], or whether the authority specified in the proposed rule is sufficient for the Department to adopt the proposed rule?
Findings Of Fact The Florida Society of Anesthesiologists is a voluntary, nonprofit association comprised of individual members, each of whom is licensed in the State of Florida to practice medicine. Petitioner, Robert A. Guskiewicz, M.D., is a licensed medical doctor in the State of Florida specializing in anesthesia. Pursuant to Section 440.13(12), Florida Statutes, a three-member panel is charged with the responsibility of determining the schedules of maximum reimbursement for physician treatment of workers' compensation patients. In March 1996, the three-member panel convened and adopted a resource-based relative value scale ("RBRVS") reimbursement system, which, on or about January 3, 1997, the Department published notice of its intent to embody in proposed Rule 38F-7.020, in Vol. 23, No. 1 of the Florida Administrative Law Weekly. A copy is attached and incorporated herein by reference. The proposed Rule lists Sections 440.13(7), 440.13(8), 440.13(11), 440.13(12), 440.13(13), 440.13(14), and 440.591, Florida Statutes, as specific authority. The proposed Rule implements Sections 440.13(6), 440.13(7), 440.13(8), 440.13(11), 440.13(12), 440.13(13), and 440.13(14), Florida Statutes. There are no other facts necessary for determination of the matter.
The Issue Whether Respondents violated the provisions of chapter 440, Florida Statutes, by failing to secure the payment of workers' compensation coverage, as alleged in the Stop-Work Orders, and, if so, what penalty is appropriate.
Findings Of Fact The Department is the state agency charged with enforcing the requirement of chapter 440, Florida Statutes, that employers in Florida secure workers' compensation coverage for their employees. § 440.107(3), Fla. Stat. Respondents are gas station/convenience stores located in South Florida. Northlake was created by Nazma Akter on May 6, 2014. MB was created by Ms. Akter on March 23, 2010. Congress Valero was created by Muhammad Saadat on July 21, 2011. Hena was created by Ms. Akter and Abu Ahsan on December 14, 2011. Hayma was created by Ms. Akter on December 14, 2011. Blue Heron was created by Ms. Akter on August 4, 2009. At all times relevant hereto, Respondents were duly-licensed to conduct business in the state of Florida. On February 2, 2015, the Department's Compliance Investigator Robert Feehrer, began a workers' compensation compliance investigation of Gardenia, LLC. Investigator Feehrer called the number listed for Gardenia, LLC, and was provided with a corporate office address. On February 10, 2015, upon arrival at Gardenia, LLC's, corporate office located at 165 US Highway 1, North Palm Beach, Florida, 33408, Investigator Feehrer spoke with Operations Manager Mohammad Hossain. Mr. Hossain stated that Gardenia, LLC, was a paper corporation and existed only for the purpose of paying unemployment taxes on the "six stores." Mr. Hossain went on to provide Investigator Feehrer with a list of Respondents and names of the employees that worked at each store. As an employee of Gardenia, LLC, and Respondents, Mr. Hossain's statements are party opponent admissions and bind Respondents. Lee v. Dep't of Health & Rehab. Servs., 698 So. 2d 1194, 1200 (Fla. 1997). With Mr. Hossain's statements and the list of Respondents' employees, Investigator Feehrer then consulted the Division of Corporations website, www.sunbiz.org, and confirmed that Respondents were current, active Florida companies. Investigator Feehrer then consulted the Department's Coverage and Compliance Automated System ("CCAS") for proof of workers' compensation coverage and exemptions associated with Respondents. Investigator Feehrer's CCAS search revealed that Respondents had no workers' compensation policies and no exemptions. On February 24, 2015, Investigator Feehrer conducted site visits at each of the six stores. Ms. Akter and Mr. Hossain accompanied Investigator Feehrer during these site visits. At all times material hereto, Ms. Akter was a corporate officer or managing member of each of the six Respondents. Muhammed Saadat and Abu Ahsan were corporate officers or managing members of Congress Valero, Hena, and Blue Heron. Kazi Ahamed was a corporate officer or managing member of Congress Valero and Hayma. Kazi Haider and Mohammed Haque were managing members of Hayma. All received compensation from the companies with which they were involved. Although Investigator Feehrer only personally observed one employee working at each location during his site visits, the payroll records revealed that at least four employees (including corporate officers or managing members without exemptions) received compensation for work at each location during the relevant period. Investigator Feehrer required additional information to determine compliance, and with Respondents' permission, contacted Respondents' accountant. Investigator Feehrer met with the accountant at least two times to obtain relevant information prior to March 30, 2015. Upon Ms. Akter's authorization, the accountant provided tax returns and payroll information for Respondents' employees. Information from Ms. Akter and Mr. Hossain also confirmed the specific employees at each of the six stores during the period of March 30, 2013, through March 30, 2015. On March 30, 2015, based on his findings, Investigator Feehrer served six Stop-Work Orders and Orders of Penalty Assessment. The Stop-Work Orders were personally served on Ms. Akter. Mr. Hossain was present as well and confirmed the lists of employees for each of the six stores were accurate. In April 2015, the Department assigned Penalty Auditor Christopher Richardson to calculate the six penalties assessed against Respondents. Respondent provided tax returns for the audit period and payroll transaction details were provided, as well as general ledgers/breakdowns, noting the employees for each Respondent company. Based on Investigator Feehrer's observations of the six stores on February 24, 2015, Auditor Richardson used the classification code 8061 listed in the Scopes® Manual, which has been adopted by the Department through Florida Administrative Code Rule 69L-6.021(1). Classification code 8061 applies to employees of gasoline stations with convenience stores. Classification codes are four-digit codes assigned to various occupations by the National Council on Compensation Insurance to assist in the calculation of workers' compensation insurance premiums. In the penalty assessment, Auditor Richardson applied the corresponding approved manual rate for classification code 8061 for the related periods of non-compliance. The corresponding approved manual rate was correctly utilized using the methodology specified in section 440.107(7)(d)1. and rule 69L-6.027 to determine the final penalties. The Department correctly determined Respondents' gross payroll pursuant to the procedures required by section 440.107(7)(d) and rule 69L-6.027. On January 14, 2016, the Department served the six Amended Orders of Penalty Assessment on Respondents, assessing penalties of $1,367.06 for Northlake, $9,687.00 for MB, $12,651.42 for Congress Valero, $18,508.88 for Hena, $7,257.48 for Hayma, and $4,031.60 for Blue Heron. The Department has demonstrated by clear and convincing evidence that Respondents were engaged in the gasoline station, self-service/convenience store industry in Florida during the periods of noncompliance; that Respondents failed to secure the payment of workers' compensation for their employees, as required by Florida's Workers' Compensation Law; and that the Department correctly utilized the methodology specified in section 440.107(7)(d)1. to determine the appropriate penalties.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a consolidated final order upholding the Stop-Work Orders and the Amended Orders of Penalty Assessment in the amounts of $1,367.06 for Northlake Mobile Enterprises, Inc.; $9,687.00 for MB Food and Beverage, Inc.; $12,651.42 for Congress Valero, Inc.; $18,508.88 for Hena Enterprises, Inc.; $7,257.48 for Hayma Enterprises, Inc.; and $4,031.60 for Blue Heron BP, Inc. DONE AND ENTERED this 16th day of June, 2016, in Tallahassee, Leon County, Florida. S MARY LI CREASY 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 16th day of June, 2016.
The Issue Whether the Petitioner should be subjected to a penalty pursuant to Section 395.5094, Florida Statutes (1987), or Section 407.51, Florida Statutes (1989)?
Findings Of Fact The Respondent, the Health Care Cost Containment Board, is an agency of the State of Florida charged with the responsibility of regulating hospital budgets. The Office of the Public Counsel is authorized pursuant to Section 407.54, Florida Statutes, to represent the general public in budget review proceedings before the Respondent. The Petitioner, Centro Asturiano Hospital, is a 144-bed acute care hospital located in Tampa, Florida. During all times relevant to this proceeding, the Petitioner's fiscal year was the calendar year. During 1984, 1985 and 1986, the accounting firm of Peat, Marwick and Main (hereinafter referred to as "Peat") prepared financial statements and Medicare reports for the Petitioner. Peat also performed audits of the Petitioner during 1984, 1985 and 1986. During all times relevant to this proceeding, the Petitioner's comptroller, Hilda Smith, prepared reports filed with the Respondent on behalf of the Petitioner. For the fiscal year 1987, the Respondent had approved the Petitioner's budgeted gross revenue per adjusted admission (hereinafter referred to as "GRAA") of $7,536.00 and net revenue per adjusted admission (hereinafter referred to as "NRAA") of $4,913.00. Based upon the Petitioner's audited actual experience for fiscal year 1987, the Petitioner's actual NRAA exceeded its budgeted NRAA. Therefore, the Respondent proposed to impose a penalty (hereinafter referred to as the "Main Penalty") on the Petitioner pursuant to Section 395.5094, Florida Statutes (1987), and Rule 10N-1.062, Florida Administrative Code. By letter dated May 12, 1988, the Respondent notified the Petitioner that it was imposing a Main Penalty on the Petitioner for 1987. A second letter dated August 15, 1988, was sent by the Respondent to the Petitioner revising the amount of the penalty. In calculating the revised penalty the Respondent took into account the Petitioner's case-mix and outlier activity. The total recommended penalty was $609,218.00. The penalty consists of a budget reduction to net revenue of $566,938.00 with a corresponding reduction to gross revenue of $854,425.00, and a cash fine of $42,280.00. The reason for imposing the Main Penalty was explained in the Respondent's letter of August 15, 1988, as follows: Preliminary findings indicated that an excess of net revenue per adjusted admission in the amount of $381.00 had occurred. These findings are based upon a comparison [sic] of the previous year's audited actual experience inflated by the MARI, and the Board approved budget for the fiscal year ended December 31, 1987. The total excess has been adjusted by case-mix and outlier activity and results in a total recommended penalty of $609,218. . . . The proposed penalty could have been avoided if the Petitioner had sought a budget amendment for 1987 or if the Petitioner had modified its operations during 1987 when it learned that its actual experience would exceed its approved budget. The Petitioner believes that the difference in the Petitioner's actual experience for 1987 and its approved budget for 1987 was caused primarily by an adjustment to Medicare contractual allowances. When a hospital treats a patient eligible for Medicare payment for the patient's services, the hospital records the gross amount of the hospital's charges for the patient's services. Medicare, however, only pays a portion of the total charges. The difference between the hospital's charges and the amount actually paid by Medicare is referred to as "Medicare contractuals." For example, if a patient is charged $1,000.00 by a hospital for services but Medicare will only pay $800.00 for those services, the $200.00 difference is referred to as a Medicare contractual. If the $200.00 is not paid from some other source it must be deducted from gross revenue to arrive at net revenue on the books of the hospital. The Petitioner receives a substantial portion of its revenue for Medicare reimbursed services. Therefore, Medicare contractuals constitute a significant item in the Petitioner's budget. An adjustment to the Petitioner's Medicare contractuals could have a significant impact on the Petitioner's budget. During April, 1987, Peat notified the Petitioner's comptroller, Ms. Smith, that the Petitioner's Medicare contractuals needed to be adjusted by $488,000.00. This adjustment was the result of Peat's audit of Petitioner's 1986 financial records and was related to Medicare cost reports for 1983, 1984 and 1985. Peat also determined that an additional $200,000.00 adjustment was required. The Petitioner knew that the adjustments were material. The net effect of Peat's 1986 audit was that the Petitioner was required in 1987 to reduce 1986 Medicare and other contractual deductions from gross revenue by $688,000.00. This amount was a significant amount. The $688,000.00 adjustment was reported by Peat to the Board of Directors of the Petitioner and accepted by the Board in April, 1987. Between June, 1987, and July, 1987, Ms. Smith, the Petitioner's comptroller, prepared a Current Year Actual and Estimated Interim Report (hereinafter referred to as the "1987 Interim Report"). In the 1987 Interim Report the Petitioner compared actual GRAA for the first 6 months of 1987 and projected GRAA for the last 6 months of 1987 with 1987 budgeted GRAA. Based upon this computation it was apparent that the Petitioner was operating in excess of the Petitioner's budget for 1987 as approved by the Respondent. The Petitioner, therefore, could have sought a budget amendment or modified its operations. Ms. Smith testified that she believed that the excess of actual GRAA and NRAA over budgeted GRAA and NRAA had been caused by the Medicare contractual adjustment recommended by Peat for 1986. The Petitioner failed to prove what the cause of the excess actually was. Ms. Smith testified that the Petitioner did not realize what the affect of the contractual adjustment was until the 1987 Interim Report was prepared. The Petitioner, however, could have determined in April of 1987 what affect the Medicare contractual adjustment would have on its 1987 budget. Therefore, if the Medicare contractual adjustment was the cause of the excess of its actual experience over its budget, the Petitioner could have taken steps as early as April, 1987, to seek a budget amendment for its 1987 fiscal year or to modify its operations. In July, 1987, Ms. Smith contacted staff of the Respondent. She spoke with Pete Pearcy and Bill Summers. She also spoke to these staff members in September, 1987. Ms. Smith contacted the Respondent because of her concern about the excess of the Petitioner's actual 1987 experience over its 1987 approved budget. She contacted the Respondent seeking assistance in determining what steps the Petitioner should take to resolve the potential problem the excess in the Petitioner's actual experience over its approved budget could cause. The Petitioner failed to prove that Ms. Smith's explanation of the problem adequately informed the Respondent what the Petitioner's problem was. Generally, the Respondent's staff will consult and/or counsel hospitals concerning matters within the Respondent's responsibilities. The Respondent's policy prohibits staff from advising hospitals, however, as to whether a budget amendment should be filed; that decision is left up to each individual hospital. Consistent with the Respondent's policy, staff of the Respondent attempted to assist Ms. Smith. During September, 1987, Ms. Smith asked Mr. Summer of the Respondent's staff whether the Petitioner should file a budget amendment. Mr. Summer responded "amend what?" This response was based upon the inability of Ms. Smith to explain to Mr. Summer what exactly the Petitioner believed it needed to amend or exactly how the Medicare contractual adjustments affected the Petitioner's 1987 budget. Mr. Summer did not specifically recommend to Ms. Smith that the Petitioner file or not file a budget amendment. Nor did anyone else on the Respondent's staff advise the Petitioner that a budget amendment should or should not be filed. Mr. Summer asked Ms. Smith to send him information concerning the problem. Mr. Summer told Ms. Smith that he would review the material before discussing the problem further. Mr. Summer did not, however, contact Ms. Smith. Nor did Ms. Smith attempt to contact Ms. Summer before the end of the Petitioner's 1987 fiscal year. The Petitioner was aware of the fact that any budget amendment for its 1987 fiscal year had to be filed before the end of the 1987 fiscal year. The Petitioner was also familiar with the manner in which a budget amendment was to be filed since the Petitioner had obtained approval of a budget amendment for its 1986 fiscal year. The Petitioner did not file a budget amendment for its 1987 fiscal year. The Petitioner was aware that it was required to operate within its 1987 approved budget. Ms. Smith indicated that she believed that the Respondent's staff would have warned her if the Petitioner had been in danger of having a penalty imposed. The Petitioner, however, was not informed by the Respondent that the Main Penalty would not be imposed upon it for its 1987 fiscal year. The Petitioner's actual GRAA for 1987 was $8,096.00 and its approved GRAA was $7,536. Therefore, the Petitioner's actual GRAA for 1987 exceeded its approved GRAA by 7.4%. The Petitioner's actual NRAA for 1987 was $5,294.00 and its approved NRAA was $4,913.00. The excess of actual NRAA over approved NRAA was 7.7%. The percentage of excess of actual GRAA and NRAA over budget is almost the same. Therefore, it is possible that whatever caused the Petitioner's excessive GRAA also caused its excessive NRAA. GRAA is not affected by Medicare contractual adjustments. NRAA is affected by Medicare contractual adjustments. Therefore, since the Petitioner's percentage excess in GRAA (7.4%) and NRAA (7/7%) for 1987 was almost the same, it is questionable whether the Petitioner's Medicare contractual adjustments were the sole cause for the excess of the Petitioner's actual experience over its budget for 1987. It is more likely that the excessive GRAA and NRAA were caused by the same problem. The Petitioner, therefore, failed to prove that its discussions with the Respondent about the Medicare contractual adjustment would have helped the Petitioner avoid the penalty proposed in this proceeding. The Petitioner filed its 1988 budget and the 1987 Interim Report with the Respondent on or about September 29, 1987. The 1987 Interim Report includes information concerning the Petitioner's actual experience for the first 7 months of 1987 and projections for the remaining 5 months of 1987. The 1987 Interim Report was submitted for informational purposes. For the first 7 months of 1987 the Petitioner's actual gross revenue was $10,171,658.00. Gross revenue for the last 5 months of 1987 was projected at $7,265,470.00. The Petitioner's estimated adjusted admissions for 1987 were 1,221 for the first 7 months and 873 for the last 5 months. Gross revenue divided by adjusted admissions for 1987 yields GRAA of $8,337.00 for the first 7 months and projected GRAA of $8,322.00 for last 5 months. Based upon the information contained in the 1987 Interim Report, the Petitioner's GRAA for the entire 1987 fiscal year was projected to be $8,331.00. The Petitioner's approved GRAA, which was included in the 1987 Interim Report, was only $7,536.00. Therefore, the Petitioner should have been aware that it would very likely exceed its approved 1987 budgeted GRAA by approximately $795.00 (approximately 10.5%) in June of 1987. Accordingly, the Petitioner should have taken steps in September of 1987 to amend its budget or to modify its operations. The Petitioner had sufficient information during 1987 (April, June and September, 1987) to warn it that its actual experience would exceed its approved budget. Although the Petitioner's comptroller did discuss what she believed to be the cause of the Petitioner's problem (the Medicare contractual adjustment) with the Respondent, the evidence failed to prove that it was reasonable for the Petitioner to wait for the Respondent to take some action while the Petitioner took no action on its own behalf to rectify the problem.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Respondent issue a final order dismissing the Petitioner's petition. DONE and ENTERED this 23rd day of July, 1990, in Tallahassee, Florida. LARRY J. SARTIN 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 23rd day of July, 1990. APPENDIX TO RECOMMENDED ORDER The parties have submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted. The Petitioner's Proposed Findings of Fact Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection 1 3. 1 and hereby accepted. hereby accepted. 2 and hereby accepted. 5 4. 6 15. 7-8 16. 9 17. 10-11 Hereby accepted. 12-13 Not supported by the weight of the evidence. 14 7. NRAA was $4,913.00 and not $4,938.00. 15 19. 16 33. 31 and hereby accepted. Not supported by the weight of the evidence. 19 22. 20 24. Hereby accepted. The last sentence is not supported by the weight of the evidence. Not supported by the weight of the evidence. Not relevant. Not supported by the weight of the evidence. See 22 and 25. Several of the contacts with the Respondent took place after 1987 and are not relevant to this proceeding. The second sentence is hereby accepted. The last sentence is not supported by the weight of the evidence. Not supported by the weight of the evidence. The Respondent's Proposed Findings of Fact Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection 1 3. 2 4. 3 5-6. 4 8-9. 10 and hereby accepted. Hereby accepted. 7 11. 8 8 and 11. 9 13 and 20. 10 16. See 21. 18 and hereby accepted. See 22. See 25. 15 27. 16 Hereby accepted. 17-18 Although true, not relevant to this proceeding. 19-21 Hereby accepted. 22 21. 23 See 21. 24 19 and 33-36. 25 11. Not relevant. See 21. Incorrect conclusion of law. Ms. Smith testified what she was told. Her testimony about what she heard is not hearsay. 29 14. 30-32 Hereby accepted. 33 33-34. 34 35 and hereby accepted. 35 36. 36 32 37 Cumulative. 38 12. 39 31-32. The Intervenor's Proposed Findings of Fact Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection 1 3. 2 4. 3 6. 4 5 and hereby accepted. 5 5-6. 6 hereby accepted. 7 7. 8 14. 9-10 15. 11 16. 12-13 17. 14 16. 15 18. 16 16. Hereby accepted. See 21. Hereby accepted. See 16. 21-22 Hereby accepted. 23-24 Not relevant. 25 Hereby accepted. 26 27. 27 21. First contact with the Respondent was in July, and not August. 28 19. 29 19-20. 30 Cumulative. 31 22. 32-33 24. 34-35 Hereby accepted. 36-37 25. 38 30. 39 Hereby accepted. 40 29. Not relevant. Hereby accepted. 43-44 Not relevant. 45 31-32. 46 33. 47-51 36. 52-54 19. 55-57 31. 58-59 32. 60 Not supported by the weight of the evidence. 61-62 Hereby accepted. 63 31-32. 64 Hereby accepted. 65 9. 66 10-11. COPIES FURNISHED: Julia P. Forrester Senior Attorney Health Care Cost Containment Board Building L, Suite 101 325 John Knox Road Tallahassee, Florida 32303 David D. Eastman, Esquire Patrick J. Phelan, Jr., Esquire Post Office Box 669 Tallahassee, Florida 32302 Jack Shreve, Public Counsel David R. Terry, Associate Public Counsel Peter Schwarz, Associate Public Counsel c/o The Florida Legislature 111 West Madison Street, Room 801 Tallahassee, Florida 32399-1400 Stephen Presnell, General Counsel Health Care Cost Containment Board Woodcrest Office Park 325 John Knox Road Building L, Suite 101 Tallahassee, Florida 32303
The Issue The issue is whether The Department of Financial Services properly imposed a Stop Work Order and Amended Order of Penalty Assessment pursuant to the requirements of Chapter 440, Florida Statutes.
Findings Of Fact The Division is charged with the regulation of workers' compensation insurance in the State of Florida. Respondent AFS, LLC. (AFS), is a corporation located in Jacksonville, Florida, and is involved in the construction industry, primarily framing houses. Braman Avery is the owner and manager of AFS. Lee Arsenault is a general contractor whose business is located in Jacksonville, Florida. Mr. Arsenault contracted with AFS to perform framing services at a construction site located at 1944 Copperstone Drive in Orange Park, Florida. At all times material to this proceeding, AFS maintained workers' compensation coverage for its employees through a licensed employee leasing company. AFS contracted with Greenleads Carpentry, Inc. (Greenleads) to perform work at the job site in question. Prior to subcontracting with Greenleads, Mr. Avery requested from Greenleads, among other things, a certificate of insurance showing that Greenleads had general liability coverage and workers' compensation insurance. Greenleads provided a certificate of insurance to Mr. Avery showing that Greenleads had workers' compensation coverage. The certificate of insurance contains a policy number, dollar limits, and effective and expiration dates of June 1, 2004 through June 1, 2005. Debra Cochran is office manager of Labor Finders, an employee leasing company. According to Ms. Cochran, Labor Finders' corporate office issued the certificate of insurance to Greenleads. At the time of issuance, the certificate of insurance was valid. Greenleads did not follow through on its obligations to Labor Finders in that Green Leads did not "run its workers through" Labor Finders. Consequently, Greenleads' workers were not covered by workers' compensation as indicated on the certificate of insurance. Labor Finders did not issue any document showing cancellation or voiding of the certificate of insurance previously issued. Mr. Avery relied upon the face of the certificate of insurance believing AFS to be in total compliance with statutory requirements regarding workers' compensation for subcontractors. That is, he believed that the Greenleads' workers were covered for workers' compensation as indicated on the face of the certificate of insurance. Mr. Avery was not informed by Labor Finders or Greenleads that Greenleads did not, after all, have workers' compensation coverage in place on the workers performing work under the contract between AFS and Greenleads on the worksite in question. Bobby Walton is president of Insure America and has been in the insurance business for 35 years. His company provides general liability insurance to AFS. According to Mr. Walton, Mr. Avery's reliance on Greenleads' presentation to him of a purportedly valid certificate of insurance is the industry standard. Further, Mr. Walton is of the opinion that there was no obligation on behalf of Mr. Avery to confirm coverage beyond receipt of the certificate of insurance provided by the subcontractor. That is, there is no duty on behalf of the contractor to confirm coverage beyond receipt of the certificate of insurance. Allen DiMaria is an investigator employed by the Division. His duties include investigating businesses to ensure that the employers in the state are in compliance with the requirements of the workers' compensation law and related rules. On January 5, 2005, Mr. DiMaria visited the job site in question and observed 13 workers engaged in construction activities. This visit was a random site check. Mr. DiMaria interviewed the owner of Greenleads and checked the Division's database. Mr. DiMaria determined that Greenleads did not have workers' compensation coverage. After conferring with his supervisor, Mr. DiMaria issued a stop-work order to Greenleads, along with a request for business records for the purpose of calculating a penalty for Greenleads. In response to the business records request, Greenleads submitted its check ledger along with an employee cash payment ledger, both of which were utilized in calculating a penalty for Greenleads. On January 11, 2005, Mr. DiMaria issued an Amended Order of Penalty Assessment to Greenleads for $45,623.34. Attached to the Amended Order of Penalty Assessment issued to Greenleads is a penalty worksheet with a list of names under the heading, "Employee Name", listing the names of the employees and amounts paid to each employee. During the investigation of Greenleads, Mr. DiMaria determined that Greenleads was performing subcontracting work for Respondent. This led to the Division's investigation of AFS. Mr. DiMaria spoke to Mr. Avery and determined that AFS paid remuneration to Greenleads for work performed at the worksite. He checked the Division's data base system and found no workers' compensation coverage for AFS. He determined that AFS had secured workers' compensation coverage through Southeast Personnel Services, Inc. (SPLI), also a licensed employee leasing company. However, the policy with SPLI did not cover the employees of Greenleads performing work at the job site. Mr. DiMaria requested business records from Mr. Avery. Mr. Avery fully complied with this request. He examined AFS' check registry and certificates of insurance from AFS. Other than the situation involving Greenleads on this worksite, Mr. DiMaria found AFS to be in complete compliance. On January 10, 2005, after consulting with his supervisor, Robert Lambert, Mr. DiMaria issued a Stop Work Order to AFS. A Stop Work Order issued by the Division requires the recipient to cease operations on a job site because the recipient is believed to be not in compliance with the workers' compensation law. The Stop Work Order issued by Mr. DiMaria was site specific to the work site in question. Based upon the records provided by Mr. Avery, Mr. DiMaria calculated a fine. Penalties are calculated by determining the premium amount the employer would have paid based on his or her Florida payroll and multiplying by a factor of 1.5. Mr. DiMaria's calculation of the fine imposed on AFS was based solely on the Greenleads' employees not having workers' compensation coverage. On February 16, 2005, Mr. DiMaria issued an Amended Order of Penalty in the amount of $45,643.87, the identical amount imposed upon Greenleads. A penalty worksheet was attached to the Amended Order of Penalty Assessment. The penalty worksheet is identical to the penalty worksheet attached to Greenleads' penalty assessment, with the exception of the business name at the top of the worksheet and the Division's case number. Greenleads partially paid the penalty by entering into a penalty payment agreement with the Division. Greenleads then received an Order of Conditional Release. Similarly, AFS entered into a penalty payment agreement with the Division and received an Order of Conditional Release on February 16, 2005. Moreover, AFS terminated its contract with Greenleads. Lee Arsenault is the general contractor involved in the work site in question. AFS was the sole framing contractor on this project, which Mr. Arsenault described as a "pretty significant project." He has hired AFS to perform framing services over the years. However, because the Stop Work Order was issued to AFS, Mr. Arsenault had to hire another company to complete the framing work on the project. Mr. Avery estimates economic losses to AFS as a result of losing this job to be approximately $150,000, in addition to the fine. Mr. Arsenault, Ms. Cochran, as well as the Division's investigator, Mr. DiMaria, all agree with Mr. Walton's opinion, that it is customary practice in the construction industry for a contractor who is subcontracting work to rely on the face of an insurance certificate provided by a subcontractor. Robert Lambert is a workers' compensation district supervisor for the Division. When asked under what authority the Division may impose a penalty on both Greenleads and AFS for the same infraction, he replied that it was based on the Division's policy and its interpretation of Sections 440.02, 440.10, and 440.107, Florida Statutes.
Recommendation Based upon the Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Division of Workers' Compensation rescind the Amended Order of Penalty Assessment issued February 16, 2005, and the Stop Work Order issued to Petitioner on January 10, 2005. DONE AND ENTERED this 26th day of August, 2005, in Tallahassee, Leon County, Florida. S BARBARA J. STAROS 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 day of August, 2005. Endnote 1/ While this Recommended Order does not rely upon the case cited by Respondent in its Notice of Supplemental Authority, Respondent was entitled to file it. COPIES FURNISHED: Colin M. Roopnarine, Esquire Douglas D. Dolin, Esquire Department of Financial Services Division of Workers' Compensation East Gaines Street Tallahassee, Florida 32399 Mark K. Eckels, ESquire Boyd & Jenerette, P.A. North Hogan Street, Suite 400 Jacksonville, Florida 32202 Honorable Tom Gallagher Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Carlos G. Muniz, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
Findings Of Fact On February 15, 1977, Petitioner was employed by the City of Clearwater as a full-time firefighter. He became certified as a firefighter on April 21, 1977, and was issued certificate number 5374. After receiving an associate's degree from St. Petersburg Junior College, Petitioner became eligible to receive firefighters' supplemental compensation benefits on July 1, 1981. After receiving a bachelor's degree from Eckerd College, Petitioner became eligible to receive additional firefighters' supplemental compensation benefits on May 1, 1984. Until July 2, 1986, Petitioner received his supplemental compensation benefits according to the appropriate level. On July 2, 1986, a hearing was held before the City of Clearwater Pension Advisory Committee as to whether Petitioner was entitled to a job- connected disability pension for injuries that he received in firefighting related activity. Following a finding by the Clearwater Pension Advisory Committee that Petitioner was entitled to the disability, the City of Clearwater forwarded to Respondent a Notice of Ineligibility for Supplemental Compensation Benefits, reflecting an ineligibility date for Petitioner of July 2, 1986. Based upon the Notice of Ineligibility, as well as the fact that Petitioner had received a disability that could not be corrected to the satisfaction of the Respondent, Respondent voided Petitioner's certification as a firefighter and terminated his supplemental compensation benefits as of July 2, 1986. Petitioner elected a retirement plan option offered by the City of Clearwater under which he extended his termination of employment date by the amount of time due him for vacation, holiday pay, and one-half of his accrued sick leave. By utilizing the vacation and sick leave time to which he was entitled, Petitioner extended his termination of employment date to October 8, 1987. Between July 2, 1986 and October 8, 1987 Petitioner occupied the status of an employee on vacation or on sick leave, i.e., he was on leave with pay. He received a paycheck at the same time that other employees of the City of Clearwater received theirs, and his paycheck carried the same deductions that other employees would have in their checks. It is uncontroverted that although Petitioner received his disability on July 2, 1986, Petitioner has received compensation from the City of Clearwater on an uninterrupted basis encompassing the period from July 2, 1986 through October 8, 1987 for duties that he performed as a full-time firefighter for the City of Clearwater Fire Departments his employing agency.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is, RECOMMENDED that a Final Order be entered reinstating Petitioner's supplemental compensation benefits from July 2, 1986 through October 8, 1987 and directing that those benefits be paid to Petitioner forthwith. DONE and RECOMMENDED this 23rd day of October, 1987, at Tallahassee, Florida. LINDA M. RIGOT, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 23rd day of October, 1987. COPIES FURNISHED: William Gunter State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Fredric S. Zinober, Esquire Village Office Park, Suite 107 2475 Enterprise Road Clearwater, Florida 33575 Lisa S. Santucci, Esquire Department of Insurance 413-B Larson Building Tallahassee, Florida 32399-0300 =================================================================
The Issue The issues are whether Respondent violated Chapter 440, Florida Statutes (2009), by failing to secure the payment of workers' compensation, and if so, what penalty should be imposed.
Findings Of Fact Petitioner is the state agency responsible for enforcing the statutory requirement that Florida employers secure the payment of workers' compensation for the benefit of their employees. See § 440.107(3), Fla. Stat. Respondent is a Florida for-profit corporation providing pharmacy services. Respondent has business locations at 842 West Plymouth Avenue, Deland, Florida, and 112 East First Avenue, Pierson, Florida. Respondent's Pierson business site sells a small amount of food like bubble gum and other sundries. Activities at the Pierson location include filling prescriptions, compounding and blending drugs, and dispensing drugs or medicine to walk-in customers and patients. The patients are referred from a health care clinic known as Northeast Florida Health Services (NEFHS). The patients are federally qualified as indigent pursuant to a federal poverty calculation. Respondent's Deland location deals solely with prescription drug transactions to indigent patients who are referred by NEFHS. The Deland business site is very small and has no walk-in customers or food or other sundries for sale. At the end of the month, Respondent sends a bill to NEFHS for the prescriptions dispensed by Respondent at both locations. NEFHS than reimburses Respondent for its services. Respondent pays its employees at both locations out of a single checking account. Only one tax identification number is used for both business locations. On October 27, 2009, Hector Beauchamp, one of Petitioner's workers' compensation compliance investigators, received a referral, indicating that Respondent was operating without workers' compensation insurance coverage for its employees. After receiving the referral, Mr. Beauchamp used the website of the Department of State, Division of Corporations, to obtain Respondent's federal employer identification number. The Department of State website showed that Respondent became Pierson Community Pharmacy, Inc., on March 3, 2005. The website also indicated that Respondent had two corporate officers, John Eidt and Hanan Francis. Next, Mr. Beauchamp contacted Samantha Nixon, one of Petitioner’s penalty calculators, to research Respondent's unemployment compensation tax information on the Department of Revenue's website. Ms. Nixon's research revealed that Respondent employed in excess of four employees for each quarter in the past three years. Mr. Beauchamp also consulted Petitioner's Coverage and Compliance Automated System (CCAS) database. The CCAS database lists the workers' compensation insurance policy information for Florida employers together with any workers' compensation exemptions for corporate officers. The CCAS database accurately revealed that Respondent had no workers' compensation insurance policy in place for its employees and no workers' compensation exemptions for either Mr. Eidt or Ms. Francis as corporate officers. This was true from October 29, 2006, through October 28, 2009. Additionally, the CCAS database did not reveal any utilization of employee leasing by Respondent. Mr. Beauchamp also researched the National Council on Compensation Insurance, Inc. (NCCI) on-line database. Using Respondent's name and federal employer identification number, the database showed no record of a Florida workers' compensation insurance policy for Respondent. On October 28, 2009, Mr. Beauchamp visited both of Respondent's business locations. At the Pierson location, Mr. Beauchamp observed five individuals working behind a Plexiglas partition filling prescriptions. Mr. Beauchamp spoke with Mr. and Mrs. Francis. They confirmed that Respondent did not have workers' compensation insurance in place. Mr. Beauchamp then issued and served a Stop-Work Order. He also issued and served a records request. On October 29, 2010, Respondent provided Petitioner with the following records: (a) corporate tax records for 2007 and 2008; (b) a workers' compensation insurance application submitted after the issuance of the Stop-Work Order; and (c) payroll summaries for October 2006 through October 2009. The records confirmed that Respondent had employed more than four employees for the prior three years. On October 30, 2009, Petitioner issued and served the Amended Order of Penalty Assessment. That order was followed by the Second Amended Order of Penalty Assessment on March 15, 2010. Ms. Nixon calculated the gross payroll for Respondent's employees for the relevant time period. The gross payroll amounts for Ms. Francis from January 1, 2008, through December 31, 2008, and April 1, 2009, through June 30, 2009, were limited to the average weekly wage in effect at the time the Stop-Work Order was issued, multiplied by 1.5 for those periods pursuant to Florida Administrative Code Rule 69L- 6.035(2). As a corporate officer, Ms. Francis' actual earnings were in excess of these amounts. However, Florida Administrative Code Rule 69L-6.035(2) limits the amount of a corporate officer's income upon which workers' compensation penalties may be assessed to 1.5 times the average weekly wage in effect at the time a Stop-Work Order is issued or actual earnings, whichever is less. Using the classification codes in the NCCI Scopes® Manual, Petitioner accurately assigned the occupation classification code 8045, which corresponds to "Store: Drug Retail." Classification code 8045 is "applicable to store locations where the employer's books of accounts reflect at least 40 percent gross receipts in prescription sales and less than 50 percent gross receipts in the service of food." Prescription sales intended for the patients of health care facilities are included even though the facility is billed instead of the individual patient. Ms. Nixon then divided the payroll for each year by 100 and multiplied that figure by the approved manual rates adopted by the Florida Office of Insurance Regulation for 2006, 2007, 2008, and 2009 for classification code 8045. That product was then multiplied by 1.5 to find the penalty for the period for the three-year period. The total penalty is $13,996.60.
Recommendation Based on the foregoing Findings of Facts and Conclusion of Law, it is RECOMMENDED: That the Department of Financial Services, Division of Workers' Compensation, issue a final order affirming the Stop- Work Order and Second Amended order of Penalty Assessment in the amount of $13,996.60. DONE AND ENTERED this 26th day of April, 2010, 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 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 26th day of April, 2010. COPIES FURNISHED: John C. Eidt Pierson Community Pharmacy Inc. 112 East 1st Avenue Pierson, Florida 32180 Justin H. Faulkner, Esquire Department of Financial Services Division of Legal Services 200 East Gaines Street Tallahassee, Florida 32399 Julie Jones, CRP, FP Agency Clerk Department of Financial Services Division of Legal Services 200 East Gaines Street Tallahassee, Florida 32399-0390 Benjamin Diamond, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0307 Honorable Alex Sink Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
The Issue The issue in this case is who is entitled to payment of remaining retirement benefits due to James E. Brandon, deceased.
Findings Of Fact James E. Brandon was employed by the Hillsborough County Parks and Recreation Department and was a participant in the Florida Retirement System (FRS). Mr. Brandon had a long standing relationship with Dennis A. Barga. In February 1995, James E. Brandon applied for FRS disability benefits due to a medical condition. On the application for disability benefits, James E. Brandon designated Dennis A. Barga as his primary beneficiary. The application for disability benefits was approved in June 1995, with an effective retirement date of March 1, 1995. James E. Brandon elected to receive benefits under "Option 2" of the FRS, which provides for a lifetime benefit to the covered employee. Option 2 also provides that, if the covered employee does not survive for the ten years following retirement, payment is made to a designated beneficiary for the remainder of the ten year period. James E. Brandon died on August 28, 1995, of the condition which resulted in his disability. James E. Brandon did not personally receive any of his disability benefits. By letter dated September 29, 1995, the Division notified Mr. Barga that he was entitled to receive the remaining benefit payments for the ten year period. At the end of September, the Division sent two checks to the home of James E. Brandon. One check covered the initial benefits period from March 1995 through August 1995. The second check was for the September 1995 benefit. The checks were not returned to the Division and apparently were cashed or deposited. On October 10, 1995, the Division was notified by William Brandon that his brother, James E. Brandon, had completed a form amending his designation of beneficiary and that the form had been filed with the Division. The Division searched its files and located a form, FRS M-10, which was apparently filed on July 25, 1995, by James E. Brandon, and which amends his prior designation to identify sequential beneficiaries. The amended beneficiaries, in order, are William W. Brandon, III, Daniel A. Brandon, and Victoria Weaver Stevens. The Brandons are family members of the deceased. Ms. Stevens is a long-time family friend and was also employed by the Hillsborough County Parks and Recreation Department. FRS Form M-10 is the form adopted by the Division for use by a non-retired FRS participant in designating a beneficiary. Form M-10 does not require execution before a notary public. FRS Form FST-12 is the form adopted by the Division for use by a retired participant in designating a beneficiary. Form FST-12 requires execution before a notary public. The amendment of the beneficiaries should have been executed on a Form FST-12. The Form M-10, which was filed on July 25, 1995, was provided to James E. Brandon by the human resources office of the Hillsborough County Parks and Recreation Department. The form was obtained by Victoria Weaver Stevens apparently at the request of the deceased. The filing of the improper form was through no fault of James E. Brandon. The Petitioner suggests that the signature on the Form M-10 is a forgery. There is no credible evidence to support the assertion. The evidence establishes that the deceased sometimes included his middle initial in his signature, and other times did not. The Petitioner suggests that during the last weeks of the deceased's life, he was overmedicated, was often unaware of his surroundings, and was likely manipulated into changing the designated beneficiaries. There is no credible evidence that James E. Brandon was mentally incapacitated and unable to understand the import of his decisions at the time the amendment was filed with the Division.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Division of Retirement enter a Final Order dismissing the Petition of Dennis A. Barga. DONE AND ORDERED this 31st day of December, 1997, in Tallahassee, Leon County, Florida. _ WILLIAM F. QUATTLEBAUM 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 Filed with the Clerk of the Division of Administrative Hearings this 31st day of December, 1997. COPIES FURNISHED: A. J. McMullian, III, Director Division of Retirement Cedars Executive Center, Building C 2639 North Monroe Street Tallahassee, Florida 32399-1560 Paul A. Rowell, General Counsel Department of Management Services 4050 Esplanade Way Tallahassee, Florida 32399-0950 David T. Weisbrod, Esquire 601 North Franklin Street Tampa, Florida 33602 Stanley N. Danek, Esquire Division of Retirement Cedars Executive Center, Building C 2639 North Monroe Street Tallahassee, Florida 32399-1560 Thomas Frost, Esquire 7901 Fourth Street North Suite 315 St. Petersburg, Florida 33702
