Findings Of Fact The factual allegations in the Stop-Work Order and Order of Penalty Assessment issued on October 28, 2008, and the 4th Amended Order of Penalty Assessment issued on October 6, 2011, which are fully incorporated herein by reference, are hereby adopted as the Department's Findings of Fact in this case.
Conclusions THIS PROCEEDING came on for final agency action and Jeff Atwater, Chief Financial Officer of the State of Florida, or his designee, having considered the record in this case, including the Stop-Work Order and Order of Penalty Assessment and the 4th Amended Order of Penalty Assessment served in Division of Workers' Compensation Case No. 08-291-Dl, and being otherwise fully advised in the premises, hereby finds that: On October 28, 2008, the Department of Financial Services, Division of Workers' Compensation (hereinafter "Department") issued a Stop-Work Order and Order of Penalty Assessment in Division of Workers' Compensation Case No. 08-291-Dl to Wainwright Construction and Roofing, Inc. (Wainwright). The Stop-Work Order and Order of Penalty Assessment included a Notice of Rights wherein Wainwright was advised that any request for an administrative proceeding to challenge or contest the Stop-Work Order and Order of Penalty Assessment must be filed within twenty-one (21) days of receipt of the Stop-Work Order and Order of Penalty Assessment in accordance with Sections 120.569 and 120.57, Florida Statutes. On November 3, 2008, the Stop-Work Order and Order of Penalty Assessment was served via certified mail on Wainwright. A copy of the Stop-Work Order and Order of Penalty Assessment is attached hereto as "Exhibit A" and incorporated herein by reference. On December 2, 2008, the Department issued an Amended Stop-Work Order to Wainwright. The Amended Stop-Work Order included a Notice of Rights wherein Wainwright was advised that any request for an administrative proceeding to chellenge or contest the Amended Stop-Work Order must be filed within twenty-one (21) days of receipt of the Amended Stop-Work Order in accordance with Sections 120.569 and 120.57, Florida Statutes. The Amended Stop-Work Order was served on Wainwright by certified mail on December 8, 2008. A copy of the Amended Stop-Work Order is attached hereto as "Exhibit B" and incorporated herein by reference. On December 2, 2008, the Department issued an Amended Order of Penalty Assessment to Wainwright in Case No. 08-291-Dl. The Amended Order of Penalty Assessment assessed a total penalty of $77,189.76 against Wainwright. The Amended Order of Penalty Assessment included a Notice of Rights wherein Wainwright was advised that any request for an administrative proceeding to challenge or contest the Amended Order of Penalty Assessment must be filed within twenty-one (21) days ofreceipt of the Amended Order of Penalty Assessment in accordance with Sections 120.569 and 120.57, Florida Statutes. The Amended Order of Penalty Assessment was served on Wainwright by certified mail on December 8, 2008. A copy of the Amended Order of Penalty Assessment is attached hereto as "Exhibit C" and incorporated herein by reference. On December 24, 2008, Wainwright filed a timely Petition for a formal administrative hearing in accordance with Sections 120.569 and 120.57, Florida Statutes. The 2 Petition was forwarded to the Division of Administrative Hearings and assigned Case No. 09- 0340. On October 6, 2011, the Department issued a 4th Amended Order of Penalty Assessment to Wainwright in Case No. 08-291-Dl. The 4th Amended Order of Penalty Assessment assessed a total penalty of $1,000.00 against Wainwright. The 4th Amended Order of Penalty Assessment was served on Wainwright through the Division of Administrative Hearings. A copy of the 4th Amended Order of Penalty Assessment is attached hereto as "Exhibit D" and is incorporated herein by reference. On October 11, 2011, Wainwright and the Department entered into a settlement agreement pursuant to which Wainwright agreed to pay the penalty assessed in the 4th Amended Order of Penalty Assessment, and accordingly, on October 11, 2011, the Department filed a Notice of Settlement in DOAH Case No. 09-0340. A copy of the Notice of Settlement filed by the Department is attached hereto as "Exhibit E." On October 12, 2011, Administrative Law Judge Lawrence P. Stevenson entered an Order Closing File, relinquishing jurisdiction to the Department. A copy of the October 12, 2011 Order Closing File is attached hereto as "Exhibit F."
The Issue The issue is whether Petitioner correctly calculated the penalty to be imposed on Respondent for failing to have a sufficient amount of workers’ compensation coverage during the time period in question.
Findings Of Fact Based on the oral and documentary evidence adduced at the final hearing and the entire record in this proceeding, the following Findings of Fact are made: The Department is the state agency responsible for enforcing the requirement in chapter 440, Florida Statutes (2016),1/ that employers in Florida secure workers’ compensation coverage for their employees. While an exemption can be obtained for up to three corporate officers, any employer in the construction industry with at least one employee must have workers’ compensation coverage. § 440.02(15), Fla. Stat. The Department fulfills its enforcement duty by conducting compliance investigations, and a compliance investigation can begin with a Department investigator visiting a worksite. Robert Conrad, LLC, is a construction company based in Green Cove Springs, Florida. It has been an active corporation in Florida since September of 2014, and Robert Conrad is the sole corporate officer. Anne Johnson is employed in Jacksonville, Florida, as a compliance investigator for the Department. On June 5, 2017, Ms. Johnson visited a worksite at 213 Charlemagne Circle, Ponte Verde Beach, Florida, where a house was being remodeled. Ms. Johnson approached the two men working on the house, Paul Zsizsek and Gary Day, and identified herself as a compliance investigator for the Department. When Ms. Johnson inquired about their employer, Mr. Day identified GLD Exclusive Home Renovation, LLC, and stated that he had an exemption from workers’ compensation coverage. Mr. Zsizsek stated that he worked for Robert Conrad, LLC, and gave Mr. Conrad’s phone number to Ms. Johnson. Ms. Johnson called Mr. Conrad, who stated that he did not have workers’ compensation coverage for Robert Conrad, LLC. Mr. Conrad also stated that he had an insurance agent and was in the process of attempting to acquire coverage. Ms. Johnson called the insurance agent identified by Mr. Conrad, and the agent reported that an application for workers’ compensation coverage had not yet been prepared and that Mr. Conrad had not remitted a down payment for coverage. After her conversations with Mr. Conrad and his insurance agent, Ms. Johnson looked for any records pertaining to Robert Conrad, LLC, within the Coverage and Compliance Automated System (“CCAS”) and the Division of Corporations. CCAS is a database maintained by the Department, and it houses all active workers’ compensation policies and exemptions. Insurance carriers in Florida are required by statute to report that information to the Department. CCAS indicated that Robert Conrad, LLC, had an exemption from workers’ compensation insurance that applied only to Mr. Conrad. There was no coverage for employees of Robert Conrad, LLC. After conferring with her supervisor, Ms. Johnson received authorization to issue a Stop-Work Order. Ms. Johnson served the Stop-Work Order and an Order of Penalty Assessment on Mr. Conrad via hand-delivery on June 5, 2017. The Stop-Work Order required Robert Conrad, LLC, to “cease all business operations for all worksites in the state” and was to remain in effect until lifted by the Department. A Stop-Work Order ceases a business’s operations until it obtains workers’ compensation coverage.2/ The Order of Penalty Assessment notified Robert Conrad, LLC, that it was required to pay an amount: [e]qual to 2 times the amount the employer would have paid in premium when applying approved manual rates to the employer’s payroll during periods for which it has failed to secure the payment of compensation within the preceding 2-year period. Employers who have not been previously issued a Stop-Work Order will receive a credit to be applied towards the penalty for: 1) the initial payment of the estimated annual workers’ compensation policy premium for coverage obtained subsequent to issuance of the Stop-Work Order, or 2) if coverage is secured through an employee leasing contract with a licensed employee leasing company, the dollar or percentage amount attributable to the initial payment of the estimated workers’ compensation expense for coverage obtained subsequent to issuance of the Stop-Work Order. On June 5, 2017, Ms. Johnson personally served on Robert Conrad, LLC, a “Request for Production of Business Records for Penalty Assessment Calculation” (“the Request for Production”).3/ Through the Request for Production, the Department sought various types of financial documents pertaining to Robert Conrad, LLC’s, payroll during the period between June 6, 2015, and June 5, 2017 (“the noncompliance period), so that it could calculate the penalty to be imposed on Robert Conrad, LLC. The business records requested by the Department consisted of payroll documents such as time sheets, check stubs, earnings records, and federal income tax documents; account documents such as all business check journals and statements, including cleared checks for all open and closed business accounts; check and cash disbursements; proof of any workers’ compensation insurance or exemptions; and subcontractor information. The Request for Production required Robert Conrad, LLC, to provide the aforementioned records within 10 business days of receiving the Request for Production. Along with the Request for Production, Ms. Johnson provided Mr. Conrad with a letter explaining how the penalty could be reduced. According to Ms. Johnson, the letter stated the following: There’s two ways to reduce a penalty. The first way is if they do a workers’ compensation policy, we give them credit towards the total penalty. The more down payment that they put towards the new policy, the better. We actually give them credit. If they give us proof of that credit – or proof of that down payment, we give them credit. And the second way is if they can get their business records to us within ten business days, we give them a 25-percent reduction towards the total penalty. On June 6, 2017, Mr. Conrad visited Ms. Johnson’s office and provided proof that he had acquired a new workers’ compensation policy for Robert Conrad, LLC. Mr. Conrad made a down payment of $1,416.40 on that policy, and the Department gave Robert Conrad, LLC, a dollar- for-dollar reduction on the penalty. As for the records that Mr. Conrad provided in response to the Request for Production, Ms. Johnson testified as follows: Q: What records did the Department receive from Mr. Conrad? A: We received partial records. There were a couple of items missing. We were missing check images. Q: Okay. And when the Department received these records from the employer, what date did it receive these records? A: On June 15th, the Department received the initial business records: bank statement, certificate of insurance, exemptions, 1099 proof, 1040 tax returns for 2015 and 2016, and there were several cash withdrawals. And we also needed to see the checks that were missing. Q: Okay. Was Mr. Conrad made aware of the missing checks and the case withdrawals? A: Yes.[4/] Q: Did Mr. Conrad – or were these records provided within the ten business day deadline to receive the 25-percent credit? A: No. Q: When was – so when it was time to calculate the penalty, had Mr. Conrad brought the checks in by that time frame? A: Not within the ten business days. Q: Were there any other times that the employer brought in additional records? A: On June 20th and June 23rd additional records were submitted. Q: Okay. And in order to be eligible for the 25-percent credit, when would the tenth business day – what day would that have fallen on? A: June 19th, 2017. Q: Okay. And after the employer brought more records in on June 20th and June 23rd, were the records complete then? A: The penalty auditor reviewed the records, and there were some missing checks and subcontractors. So I was asked to follow up [with] Mr. Conrad and ask him for that missing information. On September 15th, 2017, I contacted Mr. Conrad and Mr. Conrad said he would get that information that was missing. * * * A: I was going to say Mr. Conrad called on September 18th, 2017, and he said he was hopeful in getting the missing records and would get them to us as soon as possible. And then on the 20th, September 20th, 2017, he came into the office with the missing checks and spoke with the auditor. The checks missing from Mr. Conrad’s initial submission of business records on June 15, 2017, were significant because knowing the payees of those checks would enable the Department to ascertain if the payments were for payroll. While a bank statement would note that checks were issued during a particular month, a bank statement would not identify the payees and would be of no use in ascertaining whether the checks were for payroll. On September 15, 2017, Ms. Johnson conferred with Mr. Conrad about information that was still missing. Based on the documentation that had been provided by Robert Conrad, LLC, the Department issued an Amended Order of Penalty Assessment on October 25, 2017, stating that the Department would be seeking to impose a penalty of $103,369.58. On November 7, 2017, Mr. Conrad provided additional documents to the Department. The four missing checks may have been among those documents.5/ One check was for $2,800.00 to a cement company. Another was to a contractor for $350.00. A third check was to Lowe’s for $3,678.61, and a fourth was to the United States Treasury for $13,375.00. This new documentation resulted in the Department issuing on December 22, 2017, a 2nd Amended Order of Penalty Assessment indicating the Department was seeking to impose a penalty of $95,601.98. More information provided by Mr. Conrad led to the Department issuing a 3rd Amended Order of Penalty Assessment of $66,989.10. Chris Richardson, a penalty auditor employed by the Department, calculated the aforementioned penalty based on the business records provided by Mr. Conrad. For each person for whom Robert Conrad, LLC, failed to obtain workers’ compensation coverage during the noncompliance period, Mr. Richardson determined how much money Robert Conrad, LLC, paid each person during that period. The gross payroll amount for each person is divided by 100 in order to create a percentage, and the percentage associated with each person is then multiplied by an “approved manual rate.” An approved manual rate is associated with a particular class code. A class code describes an employee’s scope of work based on the type of work he or she performs on a daily basis. The National Council on Compensation Insurance publishes the Scopes Manual, and the Scopes Manual sets forth class codes for numerous types of work. Multiplying the gross payroll percentage by an approved manual rate results in a workers’ compensation insurance premium for a particular employee. As required by section 440.107(7)(d)1., Florida Statutes, each premium amount is multiplied by two in order to calculate a penalty associated with each employee for whom workers’ compensation insurance was not obtained. Mr. Richardson then added the individual penalties associated with each employee of Robert Conrad, LLC, in order to calculate the total penalty. The final penalty calculated by Mr. Richardson (and set forth in the 3rd Amended Order of Penalty Assessment) is $66,989.10. During the final hearing, Mr. Conrad did not dispute that Robert Conrad, LLC, did not have sufficient workers’ compensation coverage during the noncompliance period. Also, he did not dispute the method by which the Department calculated the penalty set forth in the 3rd Amended Order of Penalty Assessment. Mr. Conrad did take issue with the penalty being double the amount that he should have been paying in workers’ compensation premiums between June 6, 2015, and June 5, 2017.6/ Mr. Conrad also asserted that he was unaware that he was required to obtain workers’ compensation coverage for employees of Robert Conrad, LLC. In addition, Mr. Conrad asserted that the penalty should be reduced by 25 percent because he timely provided the Department with all of the required documentation except for four checks.
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 imposing a penalty of $66,989.10 on Robert Conrad, LLC. DONE AND ENTERED this 14th day of May, 2017, in Tallahassee, Leon County, Florida. S G. W. CHISENHALL 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 14th day of May, 2017.
Findings Of Fact 12. The factual allegations contained in the Stop-Work Order and Order of Penalty Assessment issued on February 22, 2011, the Amended Order of Penalty Assessment issued on March 24, 2011, and the 2nd Amended Order of Penalty Assessment, issued on March 8, 2012, attached as “Exhibit A,” “Exhibit B,” and Exhibit “D” respectively, and fully incorporated herein by reference, are hereby adopted as the Department’s Findings of Fact in this case.
Conclusions THIS PROCEEDING came on for final agency action and Jeff Atwater, Chief Financial Officer of the State of Florida, or his designee, having considered the record in this case, including the request for administrative hearing received from AMSTARR, INC., the Stop-Work Order and Order of Penalty Assessment, the Amended Order of Penalty Assessment, and the 2nd Amended Order of Penalty Assessment, and being otherwise fully advised in the premises, hereby finds that: 1. On February 22, 2011, the Department of Financial Services, Division of Workers’ Compensation (hereinafter “Department”) issued a Stop-Work Order and Order of Penalty Assessment in Division of Workers’ Compensation Case No. 11-060-1A to AMSTARR, INC. The Stop-Work Order and Order of Penalty Assessment included a Notice of Rights wherein AMSTARR, INC. was advised that any request for an administrative proceeding to challenge or contest the Stop- Work Order and Order of Penalty Assessment must be filed within twenty-one (21) days of receipt of the Stop-Work Order and Order of Penalty Assessment in accordance with Sections 120.569 and 120.57, Florida Statutes, and must conform to Rule 28- 106.2015, Florida Administrative Code. 2. On February 22, 2011, the Stop-Work Order and Order of Penalty Assessment was served by personal service on AMSTARR, INC. A copy of the Stop-Work Order and Order of Penalty Assessment is attached hereto as “Exhibit A” and incorporated herein by reference. 3. On March 24, 2011, the Department issued an Amended Order of Penalty Assessment to AMSTARR, INC. The Amended Order of Penalty Assessment assessed a total penalty of $80,945.25 against AMSTARR, INC. The Amended Order of Penalty Assessment included a Notice of Rights wherein AMSTARR, INC. was advised that any request for an administrative proceeding to challenge or contest the Amended Order of Penalty Assessment must be filed within twenty-one (21) days of receipt of the Amended Order of Penalty Assessment in accordance with Sections 120.569 and 120.57, Florida Statutes, and must conform to Rule 28-106.2015, Florida Administrative Code. 4, On October 27, 2011, the Amended Order of Penalty Assessment was served by personal service via a process server on AMSTARR, INC. A copy of the Amended Order of Penalty Assessment is attached hereto as “Exhibit B” and incorporated herein by reference. 5. On November 28, 2011, AMSTARR, INC. timely filed a request for administrative hearing with the Department. The petition for administrative review was forwarded to the Division of Administrative Hearings on January 6, 2012, and the matter was assigned DOAH Case No. 12-0080. A copy of the petition is attached hereto as “Exhibit C” and incorporated herein by reference. 6. On March 8, 2012, the Department issued a 2nd Amended Order of Penalty Assessment to AMSTARR, INC. The Amended Order of Penalty Assessment assessed a total penalty of $2,256.78 against AMSTARR, INC. The 2nd Amended Order of Penalty Assessment included a Notice of Rights wherein AMSTARR, INC. was advised that any request for an administrative proceeding to challenge or contest the 2nd Amended Order of Penalty Assessment must be filed within twenty-one (21) days of receipt of the 2nd Amended Order of Penalty Assessment in accordance with Sections 120.569 and 120.57, Florida Statutes, and must conform to Rule 28-106.2015, Florida Administrative Code. 7. On March 13, 2011, the 2nd Amended Order of Penalty Assessment was served by electronic mail on AMSTARR, INC. A copy of the 2nd Amended Order of Penalty Assessment is attached hereto as “Exhibit D” and incorporated herein by reference. 8. On March 26, 2012, AMSTARR, INC., entered into a Settlement Agreement with the Department. The Settlement Agreement stated that AMSTARR, INC. must accept service of the 2nd Amended Order of Penalty Assessment. The Settlement Agreement also stated that AMSTARR, INC. must pay the penalty in full, or pay a down-payment of $1,000.00 and enter into a Payment Agreement Schedule for Periodic Payment within thirty days of the execution of the Settlement Agreement. Additionally, AMSTARR, INC. agreed that upon execution of the Settlement Agreement his Petition shall be deemed dismissed with prejudice. A copy of the Executed Settlement Agreement is attached hereto as “Exhibit E” and incorporated herein by reference. 9. On March 26, 2012, the Department filed a Notice of Settlement with the Division of Administrative Hearings. A copy of the Notice of Settlement is attached hereto as “Exhibit F” and incorporated herein by reference. 10. On April 2, 2012, the Administrative Law Judge issued an Order Closing File and Relinquishing Jurisdiction. A copy of the Order Closing File and Relinquishing Jurisdiction is attached hereto as “Exhibit G” and incorporated herein by reference. ll. As of the date of this Final Order, AMSTARR, INC. has failed to comply with the conditions of the Settlement Agreement. AMSTARR, INC. has neither paid the penalty amount in full, nor has AMSTARR, INC. entered into a Payment Agreement Schedule for Periodic Payment.
The Issue The issue is whether Respondent, Department of Financial Services, Division of Workers' Compensation, properly assessed a penalty of $90,590.42 against Petitioner, S.A.C., LLC.
Findings Of Fact The Department is the state agency responsible for enforcing the statutory requirement that employers secure payment of workers' compensation for the benefit of their employees pursuant to Section 440.107, Florida Statutes. At all times relevant to this proceeding, Petitioner, S.A.C., LLC, was a corporation domiciled in Florida. S.A.C.'s 2007 Limited Liability Company Annual Report lists its principal place of business as 626 Lafayette Court, Sarasota, Florida, 34236, and its mailing address as Post Office Box 49075, Sarasota, Florida 34230. At all times relevant to this proceeding, William R. Suzor was the president and managing member of S.A.C. Collen Wharton is an Insurance Analyst II with the Department. In this position, Ms. Wharton conducts inspections to ensure that employers are in compliance with the law. On June 20, 2007, Ms. Wharton conducted a compliance check at 2111 South Osprey Avenue in Sarasota, Florida. During the compliance check, Ms. Wharton observed three males working at that location. The three men were framing a single-family house that was under construction. This type of work is carpentry, which is considered construction. During the compliance check, Ms. Wharton asked David Crawford, one of the men working at the site, who was their employer. Mr. Crawford told Ms. Wharton that he and the other two men worked for S.A.C., but were paid by a leasing company. Mr. Crawford told Ms. Wharton that the company was owned by Mr. Suzor and, in response to Ms. Wharton's inquiry, he gave her Mr. Suzor's telephone number. In addition to Mr. Crawford, the other workers at the site were identified as Terry Jenkins and Frank Orduno. By checking the records the Department maintains in a computerized database, Ms. Wharton determined that S.A.C. did not carry workers' compensation insurance, but had coverage on its employees through Employee Leasing Solutions, an employee leasing company. She also determined, by consulting the Department's database, that none of the men had a workers' compensation exemption. Ms. Wharton telephoned Employee Leasing Solutions, which advised her that two of the workers at the site, Mr. Crawford and Mr. Jenkins, were on the roster of employees that the company maintained. The company advised her that the other worker, Mr. Orduno, was not on its roster of employees. This information was verified by an employee list that the leasing company provided to Ms. Wharton. On June 20, 2007, after determining that one worker at the work site had no workers' compensation coverage, Mr. Wharton prepared a Stop-Work Order. She then telephoned Mr. Suzor, told him that he had one worker at the site who did not have workers' compensation coverage and requested that he come to the work site. During the conversation, Mr. Suzor advised Ms. Wharton that Mr. Crawford was in charge at the work site, that she could give the Stop-Work Order to Mr. Crawford, and that he (Mr. Suzor) would meet her the following day. Ms. Wharton, after she telephoned Mr. Suzor, she conferred with her supervisor and then issued Stop-Work Order No. 07-125-D3, posting it at the work site and serving it on Mr. Crawford. On June 21, 2007, Mr. Suzor met with Ms. Wharton at her office. During that meeting, Ms. Wharton served a copy of Stop-Work Order No. 07-125-D3 on Mr. Suzor. She also served him with a Request for Production of Business Records for Penalty Assessment Calculation ("Request for Business Records"). The Request for Business Records listed specific records that Mr. Suzor/S.A.C. should provide to the Department so that the Department could determine the workers who S.A.C. paid during the period of June 19, 2004, through June 20, 2007. The Request for Business Records notes that the requested records must be produced within five business days of receipt. According to the Request for Business Records, if no records are provided or the records provided are insufficient to enable the Department to determine the payroll for the time period requested for the calculation of the penalty in Subsection 440.107(7)(d), Florida Statutes, "the imputed weekly payroll for each employee, . . . shall be the statewide average weekly wage as defined in section 440.12(2), F.S. multiplied by 1.5." S.A.C. did not respond to the Department's Request for Business Records. On July 17, 2007, the Department had received no records from S.A.C. Without any records, Ms. Wharton had no information from which she could determine an accurate assessment of S.A.C.'s payroll for the previous three years. Therefore, Ms. Wharton calculated the penalty based on an imputed payroll. In her calculations, Ms. Wharton assumed that Mr. Orduno worked from June 21, 2004, through June 20, 2007, and that he was paid 1.5 times the state-wide average weekly wage for the class code assigned to the work he performed for each year or portion of the year. The Department then applied the statutory formula set out in Subsection 440.107(7)(d), Florida Statutes. Based on that calculation, the Department correctly calculated S.A.C.'s penalty assessment as $90,590.42, as specified in the Amended Order of Penalty Assessment dated July 17, 2007. The Amended Order of Penalty Assessment reflecting the correct penalty amount was served on S.A.C.'s attorney, John Myers, Esquire, by hand-delivery, on July 17, 2007.3/ On July 21, 2007, S.A.C., through its former counsel, filed a Petition for Hearing.
Recommendation Based upon the Findings of Fact and Conclusions of Law, RECOMMENDED that Respondent, Department of Financial Services, Division of Workers' Compensation, enter a final order which affirms the Amended Order of Penalty Assessment issued July 17, 2007, assessing a penalty of $90,590.42, and the Stop-Work Order issued to Petitioner, S.A.C., LLC, on June 20, 2007. DONE AND ENTERED this 25th day of March, 2008, in Tallahassee, Leon County, Florida. S CAROLYN S. HOLIFIELD 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 25th day of March, 2008.
The Issue The issue in this case is whether Respondent had workers' compensation coverage for his employees pursuant to Chapter 440, Florida Statutes (2008), specifically whether Tabitha Rexford was an employee, and, if so, what penalty should be assessed.
Findings Of Fact Neil owns and operates a business engaged in the practice of installing flooring, including carpets, tile, hardwood, and the like. Neil is a sole proprietor with no one else on his payroll. The flooring work is performed solely by Neil, individually, and he picks up and delivers his own supplies and materials. Neil has been involved in the flooring business for approximately 30 years and has operated as Rex Neil, Inc., since 2003. There have never been any employees of Rex Neil, Inc., other than Neil himself. Neil is the only officer listed for Rex Neil, Inc., at the Division of Corporations. On May 14, 2008, Neil was involved in the installation of hardwood floors at a newly constructed single-family residence in Sarasota County. Neil had recently injured his back, so his wife (Tabitha) had accompanied him to this particular job to assist with the unloading of materials. It was, apparently, the first and only time Tabitha had joined her husband at a job site. On the date in question, an investigator from DFS (Colleen Wharton) conducted a compliance investigation at the house where Petitioner was working. Wharton spoke to other individuals working in the house; they directed her to another room in the house where Neil was working. In that room, Wharton witnessed Tabitha, dressed in work clothes and wearing knee pads, putting cardboard down on freshly lain wood floors. Wharton surmised that Tabitha was working for and/or with Neil based upon Tabitha's dress (work clothes) and her activities (laying cardboard on the floor). When Wharton approached him, Neil mistakenly believed she was an officer from the Immigration and Naturalization Service. (Wharton had, moments before, been speaking with a group of Hispanic workers outside the house.) Wharton identified herself as a representative of DFS, but Neil refused to acknowledge her presence. For some reason, Neil was "ugly" with Wharton and did not demonstrate any respect for her position. After Wharton established her credentials, Neil properly identified himself and stated that he was doing the flooring work as a subcontractor for Carpet Home. Neil would not identify the name of his company, but Wharton was able to ascertain that from the general contractor. Neil told Wharton he had workers' compensation coverage when, in fact, he had an exemption from coverage; Tabitha did not have an exemption. Wharton determined from the DFS database that Rex Neil, Inc., was a valid and current entity and that Neil had an exemption from coverage. Wharton noted that Neil was the only officer of the entity and that Tabitha was not listed as an officer or agent of the entity. Wharton determined that although not listed as such, Tabitha was operating as an employee of Rex Neil, Inc. This assumption was bolstered by the fact that Tabitha had been issued checks from Rex Neil, Inc., on a regular basis. Also, Wharton believes Tabitha admitted working for her husband since December 2007. Tabitha maintains that the checks written to her were representative of the amounts owed to Neil for his work and were issued to Tabitha only so she would have access to the money to pay for family expenses. It appears no checks were written to Neil directly, but that his compensation was represented by the checks written to Tabitha. Tabitha testified under oath that she had not helped her husband, except for the day of the investigation. Her testimony was credible. Rex Neil, Inc.'s, business was identified in the Scopes Manual as Code 5478: Carpet or flooring installation. Wharton used the assigned rate for this code and it was then compared to the designated insurance rate. There were no records available concerning Tabitha's wage, so a wage of $746 per week was imputed to her (based on the Statewide Average Weekly Wage scale). Once the amount of unpaid premiums for that wage was determined, the figure was multiplied by 1.5 to ascertain the penalty amount. The amount of penalty calculated by DFS was $38,858.81. A Second Amended Order of Penalty Assessment was issued reducing the penalty to $21,690.61 due to further review of relevant records. The Stop-Work Order was left with Neil at the home where the investigation took place. Neil refused to accept it, so the Order was laid on the floor next to Neil. An Amended Order of Penalty Assessment was ultimately served on Neil on June 20, 2008, by Porter. In fact, the Order was served on Neil when he arrived at the DFS office to pick up some paperwork related to this matter. Neil did not believe the penalty was fair based on the fact that Tabitha had only worked with him for one single day. Tabitha and Neil testified that the May 14, 2008, date was the only time Tabitha had been involved with helping her husband as a worker. Their testimony is credible as to that fact, and it is accepted. Wharton's one-time observation of Tabitha laying cardboard on the flooring is not sufficient to establish that Tabitha was an employee. There was no non- hearsay evidence that Tabitha claimed to have worked with Neil since December 2007. However, it is equally clear that on the day in question, Tabitha was indeed providing some sort of assistance to her husband in an employee-like capacity. She was, on that date, essentially an employee. The absence of any Rex Neil, Inc., checks written directly to Neil is clear and convincing evidence that his personal remuneration from the company was being paid directly to his wife, rather than going to him first. The checks written to Tabitha did not include any reference in the memo line that the checks were payroll for her or Neil. It is, however, inconceivable that Neil was working for free. Neil claims retaliation and that DFS (through Wharton) was punishing him for his disrespectful behavior. There is no evidence of such retaliation or the existence of a personal vendetta, although it is clear Neil can be less than diplomatic in his dealings with authority figures. Petitioner has not been engaged in business since the date the Stop-Work Order was issued. However, Neil has worked personally on some jobs since that time.
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, Division of Workers' Compensation, assessing a penalty of $1,000 against Petitioner for failure to provide workers' compensation coverage for its employee for one day. DONE AND ENTERED this 21st day of November, 2008, in Tallahassee, Leon County, Florida. 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 21st day of November, 2008. COPIES FURNISHED: Thomas H. Duffy, Esquire Department of Financial Services 200 East Gaines Street, 6th Floor Tallahassee, Florida 32399-4229 William Clay Rexford Rex Neil, Inc. 1244 North Brink Avenue Sarasota, Florida 34237 Honorable Alex Sink Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Daniel Sumner, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0307
The Issue The issues are whether Respondent maintained workers' compensation coverage for certain employees, and, if not, what penalty, if any, should be imposed.
Findings Of Fact Petitioner is the state agency responsible for enforcing the statutory requirement that employers secure the payment of workers' compensation for the benefit of their employees. § 440.107, Fla. Stat. (2002). Respondent is a corporation domiciled in Florida and engaged in the business of installing motorized aluminum hurricane shutters and security systems. On June 3, 2003, four of Respondent's workers installed aluminum shutters on a single-family residence located at 20799 Wheelock Drive, No. 909, Heron's Glen, North Fort Myers, Florida. Respondent did not have workers' compensation insurance for the four employees. In addition, Respondent failed to maintain workers' compensation coverage for the benefit of ten employees from June 21, 2002, through June 27, 2003 (the relevant period). Respondent stipulated that Respondent was an employer during the relevant period, and that Respondent failed to maintain workers' compensation coverage for five employees identified in the record as Ricardo Mendez, Pedro Rojas, Willie Marrow, Eric Mendez, and Izarate Cartas. Respondent further stipulated that Petitioner correctly assessed the penalty amounts for those employees. The remaining five individuals that Respondent contends were not employees are identified in the record as Jessica Mendez, Gelacio Zarate, Manual Mendez, Jesus Espinoza, and David Mobley. Respondent asserts, in relevant part, that these individuals were "casual labor" and not "employees" within the meaning of Section 440.02(15)(d)5, Florida Statutes (2002). Under the Workers' Compensation Law in effect on June 21, 2002, an "employee" did not include a person if the employment satisfied the conjunctive requirements of being casual and not in the course of the trade, business, profession, or occupation of the employer. § 440.02(15)(d)5, Fla. Stat. (2002). Section 440.02(5), Florida Statutes (2002), defined the term "casual," in relevant part, to be work that satisfied the conjunctive requirements of being completed in ten working days or less, without regard to the number of persons employed, and at a total labor cost of less than $500. Ms. Mendez and Mr. Zarate were Respondent's employees during the relevant period. Respondent paid each more than $500, and each individual performed services that were in the course of the trade, business, profession, or occupation of Respondent. Ms. Mendez worked as an assistant to the wife of the president and sole shareholder of Respondent. The wife maintained accounts and pulled permits for Respondent. Ms. Mendez assisted the wife by answering telephone calls and accompanying the wife when the wife pulled permits for Respondent. Respondent paid Ms. Mendez $760 during the relevant period. Respondent paid Mr. Zarate $800 during the relevant period to help build large roll-down, accordion, or panel shutters. Building shutters is an activity required in the course of Respondent's business. Mr. M. Mendez and Mr. Espinoza were Respondent's employees during the relevant period. Although Respondent paid each person less than $500, Mr. M. Mendez and Mr. Espinoza each performed cleanup work for Respondent. The amount of cleanup required depended on the number of roll-down shutter installations Respondent had at a given time. Constructing roll-down shutters produces a lot of paper and scraps that must be cleaned up to keep the shop clean. Mr. M. Mendez and Mr. Espinoza each performed services directly related to the construction of shutters by Respondent. Respondent argues that Mr. Mobley was either casual labor or an independent contractor. Mr. Mobley did not satisfy the statutory requirements for either classification. Mr. Mobley did not satisfy the requirements for casual labor. Mr. Mobley was an electrician who installed motorized shutters for Respondent. Mr. Mobley secured electrical permits needed for Respondent to do the electrical work essential to Respondent's business. Mr. Mobley accompanied Respondent's president to the construction site, ran the electrical, and wired the motor for the shutter that Respondent was assembling. Although Mr. Mobley worked for Respondent for only three days, Respondent paid Mr. Mobley approximately $1,200. Under the Workers' Compensation Law in effect during the relevant period, Section 440.02(15)(c), Florida Statutes (2002), required an "independent contractor" to satisfy all of the following requirements in Section 440.02(15)(d)1, Florida Statutes: The independent contractor maintains a separate business with his or her own work facility, truck, equipment, materials, or similar accommodations; The independent contractor holds or has applied for a federal employer identification number, unless the independent contractor is a sole proprietor who is not required to obtain a federal employer identification number under state or federal requirements; The independent contractor performs or agrees to perform specific services or work for specific amounts of money and controls the means of performing the services or work; The independent contractor incurs the principal expenses related to the service or work that he or she performs or agrees to perform; The independent contractor is responsible for the satisfactory completion of work or services that he or she performs or agrees to perform and is or could be held liable for a failure to complete the work or services; The independent contractor receives compensation for work or services performed for a commission or on a per-job or competitive-bid basis and not on any other basis; The independent contractor may realize a profit or suffer a loss in connection with performing work or services; The independent contractor has continuing or recurring business liabilities or obligations; and The success or failure of the independent contractor's business depends on the relationship of business receipts to expenditures. Mr. Mobley satisfied some of the definitional elements of an independent contractor. He maintained a separate business as a sole proprietor not required to obtain a federal identification number, and incurred principal expenses related to the service or work he performed for Respondent. There is insufficient evidence to find that Mr. Mobley satisfied the remaining requirements for an independent contractor. The evidence was insufficient to show that Mr. Mobley could be held liable for failure to complete the work or services he performed for Respondent, had continuing or recurring business obligations, or that the success or failure of his business depended on the relationship of receipts to expenditures. The evidence is clear that Mr. Mobley would not have performed work for Respondent if he were to have suffered a loss. Mr. Mobley was Respondent's employee during the relevant period. Mr. Mobley failed to satisfy the definition of either casual labor or an independent contractor.
Recommendation Based on the Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order that affirms, approves, and adopts the Amended Stop Work and Penalty Assessment Order. DONE AND ENTERED this 9th day of April, 2004, in Tallahassee, Leon County, Florida. S DANIEL MANRY 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 9th day of April, 2004. COPIES FURNISHED: Marshall L. Cohen, Esquire Marshall L. Cohen, P.A. Post Office Box 60292 Fort Myers, Florida 33906-0292 Andrea L. Reino, Esquire Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399-4229 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, Plaza Level 11 Tallahassee, Florida 32399-0300
Findings Of Fact 12. The factual allegations contained in the Stop-Work Order and Order of Penalty Assessment issued on September 16, 2009, the Amended Order of Penalty Assessment issued on October 13, 2009, and the 2"! Amended Order of Penalty Assessment issued on December 21, 2009, attached as “Exhibit A,” “Exhibit B,” and “Exhibit C” respectively, and fully incorporated herein by reference, are hereby adopted as the Department’s Findings of Fact in this case.
Conclusions THIS PROCEEDING came on for final agency action and Jeff Atwater, Chief Financial Officer of the State of Florida, or his designee, having considered the record in this case, including the request for administrative hearing received from SONNY SAMMY, the Stop-Work Order and Order of Penalty Assessment, the Amended Order of Penalty Assessment, and the an Amended Order of Penalty Assessment, and being otherwise fully advised in the premises, hereby finds that: 1. On September 16, 2009, the Department of Financial Services, Division of Workers’ Compensation (hereinafter “Department”) issued a Stop-Work Order and Order of Penalty Assessment in Division of Workers’ Compensation Case No. 09-186-D2 to SONNY SAMMY. The Stop-Work Order and Order of Penalty Assessment included a Notice of Rights wherein SONNY SAMMY was advised that any request for an administrative proceeding to challenge or contest the Stop-Work Order and Order of Penalty Assessment must be filed within twenty-one (21) days of receipt of the Stop-Work Order and Order of Penalty Assessment in accordance with Sections 120.569 and 120.57, Florida Statutes, and must conform to Rule 28- 106.2015, Florida Administrative Code. 2. On September 16, 2009, the Stop-Work Order and Order of Penalty Assessment was served by personal service on SONNY SAMMY. A copy of the Stop-Work Order and Order of Penalty Assessment is attached hereto as “Exhibit A” and incorporated herein by reference. 3. On October 13, 2009, the Department issued an Amended Order of Penalty Assessment to SONNY SAMMY. The Amended Order of Penalty Assessment assessed a total penalty of $71,862.00 against SONNY SAMMY. The Amended Order of Penalty Assessment included a Notice of Rights wherein SONNY SAMMY was advised that any request for an administrative proceeding to challenge or contest the Amended Order of Penalty Assessment must be filed within twenty-one (21) days of receipt of the Amended Order of Penalty Assessment in accordance with Sections 120.569 and 120.57, Florida Statutes, and must conform to Rule 28-106.2015, Florida Administrative Code. 4. On October 23, 2009, the Amended Order of Penalty Assessment was served by personal service on SONNY SAMMY. A copy of the Amended Order of Penalty Assessment is attached hereto as “Exhibit B” and incorporated herein by reference. 5. On December 21, 2009, the Department issued a 2™ Amended Order of Penalty Assessment to SONNY SAMMY. The 2" Amended Order of Penalty Assessment was issued in order to make a correction to the Federal Employer Identification Number (FEIN). The gna Amended Order of Penalty Assessment included a Notice of Rights wherein SONNY SAMMY was advised that any request for an administrative proceeding to challenge or contest the and Amended Order of Penalty Assessment must be filed within twenty-one (21) days of receipt of the 2! Amended Order of Penalty Assessment in accordance with Sections 120.569 and 120.57, Florida Statutes, and must conform to Rule 28-106.2015, Florida Administrative Code. 6. On December 22, 2009, the 2°4 Amended Order of Penalty Assessment was served by personal service on SONNY SAMMY. A copy of the 2™ Amended Order of Penalty Assessment is attached hereto as “Exhibit C” and incorporated herein by reference. 7. On December 21, 2009, SONNY SAMMY timely filed a request for administrative hearing (“Petition”) with the Department. The Petition was forwarded to the Division of Administrative Hearings on March 17, 2011, and the matter was assigned DOAH Case No. 11-2470. A copy of the petition is attached hereto as “Exhibit D” and incorporated herein by reference. 8. On May 24, 2011, the Department served by overnight courier its First Interlocking Discovery Request (“discovery requests”) which included requests for admissions, interrogatories, and requests for production on Respondent. Respondent was required to serve its answers upon the Department within 30 days pursuant to Rules 1.340(a), 1.350(b), and 1.370(a), Florida Rules of Civil Procedure. However, pursuant to Rule 128-106.103, Florida Administrative Code, “One business day shall be added when service is made by overnight courier.” Therefore, Respondent was required to respond to the discovery on or before June 24, 2011. 9. On June 27, 2011, the Department filed a Motion to Deem Matters Admitted and to Relinquish Jurisdiction Pursuant to Section 120.57(1), Florida Statutes after having not received any answer from Respondent to the Department’s discovery requests. On July 20, 2011, the Administrative Law Judge entered an Order denying the motion without prejudice stating that the “requisite record for granting the requested relief has not been established” due to the Department’s failure to attach or separately file the Requests for Admission served on Respondent. 10. On July 20, 2011, the Department filed its Notice of Filing Requests for Admission and included all requests for admission that were propounded on Respondent on May 24, 2011. 11. On August 11, 2011, the Administrative Law Judge issued an Order Deeming Matters Admitted and Relinquishing Jurisdiction which relinquished jurisdiction of the matter to the Department for final disposition. A copy of the Order Deeming Matters Admitting and Relinquishing Jurisdiction is attached hereto as “Exhibit E” and incorporated herein by reference.
The Issue Whether GMD Carpet, Inc., failed to comply with coverage requirements of the workers’ compensation law, Chapter 440, Florida Statutes, and if so, what penalty should be imposed.
Findings Of Fact Petitioner is the state agency responsible for enforcing provisions of Florida law, specifically Chapter 440 of the Florida Statutes, which require that employers secure workers’ compensation coverage for their employees. Respondent, whose principal is Emmanuel Simone, Jr. (Mr. Simone), is in the business of providing carpet 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 Mr. Simone and four other individuals employed by GMD. On or about May 21, 2004, Petitioner became aware that Mr. Simone and another GMD employee were working a carpet installation job in Broward County, Florida. Upon inquiry, Petitioner accurately determined that GMD had not furnished the required coverage, and that there was no valid exemption from the coverage requirement. Accordingly, on May 21, 2004, a Stop Work and Penalty Assessment Order was properly entered. Thereafter, Petitioner reviewed Respondent's payroll records, which revealed that GMD employed three other individuals under circumstances which obliged Respondent to provide workers’ compensation for these employees. Based upon Respondent's payroll records, Petitioner recalculated the penalty assessment to be imposed in accordance with the requirements of Chapter 440, and issued an Amended Order in the amount of $1,916.65 on May 25, 2004. Respondent did not intend to violate the law. Rather, he mistakenly believed that he held a valid exemption; that his wife was not an employee, but rather a helper; and that the three other carpet installers were subcontractors to whom he had no insurance-related obligations. It is undisputed that Petitioner correctly calculated the penalty prescribed by law in the amount of $1,916.65 based upon Respondent's records and applicable law.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Petitioner enter a final order confirming the Stop Work Order and imposing a penalty in the amount of $1,916.65, as set forth in the Amended Order. DONE AND ENTERED this 15th day of October, 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 October, 2004. COPIES FURNISHED: Colin M. Roopnarine, Esquire Department of Financial Services Division of Workers’ Compensation 200 East Gaines Street Tallahassee, Florida 32399-4229 Emmanuel Simone, Jr. Debra Simone GMD Carpet, Inc. 717 North 31st Avenue Hollywood, Florida 33021 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
Findings Of Fact 12. The factual allegations in the Stop-Work Order and Order of Penalty Assessment issued on February 3, 2009, and the Third Amended Order of Penalty Assessment issued on November 4, 2009, which are fully incorporated herein by reference, are hereby adopted as the Department’s Findings of Fact in this case.
Conclusions THIS PROCEEDING came on for final agency action and Alex Sink, Chief Financial Officer of the State of Florida, or her designee, having considered the record in this case, including the Stop-Work Order and Order of Penalty Assessment and the Third Amended Order of Penalty Assessment served in Division of Workers’ Compensation Case No. 09-042-D4, and being otherwise fully advised in the premises, hereby finds that: 1. On February 3, 2009, the Department of Financial Services, Division of Workers’ Compensation (hereinafter “Department”) issued a Stop-Work Order and Order of Penalty Assessment in Division of Workers’ Compensation Case No. 09-042-D4 to GILLION ENTERPRISES, INC. The Stop-Work Order and Order of Penalty Assessment included a Notice of rights wherein GILLION ENTERPRISES, INC. was advised that any request for an administrative proceeding to challenge or contest the Stop-Work Order and Order of Penalty _ Assessment must be filed within twenty-one (21) days of receipt of the Stop-Work Order and Order of Penalty Assessment in accordance with Sections 120.569 and 120.57, Florida Statutes. 2. On February 3, 2009, the Stop-Work Order and Order of Penalty Assessment was served via personal service on GILLION ENTERPRISES, INC. A copy of the Stop- Work Order and Order of Penalty Assessment is attached hereto as “Exhibit A” and incorporated herein by reference. 3. On March 10, 2009, the Department issued a Second Amended Order of Penalty Assessment to GILLION ENTERPRISES, INC. in Case No. 09-042-D4. The Second Amended Order of Penalty Assessment assessed a total penalty of $24,732.08 against GILLION ENTERPRISES, INC. The Second Amended Order of Penalty Assessment included a Notice of Rights wherein GILLION ENTERPRISES, INC. was advised that any request for an administrative proceeding to challenge or contest the Amended Order of Penalty Assessment must be filed within twenty-one (21) days of receipt of the Amended Order of Penalty Assessment in accordance with Sections 120.569 and 120.57, Florida Statutes. 4. The Second Amended Order of Penalty Assessment was served on GILLION ENTERPRISES, INC. by certified mail on March 19, 2009. A copy of the Second Amended Order of Penalty Assessment is attached hereto as “Exhibit B” and incorporated herein by reference. | 5. On March 3, 2009, GILLION ENTERPRISES, INC. filed a timely Petition for a formal administrative hearing in accordance with Sections 120.569 and 120.57, Florida Statutes. The Petition was forwarded to the Division of Administrative Hearings and assigned Case No. 09-1389. 6. On November 4, 2009, the Department issued a Third Amended Order of Penalty Assessment to GILLION ENTERPRISES, INC. in Case No. 09-042-D4. The Third Amended Order of Penalty Assessment assessed a total penalty of $21,729.49 against GILLION ENTERPRISES, INC. The Third Amended Order of Penalty Assessment was served on GILLION ENTERPRISES, INC. through the Division of Administrative Hearings. A copy of the Third Amended Order of Penalty Assessment is attached hereto as “Exhibit C” and is incorporated herein by reference. 7. On November 5, 2009, GILLION ENTERPRISES, INC. filed a Notice of Voluntary Dismissal in DOAH Case No. 09-1389. A copy of the Notice of Voluntary Dismissal . filed by ROYMO, INC. is attached hereto as “Exhibit D.” 8. On November 9, 2009 Administrative Law Judge Susan B. Harrell entered an Order Closing File, relinquishing jurisdiction to the Department. A copy of the November 9, 2009 Order Closing File is attached hereto as “Exhibit E.”
The Issue Whether Respondent, G and F Renovations, Inc. (Respondent), timely challenged Petitioner's proposed agency action; and, if not, whether pursuant to the doctrine of equitable tolling Respondent is entitled to an administrative hearing to challenge the proposed agency action.
Findings Of Fact Petitioner is the state agency charged with the responsibility of enforcing and ensuring employers meet the requirements of chapter 440, Florida Statutes. The law in Florida requires employers to maintain appropriate workers' compensation coverage for their employees. At all times material to this case, Respondent was doing business in Florida and was represented by Pedro Malaret, attorney at law. Prior to May 1, 2014, Michael Robinson, a compliance investigator employed by Petitioner, visited a job site wherein workers were engaged in the business of construction/roofing. Robinson was advised by the workers at the site that they were employed by Respondent. Robinson then investigated the matter to determine whether the persons at the job site were covered by Respondent's workers' compensation insurance. To do so, he spoke to the supervisor at the site and others to whom he was referred. After verifying the persons on the job site were not on the list of Respondent's covered employees, and consulting with his supervisor, Robinson posted a Stop-Work Order at the job site. The Stop-Work Order provided, in pertinent part: You have a right to administrative review of this action by the Department under sections 120.569 and 120.57, Florida Statutes. To obtain review, you must file a written petition requesting review. If you dispute a material fact contained in this action, you are entitled to a hearing under Sections 120.569 and 120.57(1), Florida Statutes, at which you may be represented by counsel, present evidence and argument on the issue(s), examine witnesses, submit a proposed recommended order, and file exceptions to the recommended order of the Administrative Law Judge. If you do not dispute a material fact contained in this action, you are entitled to a hearing under section 120.57(2), Florida Statutes, at which you may be represented by counsel, present documentary evidence, and present a written statement in opposition to this action. * * * You must file the petition for hearing so that it is received by the Department within twenty-one (21) days of your receipt of this agency action. The petition must be filed with Julie Jones, DFS Agency Clerk, Department of Financial Services, 612 Larson Building, 200 East Gaines Street, Tallahassee, Florida 32399-0390. FAILURE TO FILE A PETITION WITH THE TWENTY-ONE(21) DAYS CONSTITUTES A WAIVER OF YOUR RIGHT TO ADMINISTRATIVE REVIEW OF THE AGENCY ACTION. The Stop-Work Order and an Order of Penalty Assessment was served on Respondent's corporate agent, or authorized agent, by a process server. Respondent did not timely file a petition challenging the agency's proposed action. Instead, by email only, Respondent's counsel directed a letter to Robinson that provided: This firm has the pleasure of representing G & F Renovations, Inc. All papers to be served on G & F should be mailed or delivered to this office. My client wishes to resolve all issues relating to the matter amicably and as quickly as possible. As such, please forward a list of all documents needed to my office so that I may get them to you as soon as possible. Should you require any further documentation, please feel free to contact me either at my office or on my cell . . . I look forward to working with your [sic] to resolve this matter. Contrary to the offer to provide documents to Petitioner, Respondent did not provide business records. Eventually, an Amended Order of Penalty Assessment was issued and provided by email to Respondent's counsel at his email address of record. The Amended Order of Penalty Assessment was sent to counsel on or about October 6, 2014. Respondent did not timely file a petition to challenge the proposed agency action. Respondent did not timely challenge the Stop-Work Order and did not timely challenge the Amended Order of Penalty Assessment. Respondent did not provide any assistance to resolve the issues presented by the Stop-Work Order. When Respondent failed to timely respond to the Petitioner's requests for information, refused certified mail addressed to its office or corporate representative, and failed to timely challenge Petitioner's proposed action, a final order was entered on or about July 8, 2015. Thereafter, Respondent filed an appeal claiming Petitioner had not properly served notice of its proposed action. This case was initiated in response to the appeal to address the issue of whether the Petitioner lulled the Respondent into inaction and thereby tolled the time within which to file an administrative challenge to the proposed agency action. At no time did Respondent deny allegations pertinent to the instant case, including whether the workers at the construction job site were employed by Respondent. If the workers at the construction job site were appropriately covered by workers' compensation insurance or were exempt from coverage, Respondent did not assert such defense. In fact, Respondent did not cooperate to provide any information to Petitioner that would "resolve all issues relating to the matter amicably and as quickly as possible." Petitioner provided notice to Respondent of the procedural requirements to challenge the agency action and did not lull Respondent into a false sense of security or inaction. To the contrary, Respondent attempted to circumvent its legal responsibilities by refusing certified mail and failing to provide business records in a timely manner. Respondent seeks to benefit from its inaction. Had Respondent provided documents to support any defense to the Stop-Work Order and initial assessment of administrative fine, the issues could have been resolved. The weight of the credible evidence supports the finding that Respondent did not timely challenge the proposed agency action within the 21 days allowed by law. In short, Respondent ignored the Stop-Work Order and the legal claims it presented.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department of Financial Services, Division of Workers' Compensation, enter a final order determining that Respondent failed to timely file a petition to challenge the agency's proposed action and its failure to do so was not the result of equitable tolling. DONE AND ENTERED this 6th day of December, 2016, in Tallahassee, Leon County, Florida. S J. D. PARRISH Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 6th day of December, 2016. COPIES FURNISHED: Michael Joseph Gordon, Esquire Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399 (eServed) Kelli B. Hastings, Esquire Law Office of Kelli B. Hastings, PLLC 4005 North Orange Blossom Trail Orlando, Florida 32804 (eServed) Pedro Malaret, Esquire Malaret Law Firm, PLC 732 North Thorton Avenue Orlando, Florida 32803 Julie Jones, CP, FRP, Agency Clerk Division of Legal Services Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399-0390 (eServed)
