07-005480 Dennis Lamar Flint vs. Department Of Financial Services, Division Of Workers' Compensation Status: Closed Recommended Order on Wednesday, August 20, 2008.

Summary: Petitioner was not an employer in the construction industry. Penalty assessment should be dismissed.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DENNIS LAMAR FLINT, )

)

Petitioner, )

)

vs. ) Case No. 07-5480

)

DEPARTMENT OF FINANCIAL )

SERVICES, DIVISION OF WORKERS' )

COMPENSATION, )

)

Respondent. )

)

RECOMMENDED ORDER

On February 7 and May 13, 2008, an administrative hearing

in this case was conducted by William F. Quattlebaum,

Administrative Law Judge, Division of Administrative Hearings.

APPEARANCES

For Petitioner: John Kyle Shoemaker, Esquire

Post Office Box 1601

Fort Myers, Florida 33902

For Respondent: Anthony B. Miller, Esquire

Department of Financial Services

Division of Workers' Compensation

200 East Gaines Street

Tallahassee, Florida 32399-4229

STATEMENT OF THE ISSUE

The issue in the case is whether Dennis Lamar Flint

(Petitioner) should be assessed a penalty for an alleged failure

to obtain workers' compensation insurance as charged in a Stop

Work Order and Amended Order of Penalty Assessment.

PRELIMINARY STATEMENT

On October 24, 2007, the Department of Financial Services,

Division of Workers' Compensation (Respondent), issued a Stop

Work Order and Order of Penalty Assessment against the

Petitioner, asserting that he has failed to "secure the payment

of workers' compensation in violation of sections 440.10(1),

440.38(1), and 440.107(2), Florida Statutes," specifically by

his "failure to obtain coverage that meets the requirements of

Chapter 440 F.S. and the Insurance Code."

The Petitioner disputed the alleged violations and

requested a formal hearing. The Respondent forwarded the

request to the Division of Administrative Hearings.

By Notice of Hearing dated December 18, 2007, a four-hour

video teleconference hearing was scheduled for February 7, 2008.

The time allotted was based upon the parties' response to the

Initial Order. The case was transferred to the undersigned

Administrative Law Judge on January 29, 2008.

The hearing did not conclude on February 7. Before the

hearing was rescheduled, the video teleconferencing equipment

located in Fort Myers malfunctioned and became permanently

unavailable. After consultation with the parties, the remainder

of the hearing was conducted on May 13, 2008, in Fort Myers.

At the hearing, the Petitioner testified on his own behalf.

The Respondent presented the testimony of four witnesses and had

Exhibits identified as A through C, E through G, K through O,

and Q admitted into evidence.

The Petitioner filed a "Proposed Final Order" on May 22,

2008. The two-volume Transcript of the hearing was filed on

June 16, 2008. On June 18, 2008, the Respondent filed an

Unopposed Motion for Extension of Time to File Proposed

Recommended Orders, which was granted by an Order dated June 20,

2008. The Respondent filed a Proposed Recommended Order on

July 7, 2008.

FINDINGS OF FACT

1. On October 24, 2007, an investigator employed by the

Respondent observed two men and a truck parked at a shopping

center located at 3704 Cleveland Avenue in Fort Myers, Florida.

2. According to a permit posted at the shopping center, a

general contractor identified as "Sams Property Investment" was

apparently responsible for a construction project at the

shopping center.

3. The investigator determined that one of the men was the

Petitioner. The other man was initially identified as "Steve

Nolan," but was subsequently identified as "Steve Miller."

4. At the time the investigator arrived at the shopping

center, she observed a ladder leaning against the building. The

ladder belonged to the Petitioner. The truck contained

equipment that the investigator asserted was utilized in

construction or carpentry trades.

5. The Petitioner and Mr. Miller were at the shopping

center location to determine the condition of the stucco surface

on the building.

6. The shopping center's owner was apparently interested

in improving the appearance of the property. The owner's son,

Geoffrey Hatter, familiar with the Petitioner through work the

Petitioner had done at the personal residence of the owner's

son, contacted the Petitioner and asked him to evaluate the

condition of the structure.

7. The Petitioner and Mr. Miller traveled together to the

shopping center on the morning of October 24, 2007. Mr. Miller

was the boyfriend of the Petitioner's daughter.

8. The Petitioner testified that the truck belonged to

Mr. Miller.

9. The investigator who spoke to the Petitioner at the

site testified that the vehicle tag was registered to the

Petitioner.

10. The Petitioner testified that Mr. Miller removed a

plywood board to reveal the structure below.

11. Neither inspector observed either the Petitioner or

Mr. Miller handling or removing any material from the structure.

12. The investigator who initially arrived at the scene

testified that she had "asked them to come down from the

ladder," but then testified that Mr. Miller was standing on the

ladder and that the Petitioner was standing on the ground nearby

the truck and ladder.

13. A second inspector who traveled to the location

separately from the first initially testified that she observed

two men on the building, but as she was questioned about the

observation, the testimony became less than convincing, lacked

sufficient clarity to be reliable, and conflicted with the other

inspector's testimony that the Petitioner was standing on the

ground near the truck.

14. The Respondent's lead investigator testified that when

she asked the men how they were to be compensated, they

responded that there was no agreement between them or with any

contractor and that they did not know how much they would be

paid or by whom.

15. The Respondent's investigator also testified that the

Petitioner told her that he thought he would be paid and that he

usually received about $2,000 for similar work.

16. The evidence fails to establish that there was any

commitment by anyone to pay $2,000 to the Petitioner for his

activities at the shopping center location on October 24, 2007.

17. There is no evidence that the Petitioner was

compensated in any manner for any task performed at the shopping

center location on October 24, 2007.

18. There is no evidence that the Petitioner directed

Mr. Miller to remove the plywood board from the structure.

19. There is no evidence that there was any agreement

between the Petitioner and Mr. Miller under which Miller would

receive any compensation for any tasks performed at the shopping

center on October 24, 2007.

20. There is no evidence that the Petitioner ever employed

Mr. Miller in any capacity or provided any compensation of any

kind to Mr. Miller.

21. Sams Property Investment did not have workers'

compensation coverage for the two men on October 24, 2007.

22. The Respondent's investigator testified without

contradiction that neither the Petitioner nor Mr. Miller had

workers' compensation coverage on October 24, 2007, and that

there was no statutory exemption or exclusion applicable to this

case.

23. The investigator requested the Petitioner to provide

certain business records to facilitate computation of a proposed

penalty.

24. The Petitioner earns his living as a laborer, taking

whatever work comes to him. In a letter to the Respondent,

counsel for the Petitioner asserted that the Petitioner does not

have any banking accounts, has not filed a tax return in many

years, and was unable to provide business records because there

were none.

25. Because the Petitioner provided no business records in

response to the Respondent's request, the Respondent determined

an imputed penalty as provided by statute, reflecting a

determination that the Petitioner was Mr. Miller's employer.

26. On December 6, 2007, the Respondent issued an Amended

Order of Penalty Assessment setting forth an imputed penalty of

$175,199.16. There is no evidence that the mathematical

calculation of the imputed penalty was performed incorrectly.

27. The Petitioner and Mr. Miller became employed by Sams

Property Investments in November 2007, which provided workers'

compensation coverage during the period of employment.

CONCLUSIONS OF LAW

28. The Division of Administrative Hearings has

jurisdiction over the parties to and subject matter of this

proceeding. §§ 120.569 and 120.57, Fla. Stat. (2007).

29. The administrative fine at issue in this proceeding is

penal in nature. In order to prevail, the Respondent must

demonstrate by clear and convincing evidence that the Petitioner

was required to be in compliance with the applicable statutes on

the referenced date, that he failed to meet the requirements,

and that the proposed penalty is appropriate. Department of

Banking and Finance v. Osborne Stern and Company , 670 So. 2d 932

(Fla. 1996); Ferris v. Turlington , 510 So. 2d 292 (Fla. 1987).

As stated in Slomowitz v. Walker , 429 So. 2d 797, 800 (Fla. 4th

DCA 1983), the "clear and convincing" standard requires:

[T]hat the evidence must be found to be

credible; the facts to which the witnesses

testify must be distinctly remembered; the

testimony must be precise and explicit and

the witnesses must be lacking in confusion

as to the facts in issue. The evidence must

be of such weight that it produces in the

mind of the trier of fact a firm belief or

conviction, without hesitancy, as to the

truth of the allegations sought to be

established.

30. In this case, the burden has not been met.

31. Every employer is required to obtain workers'

compensation coverage for employees unless a specific exemption

or exclusion is provided by law. See §§ 440.10 and 440.38, Fla.

Stat. (2007).

32. Section 440.02, Florida Statutes (2007), provides the

following applicable definitions:

(8) "Construction industry" means for-

profit activities involving any building,

clearing, filling, excavation, or

substantial improvement in the size or use

of any structure or the appearance of any

land . However, "construction" does not mean

a homeowner's act of construction or the

result of a construction upon his or her own

premises, provided such premises are not

intended to be sold, resold, or leased by

the owner within 1 year after the

commencement of construction. The division

may, by rule, establish standard industrial

classification codes and definitions thereof

which meet the criteria of the term

"construction industry" as set forth in this

section.

* * *

(15)(a) "Employee" means any person who

receives remuneration from an employer for

the performance of any work or service while

engaged in any employment under any

appointment or contract for hire or

apprenticeship, express or implied, oral or

written, whether lawfully or unlawfully

employed, and includes, but is not limited

to, aliens and minors.

* * *

(16)(a) "Employer" means the state and all

political subdivisions thereof, all public

and quasi-public corporations therein, every

person carrying on any employment , and the

legal representative of a deceased person or

the receiver or trustees of any person.

"Employer" also includes employment

agencies, employee leasing companies, and

similar agents who provide employees to

other persons. If the employer is a

corporation, parties in actual control of

the corporation, including, but not limited

to, the president, officers who exercise

broad corporate powers, directors, and all

shareholders who directly or indirectly own

a controlling interest in the corporation,

are considered the employer for the purposes

of ss. 440.105, 440.106, and 440.107.

* * *

(17)(a) "Employment," subject to the other

provisions of this chapter, means any

service performed by an employee for the

person employing him or her.

(b) "Employment" includes:

* * *

2. All private employments in which four or

more employees are employed by the same

employer or, with respect to the

construction industry, all private

employment in which one or more employees

are employed by the same employer .

(Emphasis supplied)

33. As the term is defined, "construction industry"

activities must be "for profit." In this case, there is no

evidence that the Petitioner received any compensation for his

activities at the shopping center on October 24, 2007. There is

no evidence whatsoever that any party was obligated to

compensate the Petitioner, financially or otherwise, for his

appearance at the site on the date in question. There is no

credible evidence that the Petitioner's subsequent employment by

the general contractor was contingent upon his review of the

structure on October 24, 2007. The Petitioner was at the

shopping center on October 24, 2007, with little more than a

hopeful assumption that he would be compensated for his

activities.

34. Additionally, there is no credible evidence that the

Petitioner was an employer or that Mr. Miller was the

Petitioner's employee. There is no evidence that the Petitioner

ever employed any person at any time.

35. There is no evidence that the Petitioner directed

Mr. Miller to remove the plywood board from the structure or

that the Petitioner directed the activities of Mr. Miller at any

time.

36. There is no evidence that Mr. Miller received

remuneration from the Petitioner on October 24, 2007, or at any

other time. The evidence fails to establish that anyone was

obligated to compensate Mr. Miller for pulling the board off the

building.

37. Section 440.107, Florida Statutes (2007), provides the

Respondent with the authority to assess an imputed penalty

against an employer who fails to provide business records within

five days of a request from the Respondent. In this case, the

Respondent requested the records and received none; accordingly,

a penalty of $175,199.16 was assessed against the Petitioner.

As stated herein, the evidence is insufficient to establish that

the Petitioner was an employer, and the referenced section is

inapplicable.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Petitioner enter a final order

dismissing the Amended Order of Penalty Assessment issued

against Dennis Lamar Flint.

DONE AND ENTERED this 20th day of August, 2008, in

Tallahassee, Leon County, Florida.

S

WILLIAM F. QUATTLEBAUM

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 20th day of August, 2008.

COPIES FURNISHED :

Anthony B. Miller, Esquire

Department of Financial Services

Division of Workers' Compensation

200 East Gaines Street

Tallahassee, Florida 32399-4229

John Kyle Shoemaker, Esquire

Post Office Box 1601

Fort Myers, Florida 33902

Honorable Alex Sink

Chief Financial Officer

Department of Financial Services

The Capitol, Plaza Level 11

Tallahassee, Florida 32399-0300

Daniel Sumner, General Counsel

Department of Financial Services

The Capitol, Plaza Level 11

Tallahassee, Florida 32399-0307

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.