The Issue Whether KP Roofing Masters, LLC ("Respondent"), failed to secure the payment of workers' compensation coverage for its employees, and if so, whether the Department of Financial Services, Division of Workers' Compensation ("Department"), correctly calculated the penalty imposed against Respondent.
Findings Of Fact The Department is the state agency charged with enforcing the requirement of chapter 440 that employers in Florida secure workers' compensation coverage for their employees. § 440.107(3), Fla. Stat. Respondent was a business providing services in the construction industry. Its principal office is located at 7100 Northwest 12th Street, Suite 210, Miami, Florida 33126. The Investigation. On September 26, 2014, the Department's compliance investigator, Cabrera, observed two individuals performing roofing work on a house in Coral Gables, Florida. Investigator Cabrera interviewed the individuals, identified as Rodolfo Moscoso and Jairo Alvarado. Both men informed Cabrera that they worked for Respondent. Cabrera then checked the permit board located at the jobsite and confirmed that Respondent pulled the permit for the roofing work. After gathering the information at the jobsite, Cabrera consulted the Division of Corporations’ website to determine, inter alia, the identity of Respondent's corporate officers. Cabrera found that Jorge Cappelleti ("Cappelleti") was Respondent's sole corporate officer. Cabrera then consulted the Department's Coverage and Compliance Automated System ("CCAS") for proof of workers' compensation coverage and for exemptions associated with Respondent. An exemption is a method in which a corporate officer can exempt himself from the requirements of chapter 440. See § 440.05, Fla. Stat. (2014). CCAS is the Department's internal database that contains workers' compensation insurance policy information and exemption information. Insurance providers are required to report coverage and cancellation information, which is then input into CCAS. Cabrera's CCAS search revealed that Respondent did not have a workers' compensation policy or an employee leasing policy. Cabrera additionally discovered that Cappelleti had a valid exemption. Cabrera then called Cappelleti who confirmed that the two men at the jobsite were his employees and that the employees were not covered by workers' compensation insurance. Based on the information gathered, on September 26, 2014, Cabrera issued Respondent a Stop-Work Order and Order of Penalty Assessment. On September 29, 2014, Cabrera served Respondent with the Stop-Work Order and Order of Penalty Assessment. Cabrera simultaneously served Respondent with the Request for Production of Business Records for Penalty Assessment Calculation ("BRR"). The BRR requested documents that would enable the Department to determine Respondent's payroll for the time period of September 27, 2012, through September 26, 2014. In response to the BRR, Respondent ultimately provided the Department with bank statements, check details, a general ledger, and other records. Penalty Calculation. In October 2014, the Department assigned Penalty Auditor Ruzzo to calculate the penalty assessed against Respondent. Ruzzo reviewed the business records produced by Respondent and properly identified the amount of gross payroll paid to Respondent's employees on which workers' compensation premiums had not been paid. Ruzzo researched Respondent and Respondent's subcontractors to determine those periods when they were not compliant with chapter 440 during the audit period. Ruzzo determined that Respondent was not compliant for the period of September 27, 2012, through September 26, 2014. However, Respondent's corporate officer was not included in the penalty for the periods in which he had an exemption. Additionally, Respondent's compliant subcontractors were not included in the penalty. The business records ultimately produced by Respondent were sufficient for Ruzzo to calculate a penalty for the entire audit period, except for September 26, 2014. For that day, Ruzzo imputed the payroll. On June 2, 2015, based on Ruzzo's calculations, the Department issued a 4th Amended Order of Penalty Assessment to Respondent. On September 1, 2015, the 4th Amended Order of Penalty Assessment was served on Respondent. The 4th Amended Order of Penalty Assessment assessed a penalty of $68,525.42. For the penalty assessment calculation, Ruzzo consulted the classification codes listed in the Scopes® Manual, which has been adopted by the Department of Financial Services through Florida Administrative Code Rules 69L-6.021 and 69L-6.031. Classification codes are assigned to various occupations to assist in the calculation of workers' compensation insurance premiums. Ruzzo assigned the class codes based on information provided to him by Cappelleti. Ruzzo then utilized the corresponding approved manual rates for those classification codes and the related periods of non-compliance. Ruzzo applied the correct approved manual rates and correctly utilized the methodology specified in section 440.107(7)(d)l. and rules 69L-6.027 and 69L-6.028 to determine the penalty. The Penalty Associated With Subcontractor Emerald. Respondent only disputes the portion of the penalty associated with its subcontractor, Emerald, in the amount of $8,434.86 for the period of non-compliance from January 1, 2014, through April 8, 2014. Section 440.10(1) provides in relevant part: In case a contractor sublets any part or parts of his or her contract work to a subcontractor or subcontractors, all of the employees of such contractor and subcontractor or subcontractors engaged on such contract work shall be deemed to be employed in one and the same business or establishment, and the contractor shall be liable for, and shall secure, the payment of compensation to all such employees, except to employees of a subcontractor who has secured such payment. A contractor shall require a subcontractor to provide evidence of workers’ compensation insurance. A subcontractor who is a corporation and has an officer who elects to be exempt as permitted under this chapter shall provide a copy of his or her certificate of exemption to the contractor. Noticeably absent from the statute is the time period within which this evidence of coverage must be provided to the contractor or the nature of the required evidence. Rule 69L-6.032(1) provides: In order for a contractor who is not securing the payment of compensation pursuant to Section 440.38(1)(a), F.S. to satisfy its obligation to obtain evidence of workers’ compensation insurance or a Certificate of Election to Be Exempt from a subcontractor pursuant to Section 440.10(1)(c), F.S., such contractor shall obtain and provide to the Department, when requested, the evidence specified in subsections (2), (3), (4) or (5) herein. (Emphasis added). Rule 69L-6.032 sets forth the contractor requirements for obtaining evidence that the subcontractor possesses workers' compensation insurance. If a subcontractor is a client company of a leasing company, such as Emerald, rule 69L-6.032(3) specifies that the evidence shall be a Certificate of Liability Insurance ("Certificate"). According to the deposition testimony of Cappelleti (Exhibit 11, offered into evidence by the Department), when Emerald began providing services to Respondent in January 2014, Emerald represented that its workers were covered by a policy through an employee leasing company. In fact, a Certificate, obtained by Respondent sometime before it was requested by the Department, indicates that Emerald had coverage for the period of January 1, 2014, through December 31, 2014. This period encompasses the period of time for which the Department now seeks to penalize Respondent. Although Respondent obtained proof of coverage from Emerald, this occurred after Emerald was paid by Respondent for work occurring between January 1, 2014, and April 8, 2014. Ruzzo checked the CCAS and found that the Certificate for Emerald was inaccurate. Emerald apparently did not join the leasing company insurance policy until April 9, 2014. Although a contractor does not have a duty to further investigate when presented with what appears to be a valid Certificate, Ruzzo's calculations penalized Respondent for the period of non-compliance of Emerald because Respondent did not seek the proof of coverage until after Emerald's workers were already on the job for Respondent. The Department has demonstrated by clear and convincing evidence that Respondent employed Mr. Moscoso and Mr. Alvarado on September 26, 2014; that Respondent was engaged in the construction industry in Florida during the period of September 27, 2012, to September 26, 2014; and that Respondent failed to carry workers' compensation insurance to cover its employees as required by Florida's Workers' Compensation Law from September 27, 2012, to September 26, 2014. The Department has demonstrated by clear and convincing evidence that Ruzzo correctly utilized the methodology specified in section 440.107(7)(d)l. However, the Department failed to show by clear and convincing evidence that a penalty for Emerald's period of non-compliance, in the amount of $8,434.86, should be included in the total penalty assessment of $68,525.42.
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, KP Roofing Masters, LLC, violated the requirement in chapter 440, Florida Statutes, to secure workers' compensation coverage, and imposing upon it a total penalty assessment of $60,090.56. DONE AND ENTERED this 2nd day of March, 2016, in Tallahassee, Leon County, Florida. S MARY LI CREASY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 2nd day of March, 2016.
The Issue Whether Respondent may levy upon property belonging to Petitioner (specially, funds in Petitioner's account, number 300126719, at Admiralty Bank), as proposed in Respondent's March 30, 2000, Notice of Intent to Levy?
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following findings of fact are made: Petitioner operates a Chevron station at 4109 Northlake Boulevard in Palm Beach Gardens, Florida, at which it engages in the business of selling motor fuels at posted retail prices. Petitioner maintains a business account at Admiralty Bank. The number of its account is . Petitioner's Local Option Motor Fuel License number is 60-023068. Petitioner was delinquent in remitting to the Department "local option gas tax" payments for the period from July 1, 1995, through June 30, 1996. The Department provided Petitioner notice of Petitioner's failure to make these payments. The Department filed with the Clerk of the Circuit Court in Palm Beach County a Tax Warrant "for collection of delinquent local option gas tax[es]," in the amount of $106,904.62, plus penalties (in the amount of $59,556.47), interest (in the amount of $12,026.25), and the amount of the "filing fee" ($12.00), for a "grand total" of $178,499.34. Rafael Fanjul is the president and sole owner of Petitioner. On May 2, 1997, Mr. Fanjul, on behalf of Petitioner, entered into a Stipulation Agreement with the Department, which provided as follows: THE FLORIDA DEPARTMENT OF REVENUE AND ELF SERVICES, D/B/A PALM BEACH CHEVRON S/S THE TAXPAYER, TAX IDENTIFICATION NO. 60- 123068, HEREBY AGREE THAT THE $178,024.29 TAX LIABILITY IS DUE THE STATE OF FLORIDA. IT IS FURTHER AGREED THE SUM OF TAX, PENALTY, AND INTEREST REFERENCED ON THE WARRANT OR WARRANTS DATED 02/20/97 IS SUBJECT TO THE FOLLOWING STIPULATIONS: The taxpayer will retire the tax, penalty, and interest shown on the Tax Warrant or Warrants whose dates or dates are shown above. The taxpayer waives any and all rights to institute any further judicial or administrative proceedings under S.72.011, F.S., with respect to this liability and; The taxpayer further agrees to meet each payment term which is detailed on the Amortization Schedule and Payment Coupons provided by the Department of Revenue. IN THE EVENT THE TAXPAYER FAILS TO MEET THE PAYMENT TERMS DETAILED ON THE ENCLOSED AMORTIZATION SCHEDULE AND PAYMENT COUPONS OR FAILS TO TIMELY REMIT ALL TAXES WHICH BECOME DUE AND PAYABLE SUBSEQUENT TO THE DATE OF THIS AGREEMENT, ANY UNPAID BALANCE OF TAX, PENALTY, AND/OR INTEREST SCHEDULED PURSUANT TO THIS AGREEMENT SHALL BECOME IMMEDIATELY DUE AND PAYABLE. Mr. Fanjul had the authority to bind Petitioner to the terms set forth in the Stipulation Agreement. There has been no showing that, in so doing, he acted involuntarily or under coercion or duress. Petitioner made some, but not all of the payments, set forth on the Amortization Schedule incorporated by reference in the Stipulation Agreement. 4/ On May 1, 1998, Petitioner entered into a second Stipulation Agreement with the Department, which provided as follows: THE FLORIDA DEPARTMENT OF REVENUE AND ELF SERVICES, D/B/A PALM BEACH CHEVRON S/S 4806, THE TAXPAYER, TAX IDENTIFICATION NO. 60- 123068, HEREBY AGREE THAT THE $142,701.38 TAX LIABILITY IS DUE THE STATE OF FLORIDA. IT IS FURTHER AGREED THE SUM OF TAX, PENALTY, AND INTEREST REFERENCED ON THE WARRANT OR WARRANTS DATED 02/20/97 IS SUBJECT TO THE FOLLOWING STIPULATIONS: The taxpayer will retire the tax, penalty, and interest shown on the Tax Warrant or Warrants whose dates or dates are shown above. The taxpayer waives any and all rights to institute any further judicial or administrative proceedings under S.72.011, F.S., with respect to this liability and; The taxpayer further agrees to meet each payment term which is detailed on the Amortization Schedule and Payment Coupons provided by the Department of Revenue. IN THE EVENT THE TAXPAYER FAILS TO MEET THE PAYMENT TERMS DETAILED ON THE ENCLOSED AMORTIZATION SCHEDULE AND PAYMENT COUPONS OR FAILS TO TIMELY REMIT ALL TAXES WHICH BECOME DUE AND PAYABLE SUBSEQUENT TO THE DATE OF THIS AGREEMENT, ANY UNPAID BALANCE OF TAX, PENALTY, AND/OR INTEREST SCHEDULED PURSUANT TO THIS AGREEMENT SHALL BECOME IMMEDIATELY DUE AND PAYABLE. Mr. Fanjul had the authority to bind Petitioner to the terms set forth in the second Stipulation Agreement. There has been no showing that, in so doing, he acted involuntarily or under coercion or duress. Petitioner made some, but not all of the payments, set forth on the Amortization Schedule incorporated by reference in the second Stipulation Agreement. 5/ On August 12, 1999, Petitioner entered into a third Stipulation Agreement with the Department, which provided as follows: THE FLORIDA DEPARTMENT OF REVENUE AND ELF SERVICES, D/B/A PALM BEACH CHEVRON S/S 4806, THE TAXPAYER, TAX IDENTIFICATION NO. 60- 123068, HEREBY AGREE THAT THE $88,375.04 TAX LIABILITY IS DUE THE STATE OF FLORIDA. IT IS FURTHER AGREED THE SUM OF TAX, PENALTY, AND INTEREST REFERENCED ON THE WARRANT OR WARRANTS DATED 02/20/97 IS SUBJECT TO THE FOLLOWING STIPULATIONS: The taxpayer will retire the tax, penalty, and interest shown on the Tax Warrant or Warrants whose dates or dates are shown above. The taxpayer waives any and all rights to institute any further judicial or administrative proceedings under S.72.011, F.S., with respect to this liability and; The taxpayer further agrees to meet each payment term which is detailed on the Amortization Schedule and Payment Coupons provided by the Department of Revenue. IN THE EVENT THE TAXPAYER FAILS TO MEET THE PAYMENT TERMS DETAILED ON THE ENCLOSED AMORTIZATION SCHEDULE AND PAYMENT COUPONS OR FAILS TO TIMELY REMIT ALL TAXES WHICH BECOME DUE AND PAYABLE SUBSEQUENT TO THE DATE OF THIS AGREEMENT, ANY UNPAID BALANCE OF TAX, PENALTY, AND/OR INTEREST SCHEDULED PURSUANT TO THIS AGREEMENT SHALL BECOME IMMEDIATELY DUE AND PAYABLE. Mr. Fanjul had the authority to bind Petitioner to the terms set forth in the third Stipulation Agreement. There has been no showing that, in so doing, he acted involuntarily or under coercion or duress. The Amortization Schedule incorporated by reference in the third Stipulation Agreement required Petitioner to make 47 weekly payments of $1,000.00 each from August 12, 1999, to June 29, 2000, and to make a final payment of $28,994.57 on July 6, 2000. As of January 12, 2000, Petitioner was five payments behind. Accordingly, on that date, the Department sent a Notice of Delinquent Tax to Admiralty Bank, which read as follows: RE: ELF SERVICES INC. DBA: PALM BEACH GARDENS CHEVRON STA 48206 FEI: 65-0055086 ACCT: ST#: To Whom It May Concern: You are being notified, under the authority contained is Subsection 212.10(3), Florida Statutes, that the referenced dealer is delinquent in the payment of gas tax liabilities in the amount of $75,581.47 to the State of Florida. You may not transfer or dispose of any credits, debts, or other personal property owed to the dealer, that are to become under your control during the effective period of this notice. Any assets in your possession exceeding the dollar amount shown above may be released in the ordinary course of business. This notice shall remain in effect until the Department consents to a transfer or disposition or until sixty (60) days elapse after receipt of this notice, whichever period expires the earliest. Please furnish a list of all credits, debts, or other property owed to the dealer in your possession and the value of these assets to the Department. Chapter 212.10(3), F.S. requires this list within five (5) days. If you fail to comply with this notice, you may become liable to the State of Florida to the extent of the value of the property or amount of debts or credits disposed of or transferred. Thank you for your cooperation. If you have any questions, please contact the undersigned at the telephone number below. On or about January 18, 2000, in response to the foregoing notice, Admiralty Bank advised the Department in writing that "the balance being held" in Petitioner's account at the bank was $2,223.53. On February 10, 2000, the Department sent Admiralty Bank a Notice of Freeze, which read as follows: RE: Elf Services Inc. DBA Palm Beach Gardens Chevron FEI: 65-0055086 ACCT: ST#: Dear Custodian: You are hereby notified that pursuant to Section 213.67, Florida Statutes, the person identified above has a delinquent liability for tax, penalty, and interest of $75,581.47, which is due the State of Florida. Therefore, as of the date you receive this Notice you may not transfer, dispose, or return any credits, debts, or other personal property owned/controlled by, or owed to, this taxpayer which are in your possession or control. This Notice remains in effect until the Department of Revenue consents to a transfer, disposition, or return, or until 60 consecutive calendar days elapse from the date of receipt of this Notice of Freeze, whichever occurs first. Further, Section 213.67(2), F.S., and Rule 12-21, Florida Administrative Code, require you to advise the Department of Revenue, within 5 days of your receipt of this Notice, of any credits, debts, or other personal property owned by, or owed to, this taxpayer which are in your possession or control. You must furnish this information to the office and address listed below. Your failure to comply with this Notice of Freeze may make you liable for the amount of tax owed, up to the amount of the value of the credits, debts or personal property transferred. Thank you for your cooperation. If you have any questions please contact the undersigned at the telephone number listed below. On March 22, 2000, the Department sent to Petitioner a Notice of Intent to Levy upon Petitioner's "Bank Account # , in the amount of $2,320.07, . . . in the possession or control of Admiralty Bank" "for nonpayment of taxes, penalty and interest in the sum of $75,581.47." After receiving information from Admiralty Bank that Petitioner actually had $7,293.36 in its account at the bank, the Department, on March 30, 2000, sent Petitioner a second Notice of Intent to Levy, which was identical in all respects to the March 22, 2000, Notice of Intent to Levy except that it reflected that Petitioner's account at Admiralty Bank contained $7,293.36, instead of $2,320.07. Petitioner's account at Admiralty Bank does not contain any monies paid by a third party to Petitioner as salary or wages. The amount of the Petitioner's current outstanding delinquent "tax liability" is $75,581.47.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department enter a final order upholding its March 30, 2000, Notice of Intent to Levy and proceed with the garnishment of the funds in Petitioner's account at Admiralty Bank. DONE AND ENTERED this 25th day of October, 2000, in Tallahassee, Florida. STUART M. LERNER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 25th day of October, 2000.
The Issue The issue is whether Respondent complied with the requirements of the Workers' Compensation Law and, if not, what is the appropriate penalty?
Findings Of Fact The Division is charged with the regulation of workers' compensation insurance in the State of Florida. Respondent, River City Roofing Sheet Metal, Inc. (River City Roofing), is a Florida corporation located in Jacksonville, Florida, and is engaged in the construction industry. Michael Robinson is an insurance analyst/compliance investigator employed by the Division. His duties include making site visits at locations where work is being conducted and determining whether the employers in the state are in compliance with the requirements of the workers' compensation law and related rules. On August 17, 2010, Mr. Robinson visited a residential job site at 4206 Katanga Drive, Jacksonville, Florida, and observed five individuals reroofing the property at the site. Mr. Robinson called up to the workers and asked them to come down from the roof so that he could speak to them. One of the workers identified himself as David Hannans, and informed Mr. Robinson that he and the others were employees of River City Roofing. Mr. Robinson proceeded to get the names of the other workers. However, during this time, one of the men wandered away and left the worksite without speaking to Mr. Robinson. Mr. Robinson inquired about the name of the worker who left the worksite, and was informed his name was "Shorty." During his conversation with Mr. Hannans, Mr. Robinson also learned that the worksite supervisor, Gary Pittman, had been at the worksite but left to go to the store. Mr. Robinson confirmed with Mr. Hannans that the men at the worksite, including Mr. Hannans, were employees of River City Roofing. Mr. Robinson inquired about the owner of the business and learned the owner is Robert Olszanowski. Mr. Robinson then called Mr. Olszanowski. According to Mr. Robinson, Mr. Olszanowski verified that three of the men at the worksite were his employees, but claimed not to know the other two men. Mr. Robinson advised Mr. Olszanowski to contact Mr. Pittman to find out who the other two men were. During a follow-up telephone call with Mr. Olszanowski, Mr. Robinson was told that one of the individuals was a friend of Mr. Hannans and the other was a man from the neighborhood. According to Mr. Robinson, Mr. Olszanowski informed him that he was unaware of the other two men. Mr. Robinson then inquired about what type of workers' compensation coverage had been procured and learned that Mr. Olszanowski held an exemption and used Phoenix Resources, Inc., a staffing company, to cover his employees. Mr. Robinson contacted Phoenix Resources and was informed that River City Roofing was a client and as of August 17, 2010, had four individuals on the payroll: Gary Pittman, Miguel Hernandez Lopez, Ancelmo Perez Fernandez, and Simon Aguilar Sanchez. Mr. Robinson requested written confirmation of this and received an e-mail communication from Phoenix Resources which provided written confirmation. David Hannans and "Shorty" were not listed. Mr. Robinson inquired as to whether Phoenix Resources carried workers' compensation coverage on the listed individuals, and learned that those listed employees were covered under a policy procured from Business Personnel Solutions. Mr. Robinson contacted Business personnel Solutions and verified that there was a policy that covered those employees of Phoenix Resources. Mr. Robinson again contacted Phoenix Resources and inquired as to whether it had received any new applications from River City Roofing, and learned that it had not received any new applications. Mr. Robinson then consulted the Department of State, Division of Corporations website, to find information concerning the corporate status of River City Roofing. He verified from the website that River City Roofing is an active corporation and that Robert Olszanowski is the Chief Executive Officer. Mr. Robinson then consulted the Division's Coverage and Compliance Automated System (CCAS) database, which is routinely used by the Department and contains both the workers' compensation policy information for each employer that has a Florida policy, as well as all information concerning workers' compensation exemptions that have been applied for and issued to individuals by the Department. Mr. Robinson learned that Respondent previously had a policy that expired on August 25, 2008, and confirmed that Mr. Olszanowski held an exemption. Based upon his investigative findings, Mr. Robinson concluded that Mr. Hannans and "Shorty" were employees of River City Roofing who were not covered by a workers' compensation policy or a valid exemption in violation of chapter 440, Florida Statutes. On August 18, 2010, Mr. Robinson issued Stop-Work Order No. 10-253-D1 to Respondent and issued a Request for Production of Business Records for Penalty Assessment Calculation. Both were personally served by Mr. Robinson on Mr. Olszanowski. The Request for Production of Business Records requested records for the time period August 26, 2008 through August 18, 2010. Respondent did not produce business records as requested. Cathe Ferguson is a Penalty Calculator for the Division. She reviews business records such as payroll, bank statements, and copies of checks, and calculates the amount of penalty for non-compliance with workers' compensation laws. As required by Chapter 440, Ms. Ferguson imputed Respondent's payroll as a result of Respondent's failure to provide business records. Mr. Robinson then issued and served by certified mail an Amended Order of Penalty Assessment to Respondent in the amount of $116,240.82. Subsequent to this and subsequent to Respondent's request for an administrative hearing, Ms. Ferguson determined there was an internal error and amended the penalty amount downward. On February 7, 2011, Mr. Robinson issued a second Amended Order of Penalty Assessment in the amount of $71,028.94. In calculating the penalty for failure to comply with chapter 440, Ms. Ferguson first sought to determine the amount of premium that Respondent would have paid had Respondent obtained the proper workers' compensation insurance in place for the period of August 26, 2008 through August 17, 2010. In determining the premium that Respondent avoided by not obtaining workers' compensation insurance coverage for all of its employees, Ms. Ferguson utilized a penalty worksheet. Ms. Ferguson identified the individual employees of Respondent not covered by a workers' compensation policy or an exemption and listed them on the penalty worksheet. For each individual listed on the penalty worksheet, Ms. Ferguson assigned a class code reflecting the work done by each employee as observed by Mr. Robinson (i.e., the class code for roofing). The amount of the penalty was imputed using the Average Weekly Wage as determined by the Agency for Workforce Innovation, across the entire period of non-compliance. Ms. Ferguson imputed the penalty because Respondent did not produce business records from which the Division could have calculated the gross payroll from the employees in question. Ms. Ferguson then took 1/100th of the payroll and multiplied that figure by the approved manual rate applicable to the applicable class code, as adopted by the Office of Insurance Regulation. Ms. Ferguson then took the previously obtained product and multiplied it by 1.5 to determine the penalty for the period of August 26, 2008 through August 17, 2010, the time period requested in the business records request. Based upon her calculations, Ms. Ferguson determined the appropriate penalty to be assessed against Respondent to be $71,028.94. Respondent disputed portions of the penalty worksheet attached to the Amended Order of Penalty Assessment, which gave rise to this proceeding. Specifically, Respondent wrote the word "Dispute" next to David Hannans and "Shorty's" names for all time periods on the penalty worksheet except for the time period July 1, 2010 through August 17, 2010, next to which Respondent wrote "not disputed". Thus, in its request for hearing, Respondent did not dispute that Hannans and "Shorty" were employees of Respondent; rather, Respondent disputed that they were employees during most of the periods of time listed on the penalty worksheet.
Recommendation Based upon the Findings of Fact and Conclusions of Law, it is, RECOMMENDED: That the Division of Workers' Compensation enter a Final Order upholding the Second Amended Order of Penalty Assessment, assigning a penalty of $71,028.94, and the Stop-Work Order issued to Respondent on August 8, 2010. DONE AND ENTERED this 29th day of March, 2011, in Tallahassee, Leon County, Florida. S BARBARA J. STAROS 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 29th day of March, 2011. COPIES FURNISHED: Jamila Georgette Gooden, Esquire Department of Financial Services Division of Legal Services 200 East Gaines Street Tallahassee, Florida 32399 Robert L. Olszanowski River City Roofing Sheet Metal, Inc. 10650 Haverford Road, Suite 2 Jacksonville, Florida 32218 Honorable Jeff Atwater Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 P. J. Jameson, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
Findings Of Fact The factual allegations contained in the Stop-Work Order and Order of Penalty Assessment, the Amended Order of Penalty Assessment, the 24 Amended Order of Penalty Assessment, and the 3rd Amended Order of Penalty Assessment, which are fully incorporated herein by reference, are hereby adopted as the Department’s Findings of Fact in this case.
Conclusions THIS PROCEEDING came on for final agency action and Jeff Atwater, Chief Financial Officer of the State of Florida, or his designee, having considered the record in this case, including the Stop-Work Order and Order of Penalty Assessment, the Amended Orders of Penalty Assessment, the Request for Administrative Hearing, the withdrawal of Petition, and the Order Relinquishing Jurisdiction and Closing File, and being otherwise fully advised in the premises, hereby finds that: 1. On March 14, 2011, the Department of Financial Services, Division of Workers’ Compensation (hereinafter “Department”) issued a Stop-Work Order and Order of Penalty Assessment in Division of Workers’ Compensation Case No. 11-083-1A to TRACY B. HINOTE, D/B/A T.H. PLASTERING. 2. On March 14, 2011, the Stop-Work Order and Order of Penalty Assessment was personally served on TRACY B. HINOTE, D/B/A T.H. PLASTERING. A copy of the Stop- Work Order and Order of Penalty Assessment is attached hereto as “Exhibit A” and incorporated herein by reference. 3. On March 28, 2011, the Department issued an Amended Order of Penalty Assessment in Division of Workers’ Compensation Case No. 11-083-1A to TRACY B. HINOTE, D/B/A T.H. PLASTERING. The Amended Order of Penalty Assessment assessed a total penalty of $7,590.78 against TRACY B. HINOTE, D/B/A T.H. PLASTERING. . 4. On April 6, 2011, the Amended Order of Penalty Assessment was personally served on TRACY B. HINOTE, D/B/A T.H. PLASTERING. A copy of the Amended Order of Penalty Assessment is attached hereto as “Exhibit B” and incorporated herein by reference. 5. On April 28, 2011, the Department issued a 2" Amended Order of Penalty Assessment in Division of Workers’ Compensation Case No. 11-083-1A to TRACY B. HINOTE, D/B/A T.H. PLASTERING. The 2" Amended Order of Penalty Assessment assessed a total penalty of $6,050.69 against TRACY B. HINOTE, D/B/A T.H. PLASTERING. 6. On May 3, 2011, the 2"4 Amended Order of Penalty Assessment was personally served on TRACY B. HINOTE, D/B/A T.H. PLASTERING. A copy of the 2" Amended Order of Penalty Assessment is attached hereto as “Exhibit C” and incorporated herein by reference. 7. On April 25, 2011, the Division received from TRACY B. HINOTE, D/B/A T.H. PLASTERING a request for an administrative hearing. The request for administrative hearing is attached hereto as “Exhibit D” and incorporated herein by reference. 8. On June 28, 2011, the Department issued a 3rd Amended Order of Penalty Assessment in Division of Workers’ Compensation Case No. 11-083-1A to TRACY B. HINOTE, D/B/A T.H. PLASTERING. The 3rd Amended Order of Penalty Assessment assessed a total penalty of $2,618.57 against TRACY B. HINOTE, D/B/A T.H. PLASTERING. 9. On June 29, 2011, the 3rd Amended Order of Penalty Assessment was served by overnight mail delivery on TRACY B. HINOTE, D/B/A T.H. PLASTERING. A copy of the 3rd Amended Order of Penalty Assessment is attached hereto as “Exhibit E” and incorporated herein by reference. 10. On October 17, 2011, the Petition was forwarded to the Division of Administrative Hearings and assigned DOAH Case No. 11-5327. 11. On November 23, 2011, the Division received from TRACY B. HINOTE, D/B/A T.H. PLASTERING a withdrawal of the request for administrative hearing. The withdrawal of request for administrative hearing is attached hereto as “Exhibit F” and incorporated herein by reference. 12. On December 8, 2011, an Order Relinquishing Jurisdiction and Closing File was entered in Division of Administrative Hearings Case. No. 11-5327. A copy of the Order Relinquishing Jurisdiction and Closing File is attached hereto as “Exhibit G” and incorporated herein by reference.
The Issue Whether Respondent, Gulf Coast Site Prep, Inc., failed to comply with the coverage requirements of the Workers’ Compensation Law, chapter 440, Florida Statutes, by not obtaining workers’ compensation insurance for its employees, and, if so, what penalty should be assessed against Respondent pursuant to section 440.107, Florida Statutes (2014).1/
Findings Of Fact The Department is the state agency responsible for enforcing the requirement of the Workers’ Compensation Law that employers secure the payment of workers’ compensation coverage for their employees and corporate officers. § 440.107, Fla. Stat. Respondent, Gulf Coast Site Prep., Inc., is a Florida for-profit corporation organized on March 3, 2008. Respondent’s registered business address is 952 TR Miller Road, Defuniak Springs, Florida. Ashley Adams is Respondent’s President and Registered Agent. On March 27, 2015, the Department’s investigator-in- training, Jill Scogland, and lead investigator, Sharon Kelson, conducted a random workers’ compensation compliance check at Lot 34 in the Driftwood Estates residential subdivision in Santa Rosa Beach, Florida. Ms. Scogland observed two men on site. David Wayne Gibson was operating a front-end loader spreading dirt on site. Colby Smith was shoveling dirt on site. While Ms. Scogland was inspecting the site, a third man, Ashley Adams, arrived driving a dump truck with a load of dirt. Mr. Adams identified himself as the owner of Gulf Coast, and stated that he had an exemption from the requirement for workers’ compensation insurance and that he thought Mr. Gibson did as well. Mr. Adams advised Ms. Scogland that he hired both Mr. Gibson and Mr. Smith to work at the site.2/ At hearing, Respondent challenged the evidence supporting a finding that Respondent hired Mr. Gibson.3/ Specifically, Respondent argues that Ms. Scogland’s testimony that Mr. Adams told her he hired Mr. Gibson is unreliable because Ms. Scogland did not include that information in her field notes. Respondent claims that Ms. Scogland’s status as investigator-in-training on the date of the inspection is indicative of her unreliability. To the contrary, Ms. Scogland’s testimony regarding both the persons and events on the date of the inspection was clear and unequivocal. While Ms. Scogland admitted her field notes were not as detailed on the date in question as they are for more recent inspections, she was confident that her investigation of the facts was thorough. The fact that Ms. Scogland did not write down what Mr. Adams said does not render her testimony unreliable. The undersigned finds Ms. Scogland’s testimony to be clear and convincing. Ms. Scogland reviewed the Department of State, Division of Corporations’ online information and identified Mr. Gibson as President and Registered Agent of David Wayne Gibson Tractor Service, Inc. According to Ms. Scogland, the online records indicated the corporation had been administratively dissolved in September 2013. Ms. Scogland next accessed the Department’s Coverage and Compliance Automated System (CCAS) and determined that Mr. Gibson had obtained a workers’ compensation coverage exemption for himself, but the exemption had expired on February 15, 2015. The information contained in CCAS is information on new policies, cancellations, etc., reported to the Department by insurance agencies as required by administrative rule. Next, Ms. Scogland accessed the Division of Corporations’ website, verified Gulf Coast as an active corporation, and identified Mr. Adams as the sole officer of Gulf Coast. Ms. Scogland then accessed CCAS and determined that, although Gulf Coast did not have workers’ compensation coverage, Mr. Adams had an active exemption effective from February 12, 2014 through February 12, 2016. Mr. Adams had a prior exemption that expired on April 14, 2013, but had no valid exemption in place between April 14, 2013 and February 12, 2014. After contacting her supervisor, Michelle Lloyd, Ms. Scogland served Mr. Adams, on behalf of Gulf Coast, with a site-specific Stop-Work Order for failure to ensure workers’ compensation coverage for its employees. Ms. Scogland also served Mr. Adams with a Request for Production of Business Records for Penalty Assessment Calculation. The request was for Gulf Coast’s payroll, account, and disbursement records, as well as records identifying its subcontractors, payments thereto, and workers’ compensation coverage thereof, from March 28, 2013 through March 27, 2015 (the penalty period).4/ Mr. Adams did not provide any records to the Department in response to the records request. The Department’s penalty auditor, Eunika Jackson, was assigned to calculate the penalty to be assessed against Gulf Coast for failure to secure workers’ compensation insurance during the penalty period. The penalty to be assessed against an employer for failure to secure workers’ compensation coverage is two times the amount the employer would have paid in workers’ compensation insurance premiums when applying approved manual rates to the employer’s payroll during the penalty period. § 440.107(7)(d), Fla. Stat. Ms. Jackson consulted the Scopes Manual, which is published by the National Council on Compensation Insurance (NCCI), and identified class code 6217--Excavation and Drivers-- as the appropriate construction class code for the work being performed at the worksite. Respondent contests the assignment of class code 6217 to Mr. Adams, who was driving a dump truck and delivering a load of dirt to the site. Respondent admits that Mr. Gibson’s operation of the front-end loader was properly classified as Excavation and Drivers. NCCI Scopes Manual provides the following with regard to classification code 6217: Includes burrowing, filling or backfilling. * * * Code 6217 is applied to specialist contractors engaged in general excavation including ditch digging, burrowing, filling or backfilling provided such operations are not otherwise classified in the manual. The operations involve the removal of earth, small boulders and rocks by power shovels, trench diggers or bulldozers and piling it at the jobsite for backfill. The material may also be removed by dump trucks for fill in some other area. Code 6217 includes excavation in connection with building foundations, swimming pools, landscape gardening and waterproofing operations. * * * This classification also is applied to specialist contractors engaged in grading land and landfilling, provided these operations are not otherwise classified in this manual. This classification includes ditch digging, burrowing, filling or backfilling, and operations such as scraping, cutting, piling or pushing the earth to rearrange the terrain. These operations utilize equipment such as bulldozers, motor graders and carryalls. [emphasis supplied]. Mr. Adams’ operation of the dump truck falls squarely within the definition of Excavation and Drivers. The material in the dump truck was fill for the site under excavation, a purpose which is directly addressed in the manual under code 6217. Under Respondent’s interpretation, fill removed from the site by a dump truck would be an excavation activity, but would no longer be excavation when the dump truck arrived at another site (or at another location on the same site) with the fill. That interpretation is illogical. No evidence was introduced to support a finding that typical operation of a dump truck in preconstruction was classified by a different code in the Scopes Manual. It is found that Ms. Jackson properly applied the Scopes Manual in assigning code 6217 to the work being performed by Mr. Adams on the site. Having no payroll records from Gulf Coast, Ms. Jackson had to impute the statewide average weekly wage as Respondent’s payroll for Mr. Adams and his subcontractor, Mr. Gibson. The average weekly wages were calculated based on the Workers’ Compensation and Employers Liability approved rate manual also published by NCCI and adopted by the Department by administrative rule. Ms. Jackson calculated a penalty of two times the workers’ compensation insurance premiums that would have applied to the purchase of insurance for Mr. Adams and Mr. Gibson during periods of non-compliance during the penalty. The period of non-compliance for Mr. Adams was April 15, 2013 to February 11, 2014, during which time his exemption had lapsed. The period of non-compliance for Mr. Gibson was February 16, 2015 to March 27, 2015, during which his exemption had expired. § 440.107(7)(e), Fla. Stat. Utilizing the penalty calculation worksheet adopted by Florida Administrative Code Rule 69L-6.027, Ms. Scogland calculated a penalty of $12,181.42. On May 20, 2015, the Department issued an Amended Order of Penalty Assessment against Gulf Coast in the amount of $12,181.42. The Department correctly calculated the penalty based on the statutory formulas and adopted rules governing workers’ compensation insurance.
Recommendation Having considered 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 upholding the Stop-Work Order and Amended Penalty Assessment against Respondent, Gulf Coast Site Prep., Inc., for its failure to secure and maintain required workers’ compensation insurance for its employees. DONE AND ENTERED this 14th day of January, 2016, in Tallahassee, Leon County, Florida. S SUZANNE VAN WYK 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, 2016.
The Issue The issue is whether Section 11B(3) of the Florida Workers' Compensation Reimbursement Manual for Hospitals, 2004 Second Edition, is an invalid exercise of delegated legislative authority.
Findings Of Fact The petitions filed by FFVA and TIC challenge the validity of Section 11B(3) of the 2004 Manual,4/ which prior to October 1, 2007, was adopted by reference as part of Florida Administrative Code Rule 69L-7.501(1). Florida Administrative Code Rule 69L-7.501(1) was amended effective October 1, 2007, to adopt by reference the Florida Workers' Compensation Reimbursement Manual for Hospitals, 2006 Edition ("the 2006 Manual"). Florida Administrative Code Rule 69L-7.501(1), as it existed when the petitions were filed and as it currently exists, adopts by reference the 2006 Manual, not the 2004 Manual. The 2004 Manual is no longer adopted by reference as part of Florida Administrative Code Rule 69L-7.501, or any other rule. AHCA applied the 2004 Manual in the reimbursement dispute initiated by HRMC against FFVA under Section 440.13, Florida Statutes, as reflected in the determination letter issued by AHCA on October 24, 2007, which was attached to FFVA's petition. The reimbursement dispute is the subject of the pending DOAH Case No. 07-5414. AHCA applied the 2004 Manual in a reimbursement dispute involving TIC under Section 440.13, Florida Statutes, as reflected in the determination letter issued by AHCA on January 9, 2008, which was attached to TIC's petition. The reimbursement dispute is the subject of the pending DOAH Case No. 08-0703.
The Issue The sole threshold issue in this bifurcated proceeding is whether Petitioner has met her burden of proving grounds for equitable tolling as a defense to the admitted untimely filing of Petitioner's request for an administrative hearing. Consideration of the merits of Petitioner's challenge to the initial agency action was deferred, pending the threshold determination of whether the challenge can be heard.
Findings Of Fact Petitioner's husband was a State of Florida employee. He passed away in 1999. As the surviving spouse of a former State of Florida employee, Petitioner is entitled to, and has obtained coverage under, the state's group health insurance since 1999. Since sometime in 2002, Petitioner has also had Medicare health care coverage. However, Petitioner continued to pay the individual monthly premium rate for state group health insurance through May 2010, instead of the lower monthly rate applicable to someone who also has Medicare coverage. In May 2010, Petitioner submitted a written request to change her state group health insurance coverage level to accurately reflect the lower monthly Medicare rate and to refund the difference in premiums between the regular premium rate she had been paying and the lower Medicare rate from May 2002 to May 2010. Petitioner's May 2010 written request for changed coverage and reimbursement of overpaid premiums was not offered into evidence. By certified letter dated June 2, 2010, the Department responded to Petitioner's May 2010 written request. The Department advised that it was granting Petitioner's request to change her coverage level to reflect that she has Medicare coverage and that Petitioner's request for a refund was granted, in part, and denied, in part. The letter advised Petitioner of her right to an administrative hearing to contest the partial denial and enclosed an informational page specifying how and when to request such a hearing. In addition, enclosed with the letter were copies of Florida Administrative Code Rules 28-106.201 and 28-106.301, which codify the manner for initiating proceedings when there are disputed issues of material fact and when there are no disputed issues of material fact, respectively. The Department's certified letter was delivered to Petitioner's home on June 5, 2010. Petitioner was at home and personally signed the certified receipt for the Department's letter on June 5, 2010. Petitioner testified that she does not remember answering the door when the Department's certified letter was delivered to her home, nor does she remember signing the certified receipt, even though she acknowledged that she did so on June 5, 2010. Petitioner and her daughter, Ms. Viegas, testified that Petitioner has had mental health issues since 2001, when Petitioner became depressed not too long after her husband died in 1999. Petitioner testified that she has been seeing a psychiatrist since 2008 and has been taking medication prescribed by the psychiatrist for depression. No evidence was presented to establish how frequently or infrequently Petitioner was seeing a psychiatrist, nor was any evidence presented with respect to the type or dosage of medication Petitioner has taken. Neither the psychiatrist whom Petitioner said she had been seeing, nor any other expert testified with respect to Petitioner's medical or psychological condition, and no medical records were offered into evidence. Throughout the years of Petitioner's chronic depression, Petitioner has lived in her own home, at times alone or with a gentleman who lives there now and is now 81 years old. In addition, in June 2009, Ms. Viegas moved in with Petitioner and has lived there continuously since that time. Ms. Viegas is 39 years old and is unemployed. Since Ms. Viegas does not work, she is present at the home 90 percent of the time. Ms. Viegas testified that the reason she moved in with Petitioner was because Petitioner needed her help with business and other needs and, also, because Ms. Viegas broke up with her boyfriend with whom she had been living. Petitioner's other daughter, Cindy, also helps out. Cindy is a regular visitor and helps with household tasks, such as doing laundry, paying bills, and calling banks on Petitioner's behalf. According to Ms. Viegas, Petitioner's chronic depression got worse in late January or early February 2010 and remained bad until sometime in July 2010, when Petitioner's medication was changed. As described by Petitioner and Ms. Viegas, in Petitioner's worsened state for this six- or seven-month period in 2010, Petitioner slept most of the day in addition to at night. Petitioner did not clean the house or cook her own meals, and she did not bathe until Ms. Viegas pushed her to bathe. Because Petitioner was not cooking her own meals, she either ate peanut butter sandwiches or went out to eat at a restaurant. Petitioner testified that during this period when her depression worsened, she frequently went out to eat. Petitioner also acknowledged that she has had a valid driver's license and a car and that she would drive herself around, sometimes alone with no passengers. Despite the fact that Ms. Viegas moved in with Petitioner to help with her business and other needs, Ms. Viegas testified that her mother was able to keep up with her own business affairs pretty well until she got worse in January or February 2010, at which point bills frequently would go missing, and Ms. Viegas would realize that when second notices were received. Even before Petitioner got worse in early 2010, important mail, such as utility bills, would occasionally go missing. Ms. Viegas explained that she was reluctant to impose tighter controls to address this chronic issue, because she did not want to give her mother the impression that she (Ms. Viegas) did not have faith in her mother's ability to handle her own business. In addition, Ms. Viegas was unwilling to restrict her mother's freedom to walk outside to the mailbox to collect the mail or to get the mail while she was out walking their poodle. Instead, Ms. Viegas just dealt with the repercussions of the occasional lost mail. Ms. Viegas acknowledged that the problem of missing important mail, such as bills, became a more frequent occurrence when Petitioner's condition got worse in January or February 2010. Still, Ms. Viegas and Petitioner did nothing different with regard to the mail routine. No evidence was presented that Petitioner's depression ever became so severe that Ms. Viegas and/or Petitioner contemplated hospitalization or some form of more intensive treatments beyond periodic office visits with a psychiatrist. Petitioner has not been adjudicated incompetent of handling her own affairs, and no guardian has been appointed to manage Petitioner's affairs, nor was there evidence that such a step was ever contemplated. The evidence suggested to the contrary-- that Petitioner led an independent lifestyle and that Ms. Viegas was unwilling to, and apparently believed it was unnecessary to, restrict Petitioner's freedoms. Petitioner testified that in July 2010, her psychiatrist changed her medication, and after that, Petitioner felt better and began cleaning house, cooking, and doing other things she had not been doing. Petitioner found the letter from Respondent, showed the letter to Ms. Viegas, and asked Ms. Viegas to help. Ms. Viegas prepared a letter requesting an administrative hearing to dispute the partial denial of Petitioner's overpayment refund request. Ms. Viegas testified that she knew enough to prepare the letter without Petitioner's help, because Ms. Viegas knew all about Petitioner's dispute with the Department. Ms. Viegas had no problems understanding from the Department's notice how to request an administrative hearing for Petitioner. Ms. Viegas reviewed her draft with Petitioner to make sure there was nothing Petitioner wanted to change or add. The request for administrative hearing prepared by Ms. Viegas was signed by Petitioner on August 13, 2010, and sent to the Department where it was filed on August 16, 2010, nearly seven weeks after the 21-day deadline specified in the letter for filing a request for administrative hearing. Petitioner does not assert that she was misled or lulled into inaction by anything said or done by the Department's representatives. Petitioner does not assert that the Department's notice was unclear or confusing with regard to when, whether, or how Petitioner needed to request an administrative hearing to contest the Department's proposed action. Instead, her sole contention is that her "diminished mental capacity"1/ constitutes an extraordinary circumstance that prevented her from timely filing her request for hearing. The greater weight of the credible evidence does not support a finding that during the six- or seven-month period in 2010, when Petitioner's depression worsened, her condition rendered her incapable of functioning. The facts are inconsistent with the suggestion of a debilitated state. Petitioner drove a car, sometimes by herself; collected the mail from the mailbox herself; walked her pet poodle; and went out for meals when she tired of peanut butter sandwiches. Though she did not, herself, clean the house or cook meals, she had the help of two daughters, one of whom lived in the house and had no other job besides helping Petitioner. Moreover, in May 2010, Petitioner was capable of submitting an appropriate written request for change of insurance coverage level and for refund of overpaid premiums; and on June 5, 2010, Petitioner was able to respond to receive the delivery of the certified letter on June 5, 2010, and to sign the certified receipt with a clear, steady signature. Based on the credible evidence, the undersigned is unable to find that Petitioner's condition rose to an extraordinary circumstance, such that she was "prevented" from timely filing a petition. "Prevented" suggests an external factor beyond one's control, something far beyond one's own lack of reasonable prudence. As Petitioner and her live-in daughter observed Petitioner's worsening condition, reasonable prudence would have mandated an adjustment in protocol. It defies credibility to suggest that Petitioner's condition worsened to the point that it was impossible for Petitioner to care for herself and tend to her business and that Ms. Viegas would have stood by unwilling to assume full responsibility for Petitioner, including dealing with day-to-day business affairs. It must be emphasized that no medical testimony and no medical records were offered to support the testimony of Petitioner and her daughter regarding Petitioner's condition during the critical time of June and July 2010. Not only are Petitioner and her daughter lay witnesses who lack the expertise to offer medical opinions, but these two witnesses share an interest in characterizing Petitioner's condition, in this proceeding, as extreme and extraordinary. Instead, the impression given by the inconsistencies noted above is that Petitioner's condition was neither extreme nor extraordinary, but, rather, was chronic and manageable or at least accepted as the norm for the household. If Petitioner's condition were as extreme and debilitating as suggested for purposes of arguing equitable tolling, it would have been reckless for Petitioner to be allowed to continue driving her car. If, in fact, Petitioner was unable to function or comprehend day-to-day occurrences, there would be no excuse, in the exercise of reasonable prudence, for Ms. Viegas, who was not otherwise employed and was living in the home for the expressed purpose of helping Petitioner, to not have assumed full responsibility for her mother's functioning and dealing with day-to-day business affairs.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby: RECOMMENDED that Respondent, Department of Management Services, enter a final order dismissing the petition for administrative hearing filed by Petitioner, Mary Ann Steadman. DONE AND ENTERED this 26th day of January, 2011, in Tallahassee, Leon County, Florida. S ELIZABETH W. MCARTHUR 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 26th day of January, 2011.
The Issue The issues in this case are whether Respondent violated chapter 440, Florida Statutes, and Florida Administrative Code Chapter 69L-6, by failing to maintain workers' compensation coverage for its employees, and if so, the penalty that should be imposed.
Findings Of Fact The Parties 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 coverage for their employees. § 440.107(3), Fla. Stat. Respondent, Door Depot of Palm Beach, Inc., is a Florida for-profit corporation engaged in the sale and installation of doors, which is encompassed within the construction industry.2/ Ms. Morris is Respondent's owner and sole corporate officer. Failure to Secure Workers' Compensation Coverage As a result of a public referral, Petitioner initiated an investigation to determine whether Respondent had the required workers' compensation coverage for its employees. Michelle Jimerson, a Compliance Investigator employed by Petitioner, researched Petitioner's Coverage and Compliance Automated System ("CCAS") internal database regarding workers' compensation coverage and compliance, and determined that Respondent did not have current workers' compensation coverage and had not previously secured coverage. Ms. Jimerson's research further revealed that Ms. Morris, as Respondent's sole corporate officer, had a current workers' compensation exemption covering herself, and that she had maintained such exemptions since August 2002. On May 11, 2011, Ms. Jimerson conducted an on-site visit to Respondent's place of business. At that time, Petitioner issued a Request for Business Records to Respondent, seeking copies of payroll documents; bank statements; business tax receipts; check stubs and check ledgers; names of subcontractors; records of payments or disbursements to subcontractors; contracts; and proof of workers' compensation coverage for, or exemptions held by, the subcontractors. Respondent produced the requested records. From a review of the records, Ms. Jimerson determined that Respondent had contracted with three subcontractors, Breeze Image, Inc.,3/ Mike Jacobs, and Ross Whitehouse, to provide construction industry services (specifically, door repair and installation work), between April 22, 2011, and May 10, 2011. Ms. Jimerson's review of Petitioner's CCAS database revealed that none of these subcontractors was exempt from the workers' compensation coverage requirement during the period in which they contracted with Respondent to provide construction industry services, that none had secured workers' compensation coverage for themselves, and that Respondent had not secured workers' compensation coverage for them during this period. Because Respondent came into compliance with chapter 440 during Petitioner's investigation and before initiation of this enforcement action, Petitioner did not issue a Stop-Work Order.4/ Nancy Morris testified on Respondent's behalf. She admitted that Respondent had not secured workers' compensation coverage for these subcontractors. She credibly testified that she had asked if they were exempt from the workers' compensation coverage requirement, that they had told her they were, and that she had believed them. Penalty Assessment On May 24, 2011, Petitioner issued to Respondent a Request for Production of Business Records for Penalty Assessment Calculation, seeking copies of payroll documents; bank statements; business tax receipts; check stubs and check ledgers; names of subcontractors; records of payments or disbursements to subcontractors; contracts; and proof of workers' compensation coverage for, or exemptions held by, the subcontractors. Respondent produced the requested documents. Using these documents, Petitioner's Penalty Calculator, Teo Morel, calculated the penalty assessment for Respondent. Section 440.107(7)(d)1., establishes a formula for determining the penalty to be assessed against an employer who fails to secure workers' compensation as required by chapter 440. Specifically, the penalty is one and a half (1.5) 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 three-year period, or $1000, whichever is greater. Petitioner has adopted a penalty worksheet for calculating the penalty prescribed by section 440.107(7)(d)1. See Fla. Admin. Code R. 69L-6.027. Ms. Morel used the worksheet in calculating the penalty to be assessed against Respondent. Specifically, Ms. Morel identified the subcontractors for which Respondent had not secured workers' compensation and identified the applicable construction industry classification NCCI Manual code for each (here, classification code 5102). For each subcontractor, she identified the periods of noncompliance for the preceding three-year period as required by section 440.107(7)(d)1., determined the subcontractor's gross payroll amount and divided that amount by 100, then multiplied this amount by the NCCI Manual rate applicable to the 5102 classification code. This calculation yielded the workers' compensation premium Respondent should have paid for each subcontractor, had Respondent complied with chapter 440. The premium amount was then multiplied by 1.5 to determine the total penalty amount to be assessed. Pursuant to the information Respondent provided, and performing the statutorily prescribed calculation, Petitioner initially calculated the total penalty to be assessed as $20,266.59. Respondent subsequently provided additional business records consisting of raw job worksite notes. These documents showed that the subcontractors were paid a total contract amount for each job. However, the notes did not indicate the cost of materials per contract, and Respondent was unable to provide records containing this information. Because the cost of materials for each contract was indeterminable, pursuant to Florida Administrative Code Rule 69L-6.035(1)(i), Petitioner assumed that the materials cost constituted 20 percent of each contract, deducted this amount from each subcontractor's gross payroll, and recalculated the premium amount. As a result, the total penalty assessment was reduced by 20 percent, to $16,213.30. Respondent disputes the amount of the amended penalty assessment on the basis that materials costs for each contract constituted more than 20 percent of each contract's amount. However, Ms. Morris was unable to provide any evidence substantiating the cost of materials for each contract. Ms. Morris credibly testified that if Respondent is required to pay the assessed penalty of $16,213.30, it likely will be forced to go out of business. Ms. Morris fully cooperated with Petitioner throughout its compliance investigation leading to this enforcement action against Respondent.
Recommendation Based on the foregoing Findings of Fact and Conclusions of law, it is hereby RECOMMENDED that Petitioner enter a Final Order determining that Respondent violated the requirement in chapter 440, Florida Statutes, to secure workers' compensation coverage; imposing a total penalty assessment of $16,213.30; and providing that Petitioner will execute with Respondent a Payment Agreement Schedule for Periodic Payment of Penalty, pursuant to Florida Administrative Code Rule 69L-6.025, under which Respondent shall make a down payment to Petitioner of ten percent of the total assessed penalty amount, which is $1,621.33, and shall repay the remaining penalty in 60 consecutive monthly installments. DONE AND ENTERED this 30th day of January, 2012, 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 26th day of January, 2012.
The Issue The issues are whether Respondent, Deck King Corp., failed to secure workers’ compensation coverage for its employees, and, if so, whether the Department of Financial Services, Division of Workers’ Compensation (“Department”) correctly calculated the penalty assessment imposed against Respondent.
Findings Of Fact The Department is the state agency responsible for enforcing the statutory requirement that employers secure the payment of workers’ compensation for the benefit of its employees. Respondent was a business providing services in the construction industry with its principal office located at 2200 Northwest 22nd Court, Miami, Florida 33142. On June 29, 2015, Marilyn Victores, the Department’s compliance investigator, observed Ivan Lopez Avila and Robert Jordan performing construction work on a job site at 150 South Hibiscus Drive, Miami Beach, Florida 33139. She learned from the individuals working that they were performing the job on behalf of Respondent, Deck King Corp. After gathering the information at the job site, Ms. Victores spoke with her supervisor, Ms. Scarlett Aldana, and an investigation was performed. The Division of Corporations’ website was consulted to determine, among other things, the identity of Respondent’s corporate officers. Mses. Victores and Aldana learned that Respondent had three corporate officers and directors listed, Derek Barnick, Thomas Barnick, and Fausto Lopez. They also learned that the corporation was “active.” Ms. Victores consulted the Department’s Coverage and Compliance Automated System (“CCAS”) for proof of workers’ compensation coverage and for any exemptions associated with Respondent. An exemption is a method whereby a corporate officer can be relieved of the responsibility of the requirements of chapter 440, Florida Statutes, pursuant to section 440.05. CCAS is the Department’s internal database that contains workers’ compensation insurance policy and exemption information. Insurance providers are required to report insurance coverage information to the Department which is then inputted into CCAS. Ms. Victores’ CCAS search revealed that Respondent did not have a workers’ compensation policy or an employee leasing policy. Additionally, she discovered that no active exemptions were associated with Respondent. Based upon the information she gathered, Ms. Victores issued and served Respondent with a Stop-Work Order on June 29, 2015. Ms. King simultaneously issued and served Respondent a Request for Production of Business Records for Penalty Assessment Calculation (the “Request for Production”). The Request for Production sought documents to enable the Department to determine Respondent’s payroll for the time period of June 30, 2013, through June 29, 2015. In response to the Request for Production, Respondent provided the Department only bank statements. Ms. Eunika Jackson, a penalty auditor with the Department, was assigned to calculate the penalty to be assessed against Respondent. Ms. Jackson believed the business records produced by Respondent were insufficient to calculate a penalty for the entire audit period as they did not specify payroll or payments made to employees other than two specific checks, which were credited against the penalty ultimately assessed against Respondent. Based upon Ms. Jackson’s calculations, on October 9, 2015, the Department issued an Amended Order of Penalty Assessment to Respondent which was served on Respondent on that date. The Amended Order of Penalty Assessment imposed a penalty of $148,923.16. To make the penalty assessment determination, Ms. Jackson consulted the codes listed in the National Council on Compensation Insurance’s (NCCI) Scopes® Manual, which has been adopted by the Department through Florida Administrative Code Rules 69L-6.021 and 69L-6.031. Classification codes are assigned to various occupations to assist in the calculation of workers’ compensation insurance premiums. Based upon Ms. Victores’ description of the activities Respondent’s workers were performing and the descriptions listed in the NCCI Scopes® Manual, Ms. Jackson determined that the proper classification for employees of Respondent was 5403. Ms. Jackson then utilized the corresponding manual rates for that classification code and the related periods of the alleged non- compliance. Based upon the information provided to her by Mses. Victores and Aldana, Ms. Jackson utilized the appropriate methodology specified in section 440.107(7)(d)1. and rules 69L-6.027 and 69L-6.028, to determine the penalty of $148,923.16. The business records supplied by Respondent in response to the Department’s Request for Production consisted of two years’ worth of bank statements. No tax records, such as W-2s, W-4s, 1099s, or tax returns of Respondent, were provided to the Department to allow it to determine whether any of the workers were independent contractors, what salaries, if any, they were paid, or in any way to mitigate the penalty assessed by the Department. By not appearing at hearing or attempting to file any documents in explanation or mitigation of the penalty assessed against it, Respondent gave the Department nothing upon which to reach any conclusion of payroll other than through imputation. Using the Penalty Calculation Worksheet, Ms. Jackson determined the penalty to be assessed against Respondent. She imputed the income for Derek Barnick, Thomas Barnick, Ivan Lopez Avila, Robert Lopez, and Fausto Lopez, and used actual records provided by Respondent to determine the income of an individual identified only as “Mili” who received $105 in April 2014. Working through the calculations called for by the worksheet included the class code, period(s) of non-compliance, gross payroll, a divisor of 100 which was then multiplied by the approved manual rate, and then multiplied by two to calculate the penalty. The result was a penalty assessment of $148,923.16. By not appearing at hearing or offering any evidence to contradict the penalty assessed by the Department, Respondent waived its opportunity to prove the Department’s data used and calculations made were performed improperly. The Department properly determined the penalty using the worksheet prescribed by its statutes and rules.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department issue a final order imposing a penalty of $148,923.16 against Respondent. DONE AND ENTERED this 15th day of March, 2016, in Tallahassee, Leon County, Florida. S ROBERT S. COHEN 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 March, 2016. COPIES FURNISHED: Tabitha G. Harnage, Esquire Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399-4229 (eServed) Deck King Corp. 2200 Northwest 22nd Court Miami, Florida 33142 Julie Jones, CP, FRP, Agency Clerk Division of Legal Services Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399-0390 (eServed)
Findings Of Fact 12. The factual allegations contained in the Stop-Work Order and Order of Penalty Assessment issued on May 28, 2010, the Amended Order of Penalty Assessment issued on August 19, 2010, and the 2" Amended Order of Penalty Assessment issued October 28, 2010, and attached as “Exhibit A” “Exhibit B” and “Exhibit D” respectively, and fully incorporated herein by reference, are hereby adopted as the Department’s Findings of Fact in this case.
Conclusions THIS PROCEEDING came on for final agency action and Jeff Atwater, Chief Financial Officer of the State of Florida, or his designee, having considered the record in this case, including the request for administrative hearing received from LAWTEY SUPERMARKET, LLC, the Stop-Work Order and Order of Penalty Assessment, the Amended Order of Penalty Assessment, and the 2" Amended Order of Penalty Assessment, and being otherwise fully advised in the premises, hereby finds that: 1. On May 28, 2010, the Department of Financial Services, Division of Workers’ Compensation (hereinafter “Department”) issued a Stop-Work Order and Order of Penalty Assessment in Division of Workers’ Compensation Case No. 10-159-D1 to LAWTEY SUPERMARKET, LLC. The Stop-Work Order and Order of Penalty Assessment included a Notice of Rights wherein LAWTEY SUPERMARKET, LLC was advised that any request for an administrative proceeding to challenge or contest the Stop-Work Order and Order of Penalty Assessment must be filed within twenty-one (21) days of receipt of the Stop-Work Order and Order of Penalty Assessment in accordance with Sections 120.569 and 120.57, Florida Statutes, and must conform to Rule 28-106.2015, Florida Administrative Code. 2. On May 28, 2010, the Stop-Work Order and Order of Penalty Assessment was served by personal service on LAWTEY SUPERMARKET, LLC. A copy of the Stop-Work Order and Order of Penalty Assessment is attached hereto as “Exhibit A” and incorporated herein by reference. 3. On August 19, 2010, the Department issued an Amended Order of Penalty Assessment to LAWTEY SUPERMARKET, LLC. The Amended Order of Penalty Assessment assessed a total penalty of $19,344.69 against LAWTEY SUPERMARKET, LLC. The Amended Order of Penalty Assessment included a Notice of Rights wherein LAWTEY SUPERMARKET, LLC was advised that any request for an administrative proceeding to challenge or contest the Amended Order of Penalty Assessment must be filed within twenty-one (21) days of receipt of the Amended Order of Penalty Assessment in accordance with Sections 120.569 and 120.57, Florida Statutes, and must conform to Rule 28-106.2015, Florida Administrative Code. 4, On August 23, 2010, the Amended Order of Penalty Assessment was served by certified mail on LAWTEY SUPERMARKET, LLC. A copy of the Amended Order of Penalty Assessment is attached hereto as “Exhibit B” and incorporated herein by reference. 5. Prior to the expiration of the twenty-one (21) day period following the service of the Amended Order of Penalty Service, LAWTEY SUPERMARKET, LLC requested and received an extension of time to file a request for administrative hearing with the Department. 6. On October 8, 2010, LAWTEY SUPERMARKET, LLC timely filed a request for administrative hearing (hereinafter “Petition’”) with the Department. The Petition was forwarded to the Division of Administrative Hearings on October 28, 2010, and the matter was assigned DOAH Case No. 10-9938. A copy of the petition is attached hereto as “Exhibit C” and incorporated herein by reference. 7. On October 28, 2010, the Department issued a 2°4 Amended Order of Penalty Assessment to LAWTEY SUPERMARKET, LLC. The 2% Amended Order of Penalty Assessment assessed a total penalty of $6,061.46 against LAWTEY SUPERMARKET, LLC. 8. On January 6, 2011, the 2"? Amended Order of Penalty Assessment was served by personal service on LAWTEY SUPERMARKET, LLC. A copy of the 2"! Amended Order of Penalty Assessment is attached hereto as “Exhibit D” and incorporated herein by reference. 9. On January 21, 2011, LAWTEY SUPERMARKET, LLC, through legal counsel, filed a voluntary dismissal of its request for administrative hearing with the Division of Administrative Hearings. A copy of the voluntary dismissal is attached hereto as “Exhibit E” and incorporated herein by reference. 10. On January 21, 2011, the Administrative Law Judge issued an Order Closing File which relinquished jurisdiction of the matter to the Department. A copy of the Order Closing File is attached hereto as “Exhibit F” and incorporated herein by reference. 11. On May 2, 2011, the Department received a check from LAWTEY SUPERMARKET, LLC in the amount of $1000. This reduced the balance of the penalty assessed against LAWTEY SUPERMARKET, LLC to $5061.46.
