The Issue The Principal issues in this matter are whether the Department of Financial Services, Division of Workers’ Compensation acted appropriately and within its’ statutory authority when it entered the Second Amended Order of Penalty Assessment and Stop-Work Order against the Petitioner for failing to secure workers’ compensation insurance for their employees when 4 tequired by Florida law, and whether any provisions of the Florida Workers’ Compensation Law provide for the mitigation or rescission of penalties against the Petitioner. 1 PRELIMINARY STATEMENT. This proceeding arose out of the requirement in Florida workers’ compensation law that employers must secure the payment of workers’ compensation insurance for the protection of their employees. The Petitioner in this matter is a Florida corporation currently doing business as a neighborhood food and convenience store in Fort Walton Beach, Florida. On April 26, 2011, Larry Eaton, a Compliance Investigator for the Florida Department of Financial Services, Division of Workers’ Compensation conducted a random job site workers’ compensation compliance investigation at the Petitioner’s place of business. After concluding the Petitioner had four (4) employees and did not maintain workers’ compensation insurance, the Department issued a Stop-Work Order and delivered a request for the production of business records. The Petitioner and their accountant cooperated with the Department’s investigation and provided records that were used to determine the mandated statutory monetary penalty for failing to maintain workers’ compensation insurance. The Petitioner then executed a penalty payment plan with the Department and also came into compliance with Florida’s Workers’ Compensation Law. The Petitioner has consistently objected to the Departments mandated statutory penalty as excessive, in violation of both the Florida and Federal Constitution, and contrary to the “principle of proportionality”. The Department originally referred this matter to this Hearing Officer for a F.S. 120.57(2) informal hearing, but that matter was closed when the Parties agreed a disputed issue of fact existed. This matter was then forwarded to the Florida Division of Administrative Hearings to hold a formal hearing pursuant to F.S. 120.57(1), and after discovery, the Administrative Law Judge closed his file after a finding there were no disputed issues of material fact. This matter was again assigned to this Hearing Officer to hold a telephonic informal hearing pursuant to Section 120.57(2), Florida Statutes, which occurred on November 1, 2011. Both Parties timely submitted Proposed Recommended Orders. EXHIBITS AND WITNESSES The Department submitted Eleven (11) Exhibits that are admitted into evidence without objection and include the following: Respondents Exhibit |: A copy of the Petitioner’s corporate status as contained within the Florida Secretary of State Records, dated April 26, 2010, the same day as the Departments random workers’ compliance Investigation. Respondent’s Exhibit 2: A two (2) page April 26, 2010, printout from the Department’s Financial Services Coverage and Compliance Automated System (“CCAS”) database for Mubarak Trading Corporation, Inc. teflecting no evidence of workers’ compensation insurance coverage and no exemptions from coverage. Respondent’s Exhibit 3: A copy of the Department’s hand delivered April 26, 2010 Stop- Work Order. Respondents Exhibit 4: A copy of the Department’s hand delivered April 26, 2011, Request for Production of Business Records for Penalty Assessment Calculation. Respondents Exhibit 5: A twenty six (26) page composite exhibit of the Petitioner’s payroll and -business records provided to the Department’s workers’ compensation compliance investigator. Respondent’s Exhibit 6: A copy of the Department’s May 12, 2010 Amended Order of Penalty Assessment hand delivered to the Petitioner on May 13, 2010. Respondent’s Exhibit 7: A copy of the Department’s’ Payment Agreement Schedule for Periodic Payment of Penalty executed by the Petitioner on May 13, Respondent's Exhibit 8: Respondent’s Exhibit 9: Respondent’s Exhibit 10: Respondent’s Exhibit 11: 2010, wherein the Petitioner paid Eighteen Hundred ($1,800.00) dollars as a ten percent (10%) down-payment on the Department’s Administrative Penalty. A copy of the Department’s Order of Conditional Release From Stop-Work Order dated May 13, 2010, that was entered after the execution and payment reflected in Respondent's Exhibit 7. A copy of the Department’s Second Amended Order of Penalty Assessinent dated February 2, 2011. A five (5) page excerpt from the National Council on Compensation Insurance, Inc. (“NCCI”) Scopes Manual description of Classification Code 8017 (Retail Store). A forty-nine (49) page excerpt of NCCI approved Manual Rates for Classification Code 8017, used in the calculation of the Department’s May 12, 2010, Amended Order for Penalty Assessment and February 2, 2011, Second Amended Order of Penalty Assessment. The Petitioner submitted two (2) exhibits that were admitted into evidence and consist of the following: Petitioner’s Exhibit 1: Petitioner’s Exhibit 2. A two (2) page copy of the Petitioner’s timely filed request for an informal proceeding to contest his administrative penalty, pursuant to Section 120.57(2), Florida Statutes, A four (4) page May 5, 2011, letter of tax representation from Mr. Chris Marsh and Mr. James Marsh, who provide accounting and tax services for and on behalf of Mubarak ‘Trading Corporation, Inc. The Department called two (2) witnesses to testify at the telephonic informal hearing, including Mr. Larry Eaton, a workers’ compensation compliance investigator for the Department, and Mrs. Michelle Newcomer, a workers’ compensation penalty calculator for the Department. The Petitioner offered the testimony of its’ President Ziad (“Mike”) Mubarak, as well as their tax advisors, Mr. Christopher Marsh, and Mr. James Marsh. Both Parties submitted Proposed Recommended Orders. FINDINGS OF FACT. Pursuant to Section 440.107, Florida Statutes, the Respondent is the state agency tesponsible for enforcing the statutory requirement that employers secure the payment of workers’ compensation for the benefit of their employees. The Petitioner is a Florida corporation that first registered with the Florida Department of State on July 15, 1993, and was in good-standing on April 26, 2010, the date on which the Department conducted their random workers’ compensation compliance investigation. (Respondent’s Exhibit 1.) On April 26, 2011, the Respondents Workers’ Compensation Compliance Investigator, Mr. Larry Eaton, conducted a random compliance investigation at the Principal Business Address of Mubarak Trading Corporation, Inc., in Fort Walton Beach, Florida. (Respondent’s Exhibit’s 2, 3, and 4.) Upon entering the Petitioner’s work-place on April 26, 2011, the Department’s compliance investigator conducted a field interview, as well as a database search to confirm the existence of four (4) employees of Mubarak Trading Corporation, Inc., and the lack of either workers’ compensation insurance or exemptions from workers? compensation insurance coverage. (Respondent’s Exhibits 2, 3, and 4.) Upon finding four (4) employees and no workers’ compensation insurance coverage for those employees, the Department’s compliance investigator hand delivered an April 26, 2010, Stop Work Order, as well as a Request for Production of Business Records for Penalty Assessment Calculation seeking payroll information for the past three (3) years. (Respondent’s Exhibits 3 and 4.) The Petitioner provided business records to the Department in response to their Request, and based on those records, an Amended Order of Penalty Assessment was hand delivered to the Petitioner on May 13, 2010, in the amount of Seventeen Thousand Seven Hundred Ninety One and 76/100 Dollars ($17,791.76). (Respondent’s Exhibits 5 and 6.) Under protest, and in the effort to remove the Department’s April 26, 2010, Stop Work Order, the Petitioner executed a Payment Agreement Schedule for Periodic Payment of Penalty on May 13, 2010, paying Eighteen Hundred Dollars ($1,800.00) to the Department as a ten percent (10%) down-payment of the administrative penalty. (Respondent’s Exhibit 7.) The Petitioner did not purchase a policy of workers’ compensation insurance, but instead the Corporation’s President obtained an exemption from the requirement of being covered by workers’ compensation insurance. With only three (3) remaining non- exempt employees, Florida law does not require an underlying worker’s compensation insurance policy, and Mubarak Trading Corporation, Inc., was no longer in violation of Florida Workers’ Compensation Law. , Mrs. Michelle Newcomb, Penalty Calculator for the Florida Department of Financial Services, Division of Workers’ Compensation, Bureau of Compliance, was assigned the task of calculating the statutory penalty to be assessed against Mubarak Trading Corporation, Inc., for failing to secure workers’ compensation insurance. Utilizing NCCI Class Code 8017 for retail stores, the appropriate NCCI premium pages for Class Code 8017, and the documentation provided by the Petitioner, the Department calculated the mandated statutory penalty of Seventeen Thousand Seven Hundred Ninety One and 76/100 ($17,791.76) in their May 12, 2010, Amended Order for Penalty Assessment (Respondent’s Exhibit 6, 10 and 11.) The Department’s administrative penalty was ultimately adjusted downward to Sixteen Thousand, Four Hundred Twenty Nine and 44/100 Dollars ($16,429.76), as reflected in the Department’s February 2, 2011, Second Amended Order of Penalty Assessment. (Respondents Exhibit 9.) There are no disputed issues of material fact in this matter. The Petitioner’s Proposed Recommended Order acknowledges “[t]he calculation of the Section 440.107(7)(d) penalty is not in question...” The Petitioner has consistently objected to the “excessive” amount of the Department’s penalty, challenged the Department’s authority to assess unconstitutional penalties, and argues the penalty assessed violates the “principle of proportionality.”
Conclusions Christopher O. Marsh, Econotax 139 Beal Parkway SE, Ste. 102 ne Fort Walton Beach, Florida 32548 f Representative for Mubarak Trading Corp, Inc. Jamila Georgette Gooden, Esq. Florida Department of Financial Services Division of Legal Services Tallahassee, Florida 32399-4429 Attorney for the Florida Department of Financial Services, Division of Workers’ Compensation
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that a Final Order be entered affirming the Division of Workers’ Compensation Second Amended Order of Penalty Assessment in the amount of Sixteen Thousand Four Hundred Twenty Nine and 44/100 Dollars ($16, 429.44). Respectfully submitted this 19" day of December, 2011. Department of Financial Services 3700 Lifford Circle Tallahassee, Florida 32309 Phone: (850)668-9820 Fax: (850)668-9825 CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the above and foregoing Recommended Order has been provided by US Mail to: Mr. Christopher Marsh, Econotax, on behalf of Mubarak Trading Corporation, Inc., 139 Deal Parkway, SE, Suite 102, Fort Walton Beach, Florida 32548 and via hand delivery in the interests of judicial economy to Alexander Brick, Esq. Department of Financial Services, Division of Legal Services, 200 East Gaines Street, Tallahassee, FL 32399-4429 this 19" day of December, 2011. Alan J. ~ 2h -13-
The Issue The issue in this case is whether Respondent, Sunburst Construction, Inc. ("Sunburst"), failed to properly maintain workers' compensation insurance coverage for his employees and, if so, what penalty should be assessed.
Findings Of Fact The Department is the state agency responsible for ensuring that all employers maintain workers' compensation insurance for themselves and their employees. It is the duty of the Department to make random inspections of job sites and to answer complaints concerning potential violations of workers' compensation rules. Sunburst is a business created by Cecil Moore and has been in operation for 35 years in the construction industry. At all times relevant hereto, Sunburst was duly-licensed to do business in the State of Florida. Construction work is assigned a Class Code of 5651 for purposes of calculating workers' compensation insurance coverage. On April 30, 2014, the Department’s investigator, Stephanie Scarton, was driving on South Peninsula Drive in Daytona Beach, Florida, when she noticed what appeared to be construction activity going on. As she is charged with doing, Scarton went to find out whether people working at the construction site were legally covered by workers’ compensation insurance. She talked to four people at the job site and made a determination that workers’ compensation coverage was missing. Scarton’s and Sunburst’s statements of the facts surrounding the coverage are significantly different in detail. Each will be set forth below. Scarton’s Version of the Facts According to Scarton, she observed three people working at the site: Two men were engaged in carpentry, specifically, securing bolts to beams on a form used for pouring concrete. One man was grinding a screw or some other metal object. Scarton identified herself to the man who was grinding the metal object. The man was Carlos Barbecho. The man did not speak English very well, but conversed with Scarton, telling her that he (Barbecho) worked for Sunburst. According to Scarton, Barbecho also told her that the other two men, Edlezar “Eddie” Cano-Lopez and Jeronimo Cano-Lopez, also worked for Sunburst. Neither of the two men (who were brothers) spoke English. Barbecho acted as an interpreter for Scarton as she asked the brothers if they worked for Sunburst. They allegedly “shook their heads up and down,” i.e., they nodded affirmation. However, Scarton could not verify exactly what question Barbecho posed to the brothers in Spanish. Meanwhile, another man, Raley, showed up at the site on his bicycle. He reported that he was an independent contractor and was not related to Sunburst. He was doing some pressure washing on the house located at the site. The investigator then went to her vehicle to research Sunburst, finding it to be a duly-registered Florida corporation. She checked the building permit which had been issued by the City of Daytona Beach and found that it had been pulled by Sunburst. She then checked the Coverage and Compliance Automated System (CCAS) used by the Department to track workers’ compensation coverage by businesses and individuals. According to CCAS, there was no coverage for Sunburst but Moore had a personal exemption. When she found there was no coverage for Sunburst but that its employees were working at the job site, Scarton contacted Moore directly via telephone. Barbecho had provided Scarton with Moore’s number. Scarton testified that Moore admitted the men were his employees, but that he believed he had up to 24 hours to obtain workers’ compensation coverage for them. Scarton eventually ascertained that Sunburst did have appropriate workers’ compensation coverage for Barbecho through a leasing company, but neither of the Cano-Lopez brothers was on the policy. Sunburst’s Version of the Facts Moore has owned Sunburst for over 35 years. He has always maintained workers’ compensation coverage for his employees and has never been cited for failing to do so. In April 2014, Sunburst was in the midst of renovations at the South Peninsula Drive job site. Barbecho was the foreman on the job. He had been working for Sunburst for about two years as a foreman or job manager. Moore had obtained workers’ compensation coverage for Barbecho through a leasing company. On April 30, 2014, Barbecho was working at the job site when the Cano-Lopez brothers came up and asked if there was work for them to do. They had been referred to the site by Pillo, a man who had worked with Moore for many years and often found laborers for him. Barbecho called Moore to see if he wanted to hire the brothers or not. Meanwhile, the men stood around talking as they waited for a determination from Moore. Raley had also been at the site on that date. He was preparing to pressure-wash the outside of the house so that it could be painted. Just about the time he was leaving on his bicycle to retrieve a chair from his nearby home, the Cano-Lopez brothers arrived. Raley paid them no mind as he had never seen them before at the job site. When he returned with his chair, Raley met Scarton, who identified herself as an investigator for the Department. Although Raley told Scarton that he was an independent contractor, he was actually doing the pressure- washing because he owed a favor to Moore. Raley watched Scarton talk to the brothers and could see that there was a large communication problem based upon language. Scarton then began talking more to Raley because he spoke English much better than the other men there. Barbecho says he only met the Cano-Lopez brothers the morning that Scarton showed up at the work site. He did not have authority to hire them on behalf of Sunburst, but put a call into Moore to see if he wanted to hire the men. Barbecho maintains that he never told Scarton the men were employees of Sunburst. He does not remember being asked to ask the brothers, in Spanish, whether they were employees of Sunburst. The men had arrived on the job site just minutes prior to Scarton’s arrival, and Barbecho had not really talked to them at all other than to give a casual greeting. Edlezar Cano-Lopez says he is not now nor has he ever been an employee of Sunburst. He has never done any work for or received any money from Moore or Sunburst. (He was hoping that Moore would pay him for his time traveling to Tallahassee and appearing at the final hearing, but there was no specific agreement in that regard.) When Moore got a call from Scarton, he told her that he did not know who the Cano-Lopez brothers were, that they were not his employees, and that he had coverage for all of his bona fide employees. He has no recollection of telling Scarton that he believed he had 24 hours to get the workers covered by insurance. Scarton asked Moore to come to the job site and he complied with her request. At the job site, Scarton served Moore with a Stop Work Order (SWO) and explained that he needed to cease doing business until it was addressed. The basis of the SWO was that two putative employees, the Cano-Lopez brothers, did not have workers’ compensation insurance coverage. The Stop Work Order and Penalty Assessment At the same time, Scarton made a request for business records in order to determine what penalty should be assessed. The request had a list of various types of documents needed by the Department to make its penalty assessment. Moore was given 20 days to produce the records to the Department. Moore contacted his bank about obtaining the requested records. He was told that it would take five to seven days to pull the records together, but in fact it took more than three weeks. The records were therefore not timely submitted to the Department. Based upon the absence of business records, the Department calculated a penalty assessment which imputed income to the Cano-Lopez brothers for a period of three years. This assessment was in accordance with the Department’s rules and guidelines. A penalty assessment of $61,568.36 was imposed on Sunburst. After the penalty assessment was calculated by the Department, the requested business records were eventually received from the bank by Moore. The records contained summaries of statements, but did not include check images. The check images were provided at a later date. However, the check images showed a large number of checks made out to “cash” so the Department could not really ascertain whether any of them were for payroll or not. Moore explained that his employee leasing company required cash, so each week he would find out what amount was needed and issue a check made payable to “cash” and obtain the needed funds. Moore’s explanation is plausible. The Department did not take heed of the business records provided by Moore because they did not arrive within the prescribed 20-day window. The Department’s auditor did, however, create a draft penalty assessment based upon the records.1/ The Cano-Lopez Brothers The dispositive issue in this case appears to be the employee status of Eddie and Jeronimo Cano-Lopez. Eddie testified at final hearing (through an interpreter) that he has never been an employee of Sunburst. He and his brother were at the job site on April 30 for the purpose of obtaining employment, but they were never hired and have never been paid for doing any work for Sunburst. There are no check images or other business records that reflect Sunburst ever paid the Cano-Lopez brothers for doing work. Moore did not hire them and did not know they were at the work site on April 30 until advised by Barbecho and Scarton that very day. Moore’s denial that he told Scarton he was intending to add the Cano-Lopez brothers to his insurance coverage within 24 hours is credible. Scarton inspects 45 to 55 business sites per month and could easily be confused about who told her they were adding employees. After 35 years in the industry, it is unlikely Moore would be confused about the requirements for coverage of his employees. The foreman, Barbecho, met the Cano-Lopez brothers for the first time on April 30 at the job site. He knew that in order to work for Sunburst, the brothers would first have to fill out an application. In fact, the Cano-Lopez brothers filled out an application after the SWO had been entered. The applications were delivered to Sunburst’s employee leasing company the next day in hopes of alleviating the SWO. But as the SWO was still in place, the Cano-Lopez brothers never engaged in work for Sunburst, and have not to this day. And in the words of the Department’s investigator, “An employee is someone who is being paid by the business.” Scarton testimony, transcript page 46. The Department calculated its penalty assessment as follows: It ascertained the average wage for construction laborers and assigned that figure to each of the Cano-Lopez brothers. The appropriate class code was assigned. A period of three years of non-compliance was imputed, per rule. The gross payroll for that three-year period was assigned to each of the brothers. The gross payroll amount was divided by 100. The resulting sum was multiplied by the manual rate, resulting in a premium. The premium was then multiplied by 1.5 to reach the penalty amount. The calculation of the penalty was based upon the mistaken presumption that the Cano-Lopez brothers were employees of Sunburst. It is clear from the evidence presented that neither Eddie nor Jeronimo Cano-Lopez were ever employees of Sunburst. Scarton’s recollection of the events (without the benefit of any contemporaneous note) was refuted by the testimony of Moore, Barbecho, Raley, and Eddie Cano-Lopez, thus her testimony does not constitute clear and convincing evidence.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Department of Financial Services rescinding the Stop-Work Order and Amended Penalty Assessment. DONE AND ENTERED this 5th day of January, 2015, in Tallahassee, Leon County, Florida. S R. BRUCE MCKIBBEN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 5th day of January, 2015.
The Issue The issue for determination in this case is whether the Petitioner is entitled to purchase a retirement service credit for approximately three and one-half years pursuant to Section 121.011(3)(e), Florida Statutes. The record in this cause consists of all documents filed in this cause either with the Hearing Officer or with the Division of Retirement, including all documents received in evidence at the hearing as exhibits. After review of the record in this case, the Division accepts all the findings of fact as set forth by the Hearing Officer in his recommended order. However, the Division is unable to accept all of the conclusions of law as set forth by the Hearing Officer in his recommended order.
Findings Of Fact As a teacher with the Orange County School Board (the School Board") since 1967, Petitioner is a member of the Florida Retirement System. Petitioner was so employed in 1978 and was a member of the Florida Retirement System at that time. In January, 1978, Petitioner was on approved personal leave for her wedding. Her husband lived in Arkansas. Petitioner requested and was granted a leave of absence to join her husband in Arkansas for the balance of the school year. Petitioner and her husband intended to return to Orlando, Florida before the beginning of the next school year. Petitioner's husband intended to accept a position with a veteran's clinic in the Orlando area. Petitioner intended to resume employment with the School Board. On January 16, 1978, Petitioner properly submitted a written request for a leave of absence. The leave requested was limited to the remaining term of the school year which ended in June, 1978. The request asked for a teaching assignment in the event the request was denied. On February 14, 1993, the School Board granted Petitioner's request for a leave of absence. The School Board's written authorization was issued on a standard approval form used by the School Board for such authorizations. The one page form consisted of standard boiler plate language except for three blanks in the first paragraph stating the date of approval, the reason for the leave, and the expiration date for the leave. The boiler plate language in the standard form included the following statement: . . . A teacher who desires to return to employment at the expiration of the leave period must notify the Superintendent in writing by March 1 of the school year for which the leave was granted. . . . Petitioner notified the Superintendent in writing of her desire to return to employment. Petitioner's written request on January 16, 1978, was addressed to the School Board. The relationship of the School Board and Superintendent is that of principal and agent. Petitioner's written request expressly provided that the leave period was limited to the remainder of the school year and that Petitioner wanted a teaching assignment if the request for leave of absence was denied. The requirement for notice prior to March 1, 1978, was based on the Master Agreement, Article IX, Section L, entered into by the School Board and the teacher's union. No similar requirement appears in Respondent's rules. Florida Administrative Code Rule 60S-2.006(1)(a) requires only that: . . . A leave of absence must be authorized in writing by a member's employer prior to or during the leave of absence. Petitioner's leave of absence was authorized in writing by Petitioner's employer during her personal leave. Early in February, 1978, Petitioner telephoned Mr. Royce B. Walden, Associate Superintendent of the School Board, and informed him that she desired to return to her employment at the beginning of the next school year; in the Fall of 1978. Mr. Walden did not indicate to Petitioner that she had failed to provide timely written notice of her intent to return to employment. Later in February, 1978, Petitioner traveled to Orlando. While in Orlando, Petitioner telephoned Mr. Walden and again stated her desire to return to employment at the beginning of the next school year. The Associate Superintendent did not indicate to Petitioner that she had failed to provide timely written notice of her desire to return to employment. In May, 1988, Petitioner moved back to Orlando. Petitioner again telephoned Mr. Walden. Petitioner was informed for the first time during that telephone conversation that there may not be a teaching position available for her at the beginning of the next school year. The reason stated by the Associate Superintendent was that Petitioner had failed to notify the Superintendent in writing by March 1, 1978, of her desire to return to employment. Petitioner immediately wrote a letter on May 25, 1978, restating her desire to return to employment at the beginning of the next school year. On the same day, Mr. Walden issued a letter to Petitioner stating that the School Board would not automatically assign Petitioner to an employment position for the 1978-1979 school year. The reason stated in Mr. Walden's letter was that Petitioner failed to comply with the requirement that she notify the Superintendent in writing by March 1, 1978, of her desire to return to employment. On July 11, 1978, Mr. Walden issued a letter to Petitioner purporting to terminate her as an employee of the School Board. The reason given for the purported termination was that Petitioner had failed to give written notice to the Superintendent by March 1, 1978, of her desire to return to employment. The letter purporting to terminate Petitioner contained no notice of Petitioner's rights to challenge the School Board's proposed action, including the right to a proceeding under Section 120.57, Florida Statutes. After informing Petitioner of the purported termination and the reason, the letter stated: . . . Should you wish to return as an employee with the School Board of Orange County, we invite you to communicate with us in the near future. Please accept our sincere appreciation for your contribution to the educational program for children in the Orange County Public School System. 1/ Shortly after July 11, 1978, the School Board sued Petitioner for repayment of funds allegedly advanced to Petitioner for a paid sabbatical in 1973. The litigation culminated in a settlement agreement and Petitioner's reinstatement to her employment for the 1981-1982 school year with credit for nine years of service. Petitioner has been continuously employed by the School Board since that time and has maintained her continuing contract status with no loss in seniority. The settlement agreement did not pay Petitioner any back compensation and did not address Petitioner's fringe benefits, including the right to purchase the retirement service credit for the period of January, 1978 through the date of her reinstatement. Petitioner must pay the total cost of providing the retirement credit into the Retirement System Trust Fund. The economic burden of the retirement service credit falls solely on Petitioner. Petitioner's purchase of the retirement service credit will not result in any adverse economic impact on the School Board, Respondent, or the State of Florida. The proposed purchase price for the retirement service credit is sound for actuarial purposes.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a Final Order allowing Petitioner to purchase the retirement service credit at the statutorily prescribed purchase price. RECOMMENDED this 26th day of July, 1993, in Tallahassee, Florida. DANIEL MANRY Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 26th day of July, 1993.
The Issue Whether Petitioner, Department of Financial Services, Division of Workers’ Compensation (the Department), properly issued a Stop-Work Order and Penalty Assessment against Respondent, Ogles Construction and Roofing, LLC (Respondent), for failing to obtain workers' compensation insurance that meets the requirements of chapter 440, Florida Statutes.1/
Findings Of Fact Based upon the testimony and documentary evidence presented at hearing, the demeanor and credibility of the witnesses, and on the entire record of this proceeding, the following findings of fact are made: On September 30, 2013, the parties filed a Joint Pre- hearing Stipulation, by which the parties stipulated to the facts set forth in the following paragraphs 2 through 12. Those facts are accepted and adopted by the undersigned. The Department is the state agency responsible for enforcing the statutory requirement that employers secure the payment of workers’ compensation for the benefit of their employees and corporate officers. Respondent, a Florida corporation,2/ was engaged in business operations as a roofing company in the State of Florida from June 13, 2010, through June 12, 2013. Respondent received a Stop-Work Order for Specific Worksite Only and Order of Penalty Assessment from the Department on June 12, 2013. Respondent received a Request for Production of Business Records for Penalty Assessment Calculation from the Department on June 12, 2013. The penalty period in this case is from June 13, 2010, through June 12, 2013. Respondent employed Robert Ogles, II, Matthew Ogles, and Stephen Ogles during the period from June 13, 2010, through June 12, 2013. Robert Ogles had no exemption from June 13, 2010, through November 14, 2010, and from November 15, 2012, through January 9, 2013. Respondent was an “employer,” as defined in chapter 440, Florida Statutes, throughout the penalty period. Respondent did not secure workers' compensation insurance coverage for its employees during the period from June 13, 2010, through June 12, 2013. The appropriate class code from the National Council on Compensation Insurance, Inc. (NCCI), Scopes Manual for Respondent's employees is 5551, corresponding to “Roofing - All Kinds and Drivers.” The NCCI manual rates attached to the Prehearing Stipulation as Exhibit “C” are the correct manual rates for NCCI Class Code 5551 during the penalty period. Given the above stipulations, Respondent was in violation of the workers’ compensation coverage requirements of chapter 440 because Respondent employed uninsured employees working as roofers throughout the penalty period. Andre Canellas, penalty auditor for the Department, was assigned to assess the appropriate penalty owed by Respondent. Penalties for workers' compensation insurance violations are based on the amount of evaded insurance premiums over the three-year period preceding the Stop-Work Order, multiplied by 1.5. § 440.107(7)(d)1., Fla. Stat. At the time of his assignment, Mr. Canellas was provided with personal bank statements from Matthew, Stephen, and Robert Ogles, II, some checks that were written to Stephen and Robert Ogles, II, and an excel spreadsheet typed up for Respondent's payroll to Matthew Ogles. The records from Robert Ogles, II, consisted of statements from his personal bank account, which he jointly held with his wife, covering the course of the penalty period; and checks paid from Respondent to Robert Ogles, II, during the years of 2012 and 2013. The bank statements reference the amounts of all transactions in Robert Ogles, II, and his wife's joint personal bank account and do not distinguish the amounts for payroll from Respondent. From the periods of time in which Robert Ogles, II, produced checks from Respondent, Mr. Canellas was able to determine that Robert Ogles, II, did not deposit the entire amount from Respondent into his joint personal bank account. Thus, Robert Ogles, II's, personal joint bank statements covering the course of the penalty period were insufficient to enable the Department to determine his compensation from Respondent for those time periods. With respect to Stephen Ogles, the Department received statements from a joint personal bank account for the period of December 2012 through June 2013; checks paid from Respondent from December 2012 through June 7, 2013; and an IRS Form 1099 for payroll to Stephen Ogles, LLC from Respondent. The Department received personal bank statements from Matthew Ogles for the entire penalty period and an excel spreadsheet setting forth the payroll to Matthew Ogles from Respondent for all but one month of the penalty period. Petitioner did not receive any records at all for the payroll to Robert Ogles or to any of Respondent's subcontractors. Although Robert Ogles testified in deposition that he probably has the records requested by the Department, he stated that he “just chose not to” produce them. Employers in Florida are required to maintain the records that were requested by the Department and produce them upon the Department's request. See Fla. Admin. Code R. 69L- 6.015(1) and 6.032(1). For the time periods of January 1, 2012, through November 14, 2012, and from January 10, 2013, through June 12, 2013, Mr. Canellas could have potentially ascertained Respondent's payroll to Matthew, Stephen, and Robert Ogles, II- assuming that those individuals had identified all of the payroll they had received from Respondent during those periods. However, Mr. Canellas could not determine Respondent's overall payroll because the Department did not receive any records concerning Respondent's payroll to the subcontractors that Respondent regularly hires. Having not received business records sufficient to determine Respondent's actual payroll for the period of June 13, 2010, through June 12, 2013, Penalty Auditor Canellas calculated an Amended Order of Penalty Assessment of $158,423.82 by imputing the statewide average weekly wage, multiplied by 1.5, to Respondent's payroll for each identified employee during the penalty period. This methodology is required by section 440.107(7)(e), and Florida Administrative Code Rule 69L- 6.028(3). The Statewide Average Weekly Wage is determined by the Agency for Workforce Innovation (now the Department of Economic Opportunity). When the Average Weekly Wage changes, the Department updates its Coverage and Compliance Automated System (CCAS) to reflect the new amounts. The Average Weekly Wage that corresponds to various periods of non- compliance are populated automatically in the penalty worksheet when a penalty auditor selects an imputed penalty in CCAS. The Department has adopted a penalty calculation worksheet to aid in calculating penalties against employers pursuant to section 440.107. See Fla. Admin Code R. 69L-6.027. Mr. Canellas utilized this worksheet in assessing Respondent's penalty. In the penalty assessment calculation, the Department's Penalty Auditor consulted the classification codes listed in the Scopes Manual, which has been adopted by the Department through Florida Administrative Code Rule 69L- 6.021(3). As stipulated by the parties, the appropriate class code from the NCCI Scopes Manual for Respondent's employees is 5551, corresponding to “Roofing - All Kinds and Drivers.” Penalty Auditor Canellas applied the correct manual rates corresponding to class code 5551 for the periods of non- compliance in calculating the penalty. Mr. Canellas utilized the manual rates to satisfy his statutory obligation to determine the evaded workers' compensation insurance premium amounts for the period of June 13, 2010, through June 12, 2013, pursuant to section 440.107(7)(d)l. Respondent did not provide records sufficient to enable the Department to determine his actual total payroll for the period at issue. Accordingly, the Department was required to impute Respondent’s payroll in calculating the penalty assessment set forth in the Amended Order of Penalty Assessment. The Amended Order of Penalty Assessment is calculated correctly, if the manual rates were properly adopted by rule.
Recommendation Based on the Findings of Fact and Conclusions of Law set forth herein, it is RECOMMENDED that the Department of Financial Services, Division of Workers’ Compensation enter a final order assessing a penalty of $158,423.82 against Respondent, Ogles Construction and Roofing, LLC, for its failure to secure and maintain required workers’ compensation insurance for its employees. DONE AND ENTERED this 23rd day of May, 2014, in Tallahassee, Leon County, Florida. S W. David Watkins 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 23rd day of May, 2014.
The Issue Whether Petitioner failed to obtain workers’ compensation insurance meeting the requirements of Chapter 440, Florida Statutes, and, if so, the penalty that should be imposed.
Findings Of Fact Olender is a Delaware corporation that is registered to do business in Florida and engaged in the business of construction. Primarily, Olender frames the walls of structures and installs siding, windows and moisture barriers to such structures. Such activities are construction activities under the Florida’s workers’ compensation law. See Ch. 440, Fla. Stat., and Fla. Admin. Code R. 69L-6. On June 22, 2006, an investigator for the Department visited the Alta Westgate Apartment complex construction project, located at 6872 Alta Westgate Drive, Orlando, Florida. The visit was prompted by a “confidential tip” received by the Department from Tyler Balsinger, a former employee of Petitioner. The Alta Westgate complex is owned by Alta Westgate, LLC. The general contractor responsible for the construction of the complex was W.P. South Builders. The overall project manager for the general contractor was Robert Beliveau. The on-site representative for the general contractor was Danny Campbell. Mr. Campbell provided the Department’s investigator with a list of subcontractors on the project worksite. The list reflected that the subcontractor for framing was Olender and that John Olender was the person in charge of the company’s work at the project site. Among other things, the contract also included the installation of a moisture barrier, generally known as Tyvek, on the framed structures. Because of the nature of construction work, it is not unusual to have several subcontractors on a construction worksite at the same time. It is unlikely that Olender was the only subcontractor working on the day the Department’s investigator visited the Alta Westgate project. The subcontract required that Olender secure the payment of workers’ compensation on its employees. The evidence was not clear regarding whether the general contractor, under its subcontract with Olender, would provide workers’ compensation insurance on the employees of Olender’s subcontractors. However, the evidence was clear that J.P. Builders did not secure such workers’ compensation insurance on the employees of Olender’s subcontractors. Mr. Campbell also provided the certificate of insurance for Petitioner. The certificate reflected that Modern Business Associates, Inc. (MBA), an employee leasing company, provided workers’ compensation for Olender’s leased employees. See § 468.520, Fla. Stat. MBA entered into a client service agreement with Olender. Under the agreement, Olender would lease employees from MBA and MBA would provide payroll services and workers’ compensation coverage for the employees it leased to Petitioner. The agreement terminated on August 30, 2006. MBA’s Client Service Agreement with Petitioner states on p. 3: Insurance Coverage. MBA is responsible for providing Workers’ Compensation coverage to workers employed by MBA and assigned to Client, in compliance with applicable law, and as specified in the Proposal. Workers performing services for Client not covered by this Agreement and not on MBA’s payroll shall not be covered by the workers’ compensation insurance. Client understands, agrees, and acknowledges that MBA shall not cover any workers with workers’ compensation coverage who has not completed and submitted to MBA an employment application and tri- fold, and which applicant has not been reviewed and approved for hire by MBA. (emphasis supplied) Other than information necessary to supply its services, MBA was not aware of any specific project or projects on which Olender was working when it leased employees from MBA. John Olender and Ruben Rojo were two employees that Olender leased from MBA and for whom MBA provided workers’ compensation insurance. The workers’ compensation policy complied with Florida’s workers’ compensation requirements. After speaking with Mr. Campbell, the Department’s investigator, who is fluent in Spanish, walked around the complex’s worksite. She did not have a hardhat on. She eventually saw about 10 to 12 workers on the third floor of one of the buildings under construction (Building 8 or 9). The Department’s investigator could not say if they were framing. At some point, John Olender, the company’s project superintendent, saw the Department’s investigator, noticed she did not have any safety equipment on, and went to meet her. The investigator yelled to the workers on the third floor and showed her Department badge or identification. She was speaking Spanish to them. The workers ran in an effort to avoid the Department’s investigator. Mr. Olender, who does not speak or understand Spanish, sent for Ruben Rojo. Mr. Rojo is the assistant superintendent for Olender and works under John Olender. He is fluent in Spanish. He does not hire employees for Olender, but oversees the work being performed under Olender’s subcontracts. The Department’s investigator continued to attempt to explain to the workers that she was not interested in their immigration status, but was there to make sure they were covered by workers’ compensation insurance. At least some of the workers came down to talk to her. Mr. Rojo thought the investigator was asking about the workers’ immigration status and told them that they did not have to talk to her. However, apparently some workers very reluctantly gave her limited information. The workers who talked to her were Pedro Antonio Mendez, Jaco Sarmentio, Juan Cardenas, Alvaro Don Juan Diaz, Jose Varela Orellana, Nesto Suarez Ventura, Miguel Martinez Diaz, Jose Perez Renaldo and Antonio Hernandez. She did not obtain any addresses, phone numbers or other identifying information from the employees. The evidence did not show whether these individuals gave the Department’s investigator the correct information. Importantly, they did not tell her who their employer was or what duties they were performing. None of these individuals testified at the hearing. John Olender did not recognize these workers. Mr. Rojo told the investigator that Olender subcontracted the framing portion of its contract to “T-Bo”. T-Bo was also known as Primitivo Torres. In his deposition testimony, Mr. Torres did not recognize these workers’ names. He also thought that most of the workers he employed for his framing subcontract with Olender were illegal immigrants. Mr. Torres was unclear in his testimony regarding his status with Olender. He did indicate that he worked in both Orlando and Tampa. Apparently, at times, he was an employee and at other times he was a subcontractor. He was listed as a leased employee under MBA’s contract with Olender. The evidence suggests, but does not prove, that Mr. Torres was a person who supplied immigrant workers to construction sites. In Orlando, Mr. Torres lived in an apartment complex in the Rosemond area with his employees. The rent was sometimes paid by Olender and then deducted from the remuneration paid to Mr. Torres. Mr. Torres paid his employees from the money he received under his subcontract with Olender. Mr. Torres also testified that when the Department’s investigator contacted him in June 2006, to discuss workers’ compensation insurance, he told her that he neither secured the payment of workers’ compensation for himself nor for the other workers in both Tampa and Orlando. Donna Knoblauch, who oversaw Olender’s main office, received a faxed copy of a certificate of workers’ compensation insurance from Mr. Torres. However, the faxed certificate was an illegible copy of what appeared to be a certificate of liability insurance issued by a company in Texas. The certificate does not have a legible “sent date,” a legible workers’ compensation policy number, legible dates of coverage, a legible producer name, or any information indicating that coverage includes the State of Florida. The document is insufficient to demonstrate that Mr. Torres provided workers’ compensation coverage for his employees that worked under his subcontract with Olender. John Olender testified that Mr. Torres utilized, at most, 20 framers for the construction at Alta Westgate. Mr. Torres corroborates that number and indicates that various people worked in crews of around five. On the other hand, Danny Campbell testified that Olender had approximately 20 workers when the project started, increased to approximately 75 people performing framing duties on the worksite and decreased to about 20 workers by the time the Department’s investigator visited the worksite. Mr. Campbell testified that on January 22, 2006, he believed that Olender had approximately five individuals for the punch-out group, three–to-five cleaners, a forklift operator, approximately two individuals installing the Tyvek moisture- barrier paper, two individuals performing window installation and approximately 15–to-20 individuals installing siding at the worksite. No other testimony supports the number of workers Mr. Campbell believed to be at the jobsite on June 22. On balance, the best evidence of the approximate number of workers was that of Mr. Olender and Mr. Torres. However, these figures were only estimates of the actual number which may have been less than 20 workers. In any event, the employment of these 12 workers on the third floor was not demonstrated by the evidence. Their names did not appear on the list of employees leased by Olender from MBA and were otherwise, unknown to the Mr. Olender, Rojo and Torres. While at the jobsite, the Department’s investigator also spoke with Victor Ibarra. Mr. Ibarra drove a forklift and indicated that he worked for Olender. Again, no address or other identifying information was supplied to the investigator. Later, the investigator spoke with a woman who purported to be Mr. Ibarra’s wife. There was no information on the forklift indicating that it belonged to Olender and Olender denies employing a person named Victor Ibarra. Mr. Campbell testified in his deposition that Olender had forklifts on the jobsite. However, he did not testify that the forklift Victor Ibarra drove on June 22, 2006, was owned by Olender. Likewise, Mr. Campbell did not testify that Mr. Ibarra was an employee of Olender. Mr. Ibarra’s name did not appear on the list of leased employees provided by MBA. The Department's investigator included Mr. Ibarra as an employee of Olender based on Mr. Ibarra’s statements. However, the evidence presented by the Department is not sufficient to establish that Mr. Ibarra was an employee of Olender, since Mr. Ibarra did not testify at the hearing. Mr. Campbell’s testimony does not corroborate the hearsay statements of Mr. Ibarra since the testimony does not indicate the forklift Mr. Ibarra drove belonged to Olender or to another subcontractor on the project. After talking to Mr. Ibarra, the Department’s investigator met Rosa Barden, Martha Alvarado and Ismael Ortiz, who were applying a moisture barrier paper known as “Tyvek” to a building at the construction site. The three individuals told the investigator that that they had been hired by Mr. Rojo on behalf of Olender and had only worked for about a day. The investigator included these three individuals as employees of Olender. No addresses or other contact information was obtained by the investigator. None of these individuals testified at the hearing. Mr. Rojo testified that he did not know the three individuals on the “paper crew” and did not hire them. None of the three individuals were listed as leased employees with MBA. However, Olender’s subcontract clearly lists the application of Tyvek as a part of its contract. Additionally, the payment information supplied by the general contractor shows that Olender was paid for Tyvek application on all the buildings in the complex. Unlike Mr. Ibarro’s testimony, the contract and payment evidence independently corroborates the otherwise hearsay statements of these three individuals and Olender should have provided workers compensation insurance on them. There was no evidence that Olender provided such workers’ compensation insurance; such failure violates Chapter 440, Florida Statutes. See §§ 440.10(1)(g) and 440.38(7), Fla. Stat., and Fla. Admin. Code R. 69L-6.019. In total, the Department’s inspector met with John Olender for approximately one hour discussing the work performed by Olender and the employees retained by Olender. During this meeting, Mr. Olender, identified members of a “punch-out” crew who had worked on the project. The punch-out crew repaired any defects in framing prior to inspection. The names supplied by Mr. Olender were Juan Gonzalez, Miguel, Sal, William, WI Gerardo (noted as El Guardo in the third Amended Order of Penalty assessment), Pedro, Jacobo and Boso. Mr. Olender did not know their last names. The evidence did not show the period of time that the punch-out crew would have been working at the project site. Presumably, they would have begun some time after the initial building was framed. The Department’s investigator did not personally see the punch-out crew at the project. Mr. Olender also informed the Department’s investigator that he did not handle matters concerning workers’ compensation insurance and that she would have to contact the Company’s main office in Missouri. He provided the number for the office. He also gave the investigator the number for Michael Olender, the president of the company and the number for Mr. Torres. The investigator issued a Workers’ Compensation Request for Production of Business Records to Olender. She left the Request with John Olender. The request for records asked for certain categories of Olender’s business records for the period of January 22, 2004 to June 22, 2004. Of importance here, the Department requested records in categories 1, 4, 5 and 6. In general, category 1 covers all payroll records, including checks and check stubs, time sheets, attendance records and cash payment records. Categories 4, 5 and 6 cover all records that relate to subcontractors, including their identity, contract, payment thereof, workers compensation coverage for all the subcontractor’s employees, and/ or the employees’ exemption status. These records are required to be maintained by a company doing business in Florida. Mr. Campbell testified that some members of the punch- out crew often approached him about whether he had paid Olender so that they in turn could be paid. Again, none of these individuals testified at the hearing. However, given the admissions of Olender’s employee and Mr. Campbell’s testimony, the evidence supports the conclusion that the eight individuals on the punch-out crew were employed by Olender. None of these employees were leased employees and therefore, were not covered by the workers’ compensation policy provided by MBA. There was no evidence that Olender secured any workers' compensation insurance on these eight employees. Such failure violates Chapter 440, Florida Statutes. See §§ 440.10(1)(g) and 440.38(7), Fla. Stat., and Fla. Admin. Code R. 69L-6.019. The Department’s investigator contacted Ms. Knoblauch while she was on her way to a medical appointment. The investigator requested Olender’s proof of workers’ compensation insurance. Ms. Knoblauch told the investigator that she was not at the office where the records were kept, but on the way to a medical appointment. She said she would be returning to the office after the appointment. The investigator said she needed the records immediately. Ms. Knoblauch offered to skip her appointment and requested time to turn around and return to the office. The investigator refused to permit her the time to return to the office. At some point, MBA supplied the Department’s investigator with a list of Olender’s leased employees. The list did not contain any of the names she had gathered during her visit to the worksite. Within a few hours from the beginning of the investigation, the Department's investigator issued a Stop Work Order and an Order of Penalty Assessment on June 22, 2006. The Order was served via certified mail on Michael Olender and Olender’s legal counsel. The Stop Work Order required that Olender "cease all business operations in this state" and advised that a penalty of $1,000.00 per day would be imposed if Olender were to conduct any business in violation of the Stop Work Order. Additionally, along with the Order, the Department issued and served on Petitioner via certified mail a Division of Workers’ Compensation Request for Production of Business Records for Penalty Calculation, requesting records for a period of three years. The request, made pursuant to Section 440.107(7), Florida Statutes, asked the employer to produce, for the preceding three years, documents that reflected payroll, proof of insurance, workers’ compensation audit reports, identity, duration, contracts, invoices and check stubs reflecting payment to subcontractors, proof of workers’ compensation coverage for those subcontractors, employee leasing company information, temporary labor service information, and any certificate of workers’ compensation exemption. The request asked for the same type of records that had been requested earlier. Neither request for records was specific to a particular construction job that Olender may have performed work on. The investigator informed Mr. Campbell that Petitioner was being issued a Stop-Work Order and gave him a copy of the Order. Mr. Campbell faxed the Order to Olender’s office in Missouri. The Department’s investigator also checked the Department’s Coverage and Compliance Automated System (“CCAS”) database. The system tracks workers' compensation insurance policy information provided by workers’ compensation carriers on an insured employer. The database did not contain an entry that reflected a current State of Florida workers' compensation insurance policy for Olender. The database did reference that Olender had a stop-work order served on it on July 12, 2002, which had been lifted on July 31, 2002, with payment of the penalty. Florida law requires that employers maintain a variety of business records involving their business. See § 440.107(5), Fla. Stat., and Fla. Admin. Code R. 69L-6.015. The Rule is limited to records regarding a business’ employees and any payout by the employer to any person. In this case, under the Rule, the only records Olender was required to maintain related to its employees and its subcontractor, Mr. Torres. There was no evidence regarding any other subcontractors Olender may have contracted with. The only records supplied by Olender to the Department were the records from MBA that included workers’ compensation information and W-2 forms for Olender’s leased employees, the illegible proof of insurance for Mr. Torres and copies of checks from Olender to Mr. Torres for the subcontract. Those records reflected that John Olender, Ruben Rojo and Primitivo Torres were leased employees and covered by workers’ compensation insurance under Olender’s contract with MBA. Olender supplied no records regarding workers’ compensation coverage for the eight employees who were members of the punch- out crew, the three workers who were members of the paper crew or the 12 workers who were on the third floor. When an employer fails to provide requested business records that the statute requires it to maintain, the Department is required to impute the employer's payroll using "the statewide average weekly wage as defined in Section 440.12(2)." § 440.107(7)(e), Fla. Stat., and Fla. Admin. Code R. 69L-6.028. The penalty for failure to secure the workers' compensation insurance coverage required by Florida law is 1.5 times the premium that would have been charged for such coverage for each employee identified by the Department. The premium is calculated by applying the approved manual rate for workers' compensation insurance coverage for each employee to each $100.00 of the gross payroll for each employee. In this case, the Department, after several amended assessments, imputed the payroll for Olender for the period beginning January 22, 2004, Petitioner’s date of incorporation, and ending June 26, 2006. Included in the calculation were the eight individuals on the punch-out crew identified by John Olender, the 12 employees who were working on the third floor, the forklift driver Victor Ibarra, and the three individuals on the paper crew. In calculating the premium for workers' compensation insurance coverage, the Department's investigator used the risk classifications and definitions of the National Council of Compensation Insurance, Inc. ("NCCI") SCOPES Manual. The appropriate code for Olender’s employees was classification code 5561 which covers framing of multiple family dwellings. The gross payroll imputed to each of the 27 employees was $683.00 per week. The Department then utilized the imputed payroll for same employees for the years 2004 and 2005. The Department’s calculation resulted in an assessed penalty of $1,205,535.40. However, the evidence establishes that Olender had 11 direct employees rather than 27 employees during the period of the Alta Westgate contract. Olender’s performance under that contract began on April 3, 2006. Other than the period of time involved with the Alta Westgate project, there was no evidence regarding the period of time Olender conducted business in Florida that would require it to comply with Florida law. The date of incorporation of Olender is insufficient to demonstrate that Olender engaged in any business in Florida that would require it to comply with Florida’s workers’ compensation law. Therefore, the penalty calculation must be modified to reflect only those eleven employees for the time period Olender performed under its contract on the Alta Westgate project.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Financial Services, Division of Workers' Compensation, enter a final order: Finding that Olender Construction Co., Inc., failed to have Florida workers' compensation insurance coverage for 11 of its employees, in violation of Sections 440.10(1)(a) and 440.38(1), Florida Statutes; and Recalculating the penalty against Olender. DONE AND ENTERED this 14th day of March, 2008, in Tallahassee, Leon County, Florida. S DIANE CLEAVINGER 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 14th day of March, 2008. COPIES FURNISHED: Colin M. Roopnarine, Esquire Department of Financial Services, Division of Workers Compensation 200 East Gaines Street Tallahassee, Florida 32399-4229 Jeremy T. Springhart, Esquire Broad and Cassel 390 North Orange Avenue, Suite 1500 Orlando, Florida 32801 Honorable Alex Sink Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Daniel Y. Sumner, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
The Issue Whether this cause is barred by a release of all claims.
Findings Of Fact Petitioner filed a Charge of Discrimination with the Florida Commission On Human Relations (FCHR) on or about December 13, 2003, based upon "race" and "national origin." The charge alleges that the employer removed Petitioner from working on a machine with which Petitioner had been familiar for eight years and assigned him to a machine for which he had not been trained, while the old machine was assigned to "a white person who has been working for less than one year." The original Charge did not contain allegations of lost seniority, pay, benefits, or of unlawful termination. On or about December 6, 2004, the FCHR entered its "Determination: No Cause," and notified the parties. On December 27, 2004, Petitioner filed his Petition for Relief, which alleged that the employer constantly assigned Petitioner to very "mterse" [sic.] jobs because the employer wanted Petitioner to leave, and the employer was "neglecting and careless to my needs." The Petition contains no specific allegation of constructive termination, i.e., that Petitioner was somehow forced into leaving Respondent's employ. The case was referred to the Division of Administrative Hearings (DOAH) on or about January 5, 2005. On or about January 18, 2005, Respondent responded to the Division's Initial Order by providing potential hearing dates. Petitioner filed no response. On January 28, 2005, a Notice of Hearing for April 4, 2005, was entered and mailed. On March 1, 2005, Respondent filed a Motion for Summary Final Order, together with supporting documentation including an affidavit of Joseph W. Standley, the attorney who had represented the Respondent Employer in Petitioner's workers' compensation claim against the employer. Petitioner did not timely respond in writing to Respondent's Motion, as he is permitted to do by Florida Administrative Code Rule 28-106.204. Therefore, the undersigned was at liberty to rule upon the pending Motion without a hearing. Furthermore, pursuant to Chapter 120, Florida Statutes, the pending Motion may be treated as a Motion for a Recommended Order of Dismissal. However, it was clear to the undersigned that oral argument or further memoranda on the pending Motion would be helpful, due to specific provisions of Chapter 440, Florida Statutes, The Florida Workers' Compensation Act, and the Administrative Code Rules promulgated thereunder. So, in an abundance of caution, the following provisions were contained in the Order entered March 21, 2005: The disputed-fact hearing now scheduled for April 4, 2005, is hereby cancelled. Petitioner Eligio Orellana is hereby granted to and until April 4, 2005, in which to either (a) file a written response in opposition to the Motion or (b) telephone the secretary to the undersigned at the number below to schedule oral argument by telephone. In the event Petitioner avails himself of neither option above, the Motion will be considered sua sponte. Petitioner requested of the secretary to the undersigned that oral argument by telephone be scheduled. Arrangements were made for a telephonic conference with both parties. However, Petitioner did not appear and participate in the pre-arranged telephonic conference call, so another Order was entered on April 15, 2005. That Order provided as follows: This cause came on for oral argument of Respondent's Motion for Summary Final Order by a telephonic conference on April 13, 2005. Despite Petitioner's request for this opportunity, which request was made late, pursuant to the Order entered March 21, 2005, and despite Petitioner agreeing to that date and time for the conference call, Petitioner did not appear by telephone. Therefore, Respondent was permitted to argue the pending Motion, which will be treated as a motion for a recommended order of dismissal. The undersigned having heard Respondent's argument, the parties are granted 15 days from date of this Order in which to state, in writing, filed with the Division of Administrative Hearings, their respective positions with regard to the pending Motion, specifically addressing the effect, if any, of Rule 4.143, Florida Workers' Compensation Rules and its successor, Florida Administrative Code Rule 60Q-6.123(1)(c). Copies of these rules are attached and incorporated herein as Exhibit "A." Respondent addressed the issues raised by the Petition for Relief, the pending Motion, and the foregoing Order, by timely filing further written argument and exhibits. Once again, Petitioner filed a paper but it failed to address the issues. On July 22, 2005, another Order to clarify facts and law was entered, providing Petitioner a last opportunity to be heard. That Order provided: Petitioner did not file a response in writing to Respondent's Motion for Summary Final Order as permitted by Florida Administrative Code Rule 28-106.204, and did not appear by telephone on April 13, 2005, when oral argument was scheduled for his benefit. Petitioner did file an explanation, of sorts, as to why he did not appear for the April 13, 2005, conference call, but that explanation did not address the Order entered herein on April 15, 2005, which Order allowed Petitioner to send the undersigned a written argument demonstrating his opposition to the pending Motion. Respondent responded in writing to the April 15, 2005 Order, as permitted. On its face, that material sets forth good cause why this case should be dismissed, the reason being that Petitioner entered into a full and complete release of Respondent while fully advised by an attorney. Florida Administrative Code Rule 60Y- 5.006, authorizes dismissal of discrimination complaints on several grounds, including "(2) The complaint has been resolved by negotiated settlement pursuant to subsection 60Y-5.003(10), F.A.C." However, in an abundance of caution, it is ORDERED: Petitioner shall show cause, in writing, filed with the Division of Administrative Hearings, at the address below the signature line of this document why this cause should not be dismissed. Specifically, Petitioner is permitted to send a written response (1) stating why any factual allegation contained in any of Respondent's previously filed materials is not true and correct; (2) giving any reason the Confidential Release and Settlement Agreement and Petitioner's Affidavit provided by Respondent should not be presumed valid; and (3) stating any reason this cause should not be dismissed for the reasons put forth by Respondent. In order to be considered, Petitioner's Response must be filed at the address below not later than August 10, 2005. On July 28, 2005, Petitioner filed a letter-response dated July 25, 2005, asking to speak to the undersigned and requesting that the case "stay alive" and move forward. Petitioner's letter-response disputed no facts or law asserted by Respondent. Accordingly, all the facts and documents presented by Respondent are presumed valid, and Respondent's pending Motion may be treated as a motion for recommended order of dismissal, to be determined upon the pleadings, without further evidence. On February 7, 2005, in a workers' compensation claim by Petitioner against Respondent Employer and the Employer's insurance carrier, Petitioner signed two settlement agreements. One settlement agreement complied with the requirements of Chapter 440, Florida Statutes, with regard to specific issues cognizable under the Florida Workers' Compensation Act and was entitled "Joint Stipulation for Settlement under Florida Statutes Sections 440.20(11)(c), (d) and (e) (2001)." The other settlement agreement, entitled "Confidential Release and Settlement Agreement" was more general and provided in pertinent part: Payment to Employee. The Employer/Carrier shall pay Employee the lump sum of $500.00 within fourteen (14) business days after Employee executes this Agreement and the Employee's withdrawal of the charge of discrimination, if any, which may be pending and is accepted and acted upon by the EEOC and the JEOC through an administrative dismissal of the charge or within fourteen (14) days of the approval of the Motion for Approval of Attorney's Fees, whichever is later. This settlement is being entered into simultaneously with a settlement of the workers' compensation claim and the consideration outlined above is provided for therein. [R]eleases and discharges the Employer [Premium Waters, Inc.] and Carrier, and any affiliated and related companies, and their attorneys, officers, directors, shareholders, agents, and employees of any of them, from all claims, actions demands, rights and causes of action (including any right to demand or receive attorney's fees) whether known or unknown by the Employee, that the Employee may have arising out of, based on, or relating directly or indirectly to, the Employee's employment with the Employer or the termination of that employment, the accident dated 06/25/03, and any events occurring during such employment or thereafter until the date of this Agreement. This release and waiver includes, but is not limited to, a release of any claims, actions, demands, rights or causes of action the employee may have under any federal, state, or local laws or regulations currently in effect and/or applicable to Employee, including, but not limited to Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967, Section 1981 of the Civil Rights Act, the Civil Rights Act of 1991, the Americans with Disabilities Act of 1990, the Family and Medical Leave Act of 1991, the National Labor Relations Act, Chapter 440 of the Florida Statutes, Chapters 448 and 760 of the Florida Statutes, the Equal Pay Act, Fair Labor ad [sic] Standards Act, the Civil Rights Act of 1871, as amended (42 U.S.C. Section 1983 and 1985), and any other statutory or common law claims including, without limitation claims for negligence, gross negligence, wrongful discharge and/or retaliation under state or federal law, including but not limited to, Fla. Stat. 440.205, and all claims of any nature which were raised or could have been raised in any charge, arising out of the injuries, accident, and employment which are the subject of this settlement, in which the Employee now has, has had, or might ever have against the Employer or Servicing Agent, or any of its or their officers, agents, servants, employees, attorneys, directors, successors, predecessors, assigns, or any other person or entity so connected or related to the Employer or Servicing Agent, without any limitation thereof or thereon in the event the United States government or any of its entities or administrative bodies makes any claim against the Employer, its Servicing Agent, and/or its insurance Carrier, for reimbursement of any medical expenses incurred, or that may be incurred in the future as a result of the workers' compensation accident of 06/25/03, the Employee agrees to indemnify and hold the Employer, its Servicing Agent and/or its insurance Carrier harmless from any such claims. The Employee further agrees to indemnify and hold harmless the Employer and Carrier against all liabilities, claims, losses and expenses, including reasonable attorney's fees and costs, arising out of the industrial injuries which are the subject of this settlement. Dismissal/Withdrawal of Charge. As a condition precedent to receipt of payment described in Section 1 hereof, Employee shall deliver to counsel for the Employer/Carrier a copy of an executed document withdrawing the Charge, if any, with evidence that it has been filed with an EEOC and the JEOC. Upon receipt of proof that the EEOC and JEOC have dismissed the Charge, the Employer shall make payment as described above. There were clearly two types of release contemplated, two types of release executed, and two amounts of money were intended to flow from the Employer to the Petitioner. One amount of money was to be paid upon the Judge of Compensation Claims' approval of the workers' compensation settlement, and $500.00 was to be paid when Petitioner dismissed his EEOC claim. The affidavit of Joseph W. Standley, with its attachments, dated February 28, 2005, has established that the foregoing "Confidential Release and Settlement Agreement" (see Finding of Fact 22), was signed by Petitioner, under oath, and was signed by Petitioner's workers' compensation attorney; and that Petitioner's own affidavit averred that he had "read, or . . . had read to [him], and underst[oo]d the terms of the . . . Confidential Release." The affidavit of Joseph W. Standley, dated April 28, 2005, and filed with Respondent's May 2, 2005 Memorandum in response to the April 15, 2005 Order herein, established that Mr. Standley represented the employer, Premium Waters, Inc., and its insurance carrier, Cincinnati Casualty, in the settlement of Petitioner's workers' compensation claim in Eligio Orellana, [Claimant] v. Premium Water[s, Inc., Employer] and Cincinnati Casualty [Carrier], OJCC Case No. 04-029070JDO. Mr. Standley's affidavit is unrefuted that the Claimant in that case (Petitioner herein) had the benefit and assistance of legal counsel throughout his workers' compensation claim, and that Petitioner's attorney received, reviewed, and signed, along with Petitioner, and returned the documents considered in accomplishing the settlement of the workers' compensation case. Mr. Standley has sworn that Petitioner was represented by counsel throughout the workers' compensation claim, through and including accomplishment of the settlement and approval by the Judge of Compensation Claims, and that as parts of the overall settlement of Petitioner's workers' compensation claim, there were a "Joint Stipulation for Settlement" as required by Chapter 440, Florida Statutes, and a separate "Confidential Release and Settlement Agreement," and an affidavit by Petitioner that he had read, or had read to him, and understood "the terms of the Joint Stipulation for Settlement and [the] Confidential Release;" that the Confidential Release was signed under oath by Petitioner and Petitioner's attorney; and that "neither the release signed under oath by Petitioner and his attorney, nor Petitioner's affidavit were included among the papers presented to the Judge of Compensation Claims." Mr. Standley's two affidavits, together with their supporting documents, are unrefuted, because Petitioner did not offer any objection or oppositional response.
Recommendation Based on the foregoing uncontroverted or undisputed Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Commission on Human Relations enter a final order dismissing the Petition for Relief and Charge of Discrimination herein. DONE AND ENTERED this 26th day of August, 2005, in Tallahassee, Leon County, Florida. S ELLA JANE P. DAVIS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 26th day of August, 2005. COPIES FURNISHED: Cecil Howard, Esquire Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301 Denise Crawford, Agency Clerk Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301 Eligio Orellana Post Office Box 1800 Interlachen, Florida 32148 Russell W. LaPeer, Esquire Landt, Wiechens, LaPeer & Ayres 445 Northeast Eighth Avenue Ocala, Florida 34470
The Issue The issues to be resolved in this proceeding concern whether the Respondent failed to abide by the coverage requirements of the Florida Workers' Compensation Law embodied in Chapter 440, Florida Statutes, by not obtaining a workers' compensation insurance policy and whether the Petitioner properly assessed a penalty against the Respondent pursuant to Section 440.107, Florida Statutes.
Findings Of Fact Investigator Pangrass conducted a random inspection of a construction site at 9 Pecan Drive Pass, Ocala, Florida, on December 18, 2002. On that occasion he observed several people working, hanging drywall. Investigator Pangrass spoke to one of the workers, Daniel Maloney, and asked him, to identify his employer. Daniel Maloney identified the Respondent as his employer. When Maloney identified him the Respondent was only 10 feet away and the noise level at the site was such that the Respondent could hear himself being identified as the employer. The Respondent did not then deny that he was Daniel Maloney's employer. Daniel Maloney stated he had worked for the Respondent full-time for two months and was paid by the hour. The Respondent told Mr. Pangrass he was unable to complete the work at the job without additional labor. Mr. Maloney assisted the Respondent by "hanging the ceiling." The Respondent offered a hearsay statement of Mr. Maloney, wherein he stated, "I am the employee." The Respondent confirmed that he had a prior employment relationship with Daniel Maloney and that Daniel Maloney wanted to work with the Respondent. Another worker observed by Mr. Pangrass, Desmond Neil, told Investigator Pangrass that he worked for the Respondent part-time and was paid by the hour. The Respondent had used the services of Desmond Neil on prior occasions and stated "we do a job for Holiday the day before." The Respondent told Mr. Pangrass that he was trying to get workers' compensation for Desmond Neil. The Respondent made a statement against his own interest and said he "re-hired" Desmond Neil because Neil could not get a workers' compensation exemption. The Respondent's use of the word "re-hired" is significant because in a prior compliance matter the Respondent had employed Desmond Neil and agreed to terminate Desmond Neil's employment. The Respondent in testimony, changed his version of the facts and said that he re-hired Desmond Neil, but that Neil worked for Charles Brandon. Investigator Pangrass interviewed the Respondent. During this interview the Respondent stated he had labor expenses connected with his business. He testified he was paid by Holiday Builders and then in turn paid Desmond Neil and Daniel Maloney. Charles Brandon did not employ or was not the sole employer of Desmond Neil or Daniel Maloney on December 18, 2002. Investigator Pangrass contacted Mr. Brandon, who stated he knew the Respondent was going to hire helpers. Mr. Brandon was not at the job-site to direct Desmond Neil or Daniel Maloney and could only be reached by phone. The Petitioner's evidence that the Respondent was the employer of Desmond Neil and Daniel Maloney on December 18, 2002, instead of Mr. Brandon or some other person or entity, is the most persuasive and is accepted. The Respondent offered conflicting evidence regarding who provided money to Desmond Neil and Daniel Maloney. The Respondent offered a hearsay statement of Daniel Maloney that Holiday Builders was Daniel Maloney's employer. The Respondent said that when Holiday Builders pays him (the Respondent) he then pays his employees. The Respondent changed his testimony, however, and then said Charles Brandon gave him checks to give to the employees. (Implying that they were Brandon's employees in this version of his story.) The Respondent submitted a signed statement to the Petitioner indicating that he had no employees between 1999 and 2002, in evidence as Petitioner's Exhibit 10-B. The Respondent recognized the signature on that statement as being his own, but professed not to remember who wrote it or what it said. The Respondent, however, did admit to having at least one employee in 2001, directly contradicting his own statement. The Respondent also testified that the only times he used Desmond Neil's services were the two times Investigator Pangrass stopped by the Respondent's job sites. It is a trifle too coincidental that the only two times the investigator visited the job sites were the only times when the Respondent purportedly used the services of Desmond Neil. This is especially the case since Desmond Neil's testimony and even that of the Respondent himself tend to contradict that statement. Finally, the Respondent admitted that he did not have a workers' compensation policy for any employees. In summary, the evidence adduced by the Petitioner is deemed more consistent and credible and is accepted. It was thus demonstrated that the Respondent had one or more employees at the times pertinent hereto.
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, Division of Workers' Compensation directing that the Respondent stop work and cease his operations until such time as he secures workers' compensation coverage for employees and directing that the Respondent pay a penalty in the amount of $1,100.00. DONE AND ENTERED this 4th day of December, 2003, 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 4th day of December, 2003. COPIES FURNISHED: John M. Iriye, Esquire Department of Financial Services Division of Workers' Compensation 200 East Gaines Street Tallahassee, Florida 32399-4229 Berisford Champagnie 15508 Southwest 34th Avenue Ocala, Florida 34473 Honorable Tom Gallagher Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Mark Casteel, General Counsel Department of Financial Services The Capitol, Level 11 Tallahassee, Florida 32399-0300
