Findings Of Fact 12. The factual allegations contained in the Stop-Work Order and Order of Penalty Assessment issued on February 22, 2011, the Amended Order of Penalty Assessment issued on March 24, 2011, and the 2nd Amended Order of Penalty Assessment, issued on March 8, 2012, attached as “Exhibit A,” “Exhibit B,” and Exhibit “D” respectively, and fully incorporated herein by reference, are hereby adopted as the Department’s Findings of Fact in this case.
Conclusions THIS PROCEEDING came on for final agency action and Jeff Atwater, Chief Financial Officer of the State of Florida, or his designee, having considered the record in this case, including the request for administrative hearing received from AMSTARR, INC., the Stop-Work Order and Order of Penalty Assessment, the Amended Order of Penalty Assessment, and the 2nd Amended Order of Penalty Assessment, and being otherwise fully advised in the premises, hereby finds that: 1. On February 22, 2011, the Department of Financial Services, Division of Workers’ Compensation (hereinafter “Department”) issued a Stop-Work Order and Order of Penalty Assessment in Division of Workers’ Compensation Case No. 11-060-1A to AMSTARR, INC. The Stop-Work Order and Order of Penalty Assessment included a Notice of Rights wherein AMSTARR, INC. was advised that any request for an administrative proceeding to challenge or contest the Stop- Work Order and Order of Penalty Assessment must be filed within twenty-one (21) days of receipt of the Stop-Work Order and Order of Penalty Assessment in accordance with Sections 120.569 and 120.57, Florida Statutes, and must conform to Rule 28- 106.2015, Florida Administrative Code. 2. On February 22, 2011, the Stop-Work Order and Order of Penalty Assessment was served by personal service on AMSTARR, INC. A copy of the Stop-Work Order and Order of Penalty Assessment is attached hereto as “Exhibit A” and incorporated herein by reference. 3. On March 24, 2011, the Department issued an Amended Order of Penalty Assessment to AMSTARR, INC. The Amended Order of Penalty Assessment assessed a total penalty of $80,945.25 against AMSTARR, INC. The Amended Order of Penalty Assessment included a Notice of Rights wherein AMSTARR, INC. was advised that any request for an administrative proceeding to challenge or contest the Amended Order of Penalty Assessment must be filed within twenty-one (21) days of receipt of the Amended Order of Penalty Assessment in accordance with Sections 120.569 and 120.57, Florida Statutes, and must conform to Rule 28-106.2015, Florida Administrative Code. 4, On October 27, 2011, the Amended Order of Penalty Assessment was served by personal service via a process server on AMSTARR, INC. A copy of the Amended Order of Penalty Assessment is attached hereto as “Exhibit B” and incorporated herein by reference. 5. On November 28, 2011, AMSTARR, INC. timely filed a request for administrative hearing with the Department. The petition for administrative review was forwarded to the Division of Administrative Hearings on January 6, 2012, and the matter was assigned DOAH Case No. 12-0080. A copy of the petition is attached hereto as “Exhibit C” and incorporated herein by reference. 6. On March 8, 2012, the Department issued a 2nd Amended Order of Penalty Assessment to AMSTARR, INC. The Amended Order of Penalty Assessment assessed a total penalty of $2,256.78 against AMSTARR, INC. The 2nd Amended Order of Penalty Assessment included a Notice of Rights wherein AMSTARR, INC. was advised that any request for an administrative proceeding to challenge or contest the 2nd Amended Order of Penalty Assessment must be filed within twenty-one (21) days of receipt of the 2nd Amended Order of Penalty Assessment in accordance with Sections 120.569 and 120.57, Florida Statutes, and must conform to Rule 28-106.2015, Florida Administrative Code. 7. On March 13, 2011, the 2nd Amended Order of Penalty Assessment was served by electronic mail on AMSTARR, INC. A copy of the 2nd Amended Order of Penalty Assessment is attached hereto as “Exhibit D” and incorporated herein by reference. 8. On March 26, 2012, AMSTARR, INC., entered into a Settlement Agreement with the Department. The Settlement Agreement stated that AMSTARR, INC. must accept service of the 2nd Amended Order of Penalty Assessment. The Settlement Agreement also stated that AMSTARR, INC. must pay the penalty in full, or pay a down-payment of $1,000.00 and enter into a Payment Agreement Schedule for Periodic Payment within thirty days of the execution of the Settlement Agreement. Additionally, AMSTARR, INC. agreed that upon execution of the Settlement Agreement his Petition shall be deemed dismissed with prejudice. A copy of the Executed Settlement Agreement is attached hereto as “Exhibit E” and incorporated herein by reference. 9. On March 26, 2012, the Department filed a Notice of Settlement with the Division of Administrative Hearings. A copy of the Notice of Settlement is attached hereto as “Exhibit F” and incorporated herein by reference. 10. On April 2, 2012, the Administrative Law Judge issued an Order Closing File and Relinquishing Jurisdiction. A copy of the Order Closing File and Relinquishing Jurisdiction is attached hereto as “Exhibit G” and incorporated herein by reference. ll. As of the date of this Final Order, AMSTARR, INC. has failed to comply with the conditions of the Settlement Agreement. AMSTARR, INC. has neither paid the penalty amount in full, nor has AMSTARR, INC. entered into a Payment Agreement Schedule for Periodic Payment.
The Issue Whether Respondent has committed the acts alleged in the Stop Work Order and Order of Penalty Assessment and if so, what penalty should be imposed.
Findings Of Fact The Department is the state agency responsible for enforcing the statutory requirement that employers secure workers' compensation insurance for the benefit of their employees. § 440.107, Fla. Stat. On August 11, 2006, Robert Lambert, the Jacksonville District Supervisor for the Division of Workers' Compensation, Bureau of Compliance, was contacted by Katina Johnson, an investigator for the Division.1/ Based on the information provided to him by Ms. Johnson, Mr. Lambert approved the issuance of a Stop Work Order against Capella Ventures, Inc. The investigator served a Stop Work Order and Order of Penalty Assessment, both by posting at the worksite and by hand delivery, on Capella Ventures. The Department investigator also issued a Request for Production of Business Records for Penalty Assessment, requesting records for a period of three years, from July 31, 2003. These records were requested in order to calculate the penalty required pursuant to Section 440.107, Florida Statutes, for not having workers' compensation insurance. The records were to be used in conjunction with the classification codes contained in the Basic Manual (Scopes Manual) published by the National Council on Compensation Insurance. Records were provided by Capella Ventures' counsel. Based on the records provided, an Amended Order of Penalty Assessment was prepared, assessing a penalty of $8,769.16. Mr. Peter King was, at all times material to this case, an officer of Capella Ventures, along with his father. His father is now deceased. Mr. King admitted that workers from Capella Ventures were assisting his father with a construction project on a home next to the home where they lived. He did not dispute that the workers were performing construction work and that the company had no workers' compensation coverage for them at the time. Nor did he dispute the amount of the penalty reflected in the Amended Order of Penalty Assessment. He contended that while his father performed the framing on the property, one of the two other employees did not have the skill to actually perform framing. The class code used by the Department to determine the appropriate penalty was 5645, which is used for carpentry operations on residential structures. Use of this code was appropriate. Capella Ventures filed for an address change in August of 2006, and voluntarily dissolved in January of 2008. No evidence was presented regarding what actions were taken by Capella Ventures with respect to the dissolution of the corporation. No evidence was presented regarding what, if any, distribution of assets was undertaken at the time of dissolution. No evidence was presented to indicate that any successor corporation or entity was formed upon the dissolution of Capella Ventures.
Recommendation Upon consideration of the facts found and conclusions of law reached, it is RECOMMENDED: That a final order be entered finding that Respondent, Capella Ventures, Inc., violated Section 440.107, Florida Statutes, by failing to secure workers' compensation for its employees, and assessing a penalty of $8,769.16. DONE AND ENTERED this 10th day of September, 2008, in Tallahassee, Leon County, Florida. S LISA SHEARER NELSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 10th day of September, 2008.
Findings Of Fact 11. The factual allegations in the Stop-Work Order and Order of Penalty Assessment issued on February 18, 2010, and the 2"! Amended Order of Penalty Assessment issued on August 5, 2011, which are fully incorporated herein by reference, are hereby adopted as the Department’s Findings of Fact in this case.
Conclusions THIS PROCEEDING came on for final agency action and Jeff Atwater, Chief Financial Officer of the State of Florida, or his designee, having considered the record in this case, including the Stop- Work Order and Order of Penalty Assessment and the 2" Amended Order of Penalty Assessment served in Division of Workers’ Compensation Case No. 10-053-D4 and being otherwise fully advised in the premises, hereby finds that: 1. On February 18, 2010, the Department of Financial Services, Division of Workers’ Compensation (hereinafter “Department”) issued a Stop-Work Order and Order of Penalty Assessment in Division of Workers’ Compensation Case No. 10-053-D4 to McDonnell Painting, d/b/a Painting and Wallcovering by McDonnell (McDonnell). The Stop-Work Order and Order of Penalty Assessment included a Notice of rights wherein McDonnell was advised that any request for an administrative proceeding to challenge or contest the Stop-Work Order and Order of Penalty Assessment must be filed within twenty-one (21) days of receipt of the Stop-Work Order and Order of Penalty Assessment in accordance with Sections 120.569 and 120.57, Florida Statutes. 2. On March 3, 2010, the Stop- Work Order and Order of Penalty Assessment was served via certified mail on McDonnell. A copy of the Stop-Work Order and Order of Penalty Assessment is attached hereto as “Exhibit A” and incorporated herein by reference. 3. On February 19, 2010, the Department issued an Amended Order of Penalty Assessment to McDonnell in Case No. 10-053-D4. The Amended Order of Penalty Assessment assessed a total penalty of $10,058.88 against McDonnell. The Amended Order of Penalty Assessment included a Notice of Rights wherein McDonnell was advised that any request for an administrative proceeding to challenge or contest the Amended Order of Penalty Assessment must be filed within twenty-one (21) days of receipt of the Amended Order of Penalty Assessment in accordance with Sections 120.569 and 120.57, Florida Statutes. 4. The Amended Order of Penalty Assessment was served on McDonnell by certified mail on February 25, 2010. A copy of the Amended Order of Penalty Assessment is attached hereto as “Exhibit B” and incorporated herein by reference. 5. On March 15, 2010, McDonnell timely filed a Petition requesting a formal administrative hearing. The Petition failed to satisfy the requirements of Rule 28-106.2015(S), Florida Administrative Code, in that it did not contain a statement requesting an administrative hearing which identified those material facts in dispute, or in the alternative a statement that there were no disputed issues of material fact. As a result, on April 23, 2010, the Department issued an Order Dismissing Petition for Section 120.57(1), Florida Statutes, Hearing Without Prejudice, giving McDonnell 21 days to file a Petition that satisfied the requirements of Rule 28- 106.2015(5), Florida Administrative Code. 6. The Order Dismissing Petition for Section 120.57(1), Florida Statutes, Hearing Without Prejudice was served on McDonnell by certified mail on April 27, 2010. 7. On May 19, 2010, McDonnell timely filed an Amended Petition requesting an administrative hearing pursuant to Section 120.57(1), Florida Statutes. A copy of the Amended Petition is attached hereto as “Exhibit C” and incorporated herein by reference. The matter was referred to the Division of Administrative Hearings, where it was assigned Case No. 10-2788. 8. On January 10, 2011, the Department and McDonnell reached a negotiated settlement in which the Department agreed to issue a 2"! Amended Order of Penalty Assessment assessing a penalty in the amount of $2,379.00, and McDonnell agreed to pay the total penalty of $2,379 and to no longer contest the Stop- Work Order and Order of Penalty Assessment and gn Amended Order of Penalty Assessment. 9. On January 10, 2011, the Department filed a Notice of Settlement with the Division of Administrative Hearings, advising the Administrative Law Judge that the parties had resolved all issues pending in Case No. 10-2788. A copy of the Notice of Settlement is attached hereto as “Exhibit D.” 10. On January 10, 2011, Administrative Law Judge R. Bruce McKibben entered an Order Closing File, relinquishing jurisdiction to the Department. A copy of the Order Closing File is attached hereto as “Exhibit E.” 11. On August 5, 2011, the Department issued a 2"™ Amended Order of Penalty Assessment to McDonnell in Case No. 10-053-D4. The 2™ Amended Order of Penalty Assessment lowered the penalty assessed against McDonnell to $2,379.00 pursuant to the negotiated settlement. The 2"? Amended Order of Penalty was served on McDonnell by email on August 11,2011. A copy of the 2"! Amended Order of Penalty Assessment is attached hereto as “Exhibit F” and incorporated herein by reference.
The Issue Whether the Respondent, Steve Mundine Construction, Inc., timely challenged the Second Amended Order of Penalty Assessment and, if not, whether pursuant to the doctrine of equitable tolling Respondent’s untimely filed challenge should be accepted.
Findings Of Fact The Petitioner is the state agency charged with the responsibility of enforcing and assuring employers meet the requirements of chapter 440, Florida Statutes. The law in Florida requires employers to maintain appropriate workers’ compensation coverage for their employees. At all times material to this case, the Respondent was doing business in Florida and was subject to the requirements of the law. On May 6, 2015, Stephanie Scarton, an investigator employed by the Petitioner, stopped at one of the Respondent’s construction sites and initiated an investigation as to whether the Respondent maintained appropriate workers’ compensation for the two employees found at the job site. After determining that the requisite documentation for workers’ compensation coverage was not produced, Ms. Scarton issued a Stop-Work Order (Petitioner’s Exhibit A). The Stop- Work Order advised the Respondent that he, Steven Mundine, d/b/a, Steve Mundine Construction, Inc., was in violation of Florida law by “failing to obtain coverage that meets the requirements of chapter 440, F.S., and the Insurance Code.” Petitioner’s Exhibit A included a Notice of Rights that provided, in part: You have a right to administrative review of this action by the Department under sections 120.569 and 120.57, Florida Statutes. * * * FAILURE TO FILE A PETITION WITHIN THETWENTY-ONE (21) DAYS CONSTITUTES A WAIVER OF YOUR RIGHT TO ADMINISTRATIVE REVIEW OF THEAGENCY ACTION. [Emphasis in original] In response to the Stop-Work Order, the Respondent met with Cathy Nunez on May 7, 2016, and executed an Agreed Order of Conditional Release from Stop-Work Order (Petitioner’s Exhibit B). In addition to signing the agreed order, the Respondent submitted an affidavit that provided: I Steve Mundine have terminated Bill Busch and Karl G. Kerr. I am no longer conducting business as Steve Mundine Const. Inc. I have opened a new company Paradigm Building, LLC but will not work til we applied and received exemptions. Including Richard Hans. Under the terms of the Agreed Order of Conditional Release from Stop-Work Order the Respondent represented that he would remit periodic payments of the remaining penalty amount pursuant to a Payment Agreement Schedule for Periodic Payment of Penalty with the Department or pay the remaining penalty amount in full within 28 days after the service of the Stop-Work Order. As a condition of receiving the conditional release the Respondent remitted $1,000.00 toward the penalty amount. In order to assist the Petitioner with the accurate calculation of the penalty that would be due, the Respondent was advised that he needed to submit records. When the Respondent asked Cathy Nunez if he needed to retain a lawyer, she did not tell him that he did not need a lawyer. She advised him that a lawyer was not required to produce the records that were needed to make the penalty calculation. The Respondent did produce records to the Petitioner and in turn an Amended Order of Penalty Assessment (Petitioner’s Exhibit C) was completed that advised the Respondent that he owed a total penalty of $63,837.82. Cathy Nunez hand-delivered the Amended Order of Penalty Assessment to the Respondent on July 24, 2015. Included was a second Notice of Rights that advised the Respondent of his right to challenge the assessment. Additionally, the Respondent was advised that a petition to seek administrative review of the action had to be filed within twenty-one days. After considering additional records submitted by the Respondent, the Petitioner prepared a Second Amended Order of Penalty Assessment (Petitioner’s Exhibit D) to itemize the revised amount owed by the Respondent. The Second Amended Order of Penalty Assessment ordered the Respondent to pay a total penalty of $47,006.28. Stephanie Scarton delivered the Second Amended Order of Penalty Assessment to the Respondent on December 22, 2015. At the same time (December 22, 2015), Ms. Scarton presented the Respondent with a Payment Agreement Schedule for Periodic Payment of Penalty (Petitioner’s Exhibit E). The payment agreement acknowledged that the Respondent had previously remitted $1,000.00 toward his penalty and allowed for the remaining $46,006.28 to be repaid over the course of 60 monthly payments. The Respondent did not agree to sign the payment agreement. Accordingly, a blank agreement was left with the Respondent, not the one providing for the payments previously described. On December 22, 2015, the Respondent disagreed with the repayment amount and believed the penalty had been incorrectly calculated. On December 22, 2015, the Respondent knew he had a limited amount of time to challenge the Second Amended Order of Penalty Assessment. On December 22, 2015, Ms. Scarton hand-delivered to the Respondent the Second Amended Order of Penalty Assessment including a Notice of Rights. The only documents not left with the Respondent on December 22, 2015, were copies of the payment agreement signed by Ms. Scarton. On December 22, 2015, the Notice of Rights provided to the Respondent was identical to the Notice of Rights previously provided to him. Before leaving the Respondent on December 22, 2015, Ms. Scarton reminded the Respondent he had a limited amount of time to file a petition seeking administrative review of the agency action. The Petitioner did not misrepresent the procedural requirements to challenge the agency action, did not lull the Respondent into a false sense of security or inaction, and did not advise the Respondent as to whether he should retain a lawyer in connection with an administrative review of the penalty assessment. The weight of the credible evidence supports the finding that when the Respondent eventually filed a petition to challenge the agency action, it was beyond the 21 days allowed by law.
Recommendation Based upon 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 determining the Respondent’s request for administrative review of the Second Amended Order of Penalty Assessment was not timely filed. DONE AND ENTERED this 27th day of May, 2016, in Tallahassee, Leon County, Florida. S J. D. PARRISH 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 27th day of May, 2016. COPIES FURNISHED: Christopher Ivey Miller, Esquire Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399 (eServed) John Laurance Reid, Esquire Dickens Reid PLLC 517 East College Avenue Tallahassee, Florida 32301 (eServed) Young J. Kwon, Esquire Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399 (eServed) Michael Joseph Gordon, Esquire Florida Department of Financial Services Workers Compensation Compliance 200 East Gaines Street Tallahassee, Florida 32399 (eServed) Julie Jones, CP, FRP, Agency Clerk Division of Legal Services Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399-0390 (eServed)
Findings Of Fact The factual allegations contained in the Stop-Work Order and Order of Penalty Assessment issued on April 1, 2011, and the Amended Order of Penalty Assessment issued on April 19, 2011, which are fully incorporated herein by reference, are hereby adopted as the Department’s Findings of Fact in this case.
Conclusions THIS PROCEEDING came on for final agency action and Jeff Atwater, Chief Financial Officer of the State of Florida, or his designee, having considered the record in this case, including the Stop-Work Order and Order of Penalty Assessment, and the Amended Order of Penalty Assessment, and being otherwise fully advised in the premises, hereby finds that: 1. On April 1, 2011, the Department of Financial Services, Division of Workers’ Compensation (hereinafter “Department”) issued a Stop-Work Order and Order of Penalty Assessment in Division of Workers’ Compensation Case No. 11-110-1A to LYNDA AGUAYO, DBA, LA FRAMING CONTRACTOR, INC., A DISSOLVED FLORIDA CORPORATION AND LA FRAMING CONTRACTOR, INC. The Stop-Work Order and Order of Penalty Assessment included a Notice of Rights wherein LYNDA AGUAYO, DBA, LA FRAMING CONTRACTOR, INC., A DISSOLVED FLORIDA CORPORATION AND LA FRAMING CONTRACTOR, INC was advised that any request for an administrative proceeding to challenge or contest the Stop-Work Order and Order of Penalty Assessment must be filed within twenty-one (21) days of receipt of the Stop-Work Order and Order of Penalty Assessment in accordance with Section 120.569 and 120.57, Florida Statutes. 2. On April 1, 2011, the Stop-Work Order and Order of Penalty Assessment was personally served on LYNDA AGUAYO, DBA, LA FRAMING CONTRACTOR, INC., A DISSOLVED FLORIDA CORPORATION AND LA FRAMING CONTRACTOR, INC. A copy of the Stop-Work Order and Order of Penalty Assessment is attached hereto as “Exhibit A” and incorporated herein by reference. 3. On April 19, 2011, the Department issued an Amended Order of Penalty Assessment in Division of Workers’ Compensation Case No. 11-110-1A to LYNDA AGUAYO, DBA, LA FRAMING CONTRACTOR, INC., A DISSOLVED FLORIDA CORPORATION AND LA FRAMING CONTRACTOR, INC. The Amended Order of Penalty Assessment assessed a total penalty of $12,985.36 against LYNDA AGUAYO, DBA, LA FRAMING CONTRACTOR, INC., A DISSOLVED FLORIDA CORPORATION AND LA FRAMING CONTRACTOR, INC. 4. On April 29, 2011, the Amended Order of Penalty Assessment was. personally served on LYNDA AGUAYO, DBA, LA FRAMING CONTRACTOR, INC., A DISSOLVED FLORIDA CORPORATION AND LA FRAMING CONTRACTOR, INC. A copy of the Amended Order of Penalty Assessment is attached hereto as “Exhibit B” and incorporated herein by reference. 5. LYNDA AGUAYO, DBA, LA FRAMING CONTRACTOR, INC., A DISSOLVED FLORIDA CORPORATION AND LA FRAMING CONTRACTOR, INC failed to answer the Stop-Work Order and Order of Penalty Assessment and the Amended Order of Penalty Assessment or request a proceeding in accordance with Sections 120.569 and 120.57, Florida Statutes.
Findings Of Fact The factual allegations in the Stop-Work Order and Order of Penalty Assessment issued on August 14, 2006, and the 2nd Amended Order of Penalty Assessment issued on June 30, 2008, which are fully incorporated herein by reference, are hereby adopted as the Department's Findings of Fact in this case.
Conclusions THIS PROCEEDING came on for final agency action and Jeff Atwater, Chief Financial Officer of the State of Florida, or his designee, having considered the record in this case, including the Stop-Work Order and Order of Penalty Assessment and the 2nd Amended Order of Penalty Assessment served in Division of Workers' Compensation Case No. 06-283-Dl, and being otherwise fully advised in the premises, hereby finds that: On August 14, 2006, the Department of Financial Services, Division of Workers' Compensation (hereinafter "Department") issued a Stop-Work Order and Order of Penalty Assessment in Division of Workers' Compensation Case No. 06-283-Dl to CARLTON REID (REID). The Stop-Work Order and Order of Penalty Assessment included a Notice of rights wherein REID was advised that any request for an administrative proceeding to challenge or contest the Stop-Work Order and Order of Penalty Assessment must be filed within twenty-one (21) days of receipt of the Stop-Work Order and Order of Penalty Assessment in accordance with Sections 120.569 and 120.57, Florida Statutes. On August 15, 2006, the Stop-Work Order and Order of Penalty Assessment was served via personal service on REID. A copy of the Stop-Work Order and Order of Penalty Assessment is attached hereto as "Exhibit A" and incorporated herein by reference. On September 6, 2006, the Department issued an Amended Order of Penalty Assessment to REID in Case No. 06-283-Dl. The Amended Order of Penalty Assessment assessed a total penalty of $183,710.84 against REID. The Amended Order of Penalty Assessment included a Notice of Rights wherein REID was advised that any request for an administrative proceeding to challenge or contest the Amended Order of Penalty Assessment must be filed within twenty-one (21) days of receipt of the Amended Order of Penalty Assessment in accordance with Sections 120.569 and 120.57, Florida Statutes. The Amended Order of Penalty Assessment was served on REID by personal service on October 26, 2006. A copy of the Amended Order of Penalty Assessment is attached hereto as "Exhibit B" and incorporated herein by reference. On November 17, 2006, REID timely filed a Petition requesting a formal administrative hearing. The matter was referred to the Division of Administrative Hearings, where it was assigned Case No. 06-4937. On February 8, 2007, the Department filed a Stipulated Joint Motion to Close DOAH Case File With Leave to Re-Open, and on February 9, 2007, Administrative Law Judge Barbara J. Staros entered an Order Closing File, relinquishing jurisdiction to the Department. On July 3, 2008, the Department and REID entered into a Settlement Agreement, pursuant to which the Department agreed to issue a 2nd Amended Order of Penalty Assessment in the amount of $14,817.78, and REID agreed to pay a penalty in the amount of $14,817.78 in order to resolve Case No. 06-283-D1. On June 30, 2008, the Department issued a 2nd Amended Order of Penalty Assessment to REID in Case No. 06-283-Dl. The 2nd Amended Order of Penalty Assessment assessed a total penalty of $14,817.75 against REID. The 2nd Amended Order of Penalty Assessment contained a Notice of Rights wherein REID was advised that any request for an administrative proceeding to challenge or contest the 2nd Amended Order of Penalty Assessment must be filed within twenty-one (21) days ofreceipt of the 2nd Amended Order of Penalty Assessment pursuant to Sections 120.569 and 120.57, Florida Statutes. The 2nd Amended Order of Penalty Assessment was served on REID's counsel by certified mail on July 7, 2008. A copy of the 2nd Amended Order of Penalty Assessment is attached hereto as "Exhibit C" and is incorporated herein by reference. REID did not file a Petition requesting an administrative proceeding to challenge or contest the 2nd Amended Order of Penalty Assessment.
The Issue The issues to be resolved in this proceeding concern whether the Petitioner was operating its restaurant business in violation of Chapter 440, Florida Statutes, the Florida Workers' Compensation Law, by failing to have required workers' compensation coverage. The related issues are whether the Department should therefore issue a Stop Work Order, whether a penalty should be imposed for so operating and what the correct penalty should be.
Findings Of Fact The Department is an Agency of the State of Florida charged with enforcing the statutory requirement, specifically Section 440.107, Florida Statutes, which mandates that employers in Florida secure the payment of workers' compensation insurance coverage for the benefit of employees. The Petitioner is a restaurant operating in the vicinity of Crystal River, Florida, which opened for business sometime in the year 2005. At certain times during its operation, which are those times relevant to this proceeding, the restaurant had four or more employees, and was thus subject to the requirement to secure payment of workers' compensation for those employees. Wanda Rivera is an investigator for the Division's Bureau of Compliance. On January 12, 2007, she was referred to investigate a restaurant in Crystal River, Florida. There was another restaurant nearby, the La Paz Mexican Grill, the Petitioner's business. Because she was in the area she made a routine visit to that restaurant as well. When Ms. Rivera entered the restaurant she saw two waitresses as well as another employee and the owner of the restaurant. She made a report of her visit as well as other events and observed facts from her investigation and included them as part of a narrative in her initial investigative report. Ms. Rivera checked the Department's Coverage and Compliance Automated System (CCAS) data base by first looking up the name La Paz Mexican Grill. She spoke to the restaurant's owner, Aswaldo Vazquez, and learned that the actual corporate name was 2 Friends, Inc. She researched that name in the Division's data base and found no indication of workers' compensation coverage for that corporation. She also interviewed workers present at the restaurant. Mr. Vazquez told Ms. Rivera that there were five employees and that the restaurant did not have workers' compensation coverage. Ms. Rivera also checked the CCAS data base, as well as the Department of State, Division of Corporation's data base. She thereby discovered that Mr. Vazquez was an officer of the corporation, but that he did not have an exemption from workers' compensation coverage which corporate officers may apply for and obtain. Ms. Rivera presented her investigative findings to her supervisor and after having done so issued a Stop Work Order, Number 07-012-D3, and served it upon Mr. Vazquez. She hand wrote the Stop Work Order Number on that form, having received that number from her supervisor. She served it on Mr. Vazquez personally on that same day, January 12, 2007. Part of her training as an investigator had emphasized serving documents personally on employers. The Stop Work Order was a three part form; she gave the yellow carbon copy of the Stop Work Order to Mr. Vazquez by hand delivery and, in checking her official file in the case in preparation for hearing, she found that her file contained no yellow copy of the Stop Work Order Form, corroborating her testimony that she had personally served the yellow copy of the Stop Work Order on Mr. Vazquez on January 12, 2007. The Stop Work Order specifically stated that all business operations had to cease immediately and could not resume until the Department issued an order releasing the Stop Work Order. The Order also stated that a penalty of $1,000.00 a day would be assessed the employer who conducted business operations in violation of the Stop Work Order. Ms. Rivera and Mr. Vazquez are fluent Spanish speakers. Ms. Rivera therefore conducted her interview with Mr. Vazquez in Spanish to assure that he understood all facets of the Division's position in his situation. She answered his questions and explained to him that the Stop Work Order was to take effect immediately and that there would be a $1,000.00 dollar per day fine for working in violation of the Stop Work Order. She also issued and served a Request for Production of Business Records for Penalty Assessment Calculation. The records were to be produced within five business days. Two types of records were requested: those that would show how much payroll the establishment had paid over the previous three years and those that would show exemptions. The request for records allows the employer five days to provide the documents; if no records were received within 15 days of the request, the Department could impute the gross payroll. Three weeks after serving the request on Mr. Vazquez, Ms. Rivera received some records by mail on February 2, 2007. They were insufficient for her investigation. Thus, not having received records from which she could calculate payroll and determine when the restaurant had four or more employees, Ms. Rivera, in accordance with statute, imputed the payroll and thereupon calculated a penalty of $34,240.30 based upon the imputed amount. She issued an Amended Order of Penalty Assessment to that effect on February 5, 2007, and it was served by certified mail on Mr. Vazquez on February 7, 2007. It was also served by a process server on February 13, 2007. That Amended Order of Penalty Assessment did not reference the Stop Work Order Number nor did it reflect the date it was issued. Ms. Rivera forgot to include this information when she filled out the Order. The Amended Order of Penalty Assessment did, however, have the following language: The Stop Work Order issued in this case shall remain in effect until either (a) the Division issues an order releasing the Stop Work Order upon finding that the employer has come into compliance with the coverage requirements of the workers' compensation law and pays the total penalty in full, or (b) the Division issues an Order of Conditional Release from Stop Work Order pursuant to the employer coming into compliance with the coverage requirements of the workers' compensation law and entering into a payment agreement schedule for periodic payment of penalty. On February 7, 2007, Mr. Vazquez phoned Ms. Rivera asking why his penalty was that high, stating that his accountant could provide additional records. Ms. Rivera had telephone contact at least twice with Mr. Vazquez between February 7, and March 29, 2007. When she contacted him at the restaurant, a voice would answer, "La Paz Mexican Restaurant, how may I help you?" She asked Mr. Vazquez if the restaurant was actually operating, and told him that he could not open for business while a Stop Work Order was in effect. She was assured that the restaurant was not working. Mr. Vazquez also told her that more records would be produced. On March 29, 2007, however, Ms. Rivera had not received any new records, so she visited the restaurant and found that it was open for business in violation of the Stop Work Order. Because the restaurant is open seven days a week, Ms. Rivera assessed an additional penalty of $1,000.00 per day since the Stop Work Order had been issued. She thus issued a Second Amended Order of Penalty Assessment for the sum of $110,240.30. The Second Amended Order of Penalty Assessment referred to Stop Work Order Number 07-012-D3, stating that the Stop Work Order had been filed on January 12, 2007, and noting that the Amended Order of Penalty Assessment was dated February 5, 2007, and the Order showed an issuance date of March 29, 2007. On the next day, March 30, 2007, Ms. Rivera received more business records, from which she could calculate a penalty without imputing the payroll. Ms. Rivera calculated the new penalty at $79,690.36. Before she could issue a new penalty order, however, Mr. Vazquez contacted her and said that his restaurant had been closed for several days while he was traveling. He subsequently provided documents to Ms. Rivera that showed that he was out of the country for nine days. While 76 days had elapsed between the date the Stop Work Order was issued and the date Ms. Rivera found the restaurant had been open, Ms. Rivera determined that she would assess the penalty for only 67 days of that period. This decision was based upon Mr. Vazquez's documentation and her giving him the benefit of the doubt in accepting his representation that he had been out of the country for nine days and not operating. She then re-calculated the penalty as being $70,060.36 and issued a Third Amended Order of Penalty Assessment to that effect. The Third Amended Order of Penalty Assessment made reference to Stop Work Order Number 07-012-D3, and notes that the Stop Work Order was issued on January 12, 2007. The Third Amended Order has "February 5, 2007," in the line on the order for "issuance date." The entry for "issuance date" on the Third Amended Order of Penalty Assessment is incorrect and it should have been April 3, 2007, the date the Amended Order of Penalty Assessment was issued. The penalty worksheet for the Third Amended Order of Penalty Assessment shows that there was $25,793.55 in payroll for the relevant portions of 2005; $8,635.30 for relevant portions of 2006 during which times the restaurant had four employees. There was $1,370.21 in payroll for the relevant first 12 days of 2007, which was up until the time the Stop Work Order was issued. Ms. Rivera did not include the payroll for periods of time when the record showed the restaurant did not have four employees and her work papers so reflect. The payroll was calculated from 2005 forward because the business opened that year. On April 4, 2007, Mr. Vazquez brought his restaurant into compliance by reducing his staff to less than four employees and he entered into an agreement with the Department whereby he would pay down 10 percent of the penalty and agree to pay the remainder in 60 interest free monthly payments. Mr. Vazquez, in effect, does not contest the Division's position that he was required to carry workers' compensation coverage during the pertinent time periods and that he did not have such coverage. In actuality he disputes the amount of the penalty because he maintains that he did not receive the Stop Work Order until March 29, 2007. Mr. Vazquez is the president of the 2 Friends, Inc., Corporation. He speaks English and opined during his testimony that he reads 60 to 70 percent of English text. He knows people who are fluent in English and has people to whom he can show documents written in English if he does not understand any part of such.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is, therefore, RECOMMENDED that a final order be entered by the Department of Financial Services finding that the Petitioner, 2 Friends Inc., d/b/a/ La Paz Mexican Grill, has failed to secure required workers' compensation coverage for its employees in violation of Sections 440.10(1)(a) and 440.38(1), Florida Statutes (2007), and that a penalty against that entity be accessed in the amount of $70,060.36, and that said final order provide for an acceptable installment payment arrangement whereby the amount may be paid over a period of at least 60 months at no interest. DONE AND ENTERED this 30th day of July, 2008, in Tallahassee, Leon County, Florida. S P. MICHAEL RUFF Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with Clerk of the Division of Administrative Hearings this 30th day of July, 2008. COPIES FURNISHED: Leon M. Boyajan, II, Esquire Leon M. Boyajan, II, P.A. 2303 West Highway 44 Inverness, Florida 34453-3809 Thomas H. Duffy, Esquire Department of Financial Services 200 East Gaines Street, 6th Floor Tallahassee, Florida 32399 Honorable Alex Sinks Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Daniel Sumner, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
