Findings Of Fact At all times relevant, Willie James Collier was licensed as a registered roof contractor in the State of Florida, having been issued license number RC0040382. At all times relevant, Willie James Collier qualified the roofing business he owns and manages, A-1 Collier Roofing, at 2230 Blossom Terrace, Orlando, Florida 32809. On May 5, 1982, Willie Collier contracted with Robert P. Guarante to reroof Mr. Guarante's residence at 2525 Venetian Way, Winter Park, Florida. The terms of the written contract included a five-year guarantee on the work. The work was completed on May 6, 1982, and Guarante paid the negotiated amount of $4800.00. A few weeks after the installation, there was some problem with the flashing around the chimney. Guarante had no difficulty contacting Collier and the necessary repairs were made. Sometime around November 1985, Guarante detected discoloration, like rust stains, under the eaves. He first had the gutter replaced, but afterward figured the problem was seepage from the roof. He attempted to call Willie Collier. There were no answers until he called one night and was told that Willie Collier was not at that number. Mr. Guarante then drove to the street address he had for the roofing company. It was a residential area and he did not get out of the car and knock on doors. He sent a letter by regular mail to 2230 Blossom Terrace, Orlando, asking that Willie Collier call him immediately. The letter was not returned, nor was it answered. He contacted the Better Business Bureau, but this did not result in a contact with Mr. Collier. Another roofer, Robin Hood, told Mr. Guarante that there was a depression collecting water on the outer extremity of the roof, due to improper installation. Robin Hood built up the depression and charged Guarante $70.00. There were no more problems, and six months later the house was sold. Mr. Collier denies receiving any letters from Mr. Guarante or the Better Business Bureau. He was in financial difficulty in 1985, and the phone was disconnected three times. At one point the phone was in his wife's name. His licensing record reveals that his license was under suspension during 1985. He did not maintain an advertisement in the Yellow Pages during 1985. His address has not changed. It remains the same as it was from the first license application in 1976: 2230 Blossom Terrace, Orlando, Florida 32809.
The Issue Does the unsatisfied civil judgment in ABC v Millman et al, Case Number 50 2008 CA 006245 XXXX MB relate to practice of Respondent’s profession, thus establishing that Respondent, Harris M. Millman, violated section 489.129(1), Florida Statutes,(2009)? If he committed the violation, what penalty should be imposed?
Findings Of Fact The Construction Industry Licensing Board has certified Millman as a General Contractor and a Roofing Contractor under the authority of Chapter 489, Florida Statutes. In 2009 and 2010, he held license numbers CGC l1522 (General) and CCC 1327057 (Roofing). Millman’s licenses are presently inactive. Millman has actively practiced the licensed professions of general contractor and roofing contractor in Florida since 1977. The Department and its predecessor agencies have never taken any disciplinary action against him. At all times material to this proceeding, Affiliated was a Construction Qualified Business in the State of Florida, certified under Chapter 489, Florida Statutes, holding license number QB45287. Millman was the Primary Qualifying Agent for Affiliated under Chapter 489, Florida Statutes, at all times material to this proceeding. On December 26, 2005, Millman signed a credit application with American Builders and Contractors Supply Company, Inc., d/b/a ABC Supply Co. Inc. (ABC), on behalf of Affiliated. Millman listed his Certified General Contractor’s License (CGC 011522) on the credit application and personal guarantee Although Millman provided his General Contractor’s license number on the application, ABC did not require a license number. The application indicates that the account is related to “low and steep slope roofing.” The account was for the purchase of roofing materials and supplies. On December 29, 2005, Millman signed a personal guarantee of the Affiliated account with ABC. Millman’s personal guarantee made him personally liable for Affiliated’s obligation to pay ABC. ABC granted the application and opened a line of credit for Millman and Affiliated. Millman and Affiliated used the account to purchase roofing supplies on credit. They purchased and paid for over $800,000 worth of supplies from 2006 into 2009. This is separate from the goods and materials that were the subject of the lawsuit described below. Most of the materials and supplies that Affiliated purchased on the ABC account were for specific roofing projects. But some, as Millman acknowledged in his testimony, were to maintain roofing materials in the Affiliated warehouse. He used these on small jobs and to supplement materials purchased for larger, specific jobs. All the goods and materials purchased related to Millman’s practice of the roofing contracting profession. In 2007 Millman and Affiliated started having financial difficulties. Millman’s business began failing. The failure of a lender that took over a construction project it was financing resulted in the lender not paying Millman for approximately $500,000 worth of his company’s work. This contributed to Millman’s business failure. In addition to Millman’s problems paying ABC, his landlord was evicting him. Millman worked hard during these difficulties to meet his obligations to ABC. He liquidated his Individual Retirement Account and his life savings to make sure he paid for all charges for supplies used for specified customers. He did this to protect customers from the risk of liens being placed on their properties. Millman advised ABC that he was being evicted from his warehouse. He told ABC that the warehouse contained materials obtained with his line of credit that had not been paid for. Millman did not have the ability to return the materials to ABC. As eviction neared, he urged ABC to retrieve the materials before eviction. ABC did not act to retrieve the materials. The landlord evicted Millman. What happened to the materials is not known. On March 4, 2008, ABC sued Millman and Affiliated in the Circuit Court of the Fifteenth Judicial Circuit in and for Palm Beach County, Florida. ABC sought payment for goods and materials purchased on the account and delivered to Millman and Affiliated between January 31, 2007, and January 31, 2008. The court assigned the action Case Number 50 2008 CA 006245 XXXX MB. The goods and materials for which ABC sought payment were roofing goods and materials. They included roofing felt, roofing cement, shingles, plywood, lumber, roofing nails, lead sheets, insulation, roof tile cement, lead boots for pipes, roofing paint, asphalt, and galvanized roof edging. Much, although not all, of the material was delivered to roof tops. Many invoices for the material describe the roof for which the material is intended by height and pitch. The goods and materials related to Millman’s profession of roofing contractor. On June 17, 2008, barely three months after ABC filed suit, Millman entered into a Stipulation for Payment with Judgment upon Default with ABC. Millman agreed in the Stipulation for Payment with Judgment upon Default, that both he as an individual and Affiliated are indebted to ABC in the amount of $45,617.02. This amount included interest, attorney’s fees, and costs. The stipulation included a schedule of eight payments starting with a payment of $2,500.00 on May 30, 2008, and ending with a payment of $22,720.02 on December 30, 2008. Millman made payments from January 1, 2007, forward, even during and after the collection litigation. Millman made over $16,000.00 of those payments. But he did not make all of them. As Millman made payments, he took care to designate payments for supplies allocated to a specific customer and job. He did this to protect his customers from liens and to make sure that documents he signed attesting that supplies for specific jobs had been paid for were honest and correct. On August 3, 2009, the court rendered a Final Judgment After Stipulation in ABC’s collection action. The court adjudged that ABC recover $29,617.02 together with interest at the rate of 11 percent per annum accruing from May 31, 2008, from Affiliated and Millman, jointly and severally. The judgment is for debt incurred relating to Millman’s practice of his licensed profession of roofing contracting. It is not related to Millman’s licensed profession of general contracting. ABC continued to actively pursue collecting the judgment. It garnished Millman’s bank account with Bank Atlantic and obtained $662.61. Millman and Affiliated have not fully satisfied the judgment within a reasonable period of time. The Department incurred $216.00 in costs for the investigation and this action.
Recommendation Based on the foregoing Findings of Fact and Conclusion of Law, it is recommended that the Department of Business and Professional Regulation, Construction Industry Licensing Board, enter a final order finding that Respondent, Harris M. Millman, violated Section 489.129(1)(q), Florida Statutes, and imposing the following penalties: Payment of an administrative fine of $500.00 within 180 days of entry of the final order. Payment of costs of investigation and prosecution in the amount of $216.00 within 180 days of entry of the final order. DONE AND ENTERED this 27th day of August, 2010, in Tallahassee, Leon County, Florida. S JOHN D. C. NEWTON, II Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 27th day of August, 2010.
The Issue The issue is whether Horace Bradley Sheffield Builders, LLC (“Sheffield Builders”), had insufficient workers’ compensation insurance during the time period in question; and, if so, the amount of the resulting penalty.
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. Lewis Johnson is employed in Tallahassee, Florida, as a compliance investigator for the Department. Mr. Johnson monitors construction and non-construction entities to ensure that they have obtained workers’ compensation coverage. On April 20, 2017, Mr. Johnson was conducting routine checks in the Killearn Lakes area of Tallahassee. He had just visited three worksites and found that the construction firms working those sites had workers’ compensation coverage. Mr. Johnson then drove past a site where a fence was being built: As I saw the fence being built, I stopped momentarily. I took a picture to document the work activity. I then got out and I made contact with the two workers. The first worker identified himself as Horace Bradley Sheffield [III], he advised that he was the subcontractor, owned his own business, Bradley’s Quality Framing and Trim, LLC. He had another gentleman there with him, that gentleman was initially very quiet. I asked Sheffield III whom he worked for, he told me that he was employed by his dad. I asked him who his dad was, he said that his dad was Horace Bradley Sheffield, and that his dad owned Horace Bradley Sheffield Builders, LLC, and that he was the general contractor for the home that was under construction, and that he was working directly for his dad. I then spoke briefly with the gentleman that was with Horace Bradley III regarding his employment. Initially during my conversation with Horace Bradley III, he said that he was trying out this worker. He said that he’d only – he’d been on the job for two days himself, but this was this guy’s first day, and he was just trying him out. So in my conversation with the employee who was identified as Colter Gilmore, Colter said “No, I’m being paid $10 dollars an hour,” and so I documented that information. After the conversation with Mr. Sheffield III, Mr. Johnson looked for any records pertaining to Quality Framing and Trim, LLC, within the Coverage and Compliance Automated System (“CCAS”) and the Division of Corporations. CCAS is a database maintained by the Department, and it enables Department investigators, such as Mr. Johnson, to ascertain if any construction company operating in Florida has workers’ compensation coverage. CCAS indicated that Quality Framing and Trim, LLC, had been dissolved and had no workers’ compensation coverage. CCAS also revealed that Mr. Sheffield III’s exemption had expired on July 10, 2015. After reporting to his supervisor that Mr. Sheffield was paying his son as a subcontractor, Mr. Johnson received authorization to issue a Stop-Work Order to Mr. Sheffield III on April 20, 2017. After issuing the Stop-Work Order, Mr. Johnson testified that he: placed a call to Mr. Horace Bradley Sheffield, the owner of Horace Bradley Sheffield Builders, LLC, Bradley’s dad, and I made him aware of the fact that I had just issued his son a Stop-Work Order for violation of Florida Statute 440; did not have proof of compliance. And then we spoke on the phone regarding that, and he expressed that he did not know, he did not – he was unaware that his son’s workers’ comp exemption had expired. What he said that was most interesting was that he did hire his son as a subcontractor; that he was paying his son directly. I asked him how much, he was paying his son approximately $4.50 a square foot to build a fence, and so that was the renumeration between son and father for the build. And so I then expressed to him that, because of that violation, his son being in violation of Florida Statute 440, that he himself was also in violation because, as a general contractor, it is Mr. Sheffield’s job to demand and require the proof of workers’ compensation coverage from any employer to include a subcontractor. Q: And did Mr. Sheffield do that in this case? A: No, sir, he did not. He sort of indicated that he just failed to do so. Mr. Johnson learned through CCAS that Sheffield Builders had no workers’ compensation policy but that Mr. Sheffield had an exemption for himself. After conferring with his supervisor regarding Mr. Sheffield’s lack of workers’ compensation coverage for those working for Sheffield Builders, Mr. Johnson served a Stop-Work Order and an Order of Penalty Assessment on Mr. Sheffield via hand-delivery on April 21, 2017. The Stop-Work Order required Sheffield Builders to cease all business operations at the Killearn Lakes worksite and was to remain in effect until lifted by the Department. The Order of Penalty Assessment notified Sheffield Builders 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 failed to secure the payment of workers’ compensation within the preceding 2-year period. Employers who have not been previously issued a Stop-Work Order may receive a credit for the initial payment of the estimated annual workers’ compensation policy premium [for] the dollar or percentage amount attributable to the initial payment of the estimated workers’ compensation expense to a licensed employee leasing contract. In all cases a minimum penalty of $1,000 is assessed against the employer. Section 440.107(7)(d), F.S. Mr. Johnson also served on April 21, 2017, a “Request for Production of Business Records for Penalty Assessment Calculation” (“the Request for Production”). Through the Request for Production, the Department sought various types of financial documents pertaining to Sheffield Builders’ payroll during the period between December 10, 2015, and April 20, 2017 (“the noncompliance period”), so that it could calculate the penalty to be imposed on Sheffield Builders. 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 Sheffield Builders to provide the aforementioned records within 10 business days of receiving the Request for Production. Mr. Sheffield provided business records, and the Department used those records to reduce the proposed penalty to $7,801.92. Eunika Jackson, a penalty auditor employed by the Department, calculated the aforementioned penalty based on the business records provided by Mr. Sheffield. For each person for whom Sheffield Builders failed to obtain workers’ compensation coverage during the noncompliance period, Ms. Jackson determined how much money Sheffield Builders paid each person during that period. Sheffield Builders paid $32,477.00 to Mr. Sheffield, III; $1,578.00 to Risocani Alfredo; $16,861.50 to Roland Hedrington; and $100.00 to Adam Chew during the noncompliance period. The gross payroll amount for each person was divided by 100 in order to create a percentage, and the percentage associated with each person was 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. Ms. Jackson then added the individual penalties associated with Horace Sheffield III, Risocani Alfredo, Roland Hedrington, and Adam Chew in order to calculate the total penalty of $7,801.92. With regard to Mr. Sheffield III, Mr. Sheffield acknowledged at the final hearing that his son did not have workers’ compensation coverage during the time period in question. Mr. Sheffield testified that his son had attempted to renew his exemption on-line but failed to realize that his attempt had been unsuccessful. Mr. Sheffield testified that Roland Hedrington had workers’ compensation through his employer, Professional Electrical Systems. Also, Mr. Sheffield supplied the Department with the workers’ compensation policy that Mr. Hedrington provided to him. Ms. Jackson testified as to why she included the compensation paid to Mr. Hedrington in the penalty calculation: Q: And so Roland Hedrington, why did you put that individual down on the penalty? A: He’s on there because the check images that I reviewed had his name written on the check images. [Mr. Sheffield] came back and gave us a certificate of insurance for Professional Electrical Services – or Systems, I did review that document. In addition to that, I went in to CCAS to determine whether or not if Mr. Roland had a workers’ comp exemption, because per statute and rule, we cannot exempt the payments to an individual if they do not have a workers’ comp exemption, even though the company that they work for may have a workers’ comp policy. So in my review of CCAS, it was determined that Professional Electrical did have a valid workers’ comp policy, but on the exemption tab, there was only one individual who had an exemption, and it wasn’t Mr. Roland. So therefore, the payments issued to Mr. Roland [are] considered uninsured, because the payment was issued to that individual and not the entity. Q: Is Roland listed as an owner of the company? A: He wasn’t. When I did my research in Sunbiz, I didn’t find his name on the employer’s detail. Q: And so from the records, Roland is simply an employee of Professional Electrical Systems, correct? A: Yes. Q: And so the payment that went from [Sheffield Builders] in this case to Roland did not go through the – that transaction was not pursuant [to] a worker’s compensation policy of Professional Systems, correct? A: Correct. Q: Okay. ALJ: So let me make sure I understand. So the check in question – or the payment in question to Mr. Roland Hedrington, he works for some sort of LLC, but the check was made payable to him as an individual? A: Correct. ALJ: All right. And the LLC had [a] workers’ compensation exemption? A: Coverage and an exemption, yes. ALJ: Okay. But the coverage did not apply to Mr. Hedrington? A: It wouldn’t apply because the payment was a direct payment to Mr. Hedrington, and not the payment to Professional Electrical. So if the payment was to Professional Electrical, then it’s indicating that Professional Electrical did the services, and whoever that employer is, in turn, would pay his employees, so the payments are covered. But because the payment document had Roland’s name on it, it’s indicating it’s a direct transaction between a subcontractor and a general contractor, not the actual entity that he works for. ALJ: So let me ask a question. So because a check was written to this individual, Mr. Roland Hedrington, I guess in theory he could have been working on his own accord, and that – and he doesn’t have workers’ comp as an individual, so that’s why you put him in the penalty calculation. A: Correct. ALJ: Okay. But if the check had been written payable to the LLC that had coverage, then it would not have gone to the calculation? A: Correct. There is no dispute regarding the mechanics behind the Department’s calculation of the penalty. The only dispute concerns the Department’s inclusion of the funds paid to Mr. Sheffield III, and Mr. Hedrington in the penalty calculation. The Department has proven by clear and convincing evidence that the payments from Sheffield Builders to Horace Sheffield III, Risocani Alfredo, and Adam Chew were not covered by workers’ compensation coverage and that Sheffield Builders should be fined $6,031.46. The Department has not proven by clear and convincing evidence that Roland Hedrington was not working under the auspices of Professional Electrical Systems when Mr. Hedrington performed work for Sheffield Builders during the noncompliance period. As a result, the payment to Mr. Hedrington should not be included in the Department’s penalty calculation.
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 $6,031.46 on Sheffield Builders, LLC. DONE AND ENTERED this 27th day of July, 2018, 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 27th day of July, 2018.
The Issue Whether Respondent violated Subsection 489.129(1)(j), Florida Statutes (1997), and Subsections 489.129(1)(n) and (o), Florida Statutes (1995).
Findings Of Fact At all times material to this proceeding, Frazier was licensed by the Department as a certified roofing contractor, having been issued license number CC CO56955 as Ronald Lee Frazier, d/b/a Frazier Urethane 4 No Leak. On or about November 24, 1995, Frazier, contracted with Victor and Janie Anderson to remove and replace the roof of the Anderson's home at 433 111th Street, Marathon, Florida, for $4,657.25. The Andersons paid the full contract price to Frazier in two increments. On or about November 24, 1995, they paid $2,328.62, and on or about January 25, 1996, they paid $2,328.63. In January 1996, Frazier removed and replaced the Anderson's roof, but Frazier applied the new roofing material without first installing a base sheet or moisture barrier. No evidence was presented on the specific manufacturer's specification for the product installed by Frazier; however, the evidence did establish that typical manufacturers' specifications for products such as urethane require the installation of a base sheet before such products are applied. The Monroe County Building Code does require that self-adhesive roofs such as the one installed by Frazier must have a one ply ASTM D226 type II anchor sheet with a four-inch headlap. In other words, the roof should have a base sheet of 30-pound felt before the urethane is applied. The base sheet or moisture barrier helps keep water off the roof, and it also facilitates removal and replacement of the roof. Failure to install the base sheet contributed to the development of roof leaks which the Andersons began noticing approximately 17 months after the work was done, a much shorter time than the normal life expectancy for the urethane roof materials that Frazier used. Frazier's failure to install a base sheet on the Andersons' roof constitutes incompetency in the practice of contracting. The only way to correct Frazier's work on the Anderson's roof is to remove the roof installed by Frazier and install a new roof in a proper manner. The Andersons began noticing leaks in the roof in June 1997. They notified Frazier by telephone and by letters. Frazier and his employees inspected the Anderson's roof and agreed to perform work to stop the leaks. In September 1997, Frazier went to the Anderson's home and began attempting to work on the roof. Monroe County roofing inspector Al Forrest met with Frazier that day at the Anderson's home and discussed the work that needed to be done. Frazier agreed to correct the deficiencies in the roof; however, Frazier left that day without completing the work and never returned to perform further work. On or about December 1, 1995, Vivian Haverly contracted with Frazier to repair the leaky roof on her home at 1711 Avalon Avenue, Ft. Pierce, Florida. Frazier was to install a new urethane roof on Ms. Haverly's house. Among other things, the contract called for Frazier to "raise the A/C unit on stand as per code." The contract price was $5,039.00. Pursuant to the contract, Ms. Haverly paid Frazier $1,039.00 on December 1, 1995, and $3,900 on January 19, 1996. The Southern Building Code Congress International (SBCCI) has been adopted as the building code by all counties in Florida except for Dade and Broward Counties. Section 1509.1.2 of the SBCCI provides that "[r]oof coverings shall provide weather protection for the building at the roof." Frazier's crew worked on Ms. Haverly's roof but never fixed the leaks. The leaks worsened, causing damage in the interior of Ms. Haverly's house. Frazier failed to raise the roof-mounted air conditioning equipment and sprayed urethane on the air conditioning unit, damaging it to the point that the air conditioner became inoperable and had to be replaced at a cost of $2,700. Frazier did not spray urethane on the portion of the roof below the air conditioning unit as he should have done. Ms. Haverly had to have another company repair her roof. On or about April 18, 1997, John Ward entered into a contract with Frazier as Frazier Urethane 4 No Leak to repair the roof of a two-story building in Marathon, Florida, owned by Virginia Ward and managed for her by her son John Ward. Frazier was to apply a urethane coating to the roof and fix roof leaks for $4,200. The Department incurred costs for the investigation and prosecution of Case Nos. 98-5213 and 99-2186 in the amount of $1,219.18. The Department incurred costs for the investigation and prosecution of Case No. 99-3573 in the amount of $244.65.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered finding that Ronald Lee Frazier did not violate Subsections 489.119(2) and 489.129(1)(j), Florida Statutes, as set forth in Count III of Case No. 98-5212; finding that Ronald Lee Frazier did violate Subsection 489.129(1)(n), Florida Statutes (1995), as set forth in Count III of Case Nos. 98-5213 and 99-2186 and Count II of Case No. 99-3573; finding that Ronald Lee Frazier did violate Subsection 489.129(1)(o), Florida Statutes, as set forth in Count III of Case No. 99-3573; imposing an administrative fine of $1,000 for violation of Subsection 489.129(1)(n), Florida Statutes, in Count III of Case Nos. 98-5213 and 99-2186; imposing an administrative fine of $1,000 for violation of Subsection 489.129(1)(n), Florida Statutes, in Count II of Case No. 99-3573; imposing an administrative fine of $1,500.00 for violation of Subsection 489.129(1)(o), Florida Statutes, in Count III of Case No. 99-3573; suspending Ronald Lee Frazier's license for six months; assessing costs of $1,463.83 for investigation and prosecution in Case Nos. 98-5213, 99-2186, and 99-3573; and taking no action to enforce or collect payment of the fines or assessed costs without authorization of the bankruptcy court unless Ronald Lee Frazier's bankruptcy petition is dismissed or discharged. DONE AND ENTERED this 30th day of August, 2000, in Tallahassee, Leon County, Florida. Susan B. Kirkland Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 30th day of August, 2000. COPIES FURNISHED: Theodore R. Gay, Esquire Department of Business and Professional Regulation 401 Northwest Second Avenue Suite N-607 Miami, Florida 33128 Ronald Lee Frazier Post Office Box 12735 Ft. Pierce, Florida 34979-2735 Ronald Lee Frazier 1006 Southwest Sultan Drive Port St. Lucie, Florida 34983 Barbara D. Auger, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792 Rodney L. Hurst, Executive Director Construction Industry Licensing Board 7960 Arlington Expressway, Suite 300 Jacksonville, Florida 32211-7467
The Issue Whether the Respondent was required to carry workers' compensation insurance coverage for its employees and, if it failed to do so, whether the Amended Notice and Penalty Assessment Order is correct.
Findings Of Fact At all times material to this case, the Department was the state agency charged with the responsibility of administering compliance with Florida law governing workers’ compensation. At all times material to this case, Genesis has been in the business of providing plastering services. At all times material to this case, Jorge Pinera (Pinera) has been an investigator employed by the Department to perform workers' compensation compliance investigations. On August 8, 2000, Pinera conducted a random inspection at a residential construction site located at 3101 Southwest 129th Avenue, Miami, Florida (the job site). While at the job site, Pinera encountered Jose Castro (Castro), and also observed an individual later identified as Reinaldo Lopez (Lopez). Both men were present on behalf of Genesis, which had been contracted to perform plastering services at the job site. At the time of Pinera's visit, Lopez was applying plaster to a back wall of the house. Pinera conducted field interviews in accordance with Department policies and procedures. At the time the field investigation commenced, Genesis' president, Carmen Duque (Duque), claimed to have relied upon the advice of Genesis' accountant, who allegedly told Duque that compensation insurance was not required for the business. There was no evidence offered to corroborate Duque's claim that such advice had in fact been rendered. Based upon the field interviews of Castro and Lopez, and a review of Department records, Pinera correctly determined that the men were employees of Genesis as that term is defined in Florida Workers' Compensation Law. During the field interview, Lopez informed Pinera that he was being paid an hourly wage by Genesis for plastering services. Lopez reduced this and other information demonstrating his employee status to writing contained in Department's Exhibit 8, which was admitted into evidence without objection. There was no physical evidence at the job site to contradict what Lopez told Pinera, i.e. there were no vehicles, equipment, or materials which one would expect to find at a job site where an independent plastering contractor is working. Genesis attempted to discredit Lopez' contemporaneous statements indicating employee status with Exhibit 14, an affidavit, purportedly executed by Lopez on January 22, 2001, in which Lopez asserts that he is an independent contractor. The affidavit was admitted over the Department's timely objection. The facts set forth in the affidavit are insufficient as a matter of law to support the affiant's legal conclusion that he is an independent contractor. Pinera's field interviews revealed, and Genesis stipulates, that it did not hold workers' compensation insurance on August 8, 2000, nor at any time relevant to this case. At all times material to this case, none of the individuals affiliated with Genesis held valid exemptions from coverage. Rather, the evidence suggests that Genesis was aware of the requirements of workers' compensation law, and took steps to evade it. For example, Genesis charged the job site's owners $10,500 for its plastering services. Prior to the commencement of the job, Genesis secured the signature of its employee, Lopez, on a form styled "Short Form Subcontract Agreement" which purports to create a subcontractor relationship with Lopez for the jobsite. The sum specified in this agreement to be paid to Lopez is $1,200. The vast discrepancy in the amount charged to the owners and the sum to be paid to the individual supposedly responsible for providing all labor and materials necessary for the work suggests that the so-called subcontract agreement is a sham. The evidence further establishes that Genesis provided Lopez with $500 to purchase materials to be used at the job site. This fact belies the contention of Genesis that, because Lopez physically purchased the materials, he was in fact an independent contractor. Rather, the purchase of materials was simply one task which Genesis delegated to its employee Lopez in the course and scope of his employment. Upon concluding that Lopez and Castro were not covered by appropriate insurance and were not exempt, Pinera properly caused a SWO to be issued against Genesis. Genesis admits, and the evidence establishes, that it did not have a valid workers' compensation policy during the three years preceding the stop work order. Despite the pendency of a valid SWO, Genesis performed work at the jobsite on August 24, 2000. Genesis stipulated, and the evidence establishes, that the Amended Notice and Penalty Assessment Order issued by the Department accurately calculates the amounts owed by the Respondent for the three-year period.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a final order confirming the SWO entered in this cause and imposing a penalty in the amount of $11,839.74 as set forth in the Amended Notice and Penalty Assessment Order. DONE AND ENTERED this 27th day of April, 2001, in Tallahassee, Leon County, Florida. 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 27th day of April, 2001. COPIES FURNISHED: David C. Hawkins, Esquire Department of Labor and Employment Security Division of Workers' Compensation 2012 Capital Circle, Southeast Hartman Building, Suite 307 Tallahassee, Florida 32399-2189 Magda Marcelo-Robaina, Esquire Magda Marcelo-Robaina, P.A. 782 Northwest Le Jeune Road Suite 548 Le Jeune Center Miami, Florida 33126 Sherri Wilkes-Cape, General Counsel Department of Labor and Employment Security The Hartman Building, Suite 307 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2189 Mary B. Hooks, Secretary Department of Labor and Employment Security The Hartman Building, Suite 303 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2152
Findings Of Fact At all times material hereto, Respondent Robert F. Copenhaver was holder of a registered general contractor's license number RG 0013968 issued by the State of Florida. At all times material hereto, Respondent qualified Southwest Building and Development Corporation with the Construction Industry Licensing Board. See Petitioner's Exhibit #1. At all times material herein, neither Respondent nor Southwest Roofing and Waterproofing, Inc., were registered or certified as a roofing contractor with the Board. See Petitioner's Exhibit #1. At all times material herein, Respondent was the holder of a Class C building contractor's license and a specialty limited roof-coating and spraying license, both issued by Sarasota County. See Transcript of Proceedings, page Said license was limited to work done to cosmetically improve a roof. Any work done to repair leaks required a standard roofing license. Respondent and Don Cogswell incorporated Southwest Roofing and Waterproofing, Inc. (SRWI), under the laws of the State of Florida on January 10, 1980. See Petitioner's Exhibit #5. All work done by SRWI was done under the Sarasota special roofing contractor qualification. Respondent was president of the corporation until December 15, 1980, at which time he resigned and transferred all his stock to Cogswell. See Petitioner's Exhibit #6. On February 14, 1980, SRWI contracted with A. T. Esslinger to completely waterproof a roof at 816 Idlewild Way, Sarasota, Florida. See Petitioner's Exhibit #2. The only warranty referenced in the contract was a separate standard warranty to be delivered at the time of final payment. See Petitioner's Exhibit #3A. Respondent gave the Esslingers a letter (Petitioner's Exhibit #3B) in which SRWI guaranteed to stop the leaks in their roof. This letter referenced SRWI's standard warranty. To waterproof the roof, gravel was removed from the existing roof and a cement-like surface applied to the roof. On June 4, 1980, SRWI contracted with Earl Mowry to waterproof a roof at 5339 Gulf Drive, Holmes Beach, Bradenton, Florida, in accordance with specifications originally attached to the contract but not introduced at hearing. See Petitioner's Exhibit #4. To waterproof the roof, a concrete material was applied to the existing roof. On June 25, 1980, SRWI contracted with Maynard Howe to waterproof a roof over the family room in accordance with attached specifications at 2271 Mill Terrace, Sarasota, Florida. The only warranty given was the separate standard warranty to be delivered at the time of final payment. See Petitioner's Exhibits #7A and #7B. To waterproof the roof, a concrete material was applied to the existing roof. All of these contracts provided that SRWI would apply MARKEM Elastic Waterproofing material so that said roof areas were completely covered and free of all leaks. See Petitioner's Exhibits #9A, #9B and #9C for data concerning MARKEM. After the work was completed, each of the roofs in question leaked. When Respondent was contacted after he had left SRWI, he advised each of the persons that he had left the company and could not assist them. Respondent referred them back to SRWI, MARKEM or the company who became the MARKEM distributors in the area. None of the persons obtained relief from SRWI, the Respondent, MARKEM or MARKEM's new distributor. See Transcript of proceedings, pages 16, 25, 34. Howe sued SRWI and served Respondent with suit papers. In response, Respondent sent Howe a notarized document (Petitioner's Exhibit #6), which states that as of December 15, 1980, Respondent had resigned as president of SRWI and had transferred all of his stock to Don Cogswell. On October 14, 1980, SRWI contracted with Catherine Gilligan to waterproof her roof at 4819 Graywood Lane Meadows, Sarasota, Florida. See Petitioner's Exhibit #12. Gilligan paid SRWI $174 as partial payment on this contract. SRWI never did any work pursuant to the contract. Gilligan called SRWI, but to her knowledge never spoke to the Respondent concerning when SRWI was to start the job. Gilligan waited for one month, then called SRWI every day for three weeks. In the fourth week, SRWI's telephone was disconnected. This date reasonably coincides with the date Respondent resigned, December 15, 1980. No evidence was received of disciplinary action against SRWI or the Respondent by Sarasota County.
Recommendation Having found Respondent Robert W. Copenhaver guilty of violating Section 489.129(1)(j), Florida Statutes, it is recommended that the Construction Industry Licensing Board suspend the registration of Respondent as a general contractor for one year. DONE and RECOMMENDED this 21st day of December, 1982, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 21st day of December, 1982. COPIES FURNISHED: Stephanie A. Daniel, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Mr. Robert W. Copenhaver 2409 34th Street, West Bradenton, Florida 33505 Samuel R. Shorstein, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 K. Linnan, Executive Director Construction Industry Licensing Board Post Office Box 2 Jacksonville, Florida 32201 =================================================================
