The Issue Whether Respondent violated the provisions of chapter 440, Florida Statutes (2017), by failing to secure the payment of workers’ compensation coverage as alleged in the Stop-Work Order and Second Amended Order of Penalty Assessment and, if so, what penalty is appropriate.1/
Findings Of Fact The Department is the state agency responsible for the enforcement of the workers’ compensation insurance coverage requirements established in chapter 440. On September 14, 2017, Investigator Murvin conducted a random workers’ compensation compliance check at a residential construction site at 8256 Lake James Drive in Lakeland, Florida. During the course of the compliance check, Investigator Murvin observed two individuals--Donald Steven Paul, Jr. and Dean Wayne Paul--painting the home. It is undisputed that Respondent had been subcontracted to perform painting services at this site; and that these two individuals were, at the time of Investigator Murvin’s visit, employed by Respondent. After speaking to Donald and Dean Paul, Investigator Murvin used the Department’s database to verify that Respondent did not have workers’ compensation insurance coverage, nor did Donald or Dean Paul have an exemption from the coverage requirements. Donald Paul admitted to Investigator Murvin at the hearing that he did not have workers’ compensation coverage for himself or Dean Paul. Donald Paul explained that he believed that his incorporation with the state and securing of liability insurance provided compliance of all insurance requirements. Based on the information provided by Dean and Donald Paul, and from the database, Investigator Murvin issued a SWO to Respondent on the same day as the site visit. A Request for Production of Business Records was also issued to Respondent. In response to the request for documentation, Respondent provided bank statements that indicated the business began in August 1, 2016. The bank statements also established that there was money being deposited and being paid out, but there was no indication what the money was for or how it was allocated. In other words, there was no way to discern whether the money paid out of the bank account was for employee salaries or other business expenses. In support of its Second Amended Order of Penalty Assessment, the Department prepared a penalty calculation worksheet showing a total penalty owed of $2,090.14. At the hearing, Respondent did not challenge the accuracy or method of calculating the assessed penalty, but only asserted that it believed it had the appropriate coverage and that the penalty was “too high.” Based on the evidence, it is clear Respondent provides construction services and has at least one employee; therefore, it was required to secure workers’ compensation insurance. The Department established by clear and convincing evidence that Respondent failed to secure the payment of workers’ compensation as required by chapter 440. The Department has established through the records submitted and testimony of Auditor Murcia, the appropriate penalty for Respondent’s failure to obtain workers’ compensation coverage is $2,090.14 for the audit period of August 1, 2016, to August 14, 2017.
Recommendation Based on the Findings of Fact and Conclusions of Law set forth herein, it is RECOMMENDED that the Department of Financial Services, Division of Workers’ Compensation, enter a final order finding that Respondent, Donald Steven Paul d/b/a/ D. P. Painting of Lakeland, violated the provisions of chapter 440 by failing to secure the payment of workers’ compensation and assessing against Respondent a penalty in the amount of $2,090.14. DONE AND ENTERED this 20th day of April, 2018, in Tallahassee, Leon County, Florida. S HETAL DESAI Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 20th day of April, 2018.
The Issue The issues are whether Respondent had workers' compensation insurance coverage for the relevant time period as required by Sections 440.10(1)(a) and 440.38(1), Florida Statutes, and if not, what penalty should be imposed.
Findings Of Fact Petitioner is the agency responsible for enforcing the requirement that employers secure the payment of workers' compensation insurance for their employees. Respondent is a Florida corporation, incorporated on October 3, 2001. Paul Gilbert is Respondent's only officer and the corporation's managing member. Zurich-American Insurance Group (Zurich) issued a workers' compensation and employer's liability insurance policy (Policy No. WC 3617144) to Mitchell Construction Company (Mitchell) in October 1999. Zurich also provided Mitchell with general liability and business automobile insurance. At that time, Paul Gilbert was the risk manager for Mitchell, which was a large commercial contractor doing business in several states. Mitchell's offices were located in Vidalia, Georgia. In October 2000, Zurich renewed Mitchell's workers' compensation policy (Policy No. WC 3617144-01) for the period October 1, 2000 through October 1, 2001. The original and renewed policies listed other combinable entities as named insureds. Mitchell owned at least 51 percent of its combinable companies, one of which was Wood-Hopkins Contracting Company of Georgia, LLC. The company was also registered in Florida as Wood-Hopkins Contracting Company, LLC. The company was located in Jacksonville, Florida, with a mailing address in Vidalia, Georgia. The type of workers' compensation insurance that Zurich provided to Mitchell was known as a rolling contractor- controlled insurance policy (CCIP). It had endorsements for large deductible reimbursements for paid losses and a set monthly premium based in part on the projected payroll and experience rating modifiers for Mitchell and its combinable entities. The CCIP also covered subcontractors that had a contract with Mitchell for such coverage. The CCIP was renewable on an annual basis. Zurich did not need to re-underwrite the policy each year because the policy was created using three-year parameters. Additionally, Zurich had the option of auditing Mitchell's operations to determine whether there was a substantial change in the business. Palmer and Cay of Georgia (Palmer and Cay) was the producer and the broker of record for Mitchell's original and renewed CCIP. Stephen McMillan, an associate with Palmer and Cay at its offices in Savannah, Georgia, was the insurance agent that helped Mr. Gilbert negotiate and service Mitchell's CCIP with Zurich. In the Fall of 2001, Mr. Gilbert and Mr. McMillan contacted Zurich about renewing Mitchell's CCIP for the period October 1, 2001 through October 1, 2002. In a meeting with Zurich's representatives at its offices in Atlanta, Georgia, Mr. Gilbert advised Zurich that a company bearing the Wood-Hopkins name was going to complete Mitchell's then on-going projects. Zurich's employees believed Mr. Gilbert was referring to Wood- Hopkins Contracting Company, LLC. During the trip to Atlanta, Mr. Gilbert told Mr. McMillan that he was attempting to form a new company. However, Mr. Gilbert did not make it clear in the meeting with the Zurich representatives that he intended to incorporate Respondent, an independent company with a similar name to Wood- Hopkins Contracting Company, LLC, but unrelated to Mitchell. After the meeting in the Fall of 2001, Zurich was unaware that Mitchell and its combinable entities were or soon would be out of business as a general contracting group. Zurich's employees mistakenly believed that Mr. Gilbert continued to work for Mitchell. Mr. Gilbert resigned his position with Mitchell on September 1, 2001. After he incorporated Respondent, it purchased the assets of Mitchell and Wood-Hopkins Contracting Company, LLC, and hired about 100 of Mitchell's employees. Respondent planned to complete Mitchell's on-going projects and then operate primarily as a marine and civil contractor. Respondent was a new company, smaller than Mitchell, with a different risk exposure. Mr. Gilbert provided Zurich's underwriters with the payroll projections and other information necessary to renew Mitchell's CCIP. The data related to Mitchell's on-going projects and loss history as well as Respondent's planned projects. Zurich subsequently issued Policy No. WC 3617144-02 for the period October 1, 2001 through October 1, 2002. The policy designated Mitchell as the primary named insured and Wood-Hopkins Contracting Company, LLC, as one of the combinable entities and an additional named insured. The policy listed Palmer and Cay as the broker of record. The policy did not list Respondent as a named insured. Mr. Gilbert did not receive a copy of the policy until March 2002. However, Mr. Gilbert learned that Zurich had not added Respondent as a named insured to Mitchell's CCIP at least by February 2002. After learning that Zurich had not named Respondent as an insured, Mr. Gilbert continued to operate Respondent as if it had workers' compensation insurance. He was convinced that Respondent's assumption of Mitchell's business presented no additional risk exposure to Zurich. In fact, Mr. Gilbert had a history of spending sufficient funds on safety to reduce a company's loss ratio by half. Additionally, Respondent had suffered no workers' compensation losses. For these reasons, Mr. Gilbert hoped to persuade Zurich to add Respondent retrospectively as a named insured on Mitchell's CCIP policy. Towards the end of 2001 or the beginning of 2002, Zurich learned that Mitchell was going out of business or was no longer in business. Michael Esposito, Mitchell's account manager at Zurich, began to realize that something was wrong when Zurich received a premium payment for Mitchell's CCIP drawn on Respondent's bank account. At that time, Mitchell was behind in making deductible and premium payments to Zurich. Mitchell also was behind in paying Palmer and Cay its fees. On or about January 2, 2002, Mr. Gilbert signed one of Respondent's checks made payable to Palmer and Cay in the amount of $28,740.23. The check included a premium payment in the amount of $3,818.00 for October 2001 workers' compensation insurance. Mr. Gilbert wrote the check pursuant to a Palmer and Cay invoice addressed to The Mitchell Group. The record indicates that Respondent sent its check to Palmer and Cay's lockbox in Atlanta, Georgia, and that it was cashed. By letter dated February 7, 2002, Palmer and Cay advised Mitchell that it resigned as broker of record for The Mitchell Group. The most persuasive evidence indicates that Palmer and Cay resigned due to a dispute with Respondent over fees, not premium payments. By the end of February 2002, Mr. Esposito became aware that Mr. Gilbert wanted Zurich to continue Mitchell's CCIP with Respondent, a totally new company, listed as a named insured. Mr. Esposito then told Mr. Gilbert that Respondent would have to pay Mitchell's past-due premiums and provide Zurich with the necessary information to re-underwrite the policy, reflecting the change in ownership and operations. There is no persuasive evidence that Palmer and Cay or Mr. Gilbert ever provided Zurich with this information. Despite its resignation as broker of record for Mitchell's CCIP, Palmer and Cay agreed to continue servicing the policies until Zurich advised otherwise. For example, on or about February 22, 2002, Mr. Gilbert asked Palmer and Cay to add Respondent as a named insured, along with Wood-Hopkins Contracting Company, LLC, to Mitchell's railroad protection policies. Palmer and Cay referred this request to Zurich. Effective February 26, 2002, Zurich issued a Notice of Cancellation for Mitchell's Policy No. WC 3617144-02. The notice indicates that the policy was cancelled due to nonpayment of premium. About that time, Mr. Gilbert began trying to find a replacement for Palmer and Cay as broker of record. Willis of Florida, an affiliate of Willis of North America, Inc. (Willis), is an insurance broker with offices located in Tampa, Florida. Robert Allen is an insurance agent associated with Willis of Florida. Mr. Allen and Mr. Gilbert had a social and business relationship for many years prior to the time frame at issue here. Toward the end of February 2002, Mr. Allen and Mr. Gilbert had a telephone conference with Mr. Esposito. During that conversation, Mr. Allen indicated that his company was not interested in becoming the broker of record for Mitchell. However, Mr. Allen agreed that, in order to assist Zurich, Willis would issue Certificates of Liability Insurance for Respondent. At that time, Mr. Allen was under the impression that Respondent was a named insured under the Mitchell CCIP. As authorized by Zurich, Palmer and Cay issued three Certificates of Liability Insurance to the Florida Department of Transportation on March 4, 2002. The certificates indicate that Zurich provided commercial general liability and railroad protection insurance for CSX Transportation, Inc., Norfolk Southern Corporation, and Florida East Coast Railway as the named insureds. The certificates state that Wood-Hopkins Contracting Company, LLC, and Respondent were the contractors. Palmer and Cay issued these certificates for the Beaver Street viaduct bridge replacement in Jacksonville, Florida, a project begun by Wood-Hopkins Contracting Company, LLC, during the time that Palmer and Cay was acting as Mitchell's broker of record. On or about March 6, 2002, Mr. Gilbert signed one of Respondent's checks made payable directly to Zurich in the amount of $24,848.00. The check included premium payments in the amount of $3,818.00 for Policy No. WC 3617144-02 for the months of February and March 2002. The record indicates that this check was sent to Zurich's lockbox in Chicago, Illinois, and that it was cashed. On or about March 7, 2002, Zurich reinstated Policy No. WC 3617144-02 without lapse of coverage. The Notice of Reinstatement indicates that Mitchell was the named insured and that Palmer and Cay was the broker of record. On or about March 20, 2002, Zurich sent Mitchell a Notice of Cancellation. The notice states that Mitchell's Policy No. WC 3617144-02 would be cancelled effective June 8, 2002, due to a material change in exposures. Mr. Gilbert did not receive a copy of this cancellation notice. Mr. Gilbert and Mr. Allen did not learn about the cancellation until November 2002. On or about April 17, 2002, Mr. Gilbert signed one of Respondent's checks made payable directly to Zurich in the amount of $12,424.00. The check included a premium payment in the amount of $3,818.00 for Policy No. WC 3617144-02 for the month of April 2002. The record indicates that this check was sent to Zurich's Illinois lockbox and cashed. On April 25, 2002, Willis issued a Certificate of Liability Insurance to American Home Assurance with Respondent as the named insured. The certificate indicates that Zurich provided commercial general liability, automobile liability, and workers' compensation insurance for Respondent on the Beaver Street viaduct bridge replacement project with American Home Assurance and the Florida Department of Transportation as additional named insureds with respect to the general liability coverage. Mr. Allen signed this certificate. On May 6, 2002, Willis issued a Certificate of Liability Insurance to the University of Georgia Athletic Association with Respondent as the named insured. The certificate indicates that Zurich provided commercial general liability, automobile liability, and workers' compensation insurance for Respondent on an academic achievement center project. Mr. Allen signed this certificate. On or about June 13, 2002, Mr. Gilbert signed one of Respondent's checks made payable directly to Zurich in the amount of $12,424.00. The check included a premium payment in the amount of $3,818.00 for Policy No. WC 3617144-02 for the month of May 2002. The record indicates that this check was sent to Zurich's Illinois lockbox and cashed. On July 18, 2002, Willis issued a Certificate of Liability Insurance to Crowley Maritime Corporation with Respondent as the named insured. The certificate indicates that Zurich provided general liability, automobile liability, and workers' compensation insurance to Respondent for a barge loading ramp concrete removal and replacement in Jacksonville, Florida, and that Crowley Maritime Corporation was an additional named insured with respect to general liability coverage. Mr. Allen did not know the policy was cancelled when he signed this certificate. On August 12, 2002, Willis issued a Certificate of Liability Insurance to Martin K. Eby Construction Company with Respondent as the named insured. The certificate indicates that Zurich provided general liability, automobile liability, and workers' compensation insurance for Respondent on the Wonderwood Expressway channel excavation with the Jacksonville Transit Authority and J. E. Sverdrup (Engineer) as additional named insureds as to general liability coverage. Mr. Allen did not know the policy was cancelled when he signed this certificate. On or about August 15, 2002, Mr. Gilbert signed one of Respondent's checks made payable directly to Zurich in the amount of $12,424.00. The check included a premium payment in the amount of $3,818.00 for Policy No. WC 3617144-02 for the month of June 2002. The record indicates that this check was sent to Zurich's Illinois lockbox and cashed. On or about October 1, 2002, Mr. Gilbert signed one of Respondent's checks made payable directly to Zurich in the amount of $12,424.00. The check included a premium payment in the amount of $3,818.00 for Policy No. WC 3617144-02 for the month of September 2002. The record indicates that this check was sent to Zurich's lockbox in Illinois and cashed. In November 2002, Petitioner issued a Stop Work and Penalty Assessment Order for failing to secure workers' compensation insurance. In November and December 2002, Mr. Gilbert and Mr. Allen attempted to persuade Seth Hausman, Zurich's regional manager, to provide retroactive coverage for Respondent under the Mitchell workers' compensation policy, to reinstate the coverage, and to let the policy continue until it lapsed at expiration. Mr. Hausman concluded that Zurich could not assume the exposure without an underwriting evaluation. Mr. Hausman told Mr. Gilbert what information he had to provide in order for Zurich to conduct such an evaluation. In January 2003, Mr. Hausman advised Mr. Gilbert that Zurich had been unable to collect on a surety bond and that Mitchell owed Zurich approximately $750,000.00 in uncollected deductible payments. Mr. Hausman stated that in order to amend the workers' compensation policy to include Respondent as a named insured and to rescind the cancellation retroactively to allow the policy to run full term, Zurich would have to be paid for all outstanding balances. In that event, Zurich was willing to talk about extending workers' compensation coverage to Respondent as requested. When Petitioner issued the Stop Work and Penalty Assessment Order in November 2002, Respondent had about 20 employees. For the period October 1, 2001 through December 31, 2001, Respondent had the following amounts of payroll by class code: Class Code Payroll 5213 $126,739.96 5606 $170,615.31 5610 $5,391.51 6003 $5,777.00 6217 $62,691.54 7335 $73,434.08 8227 $135,572.71 8810 $27,503.88 41. For the period October 1, 2001 through December 31, 2001, the workers' compensation premium rates per $100.00 of payroll for each relevant Class Code class code were as follows: Premium Rates 5213 $33.02 5606 $4.76 5610 $18.08 6003 $62.53 6217 $14.27 7335 $25.97 8227 $9.80 8810 $0.59 For the period October 1, 2001 through December 31, 2001, the premium Respondent would have paid for workers' compensation coverage Class Code by class codes was as follows: Premium 5213 $41,849.53 5606 $8,121.29 5610 $974.79 6003 $3,612.36 6217 $8,946.08 7335 $19,070.83 8227 $13,286.13 8810 $162.27 For the period January 1, 2002 through November 5, 2002, Respondent had the following amounts of payroll by class code: Class Code Payroll 5213 $360,825.22 5403 $7,969.23 5606 $355,253.16 5610 $93,981.09 6003 $17,977.19 6217 $237,889.32 7335 $212,654.00 8227 $261,091.70 8810 $162,068.41 For the period January 1, 2002 through November 5, 2002, the workers' compensation premium rates per $100.00 of payroll for each relevant Class Code class code were as follows: Premium Rates 5213 $32.31 5403 $30.39 5606 $4.91 5610 $17.91 6003 $57.57 6217 $13.52 7335 $29.60 8227 $10.80 8810 $0.65 For the period January 1, 2002 through November 5, 2002, the premium Respondent would have paid for workers' compensation coverage by class codes was as follows: Class Code Premium 5213 $116,582.63 5403 $2,421.85 5606 $17,442.93 5610 $16,832.01 6003 $10,349.46 6217 $32,162.64 7335 $62,945.58 8227 $28,197.90 8810 $1,053.44 Respondent was out of compliance with the workers' compensation law for 398 calendar days between October 1, 2001 and November 5, 2002. Petitioner properly assessed penalty of $100.00 per day, totaling $39,800.00. Respondent would have paid a premium of $384,011.72 to secure workers' compensation insurance for its employees and owes a $39,800.00 penalty for the days it operated without coverage during the period October 1, 2001 through November 5, 2002. Accordingly, Respondent owes a total penalty in the amount of $423,811.72.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That Petitioner enter a final order affirming the Amended Stop Work Penalty Assessment Order and directing Respondent to pay a penalty in the amount of $423,811.72. DONE AND ENTERED this 10th day of November, 2003, in Tallahassee, Leon County, Florida. S SUZANNE F. HOOD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 10th day of November, 2003.
The Issue The issues in this case are whether Respondent, Raul A. Correa, M.D. (Dr. Correa), failed to provide workers' compensation coverage, and if so, what penalty should be imposed.
Findings Of Fact The Department is the state agency responsible for enforcing section 440.107, Florida Statutes (2013). That section mandates, in relevant part, that employers in Florida secure workers’ compensation insurance coverage for their employees. § 440.107(3), Fla. Stat. At all times relevant, Dr. Correa was a Florida small business engaged in the practice of medicine, with his principal office located at 2505 Manatee Avenue West, Bradenton, Florida. Dr. Correa is not incorporated. On February 12, 2014, Ms. Green conducted an on-site workers’ compensation compliance investigation (compliance investigation) of Dr. Correa’s office. After identifying herself to the receptionist, Ms. Green met Dr. Correa and explained the reason for her presence, a compliance investigation. Dr. Correa telephoned his wife who handles his office management from their residence. Mrs. Correa immediately faxed a copy of the liability insurance policy to the office. However, that liability policy did not include workers’ compensation coverage. After a telephonic consultation with her supervisor, Ms. Green served a Request for Production of Business Records (Request) on Dr. Correa at 11:50 a.m. on February 12, 2014. This Request encompassed records from October 1, 2013, through February 12, 2014, for all of Dr. Correa’s payroll documents, account documents, disbursements, and workers’ compensation coverage policies. Ms. Green consulted the Department’s Coverage and Compliance Automated System (CCAS) database to determine whether Dr. Correa had secured workers’ compensation coverage or an exemption from the requirements for coverage for his employees. CCAS is a database Ms. Green consults during the course of her investigations. Ms. Green determined from CCAS that Dr. Correa did not have any current workers’ compensation coverage for his employees and he did not have an exemption from such coverage from the Department. The records reflected that Dr. Correa’s last active workers’ compensation coverage was in 2004. Dr. Correa obtained workers’ compensation coverage on February 20, 2014. Approximately one month later, Ms. Green served a Request for Production of Business Records for Penalty Assessment Calculation on Dr. Correa. Dr. Correa produced the requested records. These records were given to Lynne Murcia, one of the Department’s penalty auditors, to calculate the penalty. Ms. Murcia determined that the appropriate classification code for Dr. Correa’s employees was 8832, which incorporates physicians and clerical workers. This code was derived from the Scopes Manual, which lists all of the various jobs that may be performed in the context of workers’ compensation. The manual is produced by the National Council on Compensation Insurance, Inc., the nation’s most authoritative data collecting and disseminating organization for workers’ compensation. Dr. Correa listed seven employees on the Florida Department of Revenue Unemployment Compensation Tax (UCT-6) form for the time period of the non-compliance. The UCT-6 form lists those employees who are subject to Florida’s Unemployment Compensation Law. Ms. Murcia reasonably relied upon the UCT-6 filings for the relevant time period to calculate Dr. Correa’s gross payroll in Florida. Using Dr. Correa’s payroll chart, the UCT reports, and the classification codes for each employee, Ms. Murcia calculated the penalty assessment for the three-year penalty period preceding the investigation. This three-year period is the allocated time for reviewing coverage for those who do not have the appropriate workers’ compensation coverage. On April 9, 2014, Ms. Murcia determined the penalty to be $4,287.12. However, upon receipt of additional information regarding a former employee of Dr. Correa, an Amended Order of Penalty Assessment of $3,898.77 was issued on July 28, 2014. Dr. Correa’s position is that his practice is a small “mom and pop” operation. He employs members of his family to run the business side of his practice. His daughter, Antonia, works as Dr. Correa’s “doctor’s assistant.” She works at the various nursing homes that Dr. Correa services. Antonia believed that the nursing homes’ liability insurance would cover her, and she was not subject to workers’ compensation coverage. However, she was, in fact, paid by Dr. Correa. Dr. Correa’s daughter-in-law, Valeria, works from her home computer completing the medical billing for her father-in- law. She has been working in this capacity for approximately 14- 16 years, and it never occurred to her that she needed workers’ compensation coverage. She was paid by Dr. Correa. Dr. Correa’s brother-in-law, Mr. Collado, runs all the errands for the practice. He may go to the bank, take care of car maintenance, buy office supplies or fix things, all in support of Dr. Correa’s practice. Mr. Collado receives regular pay checks from Dr. Correa. Dr. Correa testified that his wife is his office manager and has been since he opened the practice in 1978. Mrs. Correa works from their home, in a small home office. She does all the paper work related to the practice. Dr. Correa firmly believed that he did not require workers’ compensation coverage because some of his employees were “independent contractors” or never worked in his office, but at other locations (individual homes, nursing homes, or just outside the office). Dr. Correa believed his insurance agent who did not think Dr. Correa needed the workers’ compensation coverage. Based upon the testimony and exhibits, the amended penalty assessment in the amount of $3,898.77 is accurate.
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, issue a final order upholding the Amended Order of Penalty Assessment, and assessing a penalty in the amount of $3,898.77. DONE AND ENTERED this 24th day of September, 2014, in Tallahassee, Leon County, Florida. S LYNNE A. QUIMBY-PENNOCK 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 24th day of September, 2014.
The Issue The issue in this case is whether Respondent failed to provide workers' compensation insurance coverage for employees and, if so, what penalty should be assessed.
Findings Of Fact Petitioner, Department of Financial Services, Division of Workers' Compensation ("Division") is the state agency responsible for enforcing the requirement within the state that employers cover employees with workers' compensation insurance. § 440.107, Fla. Stat. (2009). Respondent, Jurgenson Trading Corporation, is owned, in part, by Julio Raudsett, and operates a "Subway" sandwich restaurant franchise in Hialeah, Florida. It is a family-owned business with a total of five employees, three of whom are related. Cesar Tolentino, an investigator for the Division, conducted a field interview of Raudsett, who admitted that he did not carry workers' compensation insurance. Tolentino checked the database in the Coverage and Compliance Automated System ("CCAS"), and there were no records showing workers' compensation coverage for the Subway employees, nor any notices of applicable exemptions. Martha Aguilar, Tolentino's supervisor authorized the issuance of a Stop-Work Order that was personally served on Raudsett by Tolentino by hand-delivery on April 17, 2009. At the same time, Tolentino served a Request for Production of Business Records for Penalty Assessment Calculation. Raudsett provided his business records, including payroll journals and unemployment tax returns. Based on Aguilar's review of the business records, the Division issued its Amended Order of Penalty Assessment ("Order") on June 8, 2009, with an assessed penalty of $19,873.79. Aguilar determined the amount of the penalty, using the following steps: (1) assigning each employee the National Council on Compensation Insurance (NCCI) class code that was applicable for restaurant workers; (2) determining how much the employee had been paid from April 2006 to April 2009 (the period of non-coverage); and (3) assigning the rate to the gross pay to calculate the insurance premium that should have been paid, then multiplying that by 1.5, as required by rule. The NCCI class codes for employees administrative staff as compared to restaurant workers are lower and, therefore, their workers' compensation insurance premiums would be lower. The business records available to Aguilar did not distinguish among employee's responsibilities. Absent that information, the penalty is, by law, calculated using the highest NCCI class code associated with that kind of business, and was correctly done in this case. Raudsett has entered into a payment plan with the Division. He objected only to that portion of the penalty that was based on his earnings, and those of his wife, Maribel Medina, who works part-time, and his father-in-law, Rolando Medina. He claims an exemption for the three of them as owners and managers of the corporation. Excluding their salaries and associated penalties, according to Joseph Cabanas, Respondent's accountant, would reduce the penalty by $10,267.67, to $9,606.12. Cabanas testified that Raudsett, an immigrant from Venezuela, was not aware of workers' compensation laws, and that was why the three owners/officers of the Respondent's corporation failed to file a Notice of Elections to be Exempt from coverage until after the Division's investigation began.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by Petitioner, Department of Financial Services, Division of Workers' Compensation, that upholds the assessment of a penalty of $19,873.79. DONE AND ENTERED this 15th day of December, 2009, in Tallahassee, Leon County, Florida. S ELEANOR M. HUNTER 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 15th day of December, 2009. COPIES FURNISHED: Julie Jones, CP, FRP, Agency Clerk Department of Financial Services Division of Legal Services 200 East Gaines Street Tallahassee, Florida 32399-0390 Benjamin Diamond, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0307 Douglas D. Dolan, Esquire Department of Financial Services Division of Legal Services 200 East Gaines Street Tallahassee, Florida 32399 Joseph Cabanas 10520 Northwest 26 Street, Suite C-201 Doral, Florida 33172
The Issue The issue in this case is whether Respondent failed to provide workers' compensation insurance coverage for employees, and, if so, what penalty should be assessed.
Findings Of Fact Petitioner is the state agency responsible for, inter alia, monitoring businesses within the state to ensure that such businesses are providing the requisite workers' compensation insurance coverage for all employees. The Division's headquarters are located in Tallahassee, Florida, but its investigators are spread throughout the state in order to more effectively monitor businesses. Respondent is a construction company that has been operating in excess of 30 years. It is a small company and usually only has a few employees at any given time. The company is located in Charlotte Harbor, Florida. Workers' compensation coverage is required if a business entity has one or more employees and is engaged in the construction industry in Florida. Workers' compensation coverage may be secured via three non-mutually exclusive methods: 1) The purchase of a workers' compensation insurance policy; 2) Arranging for the payment of wages and workers' compensation coverage through an employee leasing company; or 3) Applying for and receiving a certificate of exemption from workers' compensation coverage, if certain statutorily-mandated criteria are met. On January 8, 2009, Ira Bender, investigator for the Division, was doing on-site inspections in Port Charlotte, Florida. Bender stopped at the site on Edgewater Drive where new construction was underway at a YMCA. Bender observed a man (later identified as Thomas Woodall) sweeping the floor. Bender questioned Woodall and was told that Woodall worked for Respondent. When asked about his workers' compensation insurance coverage, Woodall advised that his insurance was maintained through Frank Crum Leasing Company ("Crum"). Bender called Crum and found that although Woodall had been carried as an employee of Respondent in the past, he had been released from coverage. The reason for his release was that his employment had been terminated for lack of business. Bender called Respondent to inquire about workers' compensation coverage. He was told that Respondent did not realize Woodall had been dropped from the Crum insurance coverage and that he would be reinstated immediately. In fact, coverage was restarted on that same day. Based on his finding that an employee had been working without coverage, Bender called his supervisor and provided his findings. The supervisor authorized issuance of a SWO based on the findings. The SWO was served on Respondent via hand- delivery at 11:45 a.m., on January 8, 2009. The SWO was also posted at the work site. The Division then requested business records from Respondent in order to determine whether there were any violations. If there were violations, then the Division would ascertain the amount of penalty to assess. Respondent cooperated and submitted the business records, as requested. After review of the business records, the Division issued its first Amended Order of Penalty Assessment ("Order") on January 14, 2009. The process employed by the Division was to locate all uncovered employees, i.e., those working without workers' compensation insurance for any period of time. The employees were then assigned a class code from the National Council on Compensation Insurance (NCCI) publication. Each trade or type of employment is assigned a code which sets the rate to be applied to an individual depending on the type of work he/she is performing. The Division assigned codes to the employees, determined how much the employee had been paid during the period of non-coverage, assigned the rate to the gross pay, and calculated the insurance premium needed to cover the worker for the time in question. A penalty of 1.5 times the premium was then assigned. The Order assessed a total penalty of $21,165.98 against Respondent. Respondent objected to the amount and refused to sign it due to errors contained in the Penalty Worksheet attached to the Order. Signing the Order would have allowed Respondent to return to work, but he refused to sign because he knew it was not correct. Pursuant to discussions between the parties and "additional records received," the Division issued a second Order on January 16, 2009, assessing a penalty of $6,501.27. Respondent believed that the Division was still in error and provided yet additional information--some verbal--to the Division. A third Order was issued on January 21, 2009, reducing the penalty to $3,309.56. However, Respondent still believed the penalty worksheet contained errors. Again, Respondent refused to sign and provided additional information to the Division. The Division issued a fourth Order on January 28, 2009, assessing a penalty of $2,822.24. That Order had an error concerning the spelling of an employee's name, but the penalty amount was correct. Respondent would not sign the fourth Order, because he did not believe he had intentionally violated any statute or rule concerning workers' compensation coverage for his employees. A corrected (fifth amended) Order was ultimately issued on May 19, 2009.1 The fifth Order asserts the amount of penalty now in dispute, which is the same amount appearing in the fourth amended Order. Respondent signed the fifth Order and entered into a payment plan for payment of the penalty, paying a down payment of $1,000 and monthly payments of $30 until paid in full. Respondent takes great offense to the fact that the penalty assessments were not faxed to him more quickly. He maintains that he had every intention to resolve this matter as quickly as possible, but the Division delayed and dragged out the process. The penalty worksheet attached to the fifth Order listed nine "Employee Names" that are subject to the penalty assessment. Each will be discussed below. The first "employee" is listed as "Cash" and is assigned Class Code 5403. This "employee" represents checks found in Respondent's records with the payee listed as "cash- casual labor" totaling $2,178.00 in gross payroll. Code 5403 was assigned because that is the code used by Crum for Respondent's general business. The manual rate for Code 5403 is $24.74. A penalty of $808.26 was assessed for that employee. The second employee is Jacob Prewitt. Prewitt was assigned Class Code 5221, due to the word "driveway" appearing on a check issued to him. Driveway work falls under a lower approved manual rate ($10.37) than general construction. The gross payroll amount was $1,960, and the penalty assigned to Prewitt was $304.88. The third employee is Woodall, assigned a Class Code of 5606, with a manual rate of $3.84. That code is used for supervisors and is, again, not as dangerous an occupation as general construction. The gross payroll for this entry was $1,008, and the penalty assessed for Woodall was $58.07. Cash is the fourth employee and has been covered in the discussion in paragraph 16, above. Barry Lawrence is the fifth employee; he is assigned Class Code 5437 as a cabinet maker/installer with a manual rate of $13.01. Lawrence had a Verification Letter issued by the Division indicating he was exempt from workers' compensation coverage. However, that exemption was limited to cabinet- making. By installing the cabinets, Lawrence performed work outside his exemption status. The gross payroll for his work was $6,200, and the penalty assessed for Lawrence was $1,209.33. Respondent was completely unaware that the exemption letter did not cover installation and had, in fact, always allowed cabinet- makers to install the cabinets as well. Brunderman Builders is listed as the sixth employee. It is assigned Class Code 5403 with a manual rate of $14.39. The gross payroll for this entry was $550, resulting in a penalty assessment of $118.73. The seventh employee is Jorge Gonzolas, assigned Class Code 5403, the general contracting code. Gonzolas was the employee of a contractor who was subcontracting with Respondent. The contractor died unexpectedly, and Gonzolas was left without payment for the work he had performed. Respondent generously decided to pay Gonzolas for his work, thereby, effectively making Gonzolas a de facto employee. The amount paid Gonzolas was $599.00; the penalty assessed for Gonzolas was $129.30. Woodall is again listed as employee number eight, this time with Class Code 5610, reflecting casual labor he did on one date that his insurance was not in place. The payroll amount for this work was $37.50. The penalty assessed for Woodall was $4.02. The ninth employee was Julio Garcia, assigned Class Code 8742 for outside sales, with a manual rate of $.64. The payroll amount for Garcia was $1,300. His penalty assessment amount was $12.48. Garcia was another one of the deceased subcontractor's employees that Respondent volunteered to pay for work Garcia had performed. The total payroll at issue for Respondent was $14,477.50. The total premium for that amount of payroll would have been $1,881.48, and the penalty assessed was $2,822.84. This is a fairly insignificant portion of Respondent's $5.5 million annual payroll. Respondent did not intentionally attempt to avoid the payment of workers' compensation insurance for its employees. There is no pattern of avoidance or indication that non-payment was Respondent's goal. Rather, there are plausible and reasonable explanations about the unpaid premiums. For Woodall, Respondent believed he was still covered through the Crum policy. For Gonzolas and Garcia, Respondent was simply attempting to be a nice guy. For Prewitt, the employee's exemption had unknowingly lapsed. For Lawrence, Respondent relied upon a Verification Letter from the state, but misinterpreted its scope. The Division, on the other hand, only pursued Respondent based on an actual finding of non-coverage. But for Woodall's presence at a work site doing manual labor (sweeping the floor), the Division would not have looked at Respondent's records. There is no indication the Division acted other than in strict accordance to its governing rules.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by Petitioner, Department of Financial Services, Division of Workers' Compensation, upholding the assessment of a penalty of $2,822.24 against Respondent, Brunderman Building Company, Inc. DONE AND ENTERED this 9th day of October, 2009, 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 9th day of October, 2009.
The Issue The issues in this case are whether Professional Staffing and Payroll Services, LLC, failed to secure the payment of workers' compensation coverage for its employees in violation of chapter 440, Florida Statutes (2014), and, if so, the penalty that should be imposed.
Findings Of Fact Petitioner, Department of Financial Services, Division of Workers' Compensation, is the state agency responsible for enforcing the requirement that employers in the State of Florida secure the payment of workers' compensation insurance coverage for their employees, pursuant to chapter 440, Florida Statutes. Respondent, Professional Staffing and Payroll Services, LLC, is a registered Florida limited liability company. At all times relevant to this proceeding, its business address was 1400 Colonial Boulevard, Suite 260, Fort Myers, Florida. Respondent actively engaged in business during the period from February 1, 2015, to June 17, 2015. On June 2, 2015, Petitioner's compliance investigator, Jack Gumph, conducted a workers' compensation compliance investigation at a worksite located at 8530 Palacio Terrace North, Lot 67, Hacienda Lakes, Naples, Florida. At the worksite, Gumph observed five workers nailing down plywood on the trusses of the roof of a house under construction. One of the workers, Fernando Fernandez, identified himself as the job foreman. Mr. Fernandez and the other four workers were employed by J.S. Valdez, Inc. ("JSV"). These workers were engaged in carpentry work installing plywood. This type of carpentry work is classified as National Council on Compensation Insurance ("NCCI") class code 5403 and is considered a type of construction activity under Florida Administrative Code Rule 69L-6.021(2)(cc). The evidence established that JSV was a client company of Global Staffing Services, LLC ("GSS"), and that GSS supplied the workers to JSV. The evidence further established that all five workers Gumph observed at the Palacio Terrace jobsite were employees of GSS. Using the State of Florida's Coverage and Compliance Automated System ("CCAS") computer database, Gumph determined that JSV did not have workers' compensation insurance covering any of its employees, and that GSS had workers' compensation coverage only for two secretarial/clerical employees. Through research in the Florida Department of State, Division of Corporations Sunbiz database ("Sunbiz"), Gumph discovered that GSS was part of three related——as Gumph characterized it, "commingled"——business entities; these entities were GSS, Global Staffing Payroll, LLC ("GSP"), and Professional Staffing and Payroll Services, LLC, the named Respondent in this case. Ivan Hernandez was shown in Sunbiz as being the managing member of GSS and GSP. At that time, the managing member of Respondent was shown as being Martha Coloma. Gumph suspected that Respondent was leasing construction workers, who are engaged in hazardous work, through a staffing company that was characterized as a secretarial/clerical business (NCCI code 8810)——a substantially less hazardous occupation. The effect of classifying of these business as "secretarial/clerical" is that a much lower workers' compensation premium rate applies.2/ Gumph prepared requests for production of business records ("RPBR") for each of the related business entities and visited the business address listed in Sunbiz for GSS to personally serve them on Hernandez. The business was located in a strip mall that housed various types of businesses. As he was entering the business, he noted that the name shown at the entrance was "Professional Staffing." The business manager explained that GSS was opened in 2013, and that on February 1, 2015, the business name had been changed to Professional Staffing and Payroll Services——the named Respondent in this proceeding. Upon inquiry, Gumph was told that Hernandez was "out of state." Almost as soon as he left Respondent's business office, Gumph received a call from Hernandez, who confirmed that he was the owner and chief executive officer of both GSS and Respondent. Gumph scheduled an appointment with Hernandez for June 16, 2015. However, Hernandez did not keep that appointment or call Gumph back to reschedule the appointment. It was obvious to Gumph that Hernandez was avoiding him. In researching the Sunbiz records for Respondent, Gumph also noted that on June 16, 2015, the managing member's name had been changed from Martha Coloma to Ivan Hernandez. He also rechecked the CCAS and NCCI databases for Respondent and noted that only a few days before, a workers' compensation policy had been issued for Respondent. The policy listed the business as "secretarial/clerical" and had a total exposure of $143,000 to cover four secretarial/clerical employees. He also noted that GSS had a workers' compensation policy that was effective from August 15, 2014, to August 15, 2015, and that this policy did not cover any additional insured entities, so its coverage did not extend to Respondent or its employees. Gumph contacted Martha Coloma, who was employed by All Florida Financial Services, LLC, a payroll preparation and bookkeeping firm. Coloma told Gumph that in January 2015, Hernandez had asked her to amend the Sunbiz records for Respondent to be shown as Respondent's managing member. Coloma also told Gumph that Hernandez requested that she find a Professional Employer Organization ("PEO") leasing company that would secure workers' compensation coverage for approximately 40 to 50 of his employees who were engaged in construction work.3/ Coloma was unsuccessful, so Hernandez directed her to obtain another policy for secretarial/clerical employees. She obtained the policy covering the four secretarial/clerical employees. Thereafter, Gumph spoke directly with Hernandez, who confirmed that he employed 40 to 50 construction workers. He told Gumph that he had tried to obtain a policy but had been unable to do so. On June 17, 2015, Gumph issued a Stop-Work Order and Order of Penalty Assessment to Respondent, and also served a RPBR on Respondent. In response, Respondent provided business records consisting of bank statements from a Regions Bank account covering the period from February 1, 2015, to February 28, 2015. Respondent did not provide any copies of checks written during this period. Respondent also provided business records consisting of bank statements and copies of checks from a Fifth Third Bank payroll account for Respondent for the period of March 1, 2015, through June 17, 2015. The evidence establishes that between February 1, 2015, and June 12, 2015, Respondent employed 437 employees—— the great majority of whom worked in construction jobs——for whom Respondent failed to secure workers' compensation insurance coverage. For the period between June 13, 2015, and June 17, 2015, Respondent secured workers' compensation coverage for four secretarial/clerical employees. Based on the business records provided, Lynne Murcia, Petitioner's penalty auditor, calculated the penalty to be assessed against Respondent. Pursuant to section 440.107(7)(d)1., the penalty for failing to secure workers' compensation is equal to two times the amount the employer would have paid in premium when applying approved manual rates to the employer's payroll during the period for which the employer failed to secure coverage during the two-year period preceding issuance of the Stop-Work Order. Here, because Respondent became a business entity on or about February 1, 2015, the penalty period applicable to this proceeding commenced on February 1, 2015, and ran through June 17, 2015, the date on which the Stop-Work Order and Penalty Assessment were served on Respondent.4/ Respondent did not obtain any exemptions from the workers' compensation coverage requirement for the period between February 1, 2015, and June 17, 2015. The business records Respondent provided in response to the RPBR were not sufficient to enable Petitioner to calculate Respondent's payroll for the period commencing on February 1, 2015, and ending on February 28, 2015. Accordingly, Petitioner imputed the gross payroll for Respondent's employees identified in the taxable wage report for the period covering February 1, 2015, through February 28, 2015, the statewide average weekly wage effective at the time of the Stop-Work Order, multiplied by two. The imputed wages for these employees over this period amounted to $2,544,907.68. For the period commencing on March 1, 2015, and ending on June 17, 2015, Respondent provided records sufficient to enable Petitioner to determine Respondent's actual gross payroll. For this period, Respondent's gross payroll amounted to $1,202,781.88. The evidence shows that for the period from February 1, 2015, through June 12, 2015, Respondent failed to secure workers' compensation coverage for any of its employees. On June 13, 2015, Respondent secured workers' compensation covering four secretarial/clerical employees. This coverage did not extend to Respondent's employees engaged in work other than secretarial/clerical work. For the period from June 13, 2015, to June 17, 2015, Respondent's gross payroll was calculated as $22,507.37. In calculating the applicable penalty, Respondent received a credit of $923.98 for the premium paid on the policy secured on June 12, 2015. This amount was deducted from the penalty owed. In calculating the penalty, Murcia determined the NCCI class code applicable to each employee according to his or her job, and applied the pertinent approved NCCI rates to determine the amount of the evaded premium for each employee. Pursuant to this method, Murcia calculated a total penalty of $645,019.36, which was reflected in the Amended Order of Penalty Assessment. In sum, Petitioner demonstrated, by clear and convincing evidence, that Respondent failed to secure workers' compensation coverage for its employees, in violation of chapter 440. The clear and convincing evidence further establishes that Petitioner correctly calculated a penalty of $645,019.36 to be assessed against Respondent pursuant to sections 440.107(7)(d)1. and 440.107(7)(e) and rule 69L-6.028.
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 determining that Respondent Professional Staffing and Payroll Services, LLC, violated the requirement in chapter 440, Florida Statutes, to secure workers' compensation coverage and imposing a penalty of $645,019.36. DONE AND ENTERED this 10th day of February, 2016, in Tallahassee, Leon County, Florida. S CATHY M. SELLERS 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 10th day of February, 2016.
The Issue The issues in this case are: (1) whether Respondent, PFR Services Corp., failed to secure the payment of workers' compensation coverage for its employees in violation of chapter 440, Florida Statutes (2017)2/; and (2) if so, the penalty that should be imposed.
Findings Of Fact The Parties Petitioner is the state agency responsible for enforcing the requirement that employers in the State of Florida secure the payment of workers' compensation insurance covering their employees, pursuant to chapter 440. Respondent is a Florida corporation. At all times relevant to this proceeding, its business address was 8040 Northwest 95th Street, Hialeah, Florida. The evidence establishes that Respondent was actively engaged in business during the two-year audit period, from October 17, 2015, through October 16, 2017, pertinent to this proceeding.3/ The Compliance Investigation On October 16, 2017, Petitioner's compliance investigator, Cesar Tolentino, conducted a workers' compensation compliance investigation at a business located at 8040 Northwest 95th Street, Hialeah, Florida. The business was being operated as a restaurant, to which National Council on Compensation Insurance ("NCCI") class code 9082 applies. Tolentino observed Maria Morales, Gabriela Nava, and Geraldine Rodriquez performing waitressing job duties and Rafael Briceno performing chef job duties. The evidence established that these four persons were employed by Respondent. Additionally, the evidence established that corporate officers Rosanna Gutierrez and Mary Pineda were employed by Respondent.4/ The evidence established that neither had elected to be exempt from the workers' compensation coverage requirement. In sum, the evidence established that Respondent employed six employees, none of whom were independent contractors, and none of whom were exempt from the workers' compensation coverage requirement. Tolentino conducted a search of Petitioner's Coverage and Compensation Compliance Automated System, which consists of a database of workers' compensation insurance coverage policies issued for businesses in Florida, and all elections of exemptions filed by corporate officers of businesses in Florida. Tolentino's search revealed that Respondent had never purchased workers' compensation coverage for its employees; that its corporate officers had not elected to be exempt from the workers' compensation coverage requirement; and that Respondent did not lease employees from an employee leasing company. Gutierrez acknowledged that Respondent had not purchased workers' compensation coverage for its employees, and told Tolentino that she did not know it was required. Based on Tolentino's investigation, on October 16, 2017, Petitioner served Stop-Work Order No. 17-384 ("Stop-Work Order") on Respondent. At the time Tolentino served the Stop-Work Order, he informed Gutierrez that if Respondent obtained a workers' compensation policy and provided Petitioner a receipt of the amount paid to activate the policy within 28 days of issuance of the Stop-Work Order, Respondent's penalty would be reduced by the amount paid to activate the policy. On October 16, 2017, Petitioner, through Tolentino, also served on Respondent a Request for Production of Business Records for Penalty Assessment Calculation ("Business Records Request"), requesting Respondent provide several categories of business records covering the two-year audit period from October 16, 2015, to October 16, 2017. Specifically, Petitioner requested that Respondent provide its payroll documents consisting of time sheets, time cards, attendance records, earnings records, check stubs, check images, and payroll summaries, as applicable. Petitioner also requested that Respondent provide, as applicable, its federal income tax documents; account documents, including business check journals and statements and cleared checks for all open or closed business accounts; cash and check disbursements records; workers' compensation coverage records; and independent contractor records. At the time Tolentino served the Business Records Request, he informed Gutierrez that if Respondent obtained a workers' compensation policy and provided Petitioner the complete business records requested within ten business days, Respondent's penalty would be reduced by 25 percent. The evidence establishes that Respondent did not provide any business records within that time period, so is not entitled to receive that penalty reduction. On November 16, 2017, Petitioner issued an Amended Order of Penalty Assessment, assessing a total penalty of $35,262.32 against Respondent for having failed to secure workers' compensation coverage for its employees during the audit period. On December 14, 2017, Gutierrez met with Tolentino and, at that time, provided documentation to Petitioner showing that Respondent had acquired workers' compensation coverage for its employees, effective October 28, 2017, and had paid $3,966.00 for the policy. At the December 14, 2017, meeting, Gutierrez presented an envelope postmarked October 30, 2017, showing that Respondent had mailed Petitioner proof of having obtained the workers' compensation coverage within 28 days of the date the Stop-Work Order was issued; however, this mail was returned, so Petitioner did not receive such proof within 28 days. The evidence established that this mail was returned to Respondent on December 4, 2017——several days after the 28-day period had expired, and too late for Respondent to take additional steps to deliver to Petitioner the proof of its having purchased the workers' compensation policy.5/ Because Petitioner did not receive Respondent's proof of having purchased a workers' compensation policy within 28 days of issuance of the Stop-Work Order, it did not reduce the penalty imposed on Respondent by the amount that Respondent had paid for the premium. The evidence also establishes that at the December 14, 2017, meeting, Respondent tendered to Petitioner a cashier's check in the amount of $1,000.00. As a result of having received proof of workers' compensation coverage for Respondent's employees, Petitioner issued an Agreed Order of Conditional Release from Stop-Work Order ("Order of Conditional Release") on December 14, 2017, releasing Respondent from the Stop-Work Order. The Order of Conditional Release expressly recognized that Respondent "paid $1,000.00 as a down payment for a penalty calculated pursuant to F.S. 440.107(7)(d)1." Additionally, page 1 of 3 of the Penalty Calculation Worksheet attached to the Amended Order of Penalty Assessment admitted into evidence at the final hearing reflects that Respondent paid $1,000.00 toward the assessed penalty of $35,262.32. This document shows $34,262.32 as the "Balance Due." Calculation of Penalty to be Assessed Petitioner penalizes employers based on the amount of workers' compensation insurance premiums the employer has avoided paying. The amount of the evaded premium is determined by reviewing the employer's business records. In the Business Records Request served on October 16, 2017, Petitioner specifically requested that Respondent provide its payroll documents, federal income tax documents, disbursements records, workers' compensation coverage records, and other specified documents. When Gutierrez met with Tolentino on December 14, 2017, she provided some, but not all, of the business records that Petitioner had requested. Respondent subsequently provided additional business records to Petitioner, on the eve of the final hearing. Petitioner reviewed all of the business records that Respondent provided. However, these business records were incomplete because they did not include check images, as specifically required to be maintained and provided to Petitioner pursuant to Florida Administrative Code Rule 69L-6.015(6). Check images are required under Florida Administrative Code Rule 69L-6.015(6) because such images reveal the payees, which can help Petitioner identify the employees on the employer's payroll at any given time. This information is vital to determining whether the employer complied with the requirement to have workers' compensation coverage for all of its employees. Because Respondent did not provide the required check images, the records were insufficient to enable Petitioner to calculate Respondent's payroll for the audit period. Under section 440.107(7)(e), business records provided by the employer are insufficient to enable Petitioner to calculate the employer's payroll for the period for which the records are requested, Petitioner is authorized to impute the weekly payroll for each employee as constituting the statewide average weekly wage multiplied by 1.5. To calculate the amount of the penalty due using the imputed method, Petitioner imputes the gross payroll for each employee for each period during which that employee was not covered by required workers' compensation insurance. To facilitate calculation, Petitioner divides the gross payroll amount for each employee for the specific non-compliance period by 100.6/ Petitioner then multiplies this amount by the approved NCCI Scopes Manual rate——here, 2.34, which applies to restaurants——to determine the amount of the avoided premium for each employee for each non-compliance period. This premium amount is then multiplied by two to determine the penalty amount to be assessed for each employee not covered by required workers' compensation insurance for each specific period of non- compliance. Performing these calculations, Petitioner determined that a penalty in the amount of $35,262.32 should be assessed against Respondent for failing to provide workers' compensation insurance for its employees, as required by chapter 440, for the period from October 17, 2015, through October 16, 2017. As discussed above, on December 14, 2017, Respondent paid a down payment of $1,000.00 toward the penalty, and this was expressly recognized in the Stop-Work Order that was issued that same day. Thus, the amount of the penalty to be assessed against Respondent should be reduced by $1,000.00, to $34,262.32. As previously noted, this amount is identified on page 1 of 3 of the Amended Order of Penalty Assessment as the "Balance Due." As discussed in paragraphs 17 and 18, above, the evidence establishes that Respondent purchased a workers' compensation policy to cover its employees within 11 days of issuance of the Stop-Work Order, and mailed to Petitioner proof of having purchased such policy on October 30, 2017——well within the 28-day period for providing such proof. However, as discussed above, this mail was returned to Respondent on December 4, 2017——too late for Respondent to take additional steps to provide such proof to Petitioner within the 28-day period. There is no evidence in the record showing that failure of the mailed proof to be received by Petitioner was due to any fault on Respondent's part. Respondent's Defenses On behalf of Respondent, Gutierrez testified that Respondent did everything that Tolentino had told them to do. Respondent purchased workers' compensation insurance and provided proof to Petitioner that its employees were covered.7/ Gutierrez also testified that although Respondent's business was created in May 2013, it did not begin operating and, therefore, did not have any employees, until January 2016.8/ However, as previously noted, the persuasive evidence does not support this assertion.
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 determining that PFR Services Corp. violated the requirement in chapter 440, Florida Statutes, to secure workers' compensation coverage for its employees during the audit period, and imposing a penalty of $30,296.32. DONE AND ENTERED this 14th day of January, 2019, in Tallahassee, Leon County, Florida. S CATHY M. SELLERS 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 January, 2019.
The Issue The issues in this case are whether Respondent, Customs Logistics Services, Inc., failed to secure the payment of workers' compensation coverage for its employees in violation of chapter 440, Florida Statutes, and if so, the penalty that should be imposed.
Findings Of Fact The Parties Petitioner is the state agency charged with enforcing the requirement in chapter 440 that employers in Florida secure workers' compensation coverage for their employees. At all times relevant to this proceeding, Respondent was a corporation registered to do business in Florida. Respondent is a family-owned-and-operated customs brokerage service with its principal office located at 6940 Northwest 12th Street, Miami, Florida 33126. At the time of the inspection giving rise to this proceeding, Respondent employed seven or eight employees.2/ The Compliance Inspection On September 29, 2014, Petitioner's compliance inspector, Hector Fluriach, conducted an onsite inspection at Respondent's principal office to determine whether Respondent was in compliance with the workers' compensation coverage requirements established in chapter 440. At that time, Respondent's co-owners, Astrid Escalona and Carlos Henoa, told Fluriach that Respondent employed six employees and two corporate officers, and also paid two family members who did not work at the principal office. Upon inquiry, Escalona and Henoa informed Fluriach that Respondent did not have workers' compensation insurance coverage for its employees. Using Petitioner's Coverage and Compliance Automated System ("CCAS") and the National Council for Compensation Insurance ("NCCI") insurance coverage verification system, Fluriach confirmed that Respondent had not obtained workers' compensation insurance coverage for its employees, and that it was not in compliance with chapter 440 during certain periods within the two years preceding the inspection. Under the NCCI basic occupational classification system and Scopes Manual, six of Respondent's employees are classified as clerical (Code 8810), and one is classified as a driver (Code 7380). None of Respondent's employees is classified as employed within the construction industry. As a private entity employing four or more employees in a non-construction industry occupation, Respondent was required under chapter 440 to provide workers' compensation coverage for its employees. Respondent's corporate officers were eligible under section 440.05 to elect to be exempt from the workers' compensation coverage requirements of chapter 440; however, none had elected to be exempt. Fluriach issued Stop-Work Order No. 14-329-D5 ("Stop- Work Order"), personally served it on Respondent, and explained it to Escalona. The Stop-Work Order included an Order of Penalty Assessment, ordering assessment of a penalty against Respondent in an amount equal to two times the amount Respondent would have paid in workers' compensation coverage premiums when applying the approved manual rates to Respondent's payroll during the periods for which it had failed to secure workers' compensation coverage during the preceding two years (for convenience, hereafter referred to as the "look-back period"). Fluriach also served a business records request, requesting Respondent to provide specified business records3/ for Petitioner's use in determining the penalty. In a series of submittals, Respondent provided the requested business records to Petitioner. The evidence showed that during the two-year look- back period, Respondent did not have workers' compensation coverage for its employees during a substantial portion of the period in which it employed four or more employees, and none of its corporate officers were exempt from the workers' compensation coverage requirement. As such, Respondent violated chapter 440 and, therefore, is subject to penalty under that statute. Petitioner's Computation of Penalty Amount To calculate the applicable penalty, Petitioner must determine, from a review of the employer's business records, the employer's gross payroll for the two-year look-back period. For days during the look-back period for which records are not provided, Petitioner imputes the gross payroll based on the average weekly wage for the state of Florida. Here, the look-back period for purposes of calculating the applicable penalty commenced on September 30, 2012, and ended on September 29, 2014, the day on which the compliance inspection was conducted. Respondent's business records revealed that Respondent had fewer than four employees between January 1 and March 31, 2013, so Respondent was not required to have workers' compensation coverage for that period. Thus, Petitioner did not assess a penalty against Respondent for that period. For the rest of the look-back period, Respondent employed four or more employees, so was required to obtain workers' compensation coverage for those employees for that portion of the period. Respondent provided business records sufficient for Petitioner to determine Respondent's gross payroll for all but September 30, 2012. For that day, Petitioner imputed Respondent's gross payroll using Florida's statewide average weekly wage. On the basis of Respondent's business records submittals, Petitioner's auditor, Eric Ruzzo, recalculated the penalty to be assessed against Respondent. Petitioner issued an Amended Order of Penalty Assessment on October 17, 2014, imposing a total penalty of $5,617.04. On November 7, 2014, following receipt of additional records, Petitioner issued a Second Amended Order of Penalty Assessment, reducing the penalty to $3,982.52. Finally, after receiving more records, Petitioner issued a Third Amended Order of Penalty Assessment on January 12, 2015, further reducing the penalty to $3,205.70. Each of these penalty assessments was served on Respondent. Petitioner seeks to impose a $3,205.70 penalty against Respondent in this proceeding. In calculating the penalty, Ruzzo examined three-month (i.e., quarterly) periods within the two-year look-back period. Ruzzo identified the occupational class code applicable to each of Respondent's employees. As stated above, all but one of Respondent's employees were classified as clerical, and one of Respondent's employees was classified as a driver. For each employee, Ruzzo determined the gross payroll paid to that employee for the specific quarter in which Respondent was non-compliant during the look-back period, divided the employee's gross payroll by 100 pursuant to Petitioner's calculation methodology, then multiplied that amount by the numeric rate set by NCCI for that employee's specific occupational class code. This calculation yielded the workers' compensation coverage premium for that specific employee for the specific quarter for which Respondent was non- compliant during the look-back period. The premium amount then was multiplied by two, as required by statute, to yield the penalty to be imposed for failure to provide workers' compensation coverage for that specific employee. As previously noted, Respondent did not provide gross payroll records covering September 30, 2012; thus, for that day, Ruzzo imputed the gross payroll for each of Respondent's employees using the statewide average weekly wage as defined in section 440.12(2)4/ multiplied by two. Ruzzo then performed the same computations to yield the penalty amount to be imposed for Respondent's failure to provide workers' compensation on September 30, 2012. Ruzzo then added each penalty amount determined for each employee using actual gross payroll and imputed payroll, to yield the total penalty amount of $5,286.70. Because Respondent had not previously been issued a stop-work order, pursuant to section 440.107(7)(d)1., Petitioner applied a credit toward the penalty in the amount of the initial premium Respondent paid for workers' compensation coverage. Here, the premium payment amount for which Respondent received credit was $2,081.00. This was subtracted from the calculated penalty of $5,286.70, yielding a total penalty of $3,205.70. Respondent's Defense At the final hearing, Escalona testified that she and the other co-owners of Respondent always have attempted to fully comply with every law applicable to Respondent's business, and have never had compliance problems. She testified that neither she nor the other co-owners of Respondent realized that Respondent was required to have workers' compensation coverage for its employees, and they did not intentionally violate the law. Petitioner apparently mailed a memorandum regarding verifying workers' compensation coverage requirements to businesses in the area before it conducted compliance inspections. The memorandum was dated October 8, 2014, and Escalona testified Respondent received it on October 13, 2014, approximately two weeks after the compliance inspection that Fluriach conducted. Escalona asserted that had Respondent received the memorandum before the compliance inspection was conducted, she would have called Petitioner to determine if Respondent needed to obtain workers' compensation coverage, would have asked how to obtain it, and would have obtained coverage for its employees and exemptions for its corporate officers. Escalona testified that the $3,205.70 penalty is a substantial amount that Respondent, a small family-owned business, cannot afford to pay. Findings of Ultimate Fact Petitioner has shown, by clear and convincing evidence, that Respondent violated chapter 440, as charged in the Stop-Work Order, by failing to secure workers' compensation coverage for its employees. Petitioner has shown, by clear and convincing evidence, that the $3,205.70 penalty proposed to be assessed against Respondent pursuant to the Third Amended Penalty Assessment is the correct amount of the penalty to be assessed in this proceeding.
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 determining that Respondent, Customs Logistics Services, Inc., violated the requirement in chapter 440 to secure workers' compensation coverage and imposing a total penalty of $3,205.70. DONE AND ENTERED this 11th day of August, 2015, in Tallahassee, Leon County, Florida S CATHY M. SELLERS 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 11th day of August, 2015.
Findings Of Fact Respondent Judy Louise Robinson is currently licensed by the Florida Department of Insurance as a general lines agent, a health agent, and a dental health agent and has been so licensed since November 21, 1984. At all times material, Respondent engaged in the business of insurance as Fleming Island Insurer. At all times material, Respondent maintained two business bank accounts in the name of Fleming Island Insurer: Account No. 1740043215 at Barnett Bank in Orange Park and Account No. 11630004614 at First Union Bank, Park Avenue Office. First Union Bank is currently First Performance Bank. All funds received by Respondent from or on behalf of consumers, representing premiums for insurance policies, were trust funds received in a fiduciary capacity and were to be accounted for and paid over to an insurer, insured, or other persons entitled thereto in the applicable regular course of business. Respondent solicited and procured an application for a workers' compensation insurance policy from Linda Smith on September 13, 1989, to be issued by CIGNA. Respondent quoted Ms. Smith an annual workers' compensation premium of two thousand six hundred four dollars and forty cents ($2,604.40). Linda Smith issued her check payable to Fleming Island Insurer in the amount quoted by Respondent on September 13, 1989, as premium payment for the CIGNA workers' compensation insurance coverage. On September 14, 1989, Respondent endorsed and deposited Linda Smith's $2,604.40 check into Fleming Island Insurer's business bank account No. 1740043215 at Barnett Bank, Orange Park, Florida. On September 17, 1989, Respondent forwarded her check in the amount of two thousand six hundred eighty nine dollars and forty cents ($2,689.40) to NCCI ATLANTIC for issuance of a workers' compensation policy with CIGNA for Linda Smith, Inc. The difference between the amount paid to Respondent by Linda Smith ($2,604.40) and the amount paid by Respondent to CIGNA via NCCI ATLANTIC ($2,689.40) amounts to $85.00 advanced by Respondent because she misquoted the premium amount to Linda Smith. On September 17, 1989, Respondent notified Linda Smith that another $85.00 was due. Linda Smith never paid this amount to Respondent. On September 19, 1989, CIGNA issued a workers' compensation policy for Linda Smith, Inc. Respondent's check was thereafter returned to CIGNA due to insufficient funds. On or about October 20, 1989, CIGNA notified Respondent that her agency check had been returned as unpayable and requested substitute payment within ten days to avoid interruption in Linda Smith, Inc.'s workers' compensation insurance coverage. Respondent asserted that she was injured in an automobile accident on October 1, 1989 and could not work through July of 1990 due to chronic dislocation of her right arm, but she also asserted that she never closed her insurance business and operated it out of her home. Respondent's home is the address at which CIGNA notified her on October 20, 1989 concerning Ms. Smith's policy. Respondent failed to timely submit substitute payment to CIGNA, and as a result, Linda Smith, Inc.'s policy was cancelled January 1, 1990. On January 4, 1990, Linda Smith forwarded her own check in the full amount of $2,689.40 directly to CIGNA and her policy was reinstated. Respondent did not begin to repay Linda Smith the $2,604.40 proceeds of Linda Smith's prior check paid to Respondent until May 1991. At formal hearing, Respondent maintained that she was never notified that Linda Smith paid for the policy a second time. Even if such a protestation were to be believed, it does not excuse Respondent's failure to account to either Linda Smith or CIGNA for the $2,604.40, which Respondent retained. Respondent also testified that Barnett Bank's failure to immediately make available to Respondent the funds from Linda Smith's check, which cleared, resulted in Barnett Bank reporting to CIGNA that there were insufficient funds to cover Respondent's check to CIGNA. From this testimony, it may be inferred that Respondent knew or should have known that she owed someone this money well before May 1991. On November 11, 1989, Lewis T. Morrison paid the Traveler's Insurance Company six thousand forty-three dollars ($6,043.00) as a renewal payment on a workers' compensation policy for Morrison's Concrete Finishers for the policy period December 30, 1988 through December 30, 1989. At the conclusion of the 1988-1989 policy period, Traveler's Insurance Company conducted an audit of Morrison's Concrete Finishers' account. This is a standard auditing and premium adjustment procedure for workers' compensation insurance policies. It is based on the insured's payroll and is common practice in the industry. This audit revealed that Morrison's Concrete Finishers was due a return premium of two thousand one hundred fifty-three dollars and eighty- seven cents ($2,153.87) from the insurer. On March 30, 1990, Traveler's Insurance Company issued its check for $2,153.87 payable to Fleming Island Insurer. This check represented the return premium due Morrison's Concrete Finishers from Traveler's Insurance Company. On April 6, 1990, Respondent endorsed and deposited Traveler's Insurance Company's return premium check into the Fleming Island Insurer's business bank account No. 11630004614 at First Union Bank. The standard industry procedure thereafter would have been for Respondent to pay two thousand two hundred forty-eight dollars ($2,248.00) via a Fleming Island Insurer check to Morrison's Concrete Finishers as a total returned premium payment comprised of $2,153.87 return gross premium from Traveler's Insurance Company and $94.13 representing her own unearned agent's commission. When Respondent did not issue him a check, Lewis T. Morrison sought out Respondent at her home where he requested payment of his full refund. In response, Respondent stated that she would attempt to pay him as soon as she could, that she was having medical and financial problems, and that the delay was a normal business practice. Respondent testified that on or about April 19, 1990, in an attempt to induce Mr. Morrison to renew Morrison's Concrete Finishers' workers' compensation policy through Fleming Island Insurer, she offered him a "credit" of the full $2,248.00 owed him. Pursuant to this offer of credit, Respondent intended to pay Traveler's Insurance Company or another insurance company for Morrison's Concrete Finisher's next year's premium in installments from Fleming Island Insurer's account. This "credit" represented the return premium Respondent had already received from Traveler's Insurance Company on behalf of Morrison's Concrete Finishers for 1988-1989 which she had already deposited into Fleming Island Insurer's business account. Whether or not Mr. Morrison formally declined Respondent's credit proposal is not clear, but it is clear that he did not affirmatively accept the credit proposal and that he declined to re-insure for 1989-1990 through Respondent agent or Traveler's Insurance Company. Respondent still failed to pay the return premium and commission which she legitimately owed to Morrison's Concrete Finishers. On June 28, 1990, the Traveler's Insurance Company issued a check directly to Mr. Morrison for the full amount of $2,248.00. Respondent did not begin repaying Traveler's Insurance Company concerning Mr. Morrison's premium until after intervention by the Petitioner agency. At formal hearing, Respondent offered several reasons for her failure to refund the money legitimately due Mr. Morrison. Her first reason was that the district insurance commissioner's office told her to try to "work it out" using the credit method outlined above and by the time she realized this method was unacceptable to Mr. Morrison, he had already been paid by Traveler's Insurance Company. However, Respondent presented no evidence to substantiate the bold, self-serving assertion that agency personnel encouraged her to proceed as she did. Respondent also testified that she did not know immediately that Traveler's Insurance Company had reimbursed Mr. Morrison directly. However, it is clear she knew of this payment well before she began to pay back Traveler's, and since Mr. Morrison did not reinsure through her or Traveler's she should have immediately known the "credit" arrangement was unacceptable to him. Respondent further testified that she did not want to repay Mr. Morrison until a claim on his policy was resolved. However, there is competent credible record evidence that the Traveler's Insurance Company 1988-1989 workers' compensation policy premium refund was governed solely by an audit based on payroll. Mr. Morrison's policy premium or refund consequently was not governed by "loss experience rating", and the refund of premium would not be affected by a claim, open or closed. Thus, the foregoing reasons given by Respondent for not refunding Mr. Morrison's money are contradictory or not credible on their face. They also are not credible because Respondent admitted to Mr. Morrison in the conversation at her home (see Finding of Fact 24) that she was having trouble paying him because of medical and financial difficulties. Further, they are not credible because Respondent testified credibly at formal hearing that she would have paid Mr. Morrison but for her bank account being wiped out by a fraudulent check given her by an unnamed third party. On August 10, 1992, Respondent was charged by Information with two counts of grand theft. See, Section 812.014(2)(c) F.S. The allegations in the Information charged Respondent with theft of insurance premiums from Linda Smith and Lewis T. Morrison, and arose out of the same facts as found herein. On December 17, 1992, Respondent entered a nolo contendere plea to only the first count of grand theft as to matters involving Linda Smith and the other count was "null prossed." Respondent secured a negotiated sentence on the first count. "Grand theft" is a felony punishable by imprisonment by one year or more. Adjudication was withheld pending satisfactory completion of probation, including community service and payment of restitution and court costs. Respondent has been complying with her probation, including restitution payments.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is recommended that the Department of Insurance enter a final order finding Respondent guilty of violations of Sections 626.561(1), 626.611(7), (9), (10), and (13); 626.621(2) and (6) F.S. under Count I, violations of Sections 626.561(1), 626.611(7), (9), (10), and (13), and 626.621(2) and (6) under Count II, and violations of Sections 626.611(14) and 626.621(8) F.S. under Count III, finding Respondent not guilty of all other charges under each count, and revoking Respondent's several insurance licenses. RECOMMENDED this 23rd day of June, 1993, at Tallahassee, Florida. ELLA JANE P. DAVIS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 23rd day of June, 1993. APPENDIX TO RECOMMENDED ORDER 92-2060 The following constitute specific rulings, pursuant to S120.59(2), F.S., upon the parties' respective proposed findings of fact (PFOF). Petitioner's PFOF: As modified to more correctly reflect the whole of the record evidence and avoid unnecessary, subordinate, or cumulative material, all of Petitioner's proposed findings of fact are accepted. Respondent's PFOF: Sentence 1 is accepted as a paraphrased allegation of the Second Amended Administrative Complaint. Sentence 2 is covered in Findings of Fact 4-18. Sentence 3 is accepted but subordinate and to dispositive. Sentence 4 is apparently Respondent's admission that she owed $2,604.40 to Linda Smith and paid her $500.00 of it. Accepted to that extent but not dispositive in that full payment was not made timely. Sentence 1 is accepted as a paraphrased allegation of the Second Amended Administrative Complaint but not dispositive. Sentence 2 is accepted but immaterial. Sentence 3 is rejected as argument and not dispositive. As stated, the proposal also is not supported by the record. Sentence 4 It is accepted that Mr. Morrison admitted he had a claim. However, the record does not support a finding that he requested Respondent to contact Traveler's Ins. Co. about it. Even if he had, that is subordinate and not dispositive of the ultimate material issues. Sentence 5 is rejected as not supported by the credible record evidence. Covered in Findings of Fact 23-28. Sentence 6 is rejected as not supported by the record and as argument. Sentence 7 Accepted. Sentence 8 Accepted. The "Descriptive Narrative" is accepted through page 4, but not dispositive. Beginning with the words "In summary" on page 5, the remainder of the proposal is not supported by the record in this cause which closed April 16. 1993. COPIES FURNISHED: Daniel T. Gross, Esquire Division of Legal Services Department of Insurance and Treasurer 412 Larson Building Tallahassee, FL 32399-0300 Judy Louise Robinson 4336 Shadowood Lane Orange Park, FL 32073-7726 Tom Gallagher State Treasurer and Insurance Commissioner Department of Insurance and Treasurer The Capitol, Plaza Level Tallahassee, FL 32399-0300 Bill O'Neil General Counsel Department of Insurance and Treasurer The Capitol, PL-11 Tallahassee, FL 32399-0300
