08-003545
Tlc Stoneworks, Llc vs.
Department Of Financial Services, Division Of Workers' Compensation
Status: Closed
Recommended Order on Friday, October 24, 2008.
Recommended Order on Friday, October 24, 2008.
1STATE OF FLORIDA
4DIVISION OF ADMINISTRATIVE HEARINGS
8TLC STONEWORKS, LLC, )
12)
13Petitioner, )
15)
16vs. ) Case No. 08-3545
21)
22DEPARTMENT OF FINANCIAL )
26SERVICES, DIVISION OF WORKERS' )
31COMPENSATION, )
33)
34Respondent. )
36)
37RECOMMENDED ORDER
39Administrative Law Judge (ALJ) Daniel Manry conducted the
47final hearing of this case for the Division of Administrative
57Hearings (DOAH) on August 26, 2008, in Sarasota, Florida.
66APPEARANCES
67For Petitioner: Thomas Harvey, pro se
73TLC Stoneworks, LLC
765920 Bonaventure Place
79Sarasota, Florida 34243
82For Respondent: Douglas D. Dolan, Esquire
88Department of Financial Services
92Division of Legal Services
96200 East Gaines Street
100Tallahassee, Florida 32399
103STATEMENT OF THE ISSUE
107The issue is whether Petitioner is liable for a penalty for
118failure to maintain workers compensation insurance in violation
126of relevant provisions in Chapter 440, Florida Statutes (2007). 1
136PRELIMINARY STATEMENT
138On June 4 and 11, 2008, Respondent issued, respectively, a
148Stop-Work Order and an Amended Order of Penalty Assessment; the
158latter assessing a penalty in the amount of $1,218.52, pursuant
169to Subsection 440.107(7)(d), which is the penalty contested in
178this proceeding. Petitioner timely requested an administrative
185hearing, and Respondent referred the request to DOAH to conduct
195the hearing.
197At the hearing, Respondent presented the testimony of one
206witness and submitted 11 exhibits for admission into evidence.
215Petitioner presented the testimony of one witness and submitted
224one exhibit. The identity of the witnesses and exhibits and any
235associated rulings are reported in the one-volume Transcript of
244the hearing that was filed with DOAH on September 10, 2008.
255Respondent filed its Proposed Recommended Order (PRO) on
263September 22, 2008. Petitioner filed its PRO on September 29,
2732008, pursuant to an Order granting Petitioners unopposed
281request for extension of time to file its PRO.
290FINDINGS OF FACT
2931. Respondent is the state agency responsible for
301enforcing the statutory requirement that employers secure the
309payment of workers compensation for the benefit of their
318employees. § 440.107. Petitioner is a limited liability
326company domiciled in Florida and engaged in the sale of stone
337countertops.
3382. The disputed issues of fact arise from a single,
348integrated transaction involving one and the same business
356includes a contractor, a wholesaler, and two subcontractors, one
365of which is Petitioner. The integrated transaction is between
374the business and a homeowner.
3793. The contractor is identified in the record as Manasota
389Land Development (Manasota). The homeowner owns a residence on
398Agate Road in Port Charlotte, Florida (the homeowner). The
407contractor referred the homeowner to Petitioner for the purpose
416of selecting granite countertops. Petitioners representative
422visited the residence, took measurements, and received the order
431for granite from the homeowner. Petitioner placed the order
440with the wholesaler, the name of which is not material to this
452proceeding. The wholesaler delivered granite to a fabricator
460and installer designated by Petitioner and identified in the
469record as Granite Exclusive (the installer). The installer
477fabricated the countertops and installed them at the residence.
486Petitioner visited the residence to ensure customer
493satisfaction, and Petitioner paid the wholesaler and installer
501from funds provided by Manasota.
5064. Petitioner did not collect payment from the homeowner.
515Rather, Petitioner agreed with Manasota to a total price of
525$7,141.00. Petitioner billed Manasota for $3,570.00, an amount
535equal to approximately one-half of the total agreed price, on
545May 21, 2008, inferentially when the homeowner placed the order
555with Petitioner. Manasota paid Petitioner the 50 percent
563deposit. Petitioner billed Manasota for the balance due, in the
573amount of $3,571.00, on July 22, 2008, when the work was
585completed to the satisfaction of the homeowner, and Manasota
594paid the balance due.
5985. Petitioner was a sales agent, order processor, and a
608collection and payment processor for Manasota. Petitioner paid
616the wholesaler and installer from funds provided by Manasota.
625The fact-finder draws a reasonable inference from the evidence
634that Manasota collected a sum from the homeowner that was equal
645to or greater than the price Manasota paid to Petitioner.
6556. Petitioner and the installer are subcontractors of
663Manasota. Petitioner had no supervisory control over the
671installer. Respondents claim that a written or oral contract
680existed between Petitioner and the wholesaler and installer is
689not supported by clear and convincing evidence.
6967. It is undisputed that neither the installer nor
705Petitioner have workers compensation insurance, and the two
713subcontractors are, by operation of Subsection 440.10(1)(b), the
721employees of Manasota in one and the same business. Manasota
731is responsible for providing workers compensation coverage by
739operation of the statute.
7438. Petitioner mistakenly believed, in goof faith, that it
752was exempt from the requirements of Chapter 440. A company
762officer of Petitioner obtained an exemption certificate and,
770reasonably, concluded that the exemption was for Petitioner and
779both of Petitioners officers or employees. Such an exemption
788was the officers stated purpose when she entered the local
798state office responsible for issuing exemption certificates.
805The state employee represented that the exemption certificate
813actually issued achieved the officers stated purpose. The
821express terms of the exemption certificate provide that the
830exemption is for the person and company named in the
840certificate. However, Subsection 440.05 makes clear that an
848exemption covers only the company officer named in the
857certificate and that each of the two officers must be named in
869the certificate or that each officer must obtain a separate
879certificate.
8809. Petitioner did not engage in the business of
889fabricating or installing the stone countertop. Petitioner made
897a sale of the granite countertop and placed an order with a
909wholesaler. The wholesaler shipped the countertop to a the
918installer designated by Petitioner based on proximity to the
927project site. The fabricator installed the countertop.
934Petitioner did not supervise the fabrication or installation of
943the countertop.
94510. The fact-finder has considered and weighed conflicts
953in the evidence pertaining to the issue of whether Petitioner
963engaged in the business of fabricating and installing the stone
973countertop and has resolved any evidential conflicts in favor of
983Petitioner. The testimony of Petitioners witness, describing
990the nature and scope of Petitioners business, is consistent
999with Article 5 in Petitioners Articles of Incorporation which
1008states:
1009The general purpose for which the Company is
1017organized is to engage in the business of
1025natural stone countertop sales. . . .
103211. On June 3, 2008, Respondents investigator, conducted
1040a compliance check at 8206 Agate, South Gulf Cove, Florida, to
1051verify compliance with the workers compensation statutes.
1058At the worksite, Respondents investigator observed three men
1066installing a stone countertop for the installer.
107312. Installation of stone countertops is part of the
1082construction industry and is assigned Class Code 5348 in the
1092Scopes Manual, published by the National Council on Compensation
1101Insurance and adopted in Florida Administrative Code
1108Rule 69L-6.021.
111013. The investigator interviewed the three men and
1118requested proof of compliance with the workers compensation
1126law. One of the three men, neither furnished proof of an
1137election to be exempt from workers compensation nor showed that
1147he had secured workers compensation coverage.
115314. Utilizing the Department of Financial Services
1160Coverage and Compliance Automated System (CCAS), the
1167investigator was unable to determine that the employee of the
1177installer was exempt from the requirements of the workers
1186compensation law or that Petitioner had secured the payment of
1196workers compensation.
119815. On June 4, 2008, the investigator issued a Stop-Work
1208Order and Order of Penalty Assessment against Petitioner for
1217failure to meet the requirements of Chapter 440. Respondent
1226ordered Petitioner to cease all business operations and assessed
1235a $1,000.00 penalty against Petitioner pursuant to Subsection
1244440.107(7)(d).
124516. On June 4, 2008, the investigator issued a Division of
1256Workers Compensation Request for Production of Business Records
1264for Penalty Assessment Calculation. Petitioner complied with
1271the Request and provided the required records. Based on
1280Petitioners business records, the investigator issued an
1287Amended Order of Penalty Assessment on June 11, 2008, in the
1298amount of $1,218.52.
130217. Mr. Thomas Harvey, a company officer of Petitioner,
1311did not posses an election to be exempt from workers
1321compensation. Ms. Leslie Lockett, the other company officer had
1330applied for and obtained an exemption from workers compensation
1339coverage.
134018. Ms. Locketts exemption from workers compensation
1347lists the scope of business or trade as countertops, pursuant to
1358instructions from the agency employee who issued the
1366certificate. Ms. Locketts exemption from workers compensation
1373is a construction industry exemption. Ms. Lockett applied for a
1383Notice of Election to be Exempt as a member of a limited
1395liability company in the construction industry pursuant to the
1404instructions previously described.
140719. In the transaction at issue in this proceeding,
1416Petitioner collected payment for materials and installation of a
1425stone countertop from Manasota. Petitioner did not collect
1433payment from the homeowner and had no control or authority over
1444either the wholesaler or the installer.
1450CONCLUSIONS OF LAW
145320. DOAH has jurisdiction over the parties to and subject
1463(2008). DOAH provided the parties with adequate notice of the
1473final hearing.
147521. An administrative fine deprives Petitioner of
1482substantial rights in property and are punitive in nature.
1491Respondent has the burden of proof. Respondent must show by
1501clear and convincing evidence that Petitioner violated the
1509Workers Compensation Law and the reasonableness of the proposed
1518penalty assessment. Department of Banking and Finance Division
1526of Securities and Investor Protection v. Osborne Stern and Co. ,
1536670 So. 2d 932 (Fla. 1996); Dept. of Financial Services,
1546Division of Workers Compensation v. U&M Contractors, Inc. , Case
1555No. 04-3041 (DOAH April 27, 2005); Triple M Enterprises, Inc. v.
1566Department of Financial Services, Division of Workers
1573Compensation , Case No. 94-2524 (DOAH January 13, 2005).
158122. Manasota was a contractor that operated a single
1590countertop business, within the meaning of Subsection
1597440.10(1)(b), and, by operation of the same statute, Petitioner
1606and the installer were employees of Manasota because neither
1615Petitioner nor the installer had secured workers compensation
1623coverage. Manasota sublet part of the countertop business to
1632Petitioner and the installer.
1636In case a contractor sublets any part or
1644parts of his or her contract work to a
1653subcontractor or subcontractors, all of the
1659employees of such contractor and
1664subcontractor or subcontractors engaged in
1669such contract work shall be deemed to be
1677employed in one and the same business or
1685establishment; and the contractor shall be
1691liable for, and shall secure, the payment of
1699compensation to all such employees, except
1705to employees of a subcontractor who has
1712secured such payment.
1715§ 440.10(1)(b).
1717RECOMMENDATION
1718Based on the Findings of Fact and Conclusions of Law, it is
1730RECOMMENDED that Respondent issue a final order dismissing
1738the Stop-Work Order and Amended Order of Penalty Assessment
1747against Petitioner and Mr. Harvey.
1752DONE AND ENTERED this 24th day of October, 2008, in
1762Tallahassee, Leon County, Florida.
1766S
1767DANIEL MANRY
1769Administrative Law Judge
1772Division of Administrative Hearings
1776The DeSoto Building
17791230 Apalachee Parkway
1782Tallahassee, Florida 32399-3060
1785(850) 488-9675 SUNCOM 278-9675
1789Fax Filing (850) 921-6847
1793www.doah.state.fl.us
1794Filed with the Clerk of the
1800Division of Administrative Hearings
1804this 24th day of October, 2008.
1810ENDNOTE
18111/ References to chapters, sections, and subsections, are to
1820Florida Statutes (2007), unless otherwise stated.
1826COPIES FURNISHED :
1829Douglas D. Dolan, Esquire
1833Department of Financial Services
1837Division of Legal Services
1841200 East Gaines Street
1845Tallahassee, Florida 32399
1848Thomas Harvey
1850TLC Stoneworks, LLC
18535920 Bonaventure Place
1856Sarasota, Florida 34243
1859Honorable Alex Sink
1862Chief Financial Officer
1865Department of Financial Services
1869The Capitol, Plaza Level 11
1874Tallahassee, Florida 32399-0300
1877Daniel Sumner, General Counsel
1881Department of Financial Services
1885The Capitol, Plaza Level 11
1890Tallahassee, Florida 32399-0307
1893NOTICE OF RIGHT TO SUBMIT EXCEPTIONS
1899All parties have the right to submit written exceptions within
190915 days from the date of this Recommended Order. Any exceptions
1920to this Recommended Order should be filed with the agency that
1931will issue the Final Order in this case.
![](/images/view_pdf.png)
- Date
- Proceedings
-
PDF:
- Date: 10/24/2008
- Proceedings: Recommended Order cover letter identifying the hearing record referred to the Agency.
-
PDF:
- Date: 09/24/2008
- Proceedings: Order Granting Extension of Time (proposed recommended orders to be filed by September 29, 2008).
-
PDF:
- Date: 09/22/2008
- Proceedings: Department of Financial Services, Division of Workers` Compensation`s Proposed Recommended Order filed.
- Date: 09/10/2008
- Proceedings: Transcript filed.
- Date: 08/26/2008
- Proceedings: CASE STATUS: Hearing Held.
Case Information
- Judge:
- DANIEL MANRY
- Date Filed:
- 07/21/2008
- Date Assignment:
- 08/19/2008
- Last Docket Entry:
- 01/15/2009
- Location:
- Sarasota, Florida
- District:
- Middle
- Agency:
- ADOPTED IN PART OR MODIFIED
Counsels
-
Douglas Dell Dolan, Esquire
Address of Record -
Thomas Harvey
Address of Record