The Issue The issue in this case is whether the Stop-Work Order and Order of Penalty Assessment previously imposed against Yzaguirre Enterprises, Inc., was properly applied to Respondent as a successor-in-interest to Yzaguirre Enterprises, Inc.
Findings Of Fact Petitioner (also referred to herein as the "Department") is the state agency responsible for, inter alia, monitoring businesses within the state to ensure that such businesses are providing the requisite workers' compensation insurance coverage for all employees. The Department's headquarters are located in Tallahassee, Florida, but its investigators are spread throughout the state in order to more effectively monitor businesses. The Department is authorized to impose penalties against any businesses failing to maintain the proper insurance coverage for its employees. Workers' compensation coverage is required if a business entity has one or more employees and is engaged in the construction industry in Florida. Workers' compensation coverage may be secured via three non-mutually exclusive methods: 1) the purchase of a workers' compensation insurance policy; 2) arranging for the payment of wages and workers' compensation coverage through an employee leasing company; or 3) applying for and receiving a certificate of exemption from workers' compensation coverage, if certain statutorily-mandated criteria are met. Respondent is a sole proprietorship and is a duly- certified general contractor (License No. CGC1505393) in the State of Florida. Respondent was engaged in the work of carpentry on August 4, 2009. Carpentry has a construction industry classification code of 5654. Respondent's sole proprietorship is a successor-in- interest to a corporation known as Yzaguirre Enterprises, Inc. (YEI). Tammy Yzaguirre was the vice-president and a director of YEI. That corporation was administratively dissolved on September 25, 2009, for failure to file its annual report. YEI was primarily engaged in the business of carpentry. On October 13, 2008, the Department conducted an investigation of a job site in Immokalee, Florida, where YEI was engaged in work. During its investigation, the Department ascertained that several employees of YEI were not covered by a valid workers' compensation insurance policy, nor were those workers exempt from coverage. A Stop-Work Order was issued by the Department against YEI and posted on the work site. The Stop-Work Order, along with an Order of Penalty Assessment, was also given to Esequiel Yzaguirre (by hand- delivery) on November 12, 2008. Meanwhile, an Amended Order of Penalty Assessment was issued by the Department and sent to Respondent via certified mail. The Amended Order imposed a penalty in the amount of one hundred fifty-one thousand, seven hundred fifty-eight dollars and forty-six cents ($151,758.46). Neither the Stop-Work Order, nor the Amended Order of Penalty Assessment, was timely challenged by YEI. While Respondent did engage in some discussions and exchange of documents with the Department concerning the Amended Order of Penalty Assessment, she did not avail herself of the appeal rights stated in the Order. Respondent did not enter into a settlement agreement or payment plan with the Department, because she did not have any money to make payments. As of the date of the final hearing in this matter, the Stop-Work Order and Amended Order of Penalty Assessment had not been released. Instead of paying the amount set forth in the Amended Order of Penalty Assessment, Respondent formed a sole proprietorship in her name, obtained the necessary licenses and certifications to operate, and began to engage in the work of general construction again. Prior to commencing this work, Respondent obtained a workers' compensation insurance policy in an effort to satisfy all state requirements. Respondent did not intentionally attempt to break or circumvent any laws by the commencement of her new business. Respondent did not know that starting a new business in her name would be deemed improper by the Department. On August 4, 2009, the Department was engaged in a "sweep" in Immokalee, Florida. A sweep entails a large number of investigators working together in one place at one time for the purpose of determining whether employers in the area were complying with workers' compensation insurance requirements. During its sweep, a Department investigator noticed a YEI truck parked at a job site. The investigator took action to determine who was working out of the truck and obtained information about Respondent, i.e., that Respondent's new sole proprietorship may be engaged in on-going work at that site. Respondent argues that the truck was not being used by the new sole proprietorship. Rather, the truck had been loaned to some individuals who were working on their own or with other employers. Thus, claims Respondent, the Department should not be allowed to take any action against the sole proprietorship. There is no valid basis for Respondent's position. Upon further investigation, the Department ascertained that Respondent was operating under an entity that was deemed a successor-in-interest to YEI. That being the case, the Department issued its Order, which was served via hand-delivery to Respondent on August 5, 2009. At final hearing, Respondent attempted to object to the Department's findings relating to the initial Stop-Work Order from 2008. However, inasmuch as that Stop-Work Order was never formally challenged and became final by operation of law, the time for objections to it has passed. Thus, Respondent's testimony concerning whether or not all the workers listed in the Amended Order of Penalty Assessment were actually YEI's employees was not accepted.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by Petitioner, Department of Financial Services, Division of Workers' Compensation, affirming the Order Applying Stop-Work Order and Amended Order of Penalty Assessment to Successor Corporation or Business Entity. DONE AND ENTERED this 4th day of February, 2010, in Tallahassee, Leon County, Florida. R. BRUCE MCKIBBEN 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 4th day of February, 2010.
The Issue A notice dated July 2, 1996 and an administrative complaint dated September 30, 1996, charge Respondent with willful neglect of duty. The issue for disposition is whether he committed this violation and if so, whether he should be terminated as a member of the instructional staff of the Palm Beach County School Board.
Findings Of Fact Respondent, Walter Auerbach, has been employed as a classroom teacher with the Palm Beach County school district since the 1976-77 school year and is employed pursuant to a continuing contract from which he may be discharged only in accordance with the terms of section 231.36, Florida Statutes. (Stipulation of the parties) Respondent was administratively placed in the district’s Department of Information Management in the 1994-95 school year pending resolution of allegations of misconduct brought by a female student. He was transferred to the district’s textbook/library media service office for the 1995-96 school year. (Stipulation of the parties) The reassignment was by agreement between Respondent’s representative, Clarence Gunn, Associate Executive Director of the Palm Beach County Classroom Teachers’ Association (CTA) and district staff. In December 1994, Respondent entered into a deferred prosecution agreement in the criminal case related to the student’s allegations. An investigation and proceedings by Professional Practices Services continued, however, and any disposition of that proceeding is not a matter of record here. Respondent satisfied the terms of his deferred prosecution agreement in December 1995. Jane Terwillegar was Respondent’s supervisor in the district’s library media services department. His duties were primarily computer searches for bibliographic records. When he came to work Respondent did his assignments, worked quietly and left; there were no concerns about his performance. However, he attended only sporadically in the fall of 1995, and starting in January 1996 he attended very rarely. At one point Ms. Terwillegar said something to him about showing up to earn his money, but he responded that he had a great deal of sick leave. By early 1996, Respondent had depleted all of his sick leave, but continued to be absent far more than he attended. Vernon Crawford is the district’s director of multimedia services and is Jane Terwillegar’s immediate supervisor. Because of budget cuts in his department, Mr. Crawford has a standing request for assistance from employees with available time. He is happy to take on individuals placed on special or temporary assignment by Dr. Walter Pierce, assistant superintendent for personnel relations. The understanding that he has with the personnel department is that the individuals are assigned on a temporary or day-to-day basis. Mr. Crawford does not question why the individual is assigned and he usually asks his staff not to question the circumstances. From time to time, Ms. Terwillegar advised Mr. Crawford that Respondent was absent; and after the first part of 1996, when the absences were increasing, Mr. Crawford sought the guidance of Dr. Pierce’s office in addressing the problem with Respondent. On the advice of Paul LaChance, an administrative assistant for employee relations, Mr. Crawford sent this letter to Respondent on April 17, 1996: Dear Mr. Auerbach: Since your interim assignment to the Department of Multimedia Services on August 15, 1995, you have taken one hundred twenty five (125) days of sick leave without medical documentation. You have not requested nor received approval for short term or long term leave of absence. Consequently, I am directing you to provide Jane Terwillegar, Specialist for Library/Media Support and your assigned supervisor, with a written, signed statement from your doctor documenting the necessity of your sick leave as well as a date when s/he projects you able to return to work. Your failure to provide this information within ten (10) days of receipt of this letter may result in my recommending disciplinary action for violation of proper reporting procedures and use of sick leave as outlined in School Board Policy 3.80, Leaves of Absence, and leave provisions contained in Article V, Section A.2 and Section B.1(f), and any other pertinent provision of the Agreement between the School Board of Palm Beach County and the Classroom Teachers Association. (Respondent’s exhibit 1) Respondent took the letter to his representative, Mr. Gunn, who told him to take a doctor’s statement to his supervisor, so that he could work out the appropriate leave based on the doctor’s determination. In response, Respondent turned in to Jane Terwillegar a statement from his chiropractor, Dr. Brian Soroka, dated April 26, 1996 stating: This is to certify that Walter Auerbach has recovered sufficiently to be able to return to regular work. Restrictions: none. (Petitioner’s exhibit 1) Instead of returning to work, Respondent continued his practice of calling in every morning early and leaving a message on the office answering machine. Jonathan Leahy, an employee in the Library/Media Services Department at the McKesson Building answered the phone when Respondent called in after 8:00 a.m., but most frequently he took Respondent’s messages from the answering machine. Starting in mid-April, at Mr. Crawford’s instruction, he wrote the messages down, verbatim. The messages were typically brief: “I’m not going to make it today”; or “I’m under the weather”; or, on a couple of occasions, Respondent said that he needed to meet with his lawyer. Between April 16 and June 14, 1996, Respondent was absent forty-two work days. Meanwhile, on May 7, 1996, Mr. Crawford sent another letter to Respondent: Dear Mr. Auerbach: Yesterday, May 6, 1996, Jane Terwillegar, your assigned supervisor, brought me a work release form from the Family Chiropractic Center, dated April 26, 1996, that you were able to return to regular work duty with no restrictions. Be advised that your actions to date remain in noncompliance with my April 17, 1996 letter to you. Further, even though the Family Chiropractic Center cleared you on April 26, 1996, to return to work, you have not done so and have remained continuously absent. At this point, I am directing you to provide me with the information I directed you in my April 17, 1996 letter to provide me: medical verification from your attending physician as to the specific reason(s) and need for your continual absenteeism. Such documentation is to be provided to Jane Terwillegar or to my office within five (5) working days from your receipt of this letter. Failure to provide this information may result in my recommending disciplinary action outlined in my April 17, 1996, letter which you received and signed for on April 18, 1996. (Petitioner’s exhibit 3) There was no response by Respondent to the May 7th letter and a meeting was convened on June 14, 1996 with Respondent, Mr. Gunn, Mr. LaChance and Mr. Crawford. Respondent was given another opportunity to present a physician’s statement justifying his absences. Respondent returned to Dr. Soroka and obtained this statement dated June 18, 1996: Mr. Auerbach has been treating in this office for low back pain and stress related complaints. He treats on a supportive care basis as his symptoms necessitate. On occasion, he is unable to work due to the severity of his symptoms. (Respondent’s exhibit 3) On July 2, 1996, the superintendent, Dr. Kowal, notified Respondent of her recommendation that he be terminated for willful neglect of duties based on his excessive use of sick leave without approved leave and his failure to return to duty after being released by his doctor. There are leave forms indicating that Respondent’s sick leave was “approved”. These forms are ordinarily turned in when an employee returns from an illness. Many of the forms were not completed or signed by Respondent, but rather were signed by someone else, when he never returned during a pay period and the forms needed to go to the payroll office. The leave forms are marked “approved”. Mr. Crawford approved the leave because Respondent called in and because Respondent was only a temporarily-assigned employee. Nevertheless, after the early part of 1996 when the absences increased in frequency, Mr. Crawford appropriately sought advice of the personnel office and he followed that advice regarding a physician’s statement to justify Respondent’s absences. Dr. Soroka was the only medical professional treating Respondent during the relevant period. Based on Respondent’s complaints to him, Dr. Soroka performed chiropractic adjustments to relieve muscle strains and irritations to his nervous system. Nothing in Dr. Soroka’s records indicated that Respondent was incapable of working and he never told Respondent to not return to work. Respondent contends that his absences were justified by the stress that he was suffering from his legal problems. He was the caregiver for aged and ailing parents; and he also suffered from anxiety attacks, headaches and lower back pain. Respondent’s contract with the district was for 196 days in the 1995/96 school year. Of those 196 days, he was absent approximately 167 days. The Collective Bargaining Agreement between Palm Beach County Classroom Teachers Association and the School District of Palm Beach County, Florida, July 1, 1995 - June 30, 1997, governs Respondent’s employment during the relevant period. Paid leave is available for illness of an employee and the employee’s family. All absences from duty must be covered by leave applications which are duly authorized. Leave for sickness or other emergencies will be deemed granted in advance if prompt report is made to the proper authority. When misuse of sick leave is suspected, the superintendent may investigate and require verification of illness. (Respondent’s exhibit 2, Collective Bargaining Agreement, Article V, Section A). When employees have used all accumulated leave, but are still qualified for sick leave, they are entitled to sick leave without pay. Except in emergency situations, short or long-term leaves of absences without pay must be approved in advance. As with paid leave, leave for sickness or other emergencies may be deemed granted in advance if prompt report is made to the proper authority. An eligible employee may be granted family medical leave under procedures described in the collective bargaining agreement. (Respondent’s exhibit 2, Collective Bargaining Agreement, Article V, Sections C and D) Respondent did not request leave in advance for his own illness or for that of his parents or for his meetings or depositions related to his pending professional practices case. Instead, he apparently relied on the automatic approval process described above when he called in day after day, for weeks at a time. By April it was entirely appropriate for his supervisor and her superiors to require that he provide some evidence of his need for leave. He failed to comply with two requests for that evidence. The collective bargaining agreement describes procedures for discipline of employees, including this: Without the consent of the employee and the Association, disciplinary action may not be taken against an employee except for just cause, and this must be substantiated by clear and convincing evidence which supports the recommended disciplinary action. The collective bargaining agreement also requires progressive discipline (reprimand through dismissal) ...[e]xcept in cases which clearly constitute a real and immediate danger to the district or the actions/inactions of the employee constitute such clearly flagrant and purposeful violations of reasonable school rules and regulations. (Respondent’s exhibit 2, Collective Bargaining Agreement, Section M)
The Issue Whether Respondent committed the violations alleged in the Stop Work Order and Second Amended Order of Penalty Assessment and if so, what penalty should be imposed?
Findings Of Fact The Department of Financial Services, Division of Workers' Compensation is the state agency charged with enforcement of workers' compensation compliance pursuant to Chapter 440, Florida Statutes. Respondents Earl Marshall and Justin Marshall were partners in ownership of Marshall and Son Painting Company on June 16, 2006. Respondents were working in the construction industry at Lot 12, Oak Meadows III, Lake City, Florida 32615, on June 16, 2006, for which they received payment. On June 16, 2006, Respondents had not secured the payment of workers' compensation as that term is defined in Chapter 440, Florida Statutes. Respondents do not dispute liability for failure to secure workers' compensation insurance. They contend that the calculation of the penalty to be imposed is inaccurate. Marshall and Son Painting Company came to the attention of the Division through a random site visit by one of its investigators. The Division's investigator, Katina Johnson, requested proof of workers' compensation coverage after observing Earl and Justin Marshall painting a new house. She was informed that Respondents previously held exemptions from workers' compensation coverage that had expired at the end of 2003. Ms. Johnson issued a Stop Work Order and Order of Penalty Assessment on June 16, 2006. She also issued a request to Respondents for written business records, including bank statements for the business, federal tax returns, and copies of checks from their business ledger. Respondents supplied the requested records. On June 21, 2006, the Division issued an Amended Order of Penalty Assessment (Amended Order). The Amended Order imposed a penalty of $53,519.52. Respondents entered into a payment agreement whereby they paid 10 percent of the penalty assessment and agreed to pay the remainder over a 60-month period. Upon execution of the payment agreement, the Division issued an Order of Conditional Release from Stop Work Order. On October 3, 2006, the Division issued a Second Amended Order of Penalty Assessment, reducing the amount of the penalty assessment to $43,649.40. A second Payment Agreement Schedule for Periodic Payments was entered, reducing the amount of the monthly payments to be made by Respondents. Earl Marshall and Justin Marshall have dissolved Marshall and Son Painting Company and have formed a new limited liability company, Marshall and Son Painting, LLC. Each has obtained workers' compensation exemptions under the new business, and are considered to be in compliance with Chapter 440, Florida Statutes. Ms. Johnson's calculation for the penalty assessment was based upon the checks written to Earl Marshall and Justin Marshall (individually) for the period at issue. She did not go back a full three years, but began with January 1, 2004, the point in time that the Marshalls' previous exemptions from workers' compensation coverage expired. Ms. Johnson used the Scopes Manual published by the National Council on Compensation Insurance and assigned occupation code 5474, which is the appropriate code for painting within the construction industry. Ms. Johnson based her final calculations on the amount evidenced by canceled checks payable to Earl Marshall or Justin Marshall, and upon their admission that these amounts represented their salaries as partners in the business. Ms. Johnson multiplied one percent of the payments to Earl Marshall and Justin Marshall for the relevant period by the manual rate assigned to the class code for painting, giving the premium Marshall and Son Painting Company would have paid for workers' compensation insurance. This number was then multiplied by 1.5. The Respondents' dispute with the penalty calculation is that it includes all of the partnership's profits as wages for the purpose of determining the rate of pay for insurance coverage. They contend that the Division should, instead, base the calculations on an industry standard for painters in the Lake City area. While the Respondents believe that the penalty assessment should be based upon a $12 an hour industry standard for painters in the Lake City area, Earl Marshall described the checks paid to Respondents as salary checks. These checks are, quite simply, the only evidence of actual payroll presented to Ms. Johnson in response to her request for records or presented at hearing. The methodology used by Investigator Johnson is mandatory.
Recommendation Upon consideration of the facts found and conclusions of law reached, it is RECOMMENDED: That a Final Order be entered approving the Stop Work Order and Second Amended Order of Penalty Assessment that assessed a penalty of $43,649.40. DONE AND ENTERED this 17th day of November, 2006, in Tallahassee, Leon County, Florida. S LISA SHEARER NELSON 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 17th day of November, 2006. COPIES FURNISHED: Douglas D. Dolan Assistant General Counsel Division of Legal Services Division of Workers' Compensation 200 East Gaines Street Tallahassee, Florida 32399-6502 Jimmy E. Hunt, Esquire 654 Southeast Baya Drive Post Office Box 3006 Lake City, Florida 32056-6800 Honorable Tom Gallagher Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Carlos G. Mu?niz, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
Findings Of Fact 1, On August 4, 2011, the Department of Financial Services, Division of Workers’ Compensation (hereinafter “Department”) issued a Stop- Work Order and Order of Penalty Assessment in Division of Workers’ Compensation Case No. 11-269-D5 to ARTEZANOS, INC. The Stop-Work Order and Order of Penalty Assessment included a Notice of Rights wherein ARTEZANOS, INC. was advised that any request for an administrative proceeding to challenge or contest the Stop- Work Order and Order of Penalty Assessment must conform to Rule 28-106.2015, Florida Administrative Code. 2. On February 3, 2012, the Stop- Work Order and Order of Penalty Assessment was served by certified mail on ARTEZANOS, INC. A copy of the Stop-Work Order and Order of Penalty Assessment is attached hereto as “Exhibit 1” and incorporated herein by reference. 3, On February 13, 2012, ARTEZANOS, INC. filed a Petition for Administrative Review Hearing (“Petition”) with the Department. The petition for administrative review was forwarded to the Division of Administrative Hearings (hereinafter “DOAH”) on February 24, 2012, and the matter was assigned DOAH Case No. 12-0757. A copy of the petition is attached hereto as “Exhibit 2” and incorporated herein by reference. 4. On February 29, 2012, the Department issued an Amended Order of Penalty Assessment in Division of Workers’ Compensation Case No. 11-269-D5 to ARTEZANOS, INC. assessing a total penalty in the amount of $209,107.32. The Amended Order of Penalty Assessment included a Notice of Rights wherein ARTEZANOS, INC. was advised that any request for an administrative proceeding to challenge or contest the Amended Order of Penalty Assessment must conform to Rule 28-106.2015, Florida Administrative Code. 5. On March 9, 2012, the Petitioner served on Respondent the Department’s First Interlocking Discovery Requests via overnight mail. 6. On March 15, 2012, the Amended Order of Penalty Assessment was served via DOAH on ARTEZANOS, INC. A copy of the Motion to Amended Order of Penalty Assessment, Penalty Assessment Worksheet and the Order Granting Motion to Amend Order of Penalty Assessment is attached hereto as “Exhibit 3” and incorporated herein by reference. 7. On April 11, 2012, the Petitioner filed with DOAH a Motion to Deem Matters Admitted and to Relinquish Jurisdiction Pursuant to Section 120.57(1)(), Florida Statutes. A copy of the Motion to Deem Matters Admitted and to Relinquish Jurisdiction Pursuant to Section 120.57(1)(i), Florida Statutes (without Exhibits) is attached hereto as “Exhibit 4” and incorporated herein by reference. 8. On April 26, 2012, the Administrative Law Judge entered an Order granting the Department’s Motion in part and denying in part. The Administrative Law Judge granted the Department’s request to deem matters admitted as a result of the Respondent’s failure to object or otherwise respond to such requests. Additionally, the Respondent was given until May 8, 2012, to filea motion to withdraw or amend the technical admissions and to provide responses to the Department’s requests for admissions. The Order stated that the Department could renew their Motion to Relinquish Jurisdiction if the Respondent had not responded to the Order by May 8, 2012. A copy of the Order Regarding Motion to Deem Matters Admitted is attached hereto as “Exhibit 5” and incorporated herein by reference. 9. On May 9, 2012, the Department filed a Renewed Motion to Relinquish Jurisdiction as a result of the Respondent failing to file a motion to withdraw or amend the technical admissions or to provide responses to the Department’s requests for admissions. A copy of the Renewed Motion to Relinquish Jurisdiction is attached hereto as “Exhibit 6” and incorporated herein by reference. 10. On May 10, 2012, the Administrative Law Judge entered an Order granting the Department’s Renewed Motion to Relinquish Jurisdiction and the Department received a copy of an Order Closing File and Relinquishing Jurisdiction. A copy of the Order Closing File and Relinquishing Jurisdiction is attached hereto as “Exhibit 7” and incorporated herein by reference. 11. The factual allegations contained in the Stop-Work Order and Order of Penalty Assessment, issued on August 4, 2011, and the Amended Order of Penalty Assessment, issued on February 29, 2012, are fully incorporated herein by reference, and are adopted as the Department’s Findings of Fact in this matter.
Conclusions THIS PROCEEDING came on for final agency action and Jeff Atwater, Chief Financial Officer of the State of Florida, or his designee, having considered the record in this case, including the Petition received from ARTEZANOS, INC., as well as the Stop- Work Order and Order of Penalty Assessment, and the Amended Order of Penalty Assessment and being otherwise fully advised in the premises, hereby finds that:
Findings Of Fact 10. The factual allegations in the Stop-Work Order and Order of Penalty Assessment issued on July 17, 2007, and the Third Amended Order of Penalty Assessment issued on September 8, 2009, which are fully incorporated herein by reference, are hereby adopted as the Department’s Findings of Fact in this case.
Findings Of Fact Respondent is a chiropractic physician licensed in the State of Florida having been issued license CH-0001538 on December 31, 1973. On or about November 20, 1992, in DPR Case Number 91-8743, the Board of Chiropractic entered a Final Order against the Respondent imposing as discipline: A suspension of Respondent's license for a period of sixty (60) days from the date of the entry of the Final Order, and Payment of an administrative fine in the amount of two thousand dollars ($2,000.00) within thirty (30) days of the filing of the Final Order. The Final Order further provided for revocation of Respondent's license should he violate the provisions of the Final Order. The November 20, 1992, Final Order was served on Respondent by U.S. certified mail on or about December 4, 1992. According to the terms of the Final Order, Respondent was required to pay the administrative fine by December 21, 1992, and in no instance later than January 5, 1993. Further, Respondent's license was suspended from November 21, 1992, through January 20, 1993. On or about January 27, 1993, Respondent submitted a check in the amount of two thousand dollars ($2,000.00) to the Board of Chiropractic as payment of the administrative fine. Respondent had sufficient funds to cover the check at the time it was written. On the advice of counsel, Respondent stopped payment on the check. The advice was based on the fact that Respondent had "appealed" the Final Order of November 20, 1992, to the United States District Court and that payment of the fine was stayed pending outcome of the "appeal." Respondent did not appeal the Board's November 20, 1992, Final Order to a Florida District Court of Appeal. Instead, Respondent filed an independent action under 42 U.S.C. Section 1983, for injunctive relief from the Board's November 20, 1992, Final Order. No order was entered by the United States District Court which stayed enforcement of the Board's Final Order. Clearly, the federal action was technically not an appeal of the Board's Final Order in the legal sense of the meaning of appeal. However, in layperson's language the term "appeal" could easily be applied to the Federal action with the resultant confusion, as in this case, of the effect of such an appeal to stay enforcement of the Board's Final Order. The stop payment order caused the bank to dishonor the $2,000.00 check and return the item to the Department unpaid. Around February 16, 1993, Respondent was notified, by letter, from Sheri Danzis of the Department of Business and Professional Regulation, Bureau of Finance and Accounting, that his check had been returned to the Petitioner dishonored. The letter also requested that he remit the amount of $2,000.00 plus a service charge of $100.00 for the dishonored check. Around February 22, 1993, Respondent informed Ms. Danzis that he had "appealed" the Board's Final Order of November 20, 1992, to the United States District Court and that the fine was stayed pending the outcome of the "appeal." Ms. Danzis notified the board of the unpaid fine. Ms. Danzis took no further action because the Final Order had been appealed. Around April 21, 1993, Respondent was again notified by letter from Ann Broome, Board of Chiropractic Staff Office, that his check had been returned dishonored and requested Respondent to pay $2,100.00 to clear up the matter. The letter also advised that Respondent's case could be reviewed for disciplinary action for violating the Board's Final Order. Respondent, around April 29, 1993, submitted payment of $1,500.00 to the Board of Chiropractic as partial payment of the administrative fine imposed by the November 20, 1992, Final Order. Respondent was unable to pay the entire fine because of financial problems caused by large medical bills. In the meantime, around June, 1993, the exact date is unclear, the Department's records reflected that Respondent's license had been revoked. The person making the record testified that Respondent's license was revoked because the Final Order called for that penalty if it was violated and the Respondent's license was therefore revoked. However, the Department's computer records of licensure submitted as evidence of licensing do not curently reflect the revocation. The computer records reflect only that Respondent's license expired on March 1, 1994 and was reissued on May 4, 1994, under the two-year renewal provisions of Chapter 460, Florida Statutes. No testimony regarding the data processing procedures of the Department was introduced at hearing. Therefore, given the general ability to add and delete information from a computer, the current records versus the live testimony of revocation, are not found to be reliable. The testimony of revocation is found to be reliable and establishes that Respondent's license was revoked and later reissued under Chapter 460, Florida Statutes. Around March 27, 1994, Dr. McCall mailed $350.00 to the Board for renewal of his license. However, the Board did not apply the $350.00 to reissuance of Respondent's license, but instead applied the funds to the Final Order debt. Respondent notified the Board of its error and demanded that the funds be applied to reissue his license. On April 21, 1994, the Board corrected its mistake and applied the $350.00 to Respondent's license reissuance. Importantly, the Department in an internal memorandum officially placed collection of the Final Order debt on hold pending the outcome of Respondent's "appeal." Around October 12, 1994, Respondent paid the remaining balance of his administrative fine. Respondent's "appeal" with the United States District Court for the Northern District of Florida was dismissed without prejudice by the Court sometime in December, 1993. 23. On January 20, 1982, the Board of Chiropractic issued a Final Order reprimanding the Respondent and admonishing him against the use of the title "Chiropractic Adjuster General of the United States." The Board's Final Order of November 20, 1992, was issued based upon a violation of the January 20, 1982, Board Final Order. 22. In this very confused case, Respondent did not timely pay the administrative fine imposed in the Board's November 20, 1992, Final Order. However, the untimeliness was initially caused by the advice Respondent received from his counsel and a layperson's incorrect understanding of the appellate process. The untimeliness was further exacerbated by the Department's willingness to place the collection process on hold pending the outcome of the "appeal." In short, the general impression given the Respondent by the Department was that collection was on hold. By the time the "appeal" was over, Respondent had financial difficulties and could not pay the balance of the fine. 19. The violation, if any, was minimal, at best; however, Petitioner had already revoked Respondent's license for the untimely payment or nonpayment of the administrative fine. Therefore, Petitioner has had its remedy in this case and the administrative complaint should be dismissed.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is accordingly, RECOMMENDED: that the Board enter a final order dismissing the administrative complaint. DONE and ENTERED this 26th day of January, 1995, in Tallahassee, Florida. DIANE CLEAVINGER 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 26th day of January, 1995.
The Issue Whether Respondent violated statutory and rule provisions relating to record-keeping requirements for licensed check cashers, and if so, what penalty should be imposed.
Findings Of Fact Petitioner, Office of Financial Regulation (Petitioner), is the state agency charged with administering and enforcing chapter 560, Florida Statutes, related to licensing of Money Services Businesses, a term that includes check-cashing businesses. MS Money, Inc. (Respondent), has been a licensed check casher, pursuant to chapter 560, Part III, Florida Statutes, since September 2008. Respondent's fictitious name on file with the Florida Department of State is “Mister Money.” Respondent is located at 2 North 4th Street, Haines City, Florida, and Judith Foster is the president and owner of the business. On March 28, 2013, Mr. Battaglia and Petitioner’s former employee Lester Joseph visited Respondent's business for the purpose of examining Respondent's books and records in order to ascertain whether Respondent was in compliance with chapter 560, Florida Statutes, and rules related thereto. Petitioner performs such examinations so as to protect consumers and ensure that the licensees are following statutory requirements. March 1, 2012, through February 28, 2013, is the time period covered by the examination. Although there is a specific examination period, the examiner may review documents not within the examination period if such documents are provided to the examiner. Count I As part of the examination, Petitioner reviewed whether Respondent secured and maintained from its customers appropriate personal identification for checks in amounts over $1,000 that were cashed. When a licensee, such as Respondent, cashes a check that exceeds $1,000, the licensee is required to secure and maintain a valid form of personal identification from the customer. For customers J.E. and J.W., Respondent cashed one payment instrument for each customer exceeding $1,000. For customer M.B., Respondent cashed three payment instruments exceeding $1,000. For the five referenced payment instruments presented by customers J.E., J.W., and M.B., Respondent, when cashing the respective checks, failed to secure from each customer a valid form of personal identification. Count II Chapter 560 licensees are required to immediately endorse all payment instruments that are accepted for cashing. An endorsement is typically a stamp on the reverse side (or back) of a check which shows the name of the licensee, its financial institution, and account number. Ms. Foster admitted that during the examination period, employees failed to immediately endorse checks that were cashed for customers. Ms. Foster explained that this omission, which occurred when she was physically not on the premises, resulted from her instructing her employees to not use the endorsement stamp in her absence. The evidence does not quantify the number of instances when checks were not immediately endorsed. Count III As part of the examination, Petitioner reviewed whether Respondent timely filed currency transaction reports with the Financial Crimes Enforcement Network (FinCEN). Currency transaction reports are used in the prevention and detection of money laundering in money services businesses. As required by 31 C.F.R. § 1010.311 (2012), a currency transaction report must be filed with FinCEN for each deposit, withdrawal, exchange of currency, or other payment or transfer, to the financial institution which involves a transaction in currency of more than $10,000. On January 16, 2013, Respondent cashed a check for customer N.J. in the amount of $13,827.38. Respondent failed to file a currency transaction report with FinCEN within fifteen days of cashing the check presented by customer N.J. Respondent explained that the company it hired to file currency transaction reports on its behalf is to blame for the untimely filing and Respondent should, therefore, be held harmless for this violation. Contrary to Respondent’s assertion, it is Respondent’s ultimate responsibility, and not that of its agent, to ensure that currency transaction reports are timely filed. Count IV As part of the examination, Petitioner reviewed whether Respondent's payment instruments had thumbprints properly affixed. Florida Administrative Code Rule 69V-560.704(4)(a) provides that at the time a payment instrument exceeding $1,000 is presented by a customer for cashing, the check casher is required to obtain and affix an original thumbprint to the original payment instrument. In a sample of 19 payment instruments over $1,000, four of them were missing thumbprints. Count V As part of the examination, Petitioner reviewed 39 deferred presentment agreements to determine whether they included the required transaction numbers assigned by the Veritec online electronic database.3/ Veritec archives all payday loan data. A payday loan, or a deferred presentment provider transaction, is functionally equivalent to a short-term consumer loan whereby currency or a payment instrument is provided in exchange for a drawer's check, and where the check is held for the deferment period, typically between seven and thirty days. As part of a payday loan, a deferred presentment provider agreement is executed between the customer and the licensee. In executing a payday loan or deferred presentment agreement, a transaction number must be assigned by the Veritec database. A transaction number identifies the specific loan agreement with the customer and is utilized for tracking purposes in Veritec. The transaction number must be placed directly on the deferred presentment provider agreement. The transaction number requirement cannot be met by putting the number on another associated document, such as a check.4/ In a sample of 39 deferred presentment provider agreements, Respondent failed to place the transaction number on five of them. Count VI As part of the examination, Petitioner reviewed whether Respondent timely closed out deferred presentment agreement transactions/payday loans in the Veritec system. A deferred presentment transaction/payday loan is closed when the customer returns to the business at the end of the loan period and redeems, or pays, the amount due. For every deferred presentment transaction a licensee executes with a customer, the licensee is required to input information regarding the transaction into the Veritec database. One of the items of information the licensee has to report in Veritec is the date the transaction is closed. The deferred presentment transaction must be closed out in Veritec as soon as the customer pays off that transaction and exits the licensee's premises. A customer cannot have two deferred presentment transactions open at the same time. Once a customer completes a transaction, s/he must wait 24 hours before opening a new transaction. It is important for licensees to timely close out transactions in Veritec, in order to "re-set the clock" for the customer, given the 24-hour waiting period. Upon payment of the transaction in full, the customer is given a loan payoff receipt which shows the date when the loan was redeemed. Column Q on the Veritec spreadsheet is titled “Backdated System Closed Time" and reflects the date the licensee closed the transaction in the Veritec system. In a sample of 39 payday loan transactions, Respondent failed to timely close the following payday loan transactions: R.C., transaction number 54619724, payoff date July 6, 2012, closed in Veritec on July 7, 2012. G.C., transaction number 57401945, payoff date November 2, 2012, closed in Veritec on November 20, 2012. M.D., transaction number 56186881, payoff date September 21, 2012, closed in Veritec on October 8, 2012. M.F., transaction number 55261617, payoff date August 7, 2012, closed in Veritec on August 10, 2012. M.F., transaction number 56667963, payoff date October 15, 2012, closed in Veritec on November 14, 2012. J.G., transaction number 54023229, payoff date June 2, 2012, closed in Veritec on October 4, 2012. D.H., transaction number 55090429, payoff date July 26, 2012, closed in Veritec on August 11, 2012. C.J., transaction number 54828984, payoff date July 13, 2012, closed in Veritec on July 16, 2012. J.P., transaction number 58454187, payoff date December 29, 2012, closed in Veritec on February 16, 2013. The nine transactions were redeemed in cash, and they should have been closed in Veritec as soon as they were paid off by the customer.
Recommendation Based upon the aforementioned Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner, Office of Financial Regulation, enter a final order: Finding that Respondent, MS Money, Inc., violated subsections 560.123(3)(c), 560.309(2), 560.310(2)(b), 560.310(2)(c), 560.404(3)(h), and 560.404(23), Florida Statutes; and Florida Administrative Code Rules 69V-560.608, 69V- 560.704(2)(a), 69V-560.704(4)(a) through (c), 69V- 560.904(1)(a)11., and 69V-560.908(6); and Imposing an administrative fine against Respondent in the amount of $16,100.00, payable to Petitioner within 30 calendar days of the effective date of the final order entered in this case.5/ DONE AND ENTERED this 15th day of May, 2015, in Tallahassee, Leon County, Florida. S LINZIE F. BOGAN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 15th day of May, 2015.
The Issue Whether Petitioner is entitled to an award of attorney's fees pursuant to Section 57.111, Florida Statutes.1/
Findings Of Fact The Department is the state agency charged with the regulation of workers’ compensation insurance in the State of Florida. The Department issued a Stop Work Order to Petitioner on June 6, 2006. On June 27, 2006, the Department issued an Amended Order of Penalty Assessment, assessing $272,948.96 in penalties against Petitioner. Petitioner timely challenged the Stop Work Order and Amended Order of Penalty Assessment and requested an administrative hearing. A formal hearing was held on October 5, 2006. The Recommended Order, which was entered on November 28, 2006, recommended that the Department enter a final order rescinding the Amended Order of Penalty Assessment and the Stop Work Order. On February 23, 2007, a Final Order was issued by the Agency adopting the findings of fact and conclusions of law set forth in the Recommended Order. On March 30, 2007, Petitioner filed the Petition with a supporting affidavit and fee statement which initiated the instant proceeding. In the Petition, Petitioner seeks relief under the Florida Equal Access to Justice Act, Section 57.111, Florida Statutes. There is no dispute that Petitioner is the prevailing party in the underlying case. Petitioner seeks attorney's fees in the amount of $20,197.50. There is no dispute as to the reasonableness of the fees sought. At the time the underlying action was initiated, Petitioner was a sole proprietor located in Jacksonville, Florida, which engaged in the business of cutting trees. There is no dispute that Petitioner is a small business party for purposes of Subsection 57.111(4)(a), Florida Statutes. On June 6, 2006, the Department’s investigator, Michael Robinson, conducted a site visit at a job site where he observed five individuals, four of whom were involved in tree cutting activities. During his June 6, 2006, site visit, Robinson interviewed the four individuals and recorded their responses on a field interview worksheet. The workers identified Nolan as their employer, and answered Mr. Robinson’s questions regarding how long they had been employed by Nolan, and their basis of pay. One of the workers informed Mr. Robinson that he had been employed by Nolan for two weeks; a second worker informed him that he had worked for Nolan for three weeks. Both of these workers informed Mr. Robinson that they were paid on a daily basis. A third worker informed Mr. Robinson that he was paid by the job. The workers were compliant and responsive to Mr. Robinson’s inquiries. Mr. Nolan was not at the jobsite at the time of Mr. Robinson’s site visit, but Mr. Robinson obtained his phone number, called, and left a message. Mr. Nolan promptly returned the call. Mr. Nolan was also compliant and responsive to Mr. Robinson’s questions. Mr. Nolan acknowledged to Mr. Robinson that the four individuals interviewed by Mr. Robinson were his employees and that he had no workers’ compensation insurance. Mr. Nolan also informed Mr. Robinson that his business was a non-construction business entity and was not required to carry workers’ compensation insurance. Mr. Robinson told Mr. Nolan that he was required to have workers’ compensation insurance. Mr. Robinson also searched the Coverage and Compliance Automated System (CCAS) and found no proof of coverage nor an exemption for Nolan. The Stop Work Order On the same day as the site visit, Mr. Robinson conferred with his supervisor, Robert Lambert, to discuss the issuance of a stop work order. Mr. Robinson conveyed to Mr. Lambert that Nolan had four employees who were non- construction workers, and that there was no workers’ compensation coverage. Mr. Robinson did not convey the short duration of employment of two employees or that they were paid daily or by the job. Based upon this information, Mr. Lambert immediately approved a Stop Work Order, which was issued that day. Mr. Robinson also issued a request for business records to Nolan for the purpose of calculating a penalty for lack of coverage. Paragraphs 12 through 24 of the Recommended Order, adopted within the Final Order, found that Mr. Nolan started the business, Great Southern Tree Service, in February or March 2005, as a sole proprietor; that he did not employ anyone in 2003 or 2004; that the nature of the tree trimming business is seasonal and sporadic; that Nolan had fewer than four employees during 2005; and that the only time Nolan had four employees was from May 2006 until June 6, 2006, when two workers worked occasionally for Nolan due to tree damage in the Jacksonville area from a storm. Nolan did not produce business records as requested by the Department because there were no such records to produce. The Amended Order of Penalty Assessment On June 27, 2006, an Amended Order of Penalty Assessment (Amended Order) was issued to Nolan in the amount of $272,948.96, for the time period June 6, 2003 to June 6, 2006. Attached to the Amended Order is a worksheet with the names of the four workers interviewed by Mr. Robinson on June 6, 2006. Using a statutory formula, Mr. Robinson imputed a penalty for the period October 1, 2003 to June 6, 2006, and a penalty of $100 per day for the time period between June 6, 2003 and September 30, 2003. At the time of the issuance of the Stop Work Order and the Order of Penalty Assessment, Mr. Robinson and Mr. Lambert were aware of the statutory requirement that to be considered an employer under the workers’ compensation law, four or more persons must be employed by the same private non-construction employer. However, neither Mr. Robinson nor Mr. Lambert was aware of well-established case law holding that the elements of regularity, continuity, common employment, and duration, should be considered in determining the applicability of the law, and that an occasional increase in the number of workers for some unusual occasion does not automatically result in application of the workers' compensation law.2/
