The Issue Did Respondent engage in the business or act in the capacity of a contractor or advertise himself or a business organization as available to engage in the business or act in the capacity of a contractor without being duly registered or certified or without having a certificate of authority as alleged in the Administrative Complaint and, if so, what penalty should be imposed?
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made: The Department is the Agency of the State of Florida vested with the statutory authority to regulate the practice of unlicensed contracting under Chapters 455 and 489, Florida Statutes. Respondent has never been licensed to engage in contracting within the State of Florida. Specifically, at no time material to this proceeding was Respondent licensed to engage in contracting within the State of Florida. At no time material to this proceeding did the business known as Handyman-No Job Too Small ever apply for or obtain a Certificate of Authority as a Contractor Qualified Business in the State of Florida. Some time around November 15, 2000, Respondent and David Arendt entered into an oral agreement wherein Respondent was to do remodeling work on Arendt's home located at 728 Hampstead Avenue, in Orlando, Florida, for the contract price of $7,000.00. This remodeling work included, but was not limited to, repairs to the front porch, remodeling the master bedroom, and removing and replacing the shed roof with a rolled roof. Arendt paid Respondent a total of $3,500.00 for the work completed by Respondent up until December 18, 2000. Subsequent to December 18, 2000, Arendt dismissed Respondent due to disagreement concerning the work to be completed. Respondent subsequently filed a contractor's Claim of Lien in the amount of $3,500.00 against Arendt's home in Orlando, Florida. At all times material to this proceeding, Respondent was a contractor as that term is defined in Section 489.105(3), Florida Statutes. The total investigative and prosecution costs to the Department, excluding costs associated with any attorney's time, is $496.45.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, and a review of Chapter 61G4-17, Disciplinary Guidelines, Florida Administrative Code, without any consideration for mitigating or aggravating circumstances, it is RECOMMENDED that the Department enter a final order finding Respondent, David C. Marquis guilty of violating Subsection 489.127(1)(f), Florida Statutes, and imposing an administrative fine in the amount of $2,500.00 and costs in the amount of $496.45. DONE AND ENTERED this 28th day of June, 2002, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE 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, 2002. COPIES FURNISHED: Brian A. Higgins, Esquire Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-2202 David Marquis 616 Aldama Court Ocoee, Florida 34761 Hardy L. Roberts, III, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-2202
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.
The Issue The issues are whether Respondent failed to obtain required workers' compensation insurance and, if so, the penalty that should be imposed.
Findings Of Fact Manuel Farinas owns Respondent, which has been in existence since 2001 or 2002. He is an officer of the company, as is his wife. Respondent provides construction services-- specifically, the installation of decorative tiles and stones in residences--as a subcontractor to residential contractors. Prior to forming Respondent, Mr. Farinas performed similar services, but he has never previously owned a corporation such as Respondent. On March 24, 2006, an investigator of Respondent visited a worksite at 6620 Holmberg Road in Coconut Creek. The investigator saw several contractors enter and exit the residence. Among them was Respondent and another man, who were installing stone at the residence. During the course of their work, they went back and forth from the residence to a work van marked with Respondent's name. The investigator approached the two men, who were Mr. Farinas and his assistant, Christopher Crespo. The investigator asked Mr. Farinas for proof of workers' compensation coverage, but he was unable to provide it because Respondent had not obtained any workers' compensation insurance. Clearly, Mr. Farinas was an employee of Respondent. For purposes of withholding taxes and paying Social Security, Respondent treated Mr. Farinas's assistants as independent contractors, issuing them Form 1099s at the end of the year. However, they were clearly involved in the construction industry, although the evidence fails to establish that they were not independent contractors, for the purpose of workers' compensation coverage, prior to 2004. By Amended Order of Penalty Assessment dated April 12, 2006, Petitioner noted that it had issued a stop-work order to Respondent on March 24, 2006, determined that Respondent had failed to obtain workers' compensation insurance, and assessed a penalty of $13,835.37. Attached to the Amended Order is a worksheet that lists a dozen payees on which Petitioner relies in calculating the total penalty. Mr. Farinas candidly testified that the following payees were, from time to time, assistants who helped him install decorative stone and tile: Mr. Crespo, Jahmar Suarez, Michael Sanchez, Roberto Carvahal, Roberto Arquello, Guillermo Gonzalez, Mikel Gonzalez, and Yunier Nunez. The penalty attributeable to these persons totals $3172.10. Mr. Farinas is also a payee on the worksheet. The penalty attributeable to him totals $2554.72. The worksheet lists three other payees: Martineax Stone Service, for which the penalty is $5602.80; "subcontractors," for whom the penalty is $2482.62; and Ana Gonzalez, for whom the penalty is $23.13. However, Martineax was a supplier of stone and tile, not an employee or independent contractor, so Petitioner improperly used the payments to Martineax to calculate the penalty. Ms. Gonzalez was not a stoneworker, but an officeworker, so Petitioner used an excessively high rate to calculate the unpaid premium. "Subcontractors," though, is a legitimate inclusion because, during the January 1 to June 1 period covered by this category, no other listed payee received any payments from Respondent. After reducing the proposed penalty for the amounts of the penalty improperly attributed to Martineax and Ms. Gonzalez, the penalty is $8209.44. However, for the reasons set forth in the Conclusions of Law, Petitioner has failed to prove that the penalty should be based on any payments to independent contractors prior to 2004. Excluding from this adjustment two payments to Martineax (to avoid a double reduction), the portion of the penalty improperly attributed to these pre-2004 payments is $2676.50. The correct penalty is thus $5532.94.
Recommendation Based on the foregoing, it is RECOMMENDED that the Department of Financial Services enter a final order finding Respondent guilty of failing to obtain workers' compensation insurance, imposing a penalty of $5532.94 on Respondent, and maintaining the stop-work order until Respondent complies with all applicable workers' compensation laws. DONE AND ENTERED this 21st day of February, 2007, in Tallahassee, Leon County, Florida. S 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 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 21st day of February, 2007. COPIES FURNISHED: Honorable Alex Sink Chief Finacial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahssee, Florida 32399-0300 Daniel Sumner, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahssee, Florida 32399-0307 Colin M. Roopnarine Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399-4229 Michael A. Shaffir Carlton Fields, P.A. 100 Southeast Second Street, Suite 4000 Miami, Florida 33131
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 Whether the Department of Labor and Employment Security, Division of Workers' Compensation (Division) properly issued a Stop Work Order (SWO) against Respondent on August 3, 1999. Whether Respondent owes a civil penalty, and if so, how much of a civil penalty does Respondent owe.
Findings Of Fact The Division of Workers' Compensation is statutorily charged with the task of enforcing the provisions of Subsections 440.10(1)(a) and 440.38, Florida Statutes (1999), requiring employers to comply with the coverage requirements of the Workers' Compensation Law. See Subsection 440.107(5) and (7), Florida Statutes. On August 3, 1999, Division Investigator Greg Mills, with two other investigators, engaged in a sweep of construction sites in Leon County to assure that the employers were in compliance with the Workers' Compensation Law. At a new private residential construction in progress at 2158 Chaires Cross Road, the investigators encountered Robert Carroll, who had just delivered Respondent's well-drilling rig to the location. Greg Mills interviewed Mr. Carroll. Mr. Carroll's responses at that time clearly indicated an employment relationship existed between Mr. Carroll and Respondent Bobby Cox, Sr. d/b/a C H Well Drilling. Greg Mills issued an SWO, pursuant to Subsection 440.107(3), Florida Statutes, and a penalty assessment based on the alleged employment and allegedly- evaded premiums for three years, for Mr. Carroll. At some time after Respondent had requested a hearing, the Division obtained information through discovery which convinced Division personnel to amend the SWO to include premiums and penalties based on an alleged employment relationship between Melford Sims and Respondent. Based on the 1099 tax forms received by Carroll and Sims from Respondent, the Division determined that during the three- year period preceding the SWO, Respondent had paid Carroll $7,320.30 in 1996; $33,903.50 in 1997, $34,363.50 in 1998, and $32,036.00 in 1999, and determined that Respondent had paid Sims $7,797.50 in 1997; $12,786.50 in 1998, and $11,056.00 in 1999. 2/ The National Council of Compensation Insurance (NCCI) classifies types of employment in SCOPES and specifies applicable premiums by employment classification. Well drillers are classified as Code 6204. The premium rate for each $100.00 of compensation was 35.71 percent in 1996, 27.86 percent in 1997, 24.63 percent in 1998, and 20.94 percent in 1999. Respondent did not dispute the appropriateness of employing the foregoing formula. The procedure is authorized under Rule 38F-5.111(6), Florida Administrative Code. The foregoing formula and procedure resulted in the insurance premium for Mr. Carroll being calculated as $2,614.00 in 1996; $9,446.00 in 1997; $8,460.00 in 1998; and $6,708.00 in 1999, and resulted in the insurance premium for Mr. Sims being calculated as $2,173.00 in 1997; $3,148.00 in 1998; and $2,315.00 in 1999. The Division therefore seeks to impose a fine of twice the allegedly-evaded premiums for Mr. Carroll ($27,228 x 2 = $54,456) and for Mr. Sims ($7,636 x 2 = $15,272) totaling $69,728.00 At all times material, Respondent Bobby Cox, Sr., was licensed and engaged in the business of drilling water wells in Leon County, Florida. He operates as a sole proprietor under the name "C H Well Drilling." No evidence was presented as to any incorporation or fictitious name registration of this entity. At no time material did Respondent ever file for a workers' compensation exemption. At no time material did Respondent obtain workers' compensation coverage for himself or any employee(s). Dr. Bobby Ray Phills is the Dean of the College of Engineering Science for Technology and Agriculture at Florida Agricultural and Mechanical University. He owns the property at 2158 Chaires Cross Road. He personally pulled the building permit, identifying himself as the building contractor, to construct a new residential construction. He obtained no workers' compensation insurance coverage for the project. Dr. Phills testified the he employed Selmo Bradley, a licensed general contractor, to do the framing and "manage the project" for him. Dr. Phills testified that he instructed Bradley that Bradley and all other contractors were responsible for their own workers' compensation coverage. There is no evidence that Selmo Bradley obtained workers' compensation insurance coverage for the Chaires Road project. Dr. Phills never spoke directly to Respondent. He paid no money directly to Respondent. Dr. Phills gave no evidence that he intended to pay Respondent through Mr. Bradley. Respondent testified that Mr. Bradley contacted him and negotiated with him to drill a well on Dr. Phills' property and that he expected to be paid by Mr. Bradley as the general contractor. Respondent testified that Mr. Bradley asked him if he had workers' compensation coverage for his employees for the Chaires Cross Road project and that he, Respondent, had answered "No." Respondent does not contend that Mr. Bradley ever told him that Bradley's workers' compensation coverage would protect Respondent or Respondent's employees. On August 3, 1999, Respondent directed Ralph Carroll to drive Respondent's truck, equipped with Respondent's well- drilling rig, and set up the rig on the Chaires Cross Road project. Respondent paid Mr. Carroll for his time in setting up the rig. However, drilling was not due to begin until the next day and did not begin due to Greg Mills' interrogation of Mr. Carroll and issuance of the SWO. When interviewed on August 3, 1999, Mr. Carroll described himself as working for Respondent and the man assisting him with the rig as "just a friend." He did not mention owning his own business and alluded to Respondent's getting the Chaires Cross Road job and telling Mr. Carroll where to go. To the degree his testimony at hearing varied from these statements, it is discredited. Additionally, at hearing, it developed that Mr. Carroll was "not actually in" the business of pump repair and well water service on August 3, 1999. As of the date of hearing, Mr. Carroll was still trying to get set up to do such business on his own beginning January 1, 2000. He was still buying some of his equipment. There is no dispute that Mr. Carroll had been employed as an employee by Respondent until August 1, 1996. Until that date, Respondent provided Mr. Carroll with W-2 tax forms, kept timesheets on him, and withheld the required federal tax and benefits. As of August 1, 1996, Respondent began to treat Mr. Carroll as an independent contractor, ceased withholding, and issued him 1099 tax forms for federal tax purposes. The Division also alleged that Melford Sims was an "employee" of Respondent, but it could not establish that Mr. Sims had ever been on Respondent's payroll or that any creative bookkeeping had been indulged-in to create an "independent contractor" façade for Mr. Sims. Respondent, Mr. Carroll, and Mr. Sims each testified that after August 1, 1996, when payment was received for a job worked by Mr. Sims or Mr. Carroll, expenses would first be paid, i.e., if equipment or casing broke, it would be paid from the proceeds. Then the profit, if any, would be split equally between Respondent and whichever of the other two men had done the job. If there was a problem on the job, satisfactory completion was the responsibility of Sims or Carroll, whichever had done the job, and there was no extra compensation paid by the customer or Respondent to correct the problem unless the well had to be drilled deeper. Respondent testified that after August 1, 1996, checks for well-drilling work were made out to him, usually by a general contractor, and that Respondent disbursed funds to Carroll and Sims as set out above. Despite Respondent's and Mr. Carroll's testimony to the effect that after August 1, 1996, they were each independent sole proprietors who assisted one another, subtracted the costs of doing business, and then split the profit of various well- drilling jobs, the following are indices that from 1996 through 1999, Mr. Carroll remained Respondent's "employee": Mr. Carroll owned a truck, tractor, and "ditch witch." He did not own a well-drilling rig, and he used Respondent's rig. Respondent held an occupational license to drill wells. Mr. Carroll did not. Respondent advertised in the telephone book yellow pages. Mr. Carroll did not. Mr. Carroll relied exclusively on Respondent to get well-drilling jobs for him. Respondent was Mr. Carroll's sole source of income 1996- 1999. Mr. Carroll did not file for a workers' compensation exemption during 1996-1999. He filed for one only after August 3, 1999. Mr. Carroll did not secure workers' compensation insurance for himself during 1996-1999. Mr. Carroll did not provide Respondent with an affidavit that met statutory requirements during 1996-1999. The following indices of Mr. Sims' situation 1996-1999 are mixed. Mr. Sims owns a truck, tractor, and "ditch witch." He does not own a well-drilling rig, but he occasionally "leases" Respondent's well-drilling rig for jobs of his own. Otherwise, he splits profits on jobs he gets with Respondent after costs are deducted as described above. The following indices of Mr. Sims's situation 1996-1999 are indicative of his independent contractor status: Mr. Sims holds his own occupational license separate from Respondent's. Mr. Sims advertises in the telephone book yellow pages with his own location and telephone number. The following indices are indicative of Mr. Sims's employee status 1996-1999: Mr. Sims did not file for a workers' compensation exemption during 1996-1999. Mr. Sims did not secure workers' compensation insurance for himself during 1996-1999. Mr. Sims did not provide Respondent with an affidavit that met statutory requirements during 1996-1999. At all times material, Respondent worked approximately 75 percent of the time for general contractors, who paid him by check. Twenty-five percent of the time, Respondent was paid directly by others, besides general contractors. Respondent worked for Thomas L. Baldwin, certified general contractor, and for Ken Seay, licensed residential contractor, among other contractors, during the three-year period 1996-1999. These two named contractors testified to being covered by workers' compensation insurance carriers during this period. Respondent testified that he had also worked for 30-50 other general contractors during this period of time and that at all times he had relied upon these contractors covering him and his employees through Florida's statutory workers' compensation scheme, which holds general or prime contractors liable for injuries to their subcontractors and subcontractors' employees if the subcontractors have not obtained their own workers' compensation coverage. Respondent provided a sampling of applications for, and certificates of, insurance from the two named contractors and other contractors, some of which were workers' compensation policies, some of which were employers' general liability policies, and none of which covered the entire three-year period. Respondent did not establish the specific dates he worked for each general contractor.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Division of Workers' Compensation enter a Final Order that Affirms the Stop Work Order. Affirms the $100 penalty related to Mr. Carroll's employment, pursuant to Subsection 440.107(5), Florida Statutes; and Assigns only an additional penalty, based solely upon the "wages" of Mr. Carroll, in the amount of $54,457.00, plus statutory interest. DONE AND ENTERED this 20th day of March, 2000, in Tallahassee, Leon County, Florida. ELLA JANE P. DAVIS 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 20th day of March, 2000.
