The Issue The issue is whether two persons were employees or independent contractors of Respondent, pursuant to Chapter 440, Florida Statutes, and, if employees, an additional issue is the penalty that Petitioner should impose against Respondent for his failure to obtain workers’ compensation coverage for the two employees.
Findings Of Fact At the time in question, Respondent was in the business of erecting enclosures for swimming pools. On most of these jobs, Respondent served as a subcontractor of Commercial Residential Construction. On April 7, 1998, Respondent was providing labor and materials, as a subcontractor to Commercial Residential Construction, on a screened-enclosure job located at 2242 Otter Creek Lane in Sarasota. Commercial Residential Construction supplied the aluminum and screen used for this job. For this job, Respondent hired two individuals who had worked for Commercial Residential Construction or other independent contractors in the construction business. Respondent did not have workers’ compensation coverage for the two individuals working with him on this job. Respondent’s agreement with these two persons was to pay them, on a weekly basis, a specified percentage of the total price that Respondent was to receive for the work. If the contractor refused to pay Respondent due to unsatisfactory work, then Respondent would not pay the two individuals. The two individuals had to supply their own tools. Sometimes they transported themselves to the job site; sometimes, as a matter of convenience, Tom Dybalski, the owner of Respondent, transported them or was transported by them. The two individuals did not testify. Petitioner called Mr. Dybalski as a witness; otherwise, Petitioner’s witnesses consisted exclusively of staff and investigators. However, these witnesses were unable to establish the statements of the two putative employees because of hearsay. The findings of fact contained in this recommended order are derived from Mr. Dybalski’s testimony or admissions made to one of Petitioner’s investigators. However, the administrative law judge has not relied on hearsay testimony, which is admissible under the exception for admissions against interest, that Mr. Dyblaski admitted that the two individuals were employees. Mr. Dyblaski is an aluminum contractor, not an attorney, and his “concession” concerning a complex matter, especially given his obvious ignorance of the applicable legal criteria, is not entitled to any weight. Admissible evidence does not establish whether the two individuals had exemptions from workers’ compensation. Mr. Dybalski testified that he did not know whether they did. The two individuals did not testify, so it is impossible to determine from this source whether they had exemptions. The record is similarly devoid of competent evidence establishing Respondent’s contention that the two individuals were employees of Commercial Residential Construction while working on the subject job.
Recommendation It is RECOMMENDED that the Division of Workers’ Compensation enter a final order finding Respondent guilty of failing to obtain workers’ compensation coverage to two employees and imposing a penalty in the amount of $1000. DONE AND ENTERED this 9th day of September, 1998, in Tallahassee, Leon County, Florida. ROBERT E. MEALE 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 9th day of September, 1998. COPIES FURNISHED: Louise T. Sadler Senior Attorney Division of Labor and Employment Security Suite 307, Hartman Building 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2189 A. Brent McPeek Attorney 3986 South Tamiami Trail Venice, Florida 34293 Edward A. Dion, General Counsel Department of Labor and Employment Security 307 Hartman Building 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2152 Douglas L. Jamerson, Secretary Department of Labor and Employment Security 307 Hartman Building 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2152
The Issue At issue is whether Respondent committed the offenses set forth in the Administrative Complaints and, if so, what penalty should be imposed.
Findings Of Fact Petitioner, the Department of Business and Professional Regulation (Department), is the state agency charged with the duty and responsibility of regulating the practice of contracting and electrical contracting pursuant to Chapters 20, 455 and 489, Florida Statutes. At all times material to the allegations of the Administrative Complaints, Antoney Manning was not licensed nor had he ever been licensed to engage in contracting as a State Registered or State Certified Contractor in the State of Florida and was not licensed, registered, or certified to practice electrical contracting. At all times material to the allegations of the Administrative Complaints, Manning Builders did not hold a Certificate of Authority as a Contractor Qualified Business in the State of Florida and was not licensed, registered, or certified to practice electrical contracting. Respondent, Antoney Manning, was at all times material to this proceeding, the owner/operator of Manning Builders. Respondent is in the business of framing which includes framing, drywall, tile, trim work, and painting. A document which is in evidence purports to be a contract dated September 5, 2004, between Manning Builders and Ms. Gwendolyn Parker, for the construction of a 14-foot by 14- foot addition in the rear corner of Ms. Parker's house located at 8496 Southern Park Drive in Tallahassee, Florida. The contract identifies Manning Builders as the "contractor." The contract price is $15,000. Unfortunately, only the first page of the contract is in evidence. However, Respondent acknowledges that he and Ms. Parker entered into a contract regarding the 14-foot by 14-foot addition to Ms. Parker's home. Respondent insists that he informed Ms. Parker that he was not a certified general contractor, but that he could find a general contractor for her. When that did not work out, Respondent told Ms. Parker that she would have to "pull" her own permits and that he could do the framing. He also told her that he would assist her in finding the appropriate contractors to do the electrical work, plumbing, and roofing. Ms. Parker did not testify at the hearing. On September 7, 2005, Respondent signed a receipt for $7,500 for a "deposit on addition (14 x 14)." The receipt identifies Ms. Gwendolyn Parker as the person from whom the money was received by Respondent. Respondent acknowledges finding an electrical contractor to perform the electrical work on the addition. However, he insists that he did not hire the electrical contractor but found one for Ms. Parker to hire. He gave the name to Ms. Parker but she apparently did not contact him. In any event, the electrical work was never done on the addition. Respondent completed the framework on the addition. Respondent did not build the roof, as he was aware that would require a roofing contractor. Work on the project ceased before the addition was finished. Ms. Parker's home suffered rain damage as a result of the roof not being completed. There is nothing in the record establishing the dollar amount of damage to her home. The total investigative costs to the Department, excluding costs associated with any attorney's time, was $360.59 regarding the allegations relating to Case No. 06- 0601, which charged Respondent with the unlicensed practice of contracting. The total investigative costs, excluding costs associated with any attorney's time, was $140.63 regarding the allegations relating to Case No. 06-0602, which charged Respondent with the unlicensed practice of electrical contracting.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is RECOMMENDED: That the Department of Business and Professional Regulation enter a final order imposing a fine of $1,000 for a violation of Section 489.127(1); requiring Respondent to pay $360.59 in costs of investigation and prosecution of DOAH Case No. 06-0601, and dismissing DOAH Case No. 06-0602. DONE AND ENTERED this 28th day of June, 2006, 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 28th day of June, 2006. COPIES FURNISHED: Brian A. Higgins, Esquire Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-2202 Antoney Manning 11865 Register Farm Road Tallahassee, Florida 32305 G. W. Harrell, Executive Director Construction Industry Licensing Board Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-2202 Josefina Tamayo, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-2202
The Issue The issue is whether Respondent committed an unlawful employment practice against Petitioner.
Findings Of Fact Petitioner is a Hispanic male. Respondent is an 860-unit apartment complex in Ocala. Petitioner was employed by Respondent as a full-time maintenance technician from 2001 through September 28, 2007. His job responsibilities included performing repairs and general maintenance work on the insides of the apartments. Petitioner’s starting wage in 2001 was $9.00 per hour. He received annual raises from 2001 to 2004, at which point his wage was $11.75 per hour. Petitioner did not receive any raises from 2004 through 2007. He was still earning $11.75 per hour when he was fired on September 28, 2007. Starting in 2004, Respondent did not give raises to any maintenance technicians who were not HVAC-certified. This policy applied equally to all maintenance technicians, including non-Hispanics, and was intended to encourage them to get HVAC- certified. HVAC certification was important to Respondent because the air conditioning systems at the apartment complex were getting older and were requiring more frequent repairs. Respondent provided the necessary study materials for the HVAC certification exam and paid for the exam. Petitioner is not HVAC-certified. He took the certification exam once, but he did not pass. He did not take the exam again, even though Respondent would have paid for him to do so as it did for other maintenance technicians. HVAC certification is not required to perform all types of work on air conditioners, and Petitioner continued to do some work on the air conditioners at the apartment complex after 2004 even though he was not HVAC-certified. Petitioner was characterized as a “fair” employee who did “okay” work. His supervisor, a Hispanic male, testified that there were some jobs that he did not assign to Petitioner, that Petitioner frequently got help from other employees, and that he received a couple of complaints from other maintenance technicians about Petitioner’s work. Respondent does not have an employee handbook, and the only written policy that Respondent has is a policy prohibiting sexual and other harassment. Respondent’s executive director, Laura Smith, testified that she expected employees to use “common sense” regarding what they can and cannot do at work. Respondent utilizes a system of progressive discipline, which starts with warnings (oral, then written) and culminates in dismissal. However, the nature of the misconduct determines the severity of the discipline imposed, and a serious first offense may result in dismissal. On October 5, 2006, Petitioner was given an oral warning for “improper conduct” for visiting with a housekeeper multiple times a day for as long as 20 minutes at a time. The housekeeper also received an oral warning for this conduct. On May 15, 2007, Petitioner was given a written warning for the same “improper conduct,” i.e., wasting time by going into an apartment to visit with a housekeeper. Petitioner acknowledged receiving these warnings, but he denied engaging in the conduct upon which they were based. His denials were contradicted by the more credible testimony of his supervisor and Ms. Smith. Petitioner was fired on September 28, 2007, after a third incident of “improper conduct.” On that day, Petitioner left the apartment complex around 10 a.m. to get gas in his truck. He did not “clock out” or get permission from his supervisor before leaving the apartment complex. Petitioner was away from the apartment complex for at least 15 minutes, but likely no more than 30 minutes. Even though Respondent does not have written policies and procedures, Petitioner understood, and common sense dictates that he was supposed to get his supervisor’s approval and “clock out” before he left the complex on a personal errand. Petitioner also understood the procedure to be followed to get the 14 gallons of gas per week that Respondent provided for maintenance technicians. The procedure required the employee to get the company credit card from the bookkeeper, get the gas from a specific gas station, and then return the credit card and a signed receipt for the gas to the bookkeeper. Petitioner did not follow any aspect of this procedure on the day that he was fired. He had already gotten the 14 gallons of gas paid for by Respondent earlier in the week. Petitioner’s supervisor, a Hispanic male, compared Petitioner’s actions to “stealing from the company” because he was getting paid for time that he was not at the apartment complex working. He also expressed concern that Respondent could have been held liable if Petitioner had gotten in an accident on his way to or from getting gas because he was still “on the clock” at the time. Petitioner testified that he and other maintenance technicians routinely left the apartment complex to fill up their cars with gas without “clocking out” or getting permission from their supervisor. This testimony was corroborated only as to the 14 gallons of gas paid for each week by Respondent. There is no credible evidence that other employees routinely left the apartment complex to do personal errands without “clocking out,” and if they did, there is no credible evidence that Respondent’s managers were aware of it. There is no credible evidence whatsoever that Petitioner’s firing was motivated by his national origin. His supervisor is Hispanic, and he and Ms. Smith credibly testified that the fact that Petitioner was Hispanic played no role in her decision to fire Petitioner. Petitioner claimed that he was “harassed” by Ms. Smith and that she accused him of having sex with a housekeeper in the vacant apartments. No persuasive evidence was presented to support Petitioner’s “harassment” claim, which was credibly denied by Ms. Smith. Petitioner also claimed that he was disciplined differently than similar non-Hispanic employees, namely James Stroupe, Jason Head, and Willie Hutchinson. Mr. Stroupe is a white male. He worked on the grounds crew, not as a maintenance technician. In May 2007, Mr. Stroupe was given a written warning based upon allegations that he was making explosive devices at work, and in September 2007, he was given an oral warning for “wasting time” by hanging out in the woods with Mr. Head. Mr. Head is a white male. He worked on the grounds crew, not as a maintenance technician. In September 2007, he received a written warning for “wasting time” by hanging out in the woods with Mr. Stroupe. Mr. Hutchinson is a white male, and like Petitioner, he worked as a maintenance technician. In September 2007, he was arrested for DUI. Mr. Hutchinson was not disciplined by Respondent for this incident because it did not happen during working hours and it did not affect his ability to perform his job duties as maintenance technician. The grounds department (in which Mr. Stroupe and Mr. Head worked) was responsible for maintaining the landscaping around the apartment complex, whereas the maintenance department (in which Petitioner and Mr. Hutchinson worked) was responsible for maintaining the insides of the apartments. The departments had different supervisors. Petitioner was initially denied unemployment compensation by Respondent after he was fired, but he successfully appealed the denial to an Appeals Referee. Petitioner received unemployment compensation through April 2008. On April 11, 2008, Petitioner started working for Holiday Inn as a maintenance technician. He is employed full time and his wage is $11.50 per hour. Respondent placed an advertisement in the local newspaper after Petitioner was fired in order to fill his position in the maintenance department. The advertisement stated that Respondent was looking for an applicant who was HVAC-certified. Respondent hired Javier Herrera to fill the position. Mr. Herrera, like Petitioner, is a Hispanic male.
Recommendation Based upon the foregoing findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commission issue a final order dismissing the Petition for Relief with prejudice. DONE AND ENTERED this 16th day of September, 2008, in Tallahassee, Leon County, Florida. S T. KENT WETHERELL, II 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 16th day of September, 2008.
The Issue The issue is whether Respondent unlawfully failed to obtain workers' compensation insurance coverage for five employees between May 1995 through April 1998 and, if so, what is the proper amount of the penalty.
Findings Of Fact Respondent has been a residential painting subcontractor in Florida for the past 12 years. From May 1995 through April 1998, Respondent provided no workers' compensation insurance coverage for any persons whom he hired to work as painters. Respondent has treated such persons as independent contractors, rather than employees. On April 29, 1998, one of Petitioner's investigators visited a residential job site in the Rotunda development in Englewood. He found two painters working inside a new home that was under construction. Interviewing Respondent, the investigator learned that Respondent was in charge of the painting crew and was supplying the painting labor and material for the house. Respondent stated that he was paid by another contractor, who was paid by the general contractor. Respondent admitted that he paid his crew on an hourly rate for the work that they performed each week. Respondent's testimony at the hearing that he paid his crew by the job, and not a specific hourly rate, is discredited. Dale Keaser, one of the two painters, testified. He has worked for Respondent since August 1996. At all times, Respondent paid Mr. Keaser $10 per hour. Respondent never paid Mr. Keaser by the job, and Mr. Keaser never incurred any expenses in connection with the work, except for occasional use of his truck, for which Respondent reimbursed him for gas. Respondent invariably supplied the materials necessary to do the work. Respondent directed Mr. Keaser what to do and when to do it, and Respondent inspected the work frequently. Mr. Keaser never had an exemption from workers' compensation coverage and never provided Respondent an affidavit attesting to his satisfaction of the criteria defining independent contractors. Respondent paid Mr. Keaser wages of $400 in 1996, $11,095 in 1997, and $3080 in 1998. The premium rate of the National Council on Compensation Insurance for each of these years was, respectively, 32.18 percent, 28.47 percent, and 28.92 percent. The resulting unpaid amount of workers' compensation premium is thus $4178.21. Petitioner has failed to prove by admissible evidence that the other persons working for Respondent were employees.
Recommendation It is RECOMMENDED that Petitioner enter a final order assessing Respondent a penalty of $8356.42, plus any lawful interest. DONE AND ENTERED this 4th day of December, 1998, in Tallahassee, Leon County, Florida. ROBERT E. MEALE 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 4th day of December, 1998. COPIES FURNISHED: Louise T. Sadler Senior Attorney Department of Labor and Employment Security Suite 307, Hartman Building 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2189 Patrick Jackey Bert's World of Color 365 South Oxford Drive Englewood, Florida 34223 Edward A. Dion, General Counsel Department of Labor and Employment Security 307 Hartman Building 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2152 Douglas L. Jamerson, Secretary Department of Labor and Employment Security 303 Hartman Building 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2152
The Issue At issue in this proceeding is whether Respondent failed to abide by the coverage requirements of the Workers' Compensation Law, Chapter 440, Florida Statutes (2002), by not obtaining workers' compensation insurance for her employees; and whether Petitioner properly assessed a penalty against Respondent pursuant to Section 440.107, Florida Statutes (2002).
Findings Of Fact Based upon observation of the witnesses and their demeanor while testifying; documentary materials received in evidence; stipulations by the parties; evidentiary rulings made pursuant to Section 120.57, Florida Statutes (2003); and the record evidence submitted, the following relevant and material finding of facts are made: The Department is the state agency responsible for enforcing the requirement of the Workers' Compensation Law that employers secure the payment of workers' compensation for their employees. § 440.107, Fla. Stat. (2002).1 On August 8, 2003, Respondent was a sole proprietor in the construction industry by framing single-family homes. On that day, Respondent was the sub-contractor under contract with Marco Raffaele, general contractor, providing workers on a single-family home(s) located on Navigation Drive in the Panther Trace subdivision, Riverview, Florida. It is the responsibility of the Respondent/employer to secure and maintain workers' compensation coverage for each employee. During the early morning hours of August 8, 2003, Donald Lott, the Department's workers' compensation compliance investigator, was in the Panther Trace subdivision checking on site workers for potential violations of the workers' compensation statute. While driving down Navigation Drive in the Panther Trace subdivision, Mr. Lott approached two houses under construction. There he checked the construction workers on site and found them in compliance with the workers' compensation statute. Mr. Lott recognized several of the six men working on the third house under construction next door and went over to investigate workers' compensation coverage for the workers.2 At the third house Mr. Lott interviewed Darren McCarty, Henry Keithler, and Mike Sabin, all of whom acknowledged that they worked for Respondent, d/b/a Riopelle Construction. Mr. Lott ascertained through Southeast Leasing Company (Southeast Leasing) that three of the six workers, Messrs. Keithler, Sabin, and McCarthy were listed on Southeast Leasing Company's payroll through a valid employee lease agreement with Respondent as of August 8, 2003. The completed employee lease agreement provided for Southeast Leasing Company to provide workers' compensation coverage for only those employees whose names, dates of birth, and social security numbers are contained in the contractual agreement by which Southeast Leasing leased those named employees to the employing entity, Respondent, d/b/a Riopelle Construction. Mr. Lott talked with the other three workers on site, Ramos Artistes, Ryan Willis, and Robert Stinchcomb. Each worker acknowledged working for (as an employee) Respondent on August 8, 2003, in the Panther Trace subdivision. In reply to his faxed inquiry to Southeast Leasing regarding the workers' compensation coverage status for Messrs. Artistes, Willis, and Stinchcomb, Southeast Leasing confirmed to Mr. Lott that on August 8, 2003, Southeast Leasing did not have a completed employee leasing contractual agreement with Respondent for Messrs. Artistes, Willis or Stinchcomb. Southeast Leasing did not provide workers' compensation coverage for Messrs. Artistes, Willis or Stinchcomb on August 8, 2003.3 Southeast Leasing is an "employee" leasing company and is the "employer" of "leased employees." As such, Southeast Leasing is responsible for providing workers' compensation coverage for its "leased employees" only. Southeast Leasing, through its account representative, Dianne Dunphy, input employment applications into their system on the day such application(s) are received from employers seeking to lease employees. Southeast Leasing did not have employment applications in their system nor did they have a completed contractual employment leasing agreement and, therefore, did not have workers' compensation coverage for Messrs. Artistes and Willis at or before 12:08 p.m. on August 8, 2003. After obtaining his supervisor's authorization, Mr. Lott served a Stop Work and Penalty Assessment Order against Respondent on August 8, 2003, at 12:08 p.m., requiring the cessation of all business activities and assessing a penalty of $100, required by Subsection 440.107(5), Florida Statutes, and a penalty of $1,000, as required by Subsection 440.107(7), Florida Statutes, the minimum penalty under the statute. On August 12, 2003, the Department served a Corrected Stop Work and Penalty Assessment Order containing one change, corrected federal identification number for Respondent's business, Riopelle Construction. Mr. Stinchcomb, the third worker on the construction job site when Mr. Lott made his initial inquiry, was cutting wood. On August 8, 2003, at or before 12:00 p.m., Mr. Stinchcomb was not on the Southeast Leasing payroll as a leased employee covered for workers' compensation; he did not have individual workers' compensation coverage; and he did not have a workers' compensation exemption. On that day and at that time, Mr. Stinchcomb worked as an employee of Riopelle Construction and was paid hourly by Riopelle Construction payroll check(s). Respondent's contention that Mr. Stinchcomb, when he was working on the construction job site between the hours of 8:00 a.m. and 1:00 p.m. on August 8, 2003, was an independent contractor fails for the lack of substantial and competent evidence in support thereof. On August 8, 2003, the Department, through Mr. Lott, served an administrative request for business records on Respondent. Respondent failed and refused to respond to the business record request. An Order requiring Respondent to respond to Petitioner's discovery demands was entered on December 1, 2003, and Respondent failed to comply with the order. On December 8, 2003, Respondent responded that "every effort would be made to provide the requested documents by the end of the day" to Petitioner. Respondent provided no reliable evidence and Mr. Stinchcomb was not called to testify in support of Respondent's contention that Mr. Stinchcomb was an independent contractor as he worked on the site on August 8, 2003. Respondent's evidence, both testamentary and documentary, offered to prove that Mr. Stinchcomb was an independent contractor on the date in question failed to satisfy the elements required in Subsection 440.02(15)(d)1, Florida Statutes. Subsection 440.02(15)(c), Florida Statutes, in pertinent part provides that: "[f]or purposes of this chapter, an independent contractor is an employee unless he or she meets all of the conditions set forth in subparagraph(d)(1)." Subsection 440.02(15)(d)(1) provides that an "employee" does not include an independent contractor if: The independent contractor maintains a separate business with his or her own work facility, truck, equipment, materials, or similar accommodations; The independent contractor holds or has applied for a federal employer identification number, unless the independent contractor is a sole proprietor who is not required to obtain a federal employer identification number under state or federal requirements; The independent contractor performs or agrees to perform specific services or work for specific amounts of money and controls the means of performing the services or work; The independent contractor incurs the principal expenses related to the service or work that he or she performs or agrees to perform; The independent contractor is responsible for the satisfactory completion of work or services that he or she performs or agrees to perform and is or could be held liable for a failure to complete the work or services; The independent contractor receives compensation for work or services performed for a commission or on a per-job or competitive-bid basis and not on any other basis; The independent contractor may realize a profit or suffer a loss in connection with performing work or services; The independent contractor has continuing or recurring business liabilities or obligations; and The success or failure of the independent contractor's business depends on the relationship of business receipts to expenditures. The testimony of Respondent and the testimony of her husband, Edward Riopelle, was riddled with inconsistencies, contradictions, and incorrect dates and was so confusing as to render such testimony unreliable. Based upon this finding, Respondent failed to present evidence sufficient to satisfy the requirement of Subsection 440.02(15)(d)1, Florida Statutes, and failed to demonstrate that on August 8, 2003, Mr. Stinchcomb was an independent contractor. Petitioner proved by a preponderance of the evidence that on August 8, 2003, Mr. Stinchcomb, while working on the single-family construction site on Navigation Drive in the Panther Trace subdivision was an employee of Respondent and was not an independent contractor. Petitioner proved by a preponderance of the evidence that Mr. Stinchcomb did not have workers' compensation coverage on August 8, 2003. On August 8, 2003, Mr. Willis was a laborer on the single-family construction site on Navigation Drive in the Panther Trace subdivision as an employee of Respondent, who paid him $7.00 per hour. Mr. Willis was not listed on the employee list maintained by Southeast Leasing, recording those employees leased to Respondent. Mr. Willis did not have independent workers' compensation coverage on August 8, 2003. Mr. Willis had neither workers' compensation coverage nor a workers' compensation exemption on August 8, 2003. Petitioner proved by a preponderance of the evidence that Mr. Willis did not have workers' compensation coverage on August 8, 2003. On August 8, 2003, Mr. Artises was a laborer on the single-family construction site on Navigation Drive in the Panther Trace subdivision and was an employee of Respondent. Mr. Artises had been in the employment of Respondent for approximately one week before the stop work order. Mr. Artises did not have independent workers' compensation coverage on August 8, 2003. Mr. Artises did not have a workers' compensation coverage exemption on August 8, 2003. Petitioner proved by a preponderance of the evidence that Mr. Aristes did not have workers' compensation coverage on August 8, 2003.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, and the pleading 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, affirming and adopting the Corrected Stop Work and Penalty Assessment Order dated August 12, 2003. DONE AND ENTERED this 29th day of March, 2004, in Tallahassee, Leon County, Florida. S FRED L. BUCKINE 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 29th day of March, 2004.
The Issue The issues in this case are whether Respondent failed to secure workers' compensation coverage for its employees, as Petitioner alleges; and, if so, whether a penalty based upon the unpaid premium should be assessed against Respondent.
Findings Of Fact Petitioner Department of Financial Services, Division of Workers' Compensation ("DFS" or the "Department"), is the state agency responsible, among other things, for the enforcement of the workers' compensation insurance coverage requirements established in chapter 440, Florida Statutes. Respondent Ameribuild Construction Management, Inc. ("Ameribuild"), is a Florida corporation having its principal office in Boca Raton, Florida. Brandon L. Roth ("Roth") is the owner and qualifier, and a corporate officer, of Ameribuild. At all relevant times, Ameribuild was licensed to engage in construction activity in the state of Florida. In the instant case, DFS alleges that Ameribuild, as the general contractor for a construction project in Miami, failed to secure workers' compensation insurance for Roth and six employees (the "Workers") of CJ Meeko, LLC ("CJM"), a business which, DFS alleges, was a subcontractor of Ameribuild on the project in question. In its defense against this allegation of noncompliance, Ameribuild raises two disputes of material fact, asserting that, contrary to DFS's preliminary determinations, (i) Roth did not perform services for remuneration for Ameribuild, and (ii) CJM was not Ameribuild's subcontractor but was, rather, in a direct contractual relationship with Prestige Imports Outparcel LLC ("Prestige"), the owner of the project. Based on these exculpatory (but disputed) factual allegations, Ameribuild argues that, as a matter of law, neither Roth nor any of the Workers was a statutory "employee" (a term of art in this context) of Ameribuild, and thus, to the point, Ameribuild was not obligated to secure compensation for these individuals. Of the material facts in dispute, the question of whether CJM was a subcontractor of Ameribuild is by far the most significant, as the Workers account for $132,593.32 (or 96 percent) of the $137,719.54 penalty that DFS seeks to impose. The Department, which has the burden of proving the affirmative of this crucial question, relies largely (although not entirely) on the hearsay statements of Roth and Eugene Parker ("Parker"), the latter an employee of Ameribuild at all material times who was foreman or superintendent of the subject project. These statements are admissible as substantive evidence under the "admissions" exception to the hearsay rule.1/ DFS introduced the statements of Roth and Parker through its investigator, Anthony Vinci, to whom (according to Mr. Vinci) the statements were made. Mr. Vinci also testified about statements made to him by Jack Rosales, the owner of CJM (and one of the six Workers mentioned above). To the extent offered for the truth of the matters asserted, Mr. Rosales's out-of-court statements to Mr. Vinci constitute hearsay that does not fall within any recognized exception. The undersigned has not made any findings of fact based, in whole or in part, on Mr. Rosales's hearsay statements.2/ Roth and Mr. Rosales testified at hearing. Both men denied that CJM had been Ameribuild's subcontractor, contradicting the section 90.803, Florida Statutes, admissions to which Mr. Vinci attested. Because the resolution of this particular dispute turns on credibility determinations, the undersigned will discuss the testimony itself in somewhat more detail than is usually warranted. On May 31, 2017, Mr. Vinci performed a random worksite inspection at 15050 Biscayne Boulevard, North Miami Beach, Florida, where an automobile dealership was being constructed on a site that had been occupied by a drugstore. He immediately observed several men performing drywall work and debris removal. The first person to whom Mr. Vinci spoke was Mr. Rosales, who identified himself as the owner of CJM and confirmed that the five laborers presently at work were CJM's employees. Mr. Vinci immediately conducted on online database search and discovered that Mr. Rosales did not have an active exemption for himself or workers' compensation coverage for any of CJM's employees at the worksite. Parker, the Ameribuild employee, was present at the worksite, too, when Mr. Vinci arrived. As the project foreman, his duties included coordinating the job and making sure that the work flow continued. Parker told CJM's employees what to do. He opened and closed the worksite daily, coordinated all the subcontractors, and kept a log of persons entering and leaving the area. Parker, in short, was "in charge" on site. Mr. Vinci interviewed Parker, who acknowledged being an employee of Ameribuild and identified CJM as Ameribuild's subcontractor. Parker named Roth as Ameribuild's owner and gave Mr. Vinci Roth's name and number. Before calling Roth, Mr. Vinci went to his car and conducted an online search of Ameribuild's records. He learned that Ameribuild had workers' compensation coverage through a leasing company, which showed coverage for Parker. The leasing roster, however, did not cover Roth or any of CJM's employees. Mr. Vinci then got Roth on the phone to notify him that Ameribuild had not secured workers' compensation coverage for all of its employees and that, consequently, the Department would enforce compliance, including through the issuance of a Stop-Work Order ("SWO"). At hearing, Roth denied having spoken to Mr. Vinci at this time.3/ Mr. Vinci's contemporaneous notes, however, corroborate his recollection of the discussion at issue, and, equally important, the conversation fits comfortably into the undisputed chain of events, whereas its nonexistence would be harder, albeit not impossible, to reconcile with the parties' subsequent conduct. The undersigned finds that, in fact, Mr. Vinci and Roth spoke on the telephone on the afternoon of May 31, 2017. As recounted by Mr. Vinci, the ensuing discussion was, for the most part, about what you'd expect. After introducing himself, Mr. Vinci asked Roth about CJM and whether its Workers were covered. When Roth replied that Mr. Rosales had an exemption from workers' compensation, which he (Roth) had seen, Mr. Vinci informed him that, actually, Mr. Rosales did not have one. Asked whether he (Roth) had an exemption, Roth answered that he would need to check. In response to another of Mr. Vinci's inquiries, Roth told the investigator (according to the latter's contemporaneous notes) that he (Roth) did not receive any remuneration from Ameribuild. According to Mr. Vinci, whose testimony in this regard is hotly disputed, Roth stated that he had hired Mr. Rosales's company, CJM, as Ameribuild's subcontractor on the project in question. Armed with this information, DFS prepared a SWO for issuance to Ameribuild, which commanded Ameribuild to cease all business operations at the worksite and assessed a monetary penalty (exact amount to be determined) equal to two times the premium Ameribuild would have paid to provide the required coverage during the preceding two years. Mr. Vinci called Roth to tell him about the SWO and make arrangements for the service thereof. (Roth's denial of his participation in this conversation is rejected as unpersuasive.) Roth was informed of the requirements for obtaining a conditional release from the SWO so that Ameribuild could resume operations at the worksite pending a final release upon compliance and payment in full of the assessed penalty. Roth agreed to meet Mr. Vinci the following day at the Department's Miami office. That meeting took place as scheduled. Mr. Vinci personally served Roth with the SWO and a Request for Production of Business Records for Penalty Assessment Calculation ("BRR"). Roth then paid $1,000.00 towards the penalty, which had yet to be calculated, and delivered a signed "reduction-of-workforce" letter, i.e., a sworn statement, on Ameribuild letterhead, promising DFS that "Ameribuild Construction Management will no longer permit CJ Meeko LLC or his employees [to] work on the jobsite @ 15050 Biscayne Blvd., North Miami Beach, FL 33132 until CJ Meeko LLC is in compliance with Florida State Law." Upon receipt of Ameribuild's check and reduction-of-workforce letter, the Department executed an Agreed Order of Conditional Release from Stop-Work Order, which authorized Ameribuild to resume operations at the worksite. There is no evidence suggesting that, during this meeting on June 1, 2017, Mr. Vinci or anyone else interrogated Roth, who could have remained silent and refused to comment on DFS's allegations, given that it would be DFS's burden to prove the charges, were Ameribuild to request a hearing. Roth, however, volunteered his opinion that if CJM lacked coverage (as DFS alleged), then Mr. Rosales must have made an "honest mistake" because he (Roth) sincerely believed that Mr. Rosales had applied for and obtained an exemption. The point of this statement, obviously, was not to deny the violation, but to minimize it as having been neither knowing nor intentional. Roth, it appears, was offering up facts that he probably hoped would mitigate the penalty. Regardless, more telling is what Roth——in responding to the accusation that Ameribuild was responsible for its subcontractor's (CJM's) failure to secure compensation——did not say. If CJM really were not Ameribuild's subcontractor, it would be expected that Roth would protest the Department's misunderstanding of this basic fact, and state that, in fact, CJM was Prestige's contractor. While Roth's silence in this regard perhaps does not rise to the level of an evidentiary admission,4/ the undersigned finds that his failure then (or later) to inform the Department of the "true" contractual relationships is suspiciously inconsistent with Ameribuild's current litigating position. If Ameribuild did not have a contract with CJM, then Roth, if he were not going to keep quiet, should have been making that point early and often. In the months that followed, Ameribuild provided documents to DFS responsive to the BRR, which DFS deemed insufficient for purposes of determining Ameribuild's payroll for the audit period of June 1, 2015, through May 31, 2017. In such situations, where the records are insufficient to establish actual payroll, the Department is authorized to base its penalty assessment upon an "imputed payroll." Consequently, using the methodology specified in section 440.107(7)(d)1. and (e) and Florida Administrative Code Rule 69L-6.027, DFS determined (for the entire audit period) Ameribuild's imputed payroll, which is the compensation that Ameribuild is deemed to have paid the Workers and Roth. It is unnecessary in this case to make detailed findings regarding the assumptions behind Ameribuild's imputed payroll figures because Ameribuild does not dispute them or the amount of the resulting penalty ($137,719.54), which was set forth in an Amended Order of Penalty Assessment served on November 6, 2017. Rather, Ameribuild maintains that DFS has failed to prove the alleged violations, meaning there can be no penalty, which makes the imputed payroll irrelevant. If, on the other hand, Ameribuild were found to have violated a duty to secure compensation for Roth and Workers, which Ameribuild of course believes should not happen, then Ameribuild would concede that the imputed payroll and concomitant penalty are correct. As mentioned above, it is Ameribuild's contention that the Workers were not "employees" of Ameribuild for workers' compensation purposes because CJM was under contract, not to Ameribuild, but to the owner of the project, Prestige. Both Roth and Mr. Rosales testified about this purported contract; under the CJM-Prestige agreement as they described it,5/ the Workers might not have been Ameribuild's employees.6/ Ameribuild sought to introduce a copy of the contract as proof of the fact that CJM was Prestige's contractor. The Department objected because Ameribuild had not disclosed the contract as an exhibit until a few days before the hearing, long past the deadline established in the Order of Pre-hearing Instructions. Ameribuild could provide no explanation for the late disclosure. Wanting to avoid the exclusion of evidence that could be dispositive, but unwilling to countenance the prejudice DFS might suffer if the surprise exhibit were admitted, the undersigned ruled that the document would be received on the condition that the hearing be recessed for a reasonable, but brief, period so that DFS could depose the appropriate person(s) at Prestige about the purported CJM-Prestige agreement, and then supplement the record with the deposition(s). Ameribuild, however, elected to withdraw the exhibit to prevent the Department from obtaining Prestige's testimony about the alleged contract. Thus, Ameribuild neither offered (nor proffered) the purported CJM-Prestige agreement, which, accordingly, is not in the evidentiary record. The undersigned probably would be permitted to draw an adverse inference from Ameribuild's counterintuitive failure to introduce the written agreement, which was obviously available and within Ameribuild's immediate control, and which (if genuine) would be, if not dispositive, certainly persuasive exculpatory evidence directly rebutting the Department's case-in-chief. The undersigned reasonably could infer from the totality of the circumstances that Ameribuild had reason to believe Prestige would not recognize and authenticate the purported contract if asked about it under oath in deposition, which reason being (need it be said?) that the purported contract is a fake. The undersigned declines to draw such an inference. Instead, the undersigned finds that, without the contract as corroborating evidence, Ameribuild has failed to present proof sufficient to undermine the strength of the Department's prima facie case. DFS has carried its burden of proving, by clear and convincing evidence, that CJM was Ameribuild's subcontractor. On the question of whether Roth was an employee of Ameribuild for compensation purposes during the period when his name did not appear on the coverage roster, however, the undersigned finds that the Department failed to carry its burden of proof. Roth testified at hearing that he had received no remuneration from Ameribuild during the months in 2016 and 2017 when he was not included in the company's compensation coverage, which testimony was consistent with his prior statement to Mr. Vinci in this regard. Other documentation in evidence shows that in 2015, when Roth received remuneration from Ameribuild, he was also provided workers' compensation coverage, through South East Personnel, Inc., a leasing company. While the evidence fails clearly to establish that Roth did not receive remuneration from Ameribuild, it fails clearly and convincingly to prove that he did. It is determined, therefore, that Roth was not an uncovered employee during the audit period. The proposed penalty must be adjusted to remove the amount attributable to Roth——$5,126.22. Ameribuild's penalty for noncompliance, based on the Workers' imputed payroll, should be $132,593.32.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Financial Services, Division of Workers' Compensation, enter a final order finding Ameribuild Construction Management, Inc., in violation of its obligation to secure workers' compensation and imposing a penalty of $132,593.32 for such noncompliance. DONE AND ENTERED this 6th day of September, 2018, in Tallahassee, Leon County, Florida. S JOHN G. VAN LANINGHAM 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 6th day of September, 2018.
