The Issue Whether Respondents violated the provisions of chapter 440, Florida Statutes, by failing to secure the payment of workers' compensation coverage, as alleged in the Stop-Work Orders, and, if so, what penalty is appropriate.
Findings Of Fact The Department is the state agency charged with enforcing the requirement of chapter 440, Florida Statutes, that employers in Florida secure workers' compensation coverage for their employees. § 440.107(3), Fla. Stat. Respondents are gas station/convenience stores located in South Florida. Northlake was created by Nazma Akter on May 6, 2014. MB was created by Ms. Akter on March 23, 2010. Congress Valero was created by Muhammad Saadat on July 21, 2011. Hena was created by Ms. Akter and Abu Ahsan on December 14, 2011. Hayma was created by Ms. Akter on December 14, 2011. Blue Heron was created by Ms. Akter on August 4, 2009. At all times relevant hereto, Respondents were duly-licensed to conduct business in the state of Florida. On February 2, 2015, the Department's Compliance Investigator Robert Feehrer, began a workers' compensation compliance investigation of Gardenia, LLC. Investigator Feehrer called the number listed for Gardenia, LLC, and was provided with a corporate office address. On February 10, 2015, upon arrival at Gardenia, LLC's, corporate office located at 165 US Highway 1, North Palm Beach, Florida, 33408, Investigator Feehrer spoke with Operations Manager Mohammad Hossain. Mr. Hossain stated that Gardenia, LLC, was a paper corporation and existed only for the purpose of paying unemployment taxes on the "six stores." Mr. Hossain went on to provide Investigator Feehrer with a list of Respondents and names of the employees that worked at each store. As an employee of Gardenia, LLC, and Respondents, Mr. Hossain's statements are party opponent admissions and bind Respondents. Lee v. Dep't of Health & Rehab. Servs., 698 So. 2d 1194, 1200 (Fla. 1997). With Mr. Hossain's statements and the list of Respondents' employees, Investigator Feehrer then consulted the Division of Corporations website, www.sunbiz.org, and confirmed that Respondents were current, active Florida companies. Investigator Feehrer then consulted the Department's Coverage and Compliance Automated System ("CCAS") for proof of workers' compensation coverage and exemptions associated with Respondents. Investigator Feehrer's CCAS search revealed that Respondents had no workers' compensation policies and no exemptions. On February 24, 2015, Investigator Feehrer conducted site visits at each of the six stores. Ms. Akter and Mr. Hossain accompanied Investigator Feehrer during these site visits. At all times material hereto, Ms. Akter was a corporate officer or managing member of each of the six Respondents. Muhammed Saadat and Abu Ahsan were corporate officers or managing members of Congress Valero, Hena, and Blue Heron. Kazi Ahamed was a corporate officer or managing member of Congress Valero and Hayma. Kazi Haider and Mohammed Haque were managing members of Hayma. All received compensation from the companies with which they were involved. Although Investigator Feehrer only personally observed one employee working at each location during his site visits, the payroll records revealed that at least four employees (including corporate officers or managing members without exemptions) received compensation for work at each location during the relevant period. Investigator Feehrer required additional information to determine compliance, and with Respondents' permission, contacted Respondents' accountant. Investigator Feehrer met with the accountant at least two times to obtain relevant information prior to March 30, 2015. Upon Ms. Akter's authorization, the accountant provided tax returns and payroll information for Respondents' employees. Information from Ms. Akter and Mr. Hossain also confirmed the specific employees at each of the six stores during the period of March 30, 2013, through March 30, 2015. On March 30, 2015, based on his findings, Investigator Feehrer served six Stop-Work Orders and Orders of Penalty Assessment. The Stop-Work Orders were personally served on Ms. Akter. Mr. Hossain was present as well and confirmed the lists of employees for each of the six stores were accurate. In April 2015, the Department assigned Penalty Auditor Christopher Richardson to calculate the six penalties assessed against Respondents. Respondent provided tax returns for the audit period and payroll transaction details were provided, as well as general ledgers/breakdowns, noting the employees for each Respondent company. Based on Investigator Feehrer's observations of the six stores on February 24, 2015, Auditor Richardson used the classification code 8061 listed in the Scopes® Manual, which has been adopted by the Department through Florida Administrative Code Rule 69L-6.021(1). Classification code 8061 applies to employees of gasoline stations with convenience stores. Classification codes are four-digit codes assigned to various occupations by the National Council on Compensation Insurance to assist in the calculation of workers' compensation insurance premiums. In the penalty assessment, Auditor Richardson applied the corresponding approved manual rate for classification code 8061 for the related periods of non-compliance. The corresponding approved manual rate was correctly utilized using the methodology specified in section 440.107(7)(d)1. and rule 69L-6.027 to determine the final penalties. The Department correctly determined Respondents' gross payroll pursuant to the procedures required by section 440.107(7)(d) and rule 69L-6.027. On January 14, 2016, the Department served the six Amended Orders of Penalty Assessment on Respondents, assessing penalties of $1,367.06 for Northlake, $9,687.00 for MB, $12,651.42 for Congress Valero, $18,508.88 for Hena, $7,257.48 for Hayma, and $4,031.60 for Blue Heron. The Department has demonstrated by clear and convincing evidence that Respondents were engaged in the gasoline station, self-service/convenience store industry in Florida during the periods of noncompliance; that Respondents failed to secure the payment of workers' compensation for their employees, as required by Florida's Workers' Compensation Law; and that the Department correctly utilized the methodology specified in section 440.107(7)(d)1. to determine the appropriate penalties.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a consolidated final order upholding the Stop-Work Orders and the Amended Orders of Penalty Assessment in the amounts of $1,367.06 for Northlake Mobile Enterprises, Inc.; $9,687.00 for MB Food and Beverage, Inc.; $12,651.42 for Congress Valero, Inc.; $18,508.88 for Hena Enterprises, Inc.; $7,257.48 for Hayma Enterprises, Inc.; and $4,031.60 for Blue Heron BP, Inc. DONE AND ENTERED this 16th day of June, 2016, in Tallahassee, Leon County, Florida. S MARY LI CREASY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 16th day of June, 2016.
The Issue The issue to be determined is whether the doctrine of equitable tolling should excuse the late filing of a Petition for Administrative Hearing filed with Respondent by Petitioner Florists Mutual Insurance Company.
Findings Of Fact Respondent, the Department, is the state agency charged with resolving disputes over reimbursement for costs of medical services provided to injured workers under workers? compensation law. Petitioner Florists was in a reimbursement dispute with Kendall. The Department issued a Determination that Florists should reimburse Kendall the sum of $100,894.54. Florists received notice of the Reimbursement Dispute Determination on April 8, 2013, via United States Postal Service certified mail. The Reimbursement Dispute Determination included a Notice of Rights advising Florists that a request for an administrative hearing on the Determination had to be received by the Department within 21 days of Florists? receipt of the Determination. It noted in bold print that failure to file a petition within that time period constituted waiver of the right to a hearing. Florists? Initial Petition was sent via certified mail from the Tallahassee office of Petitioner?s counsel located at 1701 Hermitage Boulevard, Suite 103, Tallahassee, Florida, on or about Thursday, April 25, 2013. The filing deadline was the following Monday. The Initial Petition was appropriately addressed to “Julie Jones, CP, FRP, DFS Agency Clerk, Department of Financial Services, 612 Larson Building, 200 East Gaines Street, Tallahassee, Florida.” The Initial Petition was received by the Department on Wednesday, May 1, 2013, at 10:11 a.m. The Department determined that the Initial Petition was untimely, as it was received on the twenty-third day after Florists received notice, making it two days late. Petitioner is a workers? compensation insurance carrier whose substantial interests are affected by Respondent?s Reimbursement Dispute Determination that it must reimburse health care provider Kendall $100,894.54. That determination will become final if Petitioner is determined to have waived its right to a hearing. The distance between the Tallahassee office of Petitioner?s counsel and the office of the Department is approximately four miles. From review of the United States Postal Service tracking information, it appears that after the Initial Petition was mailed, it was processed in Louisville, Kentucky, before it returned to Tallahassee, Florida, for delivery, indicating a journey of some 1,050 miles over the course of six days. Late delivery of the Petition by the United States Postal Service did not prevent Florists from asserting its rights.
The Issue The issue is whether Petitioner, U.S. Builders, L.P. (USB), timely and effectively requested a final hearing on the issues related to the Order of Penalty Assessment issued by the Department of Financial Services, Division of Workers’ Compensation (Department) in accordance with the requirements of Chapter 120.57, Florida Statutes.
Findings Of Fact USB is a general contractor engaged in the construction industry and is properly registered to conduct business in the State of Florida. The Department is the state agency responsible for enforcing the statutory requirement that employers secure the payment of workers' compensation coverage for the benefit of their employees and corporate officers. § 440.107, Fla. Stat. On May 30, 2007, Department Investigator Teresa Quenemoen conducted an investigation or compliance check of USB to determine liability for workers’ compensation coverage. As a result of that investigation, an Order of Penalty Assessment was issued on June 18, 2007, assessing USB a penalty in the amount of $14,983.95. Attached on the opposite side of the page from the Order was a Notice of Rights directing the recipient how to properly respond if he wished to contest the penalty. Quenemoen received a letter, dated June 21, 2007, from J. Roland Fulton, President of USB, which states that he “strongly disagrees” with the Department’s allegations that USB failed to secure adequate workers’ compensation coverage and he wants to “resolve” the matter and “void the Order of Penalty.” If the Department could not make that happen, he wanted to have the “Appeal Procedures.” In a consultation with her Supervisor, Robert Lambert, regarding how to respond to Fulton’s letter, Quenemoen was advised to immediately contact USB and advise them of the Notice of Rights and timeline requirements for any petition they may wish to file. This conversation took place well within the 21-day period for request of formal administrative proceedings. Quenemoen was also advised to provide a copy of the Notice of Rights to USB. Quenemoen, however, delayed taking any action until she contacted USB via letter on August 3, 2007, after the expiration of the timeline requirements for timely filing which occurred on July 9, 2007. Quenemoen indicated within her August 3, 2007 letter to USB that the original date of the Order was the operative date. Robert Lambert testified that the June 21, 2007, letter of USB’s president contained most of the requirements considered necessary for the letter to have been viewed as a petition for administrative proceedings and would have been so considered had the words “Petition for Hearing” appeared at the top of the page. He is also unaware of any prejudice that would result to the Department if the matter of penalty assessment against USB were permitted to proceed to a hearing on the merits of the matter. Quenemoen, in her deposition, opines she did not consider the June 21, 2007, letter to be a petition because she thought it lacked crucial items, such as an explanation of how the party’s substantial interests would be affected by the agency’s decision; disputed items of material fact; and a concise statement of ultimate facts alleged. Quenemoen’s August 3, 2007 letter to USB, inquired why USB had neither paid their penalty nor entered into a Payment Agreement Schedule for Periodic Payment of Penalty, pursuant to Section 440.107, Florida Statutes. The letter re-informed USB that it had 21 days from the receipt of the original Order of Penalty Assessment to file a petition for hearing. On August 23, 2007, the Department received a Petition for Hearing from USB’s counsel. The Department determined the Petition filed by USB met the content criteria but failed on timeliness as it was filed more than forty days past the deadline of July 9, 2007. USB, through the testimony of its President, Mr. Fulton, admitted that he was not “familiar with the law. I did not go look it up.” He also said, “I did not think I needed to go back and consult the textbook of the law.” When asked if he ever decided to consult with a lawyer during the 21-day period, he stated he did not.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Financial Services enter a Final Order that Petitioner, U.S. Builders, L.P. (USB), timely and effectively requested a final hearing on the issues related to the Order of Penalty Assessment issued by the Department of Financial Services, Division of Workers’ Compensation (Department) in accordance with the requirements of Chapter 120.57, Florida Statutes, and proceed forthwith with provision of such proceedings. DONE AND ENTERED this 30th day of April, 2008, in Tallahassee, Leon County, Florida. S DON W. 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 30th day of April, 2008. COPIES FURNISHED: William H. Andrews, Esquire Coffman, Coleman, Andrews and Grogan, P.A. Post Office Box 40089 Jacksonville, Florida 32203 Marc A. Klitenic, Esquire Kandel, Klitenic, Kotz and Betten, LLP 502 Washington Avenue Suite 610 Towson, Maryland 21204 Kristian E. Dunn, Esquire Anthony B. Miller, Esquire Department of Financial Services Division of Workers’ Compensation 200 East Gaines Street Tallahassee, Florida 32399-4229 Daniel Y. Sumner, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0307 The Honorable Alex Sink Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
The Issue Whether the Florida Department of Financial Services, Division of Workers’ Compensation (Respondent) should enter a final order dismissing the Petition for Resolution of Reimbursement (Petition for Resolution) filed by Martin Memorial Health Systems (Petitioner). If the Petition for Resolution should not be dismissed, whether Guarantee Insurance Company (the Carrier) improperly disallowed reimbursement owed to Petitioner for services Petitioner rendered to an injured employee/claimant and the amount thereof.
Findings Of Fact Paragraphs 1–38 of the Agreed Facts and Conclusions of Law set forth in the Joint Pre-Hearing Statement and Filing of Exhibits are hereby incorporated by reference. The Notice of Deficiency issued by Respondent should not have been issued because the Petition for Reimbursement was complete when filed. Respondent has no basis to dismiss the Petition for Reimbursement. Petitioner provided medical services to an employee that had workers' compensation insurance coverage from the Carrier. The usual and customary charges for the services at issue in this proceeding totaled $61,111.09. The Carrier paid Petitioner the sum of $9,135.52 based on the Carrier’s determination that the charges should be based on inpatient treatment on a per diem basis. The greater weight of the evidence establishes that the services to the injured employee should be billed under the category “outpatient surgery” pursuant to the pre-admission authorization provided to Petitioner. Respondent has duly adopted rules that govern billing limitations. The parties agree that outpatient surgery, such as the services at issue in this proceeding should be reimbursed at 60 percent of the usual and customary charges. Petitioner is entitled to reimbursement from the Carrier in the amount of $36,666.65, which is 60 percent of $61,111.09. The Carrier should be credited with having paid the sum of $9,135.52, so the additional amount of the reimbursement due to Petitioner from the Carrier is $27,531.13 ($36,666.65 less $9,135.52) plus any applicable interest.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department of Financial Services enter a final order ordering the Carrier to reimburse Petitioner, Martin Memorial Hospital, in the additional amount of $27,531.13 plus any applicable interest. DONE AND ENTERED this 20th day of May, 2010, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON 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 20th day of May, 2010. COPIES FURNISHED: Karen Kennedy Martin Memorial Health Systems Post Office Box 9010 Stuart, Florida 34995 Mari H. McCully, Esquire Department of Financial Services Division of Workers` Compensation 200 East Gaines Street Tallahassee, Florida 32399-4229 Brian F. LaBovick, Esquire LaBovick & LaBovick, P.A. 5220 Hood Road, Second Floor Palm Beach Gardens, Florida 33418 Julie Jones, CP, FRP, Agency Clerk Department of Financial Services Division of Legal Services 200 East Gaines Street Tallahassee, Florida 32399-0390 Honorable Alex Sink Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Benjamin Diamond, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
The Issue Whether Gio & Sons, Inc. (Respondent) violated Sections and 440.38, Florida Statutes, and if so, what penalty should be imposed. References to sections are to the Florida Statutes (2004).
Findings Of Fact Petitioner is the state agency responsible for enforcing provisions of Florida law, specifically Chapter 440, Florida Statutes, which require that employers secure workers’ compensation coverage for their employees. Respondent, whose principal is Giovanny Martinez, Jr. (Mr. Martinez), is in the business of providing drywall installation services. At all times material to this case, Respondent is an employer within the meaning of Section 440.02(16)(a), Florida Statutes. At all times material to this case, Respondent was legally obligated to provide workers' compensation insurance in accordance with the provisions of Chapter 440, Florida Statutes, for all persons employed by Respondent to provide drywall installation services within Florida. In particular, Chapter 440 requires that the premium rates for such coverage be set pursuant to Florida law. At all times material to this case, Respondent failed to obtain workers' compensation coverage on behalf of over 150 employees. It is undisputed that Respondent had not furnished the required coverage, and that there was no valid exemption from this requirement. Accordingly, on February 26, 2004, the Stop Work Order was properly entered. Thereafter, Petitioner reviewed Respondent's payroll records, which revealed that Respondent employed the individuals referred to in paragraph 5, whose identities are not in dispute, under circumstances which obliged Respondent to provide workers' compensation coverage for their benefit. Based upon Respondent’s payroll records, Petitioner correctly calculated the penalty amount imposed by law under all the circumstances of the case, and issued the Amended Order imposing a penalty assessment in the amount of $107,885.71. Mr. Martinez does not dispute the factual or legal merits of Petitioner's case.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department of Financial Services, Division of Workers’ Compensation, enter a final order that affirms the Amended Order in the amount of $107,885.71. DONE AND ENTERED this 15th day of December, 2004, in Tallahassee, Leon County, Florida. S FLORENCE SNYDER RIVAS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 15th day of December, 2004. COPIES FURNISHED: Joe Thompson, Esquire Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399-4229 Giovanny Martinez, Jr. Gio & Sons, Inc. 6910 Southwest 18th Court Pompano Beach, Florida 33068 Honorable Tom Gallagher Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florid a 32399-0300 Pete Dunbar, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
The Issue Whether Petitioner's September 29, 1993, claim (Claim No. 34092993) for reimbursement of expenses for medical services rendered in 1992 should be denied on the ground that said claim was not timely filed with Department of Management Services, Division of State Employees' Insurance (hereinafter referred to as the "Department")?
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made: Petitioner is now, and has been at all times material to the instant case, a participant in the State of Florida Flexible Benefits Plan (hereinafter referred to as the "Plan") with an established Medical Reimbursement Account. The following were among the medical expenses incurred by Petitioner and members of her immediate family during the 1992 calendar year: DATE TYPE OF SERVICE AMOUNT 6/29/92 Dental $70.00 7/9/92 Dental $310.00 7/11/92 Endodontic $450.00 7/17/92 Optical $266.75 7/22/92 Dental $500.00 7/27/92 Optical $84.70 8/19/92 Optical $416.50 12/29/92 Dental $210.00 In August of 1992, Hurricane Andrew ravaged parts of South Florida. Petitioner's residence was extensively damaged by the storm. Most of the contents of the residence, including medical records and receipts, were destroyed. Petitioner and her family were forced to vacate the premises. They packed their remaining belongings and moved to another location in Dade County, with the intention of returning to their home once the damage to the structure had been repaired. As of the date of the hearing in this case, all of the necessary repairs to the home had yet to be made and therefore the family had not moved back in. Petitioner and the other members of her family were among those residents of South Florida whose lives were significantly disrupted by the hurricane and the destruction and devastation it caused In the aftermath of the hurricane, Petitioner directed her energies toward obtaining a return to normalcy in her life. Although she realized that there were medical expense reimbursement claims that she needed to file with the Department, filing these claims was not a priority of hers. She focused her attention on other matters that she considered to be more deserving of her time given her situation. In January or February of 1993, Petitioner telephoned the Department to inquire if extensions of time for filing reimbursement claims were being given to Plan participants, such as herself, who were still suffering from the consequences of Hurricane Andrew. The person to whom Petitioner spoke advised her that such extensions were indeed being given. Based upon what she had been told by this Department representative, Petitioner reasonably believed that she would be able to file reimbursement claims for 1992 medical expenses after March 1, 1993, without having these claims rejected on the ground that they had been untimely filed. She therefore felt that there was no urgency with respect to the filing of these claims and she acted accordingly. Shortly after gathering all of the supporting documentation she believed she needed, 1 Petitioner, on September 29, 1993, filed a claim with the Department requesting that she be reimbursed from her Medical Reimbursement Account for the medical expenses enumerated in Finding of Fact 2 of this Recommended Order. The Department designated the claim as Claim No. 34092993. Petitioner also sought reimbursement, through the filing of this claim, of certain medical expenses incurred in 1993, including $140.00 for dental work that Petitioner had inadvertently indicated on the claim form had been performed in July of 1992. The work had actually been done in July of 1993. By letter dated October 8, 1993, the Department advised Petitioner that "[o]nly expenses for services rendered during the January 1, 1993 through December 31, 1993 plan year are eligible for reimbursement" and that "[s]ince [her] 1992 expense does not fall within this plan year, it is not reimbursable." Petitioner responded to this advisement by sending the following letter, dated November 28, 1993, to the Department: This is a petition or application requesting a formal hearing on my Claim #34092993 for Payment/Reimbursement for expenses incurred during my period of coverage for 1992. This Claim was denied. My Name is: Luretha F. Lucky My Address is: 10430 S.W. 162nd Terrace (temporary) Miami, Florida 33157 My permanent address is: 10361 S.W. 139th Street Miami, Florida 33176 I am employed at Florida International University, Miami, Florida 33199. I filed my claim late because my home was severely damaged when hit [b]y Hurricane Andrew, August 24, 1992. In addition, the content[s] in my home w[ere] destroyed, therefore, it took awhile for me to collect documentation for my claim from medical personnel. Also, I had to move and the few items saved were packed away. Lastly, I called the Department of Management Services, Division of State Employees' Insurance to inform them of what had happened to me and asked if . . . they were providing extensions on submitting claims. I was told they were. My mistake was not asking and recording the name of the person with whom I spoke. As you can see from my temporary address, I am still not back in my home! In fact we just settled (with the assistance of the Insurance Commissioner's Office) with our insurance company to complete the work on our home. We had to request an extension on filing our income tax for 1992. This past year has been an awful experience for us, and I do hope you will provide me a hearing on my reimbursement. My Claim # is: 34092993. The decision that my claim was denied was received by regular mail. Thank you very much for considering my request.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby: RECOMMENDED that the Department enter a final order finding Petitioner's September 29, 1993, claim (Claim No. 34092993) for reimbursement of expenses for medical services rendered in 1992 to have been timely filed and therefore subject to consideration on its merits. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 15th day of April, 1994. STUART M. LERNER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings 15th day of April, 1994.
The Issue At issue in this proceeding is the amount of reasonable expenses, including reasonable attorney’s fees, that should be awarded as a consequence of the filing of a claim for benefits under the Florida Birth-Related Neurological Injury Compensation Plan.
Findings Of Fact Background 1. Heather Nicole Hosken (Heather) is the natural daughter of Cynthia and Brian Hosken, and was born September 4, 1993, at Cape Canaveral Hospital, Cocoa Beach, Brevard County, Florida. 2. Within a few days of Heather’s birth, NICA was advised by the office of the "participating physician", who provided obstetrical services during Heather’s delivery, that she might qualify for coverage under the Plan. Consequently, NICA, through its executive director Lynn Dickinson, spoke with the Hoskens by telephone and, by letter of September 27, 1993, advised them as follows: Per our telephone conversation of this date, enclosed please find two medical information release forms. One of these forms is for the mother’s medical records, the other form is for your daughter’s medical records. Please complete these forms and return them to us, so that we may obtain medical records to assist you in filing a NICA claim. For your review, I am enclosing a copy of Section 766.301-766.316, Florida Statutes, which is the law that governs the Florida Birth-Related Neurological Injury Compensa- tion Association. zit you have any questions, please contact me. 3. Thereafter, Ms. Dickinson spoke with the parents by telephone and made arrangements to meet with them in the area of their residence; however, Mr. Hosken subsequently cancelled the appointment stating that he would contact Ms. Dickinson again in the future. Notwithstanding such advice, neither Ms. Dickinson nor NICA received any further contact regarding this potential claim until in or about April 12, 1994, when Mr. Frederick Feins’ office, now counsel for the Hoskens, contacted NICA to inquire about, inter alia, the procedure for filing claims. Finally, on June 8, 1994, Mr. Feins’ office again contacted NICA by telephone regarding the information needed for the claim (petition) for benefits, and NICA provided, by letter of June 8, 1994, a draft petition for counsel’s benefit. To further assist counsel, the letter provided: Dear Mr. Fein: 4 Enclosed is a draft petition which may be used for your convenience. Please complete and forward to Ann Cole, Division of Administrative Hearings, 1230 Apalachee Park- way, Tallahassee, Florida 32399-1550 along with $15.00 (payable to Division of Administrative Hearings) for the filing fee. Please send us a courtesy copy along with completed medical authorization release forms for the mother and the infant. We have enclosed blank authorization forms for your convenience. Please send us a complete copy of the mother’s prenatal records, labor and delivery records and a copy of the baby’s nursery notes/records. Please do not delay filing your claim while waiting for records or bills. We can obtain them for you. We will also request all outstanding bills. If you have any questions or if I may assist you in any way to expedite this or any other claim, please contact me. 4. On June 27, 1994, Mr. Fein, on behalf of the claimants, filed a petition with the Division of Administrative Hearings ("DOAH") for compensation under the Florida Birth-Related Neurological Injury Compensation Plan (the "Plan"), and on or about July 12, 1994, DOAH served the Florida Birth-Related Neurological Injury Compensation Association ("NICA") with a copy of the claim. The petition that was filed substantially mirrored the draft petition NICA had provided petitioner’s counsel. 5. Respondent, NICA, following service of a copy of the petition, evaluated the claim and arranged for a _ medical examination to assess whether Heather was currently "permanently and substantially mentally and physically impaired" so as to qualify for benefits under the Plan. That examination was conducted by Michael Duchowny, M.D., a pediatric neurologist associated with Miami Children’s Hospital, on September 20, 1994, and he rendered his report to NICA on or about September 26, 1994, concluding that Heather’s "neurologic examination reveals evidence of a profound developmental delay affecting both motor and cognitive functioning. [Heather] has not progressed past the newborn and the prognosis for neurologic function is extremely guarded. I believe that her deficits are relatively fixed and that the long term prognosis is extremely poor." 6. Following its receipt of Dr. Duchowny’s report, NICA determined the claim to be compensable, and by letter of October 7, 1994, advised claimants’ counsel as follows: Dear Mr. Fein: As per Section 766.305(3), Florida Statutes, the Association agrees that Heather Hosken suffered a birth-related neurological injury as defined in Section 766.302(2), Florida Statutes. A copy of Dr. Duchowny’s medical evaluation is attached. We are prepared to provide medical benefits as provided by Section 766.31(1) (a) and are willing to offer the full $100,000.00 as provided in Section 766.31(1) (b). Please forward to this office, your detail of time and expense records for the above stated claim so that we may reach agreement on reasonable attorney’s fee and costs as per Section 766.31(1)(c), Florida Statutes. Also, please contact me so that we may discuss how the funds will be disbursed. Moreover, on November 4, 1994, NICA telefaxed a draft stipulation to claimants’ counsel so NICA’s agreement to accept the claim for compensation could, consistent with the provisions of Section 766.305(6), Florida Statutes, be approved by the Hearing Officer. 7. A stipulation, which substantially comported with the draft stipulation forwarded by NICA, was ultimately executed by the parties on December 29, 1994, and filed with DOAH on January 6, 1995. By final order of January 17, 1995, the stipulation was approved by the Hearing Officer, and all disputes between the parties were resolved with the exception of the amount of reasonable expenses, including attorney’s fees, that should be awarded. The claim for attorney’s fees and_expenses 8. Pertinent to the claim for attorney’s fees, the time records of the law firm of Thornton, Davis & Murray, P.A., counsel for petitioners, reflect that from March 18, 1994, to January 30, 1995, the following time had been logged, by the individual indicated, on petitioner’s file: NAME HOURS LOGGED Calvin F. David (attorney) 12.00 Frederick J. Fein (attorney) 127.75 Holly S. Harvey (attorney) 43.50 Jeffrey B. Shalek (attorney) 6.00 Jinny E. Anderson (paralegal) -50 Naomi G. Berjah (paralegal) 29.00 [Petitioner’s exhibit 1).? 9. At hearing, Mr. Fein acknowledged that some of the hours contained in the firm’s time records should not be considered as an expense of pursuing the claim, including the hours spent negotiating a fee agreement with the federal government to pursue a claim against NICA to recover benefits paid by the government, researching the entitlement to fees under the Federal Medical Recovery Act, conversations with referral counsel regarding the status of the claim, and any time expended in seeking recovery of attorney’s fees in this proceeding. 10. The actual entries or hours that Mr. Fein conceded were not germane to the claim were not identified at hearing but, post-hearing, Mr. Fein submitted a proposed "order awarding attorney’s fees and costs" which reflected a claim for 122.00 hours on behalf of Mr. Fein as opposed to the 127.75 hours reflected on the time records for the period of March 18, 1994, to January 30, 1995. No time was deducted for any other attorney or paralegal. The "order" did not, however, identify the entries to which the 5.75 hour reduction related, and the reduction made falls far short of the time identified by Mr. Fein’s expert as excludable or, on examination of the time records, is suspect and remains unexplained. li. Here, substantial time has been dedicated to reviewing the time records entry by entry, and line by line. Based on that review, it must be concluded that the time logged is grossly excessive for this NICA claim and includes a substantial amount of time that is inadequately explained or unrelated to the NICA claim. 12. In concluding that the time logged is excessive for this NICA claim, it is observed that the claim was straight- forward, lacked any novel aspects, and the earliest medical reports disclosed that Heather was profoundly impaired, mentally and physically. Moreover, NICA assisted the claimants in filing the claim, expeditiously processed the claim, promptly accepted the claim for compensation, and, but for the claim for attorney's fees, did not contest any matter regarding compensability or benefits. 13. The reliability of the time logged or, stated differently, the reliability of the records as an accurate indication of the time reasonably dedicated to the claim, is further rendered suspect based on the firm's practice of recording all time in quarter (.25) hour segments. This practice, particularly when coupled with the firm’s practice of lumping every task performed on a given day by a lawyer or paralegal into a single entry, leads to inflated hours and unreliable records.° 14. Among the time that is facially unrelated to the NICA claim is that time logged between August 4, 1994, and December 13, 1994, wherein the time records reflect numerous entries by Mr. Fein, Jeffrey P. Shalek, Holly S. Harvey, and J.E. Anderson, for work related to representing the federal government in pursuit of a claim against NICA and research related to the Federal Medical Recovery Act which, based on the context of those entries, each with the other, is clearly related to the federal representation and not to the NICA claim.* 45. First, with regard to the time recorded by Jeffrey P. Shalek on August 4, September 20, and September 28, 1994, totaling 6.00 hours, such time is patently related to the federal claim. Second, with regard to the time recorded for Holly Ss. Harvey between November 10 and November 22, 1994, in the amount of 43.50 hours, such time is all related to researching the Federal Medical Recovery Act and when read, particularly in conjunction with Mr. Fein’s time, is patently related to the federal claim.°? Third, with regard to the time recorded for g.E. Anderson of November 30 and December 13, 1994, totalling .50 hours, it is observed that the entry of December 13, 1994, for .25 hours again patently relates to the federal claim. The other entry for J.E. Anderson of November 30, 1994, of one-quarter (.25) hour for “update of pleading index" is rejected as de minimus, not shown to be related to the NICA claim, and not shown to have been necessary. 16. Next, with regard to the time recorded by Calvin F. David, totaling 12.00 hours, it is observed that the time recorded for April 6, August 4, August 9, August 30, and October 14, 1994, totaling 4 hours, did not reasonably relate to the NICA claim but, rather, related to the federal representation, revising the contingency contract with the client, and a review of the "charges printout." 17. Finally, as to the time recorded by Mr. Fein that did not reasonably relate to the NICA claim, are the time charges of March 23 (11.00 hours), August 4 (3.00 hours), August 10 (1.00 hour), August 30 (2.00 hours), September 19 (.50 hours), September 30 (.50 hours), October 5 (.50 hours), October 14 (2.00 hours), October 19 (2.50 hours), October 21 (1.00 hour), October 24 (1.00 hour), October 31 (1.50 hours), November 1 (2.00 hours), November 3 (.50 hours), November 7 (.50 hours), November 18 (1.00 hour), November 22, 1994 (1.00 hour), and January 24, 1995 (1.00 hour). As to the March 23, 1994, charge of 11.00 hours, it relates to "Travel to Melbourne. Attendance at meeting with Wolfman and plaintiffs. Travel back to office." Notably, the infant was born in Brevard County, petitioners reside in Brevard County, and there was no showing that competent or able counsel was not available in that area. Given that proper venue was Brevard County, Section 766.307(1), Florida Statutes, and there was no showing that counsel was unavailable in that area to 10 represent petitioners, travel time cannot be recovered. See, In re Florear, Inc., 16 B.R. 726 (S.D. Fla. 1982). Moreover, since there is no proof of record as to how long the conference took with the clients, that item cannot be separately addressed. As for the time recorded for January 24, 1995, that was a status conference with referring counsel and, considering it occurred after resolution of the claim, there was no proof that it was relevant to the filing of the claim. As to the remaining hours, they were facially incurred with respect to anticipated representation of the federal government on claims against NICA, or were so intertwined with those claims as not to be divisible. Accordingly, petitioners have failed to demonstrate that these 32.50 hours were reasonably expended in pursuit of the claim for compensation. ° 18. Reducing the hours claimed, as set forth in paragraph 8, by the foregoing hours that are clearly objectionable, leaves the following hours, by individual, that must still be addressed. NAME HOURS Calvin F. David (attorney) "8.00 Frederick J. Fein (attorney) 97.25 Naomi G. Berjah (paralegal) 29.00 19. With regard to the entries made for Ms. Berjah, as well as those for Mr. David and Mr. Fein that have not heretofore been rejected, the firm’s practice of lumping every task performed on a given day by the lawyer or paralegal into a single entry with only the gross hours noted for the day, renders it impossible to discern, absent further explanation, the time dedicated to any particular task. Moreover, such practice, when Mr. Fein’s 11 entries include tasks which are not related to the NICA claim, such as representing the federal government, conferring with the referring attorney regarding the status of the case, preparing contingency contracts, or exploring the possibility of opting out of NICA through the "bad faith" exception or otherwise, ’ renders it impossible, absent speculation, to derive an accurate picture of the hours dedicated to the NICA claim. 20. The unreliability of the firm’s time records, as a gauge of the number of hours reasonably expended in pursuit of the NICA claim, is, as heretofore noted, intensified by the firm’s practice of recording all time in quarter (.25) hour segments. This practice, by its very nature, leads to inflated hours and unreliable records. 21. In reaching the foregoing conclusions, the expert opinion of Michael Eidson, Esquire, has not been overlooked. His conclusion as to the relationship of the time claimed to the subject claim, as well as the necessity and reasonableness of the time expended, is not, however, persuasive. Indeed, Mr. Eidson assumed the number of hours recorded related to the claim for compensation and, essentially, accepted the integrity of the number of hours claimed; however, when made aware, he readily conceded that time recorded incident to, inter alia, representing the federal government was not relevant to the NICA claim. Accordingly, since the record demonstrates that much of the time expended was not relevant to the NICA claim and that the firm’s time records are otherwise not reliable, Mr. Eidson’s opinion that the hours claimed were reasonably and necessarily expended is rejected. 12 22. Given the proof, the testimony of John Kelner, Esquire, is credited, and his opinion that the reasonable number of hours necessarily required to pursue this simple claim for compensation benefits was between 20 and 40 hours is accepted. Giving petitioner’s counsel the full benefit of doubt, and considering his relative inexperience, 40 hours are found to be reasonable in this case. 23. The next consideration in establishing a reasonable fee is the determination of the market rate" or prevailing hourly rate, or range of hourly rates, charged in the community by lawyers of reasonably comparable skill, experience and reputation, for similar services. 24. In deriving the market rate, careful consideration has been accorded the hourly rates referenced in the affidavit of Mr. Fein for the lawyers and paralegals employed by his firm. {Petitioners’ exhibit 1] Those rates are, however, excessive, and bear no reasonable relationship to the prevailing rate in the community, when the fee basis is hourly billing for time worked. 25. With regard to Mr. Fein, the $210.00 hourly rate he seeks to ascribe to his services is patently not a real world rate but, rather, an in-house rate used in contingency fee cases where his contract with the client accords him the option of a contingency percentage or a court awarded reasonable fee, which even is higher, at his option. That rate is clearly illusory since it bears no reasonable relationship to the market rate in the community or to those cases Mr. Fein has handled on which the fee basis is hourly billing for time worked. In such cases, 13 which Mr. Fein describes as insurance defense, he has billed "as high as 185 an hour and ... as low as 155 an hour." Given that Mr. Fein was not admitted to the Florida Bar until 1989, has yet to be lead counsel on any case that has been tried, and bills in quarter hour segments, it is doubtful that he could even command that rate. 26. As for the rates ascribed to the other attorneys, with the exception of Calvin David, and paralegals who worked on this case, as set forth in Mr. Fein’s affidavit, they suffer the same disparities and bear no reasonable relationship to the market when the fee basis is hourly billing for time worked. 27. Given the record, the proof offered on behalf of petitioners is rejected as unpersuasive, and the opinion of John Kelner that the range of rates in the community for similar services, considering the experience of the personnel who worked on this claim, would be a blended or mixed fee of $100.00 to $150.00 per hour. Here, a mixed rate of $150.00 per hour is accepted as a reasonable rate in the community for the services rendered, 28. Finally, petitioners’ attorneys incurred certain expenses for which they seek recovery as reasonably incurred in connection with pursuing the claim for compensation. Such costs total $5,354.42. ([Petitioners’ exhibit 1] NICA does not object to the filing fee of $15.00, medical expert fee of $1,050.00, cost for obtaining the medical records of Dr. Pettit of $10.00, and copy service charge of $2,256.40 incurred between May 4, 1994, and September 27, 1994, for Heather’s medical records. 14 Accordingly, such expenses totaling $3,331.40 are awarded, without further discussion. 29. The expenses opposed by NICA are (1) courier service fees of $40.95, (2) mileage expense of $7.43, (3) copy service expense of February 14, 1995, of $266.50, (4) travel expenses of $281.64 for Mr. Fein’s trip to Orlando, (5) the cost of photocopies at the firm of $687.90, (6) phone charges of $395.06, (7) postage of $53.54, and (8) the cost of Westlaw research of $290.00. As to items (1), (2), (Ss), (6), (7), and (8), there was no independent proof as to what services these expenses were incurred for and, therefore, the reasonableness of the amount or the need to incur those expenses has not been established. Moreover, it is as likely that they were incurred incident to the firm’s efforts to represent the federal government as its representation of petitioners and, if mixed, which is likely, cannot be allocated. As to item (3), the copy services of February 14, 1995, it is observed that such expense was incurred subsequent to the resolution of petitioner’s claim. Accordingly, there being no other showing concerning that cost, its relevance to the claim or reasonableness has not been shown. As to item (4), the travel expenses of Mr. Fein’s trip to Orlando, such is presumed to refer to his meeting with his clients in Melbourne on March 23, 1994. Consistent with the conclusion that time spent traveling to meet with his clients is not recoverable, so also is the conclusion that the travel expense is not recoverable. In re Florcar, Inc., 16 B.R.- 726 (S§.D. Fla. 1982). Accordingly, none of the expenses to which NICA has objected are recoverable. 15 The "cap" or maximum award of attorney’s fees and expenses recoverable in this case 30. Pursuant to the provisions of Section 766.31(1) (c), Florida Statutes, petitioners are entitled to recover and NICA is obligated to pay reasonable expenses incurred in connection with the filing of the claim, including reasonable attorney’s fees. In establishing the award of attorney’s fees, the Hearing Officer is constrained to base such award on the six factors contained in subsection 766.31(1)(c), discussed infra. 31. Here, notwithstanding petitioners’ entitlement to an award of reasonable attorney’s fees and expenses as prescribed by statute, the proof demonstrates they entered into a contingency fee contract with Mr. Fein’s firm. Pursuant to that agreement, following resolution of their claim, they resolved their obligation for fees and expenses to the firm by payment of 33 1/3 percent of the $100,000 they received in compensation of the claim. According to Mr. Fein, his firm has recovered all attorney’s fees and expenses from petitioners to which the firm is entitled or petitioners are obligated to pay, and that whatever is awarded here is to be paid to petitioners as reimbursement. 32. Given such circumstances, the maximum award that could be made in this case is an award for expenses, including reasonable attorney’s fees, not to exceed a total award of $33,333.00, and not the fee award of $46,345.00 and expense award of $5,591.25 sought at hearing. (Petitioner's proposed order, page 3]. See, Lane v_ Head, 566 So.2d 508 (Fla 1990), Florida Patient’s Compensation Fund v. Rowe, 472 So.2d 1145, 1151 (Fla. 16 1985), Government Employees Insurance Co. v. Robinson, 581 So.2da 230 (Fla. 3d DCA 1991), Erickson Enterprises, Inc. v- Louis Wahl & Sons, 422 So.2d 1085 (Pla. 3d DCA 1982), and Trustees of Cameron -. Brown Investment Group v. Tavormina, 385 So.2d 728 (Fla. 3d DCA 1980). Given the award made, such restraint is not, however, significant to these proceedings.
Conclusions For Petitioners: Frederick J. Fein, Esquire Thornton, Davis & Murray, P.A. World Trade Center, Suite 2900 80 Southwest Eighth Street Miami, Florida 33130 For Respondent: David W. Black, Esquire Atkinson, Diner, Stone, Black & Mankuta, P.A. Post Office Drawer 2088 1946 Tyler Street Hollywood, Florida 33022-2088
Other Judicial Opinions A party who is adversely affected by this final order is entitled to judicial review pursuant to Sections 120.68 and 766.311, Florida Statutes. Review proceedings are governed by the Florida Rules Of Appellate Procedure. Such proceedings are commenced by filing one copy of a notice of appeal with the Agency Clerk Of The Division Of Administrative Hearings and a second copy, accompanied by filing fees prescribed by law, with the appropriate District Court of Appeal. See, Section 120.68(2), Florida Statutes, and Florida Birth-Related Neurological Injury Compensation Association v. Carreras, 598 So.2d 299 (Fla. ist DCA 1992). The notice of appeal must be filed within 30 days of rendition of the order to be reviewed. 23
