03-002472 Department Of Financial Services, Division Of Workers&Apos; Compensation vs. All Custom Hurricane Shutters And Security, Inc. Status: Closed Recommended Order on Friday, April 9, 2004.

Summary: Respondent employer that failed to maintain workers` compensation coverage on ten workers is subject to penalties totaling $11,647.56.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL )

SERVICES, DIVISION OF WORKERS' )

COMPENSATION, )

)

Petitioner, )

)

vs. ) Case No. 03 - 2472

)

ALL CUSTOM HURRICANE SHUTTERS )

AND SECURITY, INC., )

)

Respondent. )

)

RECOMMENDED ORDER

Administrative Law Judge (ALJ) Daniel Manry conducted the

administrative hearing in this proceeding on November 21, 2003,

in Fort Myers, Florida, on behalf of the Division of

Administrative Hea rings (DOAH).

APPEARANCES

For Petitioner: Andrea L. Reino, Esquire

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399 - 4229

For Respondent: Marshall L. Cohen, Esquire

Marshall L. Cohen, P.A.

Post Office Box 60292

Fort Myers, Florida 33906 - 0292

STATEMENT OF THE ISSUES

The issues are whether Respondent maintained workers'

compensation coverage for certain employees, and, if not, what

penalty, if any, should be imposed.

PRELIMINARY STATEMENT

O n June 3, 2003, Petitioner issued Stop Work and Penalty

Assessment Order Number 03 - 081 - D7 (the Order), alleging that

Respondent failed to abide by the requirements of the Workers'

Compensation Law on that date. The Order required Respondent to

cease busin ess operations and assessed separate penalties of

$100.00 and $1,000.00, pursuant to Section 440.107(5) and (7),

Florida Statutes (2002), respectively. Petitioner subsequently

amended the amount of the fine to $11,547.56 pursuant to Amended

Stop Work and Penalty Assessment Order Number 03 - 081 - D7 - 3 (the

Amended Order). Respondent timely requested an administrative

hearing.

At the hearing, Petitioner presented the testimony of one

witness, and submitted three exhibits for admission into

evidence. Respond ent presented the testimony of its president

and sole shareholder, and submitted no exhibits for admission

into evidence. The identity of the witnesses and exhibits and

any rulings regarding each are reported in the one - volume

Transcript of the hearing fi led with DOAH on February 10, 2004.

Petitioner timely filed its proposed recommended order

(PRO) on March 10, 2004. Respondent did not file a PRO.

FINDINGS OF FACT

1. Petitioner is the state agency responsible for

enforcing the statutory requirement that employers secure the

payment of workers' compensation for the benefit of their

employees. § 440.107, Fla. Stat. (2002). Respondent is a

corporation domiciled in Florida and engaged in the business of

installing motorized aluminum hurricane shutters and security

systems.

2. On June 3, 2003, four of Respondent's workers installed

aluminum shutters on a single - family residence located at

20799 Wheelock Drive, No. 909, Heron's Glen, North Fort Myers,

Florida. Respondent did not have workers' compensat ion

insurance for the four employees. In addition, Respondent

failed to maintain workers' compensation coverage for the

benefit of ten employees from June 21, 2002, through June 27,

2003 (the relevant period).

3. Respondent stipulated that Respondent wa s an employer

during the relevant period, and that Respondent failed to

maintain workers' compensation coverage for five employees

identified in the record as Ricardo Mendez, Pedro Rojas, Willie

Marrow, Eric Mendez, and Izarate Cartas. Respondent further

stipulated that Petitioner correctly assessed the penalty

amounts for those employees.

4. The remaining five individuals that Respondent contends

were not employees are identified in the record as Jessica

Mendez, Gelacio Zarate, Manual Mendez, Jesus Espin oza, and David

Mobley. Respondent asserts, in relevant part, that these

individuals were "casual labor" and not "employees" within the

meaning of Section 440.02(15)(d)5, Florida Statutes (2002).

5. Under the Workers' Compensation Law in effect on

June 21, 2002, an "employee" did not include a person if the

employment satisfied the conjunctive requirements of being casual

and not in the course of the trade, business, profession, or

occupation of the employer. § 440.02(15)(d)5, Fla. Stat. (2002).

Secti on 440.02(5), Florida Statutes (2002), defined the term

"casual," in relevant part, to be work that satisfied the

conjunctive requirements of being completed in ten working days

or less, without regard to the number of persons employed, and at

a total labo r cost of less than $500.

6. Ms. Mendez and Mr. Zarate were Respondent's employees

during the relevant period. Respondent paid each more than

$500, and each individual performed services that were in the

course of the trade, business, profession, or occu pation of

Respondent.

7. Ms. Mendez worked as an assistant to the wife of the

president and sole shareholder of Respondent. The wife

maintained accounts and pulled permits for Respondent.

Ms. Mendez assisted the wife by answering telephone calls and

accompanying the wife when the wife pulled permits for

Respondent. Respondent paid Ms. Mendez $760 during the relevant

period.

8. Respondent paid Mr. Zarate $800 during the relevant

period to help build large roll - down, accordion, or panel

shutters. B uilding shutters is an activity required in the

course of Respondent's business.

9. Mr. M. Mendez and Mr. Espinoza were Respondent's

employees during the relevant period. Although Respondent paid

each person less than $500, Mr. M. Mendez and Mr. Espino za each

performed cleanup work for Respondent. The amount of cleanup

required depended on the number of roll - down shutter

installations Respondent had at a given time. Constructing

roll - down shutters produces a lot of paper and scraps that must

be cleane d up to keep the shop clean. Mr. M. Mendez and

Mr. Espinoza each performed services directly related to the

construction of shutters by Respondent.

10. Respondent argues that Mr. Mobley was either casual

labor or an independent contractor. Mr. Mobley did not satisfy

the statutory requirements for either classification.

11. Mr. Mobley did not satisfy the requirements for casual

labor. Mr. Mobley was an electrician who installed motorized

shutters for Respondent. Mr. Mobley secured electrical permit s

needed for Respondent to do the electrical work essential to

Respondent's business. Mr. Mobley accompanied Respondent's

president to the construction site, ran the electrical, and

wired the motor for the shutter that Respondent was assembling.

Although Mr. Mobley worked for Respondent for only three days,

Respondent paid Mr. Mobley approximately $1,200.

12. Under the Workers' Compensation Law in effect during

the relevant period, Section 440.02(15)(c), Florida Statutes

(2002), required an "independen t contractor" to satisfy all of

the following requirements in Section 440.02(15)(d)1, Florida

Statutes:

a. The independent contractor maintains a

separate business with his or her own work

facility, truck, equipment, materials, or

similar accommodations;

b. The independent contractor holds or has

applied for a federal employer

identification number, unless the

independent contractor is a sole proprietor

who is not required to obtain a federal

employer identification number under state

or federal require ments;

c. The independent contractor performs or

agrees to perform specific services or work

for specific amounts of money and controls

the means of performing the services or

work;

d. The independent contractor incurs the

principal expenses related to the service or

work that he or she performs or agrees to

perform;

e. The independent contractor is

responsible for the satisfactory completion

of work or services that he or she performs

or agrees to perform and is or could be held

liable for a failu re to complete the work or

services;

f. The independent contractor receives

compensation for work or services performed

for a commission or on a per - job or

competitive - bid basis and not on any other

basis;

g. The independent contractor may realize a

profit or suffer a loss in connection with

performing work or services;

h. The independent contractor has

continuing or recurring business liabilities

or obligations; and

i. The success or failure of the

independent contractor's business depends on

t he relationship of business receipts to

expenditures.

13. Mr. Mobley satisfied some of the definitional elements

of an independent contractor. He maintained a separate business

as a sole proprietor not required to obtain a federal

identification number , and incurred principal expenses related

to the service or work he performed for Respondent.

14. There is insufficient evidence to find that Mr. Mobley

satisfied the remaining requirements for an independent

contractor. The evidence was insufficient t o show that

Mr. Mobley could be held liable for failure to complete the work

or services he performed for Respondent, had continuing or

recurring business obligations, or that the success or failure

of his business depended on the relationship of receipts to

expenditures. The evidence is clear that Mr. Mobley would not

have performed work for Respondent if he were to have suffered a

loss.

15. Mr. Mobley was Respondent's employee during the

relevant period. Mr. Mobley failed to satisfy the definition of

either casual labor or an independent contractor.

CONCLUSIONS OF LAW

16. DOAH has jurisdiction pursuant to Sections 120.57(1)

and 120.569, Florida Statutes (2003). The parties received

adequate notice of the administrative hearing.

17. Petitioner ha s the burden of proof in this case.

Petitioner must show by a preponderance of the evidence that

Respondent violated the Workers' Compensation Law during the

relevant period and that the penalty assessments are correct.

Department of Labor and Employment Security, Division of

Workers' Compensation v. Bobby Cox, Sr., d/b/a C H Well

Drilling , DOAH Case No. 99 - 3854 (Recommended Order para.

34)(adopted in part by Final Order June 8, 2000); Department of

Labor and Employment Security, Division of Workers' Comp ensation

v. Eastern Personnel Services, Inc. , DOAH Case No. 99 - 2048

(Recommended Order para. 24)(adopted by Final Order Nov. 30,

1999), appeal dismissed , Case No. 1D99 - 4839 (Fla. 1st DCA

April 10, 2000); § 120.57(1)(j), Fla. Stat. (2002).

18. Petitioner s atisfied its burden of proof. During the

relevant period, Respondent was an "employer" engaged in the

construction industry and failed to maintain workers'

compensation coverage for ten employees. The assessed penalties

are correct.

RECOMMENDATION

Base d on the Findings of Fact and Conclusions of Law, it is

RECOMMENDED that Petitioner enter a Final Order that

affirms, approves, and adopts the Amended Stop Work and Penalty

Assessment Order.

DONE AND ENTERED this 9th day of April, 2004, in

Tallahassee, Leo n County, Florida.

S

DANIEL MANRY

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675 SUNCOM 278 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 9th day of April, 2004.

COPIES FURNISHED :

Marshall L. Cohen, Esquire

Marshall L. Cohen, P.A.

Post Office Box 60292

Fort Myers, Florida 33906 - 0292

Andrea L. Reino, Esquire

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399 - 4229

Honorable Tom Gallagher

Chief Financial Officer

Department of Financial Services

The Capitol, Plaza Level 11

Tallahassee, Florida 32399 - 0300

Mark Casteel, General Counsel

Department of Financial Services

The Capitol, Plaza Level 11

Tallahassee, Florida 32399 - 0300

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Rec ommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.